Antero Resources Corp. (NYSE: AR) will replace Alleghany Corp. (NYSE: Y) in the S&P MidCap 400 effective prior to the opening of trading on Thursday, October 20. S&P 500 constituent Berkshire Hathaway Inc. (NYSE: BRK.A; BRK.B) is acquiring Alleghany in a deal expected to be completed soon,
Up 1.70 after hours -HUUUUUGE
AR = Up 1.70 after hours -HUUUUUGE
Re: AR = Up 1.70 after hours -HUUUUUGE
Any new guidance on AR, appears to be getting clobbered by the fall in natural gas. Do you expect a bump on October 26th with ER?
Re: AR = Up 1.70 after hours -HUUUUUGE
AR is going to report some very good Q3 results and I think ngas prices will rebound when real winter weather arrives in November. We are still in the Shoulder Season and there is no ngas shortage today, but Miss La Nina and Old Man Winter will have a big impact on the US ngas market in a few months.
The recent pullback in the NOV22 NYMEX contract is probably the long "paper traders" having to close out their positions.
All of my forecast/valuation models are macro driven, so you can download them to Excel and change the oil, gas and NGL price assumptions for all future periods to see how it impacts the stock valuation. I just lowered the average natural gas price to $5.00 for 2023 and the stock valuation drops to $65.
AR is trading for $32.66 at the time of this post.
Keep in mind:
> The US winter will begin with ngas storage ~150 BCF less than the 5-year average.
> The US consumes a lot more gas during the winter for space heating and power generation than it did five years ago.
> High coal prices eliminate gas-to-coal fuel switching for power generation. < This is a big deal.
> LNG exports will ramp up in late November as Freeport comes back online.
In Q2 2022 AR's realized natural gas price was $4.94/mcf net of the cash settlements on their hedges and the Company generated operating cash flow of $965.9 million ($3.13/share). AR is going to generate over $12/share of operating cash flow per share this year. There is nothing to justify this stock trading for under 3X operating CFPS. TipRanks' operating cash flow forecast is $12.34/share for 2023 and probably does not include the impact of AR's stock repurchase program.
The recent pullback in the NOV22 NYMEX contract is probably the long "paper traders" having to close out their positions.
All of my forecast/valuation models are macro driven, so you can download them to Excel and change the oil, gas and NGL price assumptions for all future periods to see how it impacts the stock valuation. I just lowered the average natural gas price to $5.00 for 2023 and the stock valuation drops to $65.
AR is trading for $32.66 at the time of this post.
Keep in mind:
> The US winter will begin with ngas storage ~150 BCF less than the 5-year average.
> The US consumes a lot more gas during the winter for space heating and power generation than it did five years ago.
> High coal prices eliminate gas-to-coal fuel switching for power generation. < This is a big deal.
> LNG exports will ramp up in late November as Freeport comes back online.
In Q2 2022 AR's realized natural gas price was $4.94/mcf net of the cash settlements on their hedges and the Company generated operating cash flow of $965.9 million ($3.13/share). AR is going to generate over $12/share of operating cash flow per share this year. There is nothing to justify this stock trading for under 3X operating CFPS. TipRanks' operating cash flow forecast is $12.34/share for 2023 and probably does not include the impact of AR's stock repurchase program.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group