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Scotia Howard Weil 2015 Energy Conference – Antero Resources

Antero Resources · Mar 23, 2015 · 55 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. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 1
    Scotia Howard Weil 2015 Energy Conference March 23, 2015
  2. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 2
    OUTSTANDING RESERVE GROWTH Antero has the largest proved reserve base in the Appalachian Basin PROVED RESERVE GROWTH (1) 2014 RESERVE ADDITIONS 3P reserves increased 16% to 40.7 Tcfe at 12/31/14 with a (Tcfe) Marcellus Utica PV-10 of…
  3. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 3
    CURRENT NGL MARKETING GEOGRAPHICALLY DIVERSE MarkWest currently processes all of Anteros rich gas and markets all NGLs Mariner East II 61,500 Bbl/d AR Commitment(1) 4Q 2016 In-Service 2015 NGL Marketing by Region Export…
  4. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 4
    ATTRACTIVE NGL REALIZATIONS AND PROPANE HEDGES Realized NGL Prices as % of WTI 2015E NGL Price Road Map (1) (WTI) (% of NGL Bbl) Realized NGL C3+ Price WTI Wtd. Avg. 120.00 1% Ethane 100% Mont Belvieu NGL Strip (1) % of C3+ Price…
  5. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 5
    RAPID GROWTH IN LPG EXPORTS AND CAPACITY Marcus Hook LPG Exports - 2014 U.S. Total LPG Export Capacity vs. Export Volumes Africa 2% 1800 Excess export 1600 capacity to support 1400 growing LPG export Antero access to export North…
  6. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 6
    2015 CAPITAL BUDGET Anteros 2015 capital budget is 1.8 billion, a 49% decrease from 2014 capital expenditures of 3.5 billion 3.5 Billion - 2014 1.8 Billion New 2015 By Segment (MM) By Segment (MM) 50 150 841 49% 197 2,477…
  7. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 7
    COMPLETION DEFERRALS OPTIMIZING PRICING 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…
  8. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 8
    LEADING UNCONVENTIONAL BUSINESS MODEL Largest Liquids-Rich Highest Growth Core Position in Large Cap E&P Appalachia 2 3 Growth Liquids-Rich Most Active Operator Low Break-Even in Appalachia 1 4 Well Price Economics Drilling…
  9. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 9
    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 &…
  10. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 10
    GROWTH STRONG TRACK RECORD NET PROVED RESERVES (Bcfe) AVERAGE NET DAILY PRODUCTION (MMcfe/d) Marcellus Utica Marcellus Utica Guidance 15,000 1,800 12,683 12,000 1,400 1,200 9,000 1,007 7,632 6,000 4,283 600 522 2,844 3,000…
  11. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 11
    LIQUIDS-RICH LARGEST CORE POSITION Antero has the largest liquids-rich core position in Appalachia with 375,000 net acres ( 1100 Btu) Represents over 21% of liquids-rich core acreage in Marcellus and Utica plays combined 2x…
  12. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 12
    WELL ECONOMICS LOW BREAK-EVEN PRICE ECONOMICS 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…
  13. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 13
    MIDSTREAM MLP (NYSE: AM) HIGHLIGHTS SUBSTANTIAL VALUE IN MIDSTREAM BUSINESS Corporate Structure Overview(1) Antero Resources Corporation (NYSE: AR) 13.5 Billion Enterprise Value(1) Ba2/BB Corporate Rating 70% Limited Partner…
  14. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 14
    TAKEAWAY LARGEST FIRM TRANSPORTATION AND PROCESSING PORTFOLIO IN APPALACHIA Antero Long Term Firm Processing & Takeaway Position (2018) Accessing Favorable Markets Chicago(1) Mariner East II 4.1 Bcf/d 62 MBbl/d Commitment +0.02 /…
  15. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 15
    LIQUIDITY LARGEST GAS HEDGE POSITION IN U.S. E&P + STRONG FINANCIAL LIQUIDITY 2.4 billion mark-to-market unrealized gain based on 3/16/2015 prices 2.4 Tcfe hedged from January 1, 2015 through year-end 2020 and 294 Bcf of TCO basis…
  16. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 16
    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)…
  17. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 17
    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…
  18. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 18
    ASSET OVERVIEW 18
  19. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 19
    MULTI-YEAR DRILLING INVENTORY SUPPORTS LOW RISK, HIGH RETURN GROWTH PROFILE Antero has over 3,000 undrilled liquids-rich Marcellus and Utica locations with an average lateral length of 6,831 feet MARCELLUS SSL WELL ECONOMICS(1) UTICA…
  20. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 20
    WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT 100% operated RJ SMITH PAD Operating 7 drilling rigs including BEE LEWIS PAD 30-Day Rate 2 intermediate rigs 30-Day Rate 4-well combined 4-well combined 30-Day Rate of 400,000 net…
  21. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 21
    PROLIFIC PREDICTABLE RESULTS ACROSS ENTIRE MARCELLUS POSITION Anteros Marcellus well performance has continued to improve over time with a tight statistical range of results across its entire acreage position Marcellus PDP Locations…
  22. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 22
    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%…
  23. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 23
    MARCELLUS WELL PERFORMANCE IMPROVEMENTS Increasing recoveries and efficiencies, through longer laterals, shorter stage lengths and faster drilling SSL completions drove a 21% decline in development costs in 2014 while lower service…
  24. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 24
    LEADING UTICA SHALE CORE POSITION DELIVERS PROLIFIC LIQUIDS-RICH WELLS 100% operated Cadiz Operating 4 drilling rigs Processing Plant 148,000 net acres in the core rich gas/ condensate window (72% includes processable rich gas…
  25. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 25
    UTICA WELL PERFORMANCE IMPROVEMENTS Increasing recoveries and efficiencies through longer laterals, shorter stage lengths and faster drilling Lower service costs and focus on liquids-rich locations expected to drive development cost…
  26. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 26
    LARGE UTICA SHALE DRY GAS POSITION Utica Shale Dry Gas Acreage in OH/WV/PA(1) Antero has 216,000 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…
  27. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 27
    ANTERO WATER BUSINESS Antero has built an integrated water business to serve upstreams water needs including fresh water distribution for completions as well as water handling, treating and recycling Projected Fresh Water…
  28. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 28
    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…
  29. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 29
    Antero Midstream (NYSE: AM) Asset Overview 29
  30. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 30
    ANTERO MIDSTREAM PARTNERS OVERVIEW Midstream Assets Utica Gathering and compression assets in core of rapidly Shale growing Marcellus and Utica Shale plays Acreage dedication of 417,000 net leasehold acres for gathering and…
  31. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 31
    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…
  32. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 32
    FULL MIDSTREAM VALUE CHAIN POTENTIAL Well Pad Condensate Gathering End Stabilization Users Compression (Miles) YE 2014 YE 2015 Fresh Water Utica 16 20 (Miles) YE 2014 YE 2015 Marcellus 62 81 Distribution(1) Low Pressure…
  33. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 33
    ANTERO MIDSTREAM MLP INVESTMENT HIGHLIGHTS Premier E&P Sponsorship Pure Play Marcellus/Utica Midstream MLP Top Tier MLP Organic Growth Full Midstream Value Chain Potential Financial Flexibility & Strong Capital Structure…
  34. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 34
    APPENDIX 34
  35. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 35
    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…
  36. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 36
    PRO FORMA CAPITALIZATION CONSOLIDATED Pro Forma Pro Forma Senior Notes(3) Equity(4) ( in millions) 12/31/2014 12/31/2014 12/31/2014 Cash 246 246 246 Senior Secured Revolving Credit Facility 1,730 991 512 6.00% Senior Notes Due…
  37. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 37
    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…
  38. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 38
    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% 35% 25.6% 25% 23.8% 20.0% 19.1% 17.7% 15.1% 15% 9.3% 7.0% 5% 3.9% 2.3% (1.5%)…
  39. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 39
    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…
  40. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 40
    CURRENT SINGLE WELL ECONOMICS Increasing recoveries and efficiencies through faster drilling, longer laterals and shorter stage lengths, combined with reduced well costs has resulted in improved well economics in the Marcellus and…
  41. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 41
    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…
  42. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 42
    MARCELLUS SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Marcellus SSL Well Economics and Total Gross Locations(1) Natural Gas 12/31/2014 strip 60% 1,010 1,050 Oil 12/31/2014 strip 889 900 NGLs 50% of Oil Price 43% Total…
  43. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 43
    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…
  44. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 44
    UTICA SINGLE WELL ECONOMICS IN ETHANE REJECTION Assumptions Utica Well Economics and Gross Locations(1) Natural Gas 12/31/2014 strip 289 60% 300 248 52% Oil 12/31/2014 strip 254 Total 3P Locations 250 NGLs 50% of Oil Price 45%…
  45. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 45
    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…
  46. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 46
    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…
  47. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 47
    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…
  48. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 48
    ANTERO FIRM TRANSPORTATION APPROPRIATELY DESIGNED TO ACCOMMODATE GROWTH Marketable FT (BBtu/d) (2) (3) % FT Utilization Anteros firm transport (FT) is well (BBtu/d) Firm Transportation / Firm Sales (BBtu/d) (including utilized…
  49. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 49
    HISTORICAL ANTERO HEDGING RESULTS Antero has realized over 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…
  50. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 50
    BALANCE SHEET POSITIONED FOR LONG-TERM GROWTH The recent bond and equity offerings have allowed Antero to reduce its cost of debt to 5.0% and significantly enhance liquidity while extending the pro forma average debt maturity to…
  51. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 51
    POSITIVE RATINGS MOMENTUM Moodys / S&P Historical Corporate Credit Ratings Moodys Upgrade Rationale S&P Upgrade Criteria The upgrade reflects Moody's expectation that Antero will continue to We could raise the ratings due to our…
  52. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 52
    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%…
  53. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 53
    LNG EXPORTS BY PROJECT EXPECTED START UP LNG Exports by Project Through 2020 Assuming 9.5 Bcf/d of LNG exports by 2020, LNG Exports by Project Antero Supplied the U.S. will be the worlds 3rd largest LNG exporter behind Qatar and…
  54. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 54
    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…
  55. Scotia Howard Weil 2015 Energy Conference – Antero Resources – slide 55
    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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