Current AR Stock Info

DENVER, April 27, 2016 /PRNewswire/ -- Antero Resources Corporation (NYSE: AR) ("Antero" or the "Company") today released its first quarter 2016 financial results and announced increased 2016 production guidance. The relevant consolidated financial statements are included in Antero's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, which has been filed with the Securities and Exchange Commission.

Highlights for the First Quarter of 2016:

Adjusted EBITDAX of $355 million, in line with the prior year quarter and a 15% i...

Analyst Commentary

From Capital One

AR 1Q Follow-Up
$29.68, OVERWEIGHT, $36.00 Target
AR underperforming the EPX Index by ~250 bps despite neutral earnings release as nat gas spot prices are down ~350 bps. Mgmt provided color to its ops and earnings releases focusing on operational improvements and midstream/takeaway issues. On the D&C side, AR is reaping the benefits of longer laterals plus increased proppant load and placement to improve Marcellus well economics. AR is targeting laterals in the 9,000+ ft range and completing with 1,480 lbs/ft of proppant as of March. This level of proppant represents a ~13% increase from YE15. The company expects to increase proppant loads further to 1,500 lbs/ft for the remainder of 2016. These improvements have boosted EURs for wells drilled in 2016 above the 1.7 Bcf/1,000 ft type curve. Although AR will not release an official type curve update for another year or so (reserve engineers need additional production data to verify), mgmt is comfortable with raising expectations. AR expects Marcellus Highly-Rich Gas/Condensate and Highly-Rich Gas EURs to improve to 2.0 Bcf/1,000 ft from the 1.7 Bcf/1,000 ft established type curve. As seen with other nat gas producers (and oil producers for that matter), longer laterals and additional frac stages are leading to higher EURs and better economics. AR has 43 wells with laterals over 10,000 ft, so we anticipate positive EUR results from these going forward. Slide 12 of the 1Q Earnings Call presentation provides a helpful scatterplot on the subject. In relation to our model, if we were to increase the type curves to the 2.0 Bcf/1,000 ft range, our NAV would increase by about $3/share. Utica operations have yet to see these broad improvements mainly because of the slower pace of drilling. AR still expects to use just 1 rig in the Ohio Utica (as opposed to 6 in the Marcellus) in 2016 as takeaway constraints limit production. Capacity constraints on the REX westbound lateral capped AR’s takeaway at 600 MMcf/d, which effectively halts Utica production growth until the ETP Rover pipeline comes into service in mid-2017. AR expects an additional 800 MMcf/d of takeaway capacity to then ease that transport constraint. AR’s Stonewall system has been a huge help in the Marcellus now that it has been operational for a full quarter. The southern takeaway diverts Marcellus gas to TCO/NYMEX pricing rather than Dominion South or TETCO. This feature helped to improve gas realizations to just 1 cent below NYMEX (pre-hedges). For the remainder of 2016, AR would need just $275MM of maintenance CAPEX to keep volumes flat at YE15 levels of 1,493 MMcfe/d. An additional $400MM of CAPEX ($675MM total) will achieve the 2016 growth target of 17%, while $625MM more (to reach the reaffirmed $1.3B FY16 guidance budget) sets the table for 20% y/y production growth in 2017 by adding DUC inventory. AR expects an inventory of 70 DUCs at YE16 to grow 2017 production by 20% to 2,100 MMcfe/d with a CAPEX budget of $875MM. The company has over 100% of its production hedged for this year and next, but if prices do improve, it has the ability to ramp up production. Finally, regarding M&A, AR may pick up blocks opportunistically, but it will rely mostly on its 300 land brokers organically adding 500 acres/month. AR now has 573,000 net acres, up from 569,000 as of April. (Velie)  


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