Antero Resources Q3 2024 Earning Call Summary

Management Comments

• Historical & Forecast Production Levels

  • Projected 2024 natural gas production range: 2.17-2.18 Bcf/d

  • Total production guidance: 3.375–3.425 Bcfe/d

  • The Improvements in drilling and completion rates result in reduced cycle times. Our cycle times have declined to 126 days, which is 23% below the 2022 level of 163 days.

  • Increased efficiencies with 12 stages per day drilling - the 10,000 feet of lateral in less than five days (very efficient rig moves and

    completion crew moves). This will result in lower capital requirements in 2025.

• Production Curtailments / Shut-ins

  • No specific shut-ins or curtailments were discussed; operations focused on optimizing efficiencies and capital spending.

• TIL / DUC Wells

  • Average lateral lengths in 2024: 15,500 feet for completed wells and 14,700 feet for drilled wells

• Hedging Strategy / Break-even Production Costs

  • "2024 natural gas price breakeven (unhedged): $2.20/Mcf"

  • "Our hedge positions for 2024 include 52,000 MMBtu/d at $2.53 and for 2025, 44,000 MMBtu/d at $2.61."

• Rig and Frac Crew Numbers

  • For this year, 2024, we reduced our drilling and completion capital budget to $650 million at the midpoint, a 28% decrease from from 2023 while holding production flat. A significant driver behind this lower capital is that today we are able to sustain maintenance production with just two rigs and approximately one completion crew.

  • For 2024, we are operating with an average of 2 rigs and 1.2 completion crews.

• New Infrastructure Projects

  • No new pipeline builds or LNG projects were noted.

• Market Activity & State of the Market

  • Increased demand for natural gas, with 2024 year-to-date power burn 1.4 Bcf/d higher than the previous year.

  • LPG export premiums continue to be high due to limited Gulf Coast export capacity.

Q&A Highlights

• Production Levels

  • Reinforced natural gas production guidance for Q4 to meet the annual target.

• Curtailments / Shut-ins

  • Reaffirmed no planned production shut-ins despite volatile market conditions.

• DUC & TIL Wells

  • Plans to complete 45-50 wells in 2024, aiming to maintain efficient completions with reduced cycle times.

• Hedging & Break-even Costs

  • Clarified break-even strategy and free cash flow goals, targeting free cash flow neutrality even at natural gas prices below $2.25/MMBtu.

• Rig and Frac Crews

  • "We have sustained a 2-rig operation to manage production at minimal cost while ensuring necessary crew availability."

• Infrastructure & Market Developments

  • No additional infrastructure projects confirmed; however, continuing to monitor demand pressures on Gulf Coast LPG export capacity.

Key Figures & Dates

• Natural Gas Production (2024): 2.17-2.18 Bcf/d

• D&C Capital Expenditure Guidance (2024): $640–$660 million

• Average Operated Rigs: 2

• Average Completion Crews: 1.2