Antero Resources (AR)

[dan_s]

We will be sending out an updated profile on AR late today. Read it carefully.

I just want to remind all of you that AR has over 100% of their natural gas production and a high percent of their liquids hedged through the end of 2017. That means strong cash flows from operations are locked in through at least the end of next year.

Cash flow from operations should exceed $1.2 Billion for 2016 and $1.3 Billion for 2017.

Production grow of 20% to 25% in 2017 is expected based on their current drilling program, which could be accelerated if market conditions improve.

For some of the larger companies in the Sweet 16, First Call provides EPS and CFPS forecasts beyond 2017.
Here is what First Call is forecasting for AR's cash flow from operations per share:
2014A = $3.74
2015A = $3.52
2016E = $4.05
2017E = $4.01
2018E = $6.16
2019E = $6.58

A company of this size, with a very strong balance sheet and 20% annual production growth locked in should be trading for AT LEAST 12x operating cash flow per share. My current valuation is $47.00 per share. Keep in mind that their 61% stake in Antero Midstream (AM) has a market cap close to $3 Billion.