Energy Prospectus

I just finished review of the Antero Resources (AR) profile. I am raising my valuation by $1.60 to $16.00 per share.

Why:
> AR is trading at $9.91 as of the time of this post. It is up almost 200% since I added it to the Sweet 16 in late November, 2020.
> AR generated $3.14 operating cash flow in 2020 and, based on their guidance, they should increase that to approximately $4.30 in 2021.
> Free cash flow should be over $600 million this year.
> The balance sheet is in good shape and will be in even better shape by year-end.
> AR announced a very accretive drilling partnership with an affiliate of Quantum Energy Partners. For details go to AR's Q4 conference call and listen to the first 15 minutes. Plus, the deal is VERY GOOD NEWS for Antero Midstream Corp. (AM), one of the companies in our High Yield Income Portfolio.
> The primary reasons for my increased valuation are (a) rapidly increasing NGL prices and (b) the Company's detailed guidance for 2021, which raised my confidence in my forecast and therefore increases the multiple of operating cash flow that I use to value it.
> AR has ~93% of their 2021 natural gas hedged at $2.77/MMBtu and their ngas has a high BTU content (sells at a premium to regional prices). Based on comments made during the CC, I think AR was able to sell quite a bit of gas at high spot market prices during the "Big Freeze", so the ngas prices I used for Q1 might be too low.
> BIG UPSIDE for us because I don't think the Wall Street Gang understands the significances of the new drilling partnership. As AR keeps paying down debt by more than $100 million per quarter, the value of the equity goes up.

The profile and my updated forecast/valuation model will be posted to the EPG website this afternoon.

From AR: Natural Gas and NGL Price Realizations
"The Company expects to realize a $0.10 to $0.20 per MMBtu price premium compared to the NYMEX Henry Hub price for its natural gas sales during 2021, as Antero's firm transportation portfolio delivers access to premium priced markets in the Gulf Coast and Midwest. The winter weather event in February is expected to result in first quarter 2020 realized natural gas prices at a $0.30 to $0.40 premium to NYMEX. Antero is forecasting an average realized price for C3+ NGLs in the range of a $0.00 to a $0.05 per gallon premium relative to Mont Belvieu pricing. Antero expects to sell at least 50% of its C3+ NGL production in 2021 at Marcus Hook, PA for export at a premium to Mont Belvieu pricing." <~70% of Antero's NGLs are C3+

I just got off of a conference call with Range Resources (RRC) and like AR they said they are now confident that their realized NL prices will be over $20/bbl all year. My guess is $23/bbl in Q1 2021 vs their realized price of $17.49/bbl in Q4 2020. This is equates to a $45 to $50 million increase in Range's revenues quarter over quarter.

At the time of this post, the propane futures contract for April is over $36/bbl. About 25% of Range's production is unhedged NGLs.

If you like big dividends, check out Antero Midstream (AM) that pays quarterly dividends for annual yield over 10%. It is a C-Corp.

Dividends are $0.225/quarter.

good pick!

https://d1io3yog0oux5.cloudfront.net/_3 ... .21_vF.pdf

New update:

https://d1io3yog0oux5.cloudfront.net/_a ... .21_vF.pdf

Impact of higher NGL pricing in Q1 is an additional 125 m for AR

Hi Fraser 921,

Can't access your posted website, what is it about?

Every week, Antero Resources , posts on their web site what they are earning on liquid sales "LPG Pricing Update"

The current pricing is 41.55 per bbl. Q1 they did 39.78.

last year they did

q-2020 $ 21.31 >>>> Current 39.78
q2-2020 $ 15.55 >>>> Current 41.55
q3- 2020 $ 22.50
q4- 2020 $ 27.64
Total yr avg $21.68 >>>> if they can avg 41 that would generated 800-850 m extra cash in 2021!

Here's the key : They avg. 115 k bbls per day times 365 days Every $5 change = $210m extra CASH!!!!!!

Q1 is $ 18 plus thats $ 186 m extra, Q2 is already $ 25 plus = $ 260 m.

https://d1io3yog0oux5.cloudfront.net/_a ... .21_vF.pdf

If the link doesnt work go to antero resources investors page, you can find it there

AR trading below book value is crazy.

Any idea why all gassers are down since 2 days ?

Maybe something here:

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


On April 8, 2021, Antero Resources Corporation (“Antero Resources”) and Antero Midstream Corporation (“Antero Midstream”) announced that Glen C. Warren, Jr. will retire as President and Chief Financial Officer of Antero Resources and President of Antero Midstream, effective as of April 30, 2021. Mr. Warren will also step down from the board of both companies as of the same date. Mr. Warren’s retirement is not the result of any disagreement with Antero Resources or Antero Midstream.



Effective upon Mr. Warren’s retirement, (i) Paul M. Rady, currently Chairman and CEO of Antero Resources and Antero Midstream, will also be named President of Antero Resources and Antero Midstream and (ii) Michael N. Kennedy, currently Senior Vice President of Finance at Antero Resources and Antero Midstream and Chief Financial Officer of Antero Midstream, will be appointed as Chief Financial Officer of Antero Resources, will cease to be the Chief Financial Officer of Antero Midstream and will continue to serve as Senior Vice President of Finance at Antero Midstream.



Information regarding Mr. Rady’s and Mr. Kennedy’s business experience is included in Antero Resources’ SEC filings and on its website.



Item 7.01 Regulation FD Disclosure.


On April 8, 2021, Antero Resources and Antero Midstream issued two joint press releases announcing Mr. Warren’s retirement and related changes to the board and management of each company. Copies of the press releases are furnished as Exhibit 99.1 and Exhibit 99.2 hereto and are incorporated by reference into this Item 7.01.



The information furnished in this Item 7.01 (including the exhibits) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.



Item 9.01 Financial Statements and Exhibits.

All energy down this week on the news that Biden is increasing taxes on energy EP firms.

The attacks on the industry are never ending. They are ok of making the USA more reliant on foreign oil.
He is also opening talks with the rogue nation of Iran ending sanctions so they can export more oil and make nuclear bombs. Maybe he can get them to soften their Death to USA and death to Israel chants

If you have trouble getting on the EPG website send an email to Sabrina at energypropectus@gmail.com

April+May is the low point for natural gas demand.

>Antero's firm transportation portfolio

This may finally pay off as pipes are filling up in the Marcellus.

Platts reports :Dominion South trades at 63-cent discount to Henry Hub

Gas production up over 900 MMcf/d from April 2020

Pipelines to Southeast, Midwest near capacity limits

Basis prices at Appalachia's benchmark Dominion South hub are at their lowest in at least five years this April as lengthening supply and dwindling midstream egress capacity leave regional cash markets steeply discounted.Month to date, Dominion South has traded at an average 63-cent discount to the US benchmark Henry Hub, S&P Global Platts data shows. Prices at other upstream locations are seeing similar weakness.

At Texas Eastern M2 receipts, cash basis has averaged minus 65 cents this month. At Tennessee zone 4-300 leg, the region's weakest location, prices are averaging 72 cents below the benchmark.

Historically, basis prices in Appalachia often see a downturn in the spring and autumn shoulder seasons as mild weather zaps regional gas demand and drives up utilization on production-takeaway pipelines. This year, though, basis prices are hitting historic lows as growing supply length faces pushback from the region's production-takeaway pipelines, which are now collectively approaching capacity.