All CATEGORIES
☰ Menu
Ohio Utica Shale

Antero Resources releases first quarter 2014 report

By Bob Downing Published: May 8, 2014

From Antero Resources:

DENVER, May 7, 2014 /PRNewswire/ --

 

Antero Resources Corporation (NYSE: AR) ("Antero" or the "Company") today released its

first quarter 2014 financial results. The relevant financial statements are included in Antero's Quarterly Report on Form 10-Q for the

quarter ended March 31, 2014, which has been filed with the Securities and Exchange Commission ("SEC").

First Quarter Highlights:

Record net daily gas equivalent production averaged 786 MMcfe/d, a 105% increase over the prior year quarter and 16% sequentially

Record net daily liquids production averaged 16,332 Bbl/d, a 583% increase over the prior year quarter and 46% sequentially

Realized natural gas price before hedging averaged $5.05 per Mcf, a 38% increase from the prior year quarter and an $0.11 per Mcf premium to the average NYMEX price for the quarter

Realized NGL price (C3+) averaged $61.69 per barrel for the quarter, or 62% of NYMEX WTI

Realized natural gas equivalent price including NGLs, oil and hedge settlements averaged $5.79 per Mcfe, a 10% increase from the prior year quarter and 10% sequentially

Adjusted net income was $88 million, a 225% increase over the prior year quarter and 21% sequentially

Adjusted EBITDAX was $274 million, a 130% increase over the prior year quarter and 27% sequentially

Adjusted EBITDAX margin was $3.87 per Mcfe, a 13% increase over the prior year quarter and 12% sequentially

Borrowing base increased by 50% to $3.0 billion and lender commitments increased by 33% to $2.0 billion

Commenting on the first quarter results, Paul Rady, Antero's Chairman of the Board and CEO, said, "Antero's record gas equivalent and liquids production combined with our strong realized prices and high cash flow per Mcfe demonstrate the success of our strategy to

emphasize liquids-rich production growth, midstream infrastructure and firm takeaway capacity. Further, we have assembled one of the

largest core liquids-rich drilling inventories in Appalachia and built the balance sheet to support our momentum for many years to

come."

Recent Developments

Senior Notes Offering

On May 6, 2014, Antero closed a private placement of $600 million of 5.125% senior unsecured notes due December 2022 at par. Antero

received net proceeds of approximately $591.6 million, a portion of which will be used to finance the redemption of the Company's

outstanding 7.25% senior notes due 2019 and the remaining net proceeds were used to repay a portion of the outstanding borrowings

under its credit facility.

Borrowing Base Redetermination and Financial Liquidity

On May 5, 2014, Antero entered into a $3.5 billion amended and restated credit facility that extends the maturity until May 2019. As a

result of the significant growth in value of the Company's proved developed reserve base since the previous borrowing base determination

in August of 2013, the borrowing base was increased by 50% to $3.0 billion. In addition, lender commitments under the facility were

increased by 33% to $2.0 billion. The $2.0 billion commitment may be expanded to the borrowing base upon receipt of the requisite bank

approval.

As of March 31, 2014, pro forma for the senior notes offering and the borrowing base and lender commitments increase under the

Company's credit facility, Antero had $13 million in cash, $431 million drawn under the credit facility and $73 million in letters of credit

outstanding, resulting in $1.5 billion of available liquidity and $2.5 billion of unused borrowing base capacity.

Piedmont Lake Utica Shale Lease Acquisition

Antero recently leased 6,363 net acres under and around Piedmont Lake in Belmont and Harrison Counties, Ohio from the Muskingum

Watershed Conservancy District ("MWCD"), Ohio's biggest water conservancy district, for $95 million. The acreage provides the

Company with 29 gross 3P locations assuming 1,000' inter-lateral distance. This represents the second transaction Antero has entered into

with the MWCD. In 2013, the Company signed a lease with the MWCD to develop 6,500 acres under and around the MWCD's Seneca

Lake property in Guernsey and Noble Counties, Ohio. Antero currently holds 115,000 net acres in the core of the Utica Shale play in

Ohio.

Marcellus Shale Processing

Antero recently committed to a sixth 200 MMcf/d cryogenic processing plant at the Sherwood facility located in Doddridge County, West

Virginia. The Company now has committed to a total of 1.15 Bcf/d of Marcellus cryogenic processing capacity by the second quarter of

2015, 550 MMcf/d of which is currently in service. Ethane is currently being rejected at the processing facility and left in the gas stream.

First Quarter 2014 Financial Results

For the three months ended March 31, 2014, Antero reported a net loss from operations of $95 million, or $(0.36) per basic and diluted

share, compared to a net loss of $48 million, or $(0.18) per basic and diluted share, in the first quarter of 2013. The GAAP net loss for the

first quarter of 2014 included the following items:

Non-cash losses on unsettled hedges of $248 million ($153 million net of tax)

Non-cash stock compensation expense for profits interests awards, that are non-dilutive to public shareholders, of $29 million

($29 million net of tax)

Excluding these items, the Company's results for the first quarter of 2014 were as follows:

Adjusted net income of $88 million, or $0.34 per basic and diluted share, a 225% increase compared to $27 million, or $0.10 per

basic and diluted share, in the first quarter of 2013

Adjusted EBITDAX of $274 million, a 130% increase compared to $119 million in the first quarter of 2013

Adjusted EBITDAX margin of $3.87 per Mcfe, a 13% increase compared to $3.44 per Mcfe in the first quarter of 2013

Cash flow from operations before changes in working capital of $238 million, a 179% increase compared to $85 million in the

first quarter of 2013

For reconciliations of adjusted net income, adjusted EBITDAX, adjusted EBITDAX margin and cash flow from operations before

changes in working capital to the most comparable GAAP measures, please read "Non-GAAP Financial Measures."

Net production for the first quarter of 2014 averaged a record 786 MMcfe/d, an increase of 105% from the first quarter of 2013 and 16%

from the fourth quarter of 2013. Net production was comprised of 688 MMcf/d of natural gas (88%), 13,316 Bbl/d of natural gas liquids

("NGLs") (10%) and 3,016 Bbl/d of crude oil (2%). First quarter 2014 net liquids production averaged a record 16,332 Bbl/d, an increase

of 583% from the first quarter of 2013 and 46% from the fourth quarter of 2013. The net production increase was driven by production

from 24 new Marcellus wells and 12 new Utica wells brought on line in the first quarter of 2014.

Average natural gas price before hedging increased 38% from the prior year quarter to $5.05 per Mcf, an $0.11 per Mcf premium to the

average NYMEX price during the quarter. This premium to NYMEX is slightly above the top end of Antero's $0.00 to $0.10 per Mcf

guidance for the year. Approximately 45% of Antero's first quarter 2014 natural gas revenue was realized at the Columbia Gas

Transmission (TCO) index price at a $0.01 per Mcf differential to NYMEX but at a net $0.38 per Mcf premium to NYMEX after Btu

upgrade due to ethane remaining in the natural gas stream. The Company's remaining natural gas revenue was realized at various other

index pricing points at a $0.43 per Mcf differential to NYMEX but at a net $0.11 per Mcf differential to NYMEX after Btu upgrade.

Average realized C3+ NGL price for the first quarter of 2014 was $61.69 per barrel, or 62% of the NYMEX WTI oil price, and the

average realized oil price was $88.87 per barrel, a negative differential to NYMEX WTI of $9.88 per barrel. Average natural gas

equivalent price including NGLs and oil, but excluding hedge settlements, increased 50% to $5.80 per Mcfe from the prior year quarter.

Average natural gas equivalent price including NGLs, oil and hedge settlements increased by 10% to $5.79 per Mcfe for the first quarter

of 2014 as compared to the first quarter of 2013. For the first quarter of 2014, Antero realized hedging losses of $1.1 million, or $0.01 per

Mcfe.

GAAP Revenue for the first quarter of 2014 was $165 million as compared to $61 million for the first quarter of 2013. Revenue for the

first quarter of 2014 included a $248 million non-cash loss on unsettled hedges while the first quarter of 2013 included a $120 million

non-cash loss on unsettled hedges, both due to rising natural gas prices during the quarter. Non-GAAP adjusted net revenue increased

127% to $413 million compared to the first quarter of 2013 including cash-settled hedge gains and losses but excluding non-cash unsettled

hedge losses. Liquids production contributed 24% of natural gas, NGLs and oil revenue before hedges in the first quarter of 2014

compared to 9% during the first quarter of 2013. For a reconciliation of adjusted net revenue to total revenue, the most comparable

GAAP measure, please read "Non-GAAP Financial Measures."

Per unit cash production expense (lease operating, gathering, compression, processing and transportation, and production tax) for the first

quarter of 2014 was $1.67 per Mcfe a 14% increase compared to $1.47 per Mcfe in the prior year quarter. The increase was primarily

driven by firm transportation costs associated with the Enterprise ATEX ethane pipeline. Per unit cash production expense is expected to

decrease throughout the year as increased production will reduce the per unit effect of fixed costs associated with firm transportation

costs. Per unit general and administrative expense for the first quarter of 2014, excluding non-cash stock compensation expense, was

$0.31 per Mcfe, a 16% decrease from the first quarter of 2013. The decrease was primarily driven by the increase in net production. Per

unit depreciation, depletion and amortization expense increased 9% from the prior year quarter to $1.29 per Mcfe, primarily driven by

higher depreciation on gathering and fresh water distribution assets as the Company continued to build out these systems in the rich gas

areas of the Marcellus and Utica Shale.

Capital Spending

Antero's total capital expenditures for the three months ended March 31, 2014 were $732 million, consisting of drilling and completion

costs of $496 million, gathering and compression costs of $108 million, fresh water distribution project costs of $60 million, leasehold

acquisitions of $60 million and $8 million of other capital expenditures. In connection with the recently signed lease for the Piedmont

Lake acreage, Antero has increased its 2014 capital budget by approximately $100 million to $2.85 billion.

SUBSCRIBE VIA RSS

OHIO.COM VIDEOS

See the most recent drilling report and an injection wells map From NewsOutlet.org
  • Main Blog Promo
  • Cavs Blog Promo
  • Browns Blog Promo
  • Indians Blog Promo
  • Beer Blog Promo
  • Fracking Blog Promo
  • High School Blog Promo
  • Zips Blog Promo
  • Akron Dish Food Blog
Prev Next

Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.