CHANGES SINCE AUGUST 2016 PRESENTATION Updated AR 2016 production and operating cost Slides 9, 20, 48 guidance Updated AM 2016 Net Income, EBITDA and Slides 43, 49 Distributable Cash Flow guidance 2
WHY OWN ANTERO Revised production growth guidance for 2016 to 20% or 1.8 Bcfe/d Momentum + 20% to 25% growth target for 2017 or 2.16 to 2.25 Bcfe/d Growth 6 rigs currently running, 70 DUCs at YE 2016 Production Sold 94% of…
ACQUISITION OVERVIEW Tag along option recently exercised on 11,500 net acres Strategic core inventory addition of 66,500 net acres and 5.0 Tcfe of Pro Forma Acreage Position Marcellus 3P reserves for 546 million purchase price (1)…
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…
INCREASES MARCELLUS HIGH-GRADED DRY GAS INVENTORY Industry - 8 Well Average Advanced Completions High-Graded Wellhead: 2.6 Bcf/1,000 Adds significant high quality Marcellus dry Acquisition Acreage Processed: 2.8 Bcfe/1,000 Dry Gas…
ACQUISITION DRIVES FIRM TRANSPORT UTILIZATION Incremental gas production from accelerated Integrated Firm Transportation Portfolio development will flow to favorably priced indices through ARs existing firm Acquired Acreage…
ANTERO MIDSTREAM VALUE CREATION OPPORTUNITY A unique opportunity as most Appalachian core acreage is already dedicated to third party midstream providers Acquisition increases Antero Midstream footprint Antero Midstream Buildout and…
NGL GROWTH AND ETHANE OPTIONALITY Antero continues to rapidly grow its liquids production, with 2015 year-over-year growth of 117% and 2016 NGL production growth guidance of 71% Developing significant ethane optionality with an estimated…
ETHANE RECOVERY ECONOMICS AND POTENTIAL VOLUMES RECOVERING ETHANE: ARBITRAGE VS. NATURAL GAS PRICING Example C2 Recovery Decision Assuming ATEX costs are sunk and Assuming 3.00/MMBtu Natural Gas NYMEX gas prices are 3.00/MMBtu, C2…
POSITIONED TO BENEFIT FROM ETHANE PRICE RECOVERY Antero has significant exposure to upside in ethane price (C2) Ethane Prices (/Gallon)(1) Ethane Upside Impact to AR(3) 0.80 Ethane Futures (ICE) Incremental EBITDAX Attributable to…
C3+ VOLUME GROWTH AND PRICE RECOVERY Antero has 2.7 billion Bbls of net 3P NGL reserves Mariner East 2 is expected to be in-service by mid-year 2017 which should significantly reduce Anteros differential to MB pricing Propane Pricing…
GROWTH ENGINE THROUGH 2020 AND BEYOND Antero plans to develop over 1,000 horizontal locations in the Marcellus and Ohio Utica by the end of the decade while utilizing less than 25% of its current 3P drilling inventory PLANNED ANTERO…
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 AR COMBINED TOTAL 12/31/15 RESERVES Assumes Ethane Rejection Net Proved Reserves 13.2 Tcfe Net 3P Reserves(1) 42.1 Tcfe Strip Pre-Tax 3P PV-10(2) 12.7 Bn SW Marcellus + Utica Rigs(4) Net…
DRILLING CONTINUOUS OPERATING IMPROVEMENT Operating Highlights Utica Shale Ohio Marcellus Shale Top 20 best drilling footage days in Marcellus since 2009 have all occurred in 2016, including 7,274 drilled in 24 hours in West…
DRILLING STEP CHANGE IN AR MARCELLUS DRILLING FOOTAGE New drilling techniques and technologies are shaving 10 days off lateral drilling times and up to 25% off drilling AFEs Key Drilling Highlights: Top 50 AR Marcellus Daily Footage…
DRILLING MARCELLUS IMPROVEMENTS DRIVING VALUE CREATION High correlation of EURs to lateral length no degradation in results out to 12,000 laterals Antero has led the way with long lateral drilling programs 2Q 2016 completions had average…
DRILLING PROVEN TRACK RECORD OF WELL COST REDUCTIONS Marcellus Well Cost Reductions for a 9,000 Lateral (MM)(1) 14 COMPLETION COST DRILLING COST 12.3 12 11.1 34% Reduction in 10.8 0.90 / 1,000 10.2 10.2 Marcellus well costs 10…
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 20% year-over-year net production growth for 2016 by spending only 675 million, or approximately 500 million less than the 900 million of expected hedge revenues for the…
WELL ECONOMICS MARCELLUS UPSIDE POTENTIAL 33% lower well cost per 1,000 lateral and 33% higher EUR per 1,000 since 2014 are driving rates of return significantly higher despite lower strip pricing 35/24 Pre-Tax PV-10 Pre-Tax ROR…
WELL ECONOMICS SUSTAINABLE BUSINESS MODEL At 6/30/2016 strip pricing, Antero has 2,713 locations with well economics that exceed 20% 6/30/2016 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 11.9 Billion Enterprise Value(1) Ba2/BB Corporate Rating 39% 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, for an average demand fee of 0.46/MMBtu and positive…
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 modest at well under 10% of EBITDA Columbia Stonewall/Tennessee Momentum III EQT…
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 6/30/2016 Debt Liquid Non-E&P Assets 6/30/2016 Debt Liquid Assets Debt Type MM Asset Type MM Debt Type MM Asset Type MM…
REALIZATIONS A LEADER IN REALIZATIONS & MARGINS Antero continues to be a leader in its peer group in price realizations and EBITDAX unit margins 2Q 2016 Natural Gas Realizations (/Mcf) 2Q 2016 NYMEX 2Q 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…
REALIZATIONS 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 Among Appalachian peers, AR has…
REALIZATIONS DRIVEN BY INCREMENTAL COSTS Anteros business strategy including firm transport to favorable markets, focus on liquids-rich drilling and hedging deliver market leading financial results Unit Cash Cost vs. 3-Year Average…
ASSET OVERVIEW 35
WELL COST REDUCTIONS SUPPORT SUSTAINABLE BUSINESS MODEL Antero has reduced average well costs for a 9,000 lateral by 33% in the Marcellus and 33% in the Utica as compared to 2014 well costs At 6/30/2016 strip pricing, Antero has 2,713…
WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT 100% operated (1) Operating 6 drilling rigs including 1 LIVINGSTON UNIT VINOLA UNIT intermediate rig 30-Day Rate 30-Day Rate 1H: 18.6 MMcfe/d 1H: 19.7 MMcfe/d 494,000 net acres pro…
WORLD CLASS OHIO UTICA SHALE DEVELOPMENT PROJECT 100% operated Operating 1 drilling rig Cadiz Processing 147,000 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 39
AMS FULL VALUE CHAIN BUSINESS MODEL AM recently exercised its option on 15% interest in Stonewall, adding a regional gas gathering pipeline to its portfolio Well Pad Condensate Gathering End Stabilization Users (Miles) YE 2015 YE…
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 576,000 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 (6/30/2016) 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 749 million at…
KEY CATALYSTS FOR ANTERO 1 Guiding to production growth of 20% in 2016 and targeting 20% to 25% in Production and 2017, with 94% of forecasted production hedged through 2018 at Cash Flow Growth 3.81/MMBtu, a 0.76 premium to strip 2…
APPENDIX 46
ANTERO CAPITALIZATION CONSOLIDATED Pro Forma(4) ( in millions) 6/30/2016 6/30/2016 Cash 28 28 AR Senior Secured Revolving Credit Facility 140 556 AM Bank Credit Facility 760 760 6.00% Senior Notes Due 2020 525 525 5.375% Senior…
ANTERO RESOURCES UPDATED 2016 GUIDANCE Key Operating & Financial Assumptions Updated Previous Key Variable 2016 Guidance(1) 2016 Guidance Net Daily Production (MMcfe/d) 1,800 1,750 Net Residue Natural Gas Production (MMcf/d) 1,365…
ASSET ACQUISITION SUMMARY UPDATE Update: With tag along right exercised, final Pro Forma Acreage Position acquisition metrics set out below: Purchase Price: 546 million Assets: 66,500 net acres primarily located in Wetzel, Tyler and…
LEADERSHIP IN MARCELLUS HIGH-GRADED CORE Anteros internal reserve engineers have analyzed over 3,000 wells in southwest Marcellus, which led to the high- Southwest Marcellus High-Graded Core graded core outlines to the right…
PRO FORMA ACQUISITION METRICS AR AR % Current Acquisition Pro Forma Increase Acreage: Net Marcellus Acres: 427,000 66,500 493,500 16% Total Net Acres: 574,000 66,500 640,500 12% Dry Gas Utica Net Acres (Stacked Pay): 191,000 51,000…
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 high yield…
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 redetermination…
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…
LARGEST GAS HEDGE POSITION IN U.S. E&P 2.1 billion mark-to-market unrealized gain based on 6/30/2016 prices 3.4 Tcfe hedged from July 1, 2016 through year-end 2022 at 3.71 per MMBtu COMMODITY HEDGE POSITION BBtu/d Hedged Volume…
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…
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%…
MARCELLUS SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Marcellus Well Economics and Total Gross Locations(1) Natural Gas 6/30/2016 strip Oil 6/30/2016 strip 80% 69% 1,500 1,235 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 6/30/2016 strip 100% 300 79% 84% Oil 6/30/2016 strip 71% 250 Total 3P Locations 80% 70% NGLs 37.5% of Oil Price…
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 3.9 billion of combined AR and AM financial liquidity as of 6/30/2016 No leverage covenant in AR bank facility, only interest coverage and working capital covenants PRO…
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 two clean completion fleets operating to both enhance the economics of its completion operations and reduce the environmental impact Replaces diesel engines (for pressure pumping) with…
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…
2015 GLOBAL LPG DEMAND Global LPG demand is 8.5 MMBbl/d and growing 70
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 6/30/2016 6/30/2016 EBITDAX: Net income including noncontrolling interest (575.5) 155.5 Commodity derivative fair value (gains)…
ANTERO MIDSTREAM EBITDA RECONCILIATION EBITDA and DCF Reconciliation Six months ended in thousands June 30, 2015 2016 Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow: Net income 67,451 92,829 Interest…
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