DENVER,
Feb. 16, 2022
/PRNewswire/ -- Antero Resources Corporation
(NYSE: AR) ("Antero Resources," "Antero,"
or the "Company") today announced its fourth quarter
2021 financial and operating results, year end 2021 estimated
proved reserves, as well as its 2022 capital budget and guidance.
In addition, Antero announced targets for returning capital to
shareholders. The relevant consolidated financial statements are
included in Antero Resources' Annual Report on Form 10-K for the
year ended December 31,
2021.
Fourth Quarter 2021 Highlights Include:
- Net production averaged 3.2 Bcfe/d, including 160 MBbl/d of
liquids
- Realized pre-hedge natural gas equivalent price of
$6.48 per Mcfe, a $0.65 per Mcfe premium to NYMEX pricing
-
- Realized pre-hedge C3+ NGL price of $58.25 per barrel, or 75% of WTI, a 111% increase
from the prior year period
- Realized pre-hedge natural gas price of $5.89 per Mcf, a $0.06 per Mcf premium to NYMEX Henry Hub
pricing
- Net Income was $901 million,
Adjusted Net Income was $157 million
(Non-GAAP)
- Adjusted EBITDAX was $420
million (Non-GAAP); net cash provided by operating
activities was $475 million
- Free Cash Flow was $237
million (Non-GAAP)
- Total Debt and Net Debt at quarter end was $2.1 billion, an $875
million reduction from year end 2020 (Non-GAAP)
- Net Debt to trailing last twelve month Adjusted EBITDAX
declined to 1.3x (Non-GAAP)
- Estimated proved reserves were 17.7 Tcfe at year end 2021
and proved developed reserves increased to 12.8 Tcfe (72% Proved
Developed)
- Estimated future development cost for 5.0 Tcfe of proved
undeveloped reserves is $0.31 per
Mcfe
Capital Return Program, 2022 Guidance and Other
Highlights:
- Targeting return of capital to shareholders of 25% to 50% of
Free Cash Flow annually going forward
-
- Initiated with a board-approved share repurchase program of
up to $1.0 billion
- Announced plans to redeem all remaining Senior Notes due
2025 on March 1, 2022
- Drilling and completion capital budget is
$675 to $700 million
- Net production is expected to average 3.2 to 3.3 Bcfe/d,
including 175 to 185 MBbl/d of liquids (NGLs and oil)
- Expanded 2025 Net Zero emissions target to include Scope 2
emissions
- Received Responsibly Sourced Gas certification following
completion of initial Project Canary Pilot
Paul Rady, Chairman,
President and Chief Executive Officer of Antero Resources
commented, "This past year proved to be an important inflection
point for Antero as we shifted to a maintenance capital program and
generated approximately $850 million
of Free Cash Flow. This substantial Free Cash Flow was used to
reduce debt during the year, driving leverage down to 1.3x as of
December 31, 2021. Looking ahead to
2022, our capital budget reflects another year of maintenance
capital that is projected to generate $1.5 to $1.7
billion in Free Cash Flow based on current commodity prices.
This Free Cash Flow outlook allows us to continue to reduce debt
while also returning substantial capital to our
shareholders."
Michael Kennedy, Chief
Financial Officer of Antero Resources said, "The dramatic reduction
in our absolute debt, below $2.0
billion in the first quarter of 2022, enables us to initiate
a return of capital program. Going forward we will target returning
25% to 50% of Free Cash Flow annually to our shareholders,
beginning with the $1.0 billion share
repurchase program that is effective immediately. This plan puts
Antero in the unique position of reducing leverage below 1.0x in
2022 while maintaining a peer-leading return of capital
profile."
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."
Return of Capital Program
Antero is initially targeting a return of capital of 25%
to 50% of Free Cash Flow annually going forward, beginning with the
implementation of the share repurchase program. Antero's Board of
Directors authorized a share repurchase program that allows the
Company to repurchase up to $1.0
billion of outstanding common stock. This represents
approximately 16% of Antero's market capitalization based on the
current share price. The open market share repurchase program is
expected to commence during the first quarter of 2022.
The actual amount, timing and nature of any returns of
capital to shareholders is subject to review and approval by
Antero's Board of Directors. The shares may be repurchased from
time to time in open market transactions, through privately
negotiated transactions or by other means in accordance with
federal securities laws. The timing, as well as the number and
value of shares repurchased under the program, will be determined
by the Company at its discretion and will depend on a variety of
factors, including the market price of the Company's common stock,
general market and economic conditions and applicable legal
requirements. The exact number of shares to be repurchased by the
Company is not guaranteed and the program may be suspended,
modified, or discontinued at any time without prior
notice.
Debt Reduction
As of December 31, 2021,
Antero's total debt was $2.1 billion
with no borrowings under the Company's revolving credit facility.
Net Debt to trailing twelve month Adjusted EBITDAX was 1.3x. In
late January, Antero announced that on March
1, 2022 it will redeem all $585
million of outstanding senior notes due 2025 at 101.25% of
par, plus accrued and unpaid interest on March 1, 2022. The redemption is expected to
reduce annual interest expense by approximately $30 million. The Company intends to utilize cash
on hand and borrowings under its revolving credit facility to fund
this senior note redemption. Borrowings utilized to fund the
redemption are expected to be paid down in 2022 with Free Cash
Flow.
Project Canary Natural Gas Certification
The pilot project to certify environmental performance of
multiple pads with Project Canary was completed in early 2022. This
rigorous independent assessment and certification process evaluated
the engineering, operational and environmental standards that
Antero employs in its operations. The certification confirms
Antero's strong operational and environmental performance and
supports the Company's continuous improvement and ESG goals, which
was expanded to include targeting Net Zero Scope 2 emissions by
2025.
2022 Capital Budget and Guidance
Antero's drilling and completion capital budget reflects
service cost inflation that is projected in 2022, partially offset
by expected savings associated with the transition to regional sand
from Antero's local sand mine. The net impact, including the sand
savings, is a projected 5% cost increase in 2022 as compared to
2021. In addition, the budget reflects Antero's election to
increase its working interest in wells to be drilled by the
drilling partnership with QL Capital Partners to 85% in 2022 from
80% in 2021, resulting in approximately $35 to $40 million
of incremental capital net to Antero.
Production is expected to increase throughout the year in
2022. Volumes in the first half of 2022 are expected to average 3.1
to 3.2 Bcfe/d as a result of the limited drilling and completion
activity that occurred at the end of 2021 as well as adverse winter
weather that reduced activity during the beginning of the first
quarter of 2022. With well completions accelerating in the second
quarter as winter weather subsides, combined with the Shell ethane
cracker near Pittsburgh that is
expected to be placed in service in the second half of 2022, net
production is expected to average between 3.3 to 3.4 Bcfe/d during
the second half of 2022. In 2023, Antero expects an additional 1%
to 2% production growth from the second half of 2022 reflecting its
higher working interest election in the drilling partnership during
2022.
The following is a summary of Antero Resources' 2022
capital budget.
Capital Budget ($ in Millions)
|
|
|
Low
|
|
High
|
|
|
Drilling &
Completion
|
|
|
$675
|
|
$700
|
|
|
Land
|
|
|
$65
|
|
$75
|
|
|
Total E&P
Capital
|
|
|
$740
|
|
$775
|
|
|
# of Wells
|
|
|
Net
Wells
|
|
Average
Lateral Length
|
|
|
Drilled
Wells
|
|
|
70 to 80
|
|
13,600
Feet
|
|
|
Completed
Wells
|
|
|
60 to 65
|
|
13,800
Feet
|
|
|
|
|
|
|
|
|
|
|
The following is a summary of Antero Resources' 2022
production, pricing and cash expense guidance.
Production Guidance
|
|
|
Low
|
|
High
|
Net Daily Natural Gas Equivalent Production
(Bcfe/d)
|
|
|
3.2
|
|
3.3
|
Net Daily Natural Gas Production
(Bcf/d)
|
|
|
2.2
|
|
2.25
|
Total Net Daily Liquids Production
(MBbl/d):
|
|
|
175
|
|
185
|
Net Daily C3+ NGL
Production (MBbl/d)
|
|
|
105
|
|
110
|
Net Daily Ethane Production (MBbl/d)
|
|
|
62
|
|
65
|
Net Daily Oil
Production (MBbl/d)
|
|
|
8
|
|
10
|
|
|
|
|
|
|
|
Realized Pricing Guidance (Before Hedges)
|
|
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Low
|
|
High
|
Natural Gas Realized
Price Premium vs. NYMEX Henry Hub ($/Mcf)
|
|
|
$0.15
|
|
$0.25
|
C3+ NGL Realized
Price Differential vs. Mont Belvieu ($/Gal)
|
|
|
$0.00
|
|
$0.00
|
Oil Realized Price
Differential vs. WTI Oil ($/Bbl)
|
|
|
($7.00)
|
|
($9.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Expense Guidance
|
|
|
Low
|
|
High
|
Cash Production
Expense ($/Mcfe)(1)
|
|
|
$2.25
|
|
$2.35
|
Marketing Expense,
Net of Marketing Revenue ($/Mcfe)
|
|
|
$0.06
|
|
$0.08
|
G&A Expense
($/Mcfe)(2)
|
|
|
$0.10
|
|
$0.12
|
|
|
|
|
|
|
|
(1)
|
Includes lease
operating expenses and gathering, compression, processing and
transportation expenses ("GP&T") and
production and ad valorem taxes. Assumes LP gathering fee rebates
of $12 million are received each quarter in 2022.
|
(2)
|
Excludes equity-based
compensation.
|
Free Cash Flow
Antero generated $237 million
and $849 million of Free Cash Flow
during the fourth quarter and full year of 2021,
respectively.
|
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|
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|
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Three Months Ended
December 31,
|
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Year Ended
December 31,
|
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
Net cash provided by
operating activities
|
|
$
|
243,130
|
|
|
475,164
|
|
|
735,640
|
|
|
1,660,116
|
|
Less: Net cash used
in investing activities
|
|
|
(145,998)
|
|
|
(205,329)
|
|
|
(530,061)
|
|
|
(710,784)
|
|
Less: Proceeds from
sale of assets, net
|
|
|
(657)
|
|
|
—
|
|
|
(216,490)
|
|
|
(3,192)
|
|
Less: Settlement of
water earnout
|
|
|
—
|
|
|
—
|
|
|
(125,000)
|
|
|
—
|
|
Less: Distributions
to non-controlling interests in Martica
|
|
|
(18,671)
|
|
|
(32,641)
|
|
|
(35,920)
|
|
|
(97,424)
|
|
Free Cash Flow
|
|
$
|
77,804
|
|
|
237,194
|
|
|
(171,831)
|
|
|
848,716
|
|
Changes in Working
Capital (1)
|
|
|
80,473
|
|
|
(64,634)
|
|
|
203,666
|
|
|
(151,722)
|
|
Free Cash Flow before Changes in Working
Capital
|
|
$
|
158,277
|
|
|
172,560
|
|
|
31,835
|
|
|
696,994
|
|
|
|
(1)
|
Working capital
adjustments in the fourth quarter of 2021 include $61.1 million in
changes in current assets and liabilities and a $3.5 million
increase in accounts payable and accrued liabilities for additions
to property and equipment. Working capital adjustments for 2021
include
$114.7 million in changes in current assets and liabilities and a
$37.0 million increase in accounts payable and accrued liabilities
for additions
to property and equipment. See the cash flow statement in this
release for details.
|
Fourth Quarter 2021 Financial Results
Net income was $901 million,
or $2.65 per diluted share, compared
to net income of $70 million, or
$0.24 per diluted share, in the prior
year period. Adjusted Net Income was $157
million, or $0.46 per diluted
share, compared to Adjusted Net Loss of $3
million, or $0.01 per diluted
share, in the prior year period.
Adjusted EBITDAX was $420
million, a 40% increase compared to the prior year quarter,
driven by higher realized natural gas and NGL
prices.
Net daily natural gas equivalent production in the fourth
quarter averaged 3.2 Bcfe/d,
including 160 MBbl/d of liquids, as
detailed in the table below. Fourth quarter volumes were down
sequentially as just 40% of the Company's 2021 completion activity
occurred during the second half of 2021, including less than 20% of
annual completion activity in the fourth quarter. Antero chose not
to accelerate activity in the second half of 2021 in order to
adhere to the capital budget. In addition, liquids volumes were
down sequentially in the fourth quarter as four of the 14
completions were dry gas Utica
wells.
Antero's average realized natural gas price before hedging
was $5.89 per Mcf,
representing a 124% increase compared to the prior year
period. Antero realized a $0.06 per Mcf
premium to the average NYMEX Henry Hub.
The premium to NYMEX was lower than expected due to the significant
decline in daily pricing during the months of November and December
relative to NYMEX first-of-month pricing. Antero sells its gas both
on a first-of-month and daily basis, which is an industry standard
for operational purposes.
The following table details the components of average net
production and average realized prices for the three months ended
December 31, 2021:
|
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Three Months Ended December 31,
2021
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Combined
|
|
|
|
|
|
|
|
|
|
|
|
Natural
|
|
|
|
Natural Gas
|
|
Oil
|
|
C3+ NGLs
|
|
Ethane
|
|
Gas Equivalent
|
|
|
|
(MMcf/d)
|
|
(Bbl/d)
|
|
(Bbl/d)
|
|
(Bbl/d)
|
|
(MMcfe/d)
|
|
Average Net Production
|
|
|
2,233
|
|
|
7,489
|
|
|
107,304
|
|
|
44,891
|
|
|
3,191
|
|
|
|
|
|
|
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Combined
|
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Natural
|
|
|
|
Natural Gas
|
|
Oil
|
|
C3+ NGLs
|
|
Ethane
|
|
Gas Equivalent
|
|
Average Realized Prices
|
|
($/Mcf)
|
|
($/Bbl)
|
|
($/Bbl)
|
|
($/Bbl)
|
|
($/Mcfe)
|
|
Average realized
prices before settled derivatives
|
|
$
|
5.89
|
|
$
|
69.53
|
|
$
|
58.25
|
|
$
|
16.81
|
|
$
|
6.48
|
|
NYMEX average
price
|
|
$
|
5.83
|
|
$
|
77.45
|
|
|
|
|
|
|
|
$
|
5.83
|
|
Premium /
(Differential) to NYMEX
|
|
$
|
0.06
|
|
$
|
(7.92)
|
|
|
|
|
|
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settled commodity
derivatives
|
|
$
|
(3.10)
|
|
$
|
(9.36)
|
|
$
|
(5.84)
|
|
|
—
|
|
$
|
(2.33)
|
|
Average realized
prices after settled derivatives
|
|
$
|
2.79
|
|
$
|
60.17
|
|
$
|
52.41
|
|
$
|
16.81
|
|
$
|
4.15
|
|
Differential to
NYMEX
|
|
$
|
(3.04)
|
|
$
|
(17.28)
|
|
|
|
|
|
|
|
$
|
(1.68)
|
|
|
|
|
|
|
|
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|
Antero's average realized C3+ NGL price before hedging was
$58.25 per barrel, a 111% increase
versus the prior year period. Antero shipped 50% of its total C3+
NGL net production on Mariner East 2 for export and realized a
$0.03 per gallon premium to Mont
Belvieu pricing on these volumes at Marcus Hook, PA. Antero sold the
remaining 50% of C3+ NGL net production at a $0.04 per gallon discount to Mont Belvieu pricing
at Hopedale, OH. The resulting
blended price on 107,304 Bbl/d of net C3+ NGL production was
$52.98 per barrel, which was a
$0.01 per gallon discount to Mont
Belvieu pricing. Antero expects to sell approximately 50% of its
C3+ NGL production in 2022 at Marcus
Hook for international export at a premium to Mont
Belvieu.
Three Months Ended December 31,
2021
|
|
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|
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|
|
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|
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|
Pricing Point
|
|
Net C3+ NGL
Production
(Bbl/d)
|
|
% by Destination
|
|
Premium (Discount)
To Mont Belvieu
($/Gal)
|
Propane / Butane
exported on ME2
|
Marcus Hook,
PA
|
|
54,188
|
|
50%
|
|
$0.03
|
Remaining C3+ NGL
volume
|
Hopedale,
OH
|
|
53,116
|
|
50%
|
|
($0.04)
|
Total C3+
NGLs/Blended Premium
|
|
|
|
107,304
|
|
100%
|
|
($0.01)
|
All-in cash expense, which includes lease operating,
gathering, compression, processing and transportation, production
and ad valorem taxes was $2.45 per
Mcfe in the fourth quarter, a 16% increase compared to $2.12 per Mcfe average during the fourth quarter
of 2020. The increase from a year ago was due primarily to a
$0.18 increase in gathering,
processing and transportation expense driven by higher fuel costs
as a result of higher natural gas prices and a $0.12 per Mcfe increase due to higher production
taxes as a result of higher commodity prices.
Net marketing expense was $0.10
per Mcfe in the fourth quarter, an increase from $0.08 during the fourth quarter of 2020 due to
lower production volume and lower third party marketing
volumes.
Fourth Quarter 2021 Operating Update
Antero placed 10 horizontal Marcellus wells to sales
during the fourth quarter with an average lateral length of 15,393
feet. All 10 wells have been online for at least 60 days and the
average 60-day rate per well was 28.5 MMcfe/d, including
approximately 1,306 Bbl/d of liquids assuming 25% ethane recovery.
Wells placed on line in 2021 were ahead of type curve projections,
leading to capital efficiency improvements during the year.
Antero also placed four horizontal Utica dry gas wells to sales during the fourth
quarter with an average lateral length of 10,046 feet. All four
wells have been on line for at least 60 days and the average 60-day
rate per well was 25.0 MMcf/d at an average BTU of 1120.
Fourth Quarter 2021 Capital Investment
Antero's accrued drilling and completion capital
expenditures for the three months ended December 31, 2021, were $152
million. In addition to capital invested in drilling and completion
costs, the Company invested $30
million in land during the fourth quarter. A portion of the
land spend was used to acquire 4,000 net acres which hold
approximately 20 incremental drilling locations at an average cost
of less than $1 million per location.
The acreage is located in Antero's core Marcellus liquids-rich
window and is expected to be developed within the Company's
five-year development program. For a reconciliation of accrued
capital expenditures to cash capital expenditures see the table in
the Non-GAAP Financial Measures section.
Balance Sheet and Liquidity
As of December 31, 2021,
Antero's Net Debt was $2.1 billion
with no borrowings under the Company's revolving credit facility.
Net Debt to trailing twelve month Adjusted EBITDAX ratio was
1.3x as of December 31, 2021.
Year End Proved Reserves
At December 31, 2021,
Antero's estimated proved reserves were 17.7 Tcfe, a 1% increase
versus the prior year. Estimated proved reserves were comprised of
58% natural gas, 41% NGLs and 1% oil.
Estimated proved developed reserves were 12.8 Tcfe, a 7%
increase over the prior year. The percentage of estimated proved
reserves classified as proved developed increased to 72% at year
end 2021, compared to 67% at year end 2020. Antero's proved
undeveloped locations have an average estimated BTU of 1263, with
an average lateral length of approximately 14,143 feet. At year end
2021, Antero's five year development plan included 276 PUD
locations.
Antero's 5.0 Tcfe of estimated proved undeveloped reserves
will require an estimated $1.5
billion of future development capital over the next five
years, resulting in an estimated average future development cost
for proved undeveloped reserves of $0.31 per Mcfe.
The following table presents a summary of changes in
estimated proved reserves (in Tcfe).
|
|
|
|
Proved reserves, December 31, 2020
(1)
|
|
17.6
|
|
Extensions,
discoveries, and other additions
|
|
0.5
|
|
Revisions
|
|
1.5
|
|
Sales of reserves in
place (2)
|
|
(0.7)
|
|
Production
|
|
(1.2)
|
|
Proved reserves, December 31, 2021
(1)
|
|
17.7
|
|
|
|
(1)
|
Proved reserves are
reported consolidated with Martica Holdings, LLC. Martica Holdings,
LLC had 254 Bcfe and 167 Bcfe of proved reserves as of year end
2020 and 2021, respectively.
|
(2)
|
Sales of reserves
were related to the drilling partnership entered into in 2021 which
assumes their participation at a 20% working interest in wells spud
in 2021 and 15% working interest in expected wells spud in 2022
through 2024.
|
Commodity Derivative Positions
Antero did not enter into any new natural gas, NGL or oil
hedges during the fourth quarter of 2021. As of December 31, 2021, the Company has hedged
438 Bcf of natural gas at a weighted average
index price of $2.49 per MMBtu through
2023 with fixed price swap positions.
Please see Antero's Annual Report on Form
10-K for the year ended December 31, 2021, for more
information on all commodity derivative positions. For detail
on current commodity positions, please see the Hedge Profile
presentations at www.anteroresources.com.
Conference Call
A conference call is scheduled on Thursday, February 17, 2022 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 24, 2022 at 9:00 am MT at 877-660-6853 (U.S.) or 201-612-7415
(International) using the conference ID: 13726193. 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, February 24, 2022 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.
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) 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 GAAP measure most directly comparable
to Adjusted Net Income is net income. The following table reconcile
net income (loss) to Adjusted Net Income (Loss) (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended December 31,
|
|
|
|
2020
|
|
2021
|
|
|
2020
|
|
2021
|
|
Net income (loss) and
comprehensive income (loss) attributable to
Antero Resources Corporation
|
|
$
|
69,830
|
|
|
901,385
|
|
|
|
(1,267,897)
|
|
|
(186,899)
|
|
Net income and
comprehensive income attributable to
noncontrolling interests
|
|
|
25,483
|
|
|
56,636
|
|
|
|
7,486
|
|
|
32,790
|
|
Unrealized commodity
derivative (gains) losses
|
|
|
(150,925)
|
|
|
(1,025,870)
|
|
|
|
725,011
|
|
|
748,540
|
|
Payments for (proceeds
from) derivative monetizations
|
|
|
9,066
|
|
|
—
|
|
|
|
(9,007)
|
|
|
4,569
|
|
Amortization of
deferred revenue, VPP
|
|
|
(9,332)
|
|
|
(11,403)
|
|
|
|
(14,507)
|
|
|
(45,236)
|
|
Loss (gain) on sale of
assets
|
|
|
348
|
|
|
595
|
|
|
|
348
|
|
|
(2,232)
|
|
Impairment of oil and
gas properties
|
|
|
67,808
|
|
|
20,905
|
|
|
|
223,770
|
|
|
90,523
|
|
Impairment of equity
method investment
|
|
|
—
|
|
|
—
|
|
|
|
610,632
|
|
|
—
|
|
Equity-based
compensation
|
|
|
6,316
|
|
|
5,248
|
|
|
|
23,317
|
|
|
20,437
|
|
Loss (gain) on early
extinguishment of debt
|
|
|
(597)
|
|
|
10,355
|
|
|
|
(175,962)
|
|
|
93,191
|
|
Loss on convertible
note equitization
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
50,777
|
|
Equity in (earnings)
loss of unconsolidated affiliate
|
|
|
(20,748)
|
|
|
(19,464)
|
|
|
|
62,660
|
|
|
(77,085)
|
|
Contract termination
and rig stacking
|
|
|
1,973
|
|
|
—
|
|
|
|
14,290
|
|
|
4,305
|
|
Tax effect of
reconciling items (1)
|
|
|
23,123
|
|
|
244,471
|
|
|
|
(351,465)
|
|
|
(212,859)
|
|
|
|
|
22,345
|
|
|
182,858
|
|
|
|
(151,324)
|
|
|
520,821
|
|
Martica adjustments
(2)
|
|
|
(25,632)
|
|
|
(25,509)
|
|
|
|
(21,841)
|
|
|
(76,719)
|
|
Adjusted Net Income
(Loss)
|
|
$
|
(3,287)
|
|
|
157,349
|
|
|
|
(173,165)
|
|
|
444,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully Diluted Shares
Outstanding (3)
|
|
|
304,172
|
|
|
340,106
|
|
|
|
272,433
|
|
|
308,146
|
|
|
|
(1)
|
Deferred taxes were 24% for 2020 and
2021.
|
(2)
|
Adjustments reflect noncontrolling interest in
Martica not otherwise adjusted in amounts
above.
|
(3)
|
Share count for year ended December 31, 2020 and 2021
does not include dilutive effect of restricted stock units,
performance share units and 2026
convertible notes due to net income loss during the
period
|
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 GAAP measure most directly comparable to
Adjusted Net Income is net income.
The following table reconciles consolidated total debt to
Net Debt as used in this release (in thousands):
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2020
|
|
2021
|
|
Credit
Facility
|
|
$
|
1,017,000
|
|
|
—
|
|
5.125% senior notes
due 2022
|
|
|
660,516
|
|
|
—
|
|
5.625% senior notes
due 2023
|
|
|
574,182
|
|
|
—
|
|
5.000% senior notes
due 2025
|
|
|
590,000
|
|
|
584,635
|
|
8.375% senior notes
due 2026
|
|
|
—
|
|
|
325,000
|
|
7.625% senior notes
due 2029
|
|
|
—
|
|
|
584,000
|
|
5.375% senior notes
due 2030
|
|
|
—
|
|
|
600,000
|
|
4.250% convertible
senior notes due 2026
|
|
|
287,500
|
|
|
81,570
|
|
Unamortized discount,
net
|
|
|
(111,886)
|
|
|
(27,772)
|
|
Unamortized debt
issuance costs
|
|
|
(15,719)
|
|
|
(21,989)
|
|
Total debt
|
|
$
|
3,001,593
|
|
|
2,125,444
|
|
Less: Cash and cash
equivalents
|
|
|
—
|
|
|
—
|
|
Net Debt
|
|
$
|
3,001,593
|
|
|
2,125,444
|
|
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 net cash used in investing
activities, which includes drilling and completion capital and
leasehold capital, less proceeds from asset sales and less
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 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.
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 (loss) and net cash provided by operating
activities. The following table represents a reconciliation
of Antero's net income (loss), including noncontrolling interest,
to Adjusted EBITDAX and a reconciliation of Antero's Adjusted
EBITDAX to net cash provided by operating activities per our
consolidated statements of cash flows, in each case, for the three
months and years ended December 31,
2020 and 2021. 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
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
(in thousands)
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
Reconciliation of net income (loss) to Adjusted
EBITDAX:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) and
comprehensive income (loss) attributable to
Antero Resources
Corporation
|
|
$
|
69,830
|
|
|
901,385
|
|
|
(1,267,897)
|
|
|
(186,899)
|
|
Net income and
comprehensive income attributable to noncontrolling
interests
|
|
|
25,483
|
|
|
56,636
|
|
|
7,486
|
|
|
32,790
|
|
Unrealized commodity
derivative (gains) losses
|
|
|
(150,925)
|
|
|
(1,025,870)
|
|
|
725,011
|
|
|
748,540
|
|
Payments for (proceeds
from) derivative monetizations
|
|
|
9,066
|
|
|
—
|
|
|
(9,007)
|
|
|
4,569
|
|
Amortization of
deferred revenue, VPP
|
|
|
(9,332)
|
|
|
(11,403)
|
|
|
(14,507)
|
|
|
(45,236)
|
|
Loss (gain) on sale of
assets
|
|
|
348
|
|
|
595
|
|
|
348
|
|
|
(2,232)
|
|
Interest expense,
net
|
|
|
46,916
|
|
|
43,748
|
|
|
199,872
|
|
|
181,868
|
|
Loss (gain) on early
extinguishment of debt
|
|
|
(597)
|
|
|
10,355
|
|
|
(175,962)
|
|
|
93,191
|
|
Loss on convertible
note equitizations
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,777
|
|
Income tax expense
(benefit)
|
|
|
23,685
|
|
|
263,491
|
|
|
(397,482)
|
|
|
(74,077)
|
|
Depletion,
depreciation, amortization, and accretion
|
|
|
209,831
|
|
|
178,716
|
|
|
865,291
|
|
|
745,829
|
|
Impairment of oil and
gas properties
|
|
|
67,808
|
|
|
20,905
|
|
|
223,770
|
|
|
90,523
|
|
Impairment of equity
method investment
|
|
|
—
|
|
|
—
|
|
|
610,632
|
|
|
—
|
|
Exploration
expense
|
|
|
188
|
|
|
474
|
|
|
1,083
|
|
|
6,566
|
|
Equity-based
compensation expense
|
|
|
6,316
|
|
|
5,248
|
|
|
23,317
|
|
|
20,437
|
|
Equity in (earnings)
loss of unconsolidated affiliate
|
|
|
(20,748)
|
|
|
(19,464)
|
|
|
62,660
|
|
|
(77,085)
|
|
Dividends from
unconsolidated affiliate
|
|
|
42,755
|
|
|
31,284
|
|
|
171,022
|
|
|
136,609
|
|
Contract termination
and rig stacking
|
|
|
1,973
|
|
|
—
|
|
|
14,290
|
|
|
4,305
|
|
Transaction
expense
|
|
|
582
|
|
|
193
|
|
|
7,244
|
|
|
3,295
|
|
|
|
|
323,179
|
|
|
456,293
|
|
|
1,047,171
|
|
|
1,733,770
|
|
Martica related
adjustments (1)
|
|
|
(23,983)
|
|
|
(36,032)
|
|
|
(45,155)
|
|
|
(116,468)
|
|
Adjusted
EBITDAX
|
|
$
|
299,196
|
|
|
420,261
|
|
|
1,002,016
|
|
|
1,617,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of our Adjusted EBITDAX to net cash
provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDAX
|
|
$
|
299,196
|
|
|
420,261
|
|
|
1,002,016
|
|
|
1,617,302
|
|
Martica related
adjustments (1)
|
|
|
23,983
|
|
|
36,032
|
|
|
45,155
|
|
|
116,468
|
|
Interest expense,
net
|
|
|
(46,916)
|
|
|
(43,748)
|
|
|
(199,872)
|
|
|
(181,868)
|
|
Exploration
expense
|
|
|
(188)
|
|
|
(474)
|
|
|
(1,083)
|
|
|
(6,566)
|
|
Changes in current
assets and liabilities
|
|
|
(30,156)
|
|
|
61,132
|
|
|
(109,047)
|
|
|
114,673
|
|
Transaction
expense
|
|
|
(582)
|
|
|
(193)
|
|
|
(7,244)
|
|
|
(3,295)
|
|
Proceeds from
(payments for) derivative monetizations
|
|
|
(9,066)
|
|
|
—
|
|
|
9,007
|
|
|
(4,569)
|
|
Other items
|
|
|
6,859
|
|
|
2,154
|
|
|
(3,292)
|
|
|
7,971
|
|
Net cash provided by
operating activities
|
|
$
|
243,130
|
|
|
475,164
|
|
|
735,640
|
|
|
1,660,116
|
|
|
|
(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,
|
|
|
|
2020
|
|
2021
|
|
Drilling and
completion costs (cash basis)
|
|
$
|
132,345
|
|
|
153,276
|
|
Change in accrued
capital costs
|
|
|
(47,931)
|
|
|
(1,639)
|
|
Adjusted drilling and
completion costs (accrual basis)
|
|
$
|
84,414
|
|
|
151,637
|
|
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 (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 return of capital,
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, 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 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.
In addition, many of the standards and metrics used in
preparing this release and the ESG Report continue to evolve and
are based on management expectations and assumptions believed to be
reasonable at the time of preparation but should not be considered
guarantees. The standards and metrics used, and the expectations
and assumptions they are based on, have not been verified by any
third party. In addition, while we seek to align these disclosures
with the recommendations of various third-party frameworks, such as
the Task Force on Climate-Related Financial Disclosures, we cannot
guarantee strict adherence to these framework recommendations.
Additionally, our disclosures based on these frameworks may change
due to revisions in framework requirements, availability of
information, changes in our business or applicable governmental
policy, or other factors, some of which may be beyond our
control. The calculation of methane leak loss rate disclosed
in the ESG Report is based on ONE Future protocol, which is based
on the EPA Greenhouse Gas Reporting Program. With respect to
its emissions goal, Antero Resources anticipates achieving Net Zero
Scope 1 and Scope 2 emissions by 2025 through operational
efficiencies and the purchase of carbon offsets. Scope 1 emissions
are the Company's direct greenhouse gas emissions, and Scope 2
emissions are the Company's indirect greenhouse gas emissions
associated with the purchase of electricity, steam, heat or
cooling; however, such goals are aspirational and we could face
unexpected material costs as a result of our efforts to meet these
goals. Moreover, given uncertainties related to the use of emerging
technologies, the state of markets for and availability of verified
quality carbon offsets, we cannot predict whether or not we will be
able to timely meet these goals, if at all. Moreover, with regards
to our participation in, or certification under, various
frameworks, we may incur certain costs associated with such
frameworks and cannot guarantee that such participation or
certification will have the intended results on our or our
products' ESG profile.
This release and the ESG Report contain statements
based on hypothetical or severely adverse scenarios and
assumptions, and these statements should not necessarily be viewed
as being representative of current or actual risk or forecasts of
expected risk. These scenarios cannot account for the entire realm
of possible risks and have been selected based on what we believe
to be a reasonable range of possible circumstances based on
information currently available to us and the reasonableness of
assumptions inherent in certain scenarios; however, our selection
of scenarios may change over time as circumstances change.
While future events discussed in this release or the report may be
significant, any significance should not be read as necessarily
rising to the level of materiality of certain disclosures included
in Antero Resources' SEC filings. The goals discussed in this
earnings release are aspirational; we could face unexpected
material costs as a result of our efforts to meet these goals and
may ultimately meet such goals through the purchase of offsets or
credits and not reductions in our actual GHG emissions. Moreover,
given uncertainties related to the use of emerging technologies,
the state of markets for and the availability of verified quality
carbon offsets, we cannot predict whether or not we will be able to
timely meet these goals, if at all. Moreover, with regards to our
participation in, or certification under, various frameworks, we
may incur certain costs associated with such frameworks and cannot
guarantee that such participation or certification will have the
intended results on our or our products' ESG
profile.
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, cybersecurity risks
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,
2021.
|
|
|
|
|
|
|
|
ANTERO RESOURCES CORPORATION
Condensed
Consolidated Balance Sheets
(In
thousands)
|
|
|
December 31,
|
|
|
|
2020
|
|
2021
|
|
Assets
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
$
|
28,457
|
|
|
78,998
|
|
Accrued
revenue
|
|
|
425,314
|
|
|
591,442
|
|
Derivative
instruments
|
|
|
105,130
|
|
|
757
|
|
Other current
assets
|
|
|
15,238
|
|
|
14,922
|
|
Total current
assets
|
|
|
574,139
|
|
|
686,119
|
|
Property and
equipment:
|
|
|
|
|
|
|
|
Oil and gas
properties, at cost (successful efforts method):
|
|
|
|
|
|
|
|
Unproved
properties
|
|
|
1,175,178
|
|
|
1,042,118
|
|
Proved
properties
|
|
|
12,260,713
|
|
|
12,646,303
|
|
Gathering systems and
facilities
|
|
|
5,802
|
|
|
5,802
|
|
Other property and
equipment
|
|
|
74,361
|
|
|
116,522
|
|
|
|
|
13,516,054
|
|
|
13,810,745
|
|
Less accumulated
depletion, depreciation, and amortization
|
|
|
(3,869,116)
|
|
|
(4,283,700)
|
|
Property and
equipment, net
|
|
|
9,646,938
|
|
|
9,527,045
|
|
Operating leases
right-of-use assets
|
|
|
2,613,603
|
|
|
3,419,912
|
|
Derivative
instruments
|
|
|
47,293
|
|
|
14,369
|
|
Investment in
unconsolidated affiliate
|
|
|
255,082
|
|
|
232,399
|
|
Other
assets
|
|
|
13,790
|
|
|
16,684
|
|
Total
assets
|
|
$
|
13,150,845
|
|
|
13,896,528
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
26,728
|
|
|
24,819
|
|
Accounts payable,
related parties
|
|
|
69,860
|
|
|
76,240
|
|
Accrued
liabilities
|
|
|
343,524
|
|
|
457,244
|
|
Revenue distributions
payable
|
|
|
198,117
|
|
|
444,873
|
|
Derivative
instruments
|
|
|
31,242
|
|
|
559,851
|
|
Short-term lease
liabilities
|
|
|
266,024
|
|
|
456,347
|
|
Deferred revenue,
VPP
|
|
|
45,257
|
|
|
37,603
|
|
Other current
liabilities
|
|
|
2,302
|
|
|
11,140
|
|
Total current
liabilities
|
|
|
983,054
|
|
|
2,068,117
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
3,001,593
|
|
|
2,125,444
|
|
Deferred income tax
liability, net
|
|
|
412,252
|
|
|
318,126
|
|
Derivative
instruments
|
|
|
99,172
|
|
|
181,806
|
|
Long-term lease
liabilities
|
|
|
2,348,785
|
|
|
2,964,115
|
|
Deferred revenue,
VPP
|
|
|
156,024
|
|
|
118,366
|
|
Other
liabilities
|
|
|
59,694
|
|
|
54,462
|
|
Total
liabilities
|
|
|
7,060,574
|
|
|
7,830,436
|
|
Commitments and
contingencies (Notes 15 and 16)
|
|
|
|
|
|
|
|
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; 268,672 shares and
313,930 shares issued and outstanding
as of December 31, 2020 and 2021,
respectively
|
|
|
2,686
|
|
|
3,139
|
|
Additional paid-in
capital
|
|
|
6,195,497
|
|
|
6,371,398
|
|
Accumulated
deficit
|
|
|
(430,478)
|
|
|
(617,377)
|
|
Total stockholders'
equity
|
|
|
5,767,705
|
|
|
5,757,160
|
|
Noncontrolling
interests
|
|
|
322,566
|
|
|
308,932
|
|
Total
equity
|
|
|
6,090,271
|
|
|
6,066,092
|
|
Total liabilities and
equity
|
|
$
|
13,150,845
|
|
|
13,896,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANTERO RESOURCES CORPORATION
Condensed
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December 31,
|
|
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
Revenue and
other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
sales
|
|
$
|
595,151
|
|
|
1,210,470
|
|
|
1,809,952
|
|
|
3,442,028
|
|
Natural gas liquids
sales
|
|
|
364,387
|
|
|
644,472
|
|
|
1,161,683
|
|
|
2,147,499
|
|
Oil sales
|
|
|
34,037
|
|
|
47,906
|
|
|
112,270
|
|
|
201,232
|
|
Commodity derivative
fair value gains (losses)
|
|
|
196,851
|
|
|
323,553
|
|
|
79,918
|
|
|
(1,936,509)
|
|
Marketing
|
|
|
108,717
|
|
|
155,993
|
|
|
310,572
|
|
|
718,921
|
|
Amortization of
deferred revenue, VPP
|
|
|
9,332
|
|
|
11,403
|
|
|
14,507
|
|
|
45,236
|
|
Other
income
|
|
|
617
|
|
|
474
|
|
|
2,797
|
|
|
1,025
|
|
Total
revenue
|
|
|
1,309,092
|
|
|
2,394,271
|
|
|
3,491,699
|
|
|
4,619,432
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating
|
|
|
27,029
|
|
|
25,238
|
|
|
98,865
|
|
|
96,793
|
|
Gathering,
compression, processing, and transportation
|
|
|
653,754
|
|
|
624,510
|
|
|
2,530,838
|
|
|
2,499,174
|
|
Production and ad
valorem taxes
|
|
|
35,294
|
|
|
67,300
|
|
|
106,775
|
|
|
197,910
|
|
Marketing
|
|
|
134,498
|
|
|
183,876
|
|
|
469,404
|
|
|
811,698
|
|
Exploration
|
|
|
188
|
|
|
474
|
|
|
1,083
|
|
|
6,566
|
|
General and
administrative (including equity-based compensation
expense)
|
|
|
33,218
|
|
|
36,313
|
|
|
134,482
|
|
|
145,006
|
|
Impairment of oil and
gas properties
|
|
|
67,808
|
|
|
20,905
|
|
|
223,770
|
|
|
90,523
|
|
Depletion,
depreciation, and amortization
|
|
|
209,740
|
|
|
177,843
|
|
|
861,870
|
|
|
742,009
|
|
Accretion of asset
retirement obligations
|
|
|
91
|
|
|
873
|
|
|
3,421
|
|
|
3,820
|
|
Contract termination
and rig stacking
|
|
|
1,973
|
|
|
—
|
|
|
14,290
|
|
|
4,305
|
|
Loss (gain) on sale of
assets
|
|
|
348
|
|
|
595
|
|
|
348
|
|
|
(2,232)
|
|
Total operating
expenses
|
|
|
1,163,941
|
|
|
1,137,927
|
|
|
4,445,146
|
|
|
4,595,572
|
|
Operating income
(loss)
|
|
|
145,151
|
|
|
1,256,344
|
|
|
(953,447)
|
|
|
23,860
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(46,916)
|
|
|
(43,748)
|
|
|
(199,872)
|
|
|
(181,868)
|
|
Equity in earnings
(loss) of unconsolidated affiliate
|
|
|
20,748
|
|
|
19,464
|
|
|
(62,660)
|
|
|
77,085
|
|
Gain (loss) on early
extinguishment of debt
|
|
|
597
|
|
|
(10,355)
|
|
|
175,962
|
|
|
(93,191)
|
|
Loss on convertible
note equitizations
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,777)
|
|
Impairment of equity
method investment
|
|
|
—
|
|
|
—
|
|
|
(610,632)
|
|
|
—
|
|
Transaction
expense
|
|
|
(582)
|
|
|
(193)
|
|
|
(7,244)
|
|
|
(3,295)
|
|
Total other
expense
|
|
|
(26,153)
|
|
|
(34,832)
|
|
|
(704,446)
|
|
|
(252,046)
|
|
Income (loss) before
income taxes
|
|
|
118,998
|
|
|
1,221,512
|
|
|
(1,657,893)
|
|
|
(228,186)
|
|
Income tax benefit
(expense)
|
|
|
(23,685)
|
|
|
(263,491)
|
|
|
397,482
|
|
|
74,077
|
|
Net income (loss) and
comprehensive income (loss) including
noncontrolling interests
|
|
|
95,313
|
|
|
958,021
|
|
|
(1,260,411)
|
|
|
(154,109)
|
|
Less: net income and
comprehensive income attributable to
noncontrolling interests
|
|
|
25,483
|
|
|
56,636
|
|
|
7,486
|
|
|
32,790
|
|
Net income (loss) and
comprehensive income (loss) attributable
to Antero Resources Corporation
|
|
$
|
69,830
|
|
|
901,385
|
|
|
(1,267,897)
|
|
|
(186,899)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per
share—basic
|
|
$
|
0.26
|
|
|
2.87
|
|
|
(4.65)
|
|
|
(0.61)
|
|
Income (loss) per
share—diluted
|
|
$
|
0.24
|
|
|
2.65
|
|
|
(4.65)
|
|
|
(0.61)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
268,653
|
|
|
313,917
|
|
|
272,433
|
|
|
308,146
|
|
Diluted
|
|
|
304,172
|
|
|
340,106
|
|
|
272,433
|
|
|
308,146
|
|
|
|
|
|
|
|
|
|
|
|
|
ANTERO RESOURCES CORPORATION
Condensed
Consolidated Statements of Cash Flows
(In
thousands)
|
|
|
Year Ended December 31,
|
|
|
|
2019
|
|
2020
|
|
2021
|
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net loss including
noncontrolling interests
|
|
$
|
(293,136)
|
|
|
(1,260,411)
|
|
|
(154,109)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depletion,
depreciation, amortization, and accretion
|
|
|
918,629
|
|
|
865,291
|
|
|
745,829
|
|
Impairments
|
|
|
1,782,816
|
|
|
834,402
|
|
|
90,523
|
|
Commodity derivative
fair value losses (gains)
|
|
|
(463,972)
|
|
|
(79,918)
|
|
|
1,936,509
|
|
Gains (losses) on
settled commodity derivatives
|
|
|
325,090
|
|
|
794,684
|
|
|
(1,183,400)
|
|
Proceeds from
(payments for) derivative monetizations
|
|
|
—
|
|
|
9,007
|
|
|
(4,569)
|
|
Deferred income tax
benefit
|
|
|
(79,158)
|
|
|
(397,273)
|
|
|
(74,293)
|
|
Equity-based
compensation expense
|
|
|
23,559
|
|
|
23,317
|
|
|
20,437
|
|
Equity in (earnings)
loss of unconsolidated affiliate
|
|
|
143,216
|
|
|
62,660
|
|
|
(77,085)
|
|
Distributions/dividends of earnings from
unconsolidated affiliate
|
|
|
157,956
|
|
|
171,022
|
|
|
136,609
|
|
Amortization of
deferred revenue
|
|
|
—
|
|
|
(14,507)
|
|
|
(45,236)
|
|
Amortization of debt
issuance costs, debt discount, debt premium and other
|
|
|
10,681
|
|
|
12,027
|
|
|
12,492
|
|
(Gain) loss on sale of
assets
|
|
|
951
|
|
|
348
|
|
|
(2,232)
|
|
Loss on the sale of
equity method investment shares
|
|
|
108,745
|
|
|
—
|
|
|
—
|
|
Water
earnout
|
|
|
(125,000)
|
|
|
—
|
|
|
—
|
|
Gain on
deconsolidation of Antero Midstream Partners LP
|
|
|
(1,406,042)
|
|
|
—
|
|
|
—
|
|
(Gain) loss on early
extinguishment of debt
|
|
|
(36,419)
|
|
|
(175,962)
|
|
|
93,191
|
|
Loss on convertible
note equitizations
|
|
|
—
|
|
|
—
|
|
|
50,777
|
|
Changes in current
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
31,631
|
|
|
(9,492)
|
|
|
(55,567)
|
|
Accrued
revenue
|
|
|
156,941
|
|
|
(107,428)
|
|
|
(166,128)
|
|
Other current
assets
|
|
|
(1,025)
|
|
|
(5,507)
|
|
|
316
|
|
Accounts payable
including related parties
|
|
|
(27,996)
|
|
|
(19,282)
|
|
|
(1,184)
|
|
Accrued
liabilities
|
|
|
(25,762)
|
|
|
37,954
|
|
|
77,584
|
|
Revenue distributions
payable
|
|
|
(102,839)
|
|
|
(5,203)
|
|
|
246,757
|
|
Other current
liabilities
|
|
|
4,592
|
|
|
(89)
|
|
|
12,895
|
|
Net cash provided by
operating activities
|
|
|
1,103,458
|
|
|
735,640
|
|
|
1,660,116
|
|
Cash flows provided
by (used in) investing activities:
|
|
|
|
|
|
|
|
|
|
|
Additions to unproved
properties
|
|
|
(88,682)
|
|
|
(45,129)
|
|
|
(79,138)
|
|
Drilling and
completion costs
|
|
|
(1,254,118)
|
|
|
(826,265)
|
|
|
(601,175)
|
|
Additions to water
handling and treatment systems
|
|
|
(24,416)
|
|
|
—
|
|
|
—
|
|
Additions to gathering
systems and facilities
|
|
|
(48,239)
|
|
|
—
|
|
|
—
|
|
Additions to other
property and equipment
|
|
|
(6,700)
|
|
|
(2,963)
|
|
|
(35,623)
|
|
Settlement of water
earnout
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
Investments in
unconsolidated affiliates
|
|
|
(25,020)
|
|
|
—
|
|
|
—
|
|
Proceeds from sale of
common stock of Antero Midstream Corporation
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
Proceeds from the
Antero Midstream Partners LP Transactions
|
|
|
296,611
|
|
|
—
|
|
|
—
|
|
Proceeds from asset
sales
|
|
|
1,983
|
|
|
701
|
|
|
3,192
|
|
Proceeds from VPP
sale, net
|
|
|
—
|
|
|
215,789
|
|
|
—
|
|
Change in other
liabilities
|
|
|
—
|
|
|
—
|
|
|
(672)
|
|
Change in other
assets
|
|
|
7,091
|
|
|
2,806
|
|
|
2,632
|
|
Net cash used in
investing activities
|
|
|
(1,041,490)
|
|
|
(530,061)
|
|
|
(710,784)
|
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
|
(38,772)
|
|
|
(43,443)
|
|
|
—
|
|
Issuance of senior
notes
|
|
|
650,000
|
|
|
—
|
|
|
1,800,000
|
|
Issuance of
convertible notes
|
|
|
—
|
|
|
287,500
|
|
|
—
|
|
Repayment of senior
notes
|
|
|
(191,092)
|
|
|
(1,219,019)
|
|
|
(1,554,657)
|
|
Borrowings
(repayments) on bank credit facilities, net
|
|
|
232,000
|
|
|
465,000
|
|
|
(1,017,000)
|
|
Payment of debt
issuance costs
|
|
|
(4,547)
|
|
|
(8,984)
|
|
|
(31,474)
|
|
Sale of noncontrolling
interest
|
|
|
—
|
|
|
351,000
|
|
|
51,000
|
|
Distributions to
noncontrolling interests
|
|
|
(85,076)
|
|
|
(35,920)
|
|
|
(97,424)
|
|
Employee tax
withholding for settlement of equity compensation awards
|
|
|
(2,389)
|
|
|
(422)
|
|
|
(13,270)
|
|
Convertible note
equitizations
|
|
|
—
|
|
|
—
|
|
|
(85,648)
|
|
Other
|
|
|
(2,560)
|
|
|
(1,291)
|
|
|
(859)
|
|
Net cash provided by
(used in) financing activities
|
|
|
557,564
|
|
|
(205,579)
|
|
|
(949,332)
|
|
Effect of
deconsolidation of Antero Midstream Partners LP
|
|
|
(619,532)
|
|
|
—
|
|
|
—
|
|
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
|
|
$
|
224,331
|
|
|
192,302
|
|
|
141,930
|
|
Increase (decrease) in
accounts payable and accrued liabilities for additions to property
and equipment
|
|
|
(15,897)
|
|
|
(94,619)
|
|
|
37,049
|
|
The following table
set forth unaudited selected financial data for the three months
ended December 31, 2020 and 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Amount of
|
|
|
|
|
|
December 31,
|
|
Increase
|
|
Percent
|
|
|
|
2020
|
|
2021
|
|
(Decrease)
|
|
Change
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
sales
|
|
$
|
595,151
|
|
|
1,210,470
|
|
|
615,319
|
|
103
|
%
|
Natural gas liquids
sales
|
|
|
364,387
|
|
|
644,472
|
|
|
280,085
|
|
77
|
%
|
Oil sales
|
|
|
34,037
|
|
|
47,906
|
|
|
13,869
|
|
41
|
%
|
Commodity derivative
fair value gains
|
|
|
196,851
|
|
|
323,553
|
|
|
126,702
|
|
64
|
%
|
Marketing
|
|
|
108,717
|
|
|
155,993
|
|
|
47,276
|
|
43
|
%
|
Amortization of
deferred revenue, VPP
|
|
|
9,332
|
|
|
11,403
|
|
|
2,071
|
|
22
|
%
|
Other
income
|
|
|
617
|
|
|
474
|
|
|
(143)
|
|
(23)
|
%
|
Total
revenue
|
|
|
1,309,092
|
|
|
2,394,271
|
|
|
1,085,179
|
|
83
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating
|
|
|
27,029
|
|
|
25,238
|
|
|
(1,791)
|
|
(7)
|
%
|
Gathering and
compression
|
|
|
217,973
|
|
|
210,847
|
|
|
(7,126)
|
|
(3)
|
%
|
Processing
|
|
|
211,322
|
|
|
190,938
|
|
|
(20,384)
|
|
(10)
|
%
|
Transportation
|
|
|
224,459
|
|
|
222,725
|
|
|
(1,734)
|
|
(1)
|
%
|
Production and ad
valorem taxes
|
|
|
35,294
|
|
|
67,300
|
|
|
32,006
|
|
91
|
%
|
Marketing
|
|
|
134,498
|
|
|
183,876
|
|
|
49,378
|
|
37
|
%
|
Exploration
|
|
|
188
|
|
|
474
|
|
|
286
|
|
152
|
%
|
General and
administrative (excluding equity-based compensation)
|
|
|
26,902
|
|
|
31,065
|
|
|
4,163
|
|
15
|
%
|
Equity-based
compensation
|
|
|
6,316
|
|
|
5,248
|
|
|
(1,068)
|
|
(17)
|
%
|
Depletion,
depreciation, and amortization
|
|
|
209,740
|
|
|
177,843
|
|
|
(31,897)
|
|
(15)
|
%
|
Impairment of oil and
gas properties
|
|
|
67,808
|
|
|
20,905
|
|
|
(46,903)
|
|
(69)
|
%
|
Accretion of asset
retirement obligations
|
|
|
91
|
|
|
873
|
|
|
782
|
|
*
|
|
Contract termination
and rig stacking
|
|
|
1,973
|
|
|
—
|
|
|
(1,973)
|
|
*
|
|
Loss on sale of
assets
|
|
|
348
|
|
|
595
|
|
|
247
|
|
71
|
%
|
Total operating
expenses
|
|
|
1,163,941
|
|
|
1,137,927
|
|
|
(26,014)
|
|
(2)
|
%
|
Operating
income
|
|
|
145,151
|
|
|
1,256,344
|
|
|
1,111,193
|
|
*
|
|
Other earnings (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(46,916)
|
|
|
(43,748)
|
|
|
3,168
|
|
(7)
|
%
|
Equity in earnings of
unconsolidated affiliate
|
|
|
20,748
|
|
|
19,464
|
|
|
(1,284)
|
|
(6)
|
%
|
Gain (loss) on early
extinguishment of debt
|
|
|
597
|
|
|
(10,355)
|
|
|
(10,952)
|
|
*
|
|
Transaction
expenses
|
|
|
(582)
|
|
|
(193)
|
|
|
389
|
|
(67)
|
%
|
Total other
expense
|
|
|
(26,153)
|
|
|
(34,832)
|
|
|
(8,679)
|
|
33
|
%
|
Income before income
taxes
|
|
|
118,998
|
|
|
1,221,512
|
|
|
1,102,514
|
|
*
|
|
Income tax
expense
|
|
|
(23,685)
|
|
|
(263,491)
|
|
|
(239,806)
|
|
*
|
|
Net income and
comprehensive income including noncontrolling interests
|
|
|
95,313
|
|
|
958,021
|
|
|
862,708
|
|
*
|
|
Less: net income and
comprehensive income attributable to noncontrolling
interests
|
|
|
25,483
|
|
|
56,636
|
|
|
31,153
|
|
122
|
%
|
Net income and
comprehensive income attributable to Antero Resources
Corporation
|
|
$
|
69,830
|
|
|
901,385
|
|
|
831,555
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX
|
|
$
|
299,196
|
|
|
420,261
|
|
|
121,065
|
|
40
|
%
|
The following table
set forth selected operating data for the three months ended
December 31, 2020 and 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Amount of
|
|
|
|
|
|
December 31,
|
|
Increase
|
|
Percent
|
|
|
|
2020
|
|
2021
|
|
(Decrease)
|
|
Change
|
|
Production data (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(Bcf)
|
|
|
226
|
|
|
205
|
|
|
(21)
|
|
(9)
|
%
|
C2 Ethane
(MBbl)
|
|
|
5,023
|
|
|
4,130
|
|
|
(893)
|
|
(18)
|
%
|
C3+ NGLs
(MBbl)
|
|
|
12,174
|
|
|
9,872
|
|
|
(2,302)
|
|
(19)
|
%
|
Oil (MBbl)
|
|
|
1,104
|
|
|
689
|
|
|
(415)
|
|
(38)
|
%
|
Combined
(Bcfe)
|
|
|
336
|
|
|
294
|
|
|
(42)
|
|
(13)
|
%
|
Daily combined
production (MMcfe/d)
|
|
|
3,650
|
|
|
3,191
|
|
|
(459)
|
|
(13)
|
%
|
Average prices before effects of derivative
settlements (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (per
Mcf)
|
|
$
|
2.63
|
|
|
5.89
|
|
|
3.26
|
|
124
|
%
|
C2 Ethane (per
Bbl)
|
|
$
|
5.56
|
|
|
16.81
|
|
|
11.25
|
|
202
|
%
|
C3+ NGLs (per
Bbl)
|
|
$
|
27.64
|
|
|
58.25
|
|
|
30.61
|
|
111
|
%
|
Oil (per
Bbl)
|
|
$
|
30.83
|
|
|
69.53
|
|
|
38.70
|
|
126
|
%
|
Weighted Average
Combined (per Mcfe)
|
|
$
|
2.96
|
|
|
6.48
|
|
|
3.52
|
|
119
|
%
|
Average realized prices after effects of derivative
settlements (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (per
Mcf)
|
|
$
|
2.76
|
|
|
2.79
|
|
|
0.03
|
|
1
|
%
|
C2 Ethane (per
Bbl)
|
|
$
|
5.44
|
|
|
16.81
|
|
|
11.37
|
|
209
|
%
|
C3+ NGLs (per
Bbl)
|
|
$
|
28.84
|
|
|
52.41
|
|
|
23.57
|
|
82
|
%
|
Oil (per
Bbl)
|
|
$
|
41.63
|
|
|
60.17
|
|
|
18.54
|
|
45
|
%
|
Weighted Average
Combined (per Mcfe)
|
|
$
|
3.12
|
|
|
4.15
|
|
|
1.03
|
|
33
|
%
|
Average costs (per Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating
|
|
$
|
0.08
|
|
|
0.09
|
|
|
0.01
|
|
13
|
%
|
Gathering and
compression
|
|
$
|
0.65
|
|
|
0.72
|
|
|
0.07
|
|
11
|
%
|
Processing
|
|
$
|
0.63
|
|
|
0.65
|
|
|
0.02
|
|
3
|
%
|
Transportation
|
|
$
|
0.67
|
|
|
0.76
|
|
|
0.09
|
|
13
|
%
|
Production
taxes
|
|
$
|
0.11
|
|
|
0.23
|
|
|
0.12
|
|
109
|
%
|
Marketing,
net
|
|
$
|
0.08
|
|
|
0.09
|
|
|
0.01
|
|
13
|
%
|
Depletion,
depreciation, amortization and accretion
|
|
$
|
0.62
|
|
|
0.61
|
|
|
(0.01)
|
|
(2)
|
%
|
General and
administrative (excluding equity-based compensation)
|
|
$
|
0.08
|
|
|
0.11
|
|
|
0.03
|
|
38
|
%
|
|
|
(1)
|
Production volumes exclude volumes related to VPP
transaction.
|
(2)
|
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.
|
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SOURCE Antero Resources Corporation