Antero Resources (AR) Valuation Update - Feb 2

[dan_s]

I took a hard look at the AR this morning and I've decided to remove it from the Sweet 16 Growth Portfolio.

AR has a lot of long-term upside potential, but if HH ngas prices average $2.50 in 2024 (the ngas price I'm now using in all of my forecasts) it will need to slow down its drilling program to live within operating cash flow. Therefore, AR's production will remain flat at best and they won't be able to start a dividend program. I moved it into the Sweet 16 because on improving NGL prices and my forecast that it would start paying dividends this year.

TipRanks: "In the last 3 months, 8 ranked analysts set 12-month price targets for AR. The average price target among the analysts is $27.88. The 8 priced targets range from $26 to $32."

I do expect AR to report strong Q4 2023 results because HH ngas prices averaged slightly more than $3.00 during the quarter and AR's realized NGL prices should also be higher in the quarter. In a "Future World" of U.S. natural gas prices firmly over $3.00, AR should be a very profitable company.

My updated forecast model for AR will be posted to the EPG website later this morning. Take a hard look at my 2025 forecast that is based on a realized natural gas price of $3.00/mcf.

[Fraser921]

Ar with a beat in after hours
They had positive FCF in q1 despite lack of hedges and poor NG prices

Heavy liquids %

If prices ever recover this is a double

[dan_s]

The BIG gassers will survive and rise again. The U.S. natural gas market is BIG and VERY IMPORTANT.