Antero Resources Corporation · NYSE:AR
Antero Resources — Q4 2023 Earnings Presentation
21 slides from Antero Resources's earnings presentation, Feb 15, 2024
Slide 1: Fourth Quarter 2023 Earnings Call Presentation
Fourth Quarter 2023 Earnings Call Presentation FEBRUARY 15th, 2024 Antero Resources (NYSE: AR)
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 Days per 10,000 Lateral Feet Drilled Increased Completion Stages per Day… Company Record 16.0 Stages 6.0 10.7 5.5 Company Record 8.0 4.2 Days 2023 2023 2022 2023 Daily Record 2022 2023 Daily Record Significantly Reduces Cycle Time per Pad (1) 427 Company Record (
Slide 4: Efficiencies Translate to Lower Maintenance Capital in 2024
Efficiencies Translate to Lower Maintenance Capital in 2024 Drilling and completion efficiencies combined with strong well performance translate to a significant reduction to 2024 maintenance capital levels Production (MMcfe/d) Maintenance Capital ($MM) D&C Capital $909 Down 26% 3,392 ~Flat 3,350 $6
Slide 5: U.S. Propane Stocks Return to 5-Year Average
U.S. Propane Stocks Return to 5-Year Average Propane inventories return to 5-Year average as record withdrawals deplete 2023 storage overhang AR Monthly Realized C3+ NGL Price (MMBbl) 110 2024 Returns to 5-Year Average: • Strong U.S. Exports Driven by PDH Demand 100 from China • Domestic demand from
Slide 6: NGL Price Trend
NGL Price Trend Driven by strong exports, C3+ pricing as a percentage of WTI is trending back to historical norms WTI Oil Price vs. C3+ NGL Price as a % of WTI ($/Bbl) WTI Price (Left Axis) % of WTI (Right Axis) $120 80% $100 $80 70% 60% 57% $60 50% C3+ NGL % OF WTI PRICE $40 40% $20 30% $0 20% AR M
Slide 7: 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 2024 1.7 China PDH 1.6 Western Economies Demand Reopening 2024 Avg YTD: 1.5 China 1.72 MMBbl/d In
Slide 8: VLGC Shipping Buildout Retreats as Panama Canal Delays Alleviate
“VLGC” Shipping Buildout Retreats as Panama Canal Delays Alleviate -Very Large Gas Carriers (“VLGC”) transport LPG (propane and butane) A banner year for ship deliveries in 2023 as flattening Baltic VLGC futures reflect transit improvements at the Panama Canal Global VLGC Fleet Baltic VLGC Futures (
Slide 9: Demand: Growing Global LNG Market
Demand: Growing Global LNG Market AR is a top U.S. LNG supplier with the ability to deliver into the growing demand 34 In Service 14.5 Bcf/d 32 Under Construction 6.1 Bcf/d 30 FID Approved 5.0 Bcf/d Waiting on FID (The Big Three Only) 3.4 Bcf/d YE 2027 29.0 Bcf/d 28 Rio Grande 1 Total = 29.0 Bcf/d (
Slide 10: 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: ($0.23) Cal ’26: ($0.25) Cal ‘27: ($0.29) Tier 1: 90% Peers(1) 33% Tier 1 TGP 500L Cal ’25: $0.03 Tier 2-3: Cal ’26: $0.03 Cal ’25: $0.28 67% Cal ‘27: $0.02 Cal ’26: $0.29 Cal ‘27: $0.26
Slide 11: Power Burn Demand Continues to Outperform
Power Burn Demand Continues to Outperform Fundamental rise in power burn continues in 2024 with January at record winter levels Natural Gas Power Burn Bcf/d Antero Resources (NYSE: AR) Source: S&P Global Platts. 11
Slide 12: 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 22 Includes $30 Bn of Acquisitions Since 2021 (seven separate transactions) 20 16 16 15 Years Includes 12 ~$340 MM 10 of Organic Leasing Since 2021 6 5 5 - AR Peer 1 Peer 2 Peer 3
Slide 13: Antero Capital Efficiency vs. Peers
Antero Capital Efficiency vs. Peers AR has the lowest CAPEX per Mcfe of its peer group, at just $0.55/Mcfe Capital Efficiency (2024E D&C Capital/ 2024E Production) $1.40 $1.23 $1.20 $1.17 $1.00 Peer Average: $0.92 $0.80 $0.73 $0.76 $0.72 $0.60 $0.55 $0.40 $0.20 $0.00 AR Peer 1 Peer 2 Peer 3 Peer 4 P
Slide 14: Antero Capital Efficiency vs. Peers
Antero Capital Efficiency vs. Peers Change in D&C Capex vs. Change in Production (2024E / 2023E) 30% Most Capital Efficient Production Growth 20% % Change in Production (2024E / 2023E) 10% Peer 1 Peer 5 0% Peer 2 Peer 3 Peer 4 Production Decline (10%) (20%) (30%) Least Capital Efficient (30%) (20%)
Slide 15: Free Cash Flow Drivers
Free Cash Flow Drivers Antero’s capital efficiency and exposure to liquids is expected to add > $400 million in incremental Free Cash Flow compared to 2023 AR D&C + Land Capital 2024E Free Cash Flow Impact ($MM) $1,057 ($294) MM $148 Capital Down Land Capex ($294) MM ~$430 MM $763 $909 $88 $675 D&C
Slide 16: Lowest Free Cash Flow Breakeven
Lowest Free Cash Flow Breakeven Antero has the lowest Free Cash Flow Natural Gas Price Breakeven 2024E Unhedged FCF Natural Gas Price Breakeven (1) ($/Mcf Henry Hub) Maintenance Capital Interest Expense Cash Costs + Basis - Liquids Uplift Base Dividend Appalachian Operators Haynesville Operators $3.
Slide 17: Appendix
APPENDIX
Slide 18: Guidance
Guidance 2024 Guidance Ranges Net Production (Bcfe/d) 3.30 – 3.40 Net Natural Gas Production (Bcf/d) 2.155 – 2.165 Net Liquids Production (Bbl/d) 192,000 – 204,000 Natural Gas Realized Price Expected Premium to $0.00 - $0.10 NYMEX ($/Mcf) C2 Ethane Realized Price - Expected Premium to ($1.00) - $1.0
Slide 19: 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 20: Antero Resources Adjusted EBITDAX Reconciliation
Antero Resources Adjusted EBITDAX Reconciliation Three Months Ended Year Ended December 31, December 31, 2022 2023 2022 2023 Reconciliation of net income to Adjusted EBITDAX: Net income and comprehensive income attributable to Antero Resources Corporation $ 730,296 94,764 1,898,771 242,919 Net incom
Slide 21: Antero Resources Total Debt to Net Debt Reconciliation
Antero Resources Total Debt to Net Debt Reconciliation December 31, 2022 2023 Credit Facility $ 34,800 417,200 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 56,932 26,386 U