Antero Resources Corporation today announced the closing of an overriding royalty interest ("ORRI") transaction with Sixth Street Partners, LLC, a leading global investment firm, that will result in proceeds to the Company of up to $402 million. Proceeds will be used to repay revolver borrowings and the effective date of the transaction is April 1, 2020. Further, the Company announced that it is has repurchased additional 2021 senior notes during the second quarter and that $540 million of that issue remain outstanding. Pro forma for the initial proceeds from the ORRI transaction and the repurchase of senior notes during the quarter, the Company has approximately $745 million drawn on its revolving credit facility and $1.2 billion in liquidity under its credit facility as of March 31, 2020. 

Highlights: 

• Proceeds of $300 million were received at closing and up to an additional $102 million will be received over the next twelve months 
• The $102 million consists of two contingent payments of up to $51 million each based on volume thresholds that relate to cumulative production net to the ORRI through September 30, 2020 and March 31, 2021 
• ORRI transaction comprised of a 1.25% overriding royalty interest in all existing producing wells and a 3.75% overriding royalty interest in existing acreage in wells completed over the next three years 
• ORRI transaction does not burden Antero well completions beyond March 31, 2023 
• On a weighted average basis, the applicable overrides equate to an approximately 1.0% to 1.5% ORRI across Antero's entire asset base on a perpetual basis (based on an acreage, reserve and present value analysis)
• Following a 13% IRR and 1.5x cash-on-cash return to Sixth Street, Antero will have an 85% reversionary interest in the ORRI and Sixth Street will have a 15% remainder interest 
• Repurchased an additional $196 million notional amount of unsecured senior notes during the second quarter to date at a weighted average 17% discount 
• $540 million notional amount of 2021 senior notes remain outstanding 
• Current liquidity is $1.2 billion, pro forma for the transaction and the repurchases of senior notes during the second quarter to date 
• Borrowing base under the credit facility remains unchanged at $2.85 billion following the ORRI transaction  

Paul Rady, Chairman and Chief Executive Officer of Antero, commented, 
"The ORRI transaction addresses over half of our $650 to $900 million asset sale goal for 2020 and allows us to pay down debt, while importantly retaining the long-term upside of our core acreage position.  Additional asset sales and projected free cash flow during 2020 will be used to further reduce debt."   

Commenting on the transaction, Glen Warren, President, and Chief Financial Officer of Antero said, 
"We continued to repurchase bonds during the second quarter, reducing the outstanding principal amount of our 2021 bonds to $540 million.  The ORRI transaction increases our liquidity, reduces debt, and positions us to address our upcoming bond maturities.  Importantly, our borrowing base remains unchanged following this transaction, which further supports our liquidity profile."

Matt Dillard, Partner at Sixth Street, commented, 
"Antero has built an extensive core acreage position in one of the lowest cost shale basins in the U.S.  Our investment further strengthens Antero's balance sheet and provides a clear path for the company to develop its attractive acreage position for many years to come.  We are excited to participate in this shale development alongside a proven team with a long-term track record of industry success."  

Credit Suisse Securities (USA) LLC was sole financial advisor to Antero on the ORRI transaction and Vinson & Elkins LLP was the legal advisor. 

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