Antero Resources Announces Third Quarter 2024 Financial and Operating Results
Antero Resources reported Q3 2024 financial results with net production averaging 3.4 Bcfe/d, a 2% decrease year-over-year. The company posted a net loss of $20 million and Adjusted Net Loss of $37 million. Natural gas production decreased 4% to 2.2 Bcf/d, while liquids production increased 2% to 206 MBbl/d. The company achieved record operational efficiency with 12.1 completion stages per day and reduced its 2024 drilling and completion capital budget to $640-660 million due to efficiency gains and deferred completions. Antero realized premium pricing with a $0.98 per Mcfe premium to NYMEX and record C3+ NGL price premium of $2.29 per barrel.
Antero Resources ha riportato i risultati finanziari del terzo trimestre 2024, con una produzione netta media di 3,4 Bcfe/giorno, con una diminuzione del 2% rispetto all'anno precedente. L'azienda ha registrato una perdita netta di 20 milioni di dollari e una perdita netta rettificata di 37 milioni di dollari. La produzione di gas naturale è diminuita del 4% a 2,2 Bcf/giorno, mentre la produzione di liquidi è aumentata del 2% a 206 MBbl/giorno. L'azienda ha raggiunto un'efficienza operativa record con 12,1 fasi di completamento al giorno e ha ridotto il proprio budget per il capitale di perforazione e completamento per il 2024 a 640-660 milioni di dollari grazie ai guadagni di efficienza e ai completamenti posticipati. Antero ha realizzato prezzi premium con un premio di 0,98 dollari per Mcfe rispetto al NYMEX e un premio record sui prezzi C3+ NGL di 2,29 dollari per barile.
Antero Resources informó sobre los resultados financieros del tercer trimestre de 2024, con una producción neta promedio de 3,4 Bcfe/día, una disminución del 2% en comparación con el año anterior. La compañía reportó una pérdida neta de 20 millones de dólares y una pérdida neta ajustada de 37 millones de dólares. La producción de gas natural disminuyó un 4% a 2,2 Bcf/día, mientras que la producción de líquidos aumentó un 2% a 206 MBbl/día. La empresa logró una eficiencia operativa récord con 12,1 etapas de completación por día y redujo su presupuesto de capital para perforación y completación de 2024 a 640-660 millones de dólares debido a las mejoras en eficiencia y los completamientos diferidos. Antero realizó precios premium con un premio de 0,98 dólares por Mcfe sobre NYMEX y un premio récord de 2,29 dólares por barril en el precio de C3+ NGL.
Antero Resources는 2024년 3분기 재무 결과를 보고했으며, 순 생산량은 하루 평균 3.4 Bcfe로 전년 대비 2% 감소했습니다. 회사는 2천만 달러의 순손실과 3천7백만 달러의 조정된 순손실을 기록했습니다. 자연 가스 생산은 4% 감소하여 2.2 Bcf/일에 달했으며, 액체 생산은 2% 증가하여 206 MBbl/일로 늘어났습니다. 회사는 하루 12.1회 완공 단계를 기록하는 운영 효율성을 달성하였고, 효율성 향상 및 완공 연기로 인해 2024년 드릴링 및 완공 자본 예산을 6억4천만 - 6억6천만 달러로 줄였습니다. Antero는 NYMEX보다 Mcfe당 0.98달러의 프리미엄 가격을 실현하였고, 배럴당 2.29달러의 C3+ NGL 가격 프리미엄을 기록했습니다.
Antero Resources a annoncé ses résultats financiers pour le troisième trimestre 2024, avec une production nette moyenne de 3,4 Bcfe/jour, soit une baisse de 2 % par rapport à l'année précédente. L'entreprise a affiché une perte nette de 20 millions de dollars et une perte nette ajustée de 37 millions de dollars. La production de gaz naturel a diminué de 4 % pour atteindre 2,2 Bcf/jour, tandis que la production de liquides a augmenté de 2 % pour atteindre 206 MBbl/jour. L'entreprise a atteint une efficacité opérationnelle record avec 12,1 phases de complétion par jour et a réduit son budget de capital pour le forage et la complétion en 2024 à 640-660 millions de dollars grâce aux gains d'efficacité et aux complétions différées. Antero a réalisé des prix premium avec un supplément de 0,98 dollar par Mcfe par rapport au NYMEX et un prix premium record de 2,29 dollars par baril pour les C3+ NGL.
Antero Resources berichtete über die finanziellen Ergebnisse für das 3. Quartal 2024, mit einer durchschnittlichen Nettoproduktion von 3,4 Bcfe/Tag, ein Rückgang um 2% im Jahresvergleich. Das Unternehmen verzeichnete einen Nettoverlust von 20 Millionen Dollar und einen bereinigten Nettoverlust von 37 Millionen Dollar. Die Produktion von Erdgas verringerte sich um 4% auf 2,2 Bcf/Tag, während die Produktion von Flüssigkeiten um 2% auf 206 MBbl/Tag stieg. Das Unternehmen erreichte eine Rekordbetriebs-effizienz mit 12,1 Abschlussphasen pro Tag und reduzierte sein Budget für Bohrungen und Abschlussmaßnahmen für 2024 auf 640-660 Millionen Dollar aufgrund von Effizienzsteigerungen und verschobenen Abschlüssen. Antero erzielte Premiumpreise mit einem Aufpreis von 0,98 Dollar pro Mcfe auf NYMEX und einem Rekordaufschlag von 2,29 Dollar pro Barrel für C3+ NGL-Preise.
- Record operational efficiency with 12.1 completion stages per day
- Achieved highest C3+ NGL price premium in company history at $2.29/barrel
- Realized $0.98/Mcfe premium to NYMEX pricing
- Reduced capital budget by $20-40 million due to efficiency gains
- Net loss of $20 million in Q3 2024
- Natural gas production decreased 4% year-over-year
- Total production decreased 2% to 3.4 Bcfe/d
- Free Cash Flow deficit of $19 million
Insights
The Q3 2024 results reveal several concerning trends for Antero Resources. The company reported a
Notable positives include record C3+ NGL price premiums at
The Free Cash Flow deficit of
The strategic decision to defer completions of two pads signals a defensive posture in response to weak natural gas prices. While this preserves capital, it could impact future production growth. The focus on operational efficiency is delivering results, with record completion stages per day and improved drilling speeds.
The company's exposure to international liquids markets through Marcus Hook terminal access is proving valuable, delivering record price premiums. However, the all-in cash expense increase to
Third Quarter 2024 Highlights:
- Net production averaged 3.4 Bcfe/d, a
2% decrease from the year ago period- Natural gas production averaged 2.2 Bcf/d, a
4% decrease from the year ago period - Liquids production averaged 206 MBbl/d, a
2% increase from the year ago period and represents36% of total production
- Natural gas production averaged 2.2 Bcf/d, a
- Realized a pre-hedge natural gas equivalent price of
$3.14 $0.98 - Realized the highest C3+ NGL price premium to
Mont Belvieu in company history at a$2.29 - Net loss was
$20 million $37 million - Adjusted EBITDAX was
$187 million $166 million - Averaged a quarterly record 12.1 completion stages per day, including a monthly record of 13.3 stages per day during the month of August
- Achieved a record for the most footage drilled per rig in a month during September, a
17% increase compared to the 2023 average - Announced the addition of Jeffrey Muñoz to the Board of Directors
2024 Full-Year Guidance Updates:
- Decreased drilling and completion capital budget for 2024 to a range of
$640 $660 million
Paul Rady, Chairman, CEO and President of Antero Resources commented, "During the third quarter we continued to improve our capital efficiency. Over the last two years, we have reduced the average number of days to drill a well by
Mr. Rady further added, "We are also pleased to announce the appointment of Jeffrey Muñoz to the Board of Directors. Mr. Muñoz brings an extensive background with over 30 years in the energy industry with a focus on legal and accounting expertise. His appointment expands the knowledge and independence of our Board."
Michael Kennedy, CFO of Antero Resources said, "Our third quarter results benefited from our significant exposure to international liquids prices as we realized the highest C3+ NGL price premium in company history. Constrained Gulf Coast export capacity combined with strong international demand increased spot international premiums over
For a discussion of the non-GAAP financial measures including Adjusted Net Income (Loss), Adjusted EBITDAX, Free Cash Flow and Net Debt please see "Non-GAAP Financial Measures."
2024 Guidance Update
Antero is decreasing its drilling and completion capital budget for 2024 to a range of
Full Year 2024 – | Full Year 2024 – | |||||||
Initial | Revised | |||||||
Full Year 2024 Guidance | Low | High | Low | High | ||||
D&C Capital Expenditures | ||||||||
Note: Any 2024 guidance items not discussed in this release are unchanged from previously stated guidance. |
Free Cash Flow
During the third quarter of 2024, the Free Cash Flow deficit was
Three Months Ended | |||||||
2023 | 2024 | ||||||
Net cash provided by operating activities | $ | 183,381 | 166,177 | ||||
Less: Net cash used in investing activities | (276,097) | (174,126) | |||||
Less: Proceeds from sale of assets, net | (136) | (7,066) | |||||
Less: Distributions to non-controlling interests in Martica | (21,161) | (15,736) | |||||
Free Cash Flow | $ | (114,013) | (30,751) | ||||
Changes in Working Capital (1) | 90,755 | 12,222 | |||||
Free Cash Flow before Changes in Working Capital | $ | (23,258) | (18,529) | ||||
(1) | Working capital adjustments include changes in current assets and liabilities and the net decrease in accounts payable and accrued liabilities for additions to property and equipment. |
Third Quarter 2024 Financial Results
Net daily natural gas equivalent production in the third quarter averaged 3.4 Bcfe/d, including 206 MBbl/d of liquids. Antero's average realized natural gas price before hedging was
The following table details average net production and average realized prices for the three months ended September 30, 2024:
Three Months Ended September 30, 2024 | ||||||||||||||||
Natural Gas (MMcf/d) | Oil (Bbl/d) | C3+ NGLs (Bbl/d) | Ethane (Bbl/d) | Natural Gas (MMcfe/d) | ||||||||||||
Average Net Production | 2,170 | 9,304 | 117,315 | 79,370 | 3,406 | |||||||||||
Three Months Ended September 30, 2024 | ||||||||||||||||
Natural Gas | Oil | C3+ NGLs | Ethane | Combined | ||||||||||||
Average Realized Prices | ($/Mcf) | ($/Bbl) | ($/Bbl) | ($/Bbl) | ($/Mcfe) | |||||||||||
Average realized prices before settled derivatives | $ | 2.13 | 61.59 | 41.30 | 8.01 | 3.14 | ||||||||||
Index price | $ | 2.16 | 75.09 | 39.01 | 6.61 | 2.16 | ||||||||||
Premium / (Discount) to Index price | $ | (0.03) | (13.50) | 2.29 | 1.40 | 0.98 | ||||||||||
Settled commodity derivatives | $ | 0.01 | (0.13) | 0.26 | — | 0.01 | ||||||||||
Average realized prices after settled derivatives | $ | 2.14 | 61.46 | 41.56 | 8.01 | 3.15 | ||||||||||
Premium / (Discount) to Index price | $ | (0.02) | (13.63) | 2.55 | 1.40 | 0.99 | ||||||||||
Note: Please see Antero's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, for more information on these index and average realized prices. |
All-in cash expense, which includes lease operating, gathering, compression, processing and transportation and production and ad valorem taxes was
Third Quarter 2024 Operating Results
- Antero placed 23 horizontal Marcellus wells to sales during the third quarter with an average lateral length of 14,800 feet
- Twelve of these wells have been on line for approximately 60 days with an average rate per well of 29 MMcfe/d, including 1,292 Bbl/d of liquids per well assuming
25% ethane recovery and an average lateral length of 13,300 feet - The remaining 11 wells were completed in September with an average lateral length of 16,500 feet
- A recent six well pad had a 60-day rate averaging 35 MMcfe/d per well with approximately 1,728 Bbl/d of liquids assuming
25% ethane recovery. These wells have an average lateral length of 18,200 feet.
Third Quarter 2024 Capital Investment
Antero's drilling and completion capital expenditures for the three months ended September 30, 2024, were
Commodity Derivative Positions
Antero did not enter into any new natural gas or liquids hedges during the third quarter of 2024.
Appointment of Jeffrey Muñoz to the Board of Directors
On October 29, 2024, the Company appointed Jeffrey Muñoz to its Board as a Class II director. Mr. Muñoz has over 30 years of experience in the energy industry with a legal and accounting background. Mr. Muñoz spent ten years as a partner with Latham and Watkins LLP, where he served as a member of the firm's Diversity Committee. Prior to that he spent 20 years with Vinson and
Conference Call
A conference call is scheduled on Thursday, October 31, 2024 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 (
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 (Loss) is net income (loss). The following table reconciles net loss to Adjusted Net Loss (in thousands):
Three Months Ended September 30, | |||||||
2023 | 2024 | ||||||
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | $ | 17,808 | (20,444) | ||||
Net income and comprehensive income attributable to noncontrolling interests | 14,834 | 10,157 | |||||
Unrealized commodity derivative gains | (9,172) | (14,100) | |||||
Amortization of deferred revenue, VPP | (7,701) | (6,812) | |||||
Gain on sale of assets | (136) | (1,297) | |||||
Impairment of property and equipment | 13,476 | 13,455 | |||||
Equity-based compensation | 18,458 | 16,065 | |||||
Loss on early extinguishment of debt | — | 528 | |||||
Equity in earnings of unconsolidated affiliate | (22,207) | (25,634) | |||||
Contract termination, loss contingency and settlements | 13,659 | (1,517) | |||||
Tax effect of reconciling items (1) | (1,371) | 4,199 | |||||
37,648 | (25,400) | ||||||
Martica adjustments (2) | (12,161) | (11,467) | |||||
Adjusted Net Income (Loss) | $ | 25,487 | (36,867) | ||||
Diluted Weighted Average Common Shares Outstanding (3) | 311,534 | 311,025 | |||||
(1) | Deferred taxes were approximately |
(2) | Adjustments reflect noncontrolling interest in Martica not otherwise adjusted in amounts above. |
(3) | Diluted weighted average shares outstanding does not include securities that would have had an anti-dilutive effect on the computation of diluted earnings per share. Anti-dilutive weighted average shares outstanding for the three months ended September 30, 2023 and 2024 were 1.6 million and 5.2 million, respectively. |
Net Debt
Net Debt is calculated as total long-term debt less cash and cash equivalents. Management uses Net Debt to evaluate the Company's financial position, including its ability to service its debt obligations.
The following table reconciles consolidated total long-term debt to Net Debt as used in this release (in thousands):
December 31, | September 30, | ||||||
2023 | 2024 | ||||||
Credit Facility | $ | 417,200 | 526,700 | ||||
96,870 | 96,870 | ||||||
407,115 | 407,115 | ||||||
600,000 | 600,000 | ||||||
26,386 | — | ||||||
Unamortized debt issuance costs | (9,975) | (8,369) | |||||
Total long-term debt | $ | 1,537,596 | 1,622,316 | ||||
Less: Cash and cash equivalents | — | — | |||||
Net Debt | $ | 1,537,596 | 1,622,316 | ||||
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 or net derivative monetizations 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, service or incur additional debt and estimate our ability to return capital to shareholders. There are significant limitations to using Free Cash Flow as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect the Company's net income, the lack of comparability of results of operations of different companies and the different methods of calculating Free Cash Flow reported by different companies. Free Cash Flow does not represent funds available for discretionary use because those funds may be required for debt service, land acquisitions and lease renewals, other capital expenditures, working capital, income taxes, exploration expenses, and other commitments and obligations.
Adjusted EBITDAX
Adjusted EBITDAX is a non-GAAP financial measure that we define as net income (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 condensed consolidated statements of cash flows, in each case, for the three months ended September 30, 2023 and 2024 (in thousands). Adjusted EBITDAX also excludes the noncontrolling interests in Martica, and these adjustments are disclosed in the table below as Martica related adjustments.
Three Months Ended September 30, | |||||||
2023 | 2024 | ||||||
Reconciliation of net income (loss) to Adjusted EBITDAX: | |||||||
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | $ | 17,808 | (20,444) | ||||
Net income and comprehensive income attributable to noncontrolling interests | 14,834 | 10,157 | |||||
Unrealized commodity derivative gains | (9,172) | (14,100) | |||||
Amortization of deferred revenue, VPP | (7,701) | (6,812) | |||||
Gain on sale of assets | (136) | (1,297) | |||||
Interest expense, net | 31,634 | 28,278 | |||||
Loss on early extinguishment of debt | — | 528 | |||||
Income tax expense | 13,663 | 1,212 | |||||
Depletion, depreciation, amortization and accretion | 177,148 | 171,195 | |||||
Impairment of property and equipment | 13,476 | 13,455 | |||||
Exploration expense | 591 | 671 | |||||
Equity-based compensation expense | 18,458 | 16,065 | |||||
Equity in earnings of unconsolidated affiliate | (22,207) | (25,634) | |||||
Dividends from unconsolidated affiliate | 31,285 | 31,314 | |||||
Contract termination, loss contingency, transaction expense and other | 13,649 | (1,511) | |||||
293,330 | 203,077 | ||||||
Martica related adjustments (1) | (22,127) | (16,177) | |||||
Adjusted EBITDAX | $ | 271,203 | 186,900 | ||||
Reconciliation of our Adjusted EBITDAX to net cash provided by operating activities: | |||||||
Adjusted EBITDAX | $ | 271,203 | 186,900 | ||||
Martica related adjustments (1) | 22,127 | 16,177 | |||||
Interest expense, net | (31,634) | (28,278) | |||||
Amortization of debt issuance costs and other | 869 | 572 | |||||
Exploration expense | (591) | (671) | |||||
Changes in current assets and liabilities | (76,808) | (10,615) | |||||
Contract termination, loss contingency, transaction expense and other | (1,748) | 3,648 | |||||
Other items | (37) | (1,556) | |||||
Net cash provided by operating activities | $ | 183,381 | 166,177 | ||||
(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 September 30, | ||||||
2023 | 2024 | |||||
Drilling and completion costs (cash basis) | $ | 242,261 | 147,075 | |||
Change in accrued capital costs | (11,191) | 893 | ||||
Adjusted drilling and completion costs (accrual basis) | $ | 231,070 | 147,968 | |||
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
This release includes "forward-looking statements." Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under Antero Resources' control. All statements, except for statements of historical fact, made in this release regarding activities, events or developments Antero Resources expects, believes or anticipates will or may occur in the future, such as those regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, anticipated reductions in letters of credit and interest expense, prospects, plans and objectives of management, return of capital, expected results, future commodity prices, future production targets, including those related to certain levels of production, future earnings, leverage targets and debt repayment, future capital spending plans, improved and/or increasing capital efficiency, estimated realized natural gas, NGL and oil prices, impacts of geopolitical and world health events, 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.
Antero Resources cautions you that these forward-looking statements are subject to all of the risks and uncertainties, incident to the exploration for and development, production, gathering and sale of natural gas, NGLs and oil, most of which are difficult to predict and many of which are beyond the Antero Resources' control. These risks include, but are not limited to, commodity price volatility, inflation, supply chain or other disruption, availability and cost of drilling, completion and production equipment and services, environmental risks, drilling and completion and other operating risks, marketing and transportation risks, regulatory changes or changes in law, the uncertainty inherent in estimating natural gas, NGLs and oil reserves and in projecting future rates of production, cash flows and access to capital, the timing of development expenditures, conflicts of interest among our stockholders, impacts of geopolitical and world health events, cybersecurity risks, our ability to achieve Net Zero Scope 1 and Scope 2 GHG emissions and the costs associated therewith, the state of markets for, and availability of, verified quality carbon offsets 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, 2023 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
ANTERO RESOURCES CORPORATION Condensed Consolidated Balance Sheets (In thousands, except per share amounts) | |||||||
(Unaudited) | |||||||
December 31, | September 30, | ||||||
2023 | 2024 | ||||||
Assets | |||||||
Current assets: | |||||||
Accounts receivable | $ | 42,619 | 26,156 | ||||
Accrued revenue | 400,805 | 319,177 | |||||
Derivative instruments | 5,175 | 4,706 | |||||
Prepaid expenses | 12,901 | 7,042 | |||||
Other current assets | 14,192 | 11,565 | |||||
Total current assets | 475,692 | 368,646 | |||||
Property and equipment: | |||||||
Oil and gas properties, at cost (successful efforts method): | |||||||
Unproved properties | 974,642 | 960,116 | |||||
Proved properties | 13,908,804 | 14,309,543 | |||||
Gathering systems and facilities | 5,802 | 5,802 | |||||
Other property and equipment | 98,668 | 105,317 | |||||
14,987,916 | 15,380,778 | ||||||
Less accumulated depletion, depreciation and amortization | (5,063,274) | (5,447,104) | |||||
Property and equipment, net | 9,924,642 | 9,933,674 | |||||
Operating leases right-of-use assets | 2,965,880 | 2,658,288 | |||||
Derivative instruments | 5,570 | 2,507 | |||||
Investment in unconsolidated affiliate | 222,255 | 226,860 | |||||
Other assets | 25,375 | 33,643 | |||||
Total assets | $ | 13,619,414 | 13,223,618 | ||||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 38,993 | 37,096 | ||||
Accounts payable, related parties | 86,284 | 92,720 | |||||
Accrued liabilities | 381,340 | 316,059 | |||||
Revenue distributions payable | 361,782 | 328,353 | |||||
Derivative instruments | 15,236 | 15,989 | |||||
Short-term lease liabilities | 540,060 | 505,652 | |||||
Deferred revenue, VPP | 27,101 | 25,709 | |||||
Other current liabilities | 1,295 | 2,377 | |||||
Total current liabilities | 1,452,091 | 1,323,955 | |||||
Long-term liabilities: | |||||||
Long-term debt | 1,537,596 | 1,622,316 | |||||
Deferred income tax liability, net | 834,268 | 831,972 | |||||
Derivative instruments | 32,764 | 17,780 | |||||
Long-term lease liabilities | 2,428,450 | 2,148,608 | |||||
Deferred revenue, VPP | 60,712 | 41,816 | |||||
Other liabilities | 59,431 | 55,839 | |||||
Total liabilities | 6,405,312 | 6,042,286 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Stockholders' equity: | |||||||
Preferred stock, | — | — | |||||
Common stock, outstanding as of December 31, 2023 and September 30, 2024, respectively | 3,035 | 3,110 | |||||
Additional paid-in capital | 5,846,541 | 5,894,786 | |||||
Retained earnings | 1,131,828 | 1,082,066 | |||||
Total stockholders' equity | 6,981,404 | 6,979,962 | |||||
Noncontrolling interests | 232,698 | 201,370 | |||||
Total equity | 7,214,102 | 7,181,332 | |||||
Total liabilities and equity | $ | 13,619,414 | 13,223,618 | ||||
ANTERO RESOURCES CORPORATION Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) (In thousands, except per share amounts) | |||||||
Three Months Ended September 30, | |||||||
2023 | 2024 | ||||||
Revenue and other: | |||||||
Natural gas sales | $ | 516,214 | 425,802 | ||||
Natural gas liquids sales | 482,570 | 504,200 | |||||
Oil sales | 62,629 | 52,724 | |||||
Commodity derivative fair value gains | 3,448 | 18,368 | |||||
Marketing | 53,068 | 47,160 | |||||
Amortization of deferred revenue, VPP | 7,701 | 6,812 | |||||
Other revenue and income | 546 | 854 | |||||
Total revenue | 1,126,176 | 1,055,920 | |||||
Operating expenses: | |||||||
Lease operating | 33,484 | 29,597 | |||||
Gathering, compression, processing and transportation | 671,886 | 685,183 | |||||
Production and ad valorem taxes | 32,258 | 47,423 | |||||
Marketing | 69,542 | 62,144 | |||||
Exploration | 591 | 671 | |||||
General and administrative (including equity-based compensation expense of and | 58,425 | 54,627 | |||||
Depletion, depreciation and amortization | 176,259 | 170,197 | |||||
Impairment of property and equipment | 13,476 | 13,455 | |||||
Accretion of asset retirement obligations | 889 | 998 | |||||
Contract termination, loss contingency and settlements | 13,659 | (1,517) | |||||
Gain on sale of assets | (136) | (1,297) | |||||
Other operating expense | 111 | 342 | |||||
Total operating expenses | 1,070,444 | 1,061,823 | |||||
Operating income (loss) | 55,732 | (5,903) | |||||
Other income (expense): | |||||||
Interest expense, net | (31,634) | (28,278) | |||||
Equity in earnings of unconsolidated affiliate | 22,207 | 25,634 | |||||
Loss on early extinguishment of debt | — | (528) | |||||
Total other expense | (9,427) | (3,172) | |||||
Income (loss) before income taxes | 46,305 | (9,075) | |||||
Income tax expense | (13,663) | (1,212) | |||||
Net income (loss) and comprehensive income (loss) including noncontrolling interests | 32,642 | (10,287) | |||||
Less: net income and comprehensive income attributable to noncontrolling interests | 14,834 | 10,157 | |||||
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | $ | 17,808 | (20,444) | ||||
Net income (loss) per common share—basic | $ | 0.06 | (0.07) | ||||
Net income (loss) per common share—diluted | $ | 0.06 | (0.07) | ||||
Weighted average number of common shares outstanding: | |||||||
Basic | 300,141 | 311,025 | |||||
Diluted | 311,534 | 311,025 | |||||
ANTERO RESOURCES CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) | |||||||
Nine Months Ended September 30, | |||||||
2023 | 2024 | ||||||
Cash flows provided by (used in) operating activities: | |||||||
Net income (loss) including noncontrolling interests | $ | 225,911 | (22,455) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depletion, depreciation, amortization and accretion | 518,218 | 516,341 | |||||
Impairments | 44,746 | 18,958 | |||||
Commodity derivative fair value gains | (137,924) | (22,229) | |||||
Gains (losses) on settled commodity derivatives | (16,511) | 11,530 | |||||
Payments for derivative monetizations | (202,339) | — | |||||
Deferred income tax expense (benefit) | 45,914 | (2,295) | |||||
Equity-based compensation expense | 44,988 | 49,293 | |||||
Equity in earnings of unconsolidated affiliate | (58,986) | (69,862) | |||||
Dividends of earnings from unconsolidated affiliate | 93,854 | 93,883 | |||||
Amortization of deferred revenue | (22,852) | (20,289) | |||||
Amortization of debt issuance costs and other | 2,601 | 1,900 | |||||
Settlement of asset retirement obligations | (633) | (3,171) | |||||
Contract termination, loss contingency and settlements | 11,901 | 5,143 | |||||
Gain on sale of assets | (447) | (1,127) | |||||
Loss on early extinguishment of debt | — | 528 | |||||
Loss on convertible note inducement | 86 | — | |||||
Changes in current assets and liabilities: | |||||||
Accounts receivable | (1,440) | 16,463 | |||||
Accrued revenue | 334,294 | 81,628 | |||||
Prepaid expenses and other current assets | 32,584 | 8,486 | |||||
Accounts payable including related parties | 12,236 | 4,277 | |||||
Accrued liabilities | (118,316) | (63,395) | |||||
Revenue distributions payable | (129,966) | (33,429) | |||||
Other current liabilities | 4,627 | 1,108 | |||||
Net cash provided by operating activities | 682,546 | 571,286 | |||||
Cash flows provided by (used in) investing activities: | |||||||
Additions to unproved properties | (139,121) | (69,033) | |||||
Drilling and completion costs | (759,852) | (509,303) | |||||
Additions to other property and equipment | (13,073) | (10,128) | |||||
Proceeds from asset sales | 447 | 7,484 | |||||
Change in other assets | (2,538) | (7,271) | |||||
Net cash used in investing activities | (914,137) | (588,251) | |||||
Cash flows provided by (used in) financing activities: | |||||||
Repurchases of common stock | (75,356) | — | |||||
Borrowings on Credit Facility | 3,503,000 | 3,331,800 | |||||
Repayments on Credit Facility | (3,063,700) | (3,222,300) | |||||
Payment of debt issuance costs | — | (6,064) | |||||
Convertible note inducement | (86) | — | |||||
Distributions to noncontrolling interests in Martica Holdings LLC | (104,245) | (58,635) | |||||
Employee tax withholding for settlement of equity-based compensation awards | (27,443) | (27,024) | |||||
Other | (579) | (812) | |||||
Net cash provided by financing activities | 231,591 | 16,965 | |||||
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 | $ | 100,067 | 109,444 | ||||
Decrease in accounts payable and accrued liabilities for additions to property and equipment | $ | (22,300) | (4,574) | ||||
The following table sets forth selected financial data for the three months ended September 30, 2023 and 2024:
(Unaudited) | ||||||||||||
Three Months Ended | Amount of | |||||||||||
September 30, | Increase | Percent | ||||||||||
2023 | 2024 | (Decrease) | Change | |||||||||
Revenue: | ||||||||||||
Natural gas sales | $ | 516,214 | 425,802 | (90,412) | (18) | % | ||||||
Natural gas liquids sales | 482,570 | 504,200 | 21,630 | 4 | % | |||||||
Oil sales | 62,629 | 52,724 | (9,905) | (16) | % | |||||||
Commodity derivative fair value gains | 3,448 | 18,368 | 14,920 | 433 | % | |||||||
Marketing | 53,068 | 47,160 | (5,908) | (11) | % | |||||||
Amortization of deferred revenue, VPP | 7,701 | 6,812 | (889) | (12) | % | |||||||
Other revenue and income | 546 | 854 | 308 | 56 | % | |||||||
Total revenue | 1,126,176 | 1,055,920 | (70,256) | (6) | % | |||||||
Operating expenses: | ||||||||||||
Lease operating | 33,484 | 29,597 | (3,887) | (12) | % | |||||||
Gathering and compression | 216,435 | 226,224 | 9,789 | 5 | % | |||||||
Processing | 264,391 | 276,569 | 12,178 | 5 | % | |||||||
Transportation | 191,060 | 182,390 | (8,670) | (5) | % | |||||||
Production and ad valorem taxes | 32,258 | 47,423 | 15,165 | 47 | % | |||||||
Marketing | 69,542 | 62,144 | (7,398) | (11) | % | |||||||
Exploration | 591 | 671 | 80 | 14 | % | |||||||
General and administrative (excluding equity-based compensation) | 39,967 | 38,562 | (1,405) | (4) | % | |||||||
Equity-based compensation | 18,458 | 16,065 | (2,393) | (13) | % | |||||||
Depletion, depreciation and amortization | 176,259 | 170,197 | (6,062) | (3) | % | |||||||
Impairment of property and equipment | 13,476 | 13,455 | (21) | * | ||||||||
Accretion of asset retirement obligations | 889 | 998 | 109 | 12 | % | |||||||
Contract termination, loss contingency and settlements | 13,659 | (1,517) | (15,176) | * | ||||||||
Gain on sale of assets | (136) | (1,297) | (1,161) | 854 | % | |||||||
Other operating expense | 111 | 342 | 231 | 208 | % | |||||||
Total operating expenses | 1,070,444 | 1,061,823 | (8,621) | (1) | % | |||||||
Operating income (loss) | 55,732 | (5,903) | (61,635) | * | ||||||||
Other earnings (expenses): | ||||||||||||
Interest expense, net | (31,634) | (28,278) | 3,356 | (11) | % | |||||||
Equity in earnings of unconsolidated affiliate | 22,207 | 25,634 | 3,427 | 15 | % | |||||||
Loss on early extinguishment of debt | — | (528) | (528) | * | ||||||||
Total other expense | (9,427) | (3,172) | 6,255 | (66) | % | |||||||
Income (loss) before income taxes | 46,305 | (9,075) | (55,380) | * | ||||||||
Income tax expense | (13,663) | (1,212) | 12,451 | (91) | % | |||||||
Net income (loss) and comprehensive income (loss) including noncontrolling interests | 32,642 | (10,287) | (42,929) | * | ||||||||
Less: net income and comprehensive income attributable to noncontrolling interests | 14,834 | 10,157 | (4,677) | (32) | % | |||||||
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | $ | 17,808 | (20,444) | (38,252) | * | |||||||
Adjusted EBITDAX | $ | 271,203 | 186,900 | (84,303) | (31) | % | ||||||
* | Not meaningful |
The following table sets forth selected financial data for the three months ended September 30, 2023 and 2024:
Three Months Ended | Amount of | |||||||||||
September 30, | Increase | Percent | ||||||||||
2023 | 2024 | (Decrease) | Change | |||||||||
Production data (1) (2): | ||||||||||||
Natural gas (Bcf) | 208 | 200 | (8) | (4) | % | |||||||
C2 Ethane (MBbl) | 6,696 | 7,302 | 606 | 9 | % | |||||||
C3+ NGLs (MBbl) | 10,977 | 10,793 | (184) | (2) | % | |||||||
Oil (MBbl) | 918 | 856 | (62) | (7) | % | |||||||
Combined (Bcfe) | 320 | 313 | (7) | (2) | % | |||||||
Daily combined production (MMcfe/d) | 3,474 | 3,406 | (68) | (2) | % | |||||||
Average prices before effects of derivative settlements (3): | ||||||||||||
Natural gas (per Mcf) | $ | 2.48 | 2.13 | (0.35) | (14) | % | ||||||
C2 Ethane (per Bbl) (4) | $ | 11.73 | 8.01 | (3.72) | (32) | % | ||||||
C3+ NGLs (per Bbl) | $ | 36.81 | 41.30 | 4.49 | 12 | % | ||||||
Oil (per Bbl) | $ | 68.22 | 61.59 | (6.63) | (10) | % | ||||||
Weighted Average Combined (per Mcfe) | $ | 3.32 | 3.14 | (0.18) | (5) | % | ||||||
Average realized prices after effects of derivative settlements (3): | ||||||||||||
Natural gas (per Mcf) | $ | 2.46 | 2.14 | (0.32) | (13) | % | ||||||
C2 Ethane (per Bbl) (4) | $ | 11.73 | 8.01 | (3.72) | (32) | % | ||||||
C3+ NGLs (per Bbl) | $ | 36.76 | 41.56 | 4.80 | 13 | % | ||||||
Oil (per Bbl) | $ | 67.91 | 61.46 | (6.45) | (9) | % | ||||||
Weighted Average Combined (per Mcfe) | $ | 3.30 | 3.15 | (0.15) | (5) | % | ||||||
Average costs (per Mcfe): | ||||||||||||
Lease operating | $ | 0.10 | 0.09 | (0.01) | (10) | % | ||||||
Gathering and compression | $ | 0.68 | 0.72 | 0.04 | 6 | % | ||||||
Processing | $ | 0.83 | 0.88 | 0.05 | 6 | % | ||||||
Transportation | $ | 0.60 | 0.58 | (0.02) | (3) | % | ||||||
Production and ad valorem taxes | $ | 0.10 | 0.15 | 0.05 | 50 | % | ||||||
Marketing expense, net | $ | 0.05 | 0.05 | — | * | |||||||
General and administrative (excluding equity-based compensation) | $ | 0.13 | 0.12 | (0.01) | (8) | % | ||||||
Depletion, depreciation, amortization and accretion | $ | 0.55 | 0.55 | — | * | |||||||
* | Not meaningful |
(1) | Production volumes exclude volumes related to VPP transaction. |
(2) | Oil and NGLs production was converted at 6 Mcf per Bbl to calculate total Bcfe production and per Mcfe amounts. This ratio is an estimate of the equivalent energy content of the products and may not reflect their relative economic value. |
(3) | Average prices reflect 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. |
(4) | The average realized price for the three months ended September 30, 2023 includes |
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SOURCE Antero Resources Corporation
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