Antero Resources Corporation · NYSE:AR
Antero Resources — Q3 2023 Earnings Presentation
20 slides from Antero Resources's earnings presentation, Oct 26, 2023
Slide 1: Third Quarter 2023 Earnings Call Presentation
Third Quarter 2023 Earnings Call Presentation October 26, 2023
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation includes “forward-looking statements.” Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under AR’s control. All statements, except for statements of historical fact, made in this presentation regarding activi
Slide 3: Drilling and Completion Efficiencies
Drilling and Completion Efficiencies Increasing Pumping Hours per Day… Increases Completion Stages per Day… 20.0 22.2 Company 16.0 Stages Record 18.0 17.1 10.8 Company Record 16.0 June 2023 March 2023 14.0 11.7 12.0 10.0 5.8 8.0 6.0 2019 2020 2021 2022 YTD Daily 2019 2020 2021 2022 YTD Daily 2023 Re
Slide 4: Increased Production Guidance
Increased Production Guidance Drilling and completion efficiencies combined with strong well performance translates to higher production 2023 Production Guidance (MMcfe/d) Maintenance Capital ($MM) Material $925 Reduction 3,400 4% Increase $875 3,275 Initial Guidance Updated Guidance 2023 Guidance 2
Slide 5: AR Has the Largest Low Cost Inventory
AR Has the Largest Low Cost Inventory Appalachia Sub-$2.75/Mcfe Inventory (Years - Locations Based on 3rd Party Data) 25 Includes $17 Bn of Acquisitions Since 2021 22 (six separate transactions) 20 16 16 15 Includes ~$340 MM 12 Years of Organic 10 Leasing Since 2021 6 5 5 - AR P1 P2 P3 P4 P5 Peer ra
Slide 6: U.S. Exports of Propane Hit Record Highs in 2023
U.S. Exports of Propane Hit Record Highs in 2023 U.S. Exports of Propane/Propylene, Quarterly Average (MMBbl/d) MMBbl/d Weekly Record High Set on October 6, 2023 of 2.129 MMBbl/d 1.8 2020 2021 2022 2023 2023 Avg YTD: 1.7 Western Economies 1.60 MMBbl/d Reopening 1.6 2022 Avg: 1.35 MMBbl/d 1.5 COVID ‘
Slide 7: U.S. Propane Stocks and Propane Days of Supply
U.S. Propane Stocks and Propane Days of Supply Propane Inventories Just Above 5-Year Historical Range Despite High Absolute Propane Stocks, Days of Supply as Exports Ramp to Record Highs Remains Within 5-Year Range Current High Inventories Due To: MMBbl Days • Lack of Winter 2022-2023 Weather 110 •
Slide 8: China PDH Buildout Continues
China PDH Buildout Continues China has Added 120 MBbl/d of China PDH Demand Capacity in 2023, 340 MBbl/d More to be Added by End of 2024 MMBbl/d Globally Planned PDH Units China’s Planned 2023/2024 PDH Units China North America Middle East Rest of Asia Europe 0.3 0.2 0.1 0.0 2023 2024 In Service PDH
Slide 9: Rig Count Declines Have Accelerated in Key Producing Basins
Rig Count Declines Have Accelerated in Key Producing Basins Antero Resources (NYSE: AR) Source: S&P Global Commodity Insights, RigData 9
Slide 10: Dramatic Reduction in Activity Will Limit Production Growth
Dramatic Reduction in Activity Will Limit Production Growth U.S. Natural Gas Basin Drilling Rigs (Appalachia + Haynesville) 160 140 53% Decline 41% Decline in rigs in rigs 120 100 80 60 2023: 2019 / 2020: Primarily Haynesville 40 Primarily Appalachia rigs rigs with higher 20 with lower base decline
Slide 11: Firm Transport to the LNG Fairway
Firm Transport to the LNG Fairway 75% of Antero’s Natural Gas is Delivered to the LNG Fairways Firm Transport to LNG Fairway 75% (Bcf/d) 2.3 of Natural Gas Production(1) 1.5 1.0 0.9 0.3 Bcf/d Cove Point LNG 0.4 TGP/CGT/ 0.0 GXP AR P1 P2 P3 P4 P5 AR is currently % of Total Production (1) 75% 54% 11%
Slide 12: Not All Transport to the U.S. Gulf Coast is Equal
Not All Transport to the U.S. Gulf Coast is Equal LNG Fairway Transport and Tiered Price Map 10% Tier 3 Cal ’25: ($0.24) Cal ’26: ($0.24) Tier 1: 90% Peers(1) 33% Tier 1 TGP 500L Cal ’25: $0.06 Tier 2-3: Cal ’26: $0.04 Cal ’25: $0.25 67% Cal ’26: $0.29 Tier 2 Cal ’25: ($0.19) Cal ’26: ($0.18) TX Ant
Slide 13: Storage Levels Trending Towards the 5-Year Average
Storage Levels Trending Towards the 5-Year Average NYMEX Natural Gas Price and Gas Storage Surplus/Deficit vs. 5-year Avg. 500 $9.00 Storage vs. Previous 5-Year Average Storage Trending Henry Hub Spot Price ($/MMBtu) Towards 5-Year Average 400 $8.00 5-Year Storage Neutral Price Levels 300 $7.00 200
Slide 14: Antero Capital Efficiency vs. Peers
Antero Capital Efficiency vs. Peers D&C Capital vs. Production Most Capital Efficient Average DD&C Growth: +25% 10% Production Growth 8% % Change in Production (3Q23 / 3Q22) 6% 4% 2% 0% Production Growth 0% Least Capital Efficient Peer 2 Peer 4 Peer 1 -2% Production Decline Peer 5 -4% -6% Peer 3 -8%
Slide 15: Appendix
APPENDIX
Slide 16: Guidance
Guidance 2023 Guidance Ranges Net Production (Bcfe/d) 3.39 – 3.41 Net Natural Gas Production (Bcf/d) 2.22 – 2.24 Net Liquids Production (Bbl/d) 194,000 – 195,500 Natural Gas Realized Price Expected Premium to Flat to NYMEX NYMEX ($/Mcf) C2 Ethane Realized Price - Expected Premium to ($1.00) - $1.00
Slide 17: Antero Resources Non-GAAP Measures
Antero Resources Non-GAAP Measures Adjusted EBITDAX: Adjusted EBITDAX as defined by the Company represents income or loss, including noncontrolling interests, before interest expense, interest income, unrealized gains or losses from commodity derivatives, but including net cash receipts or payments
Slide 18: Antero Resources Adjusted EBITDAX Reconciliation
Antero Resources Adjusted EBITDAX Reconciliation Three Months Ended September 30, 2022 2023 Reconciliation of net income to Adjusted EBITDAX: Net income and comprehensive income attributable to Antero Resources Corporation $ 559,759 17,808 Net income and comprehensive income attributable to noncontr
Slide 19: Antero Resources Adjusted EBITDAX Reconciliation
Antero Resources Adjusted EBITDAX Reconciliation Twelve Months Ended September 30, 2023 Reconciliation of net income to Adjusted EBITDAX: Net income and comprehensive income attributable to Antero Resources Corporation $ 878,451 Net income and comprehensive income attributable to noncontrolling inte
Slide 20: Antero Resources Total Debt to Net Debt Reconciliation
Antero Resources Total Debt to Net Debt Reconciliation December 31, September 30, 2022 2023 Credit Facility $ 34,800 474,100 8.375% senior notes due 2026 96,870 96,870 7.625% senior notes due 2029 407,115 407,115 5.375% senior notes due 2030 600,000 600,000 4.250% convertible senior notes due 2026 5