Antero Resources Update - Oct 5
Posted: Fri Oct 05, 2018 12:46 pm
During the first month of each quarter, I always double check all of my Sweet 16 company forecast/valuation models. I have already updated the forecasts for CLR, EOG, GPOR and RRC. Just minor adjustments on all of them and my confidence in the models is HIGH for all of the Sweet 16 because I have been tracking these companies for many years; some for over a decade.
Antero Resources (AR) is one of the three "gassers" in the Sweet 16. It is a pure play on the Marcellus/Utica where it holds a lot of Tier One leasehold.
> 100% of its natural gas for 2H 2018 and 2019 is hedged at $3.50/MMBtu
> Antero is also the largest producer of NGLs and demand for NGLs remains very strong in the U.S. petrochemical industry. Antero's realized NGL prices s/b up ~30% YOY.
> Antero's overall production is on-track to be up 20% YOY.
Antero's level of debt gets a lot of attention, but since they have their revenues and operating cash flows locked in by hedges servicing the debt is no problem. In fact, they are now generating about $50 million of free cash flow per quarter. Based on my forecast, free cash flow should increase to $100/quarter in 2019.
Read: https://finance.yahoo.com/news/does-ant ... 48468.html
PS: Antero Resources' aggressive drilling program is what makes Antero Midstream (AM) one of the Top Picks in our High Yield Income Portfolio.
Antero Resources (AR) is one of the three "gassers" in the Sweet 16. It is a pure play on the Marcellus/Utica where it holds a lot of Tier One leasehold.
> 100% of its natural gas for 2H 2018 and 2019 is hedged at $3.50/MMBtu
> Antero is also the largest producer of NGLs and demand for NGLs remains very strong in the U.S. petrochemical industry. Antero's realized NGL prices s/b up ~30% YOY.
> Antero's overall production is on-track to be up 20% YOY.
Antero's level of debt gets a lot of attention, but since they have their revenues and operating cash flows locked in by hedges servicing the debt is no problem. In fact, they are now generating about $50 million of free cash flow per quarter. Based on my forecast, free cash flow should increase to $100/quarter in 2019.
Read: https://finance.yahoo.com/news/does-ant ... 48468.html
PS: Antero Resources' aggressive drilling program is what makes Antero Midstream (AM) one of the Top Picks in our High Yield Income Portfolio.