Antero Resources Reports Third Quarter 2019 Financial and Operational Results

Recent Developments

Well Cost Savings Update

Antero's drilling and completion capital expenditures declined to $290 million during third quarter of 2019.  The reduced capital spending during the quarter showcased capital efficiency gains previously outlined that are trending ahead of schedule.  Some of the key contributions were (i) localized water blending operations that reduced flowback water costs by reducing trucking costs and (ii) the use of lower volumes of fresh water per foot in approximately 20% of stages completed during the quarter.  Additionally, Antero continued to see operational efficiency gains during the third quarter.  Completion stages per day exceeded 6 stages per day in August and September, an increase from 5.7 stages per day during the second quarter as lower water volume completions accelerated cycle times.  The Company expects further well cost savings moving forward as it transitions to using less water on all completions by 2020 and moves towards blending nearly all flowback and produced water from the Company's Marcellus wells.

Well costs are currently averaging $895 per foot, with a similar level projected for the fourth quarter of 2019.  This is 4% below Antero's previously stated second half 2019 target of $930 per foot.  First quarter 2020 well costs are now expected to average $880 per foot, and the full year 2020 target range is $830 to $870 per foot. 

Net Marketing Expense Mitigation

Antero recently entered into release capacity agreements to mitigate some of its excess firm transportation expenses.  For the September 2019 through March 2020 period, the Company has released 250 MMcf/d of excess firm transportation capacity to third parties.  Antero estimates that the release will result in a $15 million reduction in net marketing expenses during the seven month period than otherwise expected.  Antero continues to see opportunities to monetize some of its excess firm transportation capacity, driven by the recent widening of local basis and attractive spreads to the Midwest and Gulf Coast.  Antero's gross production is expected to fill essentially all of its premium transportation capacity by 2022.

Lease Operating Expense Reduction Update

Antero's lease operating expenses during the third quarter of 2019 were $36 million, or $0.12 per Mcfe.  This represents a $0.03 per Mcfe or 21% reduction from the first half of 2019.  Produced water costs represent approximately 80% of Antero's lease operating expenses.  Antero was able to achieve these significant cost savings primarily due to a combination of localized blending, which began in August, and the shifting of wastewater away from the Antero Clearwater Facility in September to a combination of blending and injection.  Recently, Antero has begun recycling up to 100% of its produced and flowback water by blending with fresh water for reuse in completions.  Given these initiatives were only implemented during a portion of the third quarter, Antero expects to see further lease operating expense savings moving in the fourth quarter and into 2020. 

For the fourth quarter of 2019, Antero expects to blend approximately 40 MBbl/d of flowback and produced water for completions, an increase from 10 MBbl/d in the third quarter. This increase in blending operations combined with reduced trucking distances and lower negotiated trucking rates is projected to result in a $4.00 per Bbl decrease in water handling expense related to lease operating expenses as compared to the beginning of 2019.  Following the idling of the Antero Clearwater Facility, water fees including trucking costs averaged $6.00 per Bbl, as compared to $10.13 per Bbl during the second quarter of 2019.  Antero is forecasting lease operating expenses to be further reduced to $0.10 per Mcfe in the fourth quarter of 2019, a 31% reduction from the first half of 2019 and a 16% reduction from the third quarter.

General & Administrative Cost Savings Update

Antero recently launched a cost savings initiative targeting a 10% reduction to general and administrative expenses by mid-2020.  The Company plans to reduce general and administrative costs through a combination of headcount reductions completed earlier this year, natural employee attrition and a reduction across the board in general and administrative expenses.

2019 Guidance Update

Drilling and Completion Capital

Based on well cost savings achieved to date, Antero has reduced its 2019 drilling and completion capital to a range of $1.275 to $1.3 billion, a 4% reduction at the midpoint from the previous range of $1.3 to $1.375 billion.   

Production Guidance

Driven by continued strong well performance throughout 2019, Antero is increasing its full year production guidance to the high end of the range or approximately 3.25 Bcfe/d, a 2% increase from the midpoint of the prior range of 3.15 to 3.25 Bcfe/d.

Net Marketing Expense

As a result of the successful mitigation efforts, Antero is decreasing its net marketing expense guidance for 2019 to a range of $0.21 to $0.23 per Mcfe, as compared to previous guidance of $0.225 to $0.25 per Mcfe.  Antero expects fourth quarter 2019 net marketing expense to be in the range of $0.15 to $0.17 per Mcfe, an approximate 20% reduction from the third quarter of 2019.

Natural Gas Price Realization

Due to sustained lower natural gas prices resulting in a lower BTU upgrade during the third quarter of 2019, Antero now expects a natural gas price differential of $0.05 to $0.10 per Mcf premium to NYMEX, as compared to the prior guidance range of $0.10 to $0.15 premium to NYMEX

All guidance not discussed in this release is unchanged from previously stated guidance.

Preliminary 2020 Outlook

Antero Resources is targeting 110 to 120 completions in 2020, with an average lateral length of 12,100 feet as compared to 115 to 125 completions in 2019 with an average lateral of 10,200 feet.  This represents a 14% increase in total lateral feet to be completed.  As a result of the well cost reductions achieved to date and expectations for 2020, Antero's preliminary drilling and completion capital target for 2020 has been reduced to $1.15 to $1.20 billion.  In addition to drilling and completion capital, Antero is targeting land capital spending of approximately $50 million in 2020, resulting in a preliminary total capital target of $1.20 to $1.25 billion.  This capital spending target is expected to deliver annual production growth of 8% to 10%.

Based on current strip prices and accounting for the reduced capital target, lease operating expense savings achieved to date and expected in 2020, the reduction in unutilized firm transport costs and the targeted general and administrative cost savings, Antero is expecting an outspend of $100 to $150 million during 2020.  This includes the $125 million water earn-out proceeds expected to be received from Antero Midstream in January of 2020 and the expected $75 million of net proceeds related to the WGL natural gas pricing dispute that has been ruled in favor of Antero, but is subject to appeal.  The 2020 capital budget is subject to Board approval and is expected to be finalized by the first quarter of 2020 based on the commodity price outlook and various other considerations at that time.

Hedging Activity Update

Antero has shifted 850 BBtu/d NYMEX of natural gas fixed price swaps from 2022 to 2021 to support the Company's expected production growth to fill its firm transportation portfolio.  The company also added another 100 BBtu/d of natural gas fixed price swaps in 2021.  As a result, as of October 29, 2019 Antero's expected natural gas production is now 91% hedged in 2020 at an average NYMEX price of $2.87 per MMBtu and approximately 89% hedged in 2021 at an average NYMEX price of $2.80 per MMBtu, assuming 9% growth in 2020, using the midpoint of the 8 to 10% target and 10% production growth 2021. 

Antero also commenced a natural gas liquids hedging program during the quarter that has continued through October.  The Company added propane hedges at Mont Belvieu, ARA (Europe) and FEI (Asia) indices as well as butane and pentane hedges tied to domestic prices.  As of October 29, 2019 Antero has hedged 54,000 Bbl/d, or 54% of its C3+ NGL production for the fourth quarter of 2019.  Antero has also hedged approximately 34,000 Bbl/d or 31% of its expected C3+ NGL production in 2020.

Please see Antero's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, for more information on its commodity derivative positions.  Please also see Commodity Derivative Positions which appears later in this press release, as well as Antero's Hedge Portfolio presentation that can be found on the Company's website.

Share Repurchase Activity Update

During the third quarter of 2019, Antero returned $17 million of cash to shareholders by repurchasing 5.1 million shares.  The Company has reduced shares outstanding by 5% since the commencement of the share repurchase program in the fourth quarter of 2018.  Antero's remaining share repurchase authorization is $454 million.

Increased Bank Lender Agreements

In October 2019, Antero added Royal Bank of Canada ("RBC") to its lending group with $140 million of incremental commitments.  Pro forma for the addition of RBC, Antero lender commitments increased to $2.64 billion and the Company's available liquidity increased to approximately $1.7 billion. 

South Jersey Payment

Antero received a net payment to the Company of $59 million from South Jersey.  The benefit consisted of $51 million in Adjusted EBITDAX ($54 million of net revenue offset by $3 million of production taxes) and $8 million in interest.  The payment related to a favorable ruling on previously disclosed contractual disputes with South Jersey.  In previous quarters South Jersey had paid the Company based on price indices unilaterally selected by South Jersey and not the index price specified in the contract.  A favorable judgment was affirmed in August 2019 and resolved in full with this payment.  For further information on this dispute, please see note 14 to Antero's condensed consolidated financial statements included in Antero's Form 10-Q for the period ending September 30, 2019.

Impairment of Oil and Gas Properties

Antero recorded an impairment charge of $1 billion related to proved properties in the Utica Shale in the third quarter of 2019 due to lower future commodity prices.  The carrying amount of the Utica Shale exceeded the estimated undiscounted future cash flows based on future commodity prices at September 30, 2019. 

Third Quarter 2019 Financial Results

For the three months ended September 30, 2019, Antero reported a GAAP net loss of $879 million, or $2.86 per diluted share, compared to a GAAP net loss of $154 million, or $0.49 per diluted share, in the prior year period.  Excluding items detailed in "Non-GAAP Financial Measures," Adjusted Net Loss was $150 million, or $0.49 per diluted share, compared to Adjusted Net Income of $22 million during the three months ended September 30, 2018, or $0.07 per diluted share. 

Adjusted EBITDAX was $258 million, a 39% decrease compared to $419 million in the prior year period primarily due to lower commodity pricing.  Net loss and Adjusted EBITDAX include $51 million related to the South Jersey payment.  The South Jersey underpayments had negatively impacted realizations and EBITDAX in prior periods.

The following table details the components of average net production and average realized prices for the three months ended September 30, 2019:

		Three months ended September 30, 2019
		Natural Gas (MMcf/d)			Oil (Bbl/d)			C3+ NGLs (Bbl/d)			Ethane (Bbl/d)			Combined Natural Gas Equivalent (MMcfe/d)
Average Net Production			2,281			9,408			124,701			46,814			3,367
Average Realized Prices		Natural Gas ($/Mcf)			Oil ($/Bbl)			C3+ NGLs ($/Bbl)			Ethane ($/Bbl)			Combined Natural Gas Equivalent ($/Mcfe)
Average realized prices before settled derivatives		$	2.50		$	46.86		$	22.53		$	6.15		$	2.74
Settled commodity derivatives			0.55			3.13			0.14 Werbung Mehr Nachrichten zur Antero Resources Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 11:22 - PR Newswire BlackRock Energy and Resources Income Trust Plc - Portfolio Update 09:16 - PR Newswire Redde Northgate Plc - Director/PDMR Shareholding 08:54 - PR Newswire Samson Rock Capital LLP - Form 8.3 - Spirent Communications PLC SolarBank    Wie die Revolution der sauberen Energie eine solide Investitionsmöglichkeit bieten könnte weiterlesen» Anzeige wo-site-teaser-box-16755_site-teaser-box_2024-04-25_09%253A00%253A00_2024-04-26_09%253A00%253A59