Antero Resources (AR) Price Target - Oct 27
Posted: Thu Oct 27, 2022 9:57 am
Truist Financial's price target is $64
Neal Dingmann's Notes
Antero reported a 3Q22 EBITDAX/FCF miss on the back of lower volumes/pricing, as well
as higher capex (inc. land) and costs. 2022 guidance was also disappointing as costs and
spending were increased while production volumes were lowered due largely to pipeline
outage shut-ins. While the print was largely negative, we expect the shares to only be mildly
impacted given the company’s current aggressive share repurchase strategy, which could
even eclipse capex.
Operational/Financial Updates
• AR spent $46mm of its 3Q22 budget (vs 2Q’s $49mm) on land, adding 5.5k net acres
and 25 net locations
• AR repurchased 10.5mm shares in 3Q, up from 2Q’s 6.7mm shares
• AR increased its share repurchase authorization by $1b, leaving $1.3b of remaining
capacity
• Select Marcellus 60-d well results dipped a bit on a mcfe basis, however the liquids
component set a new company record
• Unchanged from last quarter’s strategy, AR added no new hedges in 3Q22
Guidance Updates
• 4Q22 production guidance of 3.25 to 3.35 bcfepd versus Truist Securities/Street
estimates of 3.35/3.30 bcfepd
• FY22 capex guidance was increased by $83mm at the midpoint versus Truist Securities/
Street estimates of $850mm/$842mm, with $33mm associated with higher land spending
and $50mm associated with additional D&C activity
• Gas differential guidance was unchanged with the company expecting continued strong
gas differentials
• FY22 per unit cost guidance was increased by ~$0.15/mcfe (same as last q) to account
for inflationary impacts to fuel and higher production taxes as a result of commodity price
changes
-------------------------
MY TAKE: True the quarter was a "miss", but still outstanding results and their balance sheet is now in great shape.
Neal Dingmann's Notes
Antero reported a 3Q22 EBITDAX/FCF miss on the back of lower volumes/pricing, as well
as higher capex (inc. land) and costs. 2022 guidance was also disappointing as costs and
spending were increased while production volumes were lowered due largely to pipeline
outage shut-ins. While the print was largely negative, we expect the shares to only be mildly
impacted given the company’s current aggressive share repurchase strategy, which could
even eclipse capex.
Operational/Financial Updates
• AR spent $46mm of its 3Q22 budget (vs 2Q’s $49mm) on land, adding 5.5k net acres
and 25 net locations
• AR repurchased 10.5mm shares in 3Q, up from 2Q’s 6.7mm shares
• AR increased its share repurchase authorization by $1b, leaving $1.3b of remaining
capacity
• Select Marcellus 60-d well results dipped a bit on a mcfe basis, however the liquids
component set a new company record
• Unchanged from last quarter’s strategy, AR added no new hedges in 3Q22
Guidance Updates
• 4Q22 production guidance of 3.25 to 3.35 bcfepd versus Truist Securities/Street
estimates of 3.35/3.30 bcfepd
• FY22 capex guidance was increased by $83mm at the midpoint versus Truist Securities/
Street estimates of $850mm/$842mm, with $33mm associated with higher land spending
and $50mm associated with additional D&C activity
• Gas differential guidance was unchanged with the company expecting continued strong
gas differentials
• FY22 per unit cost guidance was increased by ~$0.15/mcfe (same as last q) to account
for inflationary impacts to fuel and higher production taxes as a result of commodity price
changes
-------------------------
MY TAKE: True the quarter was a "miss", but still outstanding results and their balance sheet is now in great shape.