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
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
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
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
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.
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.
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.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
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.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.