Antero Resources Announces Redemption of Outstanding 4.25% Convertible Senior Notes Due 2026

Rhea-AI Summary

Antero Resources Corporation (NYSE: AR) announces the redemption of its outstanding 4.25% Convertible Senior Notes Due 2026, totaling $26,386,000, at a Redemption Price of $1,003.54 per $1,000 principal amount of Notes. Notes can be converted before April 1, 2024, with a conversion rate of 230.2026 shares of Common Stock per $1,000 principal amount of Notes.

Insights

Financial Analyst

Antero Resources Corporation's decision to redeem its 4.25% Convertible Senior Notes due 2026 is a strategic financial move. By electing to pay the redemption price of 100% of the principal, plus accrued interest, Antero is opting to manage its debt obligations ahead of maturity. This could indicate a strong liquidity position, allowing the company to reduce future interest expenses. Shareholders might view this as a positive signal, suggesting that management is confident in the company's cash flow generation capabilities.

Furthermore, the choice to settle conversions into common stock rather than additional cash outlays prior to the conversion deadline could be a tactic to preserve cash while still meeting obligations to note holders. This may dilute current shareholders but could also be seen as an opportunity for note holders to participate in the equity upside. The conversion rate adjustment mechanism ensures that note holders receive a fair number of shares reflecting any fundamental changes in the company's operations or market conditions.

Market Research Analyst

The redemption of notes and the subsequent conversion into common stock could have implications for the stock market performance of Antero Resources. It's important to monitor the trading volume and stock price leading up to the conversion deadline. An influx of new shares could temporarily pressure the stock price due to increased supply. However, if the market perceives the redemption as a sign of financial strength and operational efficiency, any negative impact may be short-lived.

Given that Antero Resources operates in the natural gas and liquids sector, the company's financial decisions are closely tied to commodity prices. Investors should consider the volatility of natural gas prices when assessing the impact of this news on Antero's stock. It's also worth noting that the integrated nature of Antero's operations with Antero Midstream could provide some level of stability and predictability in cash flows, potentially affecting the stock's risk profile favorably.

Legal Expert

The legal aspects of Antero's redemption notice are crucial for compliance and investor relations. The company's adherence to the terms set forth in the indenture, including the adjustment of the conversion rate, is a testament to its commitment to upholding contractual obligations. It is also noteworthy that Antero clearly states this press release is not an offer to sell securities, which is a standard disclaimer to prevent any misinterpretation that could lead to legal complications or accusations of market manipulation.

Investors should appreciate the transparency and adherence to legal norms, as it reduces the risk of disputes or litigation that could arise from the redemption process. The clear communication about the conversion deadline and the process for surrendering notes for redemption or conversion are essential details that help maintain trust and order in the market.

DENVER, March 11, 2024 /PRNewswire/ -- Antero Resources Corporation (NYSE: AR) ("Antero Resources," "Antero," or the "Company") today announced that it has called all of its outstanding 4.25% Convertible Senior Notes Due 2026 (the "Notes") (CUSIP No. 03674X AM8) for redemption on Monday, April 1, 2024 (the "Redemption Date").

The aggregate principal amount of the Notes being redeemed is $26,386,000. This is equal to the current aggregate principal amount of Notes outstanding. The redemption price will be equal to 100% of the principal amount of each Note called for redemption, plus accrued and unpaid interest on such Note to, but excluding, the Redemption Date for such Note (the "Redemption Price").  For each $1,000 principal amount of Notes, the Redemption Price is equal to $1,003.54.

To receive payment of the Redemption Price, any certificated Notes must be surrendered to Computershare Trust Company, National Associations, as successor trustee to Wells Fargo Bank, National Association, at 1505 Energy Park Drive, St. Paul, MN 55108, on or prior to the Redemption Date. Any Notes in book-entry form must be surrendered through the facilities of The Depository Trust Company in the usual manner to be paid the Redemption Price.

Notes called for redemption may be converted at any time before 5:00 p.m., New York City time, on Thursday, March 28, 2024 (or, if the Company fails to pay the Redemption Price due on the Redemption Date in full, at any time until such time as the Company pays such Redemption Price in full) (the "Conversion Deadline").  The Company has elected to settle all conversions of Notes between now and the Conversion Deadline by delivering shares of common stock, par value $0.01 per share ("Common Stock"), and paying cash in lieu of fractional shares, as applicable, upon such conversion.

The sending of the notice of redemption is a make-whole fundamental change under the indenture governing the Notes (the "Indenture"), and therefore the current conversion rate is required to be adjusted for all conversions of Notes as set forth in the Indenture. However, based on the current trading price of the Company's Common Stock, no additional shares will be added to the conversion rate. As of today, the conversion rate for all conversions of Notes after today and before the Conversion Deadline is 230.2026 shares of Common Stock per $1,000 principal amount of Notes.  This conversion rate will remain subject to adjustment in accordance with the Indenture from time to time for certain events.

This press release is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful. No representation is made as to the correctness or accuracy of the CUSIP number either as printed on the Notes or as contained in this press release.

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 the Redemption of the Notes, 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 risks and uncertainties, 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, the risks described under the heading "Item 1A. Risk Factors" in Antero Resources' Annual Report on Form 10-K for the year ended December 31, 2023.

 

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SOURCE Antero Resources Corporation

FAQ

What is the principal amount of the Notes being redeemed by Antero Resources Corporation?

The principal amount of the Notes being redeemed by Antero Resources Corporation is $26,386,000.

What is the Redemption Price per $1,000 principal amount of Notes?

The Redemption Price per $1,000 principal amount of Notes is $1,003.54.

Where should certificated Notes be surrendered to receive the Redemption Price?

Certificated Notes should be surrendered to Computershare Trust Company, National Associations, at 1505 Energy Park Drive, St. Paul, MN 55108, on or before the Redemption Date.

What is the Conversion Deadline for converting the Notes?

The Conversion Deadline for converting the Notes is 5:00 p.m., New York City time, on Thursday, March 28, 2024.

What is the current conversion rate for all conversions of Notes after today and before the Conversion Deadline?

The current conversion rate for all conversions of Notes after today and before the Conversion Deadline is 230.2026 shares of Common Stock per $1,000 principal amount of Notes.