Antero Resources has announced its fourth quarter and full year 2019 financial and operational results as well as its 2020 capital budget, guidance and proved reserves as of December 31, 2019. 

Fourth Quarter and Full Year 2019 Highlights Include:

• Net production averaged 3,185 MMcfe/d (30% liquids by volume) during the fourth quarter and 3,220 MMcfe/d for the full year, a 19% year-over-year increase compared to 2018
• Realized natural gas equivalent price averaged $3.18 per Mcfe during the quarter
• Includes pre-hedge C3+ NGL price of $29.61/Bbl
• All-in cash expenses were $2.34 per Mcfe during the quarter, a $0.22, or 8% reduction from the first half of 2019
• Net marketing expense was $0.17 per Mcfe during the quarter, a $0.05 or 23% decrease from the prior quarter
• Drilling and completion capital spending was $300 million during the fourth quarter and $1.27 billion for the full year, an 11% and 14% decrease, respectively, compared to the prior year periods
• Proved reserves increased 5% to 18.9 Tcfe at year-end 2019 compared to year-end 2018 and proved developed reserves increased 13% to 11.7 Tcfe
• Future development cost estimate for 7.2 Tcfe of proved undeveloped reserves is $0.37 per Mcfe

2020 Guidance Highlights:                                                                                                

• Drilling and completion capital budget of $1.15 billion, down 10% from 2019
• Full year 2020 net production is expected to average 3,500 MMcfe/d, a 9% increase over 2019 net production
• Liquids production, including oil, C3+ NGLs, and ethane assuming 25% recovery, is expected to average 187,500 Bbl/d
• All-in cash expenses, including net marketing expense, are expected to be $2.25 to $2.35 per Mcfe, an $0.18 decrease from 2019
• Net marketing expense is forecast to be $0.10 to $0.12 per Mcfe, an $0.11 decline from 2019
• Natural gas production guidance is 94% hedged at $2.87/MMBtu
• Estimated oil and oil-equivalent production of 26,000 Bbl/d (pentanes are hedged to WTI) is 100% hedged in 2020 at $55.63/Bbl

Paul Rady, Chairman and Chief Executive Officer of Antero Resources commented, 
"Our 2020 capital budget highlights the direct benefit from our well cost savings initiatives that we launched in 2019.  In simple terms, we have reduced our total well cost per foot from $970 in the initial 2019 budget to a target of $795 to $825 per for 2020. The result is a 10% reduction in drilling and completion capital and a 28% reduction in lease operating expense as compared to 2019, while delivering production growth of 9%. This level of production in turn should trigger $75 million in previously announced gathering, processing and transportation expense savings in 2020 and paves the way for up to $350 million in total savings between 2020 and 2023. Additionally, by growing into our unutilized firm transportation commitments we reduce our cost structure by another $200 million by 2022."

Mr. Rady continued, 
"We believe that our industry-leading hedge portfolio and diversified production mix, combined with our ability to export more than 50% of our C3+ NGL production to premium international markets, provides Antero with a competitive advantage throughout commodity price cycles. Our cost savings initiatives and liquids exposure result in a projected cash flow neutral profile for 2020 at current strip pricing including the $125 million water earnout payment received in January from Antero Midstream."

Fourth Quarter 2019 Financial Results

For the three months ended December 31, 2019, Antero reported a GAAP net loss of $482 million, or $1.61 per diluted share, compared to a GAAP net loss of $122 million, or $0.39 per diluted share, in the prior year period. Adjusted Net Loss (non-GAAP measure) was $6 million, or $0.02 per diluted share, compared to Adjusted Net Income of $175 million during the three months ended December 31, 2018, or $0.56 per diluted share. The Adjusted Net Loss reflects a $468 million impairment based on the fair value of our equity interest in Antero Midstream at year end 2019.

Adjusted EBITDAX (non-GAAP measure) was $295 million, a 38% decrease compared to $475 million in the prior year period due to lower commodity pricing. Antero's average realized price after hedges declined 20% from $3.97 per Mcfe in the fourth quarter of 2018 to $3.18 per Mcfe in the fourth quarter of 2019.

Production

Net daily natural gas equivalent production in the fourth quarter averaged 3,185 MMcfe/d, including 160,183 Bbl/d of liquids (30% liquids by volume). Liquids revenue represented approximately 41% of total product revenue before hedges.  Production declined 1% from the prior year period due to the timing of well completions in 2019 as two pads, totaling 13 wells, were turned to sales in late December of 2019. 

Year End Proved Reserves

At December 31, 2019, Antero's estimated proved reserves were 18.9 Tcfe, a 5% increase over the prior year.  Estimated proved reserves were comprised of 61% natural gas, 38% NGLs and 1% oil. The Marcellus Shale accounted for 92% of estimated proved reserves and the Ohio Utica Shale accounted for 8%. For 2019, Antero added 3.7 Tcfe of estimated proved reserves. Approximately 2.3 Tcfe was removed from Antero's proved reserves due to the SEC 5-year rule, primarily related to changes in drilling locations in our 5-year development plan.

Estimated proved developed reserves were 11.7 Tcfe, a 13% increase over the prior year. The percentage of estimated proved reserves classified as proved developed increased to 62% at year-end 2019, compared to 58% at year-end 2018.  Antero's 328 proved undeveloped locations average an estimated 1258 BTU, with an average lateral length of approximately 12,500 feet.

Antero's 7.2 Tcfe of estimated proved undeveloped reserves will require an estimated $2.6 billion of future development capital over the next five years, resulting in an estimated average future development cost for proved undeveloped reserves of $0.37 per Mcfe. 

2020 Capital Budget ($ in Billions)

Link to Antero Resources US onshore country profile