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MARCH 2015 COMPANY OVERVIEW – Antero Resources

Antero Resources · Mar 1, 2015 · 54 slides

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Slides

  1. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 1
    Company Overview March 2015
  2. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 2
    CHANGES SINCE FEBRUARY 2015 PRESENTATION Updated firm transportation capacity and primary index Slide 13 differentials Updated liquidity graphs for AR and AM as of Slide 14 12/31/2014 Updated 4Q 2014 per unit equivalent natural gas…
  3. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 3
    2015 CAPITAL BUDGET On January 20th, Antero announced its 2015 capital budget of 1.8 billion, a 41% decrease from the final 2014 capital budget of 3.05 billion 3.05 Billion - 2014 1.8 Billion New 2015 By Segment By Segment 50 150…
  4. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 4
    ANTERO RESOURCES 2015 GUIDANCE Key Operating & Financial Assumptions(1) Key Variable 2015 Guidance Net Daily Production (MMcfe/d) 1,400 Net Residue Natural Gas Production (MMcf/d) 1,175 Net Liquids Production (Bbl/d) 33,000 Net Oil…
  5. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 5
    LEADING UNCONVENTIONAL BUSINESS MODEL Most Active Highest Growth Land Organization Large Cap E&P in Appalachia 2 3 Growth Land Largest Liquids-Rich Most Active Operator 1 4 Core Position in in Appalachia Liquids-Rich…
  6. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 6
    CATALYSTS 1 Large, low cost core Marcellus and Utica natural gas drilling inventory Sustainability of with associated liquids generates attractive returns supported by long- Anteros Integrated term natural gas hedges, takeaway…
  7. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 7
    DRILLING MOST ACTIVE OPERATOR IN APPALACHIA COMBINED TOTAL 12/31/14 RESERVES Assumes Ethane Rejection Net Proved Reserves 12.7 Tcfe Net 3P Reserves 40.7 Tcfe Pre-Tax 3P PV-10 22.8 Bn SW Marcellus & Utica(2) Net 3P Reserves &…
  8. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 8
    GROWTH HIGHEST GROWTH LARGE CAP E&P Anteros 40% production growth target for 2015 leads the U.S. large cap E&P industry(1) 45% 40.0% 40% 35% 30% 27.3% 26.8% 25% 23.6% 21.1% 20.0% 19.3% 19.1% 20% 16.2% 15% 12.4% 10%…
  9. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 9
    GROWTH STRONG TRACK RECORD NET PROVED SEC RESERVES (Bcfe) AVERAGE NET DAILY PRODUCTION (MMcfe/d) Marcellus Utica Marcellus Utica Guidance 14,000 1,800 12,683 12,000 1,400 10,000 1,200 8,000 7,632 1,007 6,000 4,283 4,000 600…
  10. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 10
    LAND MOST ACTIVE LAND ORGANIZATION IN APPALACHIA Assembled a 543,000 net acre position in the core of the Marcellus and Utica shale plays over the past 6 years Dec 2008 Dec 2011 Dec 2014 December 2008 December 2011(1) December…
  11. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 11
    LIQUIDS-RICH LARGEST CORE POSITION Antero has the largest liquids-rich core position in Appalachia 371,000 net acres ( 1100 Btu) Source: Core outlines and peer net acreage positions based on peer presentations, news releases and…
  12. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 12
    MIDSTREAM MLP (NYSE: AM) HIGHLIGHTS SUBSTANTIAL VALUE IN MIDSTREAM BUSINESS Corporate Structure Overview(1) Antero Resources Corporation (NYSE: AR) 14.7 Billion Enterprise Value(1) Ba3/BB Corporate Rating 70% Limited Partner…
  13. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 13
    TAKEAWAY LARGEST FIRM TRANSPORTATION AND PROCESSING PORTFOLIO IN APPALACHIA Antero Long Term Firm Processing & Takeaway Position (2018) Accessing Favorable Markets Mariner East II 4.1 Bcf/d Chicago(1) 62 MBbl/d Commitment(2) +0.38…
  14. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 14
    LIQUIDITY LARGEST GAS HEDGE POSITION IN U.S. E&P + STRONG FINANCIAL LIQUIDITY 1.6 billion mark-to-market unrealized gain based on 12/31/2014 prices 1.8 Tcfe hedged from January 1, 2015 through year-end 2020 and 262 Bcf of TCO basis…
  15. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 15
    REALIZATIONS HIGHEST REALIZATIONS & MARGINS AMONG LARGE-CAP APPALACHIAN PEERS 4Q 2014 Natural Gas Realizations (/Mcf) Average 4Q 2014 Average Average Average Hedge Average 4Q 2014 Premium/ Region % Sales NYMEX Price Differential(2)…
  16. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 16
    REALIZATIONS REALIZED PRICE ROAD MAP Anteros exposure to favorable gas price indices like Chicago, Gulf Coast, NYMEX and TCO is expected to increase to 94% by 2017 71% exposure to favorable price indices 85% exposure to favorable…
  17. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 17
    SECTOR POSITIONING 17
  18. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 18
    PREMIER POSITION IN LOW-COST RICH GAS PLAYS Over 3,000 of Anteros Marcellus and Utica undeveloped 3P locations are rich gas locations which have the lowest breakeven prices for both oil and natural gas compared to other U.S. shale…
  19. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 19
    MULTI-YEAR DRILLING INVENTORY SUPPORTS LOW RISK, HIGH RETURN GROWTH PROFILE Antero is well positioned in the core of the highest return shale projects in the U.S. in the current commodity price environment MARCELLUS SSL WELL…
  20. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 20
    20 BCF/D OF INCREMENTAL GAS DEMAND BY 2020 Significant demand growth expected for U.S. Projected Incremental Natural Gas Demand Through 2020 natural gas (Bcf/d) 9.5 Bcf/d of the 20 Bcf/d of 20 incremental demand is 20 More than 65%…
  21. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 21
    LNG EXPORTS BY PROJECT EXPECTED START UP LNG Exports by Project Through 2020 Assuming 9.5 Bcf/d of LNG exports by 2020, the U.S. would be the worlds 3rd largest LNG LNG Exports by Project Antero Supplied exporter (behind Qatar and…
  22. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 22
    MARCELLUS/UTICA DRIVING GAS SUPPLY GROWTH Lower 48 Gas Supply by Area Of the 23 Bcf/d of expected incremental gas (MMcf/d) supply from 2009 to 2015, 18 Bcf/d, or 78%, is expected to be generated from Marcellus 18,000 and Utica…
  23. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 23
    ASSET OVERVIEW 23
  24. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 24
    WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT 100% operated RJ SMITH PAD Operating 7 drilling rigs including BEE LEWIS PAD 30-Day Rate 3 intermediate rigs 30-Day Rate 4-well combined 4-well combined 30-Day Rate of 395,000 net…
  25. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 25
    INCREASING RECOVERIES AND LOW VARIANCE IN MARCELLUS Anteros Marcellus average 30-day rates have increased by 64% over the past two years as the Company increased per well lateral lengths by 20% and shortened stage lengths by 43%…
  26. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 26
    MARCELLUS WELL PERFORMANCE IMPROVEMENTS Increasing recoveries and efficiencies, through longer laterals, shorter stage lengths and faster drilling SSL completions drove a 21% decline in estimated development costs in 2014 while lower…
  27. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 27
    MARCELLUS ROR% AND GAS PRICE SENSITIVITY Large portfolio of Highly-Rich Gas/Condensate to Dry Gas locations Focused on drilling highly economic rich gas locations rig symbols represent current rig location by Btu regime Assumes…
  28. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 28
    LEADING UTICA SHALE CORE POSITION DELIVERS CONDENSATE AND NGLS Utica Shale Industry Activity(1) 100% operated Cadiz Operating 7 rigs including 3 intermediate rigs Processing Plant 148,000 net acres in the core rich gas/ condensate…
  29. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 29
    UTICA WELL PERFORMANCE IMPROVEMENTS Increasing recoveries and efficiencies through longer laterals, shorter stage lengths and faster drilling Lower service costs are expected to drive development cost per unit reductions in 2015 (1)…
  30. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 30
    UTICA ROR% AND GAS PRICE SENSITIVITY Large portfolio of Condensate to Dry Gas locations Focused on drilling highly economic rich gas locations rig symbols represent current rig location by Btu regime Assumes 12/31/2014 WTI strip…
  31. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 31
    LARGE UTICA SHALE DRY GAS POSITION Utica Shale Dry Gas Acreage in OH/WV/PA(1) Antero has 212,000 net acres of exposure to Utica dry gas play Rice Hess Chesapeake Range 42,000 net acres in Ohio with net 3P reserves of 2.4 Tcf as of…
  32. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 32
    FRESH WATER DISTRIBUTION SYSTEMS Projected Midstream Infrastructure(1) Marcellus Utica Shale Shale Total YE 2015E Cumulative Fresh Water System Capex (MM) 338 112 450 Water Pipelines (Miles) 226 90 316 Water Storage Facilities 24…
  33. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 33
    FIRM TRANSPORTATION AND FIRM SALES PORTFOLIO Columbia Tennessee Momentum III EQT REX/MGT/ANR 7/26/2009 9/30/2025 11/1/2015 9/30/2030 9/1/2012 12/31/2023 8/1/2012 6/30/2025 7/1/2014 12/31/2034 ANR Local Distribution Firm Sales 1 Firm…
  34. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 34
    FIRM TRANSPORTATION REDUCES APPALACHIAN BASIS EXPOSURE Anteros firm transportation (FT) portfolio increases visibility on production growth and increases exposure to Gulf Coast and Midwest pricing, with little incremental cost per Mcf…
  35. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 35
    ANTERO FIRM TRANSPORTATION APPROPRIATELY DESIGNED TO ACCOMMODATE GROWTH Marketable FT (BBtu/d) (3) % FT Utilization Anteros firm transport (FT) is well (BBtu/d) Firm Transportation / Firm Sales (BBtu/d) (including utilized during…
  36. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 36
    HEALTH, SAFETY, ENVIRONMENT & COMMUNITY Antero Core Values: Protect Our People, Communities And The Environment Strong West Virginia Keys to Execution Presence Antero has more than 3,500 employees and contract personnel working…
  37. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 37
    CLEAN FLEET & CNG TECHNOLOGY LEADER Antero has contracted for two clean completion fleets to enhance the economics of its completion operations and reduce the environmental impact Replaces diesel engines (for pressure pumping) with…
  38. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 38
    Antero Midstream (NYSE: AM) Asset Overview 38
  39. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 39
    ANTERO MIDSTREAM 2015 GUIDANCE Key Operating & Financial Assumptions Key Variable 2015 Guidance Adjusted EBITDA (MM) 150 - 160 Distributable Cash Flow (MM) 135 - 145 Year-over-Year Distribution Growth 28% - 30% Low Pressure…
  40. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 40
    SUBSTANTIAL INVESTMENT IN MIDSTREAM MLP (NYSE: AM) Midstream Assets Utica Gathering and compression assets in core of rapidly Shale growing Marcellus and Utica Shale plays Acreage dedication of 412,000 net leasehold acres for…
  41. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 41
    HIGH GROWTH THROUGHPUT Low Pressure Gathering (MMcf/d) Compression (MMcf/d) 1,000 250 Marcellus 222 Utica Marcellus 800 738 200 600 533 150 116 386 400 100 331 281 216 200 50 40 36 41 26 31 108 0 0 2Q '13 3Q '13 4Q…
  42. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 42
    SIGNIFICANT FINANCIAL FLEXIBILITY AM Liquidity (12/31/2014) Financial Flexibility Unfunded 1 billion revolver in place to fund future growth ( in millions) capital (5x Debt/EBITDA Cap) Revolver Capacity 1,000 230 million of cash at…
  43. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 43
    APPENDIX 43
  44. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 44
    PRO FORMA CAPITALIZATION ( in millions) 12/31/2014 Cash 246 Senior Secured Revolving Credit Facility 1,730 6.00% Senior Notes Due 2020 525 5.375% Senior Notes Due 2021 1,000 5.125% Senior Notes Due 2022 1,100 Net Unamortized…
  45. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 45
    LOWEST FINDING & DEVELOPMENT COST AMONG U.S. PRODUCERS Antero ranks as the most efficient finder and developer of reserves, on a per Mcfe basis, based on a 2011-2013 average all-in F&D cost analysis prepared by Credit Suisse 3-Year…
  46. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 46
    OUTSTANDING RESERVE GROWTH NET PROVED RESERVES (Bcfe)(1) 2014 RESERVE ADDITIONS 3P reserves increased 16% to 40.7 Tcfe with a PV-10 of Marcellus Utica 22.8 billion 14,000 All-in finding and development cost of 0.61/Mcfe for 2014…
  47. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 47
    COMPLETION DEFERRALS OPERATIONAL FLEXIBILITY Plan to defer 50 Marcellus well completions into 2016 to achieve higher gas price realizations Regional gathering pipeline expected in-service late 2015 will connect incremental Marcellus…
  48. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 48
    LOW DEVELOPMENT COST DRIVES BEST IN CLASS RECYCLE RATIOS 3-Year Proved Development Costs (/Mcfe) through 2013 /Mcfe 6.00 Antero Appalachia-Focused Peers Other Peers 5.00 4.00 3.00 2.00 1.60 1.15 1.18 1.21 1.00 0.00…
  49. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 49
    CONSIDERABLE RESERVE BASE WITH ETHANE OPTIONALITY 35 year proved reserve life based on 2014 production annualized Reserve base provides significant exposure to liquids-rich projects 3P reserves of over 2.5 BBbl of NGLs and condensate…
  50. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 50
    HISTORICAL ANTERO HEDGING RESULTS Antero has realized almost 900 million of gains on commodity hedges over the past 7 years Gains realized in 26 of last 28 quarters Quarterly Realized Gains/(Losses) MMs 1Q '08 - 4Q '14 /Mcfe 100.0…
  51. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 51
    BALANCE SHEET POSITIONED FOR LONG-TERM GROWTH The recent bond offerings, at progressively lower coupons, have allowed Antero to reduce its cost of debt to under 5.0% and enhance liquidity while extending the pro forma average debt…
  52. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 52
    POSITIVE RATINGS MOMENTUM Moodys / S&P Historical Corporate Credit Ratings Moodys Upgrade Criteria S&P Upgrade Criteria An upgrade could be considered if debt / average daily production is We could raise the ratings due to our…
  53. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 53
    MARCELLUS & UTICA ADVANTAGED ECONOMICS Low cost, liquids-rich Utica and Marcellus Shales will remain attractive in most commodity price environments U.S. INCREMENTAL GAS SUPPLY BREAK-EVEN PRICE CURVE(1) 3,000 Antero Drilling…
  54. MARCH 2015 COMPANY OVERVIEW – Antero Resources – slide 54
    LNG EXPORTS BY PROJECT CURRENT STATUS LNG Exports by Project Current Status Dates of Key Milestones Send Out Non- DOE Non-FTA FERC FTA Permit Underlying Permit Construction Capacity Gas Demand Project Awarded Approval (Bcf/d)…

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