During the 3rd quarter, Antero monetized some hedges for $749,906,000 cash payment.
From the 10Q:
Commodity derivative fair value gains (losses) for the three and nine months ended September 30, 2017 include gains of $750 million
related to certain natural gas derivatives that were monetized prior to their settlement dates. Proceeds received from the monetizations are
classified as operating cash flows on the Company’s condensed consolidated statement of cash flows for the nine months ended September 30,
2017. The monetizations were effected by reducing the average fixed index prices on certain natural gas swap contracts maturing from 2018
through 2022 while maintaining the total volumes hedged. The Company’s commodity derivative position presented in note 9(a) reflects the
adjusted fixed price indices after the monetization. Proceeds from the monetization were used to pay down amounts outstanding under the Prior
Credit Facility.
This gets the company in good graces with the bankers, improving balance sheet ratios.
Antero Resources (AR) Q3 Results
Antero Resources (AR) Q3 Results
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Antero Resources (AR) Q3 Results
Highlights Include:
•Net daily gas equivalent production averaged a record 2,317 MMcfe/d, a 24% increase over the prior year quarter
•Includes record liquids production of 112,393 Bbl/d, a 38% increase over the prior year quarter
•Realized natural gas price of $2.71 per Mcf, a $0.29 differential to the average Nymex natural gas price before hedging. This includes a net $0.26 per Mcf negative impact from two contractual disputes on natural gas sales contracts where Antero expects to recover damages as detailed further below.
> Including the cash settlements on their hedges, Antero's realized prices were $3.37/mcf of natural gas, $45.40/bbl for crude oil
•Realized C3+ NGL price of $28.92 per barrel before hedging, or 60% of the average WTI oil price
•Realized natural gas equivalent price of $3.39 per Mcfe including NGLs, oil and hedges
•Liquids revenue of $251 million, comprising 38% of total product revenues, a Company record
•GAAP net loss of $135 million, or $(0.43) per share, compared to net income of $238 million, or $0.78 per share, in the prior year quarter
•Adjusted EBITDAX of $336 million, a 10% decrease compared to the prior year quarter and a 5% increase sequentially. This Adjusted EBITDAX does not include the $47 million impact from the contractual disputes detailed below.
•Successfully monetized over $1 billion of non-E&P assets through combination of the sale of Antero Midstream common units and the restructuring of the hedge portfolio
•Entered into a new upstream credit facility with a borrowing base of $4.5 billion and lender commitments of $2.5 billion
Excluding the big cash settlement on their hedges, cash flow from operations was $265.4 million or $0.84/share, which compares to my forecast of $0.93/share.
•Net daily gas equivalent production averaged a record 2,317 MMcfe/d, a 24% increase over the prior year quarter
•Includes record liquids production of 112,393 Bbl/d, a 38% increase over the prior year quarter
•Realized natural gas price of $2.71 per Mcf, a $0.29 differential to the average Nymex natural gas price before hedging. This includes a net $0.26 per Mcf negative impact from two contractual disputes on natural gas sales contracts where Antero expects to recover damages as detailed further below.
> Including the cash settlements on their hedges, Antero's realized prices were $3.37/mcf of natural gas, $45.40/bbl for crude oil
•Realized C3+ NGL price of $28.92 per barrel before hedging, or 60% of the average WTI oil price
•Realized natural gas equivalent price of $3.39 per Mcfe including NGLs, oil and hedges
•Liquids revenue of $251 million, comprising 38% of total product revenues, a Company record
•GAAP net loss of $135 million, or $(0.43) per share, compared to net income of $238 million, or $0.78 per share, in the prior year quarter
•Adjusted EBITDAX of $336 million, a 10% decrease compared to the prior year quarter and a 5% increase sequentially. This Adjusted EBITDAX does not include the $47 million impact from the contractual disputes detailed below.
•Successfully monetized over $1 billion of non-E&P assets through combination of the sale of Antero Midstream common units and the restructuring of the hedge portfolio
•Entered into a new upstream credit facility with a borrowing base of $4.5 billion and lender commitments of $2.5 billion
Excluding the big cash settlement on their hedges, cash flow from operations was $265.4 million or $0.84/share, which compares to my forecast of $0.93/share.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Antero Resources (AR) Q3 Results
Commenting on the quarter and long-term outlook, Paul Rady, Chairman and CEO, said, "We took a number of steps during the quarter to delever the balance sheet, and have positioned Antero to generate attractive growth and returns while spending within cash flow in 2018 and beyond. This is a testament to the capital efficiencies and EUR improvements that we have achieved to date. Through increased EURs and lower well costs, we have been able to reduce our drilling and completion capital spending plans over the 2018 through 2020 period by approximately $1.5 billion while delivering the same production growth. Importantly, this production growth includes rapid NGL production growth, providing us with substantial upside exposure to a continuing rise in liquids pricing. The combination of the sizeable reduction in capital needs with the increased liquids cash flow provides Antero with declining leverage and an improving balance sheet. This trend positions Antero to be able to return capital to shareholders in the coming years, subject to Board review and approval."
So far, all of the companies in our model portfolios have reported better NGL prices than I had in my forecast models.
So far, all of the companies in our model portfolios have reported better NGL prices than I had in my forecast models.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Antero Resources (AR) Q3 Results
I have updated my forecast / valuation model for AR and it will be posted to the EPG website later this afternoon.
I am lowering my valuation by $9.00 to $35.00/share, which is still way above the current share price. First Call's Price Target is $27.38.
13 Wall Street Firms have submitted forecast / valuations to First Call. Their price targets range from $21 to $38.
If AR is successful in growing production by 20% annually and funding the growth entirely with cash flow from operations, it definitely deserves a higher multiple than what I am using to value it.
I just don't see much sense in valuing above the Wall Street range until there is more visible gas pricing for 2018.
AR is now the largest producer of NGLs in the U.S. and the outlook for NGLs is looking a lot better.
Fund Managers aren't going to pay much attention to the "gassers" until Mother Nature sends a couple of big winter storms down Wall Street.
I am lowering my valuation by $9.00 to $35.00/share, which is still way above the current share price. First Call's Price Target is $27.38.
13 Wall Street Firms have submitted forecast / valuations to First Call. Their price targets range from $21 to $38.
If AR is successful in growing production by 20% annually and funding the growth entirely with cash flow from operations, it definitely deserves a higher multiple than what I am using to value it.
I just don't see much sense in valuing above the Wall Street range until there is more visible gas pricing for 2018.
AR is now the largest producer of NGLs in the U.S. and the outlook for NGLs is looking a lot better.
Fund Managers aren't going to pay much attention to the "gassers" until Mother Nature sends a couple of big winter storms down Wall Street.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group