Skip to Content
US Videos

A Compelling Opportunity in the Energy Sector

Strong realized natural gas prices and leverage to liquids put Antero Resources at an advantage to its peers.


Dave Meats: Antero Resources is a natural gas company operating in the Marcellus and Utica Shales in West Virgina and Ohio. The stock is currently trading at a 25% discount to our fair value estimate, and is one of the few compelling opportunities in the generally overvalued E&P segment. The company is growing its production at a robust clip and expects 30% production growth this year and a CAGR of 20%-22% after that, according to its recently published four-year outlook.

There are two key advantages that separate Antero from its peers. The first is very strong realized natural gas prices. The company has fully hedged its natural gas output for 2017 and 2018, with significant volumes protected in subsequent years as well. In addition, the company has locked in enough firm transport and sales contracts to ensure that it can sell all of its production in premium markets outside Appalachia, sidestepping basis risk. As a result, management expects to earn a premium to Nymex through 2020 at least, which is pretty rare for a natural gas producer in the northeast.

Dave Meats does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.