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Company Overview March 2017 – Antero Resources

Antero Resources · Mar 1, 2017 · 55 slides

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Slides

  1. Company Overview March 2017 – Antero Resources – slide 1
    Company Overview March 2017
  2. Company Overview March 2017 – Antero Resources – slide 2
    CHANGES SINCE FEBRUARY 2017 PRESENTATION New AR slide highlighting leading consolidator role in Slide 5 Appalachia and selected well performance New AR slide highlighting largest liquids-rich resource Slide 7 base and infrastructure…
  3. Company Overview March 2017 – Antero Resources – slide 3
    ANTERO PROFILE Market Cap.... 7.6 billion Enterprise Value(1)(2)......13.7 billion LTM EBITDAX....... 1.5 billion Net Debt/LTM EBITDAX(2)3.0x Net Production (4Q 2016) 1,990 MMcfe/d % Liquids..........................26% 3P…
  4. Company Overview March 2017 – Antero Resources – slide 4
    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…
  5. Company Overview March 2017 – Antero Resources – slide 5
    A LEADING CONSOLIDATOR IN APPALACHIA In 2016, Antero acquired 64,000 net acres in the Marcellus, virtually all of which is located in the Southern Rich and Dry Gas high-graded core areas 2016 Acquisitions and Recent Well Results…
  6. Company Overview March 2017 – Antero Resources – slide 6
    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…
  7. Company Overview March 2017 – Antero Resources – slide 7
    LARGEST LIQUIDS-RICH RESOURCE BASE COMPLEMENTED BY SIGNIFICANT NGL INFRASTRUCTURE CONNECTIVITY Core Liquids-Rich Southwest Appalachia Undrilled Locations (1),(2) P5 P6 P8 P9 8% 5% 3% 3% P4 8% P3 9% 41% P2 P1 2,622 9%…
  8. Company Overview March 2017 – Antero Resources – slide 8
    A RISING LIQUIDS PRICE ENVIRONMENT An increase in Mont Belvieu pricing combined with an improvement in local differentials has resulted in meaningful upside to Anteros realized C3+ NGL pricing Historical Guidance / Targets (/Bbl)…
  9. Company Overview March 2017 – Antero Resources – slide 9
    AND RAPIDLY GROWING NGL PRODUCTION Antero is the largest NGL producer in the Northeast NGL Production Growth by Purity Product (Bbl/d) (Bbl/d) Ethane (C2) 160,000 C3+ Production Propane (C3) 140,000 Normal Butane (nC4) IsoButane…
  10. Company Overview March 2017 – Antero Resources – slide 10
    PROVIDES POWERFUL LIQUIDS PRICING UPSIDE EXPOSURE Assuming 55 oil, 52.5% of WTI NGL realizations and 67,500 Bbl/d C3+ volumes, Antero should realize 332 million of incremental unhedged EBITDAX in 2017 (vs. 2016) Incremental…
  11. Company Overview March 2017 – Antero Resources – slide 11
    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 (Bcfe) 2.0 3.47 3.91 Hedged Price (/Mcfe) 1.5 4.04 3.66 1.0…
  12. Company Overview March 2017 – Antero Resources – slide 12
    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…
  13. Company Overview March 2017 – Antero Resources – slide 13
    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…
  14. Company Overview March 2017 – Antero Resources – slide 14
    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…
  15. Company Overview March 2017 – Antero Resources – slide 15
    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…
  16. Company Overview March 2017 – Antero Resources – slide 16
    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…
  17. Company Overview March 2017 – Antero Resources – slide 17
    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…
  18. Company Overview March 2017 – Antero Resources – slide 18
    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…
  19. Company Overview March 2017 – Antero Resources – slide 19
    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…
  20. Company Overview March 2017 – Antero Resources – slide 20
    CAPITAL EFFICIENCY DRIVING CASH FLOW GROWTH Anteros capital efficiency has reduced outspend while maintaining its growth profile and is expected to continue delivering Cash Flow from Operations that exceeds D&C spending through 2020…
  21. Company Overview March 2017 – Antero Resources – slide 21
    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)…
  22. Company Overview March 2017 – Antero Resources – slide 22
    WELL PERFORMANCE OPTIMIZING WELL RECOVERIES WITH HIGHER INTENSITY COMPLETIONS Marcellus Cumulative Natural Gas Production Curves (Normalized to 9,000 Lateral) 5,000 Vintage 2013 2014-15 2016 Change Wellhead EUR/1,000 Stage Length…
  23. Company Overview March 2017 – Antero Resources – slide 23
    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…
  24. Company Overview March 2017 – Antero Resources – slide 24
    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…
  25. Company Overview March 2017 – Antero Resources – slide 25
    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…
  26. Company Overview March 2017 – Antero Resources – slide 26
    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…
  27. Company Overview March 2017 – Antero Resources – slide 27
    PRICE REALIZATIONS FAVORABLE PRICE INDICES Antero expects to realize a premium to NYMEX gas prices before hedges through 2020 (/Mcf) 2018-2020 2016 2017E Target (1) 2.46 3.63 2.96 Basis Differential to NYMEX(1) (0.19) (0.29) (0.17)…
  28. Company Overview March 2017 – Antero Resources – slide 28
    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…
  29. Company Overview March 2017 – Antero Resources – slide 29
    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%…
  30. Company Overview March 2017 – Antero Resources – slide 30
    BALANCE SHEET STRONG BALANCE SHEET AND HIGH FLEXIBILITY Antero Resources (NYSE:AR) Antero Midstream (NYSE:AM) 12/31/2016 Debt(1) Liquid Non-E&P Assets Pro Forma 12/31/2016 Debt (1) Liquid Assets Debt Type MM Asset Type MM Debt Type MM…
  31. Company Overview March 2017 – Antero Resources – slide 31
    Antero Midstream (NYSE: AM) Asset Overview 31
  32. Company Overview March 2017 – Antero Resources – slide 32
    MLP (NYSE: AM) HIGHLIGHTS SUBSTANTIAL VALUE IN MIDSTREAM BUSINESS Corporate Structure Overview Antero Resources Corporation (NYSE: AR) 68% Public 11.5 Billion Enterprise Value(1) Interest Public Ba2/BB Corporate Rating 41% LP…
  33. Company Overview March 2017 – Antero Resources – slide 33
    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 Processing…
  34. Company Overview March 2017 – Antero Resources – slide 34
    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…
  35. Company Overview March 2017 – Antero Resources – slide 35
    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…
  36. Company Overview March 2017 – Antero Resources – slide 36
    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…
  37. Company Overview March 2017 – Antero Resources – slide 37
    HIGH GROWTH MIDSTREAM THROUGHPUT Low Pressure Gathering (MMcf/d) Compression (MMcf/d) 2,000 Marcellus Utica 1,200 Marcellus Utica 1,800 1,522 1,000 920 1,600 1,431 1,3031,353 777 1,400 800 1,124 658 1,200 1,038 606 935 965…
  38. Company Overview March 2017 – Antero Resources – slide 38
    SIGNIFICANT FINANCIAL FLEXIBILITY AM Liquidity (12/31/2016) Financial Flexibility 1.5 billion revolver in place to fund future growth capital ( in millions) (5.0x Debt/EBITDA Cap) Revolver Capacity 1,372 Liquidity of 1,244 million…
  39. Company Overview March 2017 – Antero Resources – slide 39
    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…
  40. Company Overview March 2017 – Antero Resources – slide 40
    APPENDIX 41 41
  41. Company Overview March 2017 – Antero Resources – slide 41
    ANTERO RESOURCES UPDATED 2017 GUIDANCE Key Operating & Financial Assumptions Updated Previous Key Variable 2017 Guidance(1) 2017 Guidance Net Daily Production (MMcfe/d) 2,160 2,250 2,160 2,250 Net Residue Natural Gas Production…
  42. Company Overview March 2017 – Antero Resources – slide 42
    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…
  43. Company Overview March 2017 – Antero Resources – slide 43
    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…
  44. Company Overview March 2017 – Antero Resources – slide 44
    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…
  45. Company Overview March 2017 – Antero Resources – slide 45
    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%…
  46. Company Overview March 2017 – Antero Resources – slide 46
    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…
  47. Company Overview March 2017 – Antero Resources – slide 47
    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…
  48. Company Overview March 2017 – Antero Resources – slide 48
    LIQUIDITY & DEBT TERM STRUCTURE - Approximately 4.1 billion of combined AR and AM financial liquidity as of 12/31/2016(1), including recent AM offering - No leverage covenant in AR bank facility, only interest coverage and working…
  49. Company Overview March 2017 – Antero Resources – slide 49
    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…
  50. Company Overview March 2017 – Antero Resources – slide 50
    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…
  51. Company Overview March 2017 – Antero Resources – slide 51
    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…
  52. Company Overview March 2017 – Antero Resources – slide 52
    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…
  53. Company Overview March 2017 – Antero Resources – slide 53
    ANTERO CAPITALIZATION CONSOLIDATED Pro Forma(4) ( in millions) 12/31/2016 12/31/2016 Cash 32 32 AR Senior Secured Revolving Credit Facility 440 440 AM Bank Credit Facility 210 142 5.375% Senior Notes Due 2021 1,000 1,000 5.125%…
  54. Company Overview March 2017 – Antero Resources – slide 54
    ANTERO RESOURCES EBITDAX RECONCILIATION EBITDAX Reconciliation ( in millions) Year Ended Year Ended 12/31/2015 12/31/2016 EBITDAX: Net income including noncontrolling interest 980.0 (737.0) Commodity derivative fair value (gains)…
  55. Company Overview March 2017 – Antero Resources – slide 55
    ANTERO MIDSTREAM EBITDA RECONCILIATION EBITDA and DCF Reconciliation Year ended in thousands December 31, 2015 2016 Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow: Net income 159,105 236,703 Interest…

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