Goldman Sachs Global Energy Conference January 5, 2017
ANTERO PROFILE Market Cap.... 7.4 billion Enterprise Value(1).........13.3 billion LTM EBITDAX....... 1.4 billion Net Debt/LTM EBITDAX(2)3.2x Net Production (3Q 2016) 1,875 MMcfe/d % Liquids..........................26% 3P…
DELIVERING ON OCTOBER 2013 IPO PROMISE At IPO (October 2013) Current Change 431,000 Net Acres 629,000 Net Acres (5) Acreage: +46% Leading consolidator since IPO adding 200,000 net acres Net Production (1): 458 MMcfe/d…
A LEADING CONSOLIDATOR IN APPALACHIA Activity 2016 Acquisitions and Antero Footprint Antero capitalized on the industry 46,500 net acres environment in 2016 to acquire approximately 3,900 net acres 66,700 net acres in the core of…
2017 GUIDANCE AND LONG TERM OUTLOOK ANNOUNCED (Bcfe/d) Production Growth: 4.0 3.5 Net Daily Production 3.0 Guidance 2.5 2.2 Long-Term Targets 1.8 3.70 Hedged Volume 2.0 3.47 3.91 Hedged Price (/Mcfe) 1.5 4.04 3.66…
KEY DRIVERS BEHIND LONG TERM OUTLOOK Deep Drilling Inventory Drilling Inventory Improving Capital Efficiencies Capital Efficiency Strong Well Performance Well Performance Visible, Attractive Price Realizations Price…
DRILLING INVENTORY LARGEST CORE ACREAGE POSITION IN APPALACHIA Antero has the largest core acreage position in Appalachia, particularly as it relates to undeveloped acreage and is running 36% of the total rigs in liquids-rich core…
DRILLING INVENTORY LARGEST CORE DRILLING INVENTORY IN APPALACHIA Antero has greater than 2x as many core drilling locations of its nearest competitor and 4x as many core liquids-rich locations as nearest competitor Undrilled Core…
DRILLING INVENTORY LOW BREAKEVEN PRICES Antero has a 14 year drilling inventory at 3.00 natural gas or less at the 2017 development pace (170 completions) Cumulative Drilling Inventory Breakeven Prices at 20% ROR (1)(2) Marcellus…
DRILLING INVENTORY MULTI-YEAR GROWTH ENGINE Antero plans to develop over 800 horizontal locations in the Marcellus and Ohio Utica by the end of the decade while utilizing less than 20% of its current 3P drilling inventory Planned…
CAPITAL EFFICIENCY CONTINUOUS OPERATING IMPROVEMENT Driving drilling and completion efficiencies which continues to lower well costs Dramatic Decrease in Drilling Days Increasing Completion Stages per Day Drilling longer laterals…
CAPITAL EFFICIENCY DRAMATICALLY LOWER F&D COST Enhanced completion designs have contributed to improved recoveries and capital efficiency Increasing Proppant Per Foot Increasing Water Per Foot Higher proppant concentration has Higher…
CAPITAL EFFICIENCY LONGER LATERALS IMPROVE ROR Anteros typical Marcellus well in 2017 will have a 9,200 lateral length, an EUR of 22.3 Bcfe, including 857 MBbls of NGLS and 66 MBbls of oil and cost 7.7 MM(1) Antero 2016 average…
CAPITAL EFFICIENCY DRIVING CASH FLOW GROWTH Anteros capital efficiency has reduced outspend while maintaining its growth profile and is expected to deliver cash flow from operations higher than drilling and completion capex through…
CAPITAL EFFICIENCY ABUNDANT FREE CASH FLOW AVAILABLE FOR GROWTH Antero can deliver 20% to 25% year-over-year net production growth in 2017 by spending only 650 million in 2017 Antero Drilling & Completion Capital Budget MM 1,600…
CAPITAL EFFICIENCY MITIGATING SERVICE COST EXPOSURE Antero has limited its exposure to service cost increases over the next few years through long-term agreements with drilling contractors and completion services Drilling Rigs (1)…
WELL PERFORMANCE OPTIMIZING WELL RECOVERIES WITH HIGHER INTENSITY COMPLETIONS Marcellus Cumulative Natural Gas Production Curves (Normalized to 9,000 Lateral) Vintage 2013 2014-15 2016E Change Wellhead 5,000 EUR/1,000 Wells 114…
WELL PERFORMANCE MARCELLUS COMPLETION SIZE EVOLUTION Antero plans to continue to increase proppant intensity in 2017 primarily utilizing 1,750 and 2,000 lb/ft completions in the Marcellus 3,000 Per Well Frac Size Testing higher…
WELL PERFORMANCE IMPROVING MARCELLUS RETURNS Antero expects to complete 114 wells in 2017 in the highly-rich gas regimes where 2016 advanced completions are tracking 2.0 Bcf/1,000 of lateral Highly-Rich Gas/Condensate(1) Highly-Rich…
PRICE REALIZATIONS ANTERO FIRM TRANSPORT MITIGATES NORTHEAST BASIS RISK Antero Expected Pricing: 2017-2020 (/MMBtu) Forecasted Realized Natural Gas Price (1) Nymex + 0.10 - Average FT Expense (operating expense) (0.46) - Average…
PRICE REALIZATIONS FAVORABLE PRICE INDICES Antero expects to realize a premium to NYMEX gas prices before hedges through 2020 (/Mcf) 2018-2020 2016E 2017E Target (1) 2.46 3.63 2.96 Basis Differential to NYMEX(1) (0.20) (0.29)…
PRICE REALIZATIONS NGL GROWTH AND EXPOSURE ANTERO IS THE LARGEST C3+ LIQUIDS PRODUCER IN THE NORTHEAST NGL Production Growth by Purity Product (Bbl/d) (MM) Natural Gasoline (C5+) IsoButane (iC4) (Bbl/d) Propane Revenue Sensitivity…
PRICE REALIZATIONS HIGH LEVERAGE TO LIQUIDS PRICES AND LIMITED DOWNSIDE EXPOSURE TO NATURAL GAS PRICES Antero has hedged only 8% of its 3P reserve base leaving significant cash flow upside to commodity price improvements Cumulative…
SIGNIFICANT CASH FLOW GROWTH DRIVES DECLINING LEVERAGE PROFILE Visible cash flow growth given hedges, firm transportation portfolio, and capital efficient long- term development plan targeting 20% to 22% production CAGR (1) Consensus…
BALANCE SHEET LIQUIDITY & DEBT TERM STRUCTURE - Approximately 4.1 billion of combined AR and AM financial liquidity as of 9/30/2016 (1)(2), including 600 million senior note offering - No leverage covenant in AR bank facility, only…
ANTERO MIDSTREAM FULL VALUE CHAIN MODEL Owns a 61% limited partnership interest in Antero Midstream, which has a 2.4 billion project inventory for gathering, compression and water infrastructure buildout through 2020, simply meeting…
HIGHEST EBITDAX & MARGINS AMONG APPALACHIAN PEERS Antero has extended its lead among Appalachian Basin peers in both EBITDAX and EBITDAX margin Quarterly Appalachian Peer Group Consolidated EBITDAX (MM)(1) 500 Among Appalachian peers,…
2017 2020 OUTLOOK Significant natural gas demand growth through 2020 Macro Continued oil and NGL price recovery 20% to 25% production growth guidance for 2017 20% to 22% production growth CAGR targets for 2018 2020 Forecast a…
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APPALACHIA WILL SUPPLY NATURAL GAS DEMAND GROWTH As LNG exports, Mexico exports and power generation drive demand, gas supply growth through 2020 is expected to be primarily driven by the Marcellus and Utica shales, given their low full…
17 BCF/D OF INCREMENTAL GAS DEMAND BY 2020 Significant demand growth expected for U.S. Projected Incremental Natural Gas Demand Through 2020 natural gas (Bcf/d) 8.9 Bcf/d of the 16.8 Bcf/d of incremental demand is More than 70% of…
ANTERO RESOURCES 2017 GUIDANCE Key Operating & Financial Assumptions Key Variable 2017 Guidance(1) Net Daily Production (MMcfe/d) 2,160 2,250 Net Residue Natural Gas Production (MMcf/d) 1,625 1,675 Net C3+ NGL Production (Bbl/d)…
MOST ACTIVE OPERATOR IN APPALACHIA AR COMBINED TOTAL 12/31/15 RESERVES OHIO UTICA SHALE CORE MARCELLUS SHALE CORE Assumes Ethane Rejection Net Proved Reserves 1.8 Tcfe Net Proved Reserves 11.4 Tcfe Net Proved Reserves 13.2 Tcfe Net…
MARCELLUS SINGLE WELL ECONOMICS IN ETHANE REJECTION Marcellus Well Economics and Total Gross Locations(1) Assumptions Natural Gas 12/30/2016 strip 80% 73% 1,111 1,200 Total 3P Locations Oil 12/30/2016 strip 883 1,000 NGLs 50%…
UTICA SINGLE WELL ECONOMICS IN ETHANE REJECTION Utica Well Economics and Gross Locations(1) Assumptions Natural Gas 12/30/2016 strip 120% 300 Total 3P Locations Oil 12/30/2016 strip 100% 82% 80% 250 80% 72% 200 NGLs 50% of Oil…
WELL COST REDUCTIONS Marcellus Well Cost Reductions for a 9,000 Lateral (MM)(1) 14.0 COMPLETION COST DRILLING COST 12.3 12.0 11.1 38% Reduction in 10.8 0.84 / 1,000 10.2 10.2 Marcellus well costs 10.0 since Q4 2014 8.5 8.1 7.8…
UPSIDE IN C3+ PRICE RECOVERY EVERY 0.10/GAL INCREASE IN PROPANE DRIVES AN INCREMENTAL 45 MILLION INCREASE IN ANNUAL REVENUE (1) Revenue Sensitivity to Propane Recovery Mont Propane Belvieu Production Revenue MTB 0.75/gal 600 Pricing…
ANTERO HAS SIGNIFICANT EXPOSURE TO UPSIDE IN ETHANE (C2) PRICES BENTEK FORECASTS ETHANE PRICES TO INCREASE TO MORE THAN 0.50 / GALLON BY 2018 AND BEYOND Incremental EBITDAX Attributable to Ethane Recovery(1) 450 414 0.60/gal 400…
LARGEST FT PORTFOLIO IN NORTHEAST Antero Long Term Firm Processing & Takeaway Position (YE 2018) Accessing Favorable Markets Dom Mariner East 2 Chicago(1) Shell South(1) 62 MBbl/d Commitment YE 2018 Gas Market Mix 0.05 / 30 MBbl/d…
INCREMENTAL ANTERO TAKEAWAY CAPACITY Approximately 65% of Anteros expected firm transportation capacity is in service today Antero Capacity on Northeast Takeaway Projects 6.0 5.0 700 MMcf/d 4.8 Bcf/d 200 MMcf/d 4.0 800…
KEY APPALACHIAN TAKEAWAY PROJECTS Based on current publicly disclosed in-service dates, by the end of 2019, nine major incremental projects are expected to be in service, resulting in new takeaway capacity of nearly 16 Bcf/d 4.8…
KEY APPALACHIAN NEW TAKEAWAY PROJECTS: UNLOCKING THE NORTHEAST 18,000 1,500 17,632 700 MMcf/d By year-end 2019, an incremental Atlantic Coast 17.6 Bcf/day of new takeaway 4,660 16,000 capacity is expected to be in service…
LARGEST GAS HEDGE POSITION IN U.S. E&P 2.4 billion mark-to-market unrealized gain based on 9/30/2016 prices with 3.5 Tcfe hedged from October 1, 2016 through year-end 2022 at 3.65 per MMBtu Commodity Hedge Position BBtu/d Hedged…
STRONG BALANCE SHEET AND HIGH FLEXIBILITY Antero Resources (NYSE:AR) Antero Midstream (NYSE:AM) Pro Forma 9/30/2016 Debt(1) Liquid Non-E&P Assets 9/30/2016 Debt (1) Liquid Assets Debt Type MM Asset Type MM Debt Type MM Asset Type MM…
ANTERO CAPITALIZATION CONSOLIDATED As Adjusted Pro Forma(4) Pro Forma(5) ( in millions) 9/30/2016 9/30/2016 9/30/2016 Cash 19 19 19 AR Senior Secured Revolving Credit Facility 605 260 208 AM Bank Credit Facility 170 170 170 6.00%…
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…
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