Analyst Note| Stephen Ellis |
Antero Resources’ second-quarter results were slightly below PitchBook consensus EBITDAX expectations of $350 million with $319 million, mainly due to higher-than-expected all-in cash costs. After updating our model to reflect the quarter and adjusting for Antero’s revised guidance (higher realized natural gas liquids pricing, slightly lower production guidance, lower marketing expense, higher all-in cash costs, and higher capital spending), we’ve boosted our fair value estimate to $11 per share, while maintaining our no-moat rating. The most material change was to the natural gas liquids pricing, as not only has natural gas liquids pricing increased materially recently, but Antero’s ability to extract wider differentials has improved due to tighter end markets. The revised guidance now shifts to a midpoint of $0.20 per million cubic feet, or mcf, from an earlier midpoint of $0.15 per mcf.