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JPM HY Conference – Antero Resources

Antero Resources · Feb 28, 2022 · 44 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. JPM HY Conference – Antero Resources – slide 1
  2. JPM HY Conference – Antero Resources – slide 2
    Premier Pure-Play Appalachian E&P 8.9 Bn Ohio Utica Shale West Virginia Marcellus Shale ENTERPRISE VALUE (1) 5th Largest U.S. GAS PRODUCER (2) Headquarters: 2nd Largest Denver, CO U.S. NGL PRODUCER (2) 20+ Years OF…
  3. JPM HY Conference – Antero Resources – slide 3
    Antero Credit Momentum 1.6 Bn Debt Reduction Since YE 2019 1.3x Leverage Ratio Expected to…
  4. JPM HY Conference – Antero Resources – slide 4
    Significant Debt Reduction Antero Resources Total Debt Since 12/31/19 4,000 3,759 3,500 (757) 3,002 3,000 2,500 (876) 2,125 2,000 1.6 Bn 1,500 Asset sale 850+ MM of FCF, ABSOLUTE DEBT REDUCTION proceeds, debt paid off…
  5. JPM HY Conference – Antero Resources – slide 5
    Antero Strategy Evolution Anteros business strategy has evolved to match the U.S. shale industry life cycle AR Net Production (Right Axis) & Capital Investment (Left Axis) (MMs) (1) (MMcfe/d) We are 3,500 Production (MMcfe/d)…
  6. JPM HY Conference – Antero Resources – slide 6
    Why Antero Resources Antero is well positioned with a strong balance sheet and a business model that can generate substantial, sustainable free cash flow Balance Sheet Deep drilling Sustainable Strength Inventory Free Cash Flow…
  7. JPM HY Conference – Antero Resources – slide 7
    Strong and Sustainable Balance Sheet Balance Sheet AR Debt Term Structure (Pro Forma 12/31/2021) (1) Enhancements Issued Notice of CALLED NO 1,400 Redemption for Remaining 2025s Revolver expected to 585 MM NEAR-TERM 1,200…
  8. JPM HY Conference – Antero Resources – slide 8
    Strongest Balance Sheet in Appalachia Appalachian Peer Net Debt (1) 1 6.0 5.4 5.4 5.0 4.0 2.1 Bn 3.0 2.1 2.2 2.7 NET DEBT: 2.0 LOWEST AMONG APPALACHIAN PEERS 1.0 0.0 AR Peer 1 Peer 2 Peer 3 Peer 4 Net Debt to LTM…
  9. JPM HY Conference – Antero Resources – slide 9
    Enhanced Free Cash Flow Profile Free Cash Flow (MM) (1) 6.0 Bn+ 7,000 5-Year Avg. Strip 6,000+ 6,000 Through YE 2026 TARGETED FREE CASH FLOW NYMEX: 3.60/MMBtu THROUGH 2026, 100% OF 5,000 WTI: 70/Bbl CURRENT MARKET VALUE (2)…
  10. JPM HY Conference – Antero Resources – slide 10
    Peer Leading Premium Core Drilling Inventory Premium Core Marcellus Inventory Southwest Appalachia Core 33% AR HOLDS 1,550 UNDEVELOPED LOCATIONS, OR 33% OF TOTAL Utica Core 38% AR HOLDS 925 UNDEVELOPED LIQUIDS LOCATIONS, OR 38%…
  11. JPM HY Conference – Antero Resources – slide 11
    Right-Sized, Premium Firm Takeaway Position 100% 100 MM LNG SUPPLIER OF NATURAL GAS EXPECTED TO ANNUALIZED NET MARKETING ANTERO IS A LEADING LNG SUPPLIER BE SOLD OUT OF BASIN VIA EXPENSE REDUCTION THROUGH PROVIDING CLEAN, LOW COST…
  12. JPM HY Conference – Antero Resources – slide 12
    Diversity of Product & Destination Liquids Production & Realized Pricing Natural Gas Takeaway & Realized Pricing (2) 2021 Liquids Production (MBbl/d) (1) Percent Sold Out of Basin (2022E) 180 168 120% 160 100% 100% 168 100% 140…
  13. JPM HY Conference – Antero Resources – slide 13
    Natural Gas Fundamentals Are Strong U.S. export growth continues to outpace U.S. supply growth U.S. Dry Natural Gas Production Lower 48 (Bcf/d) Jan-20: Jan-22: Dec-22E: 100.0 94.3 96.6 Jan-21: 93.8 95.0 Jan-19: 91.6 90.0 87.9…
  14. JPM HY Conference – Antero Resources – slide 14
    Natural Gas Remains Essential in Energy Transition Natural gas and renewables displace coal and oil in the global energy transition as demand increases for low carbon energy sources U.S. Electricity Generation By Fuel Source Global…
  15. JPM HY Conference – Antero Resources – slide 15
    Propane Market Fundamentals Demand growth and robust exports combined with limited supply growth results in inventories levels below the five years range U.S. Propane Inventories (MMBbls) 120 100 80 Million Barrels…
  16. JPM HY Conference – Antero Resources – slide 16
    NGL Price Strength Antero continues to benefit from the strength in NGL prices AR Monthly Realized C3+ NGL Price /Bbl 100 100% 90 90% % of WTI 80 WTI Price 80% 63.34/Bbl 70 70% CURRENT AR C3+ NGL SPOT PRICE 60 60% 50…
  17. JPM HY Conference – Antero Resources – slide 17
    ESG Momentum Continues ESG Progress Project Canary (February 2022): 2020 ESG Report RECEIVED RESPONSIBLY SOURCED GAS CERTIFICATION (October 2021): REPORT IS EXPECTED TO DRIVE FURTHER RATINGS UPSIDE MSCI UPGRADE (August…
  18. JPM HY Conference – Antero Resources – slide 18
    Industry-Leader in ESG Wells Fargo ESG Scorecard - 2021 Environmental Social Governance 2nd of 27 WELLS FARGO EQT 73.4 AR 71.4 ESG SCORECARD RANKING RRC 71 FANG 66 CNX 65 CHK 64 SWN 64 SM 64 EOG 61 CTRA 59 CDEV 58 45th…
  19. JPM HY Conference – Antero Resources – slide 19
    Appalachia Responsible for CO2 Emission Reductions The Shale Revolution and natural gas supply growth from Appalachia has powered coal to gas switching, driving declining CO2 emissions in the U.S. since 2005 U.S. CO2 Emissions…
  20. JPM HY Conference – Antero Resources – slide 20
    ARs Role in Supporting Global Energy Access In 2020, over 54 MBbl/d of ARs LPG was shipped internationally, approximately 1/3 of which was shipped to developing countries Antero LPG Cargo Destinations & Uses Industrial &…
  21. JPM HY Conference – Antero Resources – slide 21
    Financial Policy Overview MAINTENANCE LEVEL CAPITAL to Maximize Free Cash Flow Continued Reduction of All-time Low DEBT LEVELS Opportunistic HEDGE PROGRAM 23
  22. JPM HY Conference – Antero Resources – slide 22
    Antero Credit Highlights BALANCE SHEET STRENGTH & FLEXIBILITY SCALE & DIVERSIFIED PRODUCT MIX SUSTAINABLE BUSINESS MODEL INDUSTRY-LEADING ESG METRICS 24
  23. JPM HY Conference – Antero Resources – slide 23
    Premier Northeast Infrastructure Platform
  24. JPM HY Conference – Antero Resources – slide 24
    Leader in Appalachia Energy Infrastructure Ohio West Virginia 8.2 Bn Utica Shale Marcellus Shale ENTERPRISE VALUE (1) 15% ROIC Headquarters: Denver, CO AVERAGE FROM 2015-2021 496 Miles OF PIPELINES(2) 3.4 Bcf/d…
  25. JPM HY Conference – Antero Resources – slide 25
    Credit Snapshot: Antero Midstream Credit Attributes & Trend Debt Term Structure (12/31/2021) 3.6x 3.0x 1,200 AM Senior Notes AM Credit Facility Net Debt / EBITDA Net Debt / EBITDA By YE 2024 1,000 Ba2 / BB 3 Upgrades 800 547…
  26. JPM HY Conference – Antero Resources – slide 26
    Antero Midstream Investment Thesis BALANCE SHEET STRENGTH AND FLEXIBILITY Leverage declining from 3.6x to 3.0x by year-end 2024 Internally financed and declining annual capital budgets Flexibility with 700 MM of liquidity at year-end…
  27. JPM HY Conference – Antero Resources – slide 27
    Balance Sheet Strength and Flexibility Antero Midstreams leverage of 3.6x is below the midstream industry and gathering and processing sector average of 4.2x Energy Sector Leverage (Net Debt / LTM EBITDA) 6.0x AM Peers Leverage…
  28. JPM HY Conference – Antero Resources – slide 28
    AM Organic Project Backlog From 2022-2026 AMs 1.0 Bn organic project backlog is projected to generate high teens return on invested capital consistently over the next five years AM Capital Expenditures vs. Return on Invested Capital…
  29. JPM HY Conference – Antero Resources – slide 29
    AM 2022 Capital Budget & Key Projects AM 2022 Capital Budget Map Wetzel & Tyler LP Buildout Castle Peak Compressor Station Under Construction 240 MMcf/d AR Core Development Area Lincoln Compressor Station In Service 240…
  30. JPM HY Conference – Antero Resources – slide 30
    Significant Free Cash Flow Generation AMs flexible capital budget with no long lead-time projects allows it to target significant Free Cash Flow over the next five years Free Cash Flow (MM) 3,500 3,000 2,900 2,500 2.9 Bn…
  31. JPM HY Conference – Antero Resources – slide 31
    Midstream Industry Leader in ESG Wells Fargo ESG Scorecard - 2021 1st of 12 Environmental Social Governance Wells Fargo ESG Scorecard Ranking Among U.S. G&Ps AM 71 CEQP 69 ETRN 69 TRGP 66 ENLC 66 DCP 57 36th of 197 WES 51…
  32. JPM HY Conference – Antero Resources – slide 32
    Capital Allocation Framework Antero Midstreams capital budgets and return of capital to both debt and equity stakeholders is internally financed through 2026 providing financial flexibility 2022-2026 Cash Flow Allocation Capital…
  33. JPM HY Conference – Antero Resources – slide 33
    Click to edit Master title style Appendix 35
  34. JPM HY Conference – Antero Resources – slide 34
    2022 Capital Plan and Guidance 2022 Guidance Ranges Net Production (Bcfe/d) 3.2 3.3 Net Natural Gas Production (Bcf/d) 2.2 2.25 Net Liquids Production (Bbl/d) 175,000 185,000 Natural Gas Realized Price Expected Premium 0.15 to…
  35. JPM HY Conference – Antero Resources – slide 35
    Antero Guidance and Long-Term Target Assumptions Long-term Outlook Assumptions 2022 2022-2026 NYMEX Henry Hub Natural Gas Price (/MMBtu) (1) 4.50 3.60 NYMEX WTI Oil Price (/Bbl) (1) 85.00 70.00 AR Weighted C3+ NGL Price (/Bbl) (1)…
  36. JPM HY Conference – Antero Resources – slide 36
    Antero Midstream Guidance & Outlook Summary 2022-2026 Outlook 2022 Guidance (Cumulative) Annual EBITDA Growth Flat year-over-year (%) Low single digit CAGR through 2026 Capital Budget & 275 - 300 MM Organic Project Backlog 950…
  37. JPM HY Conference – Antero Resources – slide 37
    Recent Credit Facility + Liquidity Enhancements In Oct-21, Antero restructured and extended its credit facility to 2026 while reducing letters of credit (LCs) by 207 MM Credit Facility + Liquidity Summary 3,500 127 MM 3,500…
  38. JPM HY Conference – Antero Resources – slide 38
    Antero Resources Adjusted EBITDAX Reconciliation Three Months Ended Year Ended December 31, December 31, 2020 2021 2020 2021 Reconciliation of net income (loss) to Adjusted EBITDAX: Net income (loss) and comprehensive income (loss)…
  39. JPM HY Conference – Antero Resources – slide 39
    Free Cash Flow Reconciliation Three Months Ended Year Ended December 31, December 31, 2020 2021 2020 2021 Net cash provided by operating activities 243,130 475,164 735,640 1,660,116 Less: Net cash used in investing activities…
  40. JPM HY Conference – Antero Resources – slide 40
    Total Debt to Net Debt Reconciliation December 31, 2020 2021 Credit Facility 1,017,000 5.125% senior notes due 2022 660,516 5.625% senior notes due 2023 574,182 5.000% senior notes due 2025 590,000 584,635 8.375% senior notes due…
  41. JPM HY Conference – Antero Resources – slide 41
    Antero Midstream Non-GAAP Measures Non-GAAP Financial Measures and Definitions Antero Midstream uses certain non-GAAP financial measures. Antero Midstream defines Adjusted Net Income as Net Income plus amortization of customer…
  42. JPM HY Conference – Antero Resources – slide 42
    Antero Midstream Non-GAAP Measures The following table reconciles Net Income to Adjusted EBITDA (EBITDA), and Free Cash Flow before and after dividends in Thousands 2017 2018 2019 2020 2021 Net income 307,315 312,894 (285,076)…
  43. JPM HY Conference – Antero Resources – slide 43
    Antero Midstream Non-GAAP Measures The following table reconciles Net Income to Return on Invested Capital in Thousands 2017 2018 2019 2020 2021 Net income 310,700 312,894 (284,896) (122,527) 331,617 Amortization of customer…
  44. JPM HY Conference – Antero Resources – slide 44
    Antero Midstream Non-GAAP Measures Antero Midstream has not included a reconciliation of Adjusted EBITDA and Free Cash Flow before and after dividends to the nearest GAAP financial measure for 2022 because it cannot do so without…

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