We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Antero Resources (AR) Q1 Earnings Miss on Lower Gas Prices
Read MoreHide Full Article
Antero Resources Corporation (AR - Free Report) reported first-quarter 2020 adjusted loss per share of 13 cents against the Zacks Consensus Estimate of break-even earnings. In the year-ago quarter, it had recorded earnings of 31 cents per share.
Total operating revenues amounted to $1,317.1 million, beating the Zacks Consensus Estimate of $996 million. Moreover, the top line increased from the year-ago quarter’s $1,037.4 million.
The weak earnings can be attributed to significantly lower realized commodity prices, partially offset by increased natural gas equivalent production and decreased operating expenses.
Following the earnings release, the stock jumped 21.1% yesterday, as the company stated that even though it intends to significantly reduce capital spending for 2020, it has kept its 2020 production guidance unchanged. Despite the current market uncertainty, the company expects to generate positive free cash flow of $175 million for the full year, which cheered investors.
Antero Resources Corporation Price, Consensus and EPS Surprise
Total production through first-quarter 2020 was recorded at 306 billion cubic feet equivalent (Bcfe), which rose 10% from 279 Bcfe a year ago. Natural gas production (accounting for almost 68% of total output) increased to 208 Bcf from 199 Bcf in the March quarter of 2019.
Production of oil in first-quarter 2020 was 938 thousand barrels (MBbls), down 8% from 1,017 MBbls in the prior-year period. Its production of 4,604 MBbls of C2 Ethane was 31% higher than 3,509 MBbls in the year-ago quarter. The company’s output of 10,833 MBbls of C3+ NGLs in the March quarter of 2020 was 23% higher than 8,794 MBbls a year ago.
Weighted natural gas equivalent price realization in the quarter was $2.30 per thousand cubic feet equivalent (Mcfe), down 37% from $3.65 in the year-earlier period. Realized prices for natural gas decreased 40% to $1.98 per Mcf from $3.30 a year ago.
The company’s oil price realization in the quarter was $38.02 per Bbl, down 20% from $47.23 a year ago. Its realized price for C3+ NGLs declined to $21.31 per Bbl from $31.63 in the prior-year quarter. Realized price for C2 Ethane also decreased 42% to $5.82 per Bbl from $10.12 a year ago.
Total Operating Expenses Decline
Total expenses in the quarter under review declined to $1,054.7 million from $1,071.1 million in the year-ago period.
Average lease operating costs in the quarter were 8 cents per Mcfe, down 47% from the year-ago period’s 15 cents. The same for gathering and compression fell 17% year over year to 63 cents per Mcfe. Moreover, general and administrative costs fell 44% year over year to 9 cents per Mcfe in the first quarter of 2020. However, processing costs rose 13% year over year to 69 cents per Mcfe. Also, transportation expenses rose 11% to 61 cents per Mcfe from the year-ago level of 55 cents.
Repurchases
The company bought back 27 million shares in the first quarter at a weighted average price of $1.57 per share. It currently has 269 million shares outstanding. Moreover, it repurchased $383 million notional amount of 2021 and 2022 senior unsecured notes at a 21% weighted average discount price. This move decreased the company’s total debt by $81 million.
Capital Spending & Financials
For drilling and completion operations, it spent $300 million through first-quarter 2020.
As of Mar 31, 2020, Antero Resources had no cash and cash equivalents. It had adjusted available liquidity of $1 billion and a long-term debt of $3,707.8 million. It has debt to capitalization of 36%.
Guidance
Even though the company intends to reduce capital spending for 2020, it has kept its net natural gas equivalent production guidance for 2020 unchanged at 3,500 MMcfe/d, indicating a 9% year-over-year rise. Liquids production for 2020 is expected to be 187,500 Bbls/d, per the original guidance.
It expects 2020 drilling and completion capital to be $750 million versus $1.15 billion announced originally, which then suggested a 10% decline from 2019 levels. This will be supported by the company’s increasing operating efficiency. Backed by the same, it has dropped its rig count to one rig for the rest of the year. Moreover, aided by its drilling and completion capital budget reduction, the company expects to generate $175 million in free cash flow this year.
It expects net marketing expense for 2020 to be $150 million. It has plans to generate proceeds of $650-$900 million in 2020 from the asset sale program. Moreover, 94% and 100% of its projected 2020 and 2021 natural gas production is hedged at $2.87 and $2.80 per MMBtu, respectively.
RGC Resources’ 2020 earnings per share are expected to rise 14.8% year over year.
Murphy USA’s 2020 earnings per share are expected to rise 48.2% year over year.
Comstock Resources’ 2020 sales are expected to gain 30.8% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Antero Resources (AR) Q1 Earnings Miss on Lower Gas Prices
Antero Resources Corporation (AR - Free Report) reported first-quarter 2020 adjusted loss per share of 13 cents against the Zacks Consensus Estimate of break-even earnings. In the year-ago quarter, it had recorded earnings of 31 cents per share.
Total operating revenues amounted to $1,317.1 million, beating the Zacks Consensus Estimate of $996 million. Moreover, the top line increased from the year-ago quarter’s $1,037.4 million.
The weak earnings can be attributed to significantly lower realized commodity prices, partially offset by increased natural gas equivalent production and decreased operating expenses.
Following the earnings release, the stock jumped 21.1% yesterday, as the company stated that even though it intends to significantly reduce capital spending for 2020, it has kept its 2020 production guidance unchanged. Despite the current market uncertainty, the company expects to generate positive free cash flow of $175 million for the full year, which cheered investors.
Antero Resources Corporation Price, Consensus and EPS Surprise
Antero Resources Corporation price-consensus-eps-surprise-chart | Antero Resources Corporation Quote
Overall Production Rises
Total production through first-quarter 2020 was recorded at 306 billion cubic feet equivalent (Bcfe), which rose 10% from 279 Bcfe a year ago. Natural gas production (accounting for almost 68% of total output) increased to 208 Bcf from 199 Bcf in the March quarter of 2019.
Production of oil in first-quarter 2020 was 938 thousand barrels (MBbls), down 8% from 1,017 MBbls in the prior-year period. Its production of 4,604 MBbls of C2 Ethane was 31% higher than 3,509 MBbls in the year-ago quarter. The company’s output of 10,833 MBbls of C3+ NGLs in the March quarter of 2020 was 23% higher than 8,794 MBbls a year ago.
Realized Prices (Excluding Derivatives Settlements) Decline
Weighted natural gas equivalent price realization in the quarter was $2.30 per thousand cubic feet equivalent (Mcfe), down 37% from $3.65 in the year-earlier period. Realized prices for natural gas decreased 40% to $1.98 per Mcf from $3.30 a year ago.
The company’s oil price realization in the quarter was $38.02 per Bbl, down 20% from $47.23 a year ago. Its realized price for C3+ NGLs declined to $21.31 per Bbl from $31.63 in the prior-year quarter. Realized price for C2 Ethane also decreased 42% to $5.82 per Bbl from $10.12 a year ago.
Total Operating Expenses Decline
Total expenses in the quarter under review declined to $1,054.7 million from $1,071.1 million in the year-ago period.
Average lease operating costs in the quarter were 8 cents per Mcfe, down 47% from the year-ago period’s 15 cents. The same for gathering and compression fell 17% year over year to 63 cents per Mcfe. Moreover, general and administrative costs fell 44% year over year to 9 cents per Mcfe in the first quarter of 2020. However, processing costs rose 13% year over year to 69 cents per Mcfe. Also, transportation expenses rose 11% to 61 cents per Mcfe from the year-ago level of 55 cents.
Repurchases
The company bought back 27 million shares in the first quarter at a weighted average price of $1.57 per share. It currently has 269 million shares outstanding. Moreover, it repurchased $383 million notional amount of 2021 and 2022 senior unsecured notes at a 21% weighted average discount price. This move decreased the company’s total debt by $81 million.
Capital Spending & Financials
For drilling and completion operations, it spent $300 million through first-quarter 2020.
As of Mar 31, 2020, Antero Resources had no cash and cash equivalents. It had adjusted available liquidity of $1 billion and a long-term debt of $3,707.8 million. It has debt to capitalization of 36%.
Guidance
Even though the company intends to reduce capital spending for 2020, it has kept its net natural gas equivalent production guidance for 2020 unchanged at 3,500 MMcfe/d, indicating a 9% year-over-year rise. Liquids production for 2020 is expected to be 187,500 Bbls/d, per the original guidance.
It expects 2020 drilling and completion capital to be $750 million versus $1.15 billion announced originally, which then suggested a 10% decline from 2019 levels. This will be supported by the company’s increasing operating efficiency. Backed by the same, it has dropped its rig count to one rig for the rest of the year. Moreover, aided by its drilling and completion capital budget reduction, the company expects to generate $175 million in free cash flow this year.
It expects net marketing expense for 2020 to be $150 million. It has plans to generate proceeds of $650-$900 million in 2020 from the asset sale program. Moreover, 94% and 100% of its projected 2020 and 2021 natural gas production is hedged at $2.87 and $2.80 per MMBtu, respectively.
Zacks Rank & Stocks to Consider
Currently, Antero Resources has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include RGC Resources Inc. (RGCO - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Comstock Resources, Inc. (CRK - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RGC Resources’ 2020 earnings per share are expected to rise 14.8% year over year.
Murphy USA’s 2020 earnings per share are expected to rise 48.2% year over year.
Comstock Resources’ 2020 sales are expected to gain 30.8% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>