J.P. Morgan Global High Yield & Leveraged Finance Conference March 2, 2021
Antero Resources Snapshot Denver, CO Antero Resources Acreage Map HEADQUARTERS Antero Marcellus Rig 5.7 B Industry Marcellus Rig Industry Utica Rig Antero Acreage ENTERPRISE VALUE (1) SW Marcellus Core 3rd Largest Ohio Utica…
Corporate Presentation Executive Summary Drilling Partnership Formed Natural Gas & NGL Macro Antero Midstream Overview Appendix 4
The Antero Investment Opportunity Antero is positioned to deliver peer-leading Free Cash Flow, with a rapidly declining leverage profile in 2021 1 Scale and 2nd Largest NGL Producer Operating 3rd Largest Natural Gas Producer…
1 Significant Commodity Price Leverage As one of the largest natural gas and NGL producers in the U.S., Antero has significant cash flow upside in a rising commodity price environment Top 5 U.S. Natural Gas Producers (MMcf/d) Top 5…
1 AR Provides Best Exposure to Rising Commodity Prices Anteros differentiated business model provides the cleanest upside to increasing commodity prices Leverage to Liquids Pricing Flow Nymex Price Upside Assurance Increase…
2 Enhanced Free Cash Flow Profile Antero expects to generate over 1.5 B of Free Cash Flow through 2025 pro forma for the Drilling Partnership and 5-year backwardated strip pricing Free Cash Flow (Before Changes in Working Capital)…
2 Continued Operational Momentum 2021 Capital Guidance of 590 MM (net to Antero) Announced 2021 drilling and completion guidance of 590 MM in 2021, a 20% decrease from 2020 spending 500+ MM of estimated 2021 Free Cash Flow (1)…
2 Peer Leading Premium Core Drilling Inventory Anteros technical and management teams have performed an extensive update on acreage positions, undrilled locations, well performance and EURs across the basin Led to division of the SW…
3 Significant Leverage Reduction Through a combination of Free Cash Flow and the ORRI contingent payment, AR is expected to reduce leverage below 2x by year end 2021 AR Pro Forma Year-End 2021E Credit Facility Balance and Leverage…
4 Natural Gas Producers Have the Lowest Emissions Natural gas producers are best positioned relative to oil producers with the lowest GHG emissions 2020 Antero vs 2019 Industry GHG Emission Intensity(1) 60 Antero 50 Oil Producer…
Corporate Presentation Executive Summary Drilling Partnership Formed Natural Gas & NGL Macro Antero Midstream Overview Appendix 13
Uniquely Positioned for a Drilling Partnership AR is uniquely positioned to enhance its Free Cash Flow profile with the incremental gross production generated by a drilling partnership, by leveraging its dominant liquids-rich resource,…
AR Drilling Partnership Announcement (2/17/2021) Announced Drilling Partnership With QL Capital Partners (QL), an Affiliate of Quantum Energy Partners Entered into Drilling Partnership to fund drilling of 60 incremental wells between…
Free Cash Flow Enhancement 2021 - 2025 Through the Drilling Partnership, Antero expects to increase its forecasted 2021 2025 Free Cash Flow by 400 MM Net Marketing Midstream Fee Drilling Carry Interest Expense Free Cash Flow…
Corporate Presentation Executive Summary Drilling Partnership Announcement Natural Gas & NGL Macro Antero Midstream Overview Appendix 17
Strong Natural Gas and NGL Price Momentum Natural gas and NGL prices have strengthened as global demand continues to increase while supply flattens. A cold winter in Asia has provided further support to natural gas and NGL prices U.S.…
Propane Market Fundamentals A record setting level of withdrawals via LPG exports has led to low propane inventories in the U.S. and only 16.7 days of supply, 25% below the 5-year average U.S. Propane Inventories (MMBbls) Propane…
NGL Price Strength NGL prices have risen on an absolute basis and relative to WTI since March/April lows due to resilient global demand AR Monthly Realized C3+ NGL Price /Bbl AR C3+ Realized Price (/Bbl) WTI Price % of WTI…
Key Investment Highlights Antero is well positioned for both the commodity price outlook and energy transition as a large scale, low cost natural gas and NGL producer with strong ESG metrics Scale / 3rd Largest natural gas producer…
Corporate Presentation Executive Summary Drilling Partnership Formed Natural Gas & NGL Macro Antero Midstream Overview Appendix 22
Premier Northeast Infrastructure Platform
Antero Midstream Corporation at a Glance Denver, CO Antero Midstream Asset Map HEADQUARTERS S&P 400 CONSTITUENT 7.0 Bn ENTERPRISE VALUE (1) 16% ROIC AVERAGE 2021E Sherwood and Smithburg 3.2 Bcf/d Processing…
Uniquely Positioned Midstream Entity AMs is a unique self-funding midstream C-Corp with long-term growth, Free Cash Flow after dividends, declining leverage and a strong balance sheet C-Corp Structure Volume & EBITDA Growth…
Antero Midstream Outlook Summary AR Maintenance AR + Drilling Capital Program Partnership % Change Annual Adjusted EBITDA 0% to 1% Growth through 2025 1% to 4% +3% Organic Project Backlog 875 - 975 through 2025 (MM) 1,050 -…
4 Generating Significant Free Cash Flow AMs legacy midstream infrastructure and flexible capital budget with no long lead-time projects allows it to generate significant free cash flow Free Cash Flow Before Dividends (MM) 1,000 2.6…
Antero Midstream Investment Thesis Well positioned natural gas and NGL producer with scale and sustainable business model 100% fixed fee business with no direct commodity price exposure Peer leading leverage profile of 3.7x…
Corporate Presentation Executive Summary Drilling Partnership Formed Natural Gas & NGL Macro Antero Midstream Overview Appendix 29
Antero Guidance and Long-Term Target Assumptions Long-term Outlook Assumptions (Consistent in 2021 2021-2025 both Base Plan and Drilling Partnership plans) NYMEX Henry Hub Natural Gas Price (/MMBtu) (1) 2.90 2.65 NYMEX WTI Oil Price…
Balance Capex with Cash Flow Low Maintenance Capital Antero Average Development Well 3,600 Net Production Rate: 3.4 Bcfe/d Avg. Lateral Length per Well 13,000 3,400 Bcfe/1,000 2.70 3,200 Replacement Volume 198 Bcfe 16% of 2022…
2 Attractive Breakeven Well Economics Antero has some of the lowest natural gas breakeven prices in Appalachia as highlighted in a recent JP Morgan research report Breakeven gas prices for rich gas producers like AR are actually lower…
4 Leading Sustainability and ESG Metrics GHG Emissions Social Antero has zero flaring of produced gas, one of the lowest GHG 33% of Independent Directors are intensity metrics in the industry (upstream independents and majors) and…
Natural Gas and NGLs Are Essential Antero plays a critical role in producing reliable energy for consumers 3 Largest U.S. 2 Largest U.S. Natural Gas NGL Producer Producer Natural Gas Natural Gas Liquids (NGLs) Natural gas is a…
Natural Gas Rig Count Highlights Producer Discipline Gas rig count has remained low as a result of modest gas prices with a 47% reduction in horizontal gas directed rigs since April 2019 Minimal rig response as gas prices recovered at…
Dry Gas Production Trend Accordingly, exit-to-exit U.S. supply declined slightly in 2020 and is forecast to decline further in 2021 (0.8) Bcf/d, or (0.9%), (0.1) Bcf/d, or (0.1)%, U.S. supply decline U.S. supply growth forecast Jan…
2021 Supply/Demand Balance Detail the U.S. is forecast to be undersupplied in 2021 with demand outweighing supply by 2 Bcf/d This backdrop should support higher NYMEX prices in order to incentivize drilling Weather will be the key…
Focus on Liquids Rich Drilling Antero currently recovers only 30% of the ethane in its rich gas stream while rejecting 70% of the ethane, sending it to pipeline sales in the natural gas stream Antero NGL Barrel Composition (2021…
Hedge Commodities - Natural Gas Price Exposure Mitigated Through 2022 Antero is very well hedged on its forecast natural gas production through 2022 Antero Natural Gas Hedge Profile (1) (1) (BBtu/d) Antero Swap Volumes NYMEX Strip…
Antero Resources Adjusted EBITDAX Reconciliation LTM Adjusted EBITDAX Reconciliation Year Ended December 31, (in thousands) 2020 Reconciliation of net income (loss) to Adjusted EBITDAX: Net income (loss) and comprehensive income (loss)…
Total Debt to Net Debt Reconciliation Total Debt to Net Debt Reconciliation December 31, 2020 AR bank credit facility 1,017,000 5.125% AR senior notes due 2022 660,516 5.625% AR senior notes due 2023 574,182 5.000% AR senior notes due…
Antero Midstream Non-GAAP Measures Antero Midstream has not included a reconciliation of Adjusted EBITDA, Free Cash Flow, Net Debt or Return on Invested Capital to the nearest GAAP financial measure for 2021 because it cannot do so…
Antero Midstream Non-GAAP Measures The following table reconciles net income to Adjusted EBITDA and Free Cash Flow: in Millions 2014 2015 2016 2017 2018 2019 2020 Net Income (Loss) 127,875 159,105 236,703 307,315 312,894 (284,896)…
Antero Midstream Non-GAAP Measures The following table reconciles net income to return on invested capital: in Millions 2014 2015 2016 2017 2018 2019 2020 Net income 127,900 159,100 236,700 310,700 312,894 (284,896) (122,527)…
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