Simplification and Deconsolidation: A Catalyst for Outperformance MARCH 13, 2019
Key Points of Emphasis Much improved Public float and shareholder alignment Strengthened management 1 balance sheet, reducing ownership now at 91% Closed Midstream leverage to 2.1x 8 Simplification 2 Strong Received 297 MM…
Repositioned With Simplified Structure Midstream simplification transaction results in ownership of one publicly traded midstream entity and better aligns management ownership between the two entities Simplified Structure Original…
Stronger Balance Sheet Anteros leverage has declined from 3.9x at YE 2014 to 2.1x at YE 2018 on a deconsolidated basis, and AR has reduced net debt by 800MM, or 18% Net Debt / LTM Adj. EBITDAX Year-end 2018 Net Debt / LTM Adj.…
Shareholder-Friendly Initiatives Improve Transparency Simplified corporate structure through midstream merger Majority of directors are independent at New AM with C-Corp governance Deconsolidation of Antero Midstream from Antero…
AR Firm Transportation Portfolio Provides Strategic Advantage 2016A 2017A 2018A 2019E 2020E 2021E Realized Hedge Gains (/Mcfe):(1) 1.48 0.26 0.25 0.24 0.06 0.02 - 0.03 Premium gas pricing plus realized hedge profits more than offset…
2019 Firm Transportation Benefits Outweigh Costs Firm commitment fees are expected to be offset by gas and liquids price uplift enabled by the FT and proceeds from hedges put in place to support the FT Excerpt form 2018 10-K (Page…
Hedge Position Supports Operating Plan Including FT AR is 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 Collar Volume NYMEX Swap Volume 4.00 (1) 3.48…
Peer-leading EBITDAX Margins for Six Years Forward-thinking business strategy including liquids focus, transportation capacity and forwards sales (hedging) has resulted in peer-leading realized prices and margins for 6 straight years…
Long-Term Outlook Antero is poised to prudently grow production to maximize free cash flow, ultimately resulting in an appropriate mix of further delevering and return of capital Production Growth Scenarios (2020 2023) 6,000 2.5 -…
Antero vs. Best Industry Natural Gas Drilling Inventory Anteros drilling inventory delivers many years of capital efficient development - Low breakeven gas price inventory due to liquids contribution yields resilient development plan…
Scale is Critical for Shale Development Antero has the production and cash flow scale, takeaway capacity, drilling inventory, hedge position and balance sheet strength to execute an active development program Appalachian Peer 2018…
U.S. Gas Supply and Base Decline Significant U.S. base decline requires substantial new supply just to maintain flat production 100 Base Decline Current(1): % Contribution to Current Supply 85 Bcf/d 90 Gas supply grew 12% in 12%…
Appalachian Gas Supply and Base Decline Appalachian base decline at 33% is a bit steeper than U.S. base decline as 2018 supply growth in Appalachia was higher than the U.S. as a whole Appalachia Base Decline Gross Wellhead Production…
Antero Production and Base Decline Anteros base decline rate is almost identical to the base decline rate estimated for Appalachia with Platts data - Type curve shape is very similar across all operators in the Marcellus - Base…
Maintenance Capital Capital required to maintain flat production is a function of the base decline rate, which is a function of growth over the prior 12 months, as well as the beginning production level and capital efficiency -…
Summary Decline Rate & Maintenance Capex Comments In general, the higher the supply or production growth in the prior 12 months, the higher the base decline, which assumes no more wells are completed 4Q 2018 / 4Q 2017 2019 YoY…
Strong Management Ownership and Improved Float ARs float has increased from 14% to 82% since the 2013 IPO while management has maintained a significant ownership in AR at 9% Management Ownership AR Public Float + Management (%) (1)…
Appendix
2019 Capital Plan and Guidance Consistent with guidance previously categorized as Stand-alone (released January 8, 2019) 2019 Guidance Ranges Net Production (Bcfe/d) 3.15 3.25 Net Natural Gas Production (Bcf/d) 2.225 2.275 Net…
Antero Capitalization Pro forma as of 12/31/18 Antero Midstream Antero Resources Antero Resources As of December 31, 2018 (MM) (Stand-alone) (Consolidated) Pro Forma Status Quo for AM Senior Notes Offering Cash 0 0 0 Debt…
Maintenance Capex Sensitivities Anteros annual maintenance capital declines each year and averages 600 MM (2.7 Bcfe/d) to 740 MM (3.2 Bcfe/d) over the next five years for flat production Maintenance Capex Wells Completed Maintenance…
Competitive Maintenance Capex Profile Anteros maintenance capital is approximately 740 million annually through 2023 with decline rates consistent with the Marcellus base decline Maintenance Capital Methodology Maintenance Production…
EV / 2019E EBITDAX Reconciliation Consolidated Deconsolidated (Pro Forma (Pro Forma Simplification) Simplification) Pro Forma for Enterprise Value Simplification (3 Market Capitalization 2,463 per AM unit only) 2,463 Net Debt…
Antero Resources Adjusted EBITDAX and Net Debt Reconciliation Twelve months ended (in thousands) December 31, 2018 Net (loss) and comprehensive (loss) attributable to Antero Resources Corporation (397,517) Commodity derivative fair…
Antero Resources Adjusted EBITDAX Per Mcfe 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 2.60 3.35 3.56 3.35 3.70…
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