Antero Resources(US:AR)2023-10-26 18:50Financial Data and Key Metrics Changes - Antero Resources reported a 9% total production growth in Q3 2023 compared to the same period last year, driven by an 18% increase in liquids and a 4% increase in natural gas volumes [7][8] - The company expects production to increase by 225 million cubic feet equivalent per day, or 7%, from the exit rate in 2022 to the exit rate in 2023 [7][8] - Capital efficiency gains are expected to lead to materially lower drilling and completion (D&C) capital in 2024 [7][8] Business Line Data and Key Metrics Changes - Completion pumping hours per day increased to over 17 hours, up nearly 50% from a year ago, contributing to higher completion stages per day [5][6] - Year-to-date completion stages per day averaged 11 stages, a 35% improvement compared to 2022 and nearly a 90% increase from 2019 levels [5][6] Market Data and Key Metrics Changes - Propane export demand has averaged 1.6 million barrels per day year-to-date, about 250,000 barrels per day or 19% above the 2022 full year average [10][11] - The U.S. recently set a new weekly record high for propane exports, with two consecutive weeks above two million barrels per day [10][11] Company Strategy and Development Direction - Antero Resources maintains a focus on organic leasing efforts, having invested approximately $340 million to acquire targeted drilling locations, contrasting with peers who spent $17 billion on acquisitions [8][9] - The company believes that its low-cost inventory position and operational efficiencies will drive shareholder value without the need for M&A [9][75] Management's Comments on Operating Environment and Future Outlook - Management noted that the decline in rig counts, particularly in the Haynesville Basin, will curb production growth in 2024, helping to balance the U.S. natural gas market [15][16] - The company anticipates that storage levels will balance with the five-year average in 2024, providing support to natural gas prices [20][21] Other Important Information - Antero has the largest low-cost inventory with 22 years of sub $2.75 per Mcfe drilling inventory, emphasizing its competitive advantage [8][9] - The company expects to maintain a capital budget approximately 10% lower than 2023 levels while still achieving production targets [27][24] Q&A Session Summary Question: What spurred the change in capital messaging? - Management indicated that production is ahead of expectations, leading to raised guidance and improved capital efficiency [27] Question: Will Antero's operations plan change in a favorable market? - Management stated they would maintain a stable operations plan focused on achieving maintenance capital [29] Question: What are the risks to propane prices heading into next year? - Management highlighted risks related to Gulf Coast pricing and potential maintenance at export facilities impacting export numbers [32][33] Question: What is the outlook for production costs next year? - Management expects flat production costs with a slight increase in taxes due to higher commodity prices [44][45] Question: How does Antero view M&A in the current environment? - Management emphasized a focus on operational efficiencies and organic growth rather than pursuing M&A [75][76]