CHANGES SINCE OCTOBER 2016 PRESENTATION Updated AR slide showing Q3 gas and equivalent Slide 31 realizations and performance versus peers Updated AR slide showing 3Q 2016 EBITDAX and Slide 33 margin performance versus peers Updated…
ANTERO PROFILE Market Cap........ 8.5 billion Enterprise Value(1)..........14.3 billion LTM EBITDAX........1.4 billion Net Debt/LTM EBITDAX(2)..3.2x Net Production (3Q 2016)..1,875 MMcfe/d 3P Reserves(3).........42.1 Tcfe %…
WHY OWN ANTERO Revised production growth guidance to 20% for 2016 or 1.8 Bcfe/d Momentum + 20% to 25% production growth target for 2017 or 2.16 to 2.25 Bcfe/d Growth 6 rigs currently running, 70 DUCs at YE 2016 50% to 78% ROR at…
LONGER LATERALS IMPROVE WELL ECONOMICS Antero has been a leader in drilling longer laterals in Appalachia due to its consolidated acreage position and horizontal drilling experience Antero Marcellus Highly-Rich Gas/Condensate (1275…
OPTIMIZING WELL RECOVERIES WITH HIGHER INTENSITY COMPLETIONS Driving value by drilling more productive wells in the Marcellus Marcellus Cumulative Gas Production Curves (Normalized to 9,000 Lateral) Vintage 2013 2014 2015 2016E…
IMPROVING MARCELLUS WELL ECONOMICS 36% 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 2016/2017 Development Plan: Completions…
HEDGE BOOK CAPTURES SIGNIFICANT NATURAL GAS PREMIUM Antero natural gas hedges not only protect the downside price risk, they average 0.85/MMbtu above 9/30/2016 strip pricing through 2019 resulting in a 2.2 billion mark-to-market…
ABUNDANT FREE CASH FLOW AVAILABLE FOR GROWTH Antero needs only 275 million and 200 million of maintenance capital in 2016 and 2017, respectively, to keep production flat - Leaves over 1 billion of annual cash flow in 2016 and 2017 to…
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 59% Expecting significant improvement in propane (C3) and…
C3+ VOLUME GROWTH AND PRICE RECOVERY Antero has 2.7 BBbls 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 Mont Belvieu pricing Propane…
POSITIONED TO BENEFIT FROM ETHANE PRICE RECOVERY Antero has significant exposure to upside in ethane prices (C2) Ethane Prices (/Gallon)(1) Ethane Upside Impact to AR(3) 0.80 Ethane Futures (ICE) Incremental EBITDAX Attributable to…
CLOSED MARCELLUS ACQUISITION Strategic core inventory addition of Marcellus Pro Forma Acreage Position acreage and 3P reserves for 518 million 48% HBP with additional 44% not expiring until 2019+ Southern Rich 16 MMcfe/d of net…
LARGEST CORE DRILLING INVENTORY Antero has the largest core acreage position in Appalachia and is the most active producer, operating 11% of all rigs running and 42% of rigs running in liquids rich core areas 587 Leading…
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 Net 3P Reserves & Resource(1) 57…
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 drilling times from spud of surface to final release and up to 25% off drilling AFEs Key Drilling Highlights: Top…
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 11.1 10.8 36% Reduction in 12 0.86 / 1,000 10.2 10.2 Marcellus well costs 10 since…
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 3Q 2016 completions had average…
GROWTH & MOMENTUM THROUGH THE DOWN CYCLE Antero is in the unique position of sustaining growth and value creation through the price down cycle AVERAGE NET DAILY PRODUCTION (MMcfe/d) AVERAGE NET DAILY LIQUIDS PRODUCTION (Bbl/d)…
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…
WELL ECONOMICS SUSTAINABLE BUSINESS MODEL At 9/30/2016 strip pricing, Antero has 2,713 locations with well economics that exceed 20% 9/30/2016 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 12.1 Billion Enterprise Value(1) Ba2/BB Corporate Rating 39% LP Interest…
TAKEAWAY LARGEST FT PORTFOLIO IN NORTHEAST 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 weighted average…
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 9/30/2016 Debt Liquid Non-E&P Assets 9/30/2016 Debt (4) Liquid Assets Debt Type MM Asset Type MM Debt Type MM Asset Type MM…
LIQUIDITY ATTRACTIVE DEBT TERM STRUCTURE Approximately 4.0 billion of combined AR and AM financial liquidity as of 9/30/2016, pro forma for 175 million AR PIPE on 10/3/2016 and 170 million acreage divestiture announced on 10/25/2016…
REALIZATIONS A LEADER IN REALIZATIONS & MARGINS Antero continues to be a leader in its peer group in price realizations and EBITDAX unit margins 3Q 2016 Natural Gas Realizations (/Mcf) 3Q 2016 NYMEX 3Q 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 Appalachian Basin peers in both EBITDAX and EBITDAX margin Quarterly Appalachian Peer Group EBITDAX (MM)(1) Among Appalachian peers, AR has ranked…
REALIZATIONS DRIVEN BY ANTEROS DIFFERENTIATED STRATEGY Unit Cash Cost vs. 3-Year Average Realized Pricing(1)(2)(3)(4) Differentiated Strategy 3 5.00 Hedging delivers 0.56 per Mcfe premium to realized prices Post-Hedge Price 1 Firm…
REALIZATIONS ANTERO FIRM TRANSPORT ELIMINATES NORTHEAST BASIS RISK Antero Expected Pricing: 2016-2020 (/MMBtu) Forecasted Realized Natural Gas Price (1) Nymex + 0.10 - Average FT Expense (operating expense) (0.46) - Average Net…
Antero Midstream (NYSE: AM) Asset Overview 36
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 2016E…
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 (9/30/2016) Financial Flexibility 1.5 billion revolver in place to fund future growth capital ( in millions) (5.0x Debt/EBITDA Cap) Revolver Capacity 1,157 Liquidity of 996 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 86% of forecasted production hedged through 2019 at Cash Flow Growth 3.72/MMBtu, a 0.78 premium to strip 2…
APPENDIX 43
ANTERO CAPITALIZATION CONSOLIDATED Pro Forma(4) ( in millions) 9/30/2016 9/30/2016 Cash 19 19 AR Senior Secured Revolving Credit Facility 605 260 AM Bank Credit Facility 170 170 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…
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…
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…
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 2.4 billion mark-to-market unrealized gain based on 9/30/2016 prices 3.5 Tcfe hedged from October 1, 2016 through year-end 2022 at 3.65 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) PV-10 of 6.7 billion at SEC pricing, including 3.1 billion of hedges…
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 79% over the past three years as the Company increased per well lateral lengths by 20% and shortened stage lengths by 53%…
MARCELLUS SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Marcellus Well Economics and Total Gross Locations(1) Natural Gas 9/30/2016 strip 80% 76% 1,500 Oil 9/30/2016 strip 1,235 Total 3P Locations NGLs 37.5% of Oil…
UTICA SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Utica Well Economics and Gross Locations(1) Natural Gas 9/30/2016 strip 93% 98% 100% 300 Oil 9/30/2016 strip 80% 76% 250 Total 3P Locations 80% NGLs 37.5% of Oil Price…
PORTFOLIO APPROPRIATELY DESIGNED TO ACCOMMODATE GROWTH (BBtu/d) 2016 Firm Transport 4,000 Total Firm Transport Antero projects firm transportation in excess of equity gas production of approximately 1,660 BBtu/d 3,525 BBtu/d in 2016…
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…
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…
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 9/30/2016 9/30/2016 EBITDAX: Net income including noncontrolling interest 268.2 (121.1) Commodity derivative fair value (gains)…
ANTERO MIDSTREAM EBITDA RECONCILIATION EBITDA and DCF Reconciliation Nine months ended in thousands September 30, 2015 2016 Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow: Net income 110,097 163,352…
CAUTIONARY NOTE Regarding Hydrocarbon Quantities The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserve estimates (collectively, 3P). Antero has provided internally…
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