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February 2017 Company Overview – Antero Resources

Antero Resources · Feb 10, 2017 · 56 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

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  1. February 2017 Company Overview – Antero Resources – slide 1
    Company Overview February 2017
  2. February 2017 Company Overview – Antero Resources – slide 2
    ANTERO PROFILE Market Cap.... 8.0 billion Enterprise Value(1)(2)......13.8 billion LTM EBITDAX....... 1.4 billion Net Debt/LTM EBITDAX(2)3.2x Net Production (3Q 2016) 1,875 MMcfe/d % Liquids..........................26% 3P…
  3. February 2017 Company Overview – Antero Resources – slide 3
    DELIVERING ON OCTOBER 2013 IPO PROMISE At IPO (October 2013) Current Change 431,000 Net Acres 624,000 Net Acres (5) Acreage: +45% Leading consolidator since IPO adding 200,000 net acres Net Production (1): 458 MMcfe/d…
  4. February 2017 Company Overview – Antero Resources – slide 4
    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…
  5. February 2017 Company Overview – Antero Resources – slide 5
    OUTSTANDING 2016 RESERVE GROWTH NET PROVED RESERVES (Tcfe)(1) 2016 RESERVE ADDITIONS Proved reserves increased 16% to 15.4 Tcfe (Tcfe) Marcellus Utica Proved pre-tax PV-10 at SEC pricing of 6.7 billion, including 15.4 3.0 billion…
  6. February 2017 Company Overview – Antero Resources – slide 6
    2017 GUIDANCE AND LONG TERM OUTLOOK (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 1.0 0.5…
  7. February 2017 Company Overview – Antero Resources – slide 7
    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…
  8. February 2017 Company Overview – Antero Resources – slide 8
    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…
  9. February 2017 Company Overview – Antero Resources – slide 9
    DRILLING INVENTORY LARGEST CORE DRILLING INVENTORY IN SOUTHWEST APPALACHIA Antero has greater than 2x as many core drilling locations of its nearest competitor and over 4x as many core liquids-rich locations as nearest competitor…
  10. February 2017 Company Overview – Antero Resources – slide 10
    DRILLING INVENTORY LOW BREAKEVEN PRICES Antero has a 15 year drilling inventory at 3.00 natural gas or less at the 2017 development pace (170 completions), excluding 2,000 incremental locations representing additional 15 Tcf risked…
  11. February 2017 Company Overview – Antero Resources – slide 11
    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 25% of its current 3P drilling inventory Planned…
  12. February 2017 Company Overview – Antero Resources – slide 12
    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…
  13. February 2017 Company Overview – Antero Resources – slide 13
    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…
  14. February 2017 Company Overview – Antero Resources – slide 14
    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…
  15. February 2017 Company Overview – Antero Resources – slide 15
    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…
  16. February 2017 Company Overview – Antero Resources – slide 16
    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)…
  17. February 2017 Company Overview – Antero Resources – slide 17
    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 Stage Length…
  18. February 2017 Company Overview – Antero Resources – slide 18
    WELL PERFORMANCE MARCELLUS COMPLETION 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 proppant…
  19. February 2017 Company Overview – Antero Resources – slide 19
    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…
  20. February 2017 Company Overview – Antero Resources – slide 20
    PRICE REALIZATIONS 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…
  21. February 2017 Company Overview – Antero Resources – slide 21
    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…
  22. February 2017 Company Overview – Antero Resources – slide 22
    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)…
  23. February 2017 Company Overview – Antero Resources – slide 23
    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…
  24. February 2017 Company Overview – Antero Resources – slide 24
    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…
  25. February 2017 Company Overview – Antero Resources – slide 25
    PRICE REALIZATIONS 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…
  26. February 2017 Company Overview – Antero Resources – slide 26
    SIGNIFICANT CASH FLOW GROWTH 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%…
  27. February 2017 Company Overview – Antero Resources – slide 27
    BALANCE SHEET 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…
  28. February 2017 Company Overview – Antero Resources – slide 28
    Antero Midstream (NYSE: AM) Asset Overview 28
  29. February 2017 Company Overview – Antero Resources – slide 29
    MLP (NYSE: AM) HIGHLIGHTS SUBSTANTIAL VALUE IN MIDSTREAM BUSINESS Corporate Structure Overview Antero Resources Corporation (NYSE: AR) 68% Public 11.6 Billion Enterprise Value(1) Interest Public Ba2/BB Corporate Rating 40% LP…
  30. February 2017 Company Overview – Antero Resources – slide 30
    FULL MIDSTREAM VALUE CHAIN BUILDOUT Processing and fractionation infrastructure adds to AMs full value chain model Well Pad Condensate Gathering End Stabilization Users Compression Low Pressure Gathering Terminals Gas…
  31. February 2017 Company Overview – Antero Resources – slide 31
    JOINT VENTURE OVERVIEW Antero Midstream (NYSE: AM) and MPLX (NYSE: MPLX) have formed a 50/50 joint venture for processing and fractionation infrastructure in the core of the liquids-rich Marcellus and Utica Shales Strategic Rationale…
  32. February 2017 Company Overview – Antero Resources – slide 32
    ANTERO MIDSTREAM GATHERING AND COMPRESSION ASSET OVERVIEW Gathering and Compression Assets Gathering and compression assets in core of rapidly growing Marcellus and Utica Shale plays Acreage dedication of 576,000 gross leasehold…
  33. February 2017 Company Overview – Antero Resources – slide 33
    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…
  34. February 2017 Company Overview – Antero Resources – slide 34
    HIGH GROWTH MIDSTREAM THROUGHPUT Low Pressure Gathering (MMcf/d) High Pressure Gathering (MMcf/d) 2,000 Marcellus Utica 2,000 Marcellus Utica 1,800 1,800 1,600 1,431 1,600 1,303 1,353 1,351 1,400 1,400 1,216 1,195 1,222 1,253…
  35. February 2017 Company Overview – Antero Resources – slide 35
    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 999 million at…
  36. February 2017 Company Overview – Antero Resources – slide 36
    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…
  37. February 2017 Company Overview – Antero Resources – slide 37
    APPENDIX 38 38
  38. February 2017 Company Overview – Antero Resources – slide 38
    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)…
  39. February 2017 Company Overview – Antero Resources – slide 39
    3P RESERVES & RESOURCE AR COMBINED TOTAL 12/31/16 RESERVES OHIO UTICA SHALE MARCELLUS SHALE Assumes Ethane Rejection Net Proved Reserves 2.0 Tcfe Net Proved Reserves 13.4 Tcfe Net Proved Reserves 15.4 Tcfe Net 3P Reserves 6.8 Tcfe Net…
  40. February 2017 Company Overview – Antero Resources – slide 40
    CONSIDERABLE RESERVE BASE WITH ETHANE OPTIONALITY 23 year proved reserve life based on 2016 production annualized Reserve base provides significant exposure to liquids-rich projects 3P reserves of over 3.1 BBbl of NGLs and condensate…
  41. February 2017 Company Overview – Antero Resources – slide 41
    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…
  42. February 2017 Company Overview – Antero Resources – slide 42
    MARCELLUS SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Marcellus Well Economics and Total Gross Locations(1) Natural Gas 12/31/2016 strip 120% 1,200 1,030 Total 3P Locations 98% Oil 12/31/2016 strip 100% 1,000 NGLs 50%…
  43. February 2017 Company Overview – Antero Resources – slide 43
    UTICA SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Utica Well Economics and Gross Locations(1) Natural Gas 12/31/2016 strip 80% 300 Total 3P Locations 60% 58% 250 Oil 12/31/2016 strip 60% 47% 48% NGLs 50% of Oil…
  44. February 2017 Company Overview – Antero Resources – slide 44
    LARGEST GAS HEDGE POSITION IN U.S. E&P 1.6 billion mark-to-market unrealized gain based on 12/31/2016 prices with 3.4 Tcfe hedged from January 1, 2017 through year-end 2022 at 3.63 per MMBtu Commodity Hedge Position BBtu/d Hedged…
  45. February 2017 Company Overview – Antero Resources – slide 45
    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 amount of…
  46. February 2017 Company Overview – Antero Resources – slide 46
    LIQUIDITY & DEBT TERM STRUCTURE - Approximately 4.1 billion of combined AR and AM financial liquidity as of 9/30/2016 (1)(2)(3), including recent AR and AM offerings - No leverage covenant in AR bank facility, only interest coverage…
  47. February 2017 Company Overview – Antero Resources – slide 47
    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…
  48. February 2017 Company Overview – Antero Resources – slide 48
    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…
  49. February 2017 Company Overview – Antero Resources – slide 49
    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 MMcf/d…
  50. February 2017 Company Overview – Antero Resources – slide 50
    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 17 Bcf/d Not…
  51. February 2017 Company Overview – Antero Resources – slide 51
    POSITIVE RATINGS MOMENTUM Given Anteros stable credit metrics through the commodity price crisis and improved leverage profile, Antero requests a ratings upgrade from Moodys Moodys / S&P Historical Corporate Credit Ratings Moodys…
  52. February 2017 Company Overview – Antero Resources – slide 52
    ANTERO CAPITALIZATION CONSOLIDATED As Adjusted Pro Forma(4) Pro Forma(5)(6) ( 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 170 170 167…
  53. February 2017 Company Overview – Antero Resources – slide 53
    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…
  54. February 2017 Company Overview – Antero Resources – slide 54
    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…
  55. February 2017 Company Overview – Antero Resources – slide 55
    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)…
  56. February 2017 Company Overview – Antero Resources – slide 56
    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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