Skip to Content

Antero Resources Corp AR

Rating as of

Morningstar’s Analysis

Currency in USD

Economic Moat


Capital Allocation


Boosting Antero's Fair Value Estimate Due to Higher Prices, Reduced Leverage, and QL Partnership

Stephen Ellis Sector Strategist

Analyst Note

| Stephen Ellis |

After rolling our model to 2021, refreshing our model for the latest oil and gas prices, and incorporating its partnership agreement with QL Capital Partners, we are increasing our fair value estimate for Antero Resources to $7.50 from $3.75 per share. Our no-moat rating remains unchanged, as does our extreme uncertainty rating. Given Antero's leverage, our fair value estimate is very sensitive to near-term prices, but also changes in leverage. About $2 per share of our fair value increase was linked to the increase in oil and gas prices. The other significant contributor was the decrease in long-term debt (about $2 per share), and the increase in the value of Antero's stake in Antero Midstream (about $0.50 per share). The changes were slightly offset by lower expected production due to the various asset sales and agreements Antero has signed recently.

The QL Capital Partners partnership is a good deal, in our view, as it lowers Antero's cost position beginning in 2022, while also providing substantial  free cash flow upside in a healthy oil and gas price environment. We expect Antero to be able to rapidly deleverage in this environment and be below 2 times net debt/EBITDA later in 2021.

Read Full Analysis

Company Profile

Business Description

Antero Resources, based in Denver, engages in the exploration for and production of natural gas and natural gas liquids in the United States and Canada. At the end of 2020, the company reported proven reserves of 17.6 trillion cubic feet of natural gas equivalent. Production averaged approximately 3,578 million cubic feet of equivalent a day in 2020 at a ratio of 33% liquids and 67% natural gas.

1615 Wynkoop Street
Denver, CO, 80202
T +1 303 357-7310
Sector Energy
Industry Oil & Gas E&P
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Distressed
Employees 522