J.P. Morgan Global High Yield & Leveraged Finance Conference FEBRUARY 25, 2019
Antero Family at a Glance The Most Integrated Natural Gas and NGL Platform in the U.S. A World Class E&P Operator in Appalachia NYSE: AR 7 Billion Enterprise Value(1) Ba2 / BB+ / BBB- Corporate Family Ratings 31%(1) A…
Track Record of Navigating Commodity Price Volatility Antero has increased its EBITDAX by 58% and reduced leverage from 3.9x at YE 2014 to 2.2x at YE 2018, despite a 30% reduction in NYMEX natural gas prices Stand-alone Adjusted…
Recent Credit Enhancement Developments 1 Natural Gas & Liquids Infrastructure Completed (November/December 2018) All of Anteros firm transportation is now in-service Provides clear path to flexible production growth outlook Rover…
Simplification Transaction Summary Highlights Midstream simplification transaction expected to close on March 12, 2019 allows AR to further de-leverage and provides AM with an enhanced credit profile Simplifies the organizational…
Flexible Development Plan to Maintain Strength Anteros flexible development program through 2023 will be responsive to commodity prices to grow production and maximize free cash flow Lower Prices: 50 Oil / 2.85 Gas Higher Prices: 65…
Long-Term Outlook - AR Antero is poised to prudently grow production to maximize free cash flow, ultimately resulting in an appropriate mix of further deleveraging then return of capital Production Growth Scenarios (2020 2023) 6,000…
Long-Term Outlook New AM Based on ARs flexible long-term outlook, AM is targeting an 18% - 25% distributable cash flow (DCF) CAGR from 2020 to 2022 New AM Distributable Cash Flow Growth Scenarios (2020 2022) 1,600 1,400 1,200…
Anteros Integrated Strategy Diversified Commodity Mix and Integrated Strategy Enhance Credit Quality Credit Quality 2.1x at AR and Top NGL and 5 3.1x at AM pro forma natural gas producer for midstream in the U.S. Diversified…
World Class E&P Operator: Antero Resources These materials are not to be printed, downloaded or distributed. These materials are only available to QIBs and non-US persons.
Prolific Underlying Liquids-Rich Resource Base Antero Resources holds 40% of the core undrilled liquids-rich locations in Appalachia with attractive economics and low breakeven prices Core Liquids-Rich Appalachian Undrilled…
Scale to Capitalize on Resource Base Antero is the largest NGL producer in the U.S. and 4th largest natural gas producer in the U.S. with 3,000 core drilling locations and 18 Tcfe of proved reserves Top U.S. C2+ NGL Producers -…
Antero vs. Best Industry Natural Gas Inventory Antero has a 13-year inventory of drilling locations with a breakeven gas price (25% ROR threshold) below the 2020-2023 NYMEX gas strip (2.67/MMBtu) Antero and Industry Best Gas Drilling…
Sustainable and De-risked Business Model Antero Resources is 100% hedged on natural gas through 2019; Hedges and FT provide price stability to support sustainable long-term development Hedge Portfolio Supports Antero Natural Gas…
Antero Resources Hedge Position AR realized 357 MM in proceeds from hedge restructuring while remaining 100% hedged on gas in 2019 and 55%-60% hedged in 2020 at 3.00/MMBtu Antero Hedge Profile (MMcf/d) (/MMBtu) 2,500 2,330 NYMEX…
Firm Transportation Portfolio Provides Visibility All of Antero Resources contracted firm capacity is now in service, providing visible production growth and premium pricing to NYMEX Antero Resources Firm Transportation Portfolio vs.…
Expected Natural Gas Price Realization Improvement As a result of ARs firm transportation portfolio, substantially all of Anteros gas is expected to be sold in favorably priced markets resulting in a premium to NYMEX Antero Firm…
Anteros NGL Pricing Uplift from Mariner East 2 Mariner East 2 allows AR to access 50,000 Bbl/d Mariner East 2 export capability international LPG markets and realize a equates to 50 to 60 MM of 2/Bbl to 4/Bbl uplift on its exported…
Liquids Focus Drives Peer-leading and Consistent Margins Anteros strategy has resulted in peer-leading realized prices and margins for 6 straight years and consistent results through commodity cycles Stand-alone E&P Adjusted All-in…
Midstream Critical to Sustainable Development Owning and controlling the infrastructure is critical to sustainable development; Antero Midstream provides a customized midstream solution Midstream Ownership Benefits AM Midstream…
Premier Northeast Infrastructure Platform Premier Integrated Appalachian Midstream Assets Antero Clearwater Facility February 2018 23
What Does Antero Do Exploration and production integrated with full midstream value chain 50/50 JV Exploration & Gathering & Natural Gas C3+ NGL Production Compression Processing Fractionation Terminals & Storage Long Haul…
High Growth Midstream Throughput Antero Midstream has delivered consistent, peer-leading, and sustainable growth through its organic investments Low Pressure Gathering (MMcf/d) Compression (MMcf/d) 1,738 2,500 1,800 2,148 1,600…
4-year Organic Project Backlog: 2019 - 2022 High-graded organic Primary focus on rich project backlog of 2.0B gas Marcellus through 2022 infrastructure 2.0B Project Backlog By Area 2.0B Project Backlog By Function Processing &…
Fixed Fee Business Model Supports Stable Cash Flows Antero Midstream generates all of its revenues through fixed-fee contracts, insulating EBITDA growth from commodity price volatility Details Antero Midstream Adjusted EBITDA (MM)…
Organic Strategy Drives Attractive Return on Capital Fixed-fee tolling business combined with Just-in-Time capital investment drives attractive returns on capital across commodity environments Investment Philosophy AM Return on…
Highest DCF Growth Among Top 20 Midstream New AM will be a unique midstream vehicle with scale, low leverage and high distributable cash flow growth all in a C-Corp structure C-Corp MLP Leverage * Eliminated IDRs (Simplified)…
DCF Profile Supports Capital Retention Antero Midstreams cash flow growth, self-funding business model, and declining capex profile drives optionality for New AM Distributable Cash Flow vs. Growth Capex (MM) 1,400 25% DCF CAGR…
Antero Credit Attributes Summary Reduced leverage from 3.9x at Track record of leverage in low 2- YE 2014 to 2.2x at YE 2018 Despite times flexing to 3-times for Commodity Price Volatility accretive transactions Diversified…
Appendix
Pro Forma Antero Corporate Structure AM has an enhanced credit profile due to substantial increase in retained cash flow from IDR elimination, tax efficiencies, and revised dividend policy Midstream Simplification Highlights Pro Forma…
Antero Capitalization Pro forma as of 12/31/18 Antero Midstream Antero Resources Antero Resources As of December 31, 2018 (MM) (Stand-alone) (Consolidated) Cash 0 0 0 Debt Revolving Credit Facility 990 405 1,395 Status Quo…
Track Record of Positive Ratings Momentum Historical Corporate Credit Ratings Moodys Rating Rationale S&P Rating Rationale Fitch Investment Grade Rating Rationale Anteros Corporate Family Rating is underpinned The stable outlook…
Consistent Reserve Growth and Attractive Recycle Ratio Net Proved Reserves (Tcfe)(1) (Tcfe) Marcellus Utica 20 18.0 17.3 15.4 15 12.7 13.2 12.6B Proved PV-10 (1) 12/31/18 proved PV-10 at SEC pricing 10 7.6 5 4.3 2.8 0.7…
Antero Resources Stand-alone Adjusted EBITDAX Per Mcfe Stand-alone Adjusted EBITDAX per Mcfe Reconciliation (Annual) 2013 2014 2015 2016 2017 1Q2018 2Q2018 3Q2018 4Q2018 (/Mcfe) Natural Gas, Oil, Ethane and NGL sales 4.31 4.74 2.53…
Maintenance Capital Methodology Maintenance Capital Calculation Methodology Low Pressure Gathering Estimate the number of new well connections needed during the forecast period in order to offset the natural production decline and…
Antero Midstream Non-GAAP Measures Non-GAAP Financial Measures and Definitions Antero Midstream views Adjusted EBITDA as an important indicator of the Partnerships performance. Antero Midstream defines Adjusted EBITDA as Net Income…
Adjusted EBITDA and DCF Reconciliation Adjusted EBITDA and DCF Reconciliation ( in thousands) Years ended December 31, 2017 2018 Net income 307,315 585,944 Impairment of property and equipment 23,431 5,771 Change in fair value of…
Antero Midstream Non-GAAP Reconciliation The following reconciles net income to Adjusted EBITDA and Distributable Cash Flow: 2014 in Thousands G&C Only 2014 2015 2016 2017 Net income 16,832 127,875 159,105 236,703 307,315 Interest…
Antero Midstream Non-GAAP Measures Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures. The GAAP measure most directly comparable to Adjusted EBITDA and Distributable Cash Flow is Net Income. The non-GAAP…
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