Antero Resources (AR)

[dan_s]

I am going to add Antero Resources (AR) to the Sweet 16. It has a strong balance sheet and one of the best hedge books that I've seen. It is a "gasser" and a pure play on the Marcellus/Utica. They are on-track to beat their production guidance for this year. YOY production growth will be 48% to 50% and they have publicly said that production should be up another 25% to 30% in 2016.

My initial valuation is $33.15/share, compared to First Call's price target of $33.74.
> On October 28th, Stifel published a detailed report on the company. They rated it a BUY with a $30 target price.
> Barclays rates it as "overweight" with a price target of $30.

Check out the new presentation on their website and you will see why I like it.

There are several midstream projects nearing completing that will significantly increase netback prices for gas and NGLs for all of the Marcellus/Utica producers.

In September, AR sold their water system to Antero Midstream Partners LP (AM) for $1.05 Billion. This transaction significantly improves AR's liquidity, which was already very good.

I am looking hard for companies that will do well in 2016 even if oil & gas prices stay low all year.

[dan_s]

Antero is replacing Oasis Petroleum (OAS) in the Sweet 16.

OAS is a pure play on the Bakken / Three Forks play. It will be tough for the Bakken companies to make money at today's oil price. Oasis should be fine and it is definitely a takeover target for any large-cap wanting to add a lot more oil reserves.

[dan_s]

The "gassers" have taken a beating this year, so why do I want to add another "gasser" to the Sweet 16 now?

Watch Joe's weekend update and you will see why: http://www.weatherbell.com/saturday-sum ... ber-5-2015

By the end of December, the U.S. will shift to a much colder weather pattern. Keep in mind that crude oil trades on a global market, but natural gas and NGLs trade on regional markets.
> U.S. gas production has rolled over and is now on decline. See: http://www.eia.gov/petroleum/drilling/#tabs-summary-2
> Gas demand in the first quarter will get a boost from LNG exports
> A colder than normal winter in West Texas may lead to production problems

AR, GPOR, RRC and SWN should also get a nice boost from higher Marcellus/Utica gas and NGL prices this winter as several big midstream projects are coming on-line to improve that region's market access.

[dan_s]

Baupost Group nearly doubled its position in Antero Resources Corp (NYSE:AR) during the third quarter, ending the three-month period with 16.10 million shares. Baupost’s disappointing performance this year can mainly be attributed to its high exposure to the energy and biotech sectors, but the hedge fund keeps buying shares of the Colorado-based shale gas company. The independent oil and natural gas company has seen its stock plummet by 43% thus far in 2015. Just recently, Barclays cut its price target on the stock to $30 from $31 and reiterated its ‘Overweight’ rating, citing continued pressure from low gas prices. Antero’s strong hedge position and strong balance sheet allowed the company to deliver a solid financial performance during the third quarter. Jim Simons’ Renaissance Technologies holds a stake of 276,804 shares in Antero Resources Corp (NYSE:AR) as of September 30.

http://www.insidermonkey.com/blog/top-f ... an-384407/