Antero Resources — Feb 12, 2025 release
Fiscal 2024 fourth-quarter results · 8-K Item 2.02 · Exhibit 99.1 · 0001104659-25-012276
Showing in the filing
Completed Wells (Net)
“13,700”
Period
No period stated
Measure
Company-defined measure
Source
Guidance table
All guidance in this release · 31
Maintenance production targets for FY2025
“3.35 to 3.45 Bcfe/d”
Net Daily Natural Gas Equivalent Production …
“3.35”
Realized natural gas price premium to NYMEX for FY2025
“$0.10 to $0.20 per Mcf”
Natural Gas Realized Price Premium vs. NYMEX…
“$0.10”
Realized C3+ NGL price premium to Mont Belvieu for FY2025
“$1.50 to $2.50 per barrel”
C3+ NGL Realized Price Premium vs. Mont Belv…
“$1.50”
Drilling and completion capital budget for FY2025
“$650 to $700 million”
Net production for FY2025
“3.35 and 3.45 Bcfe/d”
Land capital for FY2025
“$75 million to $100 million”
Drilling & Completion
“$650”
Land
“$100”
Total E&P Capital
“$725”
Drilled Wells (Net) for FY2025
“50 to 55”
Drilled Wells Average Lateral Length (Feet) for FY2025
“13,100”
Drilled Wells (Net)
“13,100”
Completed Wells (Net) for FY2025
“60 to 65”
Completed Wells Average Lateral Length (Feet) for FY2025
“13,700”
Completed Wells (Net)
“13,700”
Net Daily Natural Gas Production (Bcf/d)
“2.16”
Total Net Daily Liquids Production (MBbl/d)
“198”
Net Daily C3+ NGL Production (MBbl/d)
“113”
Net Daily Oil Production (MBbl/d)
“11”
Net Daily Ethane Production (MBbl/d)
“76”
Ethane Realized Price Premium vs. Mont Belvi…
“$1.00”
Oil Realized Price Differential vs. WTI Oil …
“$(12.00)”
Cash Production Expense ($/Mcfe) (1)
“$2.55”
Marketing Expense, Net of Marketing Revenue …
“$0.04”
G&A Expense ($/Mcfe) (2)
“$0.12”
First DUC pad turn-to-sales timing for Q1 FY2025
“the first quarter of 2025”
Second DUC pad turn-to-sales timing for Q3 FY2025
“the third quarter of 2025”
Turn-to-sales second DUC pad
“third quarter of 2025”
Exhibit 99.1 · full document
EXHIBIT 99.1
Exhibit 99.1
Antero Resources Announces Fourth Quarter 2024
Results, Year End Reserves and 2025 Guidance
Denver, Colorado, February 12, 2025—Antero
Resources Corporation (NYSE: AR) (“Antero Resources,” “Antero,” or the “Company”) today announced
its fourth quarter 2024 financial and operating results, year end 2024 estimated proved reserves and 2025 guidance. The relevant consolidated
financial statements are included in Antero Resources’ Annual Report on Form 10-K for the year ended December 31, 2024.
Fourth Quarter
2024 Highlights:
· Net
production averaged 3.4 Bcfe/d
o Natural
gas production averaged 2.1 Bcf/d, a 7% decrease from the year ago period
o Liquids
production averaged 217 MBbl/d, a 14% increase from the year ago period
· Realized
a pre-hedge natural gas equivalent price of $3.64 per Mcfe, an $0.85 per Mcfe premium to
NYMEX
· Realized
a pre-hedge C3+ NGL price of $44.29 per barrel, a $3.09 per barrel premium to Mont Belvieu
· Net
income was $150 million and Adjusted Net Income was $181 million (Non-GAAP)
· Adjusted
EBITDAX was $332 million (Non-GAAP); net cash provided by operating activities was $278 million
· Drilling
and completion capital was $120 million, 27% below the prior year period
· Free
Cash Flow was $159 million (Non-GAAP)
· Averaged
a quarterly company record of 13.2 completion stages per day
Full Year 2024 Highlights:
· Net
Production averaged 3.4 Bcfe/d, an increase of 1% from the prior year
o Natural
gas production averaged 2.2 Bcf/d, a decrease of 3% from the prior year
o Liquids
production averaged 209 MBbl/d, an increase of 8% from the prior year
· Drilling
and completion capital was $620 million, a 32% decline from the prior year
· Completion
stages per day averaged 12.2 stages per day, a 14% increase compared to 2023
· Estimated
proved reserves were 17.9 Tcfe at year end 2024 and proved developed reserves were 13.7 Tcfe
(77% proved developed)
· Estimated
future development cost for 4.2 Tcfe of proved undeveloped reserves is $0.44 per Mcfe
2025 Guidance Highlights:
· Raised
previously communicated maintenance production targets by 50 MMcfe/d to 3.35 to 3.45 Bcfe/d,
driven by growth in liquids production
· Realized
natural gas price is expected to average a premium of $0.10 to $0.20 per Mcf to NYMEX
· Realized
C3+ NGL price is expected to average a premium of $1.50 to $2.50 per barrel to Mont Belvieu
· Reduced
previously communicated drilling and completion capital budget, by $25 million at the midpoint
to $650 million to $700 million
Paul Rady, Chairman, CEO and President of Antero
Resources commented, “Our 2024 development program delivered production that was 2% above the midpoint of the initial guidance
range and capital that was 8% below the midpoint of the initial guidance range. This exceptional performance highlights the strength
of our asset base and the significant capital efficiency gains we made throughout the year. Our 2025 budget reflects an increase to our
maintenance production targets driven by our liquids. This development program positions us to capture a significant increase in Free
Cash Flow year-over-year with the greatest exposure to higher natural gas prices.”
Michael Kennedy, CFO of Antero Resources said,
“Antero’s 2024 financial results reflect the company’s peer-leading Free Cash Flow breakeven level driven by our significant
liquids production and firm transportation portfolio. These attributes enabled us to generate Free Cash Flow of $73 million in 2024 despite
being unhedged with Henry Hub averaging $2.27 per Mcf. Looking ahead to 2025, our firm transportation portfolio delivers 75% of our natural
gas to the LNG corridor along the Gulf Coast, and is expected to result in higher premium price realizations to NYMEX following the recent
start-up of two large LNG export terminals in the Gulf.”
For a discussion of the non-GAAP financial
measures including Adjusted Net Income, Adjusted EBITDAX, Free Cash Flow and Net Debt please see “Non-GAAP Financial Measures.”
1
2025 Guidance
Antero’s 2025 drilling and completion capital
budget is $650 to $700 million. Net production is expected to average between 3.35 and 3.45 Bcfe/d during 2025. The Company’s land
capital guidance is $75 million to $100 million.
The following is a summary of Antero
Resources’ 2025 capital budget.
Capital Budget ($ in Millions)
Low
High
Drilling & Completion
$ 650
$ 700
Land
$ 75
$ 100
Total E&P Capital
$ 725
$ 800
#
of Wells
Net
Wells
Average
Lateral
Length (Feet)
Drilled Wells (Net)
50
to 55
13,100
Completed Wells (Net)
60 to 65
13,700
The following is a summary of Antero Resources’
2025 production, pricing and cash expense guidance:
Production Guidance
Low
High
Net Daily Natural Gas Equivalent Production
(Bcfe/d)
3.35
3.45
Net Daily Natural Gas Production
(Bcf/d)
2.16
2.2
Total Net Daily Liquids Production
(MBbl/d):
198
208
Net Daily C3+ NGL Production (MBbl/d)
113
117
Net Daily Ethane Production (MBbl/d)
76
80
Net Daily Oil Production (MBbl/d)
9
11
Realized Pricing Guidance
(Before Hedges)
Low
High
Natural Gas Realized Price Premium vs. NYMEX
Henry Hub ($/Mcf)
$ 0.10
$ 0.20
C3+ NGL Realized Price Premium vs. Mont Belvieu ($/Bbl)
$ 1.50
$ 2.50
Ethane Realized Price Premium vs. Mont Belvieu ($/Bbl)
$ 1.00
$ 2.00
Oil Realized Price Differential vs. WTI Oil ($/Bbl)
$ (12.00 )
$ (16.00 )
Cash Expense Guidance
Low
High
Cash
Production Expense ($/Mcfe) (1)
$ 2.45
$ 2.55
Marketing Expense, Net of Marketing Revenue ($/Mcfe)
$ 0.04
$ 0.06
G&A
Expense ($/Mcfe) (2)
$ 0.12
$ 0.14
(1) Includes lease operating, gathering,
compression, processing and transportation expenses (“GP&T”) and production
and ad valorem taxes.
(2) Excludes equity-based compensation.
Commodity Derivative Positions
Antero added new natural gas hedges for 2025
and 2026 with amounts tied to the completion of two lean (approximately 1200 BTU gas) drilled but uncompleted (“DUC”) pads
that were deferred in 2024. Antero’s portfolio includes lean gas development in its capital budget for high gas productivity and
midstream infrastructure availability. The hedges were added to lock in attractive rates of returns on the two deferred pads. Antero
expects to turn-to-sales the first DUC pad during the first quarter of 2025 and the second DUC pad in the third quarter of 2025. Antero
did not enter into any new liquids hedges during the fourth quarter of 2024. For more detail please see the presentation titled “Hedge
and Guidance Presentation” on Antero’s website.
2
Natural Gas
MMBtu/d
Weighted
Average Index
Price ($/MMBtu)
% of Estimated
Natural Gas
Production (1)
2025 NYMEX Henry Hub Swap
100,000
$ 3.12
4 %
Weighted Average Index
Natural
Gas
MMBtu/d
Ceiling Price
($/MMBtu)
Floor Price
($/MMBtu)
% of Estimated
Natural Gas
Production (1)
2026 NYMEX Henry Hub Collars
30,000
$ 4.27
$ 3.25
1 %
(1) Based on the midpoint of 2025
natural gas guidance (including BTU upgrade)
Fourth Quarter 2024 Financial Results
Net daily natural gas equivalent production in
the fourth quarter averaged 3.4 Bcfe/d, including 217 MBbl/d of liquids. Antero’s average realized natural gas price before hedges
was $2.77 per Mcf, a $0.02 per Mcf discount to the benchmark index price. Antero’s average realized C3+ NGL price before hedges
was $44.29 per barrel, a $3.09 per barrel premium to the benchmark index price.
The following table details average net production
and average realized prices for the three months ended December 31, 2024:
Three Months Ended
December 31, 2024
Natural
Gas
Oil
C3+ NGLs
Ethane
Combined
Natural Gas
Equivalent
(MMcf/d)
(Bbl/d)
(Bbl/d)
(Bbl/d)
(MMcfe/d)
Average Net Production
2,131
9,239
114,815
92,587
3,431
Three Months Ended
December 31, 2024
Natural
Gas
Oil
C3+ NGLs
Ethane
Combined
Natural Gas
Equivalent
Average Realized Prices
($/Mcf)
($/Bbl)
($/Bbl)
($/Bbl)
($/Mcfe)
Average realized prices before settled derivatives
$ 2.77
57.80
44.29
10.31
3.64
Index price
$ 2.79
70.27
41.20
9.24
2.79
Premium / (Discount) to Index price
$ (0.02 )
(12.47 )
3.09
1.07
0.85
Settled commodity derivatives
$ (0.01 )
(0.11 )
0.14
—
(0.01 )
Average realized prices after settled derivatives
$ 2.76
57.69
44.43
10.31
3.63
Premium / (Discount) to Index price
$ (0.03 )
(12.58 )
3.23
1.07
0.84
All-in cash expense, which includes lease operating,
gathering, compression, processing and transportation and production and ad valorem taxes was $2.45 per Mcfe in the fourth quarter, as
compared to $2.32 per Mcfe during the fourth quarter of 2023. The increase was due primarily to higher gathering, compression and processing
costs related to CPI-based adjustments in 2024 and an increase in ad valorem taxes that is based on higher commodity prices in 2022.
Net marketing expense was $0.06 per Mcfe in the fourth quarter, compared to $0.05 per Mcfe during the fourth quarter of 2023.
3
Free Cash Flow
During the fourth quarter of 2024, Free Cash
Flow was $159 million.
Three Months Ended
December 31,
2023
2024
Net cash provided by operating activities
$ 312,175
278,002
Less: Capital expenditures (1)
(219,817 )
(128,315 )
Less: Distributions to non-controlling interests in Martica
(24,578 )
(15,651 )
Free Cash Flow
$ 67,780
134,036
Changes in Working Capital (2)
29,203
24,845
Free Cash Flow before Changes in Working
Capital
$ 96,983
158,881
(1) Capital expenditures includes additions to unproved properties, drilling and completion costs and additions to other property and equipment.
(2) Working capital adjustments include changes in current assets and liabilities
and changes in accounts payable and accrued liabilities for additions to property and equipment.
Fourth Quarter 2024 Operating Results
· Antero
placed 5 horizontal Marcellus wells to sales during the fourth quarter with an average lateral
length of 17,950 feet
· These
wells have been on line for approximately 60 days with an average rate per well of 34 MMcfe/d,
including 1,650 Bbl/d of liquids per well assuming 25% ethane recovery
Fourth Quarter 2024 Capital Investment
Antero’s drilling and completion capital
expenditures for the three months ended December 31, 2024, were $120 million. In addition to capital invested in drilling and completion
activities, the Company invested $22 million in land during the fourth quarter. During the quarter, Antero added approximately 4,200
net acres, representing 15 incremental drilling locations at an average cost of approximately $950,000 per location. During 2024, Antero
added 59 locations at an average cost of approximately $900,000 per location. These additions more than offset the wells Antero turned-to-sales
during the year.
Year End Proved Reserves
At December 31, 2024, Antero’s estimated
proved reserves were 17.9 Tcfe, flat from the prior year before sales of reserves in place. Estimated proved reserves were comprised
of 59% natural gas, 40% NGLs and 1% oil.
Estimated proved developed reserves were 13.7
Tcfe, flat from the prior year. The percentage of estimated proved reserves classified as proved developed increased to 77% at year end
2024. At year end 2024, Antero’s five year development plan included 289 gross PUD locations. Antero's proved undeveloped locations
have an average estimated BTU of 1259, with an average lateral length of 13,800 feet.
Antero's 4.2 Tcfe of estimated proved undeveloped
reserves will require an estimated $1.8 billion of future development capital over the next five years, resulting in an estimated average
future development cost for proved undeveloped reserves of $0.44 per Mcfe.
The following table presents a summary of changes
in estimated proved reserves (in Tcfe).
Proved reserves, December 31, 2023
18.1
Extensions, discoveries and other additions
0.8
Revisions of previous estimates
0.3
Revisions to five-year development plan
0.2
Price revisions
(0.1 )
Sales of reserves in place
(0.2 )
Production
(1.2 )
Proved reserves, December 31, 2024
17.9
Conference Call
A conference call is scheduled on Thursday, February 13,
2025 at 9:00 am MT to discuss the financial and operational results. A brief Q&A session for security analysts will immediately follow
the discussion of the results. To participate in the call, dial in at 877-407-9079 (U.S.), or 201-493-6746 (International) and reference
“Antero Resources.” A telephone replay of the call will be available until Thursday, February 20, 2025 at 9:00 am MT
at 877-660-6853 (U.S.) or 201-612-7415 (International) using the conference ID: 13750392. To access the live webcast and view the related
earnings conference call presentation, visit Antero's website at www.anteroresources.com. The webcast will be archived for replay until
Thursday, February 20, 2025 at 9:00 am MT.
4
Presentation
An updated presentation will be posted to the
Company's website before the conference call. The presentation can be found at www.anteroresources.com on the homepage. Information
on the Company's website does not constitute a portion of, and is not incorporated by reference into this press release.
Non-GAAP Financial Measures
Adjusted Net Income (Loss)
Adjusted Net Income as set forth in this release
represents net income, adjusted for certain items. Antero believes that Adjusted Net Income is useful to investors in evaluating operational
trends of the Company and its performance relative to other oil and gas producing companies. Adjusted Net Income is not a measure of
financial performance under GAAP and should not be considered in isolation or as a substitute for net income (loss) as an indicator of
financial performance. The GAAP measure most directly comparable to Adjusted Net Income is net income. The following table reconciles
net income to Adjusted Net Income (in thousands):
Three Months Ended December 31,
2023
2024
Net income and comprehensive income attributable to Antero Resources Corporation
$ 81,839
149,649
Net income and comprehensive income attributable to noncontrolling interests
21,169
9,164
Unrealized commodity derivative (gains) losses
(37,272 )
20,122
Amortization of deferred revenue, VPP
(7,700 )
(6,812 )
Loss on sale of assets
—
1,989
Impairment of property and equipment
6,556
28,475
Equity-based compensation
14,531
17,169
Loss on convertible note inducement
288
—
Equity in earnings of unconsolidated affiliate
(23,966 )
(23,925 )
Contract termination, loss contingency and settlements
4,956
937
Tax effect of reconciling items (1)
9,538
(8,257 )
69,939
188,511
Martica adjustments (2)
(11,473 )
(7,858 )
Adjusted Net Income
$ 58,466
180,653
Diluted Weighted Average Common Shares Outstanding (3)
311,956
314,165
(1) Deferred taxes were approximately 22% for
2023 and 2024, respectively.
(2) Adjustments reflect noncontrolling interest
in Martica not otherwise adjusted in amounts above.
(3) Diluted weighted average shares outstanding
does not include securities that would have had an anti-dilutive effect on the computation
of diluted earnings per share. Anti-dilutive weighted average shares outstanding for the
three months ended December 31, 2023 and 2024 were 0.7 million and 0.3 million, respectively.
Net Debt
Net Debt is calculated as total long-term debt
less cash and cash equivalents. Management uses Net Debt to evaluate the Company’s financial position, including its ability to
service its debt obligations.
The following table reconciles consolidated total
long-term debt to Net Debt as used in this release (in thousands):
December 31,
December 31,
2023
2024
Credit Facility
$ 417,200
393,200
8.375% senior notes due 2026
96,870
96,870
7.625% senior notes due 2029
407,115
407,115
5.375% senior notes due 2030
600,000
600,000
4.250% convertible senior notes due 2026
26,386
—
Unamortized debt issuance costs
(9,975 )
(7,955 )
Total long-term debt
$ 1,537,596
1,489,230
Less: Cash and cash equivalents
—
—
Net Debt
$ 1,537,596
1,489,230
5
Free Cash Flow
Free Cash Flow is a measure of financial performance not calculated
under GAAP and should not be considered in isolation or as a substitute for cash flow from operating, investing, or financing activities,
as an indicator of cash flow or as a measure of liquidity. The Company defines Free Cash Flow as net cash provided by operating activities,
less capital expenditures, which includes additions to unproved properties, drilling and completion costs and additions
to other property and equipment, less net derivative monetizations
and distributions to non-controlling interests in Martica.
The Company has not provided projected net cash
provided by operating activities or a reconciliation of Free Cash Flow to projected net cash provided by operating activities, the most
comparable financial measure calculated in accordance with GAAP. The Company is unable to project net cash provided by operating activities
for any future period because this metric includes the impact of changes in operating assets and liabilities related to the timing of
cash receipts and disbursements that may not relate to the period in which the operating activities occurred. The Company is unable to
project these timing differences with any reasonable degree of accuracy without unreasonable efforts.
Free Cash Flow is a useful indicator of the Company’s
ability to internally fund its activities, service or incur additional debt and estimate our ability to return capital to shareholders.
There are significant limitations to using Free Cash Flow as a measure of performance, including the inability to analyze the effect
of certain recurring and non-recurring items that materially affect the Company’s net income, the lack of comparability of results
of operations of different companies and the different methods of calculating Free Cash Flow reported by different companies. Free Cash
Flow does not represent funds available for discretionary use because those funds may be required for debt service, land acquisitions
and lease renewals, other capital expenditures, working capital, income taxes, exploration expenses, and other commitments and obligations.
Adjusted EBITDAX
Adjusted EBITDAX is a non-GAAP financial measure
that we define as net income, adjusted for certain items detailed below.
Adjusted EBITDAX as used and defined by us, may
not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance
with GAAP. Adjusted EBITDAX should not be considered in isolation or as a substitute for operating income or loss, net income or loss,
cash flows provided by operating, investing, and financing activities, or other income or cash flow statement data prepared in accordance
with GAAP. Adjusted EBITDAX provides no information regarding our capital structure, borrowings, interest costs, capital expenditures,
working capital movement, or tax position. Adjusted EBITDAX does not represent funds available for discretionary use because those funds
may be required for debt service, capital expenditures, working capital, income taxes, exploration expenses, and other commitments and
obligations. However, our management team believes Adjusted EBITDAX is useful to an investor in evaluating our financial performance
because this measure:
· is
widely used by investors in the oil and natural gas industry to measure operating performance
without regard to items excluded from the calculation of such term, which may vary substantially
from company to company depending upon accounting methods and the book value of assets, capital
structure and the method by which assets were acquired, among other factors;
· helps
investors to more meaningfully evaluate and compare the results of our operations from period
to period by removing the effect of our capital and legal structure from our operating structure;
· is
used by our management team for various purposes, including as a measure of our operating
performance, in presentations to our Board of Directors, and as a basis for strategic planning
and forecasting: and
· is
used by our Board of Directors as a performance measure in determining executive compensation.
There are significant limitations to using Adjusted
EBITDAX as a measure of performance, including the inability to analyze the effects of certain recurring and non-recurring items that
materially affect our net income or loss, the lack of comparability of results of operations of different companies, and the different
methods of calculating Adjusted EBITDAX reported by different companies.
The GAAP measures most directly comparable to
Adjusted EBITDAX are net income and net cash provided by operating activities. The following table represents a reconciliation of Antero’s
net income, including noncontrolling interest, to Adjusted EBITDAX and a reconciliation of Antero’s Adjusted EBITDAX to net cash
provided by operating activities per our condensed consolidated statements of cash flows, in each case, for the three months and years
ended December 31, 2023 and 2024 (in thousands). Adjusted EBITDAX also excludes the noncontrolling interests in Martica, and these
adjustments are disclosed in the table below as Martica related adjustments.
6
Three Months Ended
Year Ended
December 31,
December 31,
2023
2024
2023
2024
Reconciliation of net income to Adjusted EBITDAX:
Net income and comprehensive income attributable to Antero Resources Corporation
$ 81,839
149,649
198,404
57,226
Net income and comprehensive income attributable to noncontrolling interests
21,169
9,164
98,925
36,471
Unrealized commodity derivative (gains) losses
(37,272 )
20,122
(394,046 )
9,423
Payments for derivative monetizations
—
—
202,339
—
Amortization of deferred revenue, VPP
(7,700 )
(6,812 )
(30,552 )
(27,101 )
Gain (loss) on sale of assets
—
1,989
(447 )
862
Interest expense, net
32,608
27,061
117,870
118,207
Loss on early extinguishment of debt
—
—
—
528
Loss on convertible note inducements
288
—
374
—
Income tax expense (benefit)
26,390
(104,170 )
63,626
(118,185 )
Depletion, depreciation, amortization and accretion
191,508
194,899
750,093
765,827
Impairment of property and equipment
6,556
28,475
51,302
47,433
Exploration expense
603
702
2,691
2,618
Equity-based compensation expense
14,531
17,169
59,519
66,462
Equity in earnings of unconsolidated affiliate
(23,966 )
(23,925 )
(82,952 )
(93,787 )
Dividends from unconsolidated affiliate
31,284
31,314
125,138
125,197
Contract termination, loss contingency, transaction expense and other
4,981
1,404
55,491
4,933
342,819
347,041
1,217,775
996,114
Martica related adjustments (1)
(20,373 )
(15,105 )
(97,257 )
(63,789 )
Adjusted EBITDAX
$ 322,446
331,936
1,120,518
932,325
Reconciliation of our Adjusted EBITDAX to net cash provided by operating activities:
Adjusted EBITDAX
$ 322,446
331,936
1,120,518
932,325
Martica related adjustments (1)
20,373
15,105
97,257
63,789
Interest expense, net
(32,608 )
(27,061 )
(117,870 )
(118,207 )
Amortization of debt issuance costs and other
(337 )
520
2,264
2,420
Exploration expense
(603 )
(702 )
(2,691 )
(2,618 )
Changes in current assets and liabilities
9,259
(39,944 )
143,278
(24,806 )
Contract termination, loss contingency, settlements, transaction expense and other
(4,782 )
(1,203 )
(43,391 )
411
Payments for derivative monetizations
—
—
(202,339 )
—
Other items
(1,573 )
(649 )
(2,305 )
(4,026 )
Net cash provided by operating activities
$ 312,175
278,002
994,721
849,288
(1) Adjustments reflect noncontrolling interests
in Martica not otherwise adjusted in amounts above.
Drilling and Completion Capital Expenditures
For a reconciliation between cash paid for drilling
and completion capital expenditures and drilling and completion accrued capital expenditures during the period, please see the capital
expenditures section below (in thousands):
Three Months Ended
December 31,
2023
2024
Drilling and completion costs (cash basis)
$ 204,494
105,552
Change in accrued capital costs
(40,265 )
14,912
Adjusted drilling and completion costs (accrual basis)
$ 164,229
120,464
7
Notwithstanding their use for comparative purposes,
the Company’s non-GAAP financial measures may not be comparable to similarly titled measures employed by other companies.
Antero Resources is an independent natural
gas and natural gas liquids company engaged in the acquisition, development and production of unconventional properties located in the
Appalachian Basin in West Virginia and Ohio. In conjunction with its affiliate, Antero Midstream Corporation (NYSE: AM), Antero is one
of the most integrated natural gas producers in the U.S. The Company’s website is located at www.anteroresources.com .
This release includes "forward-looking
statements." Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under Antero
Resources’ control. All statements, except for statements of historical fact, made in this release regarding activities, events
or developments Antero Resources expects, believes or anticipates will or may occur in the future, such as those regarding our strategy,
future operations, financial position, estimated revenues and losses, projected costs, estimated realized natural gas, NGL and oil prices,
anticipated reductions in letters of credit and interest expense, prospects, plans and objectives of management, return of capital, expected
results, impacts of geopolitical and world health events, future commodity prices, future production targets, including those related
to certain levels of production, future earnings, leverage targets and debt repayment, future capital spending plans, improved and/or
increasing capital efficiency, expected drilling and development plans, projected well costs and cost savings initiatives, operations
of Antero Midstream, future financial position, the participation level of our drilling partner and the financial and production results
to be achieved as a result of that drilling partnership, the other key assumptions underlying our projections, and future marketing opportunities,
are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All forward-looking statements speak only as of the date of this release. Although Antero Resources believes that
the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance
that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what
is expressed, implied or forecast in such statements. Except as required by law, Antero Resources expressly disclaims any obligation
to and does not intend to publicly update or revise any forward-looking statements.
Antero Resources cautions you that these forward-looking
statements are subject to all of the risks and uncertainties, incident to the exploration for and development, production, gathering
and sale of natural gas, NGLs and oil, most of which are difficult to predict and many of which are beyond the Antero Resources’
control. These risks include, but are not limited to, commodity price volatility, inflation, supply chain or other disruption, availability
and cost of drilling, completion and production equipment and services, environmental risks, drilling and completion and other operating
risks, marketing and transportation risks, regulatory changes or changes in law, the uncertainty inherent in estimating natural gas,
NGLs and oil reserves and in projecting future rates of production, cash flows and access to capital, the timing of development expenditures,
conflicts of interest among our stockholders, impacts of geopolitical and world health events, cybersecurity risks, the state of markets
for, and availability of, verified quality carbon offsets and the other risks described under the heading " Risk Factors" in
Antero Resources’ Annual Report on Form 10-K for the year ended December 31, 2024.
For more information, contact Daniel Katzenberg,
Director - Finance and Investor Relations of Antero Resources at (303) 357-7219 or dkatzenberg@anteroresources.com.
8
ANTERO RESOURCES CORPORATION
Consolidated Balance Sheets
(In thousands, except per share amounts)
December 31,
2023
2024
Assets
Current assets:
Accounts receivable
$ 42,619
34,413
Accrued revenue
400,805
453,613
Derivative instruments
5,175
1,050
Prepaid expenses
12,901
12,423
Other current assets
14,192
6,047
Total current assets
475,692
507,546
Property and equipment:
Oil and gas properties, at cost (successful efforts method):
Unproved properties
974,642
879,483
Proved properties
13,908,804
14,395,680
Gathering systems and facilities
5,802
5,802
Other property and equipment
98,668
105,871
14,987,916
15,386,836
Less accumulated depletion, depreciation and amortization
(5,165,449 )
(5,699,286 )
Property and equipment, net
9,822,467
9,687,550
Operating leases right-of-use assets
2,965,880
2,549,398
Derivative instruments
5,570
1,296
Investment in unconsolidated affiliate
222,255
231,048
Other assets
25,375
33,212
Total assets
$ 13,517,239
13,010,050
Liabilities and Equity
Current liabilities:
Accounts payable
$ 38,993
62,213
Accounts payable, related parties
86,284
111,066
Accrued liabilities
381,340
402,591
Revenue distributions payable
361,782
315,932
Derivative instruments
15,236
31,792
Short-term lease liabilities
540,060
493,894
Deferred revenue, VPP
27,101
25,264
Other current liabilities
1,295
3,175
Total current liabilities
1,452,091
1,445,927
Long-term liabilities:
Long-term debt
1,537,596
1,489,230
Deferred income tax liability, net
811,981
693,341
Derivative instruments
32,764
17,233
Long-term lease liabilities
2,428,450
2,050,337
Deferred revenue, VPP
60,712
35,448
Other liabilities
59,431
62,001
Total liabilities
6,383,025
5,793,517
Commitments and contingencies
Equity:
Stockholders' equity:
Preferred stock, $0.01 par value; authorized - 50,000 shares; none issued
—
—
Common stock, $0.01 par value; authorized - 1,000,000 shares; 303,544 and 311,165 shares issued and outstanding as of December 31, 2023 and December 31, 2024, respectively
3,035
3,111
Additional paid-in capital
5,846,541
5,909,373
Retained earnings
1,051,940
1,109,166
Total stockholders' equity
6,901,516
7,021,650
Noncontrolling interests
232,698
194,883
Total equity
7,134,214
7,216,533
Total liabilities and equity
$ 13,517,239
13,010,050
9
ANTERO RESOURCES CORPORATION
Condensed Consolidated Statements of Operations
and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2024
2023
2024
Revenue and other:
Natural gas sales
$ 570,690
543,794
2,192,349
1,818,297
Natural gas liquids sales
461,212
555,722
1,836,950
2,066,975
Oil sales
74,744
49,128
247,146
230,027
Commodity derivative fair value gains (losses)
28,400
(21,498 )
166,324
731
Marketing
50,732
33,971
206,122
179,069
Amortization of deferred revenue, VPP
7,700
6,812
30,552
27,101
Other revenue and income
665
822
2,529
3,396
Total revenue
1,194,143
1,168,751
4,681,972
4,325,596
Operating expenses:
Lease operating
26,888
30,216
118,441
118,693
Gathering, compression, processing and transportation
661,325
682,024
2,642,358
2,702,930
Production and ad valorem taxes
41,163
60,147
158,855
207,671
Marketing
67,887
52,142
284,965
244,906
Exploration and mine expenses
603
702
2,700
2,618
General and administrative (including equity-based compensation expense)
54,929
59,421
224,516
229,338
Depletion, depreciation and amortization
191,235
193,694
746,849
762,068
Impairment of property and equipment
6,556
28,475
51,302
47,433
Accretion of asset retirement obligations
273
1,205
3,244
3,759
Contract termination, loss contingency
and settlements
4,956
937
52,606
4,468
Loss (gain) on sale of assets
—
1,989
(447 )
862
Other operating expense
—
20
336
390
Total operating expenses
1,055,815
1,110,972
4,285,725
4,325,136
Operating income
138,328
57,779
396,247
460
Other income (expense):
Interest expense, net
(32,608 )
(27,061 )
(117,870 )
(118,207 )
Equity in earnings of unconsolidated affiliate
23,966
23,925
82,952
93,787
Loss on early extinguishment of debt
—
—
—
(528 )
Loss on convertible note inducements
(288 )
—
(374 )
—
Total other expense
(8,930 )
(3,136 )
(35,292 )
(24,948 )
Income before income taxes
129,398
54,643
360,955
(24,488 )
Income tax benefit (expense)
(26,390 )
104,170
(63,626 )
118,185
Net income and comprehensive income including noncontrolling interests
103,008
158,813
297,329
93,697
Less: net income and comprehensive income attributable to noncontrolling interests
21,169
9,164
98,925
36,471
Net income and comprehensive income attributable to Antero Resources Corporation
$ 81,839
149,649
198,404
57,226
Net income per common share—basic
$ 0.27
0.48
0.66
0.18
Net income per common share—diluted
$ 0.26
0.48
0.64
0.18
Weighted average number of common shares outstanding:
Basic
301,825
311,145
299,793
309,489
Diluted
311,956
314,165
311,597
313,414
10
ANTERO RESOURCES CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
Year Ended December 31,
2022
2023
2024
Cash flows provided by (used in) operating activities:
Net income including noncontrolling interests
$ 1,998,837
297,329
93,697
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion, depreciation, amortization and accretion
719,790
750,093
765,827
Impairments
149,731
51,302
47,433
Commodity derivative fair value losses (gains)
1,615,836
(166,324 )
(731 )
Settled commodity derivative gains (losses)
(1,911,065 )
(25,383 )
10,154
Payments for derivative monetizations
—
(202,339 )
—
Deferred income tax expense (benefit)
440,417
62,039
(118,640 )
Equity-based compensation expense
35,443
59,519
66,462
Equity in earnings of unconsolidated affiliate
(72,327 )
(82,952 )
(93,787 )
Dividends of earnings from unconsolidated affiliate
125,138
125,138
125,197
Amortization of deferred revenue
(37,603 )
(30,552 )
(27,101 )
Amortization of debt issuance costs and other
4,336
2,264
2,420
Settlement of asset retirement obligations
(1,050 )
(718 )
(3,571 )
Contract termination, loss contingency and settlements
—
12,100
5,344
Loss (gain) on sale of assets
471
(447 )
862
Loss on early extinguishment of debt
46,027
—
528
Loss on convertible note inducements
169
374
—
Changes in current assets and liabilities:
Accounts receivable
43,510
7,550
25,410
Accrued revenue
(116,243 )
306,880
(52,808 )
Prepaid expenses and other current assets
(27,530 )
14,890
8,680
Accounts payable including related parties
32,374
(16,837 )
35,301
Accrued liabilities
(5,620 )
(62,419 )
1,280
Revenue distributions payable
23,337
(106,429 )
(45,849 )
Other current liabilities
(12,636 )
(357 )
3,180
Net cash provided by operating activities
3,051,342
994,721
849,288
Cash flows provided by (used in) investing activities:
Additions to unproved properties
(149,009 )
(151,135 )
(90,995 )
Drilling and completion costs
(780,649 )
(964,346 )
(614,855 )
Additions to other property and equipment
(14,313 )
(16,382 )
(10,929 )
Proceeds from asset sales
2,747
447
9,499
Change in other assets
(2,388 )
(9,351 )
(6,873 )
Net cash used in investing activities
(943,612 )
(1,140,767 )
(714,153 )
Cash flows provided by (used in) financing activities:
Repurchases of common stock
(873,744 )
(75,355 )
—
Repayment of senior notes
(1,027,559 )
—
—
Borrowings on Credit Facility
6,308,900
4,501,400
4,130,900
Repayments on Credit Facility
(6,274,100 )
(4,119,000 )
(4,154,900 )
Payment of debt issuance costs
(814 )
(605 )
(6,138 )
Distributions to noncontrolling interests
(173,537 )
(128,823 )
(74,286 )
Employee tax withholding for settlement of equity-based compensation awards
(66,132 )
(30,367 )
(29,605 )
Convertible note inducements
(169 )
(374 )
—
Other
(575 )
(830 )
(1,106 )
Net cash provided by (used in) financing activities
(2,107,730 )
146,046
(135,135 )
Net increase in cash and cash equivalents
—
—
—
Cash and cash equivalents, beginning of period
—
—
—
Cash and cash equivalents, end of period
$ —
—
—
Supplemental disclosure of cash flow information:
Cash paid during the period for interest
$ 155,006
113,910
120,058
Increase (decrease) in accounts payable and accrued liabilities for additions to property and equipment
$ 38,035
(60,762 )
10,525
11
The following table sets forth selected financial data for the three
months ended December 31, 2023 and 2024:
(Unaudited)
Three Months Ended
Amount of
December 31,
Increase
Percent
2023
2024
(Decrease)
Change
Revenue:
Natural gas sales
$ 570,690
543,794
(26,896 )
(5 )%
Natural gas liquids sales
461,212
555,722
94,510
20 %
Oil sales
74,744
49,128
(25,616 )
(34 )%
Commodity derivative fair value gains (losses)
28,400
(21,498 )
(49,898 )
*
Marketing
50,732
33,971
(16,761 )
(33 )%
Amortization of deferred revenue, VPP
7,700
6,812
(888 )
(12 )%
Other revenue and income
665
822
157
24 %
Total revenue
1,194,143
1,168,751
(25,392 )
(2 )%
Operating expenses:
Lease operating
26,888
30,216
3,328
12 %
Gathering and compression
217,732
225,267
7,535
3 %
Processing
249,880
267,538
17,658
7 %
Transportation
193,713
189,219
(4,494 )
(2 )%
Production and ad valorem taxes
41,163
60,147
18,984
46 %
Marketing
67,887
52,142
(15,745 )
(23 )%
Exploration
603
702
99
16 %
General and administrative (excluding equity-based compensation)
40,398
42,252
1,854
5 %
Equity-based compensation
14,531
17,169
2,638
18 %
Depletion, depreciation and amortization
191,235
193,694
2,459
1 %
Impairment of property and equipment
6,556
28,475
21,919
334 %
Accretion of asset retirement obligations
273
1,205
932
341 %
Contract termination and loss contingency
4,956
937
(4,019 )
(81 )%
Loss on sale of assets
—
1,989
1,989
*
Other operating expense
—
20
20
*
Total operating expenses
1,055,815
1,110,972
55,157
5 %
Operating income
138,328
57,779
(80,549 )
(58 )%
Other earnings (expenses):
Interest expense, net
(32,608 )
(27,061 )
5,547
(17 )%
Equity in earnings of unconsolidated affiliate
23,966
23,925
(41 )
*
Loss on convertible note inducement
(288 )
—
288
*
Total other expense
(8,930 )
(3,136 )
5,794
(65 )%
Income before income taxes
129,398
54,643
(74,755 )
(58 )%
Income tax (expense) benefit
(26,390 )
104,170
130,560
*
Net income and comprehensive income including noncontrolling interests
103,008
158,813
55,805
54 %
Less: net income and comprehensive income attributable to noncontrolling interests
21,169
9,164
(12,005 )
(57 )%
Net income and comprehensive income attributable to Antero Resources Corporation
$ 81,839
149,649
67,810
83 %
Adjusted EBITDAX
$ 322,446
331,936
9,490
3 %
* Not meaningful
12
The following table sets forth selected financial data for the three
months ended December 31, 2023 and 2024:
(Unaudited)
Three Months Ended
Amount of
December 31,
Increase
Percent
2023
2024
(Decrease)
Change
Production data (1) (2) :
Natural gas (Bcf)
210
196
(14 )
(7 )%
C2 Ethane (MBbl)
5,406
8,518
3,112
58 %
C3+ NGLs (MBbl)
10,918
10,563
(355 )
(3 )%
Oil (MBbl)
1,154
850
(304 )
(26 )%
Combined (Bcfe)
315
316
1
*
Daily combined production (MMcfe/d)
3,420
3,431
11
*
Average prices before effects of derivative settlements (3) :
Natural gas (per Mcf)
$ 2.72
2.77
0.05
2 %
C2 Ethane (per Bbl) (4)
$ 9.13
10.31
1.18
13 %
C3+ NGLs (per Bbl)
$ 37.72
44.29
6.57
17 %
Oil (per Bbl)
$ 64.77
57.80
(6.97 )
(11 )%
Weighted Average Combined (per Mcfe)
$ 3.52
3.64
0.12
3 %
Average realized prices after effects of derivative settlements (3) :
Natural gas (per Mcf)
$ 2.68
2.76
0.08
3 %
C2 Ethane (per Bbl) (4)
$ 9.13
10.31
1.18
13 %
C3+ NGLs (per Bbl)
$ 37.68
44.43
6.75
18 %
Oil (per Bbl)
$ 64.58
57.69
(6.89 )
(11 )%
Weighted Average Combined (per Mcfe)
$ 3.49
3.63
0.14
4 %
Average costs (per Mcfe):
Lease operating
$ 0.09
0.10
0.01
11 %
Gathering and compression
$ 0.69
0.71
0.02
3 %
Processing
$ 0.79
0.85
0.06
8 %
Transportation
$ 0.62
0.60
(0.02 )
(3 )%
Production and ad valorem taxes
$ 0.13
0.19
0.06
46 %
Marketing expense, net
$ 0.05
0.06
0.01
20 %
General and administrative (excluding equity-based compensation)
$ 0.13
0.13
—
*
Depletion, depreciation, amortization and accretion
$ 0.61
0.62
0.01
2 %
* Not meaningful
(1) Production data excludes volumes related to VPP transaction.
(2) Oil and NGLs production was converted at 6 Mcf per Bbl to calculate total
Bcfe production and per Mcfe amounts. This ratio is an estimate of the equivalent energy
content of the products and may not reflect their relative economic value.
(3) Average sales prices shown in the table reflect both the before and after
effects of the Company’s settled commodity derivatives. The calculation of such after
effects includes gains on settlements of commodity derivatives, which do not qualify for
hedge accounting because the Company does not designate or document them as hedges for accounting
purposes. Oil and NGLs production was converted at 6 Mcf per Bbl to calculate total Bcfe
production and per Mcfe amounts. This ratio is an estimate of the equivalent energy content
of the products and does not necessarily reflect their relative economic value.
(4) The average realized price for the three months ended December 31,
2023 includes $2 million of proceeds related to a take-or-pay contract. Excluding the effect
of these proceeds, the average realized price for ethane before the effects of derivatives
for the three months ended December 31, 2023 would have been $8.78 per Bbl.
13
the item shown at left
other guidance in this release
Text is the filed exhibit, verbatim.