Antero Resources 3Q15: Bucks the Trend, $237M in the Black!
Antero Resources, perhaps the largest driller completely focused on the Marcellus/Utica (by acreage), is also one of the few drillers that separates their operational updates from financial updates. Two weeks ago Antero published their third quarter 2015 operational update–the “good news” if you will (see Antero 3Q15 Operational Update: Production Up 39%, Gets $3.99/Mcf). There was, justifiably, plenty to crow about in their operational update. With yesterday’s financial update, this is normally where you might expect to the see “the bad news.” So far every driller we’ve covered lost money in 3Q15. But not, it seems, Antero! They made money in 3Q15. If we’re reading the financials correctly, it looks to us like Antero’s net revenue was $237 million in 3Q15. While net revenue is down slightly from 3Q14, Antero stayed in the black, which is no small feat. How did they do it? Some of it may be accounting maneuvers–selling their water business to their midstream subsidiary for $794 million. However, it appears Antero’s ace in the hole was their ability to hedge and get more money for their gas than others (an average of $3.99/Mcf). Antero’s production increased dramatically in 3Q15 over the previous year–up 39%. And they got more money for their gas. And they didn’t spend as much money in 3Q15, scaling back on their drilling budget. Combine it all together and it’s big news indeed that Antero did well financially in 3Q15. Perhaps the only dark cloud (a seriously dark cloud) is that the company continues to swim in debt. Antero’s debt increased from $4 billion to $4.5 billion in 3Q15 (the company’s stock is only worth $5.7 billion)…
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Along with releasing their third quarter financial update yesterday, Antero Resources also released an updated investor PowerPoint presentation. There’s a lot of interesting slides in the deck, and we didn’t want it to get lost with the other (big) Antero news in their update, so we’re bringing you this second, separate post. Below we have the presentation embedded, along with a listing of our favorite slides and brief description of what they show/why the slides are notable…
It’s obvious that Hess has pretty much given up on its Utica Shale drilling program. Just last week we told you that Hess is shopping the rest of its remaining Utica acreage (see 
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Equitrans files with FERC to build Marcellus pipeline; PennLive’s repackaged hit series on shale; Philly keeps pushing energy hub concept; Spectra exec says ignore the antis, pay attention to FERC instead; Duke turns its attention back to natgas; midstream dominates M&A; Big Data comes to water management; Saudis trying to torpedo climate talks; and more!
Shortly after assuming the office of Secretary of the Pennsylvania Dept. of Environmental Protection, John Quigley (who formerly worked for the anti-drilling Big Green group PennFuture) mass-fired a very important group at the DEP called the Oil & Gas Technical Advisory Board, or TAB (see 
We’ve heard just about everything blamed on fracking. Global warming? Yep–blame fracking because fracking produces natural gas and natural gas, when burned, turns into carbon dioxide and and abundance of CO2 in the atmosphere supposedly heats the planet (although the average temp hasn’t gone up in nearly 19 years now). What about STDs–sexually transmitted diseases? Yep–blame fracking because nefarious roustabouts from “foreign” locations like Texas and Oklahoma show up to work on rigs, and the only off-hours things they do is screw the local women-folk and spread STDs all over the place (do you honestly think they have an ounce of energy left after working a 12-15 hour day lifting heavy stuff at a rig site?). Here’s a new one we’ve just heard for the first time: you can blame fracking in places like Pennsylvania for the high cost of firewood this winter. Say what???…
EdgeMarc Energy is a small driller headquartered in the Pittsburgh area, formed in 2012. The company has leased 50,000 acres in the Marcellus and Utica Shales. On Monday EdgeMarc issued a press release to announce they’ve attracted a new investor–the Ontario Teachers’ Pension Plan–which has promised the company up to $300 million in cash in return for part ownership (called an “equity commitment”). The announcement also says EdgeMarc currently drills and produces natural gas in Monroe and Washington counties in Ohio, and Butler County in Pennsylvania. In checking the latest issue of our 
EXCO Resources is an exploration and production company operating in East Texas/North Louisiana (the Haynesville Shale), South Texas (the Eagle Ford Shale), and in the Marcellus Shale region–in Pennsylvania and West Virginia. EXCO has a sizable Marcellus presence with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells. EXCO is also a company in trouble. Their stock price has gone so low the New York Stock Exchange is threatening to de-list them (see 
Layoffs in the natural gas industry have cut wide and deep. We spotted one article recently that said layoffs worldwide have hit 200,000 (see Forbes: 
A gang of Big Green groups are tickled pink–or is it tickled “green”–that their continuous frivolous lawsuits against the federal Environmental Protection Agency (EPA) have once again yield the desired result. Radical leftist “green” groups like Earthworks, Environmental Integrity Project, THE Delaware Riverkeeper, and yes, PennFuture (where PA’s current Secretary of the Dept. of Environmental Protection, John Quigley, used to work), had previously sued the federal EPA to force onerous new reporting rules on natural gas processing plants, using lies about the kinds of air pollutants released by the plants. The EPA cooperates with these sleazy organizations in a “sue and settle” scam. “Hey, you sue us for this, a liberal judge will ‘make us’ do it–then we can bypass Congress and everyone else and set up our own laws outside of that stupid old Constitution.” That’s how these groups collude with the EPA (see 
May we paint with broad brush-strokes for a moment? It’s been our observation over the years that anti-drillers (and anti-pipeliners, and anti-fossil fuelers) are typically liberal Democrats who have bought into the notion that (a) mankind is catastrophically heating up ole Mother Earth, and (b) they (the lib Dems) are uniquely qualified to run your life for you by choosing your energy sources. They love to tell you how to live your life–i.e. deny you freedom to live your life they way you want to, including selecting your own energy sources. It’s also been our observation that many (not all, but many) of the most vocal antis are hippie retreads who haven’t been this jazzed about a “cause” since the end of the Vietnam war. Yes that’s a very broad generalization and not true in all circumstances–but it’s more true than not. On the other side of the isle, when we’ve attended meetings about fracking and pipelines and FERC scoping hearings–we’ve noticed landowners and small business owners and pro-drillers are the “gray heads with hats” and blue jeans in the crowd. Typically quiet. Perhaps a bit uncomfortable that they’re in the same room with a largely lawless bunch of mouthy antis. The antis tend to form all sorts of groups with innocuous sounding names (Riverkeeper, Mountainkeeper, Trout, Clean Air, Community Rights, etc.). Pro-drillers and landowners? They don’t form groups so much. They don’t protest so much. They’re too busy working their fingers to the bone–paying for the welfare state anti-drillers avail themselves of! So when a group of pro-energy people DO form a group–that’s news. Such a group has formed in Ohio and Michigan in order to support two much-needed pipeline projects–Energy Transfer’s Rover Pipeline and Spectra Energy’s NEXUS Pipeline…
Here’s something that should scare the #$%@ out of you this Halloween: the Community Environmental Legal Defense Fund (CELDF). The CELDF, based in Pennsylvania, is attempting to interfere in other states like Ohio by fleecing local governments into believing they can pass so-called community bill of rights legislation (i.e. “home rule” laws). Problem is, the local communities who have tried it keep getting sued, and losing in court–and taxpayers end up paying tens of thousands of dollars in legal fees in an empty gesture to make a statement opposing shale energy. Our friends at Energy in Depth have put together a video for this Halloween that exposes the CELDF and should scare you to death, especially if you live in Youngstown, OH where a CELDF ballot initiative will be on the ballot this November (next week), for the FIFTH TIME…