ANTERO RESOURCES CORPORATION Third Quarter 2023 Earnings Call Presentation
October 26, 2023
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 activities, events or developments AR expects, believes or anticipates will or may occur in the future, such as those regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management, return of capital, expected results, future commodity prices, future production targets, realizing potential future fee rebates or reductions, including those related to certain levels of production, leverage targets and debt repayment, future earnings, future capital spending plans, improved and/or increasing capital efficiency, estimated realized natural gas, natural gas liquids and oil prices, expected drilling and development plans, projected well costs and cost savings initiatives, future financial position, future marketing opportunities, the participation level of our drilling partner and the financial and production results to be achieved as a result of the drilling partnership and the key assumptions underlying its projection and AR's environmental goals are 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 forward-looking statements speak only as of the date of this presentation. Although AR believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Except as required by law, AR expressly disclaims any obligation to and does not intend to publicly update or revise any forward-looking statements.
AR cautions you that these forward-looking statements are subject to all of the risks and uncertainties incident to the exploration for and the development, production, gathering and sale of natural gas, NGLs and oil, most of which are difficult to predict and many of which are beyond AR's control. These risks include, but are not limited to, commodity price volatility, inflation, supply chain disruption, lack of availability of drilling, completion and production equipment and services, environmental risks, drilling and completion and other operating risks, marketing and transportation risks, regulatory changes and changes in law, the uncertainty inherent in estimating natural gas and oil reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, impacts of geopolitical events and world health events, cybersecurity risks, conflicts of interest among our stockholders, the state of markets for and availability of verified carbon offsets and the other risks described under the heading "Item 1A. Risk Factors" in AR's Annual Report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement speaks only as of the date on which such statement is made and AR undertakes no obligation to correct or update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by applicable law.
This presentation also includes AR non-GAAP measures which are financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). Please see "Antero Non-GAAP Measures" for definitions of these measures as well as certain additional information regarding these measures.
Antero Resources Corporation is denoted as "AR" in the presentation and Antero Midstream Corporation is
denoted as "AM", which are their respective New York Stock Exchange ticker symbols.
Antero Resources (NYSE: AR) | 2 |
Drilling and Completion Efficiencies
Increasing Pumping Hours per Day…
20.0 | 22.2 | |
18.0 | 17.1 | |
16.0 | 2023 | |
14.0 | 11.7 | |
12.0 | ||
June | ||
10.0 | ||
8.0 | ||
6.0 |
Increases Completion Stages per Day…
Company | 16.0 Stages |
Record | |
10.8 Company
Record
2023 | |
5.8 | March |
2019 2020 2021 2022 YTD | Daily | 2019 2020 2021 2022 | YTD | Daily |
2023 | Record | 2023 | Record | |
Significantly Reduces Cycle Time per Pad (1) |
427 | |||||
Company | |||||
Record (2) | |||||
160 | 129 Days | ||||
June | |||||
2023 | |||||
2019 | 2020 | 2021 | 2022 | YTD 2023 | Record |
Antero Resources (NYSE: AR) | Note: Percentage increase or decrease arrows represent change from 2019 to YTD 2023 as of 9/30/2023. | 3 | |
1) | Cycle time represents days from surface spud date to first production date. | ||
2) | Cycle time record excludes single "step out" wells or wells drilled and completed on pads with 5 wells or less. |
Increased Production Guidance
Drilling and completion efficiencies combined with strong
well performance translates to higher production
2023 Production Guidance (MMcfe/d) | Maintenance Capital ($MM) | |
3,275
3,400
4%
Increase
$925
$875
Material
Reduction
Initial Guidance | Updated Guidance | 2023 Guidance | 2024E | |
Range | ||||
Antero Resources (NYSE: AR) | 4 | |||
AR Has the Largest Low Cost Inventory
Appalachia Sub-$2.75/Mcfe Inventory
(Years - Locations Based on 3rd Party Data)
Years
25 | |
Includes $17 Bn of Acquisitions Since 2021 | |
22 | (six separate transactions) |
20 | |
1616
15 Includes
~$340 MM | 12 | ||
of Organic | |||
10 | Leasing | ||
Since 2021 | |||
6 | 5 | ||
5 | |||
-
AR | P1 | P2 | P3 | P4 | P5 |
Peer rationale for M&A: | Inventory | Gulf Coast/LNG market access | Balance Sheet Repair |
Antero Resources (NYSE: AR) Note: Peers include CHK, CNX, EQT, RRC and SWN | 5 |
Source: Enverus - September 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 | 2021 | 2022 | 2023 |
2020 | |||
1.7 | Western Economies | 2023 Avg YTD: | |
1.60 MMBbl/d | |||
Reopening | |||
1.6 | |||
2022 Avg: 1.35 MMBbl/d | |||
1.5 | COVID 'Normal' and | China | |
1.4 | China Lockdowns | Reopening | |
Initial COVID Onset | |||
1.3 |
1.2
1.1 | 2021 Avg: 1.18 MMBbl/d | ||||||||||||||||
1.0 | |||||||||||||||||
2020 Avg: 1.15 MMBbl/d | |||||||||||||||||
0.9 | |||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | ||
Antero Resources (NYSE: AR) | Source: EIA | 6 | |||||||||||||||
U.S. Propane Stocks and Propane Days of Supply
Propane Inventories Just Above 5-Year Historical Range
as Exports Ramp to Record Highs
MMBbl | Current High Inventories Due To: | ||
• Lack of Winter 2022-2023 Weather | |||
110 | • US PDH Outages | ||
Current 2023 Inventories:+16 MMBbls | |||
100 | (+18%) Above 5-Year Average | ||
Now Offset by: | |||
90 | • | Strong US Exports | |
Driven by Demand |
from China Reopening
Despite High Absolute Propane Stocks, Days of Supply
Remains Within 5-Year Range
Days
60 | Consistent Domestic Demand and | 2023: +1 Day Above |
Growing Exports Require Higher | ||
Propane Stocks | 5-Year Average | |
50 |
80
70
60 | 2023 |
5-Year Range (2018-2022) | |
50 | 5-Year Average |
40
30
20
2023
5-Year Range (2018-2022)
40 | 2022 |
30 |
5-Year Average
10
20 | 0 Days of Supply = Total Propane Stocks / (Domestic Demand + Exports) | |||
Jan Feb Mar Apr May Jun Jul | Aug Sep Oct Nov Dec | |||
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec | ||||
Antero Resources (NYSE: AR) | Source: US EIA | 7 | ||
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 | ||||
0.3 | China | North America | Middle East | Rest of Asia | Europe | |
0.2 | ||||||
0.1 | ||||||
0.0 | ||||||
2023 | 2024 | |||||
In Service PDH Unit - Guangdong Province | ||||||
Antero Resources (NYSE: AR) | Source: Argus, Energy Aspects | 8 | ||||
Rig Count Declines Have Accelerated in Key Producing Basins
Antero Resources (NYSE: AR) | Source: S&P Global Commodity Insights, RigData | 9 |
Dramatic Reduction in Activity Will Limit Production Growth
U.S. Natural Gas Basin Drilling Rigs (Appalachia + Haynesville)
160 | 53% Decline | 41% Decline |
140 | ||
120 | in rigs | in rigs |
100 | ||
80 | 2023: | |
60 | 2019 / 2020: | |
40 | Primarily Haynesville | |
Primarily Appalachia rigs | ||
rigs with higher | ||
20 | ||
with lower base decline | ||
base decline | ||
0 | ||
U.S. Natural Gas Production (Bcf/d)
105 | |
100 | Current: |
95 | Production |
Flattening… | |
90 | |
85 | 2019 / 2020: |
80 | (5)-(10)% decline in |
75 | natural gas production |
Antero Resources (NYSE: AR)
Source: Platts Analytics. | 10 |
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Antero Resources Corporation published this content on 26 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2023 14:55:03 UTC.
