DENVER, March 13, 2019 /PRNewswire/ -- Antero
Resources (NYSE: AR) ("Antero Resources", or "AR") today
announced receipt of consideration in connection with the closing
of the previously announced simplification transaction between
Antero Midstream GP LP (NYSE: AMGP) ("AMGP") and
Antero Midstream Partners LP (NYSE: AM) ("Antero
Midstream Partners" or "AM"). At closing, AMGP was converted
from a Limited Partnership to a Corporation and was renamed Antero
Midstream Corporation ("New AM"). Beginning on March 13, 2019, New AM's common stock will trade
on the NYSE under the ticker symbol AM. With the closing of
this transaction, Antero Resources will no longer consolidate
Antero Midstream Partners' financial and operating results in
Antero Resources' consolidated financial statements. Antero
Resources will account for its interest in New AM under the equity
method of accounting. This new financial statement
presentation will be substantially the same as the previously
categorized "Stand-alone" data that was historically
reported. Please see the accompanying presentation on our
website titled "Simplification and Deconsolidation: Catalyst for
Outperformance" for supplemental details.
Highlights Include:
- AR received $297 million in
cash and 158.4 million New AM shares, reflecting a 31% current
ownership in New AM
- Pro forma December 31, 2018
Net Debt to trailing twelve month EBITDAX was 2.1x
- AR will report its financial and operational results on a
Stand-alone upstream basis only, beginning with the first quarter
of 2019, along with deconsolidating of New AM and accounting for
its interest in New AM under the equity method of
accounting
- Reaffirming all previously disclosed Stand-alone guidance.
Consolidated guidance will no longer be provided as a result of the
deconsolidation.
- Pro forma financial statements for the year ended
December 31, 2018 reflecting the
deconsolidation of Antero Midstream Partners will be included in
Current Report on Form 8-K to be filed by AR later today
Paul Rady, Chairman and CEO
commented, "This improved visibility and simplified corporate
structure, alongside a diversified production mix and
industry-leading hedge book, result in a low-risk E&P profile
positioned to maximize returns across the commodity price
cycles. We remain committed to our long-term strategy of
spending within cash flow, continuing to delever our already strong
balance sheet and then returning free cash flow to
shareholders. We project 2019 capital to be at the low end of
the guidance range, with a continued focus on keeping capital
spending within cash flow."
Glen Warren, President, and Chief
Financial Officer added, "With the simplification of our midstream
structure and the deconsolidation of our financial statements, we
have made significant progress in improving Antero's financial
transparency. We believe the deconsolidation showcases the
strength of our balance sheet and highlights the independence of
the two companies. As of year-end 2018, we have reduced
leverage to 2.1x leverage on a pro forma basis, while growing to
become the 4th largest natural gas producer and the
largest NGL producer in the U.S. today. This was achieved
only nine years after placing our first well online."
2019 Capital Budget and Guidance
The following is a summary of Antero Resources' 2019 capital
budget for drilling and completion and land capital as previously
announced on January 8, 2019, and
previously categorized as Stand-alone. As a result of the
deconsolidation, all previously communicated consolidated guidance
and targets should no longer be relied upon. All other
guidance items are unchanged, as detailed in the Form 8-K filed
today.
Capital Budget ($
in MM)
|
|
|
|
|
|
|
Low
|
|
High
|
Drilling &
Completion
|
|
|
$1,300
|
|
$1,450
|
Land
Capital
|
|
|
$75
|
|
$100
|
Total Capital
|
|
|
$1,375
|
|
$1,550
|
|
|
|
|
|
|
The following is a
summary of Antero Resources' 2019 production guidance as previously
announced on January 8, 2019.
|
|
Production
Guidance
|
|
|
|
|
|
|
Low
|
|
High
|
Net Daily Production
(MMcfe/d)
|
|
|
3,150
|
|
3,250
|
|
|
|
|
|
The following is a
summary of Antero Resources' 2019 expense guidance as previously
announced on January 8, 2019.
|
|
|
|
|
Cash Expense
Guidance
|
|
|
Low
|
|
High
|
Cash Production
Expense ($/Mcfe)(1)
|
|
|
$2.15
|
|
$2.25
|
G&A Expense
($/Mcfe) (2)
|
|
|
$0.10
|
|
$0.14
|
|
|
|
|
|
|
(1)
|
Includes lease
operating expenses, gathering, compression, processing,
transportation expenses and production and ad valorem
taxes.
|
(2)
|
Excludes equity-based
compensation.
|
Total Debt and Net Debt
Net Debt is calculated as total debt less cash and cash
equivalents. Management uses Net Debt to evaluate its
financial position, including its ability to service its debt
obligations.
The following table reconciles pro form Net Debt as used in this
release (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
AR bank credit
facility
|
|
|
|
|
|
405,000
|
|
5.375% AR senior
notes due 2021
|
|
|
|
|
|
1,000,000
|
|
5.125% AR senior
notes due 2022
|
|
|
|
|
|
1,100,000
|
|
5.625% AR senior
notes due 2023
|
|
|
|
|
|
750,000
|
|
5.000% AR senior
notes due 2025
|
|
|
|
|
|
600,000
|
|
Net unamortized
premium
|
|
|
|
|
|
1,241
|
|
Net unamortized debt
issuance costs
|
|
|
|
|
|
(26,700)
|
|
Total debt
|
|
|
|
|
|
3,829,541
|
|
Less: AR cash and cash
equivalents
|
|
|
|
|
|
—
|
|
Debt
|
|
|
|
|
|
3,829,541
|
|
|
|
|
|
|
|
|
|
Less: Proceeds from
Antero Midstream Simplification
|
|
|
|
|
|
297,000
|
|
Pro Forma Net
Debt
|
|
|
|
|
|
3,532,541
|
|
The following table reconciles Net Income as reported in the
Parent column of Antero's guarantor footnote to its financial
statements to Adjusted EBITDAX for the twelve months ended
December 31, 2018, as used in this release (in thousands):
|
|
Twelve months
ended
|
|
(in
thousands)
|
|
December 31,
2018
|
|
Net (loss) and
comprehensive (loss) attributable to Antero Resources
Corporation
|
|
$
|
|
|
|
(397,517)
|
|
Commodity derivative
fair value losses
|
|
|
|
|
|
87,594
|
|
Gains on settled
commodity derivatives
|
|
|
|
|
|
243,112
|
|
Marketing derivative
fair value gains
|
|
|
|
|
|
(94,081)
|
|
Gains on settled
marketing derivatives
|
|
|
|
|
|
72,687
|
|
Interest
expense
|
|
|
|
|
|
224,977
|
|
Income tax
benefit
|
|
|
|
|
|
(128,857)
|
|
Depletion,
depreciation, amortization, and accretion
|
|
|
|
|
|
845,136
|
|
Impairment of unproved
properties
|
|
|
|
|
|
549,437
|
|
Impairment of gathering
systems and facilities
|
|
|
|
|
|
4,470
|
|
Exploration
expense
|
|
|
|
|
|
4,958
|
|
Gain on change in fair
value of contingent acquisition consideration
|
|
|
|
|
|
93,019
|
|
Equity-based
compensation expense
|
|
|
|
|
|
49,341
|
|
Equity in loss of
Antero Midstream Partners LP
|
|
|
|
|
|
3,664
|
|
Distributions from
Antero Midstream Partners LP
|
|
|
|
|
|
159,181
|
|
Adjusted
EBITDAX
|
|
$
|
|
|
|
1,717,121
|
|
Antero Resources is an independent natural gas and oil
company engaged in the acquisition, development and production of
unconventional liquids-rich natural gas properties located in the
Appalachian Basin in West Virginia
and Ohio.
This release includes "forward-looking statements".
Such forward-looking statements are subject to a number of risks
and uncertainties, many of which are Antero Resources'
control. All statements, except for statements of historical
fact, made in this release regarding activities, events or
developments Antero Resources expects, believes or anticipates will
or may occur in the future, such as those regarding future
commodity prices, future production targets, future capital
spending plans, estimated realized natural gas, natural gas liquids
and oil prices, acreage quality and expected drilling and
development plans (including the number, type, lateral length and
location of wells to be drilled, the number and type of drilling
rigs and the number of wells per pad), are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of
1934. All forward-looking statements speak only as of the
date of this release. Although Antero Resources believes that
the plans, intentions and expectations reflected in or suggested by
the forward-looking statements are reasonable, there is no
assurance that these plans, intentions or expectations will be
achieved. Therefore, actual outcomes and results could
materially differ from what is expressed, implied or forecast in
such statements. Antero expressly disclaims any obligation to
and does not intend to publicly update or revise any
forward-looking statements.
Antero Resources cautions you that these forward-looking
statements are subject to all of the risks and uncertainties, most
of which are difficult to predict and many of which are beyond the
Antero Resources' control, incident to the exploration for and
development, production, gathering and sale of natural gas, NGLs
and oil. These risks include, but are not limited to, the
expected timing and likelihood of completion of the simplification
transaction, commodity price volatility, inflation, lack of
availability of drilling and production equipment and services,
environmental risks, drilling and other operating risks, regulatory
changes, the uncertainty inherent in estimating natural gas and oil
reserves and in projecting future rates of production, cash flow
and access to capital, the timing of development expenditures, and
the other risks described under the heading "Item 1A. Risk
Factors" in Antero's Annual Report on Form 10-K for the year ended
December 31, 2018.
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SOURCE Antero Resources Corporation