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Scotia Howard Weil 45th Annual Energy Conference – Antero Resources

Antero Resources · Mar 27, 2017 · 47 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.

Slides

  1. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 1
    Howard Weil 45th Annual Energy Conference March 27, 2017
  2. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 2
    Key Antero Attributes Most Integrated Natural Gas & NGL Story in the U.S. Largest core drilling inventory in lowest cost gas producing basin in North America Annual production target growth rate in excess of 20% through 2020 with…
  3. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 3
    Antero Profile Market Cap.... 7.7 billion Enterprise Value(1)(2)......13.8 billion LTM EBITDAX....... 1.5 billion Net Debt/LTM EBITDAX(2)3.0x Net Production (4Q 2016) 2.0 Bcfe/d % Liquids..........................26% 3P…
  4. Scotia Howard Weil 45th Annual Energy Conference – 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. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 5
    Announced Processing and Fractionation JV Antero Midstream (NYSE: AM) and MPLX (NYSE: MPLX) formed a 50/50 joint venture for processing and fractionation infrastructure in the core of the liquids-rich Marcellus and Utica Shales in…
  6. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 6
    Capturing Midstream Value Chain Antero Midstreams ten year opportunity set for Northeast infrastructure buildout is in excess of 6 billion, including 5.0 billion of identified organic projects AM to invest 2.6 billion by 2020 Upstream…
  7. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 7
    Largest Liquids-Rich Resource Complemented by Processing JV and NGL Infrastructure Connectivity The Northeast NGL infrastructure buildout will Mariner West (50 Mbbl/d C2) optimize NGL pricing and 62,500 MBbl/d presents an…
  8. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 8
    Rapidly Growing NGL Production Antero is the largest NGL producer in the Northeast NGL Production Growth by Purity Product (Bbl/d) (1) (Bbl/d) Ethane (C2) 160,000 C3+ Production 153,500 Propane (C3) 140,000 Normal Butane (nC4)…
  9. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 9
    And Liquids Price Improvement 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) 2017…
  10. Scotia Howard Weil 45th Annual Energy Conference – 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. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 11
    2017 Guidance and Long-Term Outlook (Bcfe/d) Production Growth: 4.0 3.9 3.5 3.2 Net Daily Production 3.0 Guidance 2.7 Long-Term Targets 2.5 2.2 Hedged Volume (Bcfe) 2.0 1.8 3.70 3.47 Hedged Price (/Mcfe) 3.91 1.5 1.0…
  12. Scotia Howard Weil 45th Annual Energy Conference – 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. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 13
    Drilling Inventory Largest Core Acreage Position In Appalachia Antero has the largest core acreage position in Appalachia and a dominant liquids-rich position 12 Marcellus Rigs Largest Core Acreage Position in Appalachia…
  14. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 14
    Drilling Inventory Largest Core Drilling Inventory In Appalachia Antero has 75% more core drilling locations than the nearest competitor and 3x as many core liquids-rich locations as nearest competitor Undrilled Core Marcellus and…
  15. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 15
    Drilling Inventory Low Breakeven Prices Antero has a 15 year drilling inventory at 3.00 natural gas or less assuming a 20% ROR and the 2017 development pace (170 completions) Cumulative 3P Drilling Inventory Breakeven Prices at 20%…
  16. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 16
    Capital Efficiency Continuous Operating Improvement Drilling and completion efficiencies continue to lower well costs Dramatic Decrease in Drilling Days Increasing Completion Stages per Day Drilling longer laterals while More…
  17. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 17
    Capital Efficiency Improved Productivity Drives Lower F&D Costs Enhanced completion designs contribute to improved recoveries and capital efficiency Increasing Proppant Per Foot Increasing Water Per Foot Higher proppant…
  18. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 18
    Well Performance Higher Intensity Completions 54 wells with 1,500 lb./ft completions and up to 300 days of production history support a 2.0 Bcf/1,000 type curve. Marcellus Cumulative Natural Gas Production Curves (Normalized to 9,000…
  19. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 19
    Well Performance Marcellus Completion Evolution Antero has further increased proppant intensity in 2017 primarily using 1,750 and 2,000 lb/ft completions in the Marcellus 3,000 Per Well Frac Size Testing higher proppant loads in…
  20. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 20
    Well Performance Outstanding Early Results EURs from Anteros recent 1,750 pound per foot completions have continued to outperform, ranging from 2.0 to 2.4 Bcf/1,000 at the wellhead Early results indicate a 10% improvement vs. 1,500…
  21. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 21
    Well Performance Improving Marcellus Returns Antero expects to complete 114 wells in 2017 in the highly-rich gas regimes where 1,500 lb/ft completions are tracking 2.0 Bcf/1,000 of lateral and 1,750 lb/ft completions are even higher…
  22. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 22
    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…
  23. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 23
    Price Realizations 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 Net…
  24. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 24
    Price Realizations Highest EBITDAX & Margins Among Peers Quarterly Appalachian Peer Group Consolidated EBITDAX (MM)(1) 500 476 Y-O-Y AR: 168MM Among Appalachian peers, AR has generated the highest EBITDAX Peer Avg: 21MM and EBITDAX…
  25. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 25
    Significant Cash Flow Growth Covering D&C Spend 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…
  26. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 26
    Significant Cash Flow Growth Covering D&C Spend Visible cash flow growth given hedges, firm transportation portfolio, and capital efficient long-term development plan targeting 20% to 22% production CAGR (1) Consensus EBITDAX 3,000…
  27. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 27
    Antero Midstream Asset Overview An integrated system for natural gas and NGL production, gathering and processing Midstream Infrastructure (In Service) Gathering Pipelines (Miles) 307 Compression Capacity (MMcf/d) 1,135…
  28. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 28
    APPENDIX 29 29
  29. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 29
    Leading Consolidation in Appalachia Activity Acquisitions and Antero Footprint Acquired almost 200,000 net acres since its IPO in October 2013 Acquired 81,000 net acres in the core of the Marcellus and Utica Shale plays since the…
  30. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 30
    Key Attributes Processing & Fractionation JV Aligns largest core liquids-rich resource base (AR) with the largest processing & fractionation footprint (MPLX) in Appalachia JV secures over 800 million in organic project inventory…
  31. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 31
    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…
  32. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 32
    Antero Midstream 2017 Guidance Key Operating & Financial Assumptions 2017 Previous 2017 Updated Key Variable Guidance Guidance(1) Financial: Net Income (MM) 295 335 305 345 Adjusted EBITDA (MM) 510 550 520 560 Distributable Cash…
  33. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 33
    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…
  34. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 34
    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…
  35. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 35
    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) Contracted Rigs Rigs…
  36. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 36
    Price Realizations Favorable Price Indices Antero expects to realize a premium to NYMEX gas prices before hedges through 2020 (/Mcf) 2018-2020 2017E Target (1) 3.11 2.87 Basis Differential to NYMEX(1) (0.21) (0.15) - (0.20) BTU…
  37. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 37
    Marcellus Single Well Economics In Ethane Rejection Assumptions Marcellus Well Economics and Total Gross Locations(1) Natural Gas 12/31/2016 strip 120% 1,125 1,200 Total 3P Locations 98% Oil 12/31/2016 strip 100% 1,000 NGLs 50%…
  38. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 38
    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 Price…
  39. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 39
    Largest Gas Hedge Position in U.S. E&P at Attractive Pricing 1.6 billion mark-to-market unrealized gain based on 12/31/16 prices with 3.4 Tcfe hedged from January 1, 2017 through year-end 2022 at 3.63 per MMBtu Commodity Hedge…
  40. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 40
    Largest Firm Transportation Portfolio in the 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…
  41. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 41
    Key Appalachian Natural Gas Takeaway Projects Growth in natural gas infrastructure by the end of 2019, resulting in 16.8 Bcf/d of incremental capacity, will support expected supply growth Not included on map TETCO Expansions (972…
  42. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 42
    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…
  43. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 43
    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 Asset Type MM…
  44. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 44
    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…
  45. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 45
    2016 Segment Ebitdax and Capital Expenditures 1 Gathering and compression fees paid to Antero Midstream are included in Gathering, Processing & Transportation expense on stand-alone basis (eliminated on consolidated basis); Gathering…
  46. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 46
    Antero Resources EBITDAX Reconciliation EBITDAX Reconciliation ( in millions) Year Ended Year 12/31/2015 12/31/2016 EBITDAX: Net income including noncontrolling interest 980.0 (737.0) Commodity derivative fair value (gains)…
  47. Scotia Howard Weil 45th Annual Energy Conference – Antero Resources – slide 47
    Antero Midstream EBITDA Reconciliation EBITDA Reconciliation Three months ended Years ended December 31, December 31, 2015 2016 2015 2016 Net income 49,008 73,351 159,105 236,703 Interest expense 2,892 9,008 8,158 21,893…

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