2024-04-25 06:11:39 ET
Summary
- Antero Resources has been able to transport its production to stronger markets, allowing the company to get better prices for its production.
- The company is increasing its guidance on some liquids premiums.
- AR, now virtually unhedged, is well-positioned to take advantage of the expected recovery of natural gas prices.
- Management projects about $400 million in more free cash flow on an "apples to apples" basis.
- Demand is expected to balance with supply probably by fiscal year 2025.
Antero Resources ( AR ) was one of the few Marcellus producers to be able to transport its production to stronger markets. This has long led the company to get some of the best prices for its production. As a result of this industry-leading strategy, management is increasing its guidance on some premiums for the rest of the fiscal year while maintaining a very tight control of costs. This company had free cash flow to use to repay some debt when many were cutting back operations to reduce negative free cash flow. This article builds therefore on the ideas mentioned in the last article, with hopefully visible success items for investors to use in evaluating the company. The varying commodity prices make the strategy progress hard for investors to measure. Therefore, I intend to cover some success "signposts" to help out. The company, now virtually unhedged, is in a good position to take advantage of the coming recovery of natural gas prices.
Supply And Demand
Many do not understand that generally activity will continue a downward spiral until natural gas prices begin to recover. The result is that the market assumes that natural gas prices will remain low "forever" and price the industry common stocks accordingly....
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For further details see:
Antero Resources: Increasing Premiums Combined With Tight-Fisted Cost Control