CHANGES SINCE JUNE 2016 PRESENTATION New AR slides for third-party acreage acquisition in Slides 4-9, 17 Marcellus and Utica core Updated AR slides for third-party acreage position pro Slides 11, 12, 18, 33-35, 55 forma for…
WHY OWN ANTERO 3.8 billion of consolidated liquidity available as of 3/31/2016 pro forma for offering Balance Sheet Ba2/BB corporate ratings affirmed; 4.5 billion AR borrowing base affirmed Strength Stable leverage not increasing…
ASSET ACQUISITION SUMMARY Date: On June 9th, 2016 Antero announced the core Pro Forma Acreage Position acreage asset acquisition described below: Purchase 450 million Price: Assets: 55,000 net acres primarily located in Wetzel, Tyler…
ACQUISITION RATIONALE Strategic core inventory addition of 55,000 net acres and 4.1 Tcfe of Marcellus 3P reserves (1) Pro Forma Acreage Position 33,000 net acre new footprint in Wetzel County Southern Rich 12,000 net infill acres in…
PRO FORMA ACQUISITION METRICS AR AR % Current Acquisition Pro Forma Increase Acreage: Net Marcellus Acres: 425,000 55,000 480,000 13% Total Net Acres: 573,000 55,000 628,000 10% Dry Gas Utica Net Acres (Stacked Pay): 190,000 41,000…
LARGE INCREASE IN HIGHLY ECONOMIC WELL LOCATIONS The acquisition acreage is primarily located in areas where Antero is observing EURs of 2.0 Bcf/1,000 and higher driven by improved sand placement and now higher proppant loading…
ALSO ADDS ATTRACTIVE DRY UTICA ACREAGE CVX Conner RRC Claysville Sportsman Acquisition includes stacked pay potential in 6,451 Lateral 5,420 Lateral 24-hr IP: 25.0 MMcf/d 24-hr IP: 59.0 MMcf/d the form of dry Utica rights on 41,000…
ANTERO MIDSTREAM VALUE CREATION OPPORTUNITY A unique opportunity as most Appalachian core acreage is already dedicated to third party midstream providers Increases Antero Midstream footprint and Antero Midstream Buildout identified…
LEADING UNCONVENTIONAL BUSINESS MODEL Current Flexibility & Prudent Growth Drives Upside Participation in Value Creation Commodity Price Recovery 2 Growth & 3 Flexibility & Momentum Upside Most Active Operator Sustainable…
DRILLING MOST ACTIVE OPERATOR IN APPALACHIA COMBINED TOTAL 12/31/15 RESERVES Assumes Ethane Rejection Net Proved Reserves 13.2 Tcfe Net 3P Reserves(1) 41.2 Tcfe Strip Pre-Tax 3P PV-10(2) 11.2 Bn SW Marcellus + Utica Rigs(4) Net 3P…
DRILLING CONTINUOUS OPERATING IMPROVEMENT Utica Shale Ohio Marcellus Shale Operating Highlights Top 20 best drilling footage days in Marcellus since 2009 have all occurred in 2016, including 6,528 drilled in 24 hours in West…
DRILLING PROVEN TRACK RECORD OF WELL COST REDUCTIONS Marcellus Well Cost Reductions for a 9,000 Lateral (MM)(1) 14 DRILLING COST AFE COMPLETION COST AFE 12.3 12 11.1 32% Reduction in 10.8 0.95 / 1,000 10.2 10.2 Marcellus well…
GROWTH & MOMENTUM THROUGH THE DOWN CYCLE Antero is in the unique position of being able to sustain growth and value creation through the price down cycle AVERAGE NET DAILY PRODUCTION (MMcfe/d) AVERAGE NET DAILY LIQUIDS PRODUCTION…
FLEXIBILITY & UPSIDE ANTERO THRIVES WITH RISING PRICES As the most active operator in Appalachia, Antero has kept its workforce intact while also preserving the ability to accelerate efficiently when commodity prices recover…
FLEXIBILITY & UPSIDE LOW MAINTENANCE CAPITAL Antero can achieve 17% year-over-year net production growth for 2016 by spending only 675 million, or approximately 500 million less than the 1.2 billion of expected hedge revenues for the…
WELL ECONOMICS MARCELLUS UPSIDE POTENTIAL While we have not changed our 1.7 Bcf/1,000' Marcellus project-wide type curve, we are seeing stronger EURs per 1,000' in a significant portion of our Marcellus rich gas acreage for wells…
WELL ECONOMICS SUSTAINABLE BUSINESS MODEL At 3/31/2016 strip pricing, Antero has 2,517 locations with well economics that exceed 20% 03/31/16 NYMEX Strip Pricing - Before Hedges rate of return (excluding hedges), pro forma for…
WELL ECONOMICS HEDGING UNDEVELOPED PRODUCTION Antero has hedged a significant portion of its forecasted undeveloped production stream from wells yet to be drilled at prices well above current strip pricing, including virtually all of…
MIDSTREAM MLP (NYSE: AM) HIGHLIGHTS SUBSTANTIAL VALUE IN MIDSTREAM BUSINESS Corporate Structure Overview Antero Resources Corporation (NYSE: AR) Public 13.3 Billion Enterprise Value(1) Ba2/BB Corporate Rating 38% LP Interest…
TAKEAWAY LARGEST FT AND PROCESSING PORTFOLIO IN APPALACHIA Anteros natural gas firm transportation (FT) portfolio builds to 4.85 Bcf/d by YE 2018 with 87% serving favorable markets, with an average demand fee of 0.46/MMBtu and…
TAKEAWAY FIRM TRANSPORTATION AND SALES PORTFOLIO While Antero has excess FT in place through 2017, the expected cost of unutilized FT is estimated to be manageable at well under 10% of EBITDA Columbia Stonewall/Tennessee Momentum III…
HEDGING INTEGRAL TO BUSINESS MODEL Hedging is a key component of Anteros business model which includes development of a large, repeatable drilling inventory Locks in higher returns in a low commodity price environment and reduces the…
LIQUIDITY STRONG BALANCE SHEET AND FLEXIBILITY Antero Resources (NYSE:AR) Antero Midstream (NYSE:AM) Pro Forma 3/31/2016 Debt Liquid Non-E&P Assets 3/31/2016 Debt Liquid Assets Debt Type MM Asset Type MM Debt Type MM Asset Type MM…
LIQUIDITY ANTERO CREDIT QUALITY AFFIRMED Anteros Ba2 / BB credit ratings were affirmed by Moodys and S&P in February 2016 Moodys reviewed 20 high yield issuers and announced 16 downgrades ranging from 1 to 5 notches S&P reviewed 45…
LIQUIDITY BORROWING BASE AFFIRMED Anteros 4.5 Billion borrowing base was reaffirmed by its lender group, representing one of only five public E&P companies that did not receive a reduction in its borrowing base thus far in the…
REALIZATIONS A LEADER IN REALIZATIONS & MARGINS Antero continues to be a leader in its peer group in price realizations and EBITDAX unit margins 1Q 2016 Natural Gas Realizations (/Mcf) 1Q 2016 NYMEX 1Q 2016 Average Average Average…
REALIZATIONS FAVORABLE PRICE INDICES Anteros exposure to favorable gas price indices like Chicago, Gulf Coast, NYMEX and TCO is expected to increase to 99% in 2016 Improved 2016 realizations driven by Stonewall gathering pipeline which…
POSITIVE OUTLOOK FOR LONG-TERM NGL MARKETS Forecast global LPG demand growth of 800 MBbl/d to 1 MMBbl/d by 2020 to be driven by petrochem projects in Asia and Middle East as well as residential/commercial, alkylate and power generation…
POSITIVE OUTLOOK FOR LONG-TERM ETHANE MARKETS AS WELL U.S. ethane demand is projected to increase at an annual 3.5% CAGR through 2020, primarily based on an 8% CAGR for U.S. petrochem demand and a 30% growth in exports primarily to…
ASSET OVERVIEW 32
WELL COST REDUCTIONS SUPPORT SUSTAINABLE BUSINESS MODEL Antero has reduced average well costs for a 9,000 lateral by 31% in the Marcellus and 28% in the Utica as compared to 2014 well costs At 3/31/2016 strip pricing, Antero has 2,517…
WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT (1) 100% operated RJ SMITH PAD Operating 6 drilling rigs including BEE LEWIS PAD 30-Day Rate 30-Day Rate 4-well combined 1 intermediate rig 4-well combined 30-Day Rate of 30-Day…
PROLIFIC PREDICTABLE RESULTS ACROSS ENTIRE MARCELLUS POSITION Anteros Marcellus well performance has continued to improve over time with a tight statistical range of results across its entire acreage position Average Antero Marcellus…
INCREASING RECOVERIES AND LOW VARIANCE IN MARCELLUS Anteros Marcellus average 30-day rates have increased by 55% over the past two years as the Company increased per well lateral lengths by 13% and shortened stage lengths by 33%…
WORLD CLASS OHIO UTICA SHALE DEVELOPMENT PROJECT 100% operated Operating 1 drilling rig Cadiz Processing 148,000 net acres in the core rich gas/ Plant condensate window (72% includes processable rich gas assuming an 1100 Btu…
Antero Midstream (NYSE: AM) Asset Overview 38
AMS FULL VALUE CHAIN BUSINESS MODEL Well Pad Condensate Gathering End Stabilization Users (Miles) YE 2015 YE 2016E Compression (Miles) YE 2015 YE 2016E Utica 19 19 Marcellus 76 98 Low Pressure Gathering Utica 36 36 Total 112…
ANTERO MIDSTREAM GATHERING AND COMPRESSION ASSET OVERVIEW Gathering and Compression Assets Utica Gathering and compression assets in core of rapidly Shale growing Marcellus and Utica Shale plays Acreage dedication of 597,000 gross…
ANTERO MIDSTREAM WATER BUSINESS OVERVIEW AM acquired ARs integrated water business for 1.05 billion plus earn out payments of 125 million at year-end in each of 2019 and 2020 The acquired business includes Anteros Marcellus and Utica…
SIGNIFICANT FINANCIAL FLEXIBILITY AM Liquidity (3/31/2016) Financial Flexibility 1.5 billion revolver in place to fund future growth capital ( in millions) (5x Debt/EBITDA Cap) Revolver Capacity 1,500 Liquidity of 834 million at…
KEY CATALYSTS FOR ANTERO 1 Large, low unit cost core Marcellus and Utica natural gas drilling inventory Sustainability of with associated liquids generates attractive returns supported by long-term Anteros Integrated natural gas…
APPENDIX 45
ANTERO CAPITALIZATION CONSOLIDATED Pro Forma(4) ( in millions) 3/31/2016 3/31/2016 Cash 40 40 AR Senior Secured Revolving Credit Facility 680 377 AM Bank Credit Facility 680 680 6.00% Senior Notes Due 2020 525 525 5.375% Senior…
ANTERO RESOURCES UPDATED 2016 GUIDANCE Key Operating & Financial Assumptions Key Variable 2016 Guidance(1) Net Daily Production (MMcfe/d) 1,750 Net Residue Natural Gas Production (MMcf/d) 1,355 Net C3+ NGL Production (Bbl/d)…
ANTERO MIDSTREAM UPDATED 2016 GUIDANCE Key Operating & Financial Assumptions Original Updated Key Variable 2016 Guidance 2016 Guidance Financial: Net Income (MM) N/A 165 - 190 Adjusted EBITDA (MM) 300 - 325 325 - 350 Distributable…
HIGHEST EBITDAX & MARGINS AMONG PEERS Antero has extended its lead among Appalachia Basin peers in both EBITDAX and EBITDAX margin Quarterly Appalachian Peer Group EBITDAX (MM)(1) 500 Y-O-Y AR: 0MM AR has ranked in the top 2 for…
2016 CAPITAL BUDGET Anteros 2016 initial capital budget is 1.4 billion, a 23% decrease from 2015 capital expenditures of 1.8 billion and a 58% decline from 2014 capital expenditures 1.8 Billion 2015(1) 1.4 Billion 2016 By Segment…
HIGHEST PROPORTION HEDGED AMONG E&P OPERATORS Antero has substantially de-risked its cash flow profile and differentiated itself versus its peer group through its extensive hedge portfolio, with 100% of forecasted production hedged in…
LARGEST GAS HEDGE POSITION IN U.S. E&P 3.1 billion mark-to-market unrealized gain based on 3/31/2016 prices 3.6 Tcfe hedged from April 1, 2016 through year-end 2022 COMMODITY HEDGE POSITION BBtu/d Hedged Volume Average Index Hedge…
OUTSTANDING RESERVE GROWTH NET PROVED RESERVES (Tcfe)(1) 2015 RESERVE ADDITIONS Proved reserves increased 4% to 13.2 Tcfe at 12/31/2015 with a pre-tax (Tcfe) Marcellus Utica PV-10 of 6.7 billion at SEC pricing, including 3.1 billion…
CONSIDERABLE RESERVE BASE WITH ETHANE OPTIONALITY 27 year proved reserve life based on 2015 production annualized Reserve base provides significant exposure to liquids-rich projects 3P reserves of over 2.4 BBbl of NGLs and condensate…
MARCELLUS SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Marcellus Well Economics and Total Gross Locations(1) Natural Gas 3/31/2016 strip Oil 3/31/2016 strip 80% 1,500 63% 1,154 Total 3P Locations NGLs 37.5% of Oil Price…
UTICA SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Utica Well Economics and Gross Locations(1) Natural Gas 3/31/2016 strip 100% 300 Oil 3/31/2016 strip 250 Total 3P Locations 80% 64% 64% NGLs 37.5% of Oil Price 2016;…
PORTFOLIO APPROPRIATELY DESIGNED TO ACCOMMODATE GROWTH (BBtu/d) 2016 Firm Transport Antero projects firm transportation in excess of 4,000 Total Firm Transport equity gas production of approximately 1,660 BBtu/d 3,525 BBtu/d in…
FT MARKETING EXPENSE UPDATE Illustrative Marketing Example: No Spread 2016 Projected Marketing Expenses: Unmarketable (EQT / M3) (/MMBtu) ( in millions, except per unit amounts) Demand 2016E 2016E 2016E 2016 TETCO M2 Pricing (Sold…
STRONG FINANCIAL LIQUIDITY AND DEBT TERM STRUCTURE Approximately 3.8 billion of combined AR and AM financial liquidity as of 3/31/2016 pro forma for 762 million equity offering on 6/9/2016 No leverage covenant in AR bank facility, only…
POSITIVE RATINGS MOMENTUM Anteros corporate credit ratings were recently affirmed at Ba2/BB by Moodys and S&P, respectively, despite the severe commodity price down cycle Moodys / S&P Historical Corporate Credit Ratings Moodys Rating…
HEALTH, SAFETY, ENVIRONMENT & COMMUNITY Antero Core Values: Protect Our People, Communities And The Environment Strong West Virginia Keys to Execution Presence Antero has more than 3,500 employees and contract personnel working…
CLEAN FLEET & CNG TECHNOLOGY LEADER Antero has contracted for two clean completion fleets to enhance the economics of its completion operations and reduce the environmental impact Replaces diesel engines (for pressure pumping) with…
2015 GLOBAL LPG DEMAND Global LPG demand is 8.5 MMBbl/d and growing 63
GLOBAL LPG DEMAND DRIVEN BY PETCHEM AND RES/COMM Largest end-use sectors for LPG are residential/commercial, which tends to grow with population and improvement in living standards in the emerging markets PIRA forecasting 1.0 MMBbl/d…
GLOBAL LPG TRADE DRIVEN BY U.S. SHALE The U.S. is the largest single driver of the rapid expansion in LPG trade accounting for over 90% in trade growth MMBbl/d 5.2 4.6 3.9 3.3 2.6 2.0 United States 1.3 0.7 1.…
U.S. SHALE NGL EURS SUPPORT LPG TRADE GROWTH U.S. shale play NGL reserves are 50.8 billion barrels (1) Eagle Ford, Marcellus, Utica, Bakken and Permian are the work horses of U.S. shale production growth Marcellus/Utica NGL resource…
NGL EXPORTS AND NETBACKS STEP-UP BY 2Q 2017 Upon in-service of Mariner East II, Antero will have the ability to market its propane and n-butane to international buyers, which we expect will provide uplifts of 0.16/Gal and 0.18/Gal,…
ANTERO RESOURCES DECEMBER 31, 2015 RESERVES Anteros proved reserves were 13.2 Tcfe, while its 3P reserves were 37.1 Tcfe Proved pre-tax PV-10 at strip prices was 5.7 billion, while the 3P pre-tax PV-10 was 11.2 billion Including…
ANTERO RESOURCES EBITDAX RECONCILIATION EBITDAX Reconciliation ( in millions) Quarter Ended LTM Ended 3/31/2016 3/31/2016 EBITDAX: Net income including noncontrolling interest 10.7 591.5 Commodity derivative fair value (gains)…
ANTERO MIDSTREAM EBITDA RECONCILIATION EBITDA and DCF Reconciliation Three months ended in thousands March 31, 2015 2016 Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow: Net income 32,327 42,918 Add:…
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