Antero Resources Corporation · NYSE:AR
Antero Resources — Investor Presentation (April 2012)
27 slides from Antero Resources's investor presentation, Apr 11, 2012
Slide 1: Antero Resources September 2010
Antero Resources September 2010
Slide 2: Forward-Looking Statements
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 addre
Slide 3: Cautionary Note Regarding Hydrocarbon Quantities
Cautionary Note Regarding Hydrocarbon Quantities The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and
Slide 4: Company Overview
Company Overview Paul M. Rady, Chairman & CEO Glen C. Warren, Jr., President & CFO 3
Slide 5: Executive Summary
Executive Summary • Antero Resources is an oil and gas exploration and production (E&P) company focused on acquiring, developing and producing unconventional natural gas resources in the U.S. – Focused on fractured shales and tight sand reservoirs – Diversified asset base with critical mass in Appal
Slide 6: Key Management Operating Accomplishments
Key Management Operating Accomplishments Antero management team has been a leader in unconventional resource identification, delineation and development for two decades with the following entities: • Barrett Resources (1990’s) - A leader in developing Piceance Basin tight sands play and the Powder R
Slide 7: Substantial Low Cost Resource Base
Substantial Low Cost Resource Base • $1.20/Mcfe all-in finding cost since 2007 – including land costs • $1.23/Mcfe average development cost over the past 12 months (33 wells) – excluding land costs • Risked resource over 9x proved reserves Appalachia Proved Reserves(1) 1.5 Tcfe Risked Resource(2) 14
Slide 8: Strong Track Record of Growth
Strong Track Record of Growth Average Net Daily Production (1) Proved Reserves (2) 500 1,000 1,500 2,000 50 100 150 31 85 6 105 87 235 680 1,141 135 1,513 0 2006 2007 2008 2009 6/30/2010 Arkoma Piceance Appalachia Fayetteville/Ardmore 0 2006 2007 2008 2009 2010E Arkoma Piceance Appalachia Fayettevil
Slide 9: Best-in-Class Finding Costs in 2009
Best-in-Class Finding Costs in 2009 Industry All-in Finding Costs 2009 (1) $ / Mcfe 2009 Antero traditional cost of $0.39/Mcfe(2) $6.00 $7.00 $8.00 • finding $0.39/• 1H 2010 Antero traditional finding cost of $0.47/Mcfe(2) • 98% drilling success rate since inception • Over 80% of the 350+ wells dril
Slide 10: And Low Finding Costs Over the Long-Term
And Low Finding Costs Over the Long-Term • Antero has successfully proven up over 1.5 Tcfe of reserves over the past 3 ½ years at low per unit cost including the $347 million Marcellus land acquisition from Dominion $7.00 $8.00 Industry 3-year All-in Finding Costs Through 2009 (1) • 3 ½-year Antero
Slide 11: Top-Quartile Development Costs
Top-Quartile Development Costs • Per Mcfe development costs are an even better measure of capital efficiency and Antero is in the top-quartile Industry Development Costs 2009 $8.00 $9.00 • 2009 Antero development cost of $2.35/Mcfe(2) • 1H 2010 Antero development cost declined to $1.95/Mcfe(2) (incl
Slide 12: Impressive Well by Well Development Costs
Impressive Well by Well Development Costs • Antero well by well development costs since September 2009 are $1.23/Mcfe • Antero LTM average development costs including land are only $1.40/Mcfe, well below the industry median development costs calculated by JPMorgan research for 2009 which were $3.63/
Slide 13: Low Break Even Natural Gas Prices
Low Break Even Natural Gas Prices • 50% of Antero 2010 capital budget is directed to the Marcellus NYMEX Break Even Price ($ per MMBtu)(1) $7.00 $8.00 6.18 $7.43 $7.52 $7.81 $4.00 $5.00 $6.00 $3.63 $3.96 $4.06 $4.08 $4.33 $4.36 $4.54 $4.60 $4.77 $4.85 $5.11 $5.21 $5.55 $5.74 $1.00 $2.00 $3.00 $0.35
Slide 14: Marcellus Shale – The Place to Be
Marcellus Shale – The Place to Be 13 Source: Company presentations and websites
Slide 15: Antero Marcellus Shale
Antero Marcellus Shale • 124,000 net acres of leasehold in heart of the play, Resources Summary primarily acquired from Dominion – 84% HBP – 100% operated – 83% of acreage is 100% working interest – 80% NRI • 36 MMcfe/d net production (25% of total Company) • Antero operating 3 rigs • Only 1% of Ant
Slide 16: Piceance Basin – A Rich Gas Play
Piceance Basin – A Rich Gas Play • 67,000 net acres – 24% HBP and 55% 2013+ expiration • 35 MMcfe/d net production ( 24% of total Company) Summary Mesaverde Sand: • 10-acre well density throughout Mesaverde development • 81% NRI • Almost 100% operated • Antero operating 1 rig • Only 3% of Antero pot
Slide 17: Antero Mesaverde – A Liquids Play
Antero Mesaverde – A Liquids Play • Most of Antero and industry drilling to date has been Summary • In the Gravel Trend area, Antero has improved recoveries focused on the Mesaverde tight sands formation • Antero has completed 11 wells in its Battlement Mesa area where it has under $1.20/Mcfe develo
Slide 18: Arkoma Woodford Shale
Arkoma Woodford Shale Antero Acreage Position Summary • Antero operated 138 sections (63% of its net acreage) • 79,000 net acres – 71% HBP • Drilled and operated over 155 horizontal wells with a 97% success rate to date • 65 MMcfe/net production (45% of total Company)(1) East Rockpile Area d • Anter
Slide 19: Integrated Midstream Assets Overview
Integrated Midstream Assets Overview Coalgate Processing Plant • Owns and operates 90 miles of gathering pipelines in Arkoma, Piceance and Appalachia combined • Operates 100 MMcfe/d of cryogenic processing plants in the Arkoma Basin • Backed by all Antero and Newfield wet gas reserves in Arkoma Wood
Slide 20: Financial Review
Financial Review Glen Warren, President & CFO 19
Slide 21: Conservative Financial Philosophy
Conservative Financial Philosophy • Antero has historically employed a sound and disciplined financial philosophy – Equity capital used to fund acquisition of land, delineation drilling and initial infrastructure – Debt capital used primarily to execute the development plan and convert unproved rese
Slide 22: Current Financial Summary
Current Financial Summary 12/31/2007 12/31/2008 12/31/2009 6/30/2010 $ thousands 12 mos. 12 mos. 12 mos. LTM Financial Summary Summary Operating Results Production (Bcfe) 11 32 38 40 Revenue $91,494 $366,490 $207,990 $349,161 EBITDAX $59,980 $208,513 $201,270 $193,057 Summary Capital Structure Cash
Slide 23: 2010 Capital Budget
2010 Capital Budget 2010 (1) (1) • 2010 budget funded by cash flow and revolver Capex Budget by Type 2010 Capex Budget by Basin Drilling 83% Midstream 5% Land 12% Appalachia 50% Arkoma 31% Piceance 19% 22 Budget = $394 Million 1. Latest management estimate.
Slide 24: Strong Hedge Portfolio
Strong Hedge Portfolio • Antero is well hedged with 198 Bcf(1) at $6.47/MMBtu NYMEX-equivalent pricing • Represents four years of production at current production rates $9.00 $10.00 160.0 170.0 180.0 2H 2010 30,000 MMBtu/d @ $5.23 CIG 30,000 MMBtu/d @ $7.36 CP 10,000 MMBtu/d @ $6.39 NYMEX 35,000 MMB
Slide 25: Key Investment Highlights
Key Investment Highlights . Significant reserve potential diversified across three of the “big five” key U.S. onshore shale plays . Ability to allocate capital to most profitable projects based on commodity prices, basis differentials and local cost dynamics . No significant lease expirations; 63% o
Slide 26: Antero Resources
ANTERO RESOURCES
Slide 27: SEC Reserve Reconciliation
SEC Reserve Reconciliation SEC Reserve Reconciliation from 12/31/2009 to 6/30/2010 1,400.0 1,600.0 1,513 Bcfe Bcfe 1,141 Bcfe 600.0 800.0 1,000.0 1,200.0 865 1165 -200.0 0.0 200.0 400.0 YE 2009(1) Extensions, discoveries and additions Price and performance revisions Production MY 2010(2) 276 63 2 -2
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