DENVER, July 29, 2020 /PRNewswire/ -- Antero Resources
Corporation (NYSE: AR) ("Antero Resources" or the
"Company") today announced its second quarter 2020 financial
and operational results. The relevant condensed consolidated
financial statements are included in Antero's Quarterly Report on
Form 10-Q for the quarter ended June
30, 2020.
Highlights Include:
- Net production averaged 3,521 MMcfe/d (67% natural gas by
volume) during the second quarter, a 9% increase over the prior
year period
- Realized natural gas equivalent price including hedges
averaged $2.81 per Mcfe during the
second quarter
- Drilling and completion capital spend was $180 million, the lowest quarterly spend since
Antero's IPO in 2013
-
- Well costs are expected to average $675 per foot during the second half of 2020, 6%
below the prior target
- Established a new U.S. horizontal well record drilling
11,253' lateral feet during a 24 hour period
- Monetized 100 MMBtu/d of 2021 natural gas hedges in July for
$29 million to align hedges and 2021
projected net volumes, adjusting for the volumes associated with
the previously announced ORRI transaction
-
- 2021 projected natural gas volumes are approximately 100%
hedged at $2.77 per MMBtu
- Asset sales announced to date total $531 million, relative to the $750 to $1 billion
asset sale target for 2020
- Repurchased an additional $279
million notional amount of senior notes through July 24th at an 18% weighted average
discount
-
- Repurchases included $228
million notional amount of the 2021 senior notes,
$5 million notional amount of the
2022 senior notes, $36 million
notional amount of the 2023 senior notes and $10 million notional amount of the 2025 senior
notes
- Since the start of the debt repurchase program in the fourth
quarter of 2019, Antero has purchased $888
million of senior notes at a 19% weighted average
discount
-
- Reducing total debt by $171
million and annualized interest expense by $24 million
- Liquidity was $1.0 billion as
of June 30, 2020 pro forma for the
hedge monetization and senior note repurchases
Paul Rady, Chairman and Chief
Executive Officer of Antero Resources commented, "We have made
considerable progress towards our $750 to $1 billion
asset sale target having closed $531
million of transactions to date. The asset sale
proceeds received to date have enabled Antero to reduce total debt
by $365 million since the start of
the bond repurchase program in the fourth quarter of 2019,
capturing a meaningful discount on our outstanding senior notes and
significantly addressing our upcoming debt maturities. On the
operating front, we continue to see momentum on well cost savings,
setting a new quarterly record with an average of 8.7 completion
stages per day. We also set a U.S. horizontal well record
during the quarter, drilling 11,253 lateral feet in a 24-hour
period. These well cost savings helped to deliver our lowest
quarterly drilling and completion capital spend since the company's
IPO in 2013 and drove well costs to below $700 per lateral foot in May and June. We
are incredibly proud of all of our employees who have safely
delivered these results despite the ongoing uncertainty and
challenges surrounding the COVID-19 pandemic. The combination
of a successful asset sale program with repurchasing debt at a
discount and significant capital efficiencies have materially
improved Antero's credit profile and outlook."
Glen Warren, CFO and President of
Antero Resources said, "Over the last nine months we have delivered
on our commitment to reduce debt through a combination of asset
sales and debt repurchased at a discount. This successful
debt repurchase program has resulted in an $888 million reduction in near-term
maturities. Further, we have completed 69 of our 105
projected wells for the year and expect drilling and completion
capital spend to be substantially lower during the second half of
the year. The low capital spend projected for the second half
of 2020 is expected to result in over $175
million in Free Cash Flow based on today's strip prices,
providing additional liquidity for debt retirement. Longer
term, we are committed to maximizing Free Cash Flow and further
reducing total debt."
For a discussion of the non-GAAP financial measures including
Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow presented
on an actual and pro forma basis, please see "Non-GAAP Financial
Measures."
Asset Sale Program Update
Since the announcement of the Company's $750 million to $1
billion asset sale target in December
2019, Antero has closed $531
million of transactions. This total includes the sale
of $100 million of Antero Midstream
common stock in December 2019, the
$402 million ORRI transaction
announced in June 2020, which
includes $102 million of contingent
payments that may be earned based on volume thresholds in the third
quarter of 2020 and the first quarter of 2021, and the $29 million hedge monetization announced
today. Proceeds received to date have been used to repurchase
debt at a discount. Pro forma for the hedge monetization and
senior note repurchases, Antero had $1.0
billion in liquidity as of June 30,
2020.
Hedge Monetization
As a result of the ORRI transaction and the resulting excess
hedges based on expected 2021 net natural gas production, Antero
monetized 100,000 MMBtu/d of 2021
natural gas hedges in July for proceeds of $29 million. Pro forma for the hedge
monetization, Antero has 2,300,000
MMBtu/d of natural gas hedged in 2021 at $2.77 per MMBtu. Assuming a maintenance
level capital plan, approximately 100% of Antero's 2021 expected
natural gas production is hedged.
Debt Repurchases
Antero repurchased $279 million
notional amount of senior debt from April 1,
2020 through July 24, 2020 at
an 18% weighted average discount price. The repurchases were
comprised primarily of the 2021 and 2023 senior notes, but also
included the 2022 and 2025 senior notes. The repurchases over this
time period reduced our total indebtedness by $51 million. Since the commencement of the
debt repurchase program in the fourth quarter of 2019, Antero has
repurchased $888 million of notional
debt at a 19% weighted average discount, reducing our total
indebtedness by $171 million and
interest expense by $24 million on an
annualized basis.
The par value of the 2021 senior notes outstanding have been
reduced from $1.0 billion initially
to $503 million and the par value of
the 2022 senior notes outstanding has been reduced from
$1.1 billion to $756 million. The par value of the 2023 and 2025
senior notes outstanding have been reduced from $750 million to $714
million and $600 million to
$590 million, respectively. In total,
debt repurchases have reduced the total par value of Antero's
senior notes outstanding by $888
million as of July 24,
2020.
Second Quarter 2020 Financial Results
For the three months ended June 30,
2020, Antero reported a GAAP net loss of $463 million, or $1.73 per diluted share, compared to a GAAP net
income of $42 million, or
$0.14 per diluted share, in the prior
year period. The decrease compared to the year ago period is
attributable to lower commodity pricing. Adjusted Net Loss
(non-GAAP measure) was $99 million,
or $0.37 per diluted share, compared
to Adjusted Net Loss of $76 million
during the three months ended June 30,
2019, or $0.25 per diluted
share.
Adjusted EBITDAX (non-GAAP measure) was $186 million, a 26% decrease compared to
$252 million in the prior year period
due to lower commodity pricing. Antero's average realized
price after hedges declined 13% from $3.24 per Mcfe in the second quarter of 2019 to
$2.81 per Mcfe in the second quarter
of 2020.
The following table details the components of average net
production and average realized prices for the three months ended
June 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2020
|
|
|
|
|
Natural Gas
(MMcf/d)
|
|
Oil
(Bbl/d)
|
|
C3+ NGLs
(Bbl/d)
|
|
Ethane
(Bbl/d)
|
|
Combined Natural
Gas
Equivalent (MMcfe/d)
|
|
|
Average Net
Production
|
|
|
2,364
|
|
|
11,029
|
|
|
131,150
|
|
|
50,796
|
|
|
3,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized
Prices
|
|
Natural Gas
($/Mcf)
|
|
Oil
($/Bbl)
|
|
C3+ NGLs
($/Bbl)
|
|
Ethane
($/Bbl)
|
|
Combined Natural
Gas
Equivalent ($/Mcfe)
|
|
|
Average realized
prices before settled derivatives
|
|
$
|
1.71
|
|
$
|
8.29
|
|
$
|
15.55
|
|
$
|
5.76
|
|
$
|
1.83
|
|
Settled commodity
derivatives
|
|
|
1.08
|
|
|
25.18
|
|
|
4.68
|
|
|
(0.10)
|
|
|
0.98
|
|
Average realized
prices after settled derivatives
|
|
$
|
2.79
|
|
$
|
33.47
|
|
$
|
20.23
|
|
$
|
5.66
|
|
$
|
2.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX average
price
|
|
$
|
1.72
|
|
$
|
27.84
|
|
|
|
|
|
|
|
$
|
1.72
|
|
Premium /
(Differential) to NYMEX
|
|
$
|
1.07
|
|
$
|
5.63
|
|
|
|
|
|
|
|
$
|
1.09
|
|
Net daily natural gas equivalent production in the second
quarter averaged 3,521 MMcfe/d, including 192,975 Bbl/d of liquids
(67% natural gas by volume). Net production increased 9% from
the year ago period and 4% from the prior period.
Antero's average realized C3+ NGL price before hedging was
$15.55 per barrel, representing a 46%
decrease versus the prior year period. Antero shipped 54% of
its total C3+ NGL net production on Mariner East 2 for export and
realized a $0.04 per gallon premium
to Mont Belvieu pricing on these volumes at Marcus Hook, PA.
Antero sold the remaining 46% of C3+ NGL net production at a
$0.12 per gallon discount to Mont
Belvieu pricing at Hopedale, OH. The resulting blended price
on 131,150 Bbl/d of net C3+ NGL production was $15.55 per barrel, which was a $0.04 per gallon discount to Mont Belvieu
pricing. Based on current strip prices at Mont Belvieu and in
the international markets, Antero expects its blended realized C3+
NGL prices in 2020 to average a $0.00
to a $0.05 per gallon premium to Mont
Belvieu. Antero expects to sell at least 50% of its C3+ NGL
production in 2020 at Marcus Hook for export at a premium to Mont
Belvieu.
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2020
|
|
|
Pricing
Point
|
|
Net C3+
NGL
Production
(Bbl/d)
|
|
% by
Destination
|
|
Premium
(Discount)
To Mont
Belvieu
($/Gal)
|
Propane / Butane
exported on ME2
|
Marcus Hook,
PA
|
|
70,369
|
|
54%
|
|
$0.04
|
Remaining C3+ NGL
volume
|
Hopedale,
OH
|
|
60,781
|
|
46%
|
|
($0.12)
|
Total C3+
NGLs/Blended Premium
|
|
|
|
131,150
|
|
100%
|
|
($0.04)
|
All-in cash expense, which includes lease operating, gathering,
compression, processing and transportation, production and ad
valorem taxes, net marketing, and general and administrative
expense (excluding equity-based compensation) was $2.35 per Mcfe in the second quarter, an 8%
decrease compared to $2.56 per Mcfe
average during the second quarter of 2019. Lease operating
expense was $0.08 per Mcfe in the
second quarter, a 43% decline from $0.14 per Mcfe in the year ago period driven by a
decrease in water handling costs as Antero increased water blending
and reuse in completion operations. G&A expense was
$0.09 per Mcfe, a 25% decrease from
the second quarter of 2019 primarily due to reduced employee
headcount and a 9% increase in production. Antero expects
all-in cash expense to average $2.25
to $2.35 per Mcfe in 2020 driven by a
decrease in net marketing expense during the second half of the
year.
Per unit net marketing expense declined to $0.15 per Mcfe in the second quarter compared to
$0.25 per Mcfe reported in the prior
year period. The decline was driven primarily by higher
production volumes during the quarter resulting in less unutilized
transportation capacity. Net marketing expense averaged
$0.10 per Mcfe in June as production
volumes increased significantly during the month. Net
marketing expense is expected to average $0.09 to $0.10 per
Mcfe during the second half of 2020 as a result of Antero's
increase in natural gas production volumes. Full year
guidance for net marketing expense remains $0.10 to $0.12 per
Mcfe.
Liquids Pricing Update
NGL Prices
C3+ NGL prices during the second quarter were negatively
impacted by weak demand for normal butane (nC4), isobutane (iC4),
and pentane (C5), all of which are used for gasoline. The
demand destruction on gasoline caused by the COVID-19 pandemic
forced C5 prices below propane prices for much of April to under
$0.40 per gallon. As gasoline
demand rebounded in May and June, there has been a notable
improvement in C5 pricing and therefore C3+ NGL pricing. The
benchmark C5 price in July has been in the range of $0.60 to $0.70 per
gallon.
The restart of economic activity in Asia and Europe, coupled with lower LPG production from
refineries in the US, Europe, and
Asia during the second quarter,
provided support for international LPG prices relative to
oil. Further, reductions in OPEC+ and North American oil
production and the associated NGL volumes are expected to have a
supportive effect on propane and butane prices through the
remainder of 2020 and into 2021.
Condensate Pricing
During the second quarter, condensate differentials to WTI were
notably wider as a result of COVID-19 demand destruction at both
the Appalachia regional level and national level. To protect
against production curtailments and shut-ins due to insufficient
storage capacity, Antero expanded its customer base and its
condensate storage capacity within the basin. In addition,
Antero entered into transactions that required buyers to transport
product to more distant markets and storage, which coincided with
substantially weakened crack spreads for refined products. To
date, Antero has not shut in or curtailed any production from its
assets as a result of COVID-19 demand issues and does not expect to
shut in any volumes during 2020.
Condensate differentials to WTI expanded to nearly $20/Bbl during the second quarter, but have begun
to return to pre-pandemic levels as gasoline demand improved
through the summer months. Pre-hedge oil realizations were
negatively impacted during the quarter as Antero sold volumes at a
material discount to WTI in order to keep from shutting in
production volumes. This period of weak condensate demand
driven by the pandemic coincided with an active well completion
quarter for Antero that brought on large condensate volumes.
The negative impact from wider oil differentials was more than
offset by the benefit of maintaining full natural gas and NGL
volumes. Antero expects its full year 2020 realized oil price
differential to be $10.00/Bbl to
$12.00/Bbl, as the differential
normalizes during the second half of 2020.
COVID-19 Pandemic Developments
As a producer of natural gas, NGLs and oil, Antero Resources is
recognized as an essential business under various federal, state
and local regulations related to the COVID-19 pandemic and the
communities in which it operates. Antero has continued to
operate under these regulations, while taking steps to protect the
health and safety of its workers. Antero has implemented
protocols to reduce the risk of an outbreak within its field
operations, and these protocols have not had an impact on
production. A substantial portion of the Company's non-field
level employees have transitioned to remote work from home
arrangements. Antero has been able to maintain a consistent
level of effectiveness, including maintaining day-to-day operations
and decision making, and financial reporting systems and internal
control over financial reporting. For more information,
please see Antero's Quarterly Report on Form 10-Q for the quarter
ended June 30,
2020.
Second Quarter 2020 Operating Update
Marcellus Shale —
Antero placed 44 horizontal Marcellus wells to sales during the
second quarter with an average lateral length of 10,757 feet.
Nineteen of the 44 new wells have had at least 60 days of reported
production data to date and the average 60-day rate per well was
20.2 MMcfe/d, including approximately 922 Bbl/d of liquids,
assuming 25% ethane recovery. During the second quarter,
Antero achieved a new U.S. horizontal record by drilling 11,253
lateral feet during a 24-hour period. Additionally, Antero's
ongoing emphasis on completion efficiencies resulted in a material
improvement during the second quarter to 8.7 stages completed per
day, a 23% increase from 7.1 stages per day in the prior period,
also a company record. During the quarter, Antero set a
company record for an entire pad averaging 9.6 stages per day.
These efficiency gains led to average well costs below
$700 per lateral foot during the
months of May and June, despite only partial vendor cost savings
being realized. All-in well costs are expected to average
$675 per lateral foot for the second
half of 2020 for a 12,000' lateral. Antero currently has one
drilling rig and two completion crews
running.
Second Quarter 2020 Capital Investment
Antero's drilling and completion capital expenditures for the
three months ended June 30, 2020 were
$180 million. Through the first
half of 2020, Antero has completed 69 of the projected 105 well
completions planned for the year. Antero anticipates a
decline in capital spending in each subsequent quarter of 2020,
reflecting continued efficiencies, service cost deflation and the
release of three rigs and two completion crews that occurred during
the second quarter of 2020. In addition to capital invested
in drilling and completion costs, the Company invested $11 million in land during the second
quarter. For a reconciliation of accrued capital expenditures
to cash capital expenditures see the table on page 10.
Balance Sheet and Liquidity
As of June 30, 2020, Antero's
total debt was $3.5 billion, of which
$926 million were borrowings
outstanding under the Company's revolving credit facility.
Antero has a borrowing base of $2.85
billion with lender commitments that total $2.64 billion. After deducting letters of
credit outstanding of $730 million
and pro forma for the subsequent hedge monetization and senior note
repurchases, the Company had $1.0
billion in available liquidity at June 30, 2020.
Commodity Derivative Positions
Antero has hedged 1.7 Tcf of natural gas at a weighted average
index price of $2.71 per MMBtu
through 2023 with fixed price swap positions. Antero also has
oil and NGL and ethane fixed price swap positions, including oil
positions that total 26,000 Bbl/d, NGL positions that total 10,315
Bbl/d and ethane positions that total 24,500 Bbl/d during
2020. As of June 30, 2020, the
Company's estimated fair value gain on remaining commodity
derivative instruments was $618
million based on strip pricing, a portion of which was
realized in the Company's hedge monetization described above.
Please see Antero's Annual Report on Form 10-Q for the quarter
ended June 30, 2020, for more
information on all commodity derivative positions, including basis
swaps and natural gas calls.
The following tables summarize Antero's hedge position as of
June 30, 2020:
Fixed price natural gas positions from July 1, 2020 through December 31, 2023 were as follows:
|
|
|
|
|
|
|
|
|
Natural gas
MMBtu/day
|
|
Weighted
average index
price
|
|
Year ending
December 31, 2020:
|
|
|
|
|
|
|
NYMEX
($/MMBtu)
|
|
2,227,500
|
|
|
$2.87
|
|
Year ending
December 31, 2021:
|
|
|
|
|
|
|
NYMEX ($/MMBtu)
(1)
|
|
2,400,000
|
|
|
$2.80
|
|
Year ending
December 31, 2022:
|
|
|
|
|
|
|
NYMEX
($/MMBtu)
|
|
1,307,500
|
|
|
$2.44
|
|
Year ending
December 31, 2023:
|
|
|
|
|
|
|
NYMEX
($/MMBtu)
|
|
150,000
|
|
|
$2.38
|
|
|
|
(1)
|
Pro forma for the
recent hedge monetization, 2021 fixed price natural gas position is
2,300,000 MMBtu/d at $2.77/MMBtu
|
C3+ NGL, ethane and
oil derivative contract positions from July 1, 2020 through
December 31, 2020 were as follows:
|
|
|
|
|
|
|
|
|
Derivative
Contract
Type
|
Liquids
Hedges (Bbl/d)
|
|
Weighted
average
index price
($/Gal)
|
Weighted
average basis
differential
$/Gal
|
Weighted
average
index price
($/Bbl)
|
Year ending
December 31, 2020:
|
|
|
|
|
|
|
Total Propane (C3)
– ARA (Europe) (1)
|
Fixed
swap
|
10,315
|
|
$0.55
|
|
$23.10
|
|
|
|
|
|
|
|
Total OPIS Ethane
Mt Belvieu
|
Fixed
swap
|
24,500
|
|
$0.20
|
|
|
|
|
|
|
|
|
|
Total NYMEX Crude
Oil (2)
|
|
26,000
|
|
|
|
$55.63
|
(1) Net
of shipping. Assumes $0.10/gal shipping to ARA.
(2)
Hedged 20,000 Bbl/d of pentane (C5) at 80% of WTI and hedged the
resulting 26,000 Bbl/d of oil-
equivalent volumes at $55.63/Bbl WTI
on average (80% x $55.63 = $44.52/Bbl pentane).
|
|
|
|
|
|
Guidance
All guidance not discussed in this release is unchanged from
previously stated guidance.
Consolidation
For the three months and six months ended June 30, 2020, Martica Holdings, LLC ("Martica"),
the entity associated with the ORRI transaction, is consolidated in
the Company's consolidated financial statements. All
significant intercompany accounts and transactions have been
eliminated in the Company's unaudited condensed consolidated
financial statements. The noncontrolling interest in the
Company's unaudited condensed consolidated financial statements for
the three and six months ended June 30,
2020 represents the interest in Martica owned by Sixth
Street. For more information, please see Antero's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2020.
Conference Call
A conference call is scheduled on Thursday, July 30, 2020 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 for
the quarter. 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, August 6,
2020 at 9:00 am MT at
877-660-6853 (U.S.) or 201-612-7415 (International) using the
conference ID: 13703838.
A simultaneous webcast of the call may be accessed over the
internet at www.anteroresources.com. The webcast will be
archived for replay on the Company's website until Thursday, August 6, 2020 at 9:00 am MT.
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.
Basis of Financial Presentation
In connection with the closing of the simplification transaction
between Antero Midstream GP LP and Antero Midstream Partners LP
("Antero Midstream Partners") on March 12,
2019, among other things, Antero Midstream GP LP converted
to a Delaware corporation and
changed its name to Antero Midstream Corporation ("Antero
Midstream") and Antero Midstream Partners became Antero Midstream's
wholly owned subsidiary. As of June
30, 2020, Antero Resources owned 29% of the shares of common
stock of Antero Midstream. Through March 12, 2019, Antero Midstream Partners'
results were consolidated within Antero Resources' results.
Upon closing, Antero Midstream Partners was deconsolidated from
Antero Resources and Antero Resources' interests in Antero
Midstream were accounted for under the equity method of accounting
within Antero Resources' results. The GAAP results discussed
below include the results of Antero Midstream Partners from
January 1, 2019, through March 12, 2019, on a consolidated basis, and from
March 13, 2019, to June 30, 2020, the results of Antero Midstream
Partners are no longer consolidated. The non-GAAP results described
herein reflect the applicable results as if the simplification
transaction had occurred at the beginning of the applicable period,
unless otherwise noted.
Non-GAAP Financial Measures
Adjusted Net Income (Loss)
Adjusted Net Income (Loss) as set forth in this release
represents net income (Loss), adjusted for certain items.
Antero believes that Adjusted Net Income (Loss) and Adjusted Net
Income (Loss) per share 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
(Loss) 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
following tables reconcile net income (loss) to Adjusted Net
Income (Loss) (in thousands):
|
|
Three months ended
June 30,
|
|
|
2019
|
|
2020
|
Net income (loss)
attributable to Antero Resources Corp
|
|
$
|
42,168
|
|
$
|
(463,304)
|
Commodity derivative
fair value (gains) losses
|
|
|
(328,427)
|
|
|
168,015
|
Gains on settled
commodity derivatives
|
|
|
44,699
|
|
|
313,912
|
Impairment of oil and
gas properties
|
|
|
130,999
|
|
|
37,350
|
Equity-based
compensation
|
|
|
6,549
|
|
|
7,973
|
Equity in earnings of
unconsolidated - AMC
|
|
|
(13,585)
|
|
|
(20,228)
|
Gain on early
extinguishment of debt
|
|
|
—
|
|
|
(39,171)
|
(Gain) loss on sale of
assets
|
|
|
951
|
|
|
—
|
Contract termination
and rig stacking
|
|
|
5,604
|
|
|
11,071
|
Tax effect of
reconciling items (1)
|
|
|
34,914
|
|
|
(115,047)
|
Adjusted Net
Loss
|
|
$
|
(76,128)
|
|
$
|
(99,429)
|
|
|
|
|
|
|
|
Fully Diluted Shares
Outstanding
|
|
|
309,062
|
|
|
268,386
|
|
|
(1)
|
Deferred taxes
were approximately 23% for 2019 and 24% for 2020.
|
Per Share
Amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
|
|
2019
|
|
2020
|
|
Net income (loss)
attributable to Antero Resources Corp
|
|
$
|
0.14
|
|
|
(1.73)
|
|
Commodity derivative
fair value (gains) losses
|
|
|
(1.06)
|
|
|
0.63
|
|
Gains on settled
commodity derivatives
|
|
|
0.14
|
|
|
1.17
|
|
Impairment of oil and
gas properties
|
|
|
0.42
|
|
|
0.14
|
|
Equity-based
compensation
|
|
|
0.02
|
|
|
0.03
|
|
Equity in earnings of
unconsolidated - AMC
|
|
|
(0.04)
|
|
|
(0.07)
|
|
Gain on early
extinguishment of debt
|
|
|
—
|
|
|
(0.15)
|
|
(Gain) loss on sale of
assets
|
|
|
—
|
|
|
—
|
|
Contract termination
and rig stacking
|
|
|
0.02
|
|
|
0.04
|
|
Tax effect of
reconciling items (1)
|
|
|
0.11
|
|
|
(0.43)
|
|
Adjusted Net
Loss
|
|
$
|
(0.25)
|
|
|
(0.37)
|
|
|
|
(1)
|
Deferred taxes
were approximately 23% for 2019 and 24% for 2020.
|
Net Debt
Net Debt is calculated as total 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 debt to Net
Debt as used in this release (in thousands):
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
June 30,
|
|
|
|
2019
|
|
2020
|
|
AR bank credit
facility
|
|
$
|
552,000
|
|
|
926,000
|
|
5.375% AR senior
notes due 2021
|
|
|
952,500
|
|
|
516,202
|
|
5.125% AR senior
notes due 2022
|
|
|
923,041
|
|
|
756,030
|
|
5.625% AR senior
notes due 2023
|
|
|
750,000
|
|
|
743,690
|
|
5.000% AR senior
notes due 2025
|
|
|
600,000
|
|
|
590,000
|
|
Net unamortized
premium
|
|
|
791
|
|
|
542
|
|
Net unamortized debt
issuance costs
|
|
|
(19,464)
|
|
|
(14,388)
|
|
Consolidated total
debt
|
|
$
|
3,758,868
|
|
|
3,518,076
|
|
Less: AR cash and cash
equivalents
|
|
|
—
|
|
|
—
|
|
Net Debt
|
|
$
|
3,758,868
|
|
|
3,518,076
|
|
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 Cash Flow
from Operations, less drilling and completion capital and leasehold
capital plus earnout payments.
The Company has not provided projected Cash Flow from Operations
or a reconciliation of Free Cash Flow to projected Cash Flow from
Operations, the most comparable financial measure calculated in
accordance with GAAP. The Company is unable to project Cash
Flow from Operations 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. Targeted 2020 Free Cash Flow is based
on current strip pricing and assumes that dividends from Antero
Midstream remain flat for the year for aggregate annual dividends
from Antero Midstream of $171 million
in 2020. Antero Midstream previously announced that in light
of the uncertain conditions impacting the energy industry, Antero
Midstream will continue to evaluate its capital budget as well as
the appropriate amount of capital that is returned to shareholders
through dividends and share repurchases in order to maintain its
financial profile.
Free Cash Flow is a useful indicator of the Company's ability to
internally fund its activities and to service or incur additional
debt. 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 (loss), adjusted for certain items detailed
below.
Through March 12, 2019, the
financial results of Antero Midstream Partners were included in our
consolidated results. Effective March
13, 2019, we no longer consolidate Antero Midstream Partners
and account for our interest in Antero Midstream using the equity
method of accounting. Adjusted EBITDAX includes distributions
received with respect to limited partner interests in Antero
Midstream Partners common units through March 12, 2019.
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 following table represents a reconciliation of our net
income (loss), including noncontrolling interest, to Adjusted
EBITDAX and a reconciliation of our Adjusted EBITDAX to net cash
provided by operating activities per our unaudited condensed
consolidated statements of cash flows, in each case, for the three
and six months ended June 30, 2019
and 2020. Adjusted EBITDAX also excludes the noncontrolling
interests in Martica and these adjustments are disclosed in the
table below as Martica related adjustments.
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
(in
thousands)
|
|
2019
|
|
2020
|
|
Reconciliation of
net income (loss) to Adjusted EBITDAX:
|
|
|
|
|
|
|
|
Net income (loss) and
comprehensive income (loss) attributable to Antero Resources
Corporation
|
|
$
|
42,168
|
|
|
(463,304)
|
|
Net loss and
comprehensive loss attributable to noncontrolling
interests
|
|
|
—
|
|
|
236
|
|
Depletion,
depreciation, amortization, and accretion
|
|
|
243,220
|
|
|
215,146
|
|
Impairment of oil and
gas properties
|
|
|
130,999
|
|
|
37,350
|
|
Commodity derivative
fair value (gains) losses (1)
|
|
|
(328,427)
|
|
|
168,015
|
|
Gains on settled
commodity derivatives (1)
|
|
|
44,699
|
|
|
313,912
|
|
Equity-based
compensation expense
|
|
|
6,549
|
|
|
7,973
|
|
Provision for income
tax expense (benefit)
|
|
|
17,249
|
|
|
(142,404)
|
|
Gain on early
extinguishment of debt
|
|
|
—
|
|
|
(39,171)
|
|
Equity in (earnings)
loss of unconsolidated affiliates
|
|
|
(13,585)
|
|
|
(20,228)
|
|
Distributions/dividends from unconsolidated
affiliates
|
|
|
47,922
|
|
|
42,755
|
|
Interest expense,
net
|
|
|
54,164
|
|
|
51,811
|
|
Exploration
expense
|
|
|
314
|
|
|
231
|
|
(Gain) Loss on sale of
assets
|
|
|
951
|
|
|
—
|
|
Contract termination
and rig stacking
|
|
|
5,604
|
|
|
11,071
|
|
Transaction
expense
|
|
|
—
|
|
|
6,138
|
|
|
|
|
251,827
|
|
|
189,531
|
|
Martica related
adjustments (2)
|
|
|
—
|
|
|
(3,100)
|
|
Adjusted
EBITDAX
|
|
$
|
251,827
|
|
|
186,431
|
|
|
|
|
|
|
|
|
|
Reconciliation of
our Adjusted EBITDAX to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Adjusted
EBITDAX
|
|
$
|
251,827
|
|
|
186,431
|
|
Martica related
adjustments (2)
|
|
|
—
|
|
|
3,100
|
|
Interest expense,
net
|
|
|
(54,164)
|
|
|
(51,811)
|
|
Exploration
expense
|
|
|
(314)
|
|
|
(231)
|
|
Changes in current
assets and liabilities
|
|
|
31,910
|
|
|
(6,310)
|
|
Transaction
expense
|
|
|
—
|
|
|
(6,138)
|
|
Other items
|
|
|
(11,155)
|
|
|
(9,078)
|
|
Net cash provided by
operating activities
|
|
$
|
218,104
|
|
|
115,963
|
|
|
|
(1)
|
The adjustments
for the derivative fair value gains and losses and gains on settled
derivatives have the effect of adjusting net income (loss) from
operations for changes in the fair value of unsettled derivatives,
which are recognized at the end of each accounting period. As
a result, derivative gains included in the calculation for Adjusted
EBITDAX only reflect derivatives that settled during the
period.
|
(2)
|
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
June 30,
|
|
|
|
|
2019
|
|
2020
|
|
Drilling and
completion costs (as reported; cash basis)
|
|
|
$
|
311,401
|
|
|
251,744
|
|
Change in accrued
capital costs
|
|
|
|
(8,624)
|
|
|
(71,793)
|
|
Adjusted drilling and
completion costs (accrual basis)
|
|
|
$
|
302,777
|
|
|
179,951
|
|
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 oil
company engaged in the acquisition, development and production of
unconventional liquids-rich natural gas properties located in the
Appalachian Basin in West Virginia
and Ohio. 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 expected results, future
commodity prices, future production targets, realizing potential
future fee rebates or reductions, including those related to
certain levels of production, future earnings, leverage targets and
debt repayment, future capital spending plans, asset monetization
opportunities and pricing, improved and/or increasing capital
efficiency, estimated realized natural gas, NGL and oil prices,
expected drilling and development plans, projected well costs and
cost savings initiatives, future financial position, the amount and
timing of any litigation settlements or awards, 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, lack of availability of
drilling and production equipment and services, environmental
risks, drilling and other operating risks, regulatory changes, the
uncertainty inherent in estimating natural gas and oil reserves and
in projecting future rates of production, cash flow and access to
capital, the timing of development expenditures, impacts of world
health event, including the COVID-19 pandemic, potential shut-ins
of production due to lack of downstream demand or storage capacity
and the other risks described under the heading "Item 1A. Risk
Factors" in Antero Resources' Annual Report on Form 10-K for the
year ended December 31, 2019 and in
its Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020.
ANTERO RESOURCES
CORPORATION Consolidated Balance Sheets
December 31, 2019 and June 30, 2020
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
December
31,
|
|
June
30,
|
|
|
2019
|
|
2020
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Accounts
receivable
|
|
$
|
46,419
|
|
|
57,013
|
Accounts receivable,
related parties
|
|
|
125,000
|
|
|
—
|
Accrued
revenue
|
|
|
317,886
|
|
|
254,863
|
Derivative
instruments
|
|
|
422,849
|
|
|
521,459
|
Other current
assets
|
|
|
10,731
|
|
|
8,942
|
Total current
assets
|
|
|
922,885
|
|
|
842,277
|
Property and
equipment:
|
|
|
|
|
|
|
Oil and gas
properties, at cost (successful efforts method):
|
|
|
|
|
|
|
Unproved
properties
|
|
|
1,368,854
|
|
|
1,277,476
|
Proved
properties
|
|
|
11,859,817
|
|
|
11,989,302
|
Gathering systems and
facilities
|
|
|
5,802
|
|
|
5,802
|
Other property and
equipment
|
|
|
71,895
|
|
|
72,649
|
|
|
|
13,306,368
|
|
|
13,345,229
|
Less accumulated
depletion, depreciation, and amortization
|
|
|
(3,327,629)
|
|
|
(3,408,099)
|
Property and
equipment, net
|
|
|
9,978,739
|
|
|
9,937,130
|
Operating leases
right-of-use assets
|
|
|
2,886,500
|
|
|
2,562,945
|
Derivative
instruments
|
|
|
333,174
|
|
|
103,514
|
Investment in
unconsolidated affiliate
|
|
|
1,055,177
|
|
|
279,805
|
Other
assets
|
|
|
21,094
|
|
|
18,319
|
Total
assets
|
|
$
|
15,197,569
|
|
|
13,743,990
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
14,498
|
|
|
36,736
|
Accounts payable,
related parties
|
|
|
97,883
|
|
|
73,375
|
Accrued
liabilities
|
|
|
400,850
|
|
|
339,388
|
Revenue distributions
payable
|
|
|
207,988
|
|
|
173,759
|
Derivative
instruments
|
|
|
6,721
|
|
|
3,652
|
Short-term lease
liabilities
|
|
|
305,320
|
|
|
230,499
|
Other current
liabilities
|
|
|
6,879
|
|
|
6,831
|
Total current
liabilities
|
|
|
1,040,139
|
|
|
864,240
|
Long-term
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
|
3,758,868
|
|
|
3,518,076
|
Deferred income tax
liability
|
|
|
781,987
|
|
|
529,598
|
Derivative
instruments
|
|
|
3,519
|
|
|
2,558
|
Long-term lease
liabilities
|
|
|
2,583,678
|
|
|
2,334,227
|
Other
liabilities
|
|
|
58,635
|
|
|
62,312
|
Total
liabilities
|
|
|
8,226,826
|
|
|
7,311,011
|
Commitments and
contingencies (Notes 14 and 15)
|
|
|
|
|
|
|
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; 295,941 shares and
268,390 shares issued
and outstanding at December 31, 2019 and June 30, 2020,
respectively
|
|
|
2,959
|
|
|
2,684
|
Additional paid-in
capital
|
|
|
6,130,365
|
|
|
6,098,167
|
Accumulated
earnings
|
|
|
837,419
|
|
|
35,305
|
Total stockholders'
equity
|
|
|
6,970,743
|
|
|
6,136,156
|
Noncontrolling
interests
|
|
|
—
|
|
|
296,823
|
Total
equity
|
|
|
6,970,743
|
|
|
6,432,979
|
Total liabilities and
equity
|
|
$
|
15,197,569
|
|
|
13,743,990
|
ANTERO RESOURCES
CORPORATION Condensed Consolidated Statements of Operations
and Comprehensive Income (Loss)
Three Months Ended June 30, 2019 and 2020
(Unaudited)
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
2019
|
|
2020
|
|
Revenue and
other:
|
|
|
|
|
|
|
|
Natural gas
sales
|
|
$
|
553,372
|
|
|
367,415
|
|
Natural gas liquids
sales
|
|
|
303,963
|
|
|
212,197
|
|
Oil sales
|
|
|
49,062
|
|
|
8,322
|
|
Commodity derivative
fair value gains (losses)
|
|
|
328,427
|
|
|
(168,015)
|
|
Marketing
|
|
|
63,080
|
|
|
64,285
|
|
Other
income
|
|
|
1,760
|
|
|
707
|
|
Total
revenue
|
|
|
1,299,664
|
|
|
484,911
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Lease
operating
|
|
|
40,857
|
|
|
24,742
|
|
Gathering,
compression, processing, and transportation
|
|
|
566,834
|
|
|
631,845
|
|
Production and ad
valorem taxes
|
|
|
30,968
|
|
|
19,992
|
|
Marketing
|
|
|
137,539
|
|
|
113,053
|
|
Exploration
|
|
|
314
|
|
|
231
|
|
Impairment of oil and
gas properties
|
|
|
130,999
|
|
|
37,350
|
|
Depletion,
depreciation, and amortization
|
|
|
242,302
|
|
|
214,035
|
|
Loss on sale of
assets
|
|
|
951
|
|
|
—
|
|
Accretion of asset
retirement obligations
|
|
|
918
|
|
|
1,111
|
|
General and
administrative (including equity-based compensation expense of
$6,549 and
$7,973 in 2019 and 2020, respectively)
|
|
|
42,382
|
|
|
38,403
|
|
Contract termination
and rig stacking
|
|
|
5,604
|
|
|
11,071
|
|
Total operating
expenses
|
|
|
1,199,668
|
|
|
1,091,833
|
|
Operating income
(loss)
|
|
|
99,996
|
|
|
(606,922)
|
|
Other income
(expenses):
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
13,585
|
|
|
20,228
|
|
Transaction
expense
|
|
|
—
|
|
|
(6,138)
|
|
Interest expense,
net
|
|
|
(54,164)
|
|
|
(51,811)
|
|
Gain on early
extinguishment of debt
|
|
|
—
|
|
|
39,171
|
|
Total other income
(expenses)
|
|
|
(40,579)
|
|
|
1,450
|
|
Income (loss) before
income taxes
|
|
|
59,417
|
|
|
(605,472)
|
|
Provision for income
tax (expense) benefit
|
|
|
(17,249)
|
|
|
142,404
|
|
Net income (loss) and
comprehensive income (loss) including noncontrolling
interests
|
|
|
42,168
|
|
|
(463,068)
|
|
Less: Net income
and comprehensive income attributable to noncontrolling
interests
|
|
|
—
|
|
|
236
|
|
Net income (loss) and
comprehensive income (loss) attributable to Antero Resources
Corporation
|
|
$
|
42,168
|
|
|
(463,304)
|
|
|
|
|
|
|
|
|
|
Income (loss) per
share—basic
|
|
$
|
0.14
|
|
|
(1.73)
|
|
Income (loss) per
share—diluted
|
|
$
|
0.14
|
|
|
(1.73)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
309,062
|
|
|
268,386
|
|
Diluted
|
|
|
309,137
|
|
|
268,386
|
|
ANTERO RESOURCES
CORPORATION Condensed Consolidated Statements of Cash
Flows
Three Months Ended June 30, 2019 and 2020
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2019
|
|
2020
|
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
Net income (loss)
including noncontrolling interests
|
|
$
|
1,067,924
|
|
|
(801,878)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depletion,
depreciation, amortization, and accretion
|
|
|
484,397
|
|
|
415,927
|
|
Impairment of oil and
gas properties
|
|
|
212,243
|
|
|
126,570
|
|
Impairment of
midstream assets
|
|
|
6,982
|
|
|
—
|
|
Commodity derivative
fair value gains
|
|
|
(251,059)
|
|
|
(397,818)
|
|
Gains on settled
commodity derivatives
|
|
|
141,791
|
|
|
524,838
|
|
Loss on sale of
assets
|
|
|
951
|
|
|
—
|
|
Equity-based
compensation expense
|
|
|
15,452
|
|
|
11,302
|
|
Deferred income tax
expense (benefit)
|
|
|
304,963
|
|
|
(252,389)
|
|
Gain on early
extinguishment of debt
|
|
|
—
|
|
|
(119,732)
|
|
Equity in (earnings)
loss of unconsolidated affiliates
|
|
|
(27,666)
|
|
|
107,827
|
|
Impairment of equity
investment
|
|
|
—
|
|
|
610,632
|
|
Gain on
deconsolidation of Antero Midstream Partners LP
|
|
|
(1,406,042)
|
|
|
—
|
|
Distributions/dividends of earnings from
unconsolidated affiliates
|
|
|
60,527
|
|
|
85,511
|
|
Other
|
|
|
5,670
|
|
|
4,433
|
|
Changes in current
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
5,848
|
|
|
(27,329)
|
|
Accrued
revenue
|
|
|
166,066
|
|
|
63,023
|
|
Other current
assets
|
|
|
2,307
|
|
|
789
|
|
Accounts payable
including related parties
|
|
|
(2,424)
|
|
|
(21,182)
|
|
Accrued
liabilities
|
|
|
(22,146)
|
|
|
15,722
|
|
Revenue distributions
payable
|
|
|
(9,795)
|
|
|
(29,560)
|
|
Other current
liabilities
|
|
|
1,119
|
|
|
(46)
|
|
Net cash provided by
operating activities
|
|
|
757,108
|
|
|
316,640
|
|
Cash flows provided
by (used in) investing activities:
|
|
|
|
|
|
|
|
Additions to unproved
properties
|
|
|
(56,814)
|
|
|
(21,672)
|
|
Drilling and
completion costs
|
|
|
(680,088)
|
|
|
(552,227)
|
|
Additions to water
handling and treatment systems
|
|
|
(24,416)
|
|
|
—
|
|
Additions to gathering
systems and facilities
|
|
|
(48,239)
|
|
|
—
|
|
Additions to other
property and equipment
|
|
|
(4,629)
|
|
|
(1,234)
|
|
Settlement of water
earnout
|
|
|
—
|
|
|
125,000
|
|
Investments in
unconsolidated affiliates
|
|
|
(25,020)
|
|
|
—
|
|
Proceeds from the
Antero Midstream Partners LP Transactions
|
|
|
296,611
|
|
|
—
|
|
Proceeds from asset
sales
|
|
|
1,983
|
|
|
—
|
|
Change in other
assets
|
|
|
(4,974)
|
|
|
525
|
|
Net cash used in
investing activities
|
|
|
(545,586)
|
|
|
(449,608)
|
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
|
—
|
|
|
(43,443)
|
|
Issuance of senior
notes
|
|
|
650,000
|
|
|
—
|
|
Repayment of senior
notes
|
|
|
—
|
|
|
(496,541)
|
|
Borrowings
(repayments) on bank credit facilities, net
|
|
|
(145,000)
|
|
|
374,000
|
|
Payments of deferred
financing costs
|
|
|
(8,259)
|
|
|
—
|
|
Sale of noncontrolling
interest
|
|
|
—
|
|
|
300,000
|
|
Distributions to
noncontrolling interests in Antero Midstream Partners LP
|
|
|
(85,076)
|
|
|
—
|
|
Employee tax
withholding for settlement of equity compensation awards
|
|
|
(2,295)
|
|
|
(331)
|
|
Other
|
|
|
(1,360)
|
|
|
(717)
|
|
Net cash provided by
financing activities
|
|
|
408,010
|
|
|
132,968
|
|
Effect of
deconsolidation of Antero Midstream Partners LP
|
|
|
(619,532)
|
|
|
—
|
|
Net decrease 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
|
|
$
|
119,180
|
|
|
101,885
|
|
Decrease in accounts
payable and accrued liabilities for additions to property and
equipment
|
|
$
|
33,240
|
|
|
61,305
|
|
The following table set forth selected operating data for the
three months ended June 30, 2019 and
2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of
|
|
|
|
|
|
Three months ended
June 30,
|
|
Increase
|
|
Percent
|
|
(in thousands)
|
|
2019
|
|
2020
|
|
(Decrease)
|
|
Change
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
sales
|
|
$
|
553,372
|
|
$
|
367,415
|
|
$
|
(185,957)
|
|
(34)
|
%
|
Natural gas liquids
sales
|
|
|
303,963
|
|
|
212,197
|
|
|
(91,766)
|
|
(30)
|
%
|
Oil sales
|
|
|
49,062
|
|
|
8,322
|
|
|
(40,740)
|
|
(83)
|
%
|
Commodity derivative
fair value gains (losses)
|
|
|
328,427
|
|
|
(168,015)
|
|
|
(496,442)
|
|
(151)
|
%
|
Marketing
|
|
|
63,080
|
|
|
64,285
|
|
|
1,205
|
|
2
|
%
|
Other
income
|
|
|
1,760
|
|
|
707
|
|
|
(1,053)
|
|
(60)
|
%
|
Total
revenue
|
|
|
1,299,664
|
|
|
484,911
|
|
|
(814,753)
|
|
(63)
|
%
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating
|
|
|
40,857
|
|
|
24,742
|
|
|
(16,115)
|
|
(39)
|
%
|
Gathering and
compression
|
|
|
210,149
|
|
|
202,773
|
|
|
(7,376)
|
|
(4)
|
%
|
Processing
|
|
|
193,018
|
|
|
242,592
|
|
|
49,574
|
|
26
|
%
|
Transportation
|
|
|
163,667
|
|
|
186,480
|
|
|
22,813
|
|
14
|
%
|
Production and ad
valorem taxes
|
|
|
30,968
|
|
|
19,992
|
|
|
(10,976)
|
|
(35)
|
%
|
Marketing
|
|
|
137,539
|
|
|
113,053
|
|
|
(24,486)
|
|
(18)
|
%
|
Exploration
|
|
|
314
|
|
|
231
|
|
|
(83)
|
|
(26)
|
%
|
Impairment of oil and
gas properties
|
|
|
130,999
|
|
|
37,350
|
|
|
(93,649)
|
|
(71)
|
%
|
Depletion,
depreciation, and amortization
|
|
|
242,302
|
|
|
214,035
|
|
|
(28,267)
|
|
(12)
|
%
|
Loss on sale of
assets
|
|
|
951
|
|
|
—
|
|
|
(951)
|
|
(100)
|
%
|
Accretion of asset
retirement obligations
|
|
|
918
|
|
|
1,111
|
|
|
193
|
|
21
|
%
|
General and
administrative (excluding equity-based compensation)
|
|
|
35,833
|
|
|
30,430
|
|
|
(5,403)
|
|
(15)
|
%
|
Equity-based
compensation
|
|
|
6,549
|
|
|
7,973
|
|
|
1,424
|
|
22
|
%
|
Contract termination
and rig stacking
|
|
|
5,604
|
|
|
11,071
|
|
|
5,467
|
|
98
|
%
|
Total operating
expenses
|
|
|
1,199,668
|
|
|
1,091,833
|
|
|
(107,835)
|
|
(9)
|
%
|
Operating income
(loss)
|
|
|
99,996
|
|
|
(606,922)
|
|
|
(706,918)
|
|
(707)
|
%
|
Other earnings
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
13,585
|
|
|
20,228
|
|
|
6,643
|
|
49
|
%
|
Transaction
expense
|
|
|
—
|
|
|
(6,138)
|
|
|
(6,138)
|
|
*
|
|
Interest expense,
net
|
|
|
(54,164)
|
|
|
(51,811)
|
|
|
2,353
|
|
(4)
|
%
|
Gain on early
extinguishment of debt
|
|
|
—
|
|
|
39,171
|
|
|
39,171
|
|
*
|
|
Total other income
(expenses)
|
|
|
(40,579)
|
|
|
1,450
|
|
|
42,029
|
|
(104)
|
%
|
Income (loss) before
income taxes
|
|
|
59,417
|
|
|
(605,472)
|
|
|
(664,889)
|
|
(1,119)
|
%
|
Provision for income
tax (expense) benefit
|
|
|
(17,249)
|
|
|
142,404
|
|
|
159,653
|
|
(926)
|
%
|
Net income (loss) and
comprehensive income (loss) including
noncontrolling interests
|
|
|
42,168
|
|
|
(463,068)
|
|
|
(505,236)
|
|
(1,198)
|
%
|
Less: Net income
and comprehensive income attributable to
noncontrolling interests
|
|
|
—
|
|
|
236
|
|
|
236
|
|
*
|
|
Net income (loss) and
comprehensive income (loss)
attributable to Antero Resources Corporation
|
|
|
42,168
|
|
|
(463,304)
|
|
|
(505,472)
|
|
(1,199)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDAX
|
|
$
|
251,827
|
|
$
|
186,431
|
|
$
|
(65,396)
|
|
(26)
|
%
|
|
* Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Amount of
Increase
|
|
Percent
|
|
|
|
2019
|
|
2020
|
|
(Decrease)
|
|
Change
|
|
Production
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(Bcf)
|
|
|
208
|
|
|
215
|
|
|
7
|
|
3
|
%
|
C2 Ethane
(MBbl)
|
|
|
3,720
|
|
|
4,622
|
|
|
902
|
|
24
|
%
|
C3+ NGLs
(MBbl)
|
|
|
9,576
|
|
|
11,935
|
|
|
2,359
|
|
25
|
%
|
Oil (MBbl)
|
|
|
940
|
|
|
1,004
|
|
|
64
|
|
7
|
%
|
Combined
(Bcfe)
|
|
|
294
|
|
|
320
|
|
|
26
|
|
9
|
%
|
Daily combined
production (MMcfe/d)
|
|
|
3,226
|
|
|
3,521
|
|
|
295
|
|
9
|
%
|
Average prices
before effects of derivative settlements
(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (per
Mcf)
|
|
$
|
2.66
|
|
$
|
1.71
|
|
$
|
(0.95)
|
|
(36)
|
%
|
C2 Ethane (per
Bbl)
|
|
$
|
8.16
|
|
$
|
5.76
|
|
$
|
(2.40)
|
|
(29)
|
%
|
C3+ NGLs (per
Bbl)
|
|
$
|
28.57
|
|
$
|
15.55
|
|
$
|
(13.02)
|
|
(46)
|
%
|
Oil (per
Bbl)
|
|
$
|
52.19
|
|
$
|
8.29
|
|
$
|
(43.90)
|
|
(84)
|
%
|
Weighted Average
Combined (per Mcfe)
|
|
$
|
3.09
|
|
$
|
1.83
|
|
$
|
(1.26)
|
|
(41)
|
%
|
Average realized
prices after effects of derivative settlements
(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (per
Mcf)
|
|
$
|
2.86
|
|
$
|
2.79
|
|
$
|
(0.07)
|
|
(2)
|
%
|
C2 Ethane (per
Bbl)
|
|
$
|
8.16
|
|
$
|
5.66
|
|
$
|
(2.50)
|
|
(31)
|
%
|
C3+ NGLs (per
Bbl)
|
|
$
|
28.67
|
|
$
|
20.23
|
|
$
|
(8.44)
|
|
(29)
|
%
|
Oil (per
Bbl)
|
|
$
|
53.49
|
|
$
|
33.47
|
|
$
|
(20.02)
|
|
(37)
|
%
|
Weighted Average
Combined (per Mcfe)
|
|
$
|
3.24
|
|
$
|
2.81
|
|
$
|
(0.43)
|
|
(13)
|
%
|
Average costs (per
Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating
|
|
$
|
0.14
|
|
$
|
0.08
|
|
$
|
(0.06)
|
|
(43)
|
%
|
Gathering and
compression
|
|
$
|
0.72
|
|
$
|
0.63
|
|
$
|
(0.09)
|
|
(13)
|
%
|
Processing
|
|
$
|
0.66
|
|
$
|
0.76
|
|
$
|
0.10
|
|
15
|
%
|
Transportation
|
|
$
|
0.56
|
|
$
|
0.58
|
|
$
|
0.02
|
|
4
|
%
|
Production
taxes
|
|
$
|
0.11
|
|
$
|
0.06
|
|
$
|
(0.05)
|
|
(45)
|
%
|
Marketing,
net
|
|
$
|
0.25
|
|
$
|
0.15
|
|
$
|
(0.10)
|
|
(40)
|
%
|
General and
administrative (excluding equity-based compensation)
|
|
$
|
0.12
|
|
$
|
0.09
|
|
$
|
(0.03)
|
|
(25)
|
%
|
All-in cash
expense
|
|
$
|
2.56
|
|
$
|
2.35
|
|
$
|
(0.21)
|
|
(8)
|
%
|
Depletion,
depreciation, amortization and accretion
|
|
$
|
0.83
|
|
$
|
0.67
|
|
$
|
(0.16)
|
|
(19)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Average sales
prices shown in the table reflect both the before and after effects
of our settled commodity derivatives. Our calculation of such
after effects includes gains on settlements of commodity
derivatives, which do not qualify for hedge accounting because we
do 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.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/antero-resources-reports-second-quarter-2020-financial-and-operating-results-301102550.html
SOURCE Antero Resources Corporation