Antero: Proved Reserves Up 16% to 15.4 Tcfe, Latest Slides
Quick. Who has the largest core acreage position in the Marcellus/Utica? And which company runs more than one-third of all the rigs operating in the Marcellus/Utica? The answer to both those questions would be Antero Resources. They also have some of the lowest drilling (i.e. breakeven) costs in the industry–and some of the highest hedges (prices they get for the gas). Put it altogether and Antero is one of the most important drillers in our beloved shale plays. Antero won’t release full year 2016 numbers until later this month, but ahead of that, they’ve just released two helpful documents. The first is a press release announcing proved reserves and drilling/development costs. The second is the latest series of PowerPoint slides, the February 2017 company presentation (a preview of the 2016 update). We have both items for you below…
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We have sad news to report. A young man, just 19 years old, was killed when he was “struck by a truck, then pinned between the truck and a stationary object” at an Antero Resources well pad site in Tyler County, WV last Thursday. Hunter Osborn, of Lewis County, WV, worked for U.S. Well Services, the fracking company hired by Antero. The well pad is called the Hartley East Pad in Middlebourne. Mr. Osborn was pinned between a tractor trailer backing up to unload sand and a sand silo. Our thoughts and prayers go out to the family and friends of this young man. Below are the details we could find about the accident…
Rex Energy announced yesterday the company has cut a deal with Antero Resources to sell all of Rex’s “Warrior South Area” assets to Antero. Which may should like a big deal, but really isn’t. The assets sold include 4,100 net acres in perhaps the hottest part of the Ohio Utica Shale: Guernsey, Noble and Belmont counties. It also includes 14 Utica Shale wells. However, the wells are only producing 9 million cubic feet per day (MMcf/d) collectively. The sale price is $30 million–or $7,317 per acre. Rex says the acreage and wells are in a “non-core” area for the company. Rex, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), has had its share of financial challenges. In December the company was warned by the New York Stock Exchange that the per share price is too low and the stock is in danger of being delisted (see 
Ladies and gentleman: Start your drill bits! Yesterday Antero Resources, one of the biggest drillers in the Marcellus/Utica, released their road map for what lies ahead in 2017 for the company. Among the gems: The company plans to do a serious amount of drilling. They will have drilled 170 new wells, bringing them online, by the end of the year, with another 30 drilled but not completed. Antero will spend $1.3 billion to do it–with another $200 million spent on land deals. Daily production is forecast to average somewhere around 2.1 to 2.2 billion cubic feet (Bcf) per day, up 20-25% over production in 2016. Observation: Antero will spend about what it spent last year, but still goose production by nearly a quarter more than last year. Talented folks! Antero, as we’ve previously highlighted, has what we consider to be the best hedging in the business. They announced two-thirds of their production for 2017 is hedged at $3.68/Mcf (thousand cubic feet). In fact, all of their production for this year is hedged, at various price points. The spot price of natural gas today, as this was being written, was $3.27/Mcf. Here is Antero’s success road map for the next 365 days…
A kerfuffle erupted yesterday when Chapter IV Investors, a Charlotte, NC-based investment firm with investments in EQT, Range Resources and Antero Resources, announced it had sent a letter to EQT urging the company to consider merging with either Range Resources or Antero Resources. Chapter IV, which is essentially two big-money investors (W. Barnes Hauptfuhrer, Managing Partner and Portfolio Manager, and Ryan J. Jack, Partner), does not own enough stock in any of the companies (less than 1% in each) to throw its weight around like a corporate raider. Rather, it appears to be two investors attempting to grab the attention of these companies and their shareholders by issuing a press release (full copy below) with a plan they say would create a new Marcellus/Utica driller worth more than $25 billion. Obviously the value of investments for Chapter IV would go up under such a scenario–so there is self-interest at work here. However, we don’t detect any kind of bullying on the part of Chapter IV, like that of a raider Carl Icahn (successful takeover of Chesapeake Energy & Cheniere Energy) or Keith “Mini-Me” Meister (unsuccessful attempt to takeover Williams). Rather, it appears to be a couple of investors who believe there is an honest and good case for a combination of EQT with another company, and were willing to spend $500 on a press release to make their case. Are they right?…
In September, MDN brought you research on 10 of the largest Marcellus/Utica drillers that have “hedged” their 2017 production (see 
Earlier this week we ran the news that Canadian pipeline giant TransCanada’s plan to radically lower the cost to pipe natural gas from the western regions of Canada to the eastern part of the country, in an effort to undercut Marcellus/Utica gas from flooding into the region, failed (see 
We can’t say enough good things about Rusty Braziel and 
Last Thursday Antero Midstream, the wholly-owned midstream subsidiary of powerhouse Marcellus/Utica driller Antero Resources, announced it is floating a round of “senior notes” (otherwise known as IOUs) to help the company pay off older debt. New debt for old debt. Not a game we enjoy playing, but Wall Streeters dig it. Antero Midstream first said they hoped to get $500 million for the notes, but later issued a second announcement “upsizing” the offering (like supersizing your fries at McDonalds) to $650 million. Such upsizing is typical (we’ve seen it dozens of times before). Here’s the announcements from Antero from last week…