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HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources

Antero Resources · Mar 24, 2014 · 42 slides

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Slides

  1. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 1
    Howard Weil 42nd Annual Energy Conference March 24, 2014
  2. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 2
    WORLD CLASS POSITION IN THE CORE OF THE MARCELLUS AND UTICA LIQUIDS-RICH FAIRWAYS ANTERO LIQUIDS-RICH UTICA SHALE Marcellus Utica Shale 107,000 Net Acres Shale Liquids-Rich 18 Horizontals Completed Southwestern Fairway 5 Rigs…
  3. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 3
    STRONG TRACK RECORD OF GROWTH AVERAGE NET DAILY PRODUCTION (MMcfe/d) NET PROVED SEC RESERVES (Bcfe)(2) Woodford Piceance Marcellus Utica Woodford Piceance Marcellus(3) Utica 1,000 950 9,000 8,000 7,632 800 Sold Woodford Sold…
  4. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 4
    PREMIER UNCONVENTIONAL RESOURCE PLATFORM TOTAL 12/31/13 RESERVES(1) A MARCELLUS SHALE Pure-Play Appalachian-Focused Shale Company Assumes Ethane Rejection Net Proved Reserves(1) 7.2 Tcfe 100% operated Net Proved Reserves(1) 7.6 Tcfe…
  5. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 5
    OUTSTANDING RESERVE GROWTH PROVED RESERVE GROWTH(1) 2013 RESERVE UPDATE Proved PV-10 increased 133% to 7.0 billion (including (Tcfe) hedges) 10 Drivers Successful 3P PV-10 increased 82% to 21.4 billion (including hedges) 7.6 8…
  6. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 6
    LARGE UNBOOKED ANTERO UTICA DRY GAS POSITION Dry gas resource position underlies Anteros Marcellus leasehold in WV / PA 128,000 Utica dry gas net acres Chesapeake 1,080 locations underlying current Marcellus Shale leasehold Hubbard…
  7. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 7
    INTEGRATED MIDSTREAM PROCESSING AND TAKEAWAY Infrastructure and commitments in place to handle strong natural gas, NGL and oil production growth Portfolio of firm transportation and sales and West Virginia location minimizes basis…
  8. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 8
    LONG HAUL PIPELINE AND TRANSPORTATION NETWORK Antero has a leading firm transportation capacity position and is well-positioned in the southern portion of the Marcellus and Utica Shale from a gas takeaway perspective Chicago Leidy…
  9. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 9
    FIRM TRANSPORTATION REDUCES APPALACHIAN BASIS EXPOSURE Anteros future firm transportation portfolio introduces more exposure to Gulf Coast and Chicago pricing, with little incremental cost All-in Firm Transportation Costs + 0.06/Mcf…
  10. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 10
    2014E REALIZATIONS ESTIMATED 2014 NATURAL GAS REALIZATIONS (/MCF) Average 2014E Average Average Average Estimated Average 2014E Premium / Region % Sales NYMEX Price(3) Differential(2),(3) BTU Upgrade Hedge Gain(3) Realized Gas…
  11. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 11
    BIGGEST BANG FOR THE BUCK IN APPALACHIAN BASIN Antero has the highest price realizations and operating cash flow per Mcfe combined with the lowest all-in F&D cost among its Appalachian peers Results in highest recycle ratio, or ability…
  12. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 12
    LOW DEVELOPMENT COST DRIVES BEST-IN-CLASS RECYCLE RATIOS 3-Year All-in Development Costs (/Mcfe) through 2012 /Mcfe 4.00 3.00 Antero Appalachia-Focused Peers Other Peers 2.00 1.71 1.41 1.57 1.03 1.14 1.00 0.00 Source:…
  13. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 13
    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) Over 2,700 Antero…
  14. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 14
    SIGNIFICANT LONG-TERM COMMODITY HEDGE POSITION NATURAL GAS HEDGES 3/18/2014 BBtu/d Hedged Volume Average Index Hedge Price (/MMBtu)(1) NYMEX Strip (3/18/2014) (/MMBtu) 800 7.00 4.92 6.00 600 4.80 4.71 4.60 4.41 4.33 5.00 4.49…
  15. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 15
    LARGE MIDSTREAM FOOTPRINT Antero Midstream estimated cumulative YE 2014 total capital investment in midstream 1.5 billion Includes gathering lines, compressor stations and water distribution infrastructure Proprietary water…
  16. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 16
    APPALACHIAN FRESH WATER DISTRIBUTION SYSTEM West Virginia System 2014+ Antero leasehold Marcellus withdrawal point Utica Tyler County Ohio System West Virginia System Pleasants County Doddridge County Harrison County…
  17. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 17
    ASSET OVERVIEW 17
  18. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 18
    WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT Antero Has Delineated And De-Risked Its Large Scale Acreage Position 100% operated DOTSON UNIT MHR WEESE UNIT BLANCHE UNIT 30-Day Rate 352,000 net acres in 30-Day Rate 30-Day Rate 1H:…
  19. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 19
    MARCELLUS SIMPLE STRUCTURE Several regional anticlines in core area Predictable layer cake geology No faults at Marcellus level Over 1.7 million feet (315 miles) drilled horizontally without crossing a fault 3-D seismic not…
  20. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 20
    SHORTER STAGE LENGTHS (SSL) ENHANCING MARCELLUS RECOVERIES Enhancing Recoveries SSL vs Non-SSL Wellhead Shorter stage length (SSL) summary: Average Rate Comparison 36 SSL wells completed 30-day 90-day 120-day 180-day Rate Rate Rate…
  21. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 21
    ANTEROS MARCELLUS SHALE TYPE CURVE SUPPORT Antero has over four years of production history to support its 1.5 Bcf/1,000 type curve (non-SSL) Anteros SSL type curve has been increased to 1.73 Bcf/1,000 with only 12% to 15% higher well…
  22. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 22
    MARCELLUS SINGLE WELL ECONOMICS ASSUMES ETHANE REJECTION Assumptions Marcellus SSL Well Economics and Total Locations(1) 12/31/2013 Strip Pricing & SEC Reserves 150% 890 1,000 NYMEX WTI C3+ NGL(2) 637 834 Total 3P Locations…
  23. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 23
    EXCITING CORE UTICA SHALE POSITION DELIVERS CONDENSATE AND NGLS 100% operated Utica Shale Industry Activity(1) 107,000 net acres in the core rich gas / condensate window GULFPORT 24-Hour IP Wagner 1-28H, 20% HBP with additional 79%…
  24. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 24
    UTICA CORE GEOLOGICALLY DEFINED Utica Geologic Map Core Utica Shale Liquids-Rich Fairway SEM: Highly Porous Amorphous Kerogen - Miley 5H Core A CEMCO OPERATING ANTERO RESOURCES CORPORATION CHESAPEAKE EXP LLC A CHESAPEAKE…
  25. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 25
    ANTERO HAS MOST OF THE TOP UTICA 24-HOUR IPS STRONG SUPPORT FOR CORE POSITION Antero has 12 of the top 13 UTICA 24-HOUR IPs Utica 24-hour peak rates (IPs) Core announced to date 12 to 53 Represent some of the best 24- 60.0 MMcfe/d…
  26. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 26
    UTICA SINGLE WELL ECONOMICS ASSUMES ETHANE REJECTION Assumptions Utica Well Economics and Locations(1) 12/31/2013 Strip Pricing & SEC Reserves 200% 161 250 205 211 NYMEX WTI C3+ NGL(2) 182 200 Total 3P Locations (/MMBtu)…
  27. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 27
    ANTERO KEY ATTRIBUTES Critical Mass In Two World Class Shale Plays Market Leading Growth Industry Leading Capital Efficiency and Recycle Ratio Significant Emphasis on Takeaway and Liquids Processing Liquidity and Hedge…
  28. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 28
    APPENDIX 28
  29. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 29
    HEALTH, SAFETY, ENVIRONMENT & COMMUNITY Antero Core Values: Protect Our People and the Environment Strong West Virginia Presence Keys to Execution Over 75% of Antero Marcellus Closed loop mud system no mud pits employees and contract…
  30. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 30
    ANTERO FIRM TRANSPORTATION AND FIRM SALES Columbia Firm Sales 1 Firm Sales 2 Firm Sales 3 7/26/2009 9/30/2025 10/1/2011 10/31/2019 10/1/2011 5/31/2017 1/1/2013 5/31/2022 Momentum III EQT REX/MGT/ANR 9/1/2012 12/31/2023 8/1/2012…
  31. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 31
    MARCELLUS SHALE RICH GAS LIQUIDS AND PROCESSING UPGRADE Marcellus Shale rich gas and highly-rich gas acreage provides a significant advantage in well economics assuming 4.25/MMBtu NYMEX, 90.00/Bbl WTI and current spot NGL…
  32. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 32
    2013 REALIZATIONS 2013 NATURAL GAS REALIZATIONS (/MCF) Average 2013 Average Average Average Average 2013 Premium / % Sales NYMEX Price Differential(2) BTU Upgrade Realized Price(3) (Discount) TCO 67% 3.65 (0.06) 0.42 4.02 0.37…
  33. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 33
    MULTI-YEAR DRILLING INVENTORY SUPPORTS LOW-RISK, HIGH-RETURN GROWTH PROFILE MARCELLUS SSL WELL ECONOMICS(1)(2) UTICA WELL ECONOMICS(1) 150% 637 834 890 1000 1,000 200% 205 161 211 250 Total 3P Locations 707 800 182 200…
  34. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 34
    OUTSTANDING UTICA WELL RESULTS DRIVE STRONG PROVED RESERVE BOOKING Antero Utica Well Results Antero Type Curve Regime - 12/31/2013 Strip Pricing - 7,000' Lateral Ethane Recovery Ethane Rejection Well 24-Hour Peak Rate % Total…
  35. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 35
    ANTERO UTICA SHALE WELLS 24 HOUR IPS 24hr Peak Rate Lateral Well Gas Equivalent Rate Wellhead Gas Shrunk Gas NGL Condensate % Total Length Name County (MMcfe/d) (MMcf/d) (MMcf/d) (Bbl/d) (Bbl/d) Liquids BTU (Feet) Yontz 1H Monroe…
  36. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 36
    ANTERO UTICA SHALE WELLS 30-DAY RATES Anteros wells produced against 1,100 psi line pressure until late January 2014 due to lack of compression facilities First 120 MMcf/d compressor station started up in late January 2014 30Day…
  37. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 37
    CONSIDERABLE RESERVE BASE WITH ETHANE OPTIONALITY 40 year proved reserve life based on 2013E production Reserve base provides significant exposure to liquids-rich projects 3P reserves of over 2.2 BBbl of NGLs and condensate in ethane…
  38. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 38
    POSITIVE RATINGS MOMENTUM Moodys / S&P Historical Credit Ratings Moodys Upgrade Criteria S&P Upgrade Criteria An upgrade could be considered if debt / average daily production is We would consider a positive rating action if the…
  39. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 39
    ANTERO 2014 GUIDANCE Key 2014 Operating & Financial Assumptions(1) Key Variable Guidance Range Natural Gas Realized Price Premium to NYMEX (/Mcf)(2) 0.00 - 0.10 NGL Realized Price (% of WTI) (/Bbl) 53% - 57% Oil Realized Price…
  40. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 40
    ANTERO 2014 CAPITAL BUDGET 2014E 2014E 200 27% 600 2.60 Billion 1,800 73% Drilling & Completion Midstream Land Marcellus Utica 2013E 2013E 450 18% 650 1,550 2.65 Billion 82% Drilling & Completion Midstream…
  41. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 41
    PRO FORMA CAPITALIZATION CAPITALIZATION (PF Financing) ( in millions) 12/31/2013 12/31/2013 (2) Cash 17 17 Senior Secured Revolving Credit Facility 288 288 7.25% Senior Notes Due 2019 260 260 6.00% Senior Notes Due 2020 525 525…
  42. HOWARD WEIL 42ND ANNUAL ENERGY CONFERENCE – Antero Resources – slide 42
    ANTERO EBITDAX RECONCILIATION EBITDAX Reconciliation ( in millions) (12 Months Ended) Antero Resources LLC 12/31/2012 12/31/2013 EBITDAX: Net income (loss) from continuing operations 225.3 (24.2) Commodity derivative fair value…

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