Antero Resources Corporation · NYSE:AR
Antero Resources — Investor Presentation (April 2012)
22 slides from Antero Resources's investor presentation, Apr 11, 2012
Slide 1: Company Overview
June 2011 Company Overview
Slide 2: Forward Looking Statements
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation that address activities, events or de
Slide 3: Reserve estimates and SEC cautionary note
The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserve estimates (3P). Antero has provided internally generated estimates for proved, probable and possible reserves in this presentation in
Slide 4: Antero Snapshot
Antero Snapshot Antero is an E&P company focused on acquiring, developing and producing unconventional natural gas in the U.S. Diversified asset base with critical mass in Appalachian, Piceance and Arkoma resource plays Gross operated production of 269 MMcfe/d (236 MMcfe/d net including 38 MMcfe/d n
Slide 5: Strengthened credit quality since November 2009 bond offering
Antero has significantly strengthened its credit quality since its initial bond offering in November 2009: New Credit Facility – Established $1.5 billion credit facility led by JP Morgan and Wells Fargo Bluestone Marcellus Acquisition – Acquired 40,000 net acres in the heart of the southwestern core
Slide 6: Reserves, PV-10 and acreage by play
Proved Reserves (1) 60 Bcfe Total 3P (2) 93 Bcfe Proved PV-10 (1,3) $13 Million Net Production 7 MMcf/d Net Acreage 5,300 Fayetteville Shale Proved Reserves (1) 1,701 Bcfe Total 3P (2) 3,271 Bcfe Total 3P Liquids (2) 115 MMBbls Proved PV-10 (1,3) $941 Million Net Production 40 MMcfe/d Net Acreage 64
Slide 7: Strong Track Record of Growth
Strong Track Record of Growth Mid-point of most recent company production guidance. Proved reserves for 2006, 2007 and 2008 were determined using previously effective SEC methodology. 2009 and 2010 reserves based on currently effective SEC methodology and pricing. 31 85 8 105 CAGR = ~95% 85 96 126 8
Slide 8: Industry Leading 3-Year Finding Costs
Industry Leading 3-Year Finding Costs Industry 3-Year All-in Finding Costs(1) 3-Year Comp Median = $1.33/Mcfe(3) 2010 Antero all-in finding costs of $0.28/Mcfe 3-year Antero all-in finding costs of $0.59/Mcfe(2) $ / Mcfe Antero spent $800 million on leasehold and acquisitions, and $1 billion on dril
Slide 9: Industry Leading Development Costs
2010 Industry Development Costs(1) Antero 2010 Comp Median = $2.17(2) 2010 Antero development cost includes $0.31/Mcfe of wells drilled but not yet completed Excluding costs for wells not yet completed results in $1.15/Mcfe development costs for 2010 completed wells $ / Mcfe Per Mcfe development cos
Slide 10: Marcellus Shale – The Players
Marcellus Shale – The Players Antero 2 horizontals completed Strong results Antero 39 horizontals completed Strong results 9 Source: Company presentations
Slide 11: Antero Marcellus Shale Summary
Majority of acreage has rich gas processing potential 184,000 net acres of leasehold in heart of the play 72% HBP 100% operated 912 Bcfe of proved reserves (27% of total Company) / 7.6 Tcfe of 3P reserves 122 MMcf/d net production (52% of total Company) Surrounded by key Range, Chevron, XOM, EQT and
Slide 12: Piceance Basin – A Rich Gas Play
Piceance Basin – A Rich Gas Play Rich processable gas from Mesaverde 64,000 net acres – 29% HBP 1.7 Tcfe of proved reserves (50% of total company) / 3.3 Tcfe of 3P reserves 40 MMcfe/d net production (17% of total Company) Drilled and completed over 170 wells with a 99% success rate 2011 Program: 1 r
Slide 13: Arkoma Woodford Shale
Arkoma Woodford Shale Antero Acreage Position Summary East Rockpile Area Torpedo Junction Area Northern Front Area 12 Rich processable gas from west side of play 744 Bcfe of net proved reserves (22% of total) / 1.5 Tcfe 3P reserves 69,000 net acres – 86% HBP Drilled and operated over 120 horizontal
Slide 14: Conservative Financial Philosophy
Conservative Financial Philosophy Assumes 1,000 Btu average heat content. Antero has historically employed a sound and disciplined financial philosophy Antero credit objectives: Target net debt / EBITDAX of 2.0x to 3.0x (3.4x 3/31/2011) Target net debt / proved reserves of $0.25 to $0.75 / Mcfe ($0.
Slide 15: Summary operating results and credit statistics
12 mos. 12 mos. 12 mos. LTM Q1 2011 Annualized(4) $ millions 12/31/2008 12/31/2009 12/31/2010 3/31/2011 3/31/2011 Summary Operating Results Production (Bcfe) 19 38 49 54 62 EBITDAX $207 $153 $198 $211 $259 Cash interest expense (1) $38 $36 $56 $54 $57 Proved reserves (Bcfe) (2) 680 1,141 3,231 3,418
Slide 16: Strong Hedge Position
Strong Hedge Position Antero will realize almost $200 million of hedge gains over the next five years from its 479 Bcfe hedge book assuming current strip prices(1) Protects future cash flow thereby supporting drilling plans and production growth Antero Hedge Position – 2011 through 2015(2) Natural G
Slide 17: 2010 and 2011E Capital Budget
2010 CapEx by Type 2010 CapEx by Basin Total: $638MM Total: $638MM 2011E CapEx Budget by Type 2011E CapEx Budget by Basin Total: $685MM Total: $685MM 2010 and 2011E Capital Budget 16
Slide 18: Impressive Internal Rates of Return
Woodford – Arkoma Op (Lean)(3) Impressive Internal Rates of Return Internal Rates of Return – Futures Strip(1) - Antero Projects Marcellus Shale – SW Liquids Rich Piceance Valley – Liquids Rich (2) Marcellus Shale – SW Lean Fayetteville Shale Piceance Valley – Lean (2) Woodford – Arkoma Non-Op (Rich
Slide 19: Key Credit Strengths
Key Credit Strengths Significant reserve potential diversified across three of the key U.S. shale plays Ability to allocate capital to most profitable projects based on commodity prices, basis differentials and local cost dynamics Growing liquids exposure Diversified, stable asset base Large invento
Slide 20: West Virginia Marcellus Operating Environment
West Virginia Marcellus Operating Environment Considerations Discussion Drilling rigs and services Top service providers are in Marcellus now Antero has five rigs under contract – adding additional rig July 2011 Dedicated 24/7 frac crew for 2011 and 2012 Topography West Virginia topography is genera
Slide 21: Historical Antero Hedging Results
Antero has realized over $240 million of gains on commodity hedges over the past 13 quarters Gains realized in 12 of last 13 quarters $MMs $/Mcfe Historical Antero Hedging Results 21
Slide 22: Low Break Even Natural Gas Prices
Source: Credit Suisse report dated 5/23/2011 – Break even price is for 15% after-tax ROR. As footnoted, Piceance Valley and Arkoma analysis prepared by management using comparable approach to Credit Suisse, incorporating Antero-specific assumptions. Antero Piceance rich gas estimate assuming 1.5 Bcf
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