Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 27, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | ANTERO RESOURCES Corp | |
Entity Central Index Key | 1,433,270 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 315,469,893 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 40,190 | $ 31,610 |
Accounts receivable, net of allowance for doubtful accounts of $1,195 in 2016 and 2017 | 16,494 | 29,682 |
Accrued revenue | 218,621 | 261,960 |
Derivative instruments | 452,005 | 73,022 |
Other current assets | 8,573 | 6,313 |
Total current assets | 735,883 | 402,587 |
Natural gas properties, at cost (successful efforts method): | ||
Unproved properties | 2,309,839 | 2,331,173 |
Proved properties | 10,493,932 | 9,549,671 |
Water handling and treatment systems | 840,183 | 744,682 |
Gathering systems and facilities | 1,884,712 | 1,723,768 |
Other property and equipment | 48,537 | 41,231 |
Property and equipment, gross | 15,577,203 | 14,390,525 |
Less accumulated depletion, depreciation, and amortization | (2,767,358) | (2,363,778) |
Property and equipment, net | 12,809,845 | 12,026,747 |
Derivative instruments | 1,600,165 | 1,731,063 |
Investments in unconsolidated affiliates | 259,697 | 68,299 |
Other assets | 36,631 | 26,854 |
Total assets | 15,442,221 | 14,255,550 |
Current liabilities: | ||
Accounts payable | 51,567 | 38,627 |
Accrued liabilities | 418,352 | 393,803 |
Revenue distributions payable | 203,151 | 163,989 |
Derivative instruments | 3,279 | 203,635 |
Other current liabilities | 16,711 | 17,334 |
Total current liabilities | 693,060 | 817,388 |
Long-term liabilities: | ||
Long-term debt | 5,291,973 | 4,703,973 |
Deferred income tax liability | 1,100,382 | 950,217 |
Derivative instruments | 172 | 234 |
Other liabilities | 53,772 | 55,160 |
Total liabilities | 7,139,359 | 6,526,972 |
Commitments and contingencies (notes 13 and 14) | ||
Equity: | ||
Common stock, $0.01 par value; authorized - 1,000,000 shares; issued and outstanding 314,877 shares and 315,448 shares, respectively | 3,154 | 3,149 |
Additional paid-in capital | 6,435,047 | 5,299,481 |
Accumulated earnings | 1,223,259 | 959,995 |
Total stockholders' equity | 7,661,460 | 6,262,625 |
Noncontrolling interest in consolidated subsidiary | 641,402 | 1,465,953 |
Total equity | 8,302,862 | 7,728,578 |
Total liabilities and equity | $ 15,442,221 | $ 14,255,550 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets | ||
Allowance for doubtful accounts | $ 1,195 | $ 1,195 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 315,448,000 | 314,877,000 |
Common stock, shares outstanding | 315,448,000 | 314,877,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Natural gas sales | $ 454,257 | $ 229,787 | $ 920,921 | $ 484,563 |
Natural gas liquids sales | 170,819 | 94,713 | 365,471 | 167,778 |
Oil sales | 26,512 | 16,740 | 53,472 | 26,919 |
Gathering, processing, and water handling and treatment | 3,192 | 3,294 | 5,796 | 7,138 |
Marketing | 49,968 | 90,902 | 115,892 | 190,118 |
Commodity derivative fair value gains (losses) | 85,641 | (684,634) | 524,416 | (404,710) |
Total revenue | 790,389 | (249,198) | 1,985,968 | 471,806 |
Operating expenses: | ||||
Lease operating | 16,992 | 12,043 | 32,543 | 23,336 |
Gathering, compression, processing, and transportation | 266,747 | 206,060 | 533,576 | 414,798 |
Production and ad valorem taxes | 22,553 | 17,458 | 47,346 | 36,742 |
Marketing | 77,421 | 125,977 | 167,414 | 263,910 |
Exploration | 1,804 | 1,109 | 3,911 | 2,123 |
Impairment of unproved properties | 15,199 | 19,944 | 42,098 | 35,470 |
Depletion, depreciation, and amortization | 201,182 | 197,362 | 403,911 | 388,944 |
Accretion of asset retirement obligations | 649 | 620 | 1,286 | 1,218 |
General and administrative (including equity-based compensation expense) | 64,099 | 60,102 | 128,797 | 116,389 |
Total operating expenses | 666,646 | 640,675 | 1,360,882 | 1,282,930 |
Operating income (loss) | 123,743 | (889,873) | 625,086 | (811,124) |
Other income (expenses): | ||||
Income Loss From Equity Method Investments | 3,623 | 484 | 5,854 | 484 |
Interest | (68,582) | (62,595) | (135,252) | (125,879) |
Total other expenses | (64,959) | (62,111) | (129,398) | (125,395) |
Income (loss) before income taxes | 58,784 | (951,984) | 495,688 | (936,519) |
Provision for income tax (expense) benefit | (18,819) | 376,494 | (150,165) | 371,679 |
Net income (loss) and comprehensive income (loss) including noncontrolling interest | 39,965 | (575,490) | 345,523 | (564,840) |
Net income and comprehensive income attributable to noncontrolling interest | 45,097 | 20,754 | 82,259 | 36,459 |
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | $ (5,132) | $ (596,244) | $ 263,264 | $ (601,299) |
Earnings (loss) per common share: | ||||
Earnings (loss) per common share - basic (in dollars per share) | $ (0.02) | $ (2.12) | $ 0.84 | $ (2.15) |
Earnings (loss) per common share assuming dilution: | ||||
Earnings (loss) per common share—assuming dilution (in dollars per share) | $ (0.02) | $ (2.12) | $ 0.83 | $ (2.15) |
Weighted average number of shares outstanding | ||||
Basic (in shares) | 315,401 | 281,786 | 315,179 | 279,418 |
Diluted (in shares) | 315,401 | 281,786 | 315,927 | 279,418 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | ||||
Equity-based compensation expense | $ 26,975 | $ 25,816 | $ 52,478 | $ 49,286 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Common Stock | Additional paid-in capital | Accumulated earnings | Noncontrolling Interests | Total |
Balances at Dec. 31, 2016 | $ 3,149 | $ 5,299,481 | $ 959,995 | $ 1,465,953 | $ 7,728,578 |
Shares Issued, Beginning Balance at Dec. 31, 2016 | 314,877 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income tax withholdings | $ 5 | (7,506) | (7,501) | ||
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income tax withholdings (in shares) | 571 | ||||
Issuance of common units by subsidiary - Antero Midstream Partners LP | 246,585 | 246,585 | |||
Issuance of common units in Antero Midstream LP upon vesting of equity-based compensation awards, net of units withheld for income tax withholdings | (1,559) | 627 | (932) | ||
Equity-based compensation | 47,897 | 4,581 | 52,478 | ||
Net income (loss) and including noncontrolling interest | 263,264 | 82,259 | 345,523 | ||
Effects of changes in ownership interests in consolidated subsidiaries | 1,096,734 | (1,096,734) | |||
Distributions to non-controlling interests | (61,869) | (61,869) | |||
Balances at Jun. 30, 2017 | $ 3,154 | $ 6,435,047 | $ 1,223,259 | $ 641,402 | $ 8,302,862 |
Shares Issued, Ending Balance at Jun. 30, 2017 | 315,448 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) including noncontrolling interest | $ 345,523 | $ (564,840) |
Adjustment to reconcile net income (loss) to net cash provided by operating activities: | ||
Depletion, depreciation, amortization, and accretion | 405,197 | 390,162 |
Impairment of unproved properties | 42,098 | 35,470 |
Derivative fair value (gains) losses | (524,416) | 404,710 |
Gains on settled derivatives | (75,913) | (616,848) |
Deferred income tax expense (benefit) | 150,165 | (371,679) |
Equity-based compensation expense | 52,478 | 49,286 |
Equity in earnings of unconsolidated affiliate | (5,854) | (484) |
Distributions of earnings from unconsolidated affiliates | 5,820 | |
Other | (472) | (621) |
Changes in current assets and liabilities: | ||
Accounts receivable | 13,188 | 7,798 |
Accrued revenue | 43,339 | (5,237) |
Other current assets | (2,385) | 1,559 |
Accounts payable | 2,072 | 13,223 |
Accrued liabilities | 4,204 | (3,362) |
Revenue distributions payable | 39,162 | 5,105 |
Other current liabilities | 610 | (474) |
Net cash provided by operating activities | 647,586 | 578,706 |
Cash flows used in investing activities: | ||
Additions to proved properties | (179,318) | |
Additions to unproved properties | (129,876) | (58,195) |
Drilling and completion costs | (629,308) | (709,974) |
Additions to water handling and treatment systems | (95,451) | (78,625) |
Additions to gathering systems and facilities | (155,365) | (97,300) |
Additions to other property and equipment | (6,564) | (1,296) |
Investments in unconsolidated affiliates | (191,364) | (45,044) |
Change in other assets | (12,452) | (47,925) |
Other | 2,156 | |
Net cash used in investing activities | (1,397,542) | (1,038,359) |
Cash flows from financing activities: | ||
Issuance of common stock | 752,599 | |
Issuance of common units by Antero Midstream Partners LP | 246,585 | |
Proceeds From Sale Of Interest In Partnership Unit | 178,000 | |
Borrowings (repayments) on bank credit facility, net | 585,000 | (427,000) |
Payments of deferred financing costs | (96) | |
Distributions to noncontrolling interest in consolidated subsidiary | (61,869) | (31,681) |
Employee tax withholding for settlement of equity compensation awards | (8,433) | (4,819) |
Other | (2,747) | (2,572) |
Net cash provided by financing activities | 758,536 | 464,431 |
Net increase in cash and cash equivalents | 8,580 | 4,778 |
Cash and cash equivalents, beginning of period | 31,610 | 23,473 |
Cash and cash equivalents, end of period | 40,190 | 28,251 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 125,284 | 121,128 |
Supplemental disclosure of noncash investing activities: | ||
Increase (decrease) in accounts payable and accrued liabilities for additions to property and equipment | $ (31,182) | $ 155,671 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2017 | |
Organization | |
Organization | (1) Antero Resources Corporation (individually referred to as “Antero” or the “Parent”) and its consolidated subsidiaries (collectively referred to as the “Company”) are engaged in the exploration, development, and acquisition of natural gas, NGLs, and oil properties in the Appalachian Basin in West Virginia, Ohio, and Pennsylvania. The Company targets large, repeatable resource plays where horizontal drilling and advanced fracture stimulation technologies provide the means to economically develop and produce natural gas, NGLs, and oil from unconventional formations. Through its consolidated subsidiary, Antero Midstream Partners LP, a publicly-traded limited partnership (“Antero Midstream” or the “Partnership”), the Company has water handling and treatment operations and midstream operations in the Appalachian Basin. The Company’s corporate headquarters are located in Denver, Colorado. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) (a) These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC applicable to interim financial information and should be read in the context of the December 31, 2016 consolidated financial statements and notes thereto for a more complete understanding of the Company’s operations, financial position, and accounting policies. The December 31, 2016 consolidated financial statements have been filed with the SEC in the Company’s 2016 Form 10-K. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2016 and June 30, 2017, the results of its operations for the three and six months ended June 30, 2016 and 2017, and its cash flows for the six months ended June 30, 2016 and 2017. The Company has no items of other comprehensive income or loss; therefore, its net income or loss is identical to its comprehensive income or loss. Operating results for the period ended June 30, 2017 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for natural gas, NGLs, and oil, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, and other factors. The Company’s statement of cash flows for the six months ended June 30, 2016 includes reclassifications within current liabilities that were made to conform to the six months ended June 30, 2017 presentation. The Company’s exploration and production activities are accounted for under the successful efforts method. As of the date these financial statements were filed with the SEC, the Company completed its evaluation of potential subsequent events for disclosure and no items requiring disclosure were identified. (b) The accompanying condensed consolidated financial statements include the accounts of Antero, its wholly-owned subsidiaries, any entities in which the Company owns a controlling interest, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. We have determined that Antero Midstream is a VIE for which Antero is the primary beneficiary. Therefore, Antero Midstream’s accounts are included in the Company’s condensed consolidated financial statements. Antero is the primary beneficiary of Antero Midstream based on its power to direct the activities that most significantly impact Antero Midstream’s economic performance, and its obligation to absorb losses or right to receive benefits of Antero Midstream that could be significant to the Partnership. Antero Midstream was formed to own, operate, and develop midstream energy assets to service Antero’s production under long-term service contracts. Antero owned 58.4% of the outstanding limited partner interests in Antero Midstream at June 30, 2017. Antero Midstream GP LP (“AMGP”) indirectly controls the general partnership interest in Antero Midstream as well as Antero IDR Holdings LLC (“IDR LLC”), which owns the incentive distribution rights in Antero Midstream. AMGP has not provided, and is not expected to provide, financial support to Antero Midstream. Antero’s officers and management group also act as management of Antero Midstream and AMGP. Antero and Antero Midstream have contracts with 20-year initial terms and automatic renewal provisions, whereby Antero has dedicated the rights for gathering and compression, and water delivery and handling, services to Antero Midstream on a fixed-fee basis. Such dedications cover a substantial portion of Antero’s current acreage and future acquired acreage, in each case, except for acreage that was already dedicated to other parties prior to entering into the service contracts or that was acquired subject to a pre-existing dedication. The contracts call for Antero to present, in advance, its drilling and completion plans in order for Antero Midstream to develop gathering and compression, water delivery and handling, and gas processing assets to service Antero’s operations. Consequently, the drilling and completion capital investment decisions made by Antero control the development and operation of all of Antero Midstream’s assets. Because of these contractual obligations and the capital requirements related to these obligations, Antero Midstream has and, for the foreseeable future, will devote substantially all of its resources to servicing Antero’s operations. Additionally, revenues from Antero provide substantially all of Antero Midstream’s financial support and, therefore, its ability to finance its operations. As a result of the long-term contractual commitment to support Antero’s substantial growth plans, Antero Midstream will be practically and physically constrained from providing any substantive amount of services to third-parties. Therefore, Antero controls the activities that most significantly impact Antero Midstream’s economic performance. Antero does not control AMGP and does not have any investment in AMGP. All significant intercompany accounts and transactions have been eliminated in the Company’s condensed consolidated financial statements. Noncontrolling interest in the Company’s condensed consolidated financial statements represents the interests in Antero Midstream which are owned by the public and the holder of Antero Midstream’s incentive distribution rights. Noncontrolling interests in consolidated subsidiaries is included as a component of equity in the Company’s condensed consolidated balance sheets. Investments in entities for which the Company exercises significant influence, but not control, are accounted for under the equity method. Such investments are included in Investments in unconsolidated affiliates on the Company’s condensed consolidated balance sheets. Income from equity method investees is included in Equity in earnings of unconsolidated affiliates on the Company’s condensed consolidated statements of operations and cash flows. (c) The preparation of condensed consolidated financial statements in conformity with GAAP requires that management formulate estimates and assumptions which affect revenues, expenses, assets, and liabilities, and the disclosure of contingent assets and liabilities. Changes in facts and circumstances or discovery of new information may result in revised estimates, and actual results could differ from those estimates. The Company’s condensed consolidated financial statements are based on a number of significant estimates including estimates of natural gas, NGLs, and oil reserve quantities, which are the basis for the calculation of depletion and impairment of oil and gas properties. Reserve estimates, by their nature, are inherently imprecise. Other items in the Company’s condensed consolidated financial statements which involve the use of significant estimates include derivative assets and liabilities, accrued revenue, deferred income taxes, equity-based compensation, asset retirement obligations, depreciation, amortization, and commitments and contingencies. (d) Historically, the markets for natural gas, NGLs, and oil have experienced significant price fluctuations. Price fluctuations can result from variations in weather, levels of production, availability of transportation capacity to other regions of the country, and various other factors. Increases or decreases in the prices the Company receives for its production could have a significant impact on the Company’s future results of operations and reserve quantities. (e) In order to manage its exposure to natural gas, NGLs, and oil price volatility, the Company enters into derivative transactions from time to time, which may include commodity swap agreements, basis swap agreements, collar agreements, and other similar agreements related to the price risk associated with the Company’s production. To the extent legal right of offset exists with a counterparty, the Company reports derivative assets and liabilities on a net basis. The Company has exposure to credit risk to the extent that the counterparty is unable to satisfy its settlement obligations. The Company actively monitors the creditworthiness of counterparties and assesses the impact, if any, on its derivative position. The Company records derivative instruments on the condensed consolidated balance sheets as either assets or liabilities measured at fair value and records changes in the fair value of derivatives in current earnings as they occur. Changes in the fair value of commodity derivatives, including gains or losses on settled derivatives, are classified as revenues on the Company’s condensed consolidated statements of operations. The Company’s derivatives have not been designated as hedges for accounting purposes. (f) Management has evaluated how the Company is organized and managed and has identified the following segments: (1) the exploration, development, and production of natural gas, NGLs, and oil; (2) gathering and processing; (3) water handling and treatment; and (4) marketing of excess firm transportation capacity. All of the Company’s assets are located in the United States and substantially all of its production revenues are attributable to customers located in the United States. (g) Earnings (loss) per common share —basic for each period is computed by dividing net income (loss) attributable to Antero by the basic weighted average number of shares outstanding during the period. Earnings (loss) per common share—assuming dilution for each period is computed after giving consideration to the potential dilution from outstanding equity awards, calculated using the treasury stock method. The Company includes performance share unit awards in the calculation of diluted weighted average shares outstanding based on the number of common shares that would be issuable if the end of the period was also the end of the performance period required for the vesting of such awards. During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards is antidilutive. The following is a reconciliation of the Company’s basic weighted average shares outstanding to diluted weighted average shares outstanding during the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 Basic weighted average number of shares outstanding 281,786 315,401 279,418 315,179 Add: Dilutive effect of non-vested restricted stock units — — — 710 Add: Dilutive effect of outstanding stock options — — — — Add: Dilutive effect of performance stock units — — — 38 Diluted weighted average number of shares outstanding 281,786 315,401 279,418 315,927 Weighted average number of outstanding equity awards excluded from calculation of diluted earnings per common share(1): Non-vested restricted stock and restricted stock units 6,982 5,105 6,862 1,596 Outstanding stock options 706 679 713 681 Performance stock units 724 1,213 471 896 (1) The potential dilutive effects of these awards were excluded from the computation of earnings (loss) per common share—assuming dilution because the inclusion of these awards would have been anti-dilutive. When the Company incurs a net loss, all outstanding equity awards are excluded from the calculation of diluted loss per common share because the inclusion of such awards would be anti-dilutive. (h) The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short term nature of these instruments. From time to time, the Company may be in the position of a “book overdraft” in which outstanding checks exceed cash and cash equivalents. The Company classifies book overdrafts within accounts payable within its condensed consolidated balance sheets, and classifies the change in accounts payable associated with book overdrafts as an operating activity within its condensed consolidated statements of cash flows. (i) For the three and six months ended June 30, 2016, the Company’s overall effective tax rate was different than the statutory rate of 35% primarily due to the effects of noncontrolling interest income and state tax rates. For the three and six months ended June 30, 2017, the Company’s overall effective tax rate was different than the statutory rate of 35% primarily due to the effects of noncontrolling interest income, state tax rates, and permanent differences on vested equity compensation awards. |
Antero Midstream Partners LP
Antero Midstream Partners LP | 6 Months Ended |
Jun. 30, 2017 | |
Antero Midstream Partners LP | |
Antero Midstream Partners LP | (3) In 2014, the Company formed Antero Midstream to own, operate, and develop midstream energy assets that service Antero’s production. Antero Midstream’s assets consist of gathering systems and facilities, and water handling and treatment facilities, through which it provides services to Antero under long-term, fixed-fee contracts. AMGP indirectly owns the general partnership interest in Antero Midstream as well as IDR LLC, which owns the incentive distribution rights in Antero Midstream. Antero Midstream is an unrestricted subsidiary as defined by Antero’s senior secured revolving bank credit facility (the “Credit Facility”). As an unrestricted subsidiary, Antero Midstream and its subsidiaries are not guarantors of Antero’s obligations, and Antero is not a guarantor of Antero Midstream’s obligations (see Note 12). In connection with Antero’s contribution of its water handling and treatment assets to Antero Midstream in September 2015, Antero Midstream agreed to pay Antero (a) $125 million in cash if Antero Midstream delivers 176,295,000 barrels or more of fresh water during the period between January 1, 2017 and December 31, 2019 and (b) an additional $125 million in cash if Antero Midstream delivers 219,200,000 barrels or more of fresh water during the period between January 1, 2018 and December 31, 2020. The Partnership has an Equity Distribution Agreement (the “Distribution Agreement”) pursuant to which the Partnership may sell, from time to time through brokers acting as its sales agents, common units representing limited partner interests having an aggregate offering price of up to $250 million. Sales of the common units are made by means of ordinary brokers’ transactions on the New York Stock Exchange, at market prices, in block transactions, or as otherwise agreed to between Antero Midstream and the sales agents. Proceeds are used for general partnership purposes, which may include repayment of indebtedness and funding working capital or capital expenditures. The Partnership is under no obligation to offer and sell common units under the Distribution Agreement. During the six months ended June 30, 2017, the Partnership issued and sold 700,031 common units under the Distribution Agreement, resulting in net proceeds of $23.1 million after deducting commissions and other offering costs. As of June 30, 2017, Antero Midstream had the capacity to issue additional common units under the Distribution Agreement up to an aggregate sales price of $159.9 million. On May 26, 2016, Antero Midstream purchased a 15% equity interest in a regional gathering pipeline. This investment is accounted for under the equity method, and had a balance of $67.6 million at June 30, 2017. Antero Midstream’s equity share of the pipeline’s earnings was $5.1 million during the six months ended June 30, 2017. On February 6, 2017, Antero Midstream formed a joint venture (the “Joint Venture”) to develop processing assets in Appalachia with MarkWest Energy Partners, L.P. (“MarkWest”), a wholly owned subsidiary of MPLX, L.P. Antero Midstream and MarkWest each own a 50% interest in the Joint Venture and MarkWest operates the Joint Venture assets. The Joint Venture assets consist of processing plants in West Virginia and a one-third interest in a recently commissioned MarkWest fractionator in Ohio. The Joint Venture is accounted for under the equity method, and had a balance of $192.1 million at June 30, 2017. Antero Midstream’s equity share of the Joint Venture’s earnings was $0.8 million during the six months ended June 30, 2017. In conjunction with the formation of the Joint Venture, on February 10, 2017 Antero Midstream issued 6,900,000 common units, including common units issued pursuant to the underwriters’ option to purchase additional common units, generating net proceeds of approximately $223 million. Antero Midstream used the net proceeds to fund the initial contribution to the Joint Venture, repay outstanding borrowings under its credit facility, and for general partnership purposes. Antero owned approximately 60.9% and 58.4% of the limited partner interests of Antero Midstream at December 31, 2016 and June 30, 2017, respectively. |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Accrued Liabilities | |
Accrued Liabilities | (4) Accrued Liabilities Accrued liabilities as of December 31, 2016 and June 30, 2017 consisted of the following items (in thousands): December 31, 2016 June 30, 2017 Capital expenditures $ 159,811 173,981 Gathering, compression, processing, and transportation expenses 75,223 83,474 Marketing expenses 52,822 30,123 Interest expense 35,533 45,628 Other 70,414 85,146 $ 393,803 418,352 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2017 | |
Long-Term Debt. | |
Long-Term Debt | (5) Long-Term Debt Long-term debt was as follows at December 31, 2016 and June 30, 2017 (in thousands): December 31, 2016 June 30, 2017 Antero: Bank credit facility(a) $ 440,000 930,000 5.375% senior notes due 2021(b) 1,000,000 1,000,000 5.125% senior notes due 2022(c) 1,100,000 1,100,000 5.625% senior notes due 2023(d) 750,000 750,000 5.00% senior notes due 2025(e) 600,000 600,000 Net unamortized premium 1,749 1,655 Net unamortized debt issuance costs (37,690) (35,131) Antero Midstream: Bank credit facility(g) 210,000 305,000 5.375% senior notes due 2024(h) 650,000 650,000 Net unamortized debt issuance costs (10,086) (9,551) $ 4,703,973 5,291,973 Antero Resources Corporation (a) Senior Secured Revolving Credit Facility Antero’s Credit Facility is with a consortium of bank lenders. Borrowings under the Credit Facility are subject to borrowing base limitations based on the collateral value of Antero’s assets and are subject to regular semiannual redeterminations. At June 30, 2017, the borrowing base was $4.75 billion and lender commitments were $4.0 billion. The next redetermination of the borrowing base is scheduled to occur in October 2017. The maturity date of the Credit Facility is May 5, 2019. The Credit Facility is ratably secured by mortgages on substantially all of Antero’s properties and guarantees from Antero’s restricted subsidiaries, as applicable. The Credit Facility contains certain covenants, including restrictions on indebtedness and dividends, and requirements with respect to working capital and interest coverage ratios. Interest is payable at a variable rate based on LIBOR or the prime rate, determined by Antero’s election at the time of borrowing. Antero was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2016 and June 30, 2017. As of June 30, 2017, Antero had a total outstanding balance under the Credit Facility of $930 million, with a weighted average interest rate of 2.99%, and outstanding letters of credit of $706 million. As of December 31, 2016, Antero had an outstanding balance under the Credit Facility of $440 million, with a weighted average interest rate of 2.44%, and outstanding letters of credit of $710 million. Commitment fees on the unused portion of the Credit Facility are due quarterly at rates ranging from 0.375% to 0.50% of the unused portion based on utilization. (b) 5.375% Senior Notes Due 2021 On November 5, 2013, Antero issued $1 billion of 5.375% senior notes due November 21, 2021 (the “2021 notes”) at par. The 2021 notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2021 notes rank pari passu to Antero’s other outstanding senior notes. The 2021 notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero’s wholly-owned subsidiaries and certain of its future restricted subsidiaries. Interest on the 2021 notes is payable on May 1 and November 1 of each year. Antero may redeem all or part of the 2021 notes at any time at redemption prices ranging from 104.031% currently to 100.00% on or after November 1, 2019. If Antero undergoes a change of control, the holders of the 2021 notes will have the right to require Antero to repurchase all or a portion of the notes at a price equal to 101% of the principal amount of the 2021 notes, plus accrued and unpaid interest. (c) 5.125% Senior Notes Due 2022 On May 6, 2014, Antero issued $600 million of 5.125% senior notes due December 1, 2022 (the “2022 notes”) at par. On September 18, 2014, Antero issued an additional $500 million of the 2022 notes at 100.5% of par. The 2022 notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2022 notes rank pari passu to Antero’s other outstanding senior notes. The 2022 notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero’s wholly-owned subsidiaries and certain of its future restricted subsidiaries. Interest on the 2022 notes is payable on June 1 and December 1 of each year. Antero may redeem all or part of the 2022 notes at any time at redemption prices ranging from 103.844% currently to 100.00% on or after June 1, 2020. If Antero undergoes a change of control, the holders of the 2022 notes will have the right to require Antero to repurchase all or a portion of the notes at a price equal to 101% of the principal amount of the 2022 notes, plus accrued and unpaid interest. (d) 5.625% Senior Notes Due 2023 On March 17, 2015, Antero issued $750 million of 5.625% senior notes due June 1, 2023 (the “2023 notes”) at par. The 2023 notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2023 notes rank pari passu to Antero’s other outstanding senior notes. The 2023 notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero’s wholly-owned subsidiaries and certain of its future restricted subsidiaries. Interest on the 2023 notes is payable on June 1 and December 1 of each year. Antero may redeem all or part of the 2023 notes at any time on or after June 1, 2018 at redemption prices ranging from 104.219% on or after June 1, 2018 to 100.00% on or after June 1, 2021. In addition, on or before June 1, 2018, Antero may redeem up to 35% of the aggregate principal amount of the 2023 notes with the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 105.625% of the principal amount of the 2023 notes, plus accrued and unpaid interest. At any time prior to June 1, 2018, Antero may also redeem the 2023 notes, in whole or in part, at a price equal to 100% of the principal amount of the 2023 notes plus a “make-whole” premium and accrued and unpaid interest. If Antero undergoes a change of control, the holders of the 2023 notes will have the right to require Antero to repurchase all or a portion of the notes at a price equal to 101% of the principal amount of the 2023 notes, plus accrued and unpaid interest. (e) 5.00% Senior Notes Due 2025 On December 21, 2016, Antero issued $600 million of 5.00% senior notes due March 1, 2025 (the “2025 notes”) at par. The 2025 notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2025 notes rank pari passu to Antero’s other outstanding senior notes. The 2025 notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero’s wholly-owned subsidiaries and certain of its future restricted subsidiaries. Interest on the 2025 notes is payable on March 1 and September 1 of each year. Antero may redeem all or part of the 2025 notes at any time on or after March 1, 2020 at redemption prices ranging from 103.750% on or after March 1, 2020 to 100.00% on or after March 1, 2023. In addition, on or before March 1, 2020, Antero may redeem up to 35% of the aggregate principal amount of the 2025 notes with the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 105.00% of the principal amount of the 2025 notes, plus accrued and unpaid interest. At any time prior to March 1, 2020, Antero may also redeem the 2025 notes, in whole or in part, at a price equal to 100% of the principal amount of the 2025 notes plus a “make-whole” premium and accrued and unpaid interest. If Antero undergoes a change of control, the holders of the 2025 notes will have the right to require Antero to repurchase all or a portion of the notes at a price equal to 101% of the principal amount of the 2025 notes, plus accrued and unpaid interest. (f) Treasury Management Facility Antero has a stand-alone revolving note with a lender under the Credit Facility which provides for up to $25 million of cash management obligations in order to facilitate Antero’s daily treasury management. Borrowings under the revolving note are secured by the collateral for the Credit Facility. Borrowings under the revolving note bear interest at the lender’s prime rate plus 1.0%. The note matures on May 1, 2018. At December 31, 2016 and June 30, 2017, there were no outstanding borrowings under this note. Antero Midstream Partners LP (g) Senior Secured Revolving Credit Facility – Antero Midstream Antero Midstream has a secured revolving credit facility (the “Midstream Facility”) with a syndicate of bank lenders. At June 30, 2017, lender commitments were $1.5 billion. The maturity date of the Midstream Facility is November 10, 2019. The Midstream Facility is ratably secured by mortgages on substantially all of the properties of Antero Midstream and guarantees from its restricted subsidiaries, as applicable. The Midstream Facility contains certain covenants, including restrictions on indebtedness and certain distributions to owners, and requirements with respect to leverage and interest coverage ratios. Interest is payable at a variable rate based on LIBOR or the prime rate, determined by election at the time of borrowing. Antero Midstream was in compliance with all of the financial covenants under the Midstream Facility as of December 31, 2016 and June 30, 2017. As of June 30, 2017, Antero Midstream had an outstanding balance under the Midstream Facility of $305 million with a weighted average interest rate of 2.62%. As of December 31, 2016, Antero Midstream had a total outstanding balance under the Midstream Facility of $210 million with a weighted average interest rate of 2.23%. Commitment fees on the unused portion of the Midstream Facility are due quarterly at rates ranging from 0.25% to 0.375% of the unused portion based on utilization. (h) 5.375% Senior Notes Due 2024 – Antero Midstream On September 13, 2016, Antero Midstream and its wholly-owned subsidiary, Antero Midstream Finance Corporation (“Midstream Finance Corp.”) as co-issuers, issued $650 million in aggregate principal amount of 5.375% senior notes due September 15, 2024 (the “2024 Midstream notes”) at par. The 2024 Midstream notes are unsecured and effectively subordinated to the Midstream Facility to the extent of the value of the collateral securing the Midstream Facility. The 2024 Midstream notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero Midstream’s wholly-owned subsidiaries, excluding Midstream Finance Corp., and certain of Antero Midstream’s future restricted subsidiaries. Interest on the 2024 Midstream notes is payable on March 15 and September 15 of each year. Antero Midstream may redeem all or part of the 2024 Midstream notes at any time on or after September 15, 2019 at redemption prices ranging from 104.031% on or after September 15, 2019 to 100.00% on or after September 15, 2022. In addition, prior to September 15, 2019, Antero Midstream may redeem up to 35% of the aggregate principal amount of the 2024 Midstream notes with an amount of cash not greater than the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 105.375% of the principal amount of the 2024 Midstream notes, plus accrued and unpaid interest. At any time prior to September 15, 2019, Antero Midstream may also redeem the 2024 Midstream notes, in whole or in part, at a price equal to 100% of the principal amount of the 2024 Midstream notes plus a “make-whole” premium and accrued and unpaid interest. If Antero Midstream undergoes a change of control, the holders of the 2024 Midstream notes will have the right to require Antero Midstream to repurchase all or a portion of the notes at a price equal to 101% of the principal amount of the 2024 Midstream notes, plus accrued and unpaid interest. |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Jun. 30, 2017 | |
Asset Retirement Obligations | |
Asset Retirement Obligations | (6) The following is a reconciliation of the Company’s asset retirement obligations for the six months ended June 30, 2017 (in thousands): Asset retirement obligations—December 31, 2016 $ 32,736 Obligations incurred for wells drilled and producing properties acquired 2,824 Accretion expense 1,286 Asset retirement obligations—June 30, 2017 $ 36,846 Asset retirement obligations are included in Other liabilities on the Company’s condensed consolidated balance sheets. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Equity-Based Compensation | |
Equity-Based Compensation | (7) Equity-Based Compensation Antero is authorized to grant up to 16,906,500 shares of common stock to employees and directors of the Company under the Antero Resources Corporation Long-Term Incentive Plan (the “Plan”). The Plan allows equity-based compensation awards to be granted in a variety of forms, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, dividend equivalent awards, and other types of awards. The terms and conditions of the awards granted are established by the Compensation Committee of Antero’s Board of Directors. A total of 7,645,937 shares were available for future grant under the Plan as of June 30, 2017. Antero Midstream is authorized to grant up to 10,000,000 common units representing limited partner interests in Antero Midstream under the Antero Midstream Partners LP Long-Term Incentive Plan (the “Midstream Plan”) to non-employee directors of AMP GP and certain officers, employees, and consultants of Antero Midstream and its affiliates (which include Antero). A total of 7,667,042 common units were available for future grant under the Midstream Plan as of June 30, 2017. The Company’s equity-based compensation expense, by type of award, was as follows for the three and six months ended June 30, 2016 and 2017 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 Restricted stock unit awards $ 18,146 18,681 35,613 36,906 Stock options 641 616 1,301 1,236 Performance share unit awards 2,466 2,748 3,349 4,883 Antero Midstream phantom unit awards 4,013 4,443 8,001 8,486 Equity awards issued to directors 550 487 1,022 967 Total expense $ 25,816 26,975 49,286 52,478 Restricted Stock Unit Awards Restricted stock unit awards vest subject to the satisfaction of service requirements. Expense related to each restricted stock unit award is recognized on a straight-line basis over the requisite service period of the entire award. Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period. The grant date fair values of these awards are determined based on the closing price of the Company’s common stock on the date of the grant. A summary of restricted stock unit awards activity for the six months ended June 30, 2017 is as follows: Weighted Aggregate Number of grant date intrinsic value Total awarded and unvested—December 31, 2016 5,353,447 $ 31.77 $ 126,609 Granted 757,694 $ 22.23 Vested (826,675) $ 44.32 Forfeited (195,400) $ 23.96 Total awarded and unvested—June 30, 2017 5,089,066 $ 28.56 $ 109,975 Intrinsic values are based on the closing price of the Company’s stock on the referenced dates. As of June 30, 2017, there was $105.6 million of unamortized equity-based compensation expense related to unvested restricted stock units. That expense is expected to be recognized over a weighted average period of approximately 1.9 years. Stock Options Stock options granted under the Plan vest over periods from one to four years and have a maximum contractual life of 10 years. Expense related to stock options is recognized on a straight-line basis over the requisite service period of the entire award. Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period. Stock options are granted with an exercise price equal to or greater than the market price of the Company’s common stock on the date of grant. A summary of stock option activity for the six months ended June 30, 2017 is as follows: Weighted Weighted average Intrinsic Stock exercise contractual value Outstanding at December 31, 2016 687,929 $ 50.46 8.12 $ — Granted — $ — Exercised — $ — Forfeited (10,458) $ 50.00 Expired — $ — Outstanding at June 30, 2017 677,471 $ 50.47 7.61 $ — Vested or expected to vest as of June 30, 2017 677,471 $ 50.47 7.61 $ — Exercisable at June 30, 2017 364,855 $ 50.70 7.52 $ — Intrinsic values are based on the exercise price of the options and the closing price of the Company’s stock on the referenced dates. As of June 30, 2017, there was $4.0 million of unamortized equity-based compensation expense related to unvested stock options. That expense is expected to be recognized over a weighted average period of approximately 1.8 years. Performance Share Unit Awards Performance Share Unit Awards Based on Price Targets In 2016, the Company granted performance share unit awards (“PSUs”) to certain of its executive officers that are based on price targets. The vesting of these PSUs is conditioned on the closing price of the Company’s common stock achieving specific price thresholds over 10-day periods, subject to the following vesting restrictions: no PSUs may vest before the first anniversary of the grant date; no more than one-third of the PSUs may vest before the second anniversary of the grant date; and no more than two-thirds of the PSUs may vest before the third anniversary of the grant date. Any PSUs which have not vested by the fifth anniversary of the grant date will expire. Expense related to these PSUs is recognized on a graded basis over three years. Performance Share Unit Awards Based on Total Shareholder Return In 2016 and 2017, the Company also granted PSUs to certain of its employees and executive officers which vest based on the total shareholder return (“TSR”) of the Company’s common stock relative to the TSR of a peer group of companies over a three-year performance period. The number of performance shares which may ultimately be earned ranges from zero to 200% of the PSUs granted. Expense related to these PSUs is recognized on a straight-line basis over three years. Summary Information for Performance Share Unit Awards A summary of PSU activity for the six months ended June 30, 2017 is as follows: Number of Weighted Total awarded and unvested—December 31, 2016 785,301 $ 29.75 Granted 558,021 $ 26.21 Vested (41,666) $ 27.38 Forfeited (8,623) $ 29.86 Total awarded and unvested—June 30, 2017 1,293,033 $ 28.30 The following table present information regarding the weighted average fair value for PSUs granted during the six months ended June 30, 2017 and the assumptions used to determine the fair values. Six Months Ended June 30, 2017 Dividend yield — % Volatility 42 % Risk-free interest rate 1.40 % Weighted average fair value of awards granted $ 26.21 As of June 30, 2017, there was $24.2 million of unamortized equity-based compensation expense related to unvested PSUs. That expense is expected to be recognized over a weighted average period of approximately 2.3 years. Antero Midstream Partners Phantom Unit Awards Phantom units granted by Antero Midstream vest subject to the satisfaction of service requirements, upon the completion of which common units in Antero Midstream are delivered to the holder of the phantom units. These phantom units are treated, for accounting purposes, as if Antero Midstream distributed the units to Antero. Antero recognizes compensation expense as the units are granted to its employees, and a portion of the expense is allocated to Antero Midstream. Expense related to each phantom unit award is recognized on a straight-line basis over the requisite service period of the entire award. Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period. The grant date fair values of these awards are determined based on the closing price of Antero Midstream’s common units on the date of grant. A summary of phantom unit awards activity for the six months ended June 30, 2017 is as follows: Number of Weighted Aggregate Total awarded and unvested—December 31, 2016 1,331,961 $ 27.31 $ 41,131 Granted 340,773 $ 32.45 Vested (73,080) $ 21.34 Forfeited (48,760) $ 28.85 Total awarded and unvested—June 30, 2017 1,550,894 $ 28.68 $ 51,459 Intrinsic values are based on the closing price of Antero Midstream’s common units on the referenced dates. As of June 30, 2017, there was $34.4 million of unamortized equity-based compensation expense related to unvested phantom unit awards. That expense is expected to be recognized over a weighted average period of approximately 2.3 years. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments | |
Financial Instruments | (8) Financial Instruments The carrying values of accounts receivable and accounts payable at December 31, 2016 and June 30, 2017 approximated market values because of their short-term nature. The carrying values of the amounts outstanding under the Credit Facility and Midstream Facility at December 31, 2016 and June 30, 2017 approximated fair value because the variable interest rates are reflective of current market conditions. Based on Level 2 market data inputs, the fair value of Antero’s senior notes was approximately $3.5 billion at December 31, 2016 and June 30, 2017. Based on Level 2 market data inputs, the fair value of Antero Midstream’s senior notes was approximately $657 million at December 31, 2016 and $668 million at June 30, 2017. See Note 9 for information regarding the fair value of derivative financial instruments. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments. | |
Derivative Instruments | (9) Derivative Instruments (a) Commodity Derivative Positions The Company periodically enters into natural gas, NGLs, and oil derivative contracts with counterparties to hedge the price risk associated with its production. These derivatives are not held for trading purposes. To the extent that changes occur in the market prices of natural gas, NGLs, and oil, the Company is exposed to market risk on these open contracts. This market risk exposure is generally offset by the change in market prices of natural gas, NGLs, and oil recognized upon the ultimate sale of the Company’s production. The Company was party to various fixed price commodity swap contracts that settled during the six months ended June 30, 2016 and 2017. The Company enters into these swap contracts when management believes that favorable future sales prices for the Company’s production can be secured. Under these swap agreements, when actual commodity prices upon settlement exceed the fixed price provided by the swap contracts, the Company pays the difference to the counterparty. When actual commodity prices upon settlement are less than the contractually provided fixed price, the Company receives the difference from the counterparty. In addition to fixed price swap contracts, the Company has entered into basis swap contracts in order to hedge the difference between the New York Mercantile Exchange (“NYMEX”) index price and a local index price at which the Company sells a portion of its natural gas production. The Company’s derivative swap contracts have not been designated as hedges for accounting purposes; therefore, all gains and losses are recognized in the Company’s statements of operations. As of June 30, 2017, the Company’s fixed price natural gas, NGLs, and oil swap positions from July 1, 2017 through December 31, 2023 were as follows (abbreviations in the table refer to the index to which the swap position is tied, as follows: NYMEX=Henry Hub; CGTLA=Columbia Gas Louisiana Onshore; CCG=Chicago City Gate; Mont Belvieu-Ethane=Mont Belvieu Purity Ethane; Mont Belvieu-Propane=Mont Belvieu Propane; NYMEX-WTI=West Texas Intermediate): Natural gas Oil Natural Gas Weighted Three months ending September 30, 2017: NYMEX ($/MMBtu) 1,370,000 — — $ 3.33 CGTLA ($/MMBtu) 420,000 — — $ 4.20 CCG ($/MMBtu) 70,000 — — $ 4.45 NYMEX-WTI ($/Bbl) — 3,000 — $ 54.75 Mont Belvieu-Ethane ($/Gallon) — — 20,000 $ 0.25 Mont Belvieu-Propane ($/Gallon) — — 27,500 $ 0.39 Total 1,860,000 3,000 47,500 Three months ending December 31, 2017: NYMEX ($/MMBtu) 1,370,000 — — $ 3.46 CGTLA ($/MMBtu) 420,000 — — $ 4.37 CCG ($/MMBtu) 70,000 — — $ 4.68 NYMEX-WTI ($/Bbl) — 3,000 — $ 54.75 Mont Belvieu-Ethane ($/Gallon) — — 20,000 $ 0.25 Mont Belvieu-Propane ($/Gallon) — — 27,500 $ 0.40 Total 1,860,000 3,000 47,500 Year ending December 31, 2018: NYMEX ($/MMBtu) 2,002,500 — $ 3.91 Mont Belvieu-Propane ($/Gallon) — 2,000 $ 0.65 Total 2,002,500 2,000 Year ending December 31, 2019: NYMEX ($/MMBtu) 2,330,000 $ 3.70 Year ending December 31, 2020: NYMEX ($/MMBtu) 1,417,500 $ 3.63 Year ending December 31, 2021: NYMEX ($/MMBtu) 710,000 $ 3.31 Year ending December 31, 2022: NYMEX ($/MMBtu) 850,000 $ 3.16 Year ending December 31, 2023: NYMEX ($/MMBtu) 90,000 $ 2.91 As of June 30, 2017, the Company’s natural gas basis swap positions, which settle on the pricing index to basis differential of TCO to the NYMEX Henry Hub natural gas price, were as follows: Natural gas Hedged Differential ($/MMBtu) Six months ending December 31, 2017: 125,000 $ (0.51) As of June 30, 2017, the Company’s natural gas basis swap positions, which settle on the pricing index to basis differential of NYMEX Henry Hub to the TCO natural gas price, were as follows: Natural gas Hedged Differential ($/MMBtu) Six months ending December 31, 2017: 125,000 $ 0.38 (b) The following table presents a summary of the fair values of the Company’s derivative instruments and where such values are recorded in the consolidated balance sheets as of December 31, 2016 and June 30, 2017. None of the Company’s derivative instruments are designated as hedges for accounting purposes. December 31, 2016 June 30, 2017 Balance sheet Fair value Balance sheet Fair value (In thousands) (In thousands) Asset derivatives not designated as hedges for accounting purposes: Commodity contracts Current assets $ 73,022 Current assets 452,005 Commodity contracts Long-term assets 1,731,063 Long-term assets 1,600,165 Total asset derivatives 1,804,085 2,052,170 Liability derivatives not designated as hedges for accounting purposes: Commodity contracts Current liabilities 203,635 Current liabilities 3,279 Commodity contracts Long-term liabilities 234 Long-term liabilities 172 Total liability derivatives 203,869 3,451 Net derivatives $ 1,600,216 2,048,719 The following table presents the gross values of recognized derivative assets and liabilities, the amounts offset under master netting arrangements with counterparties, and the resulting net amounts presented in the consolidated balance sheets as of the dates presented, all at fair value (in thousands): December 31, 2016 June 30, 2017 Gross Gross amounts Net amounts Gross Gross amounts Net amounts Commodity derivative assets $ 1,914,245 (110,160) 1,804,085 $ 2,161,257 (109,087) 2,052,170 Commodity derivative liabilities $ (324,667) 120,798 (203,869) $ (3,451) — (3,451) The following is a summary of derivative fair value gains and where such values are recorded in the condensed consolidated statements of operations for the three and six months ended June 30, 2016 and 2017 (in thousands): Statement of Three months ended June 30, Six months ended June 30, location 2016 2017 2016 2017 Commodity derivative fair value gains (losses) Revenue $ (684,634) 85,641 $ (404,710) 524,416 The fair value of commodity derivative instruments was determined using Level 2 inputs. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Contingencies | |
Contingencies | (10) Contingencies The Company is the plaintiff in two nearly identical lawsuits against South Jersey Gas Company and South Jersey Resources Group, LLC (collectively, “SJGC”) pending in United States District Court in Colorado. The Company filed suit against SJGC seeking relief for breach of contract and damages in the amounts that SJGC have short paid, and continue to short pay, the Company in connection with two long term gas contracts. Under those contracts, SJGC are long term purchasers of some of the Company’s natural gas production. Deliveries under the contracts began in October 2011 and the delivery obligation continues through October 2019. SJGC unilaterally breached the contracts claiming that the index prices specified in the contracts, and the index prices at which SJGC paid for deliveries from 2011 through September 2014, are no longer appropriate under the contracts because a market disruption event (as defined by the contract) has occurred and, as a result, a new index price is to be determined by the parties. Beginning in October 2014, SJGC began short paying the Company based on indexes unilaterally selected by SJGC and not the index specified in the contract. The Company contends that no market disruption event has occurred and that SJGC have breached the contracts by failing to pay the Company based on the express price terms of the contracts. On May 8, 2017, a jury in the United States District Court in Colorado returned a unanimous verdict finding in favor of Antero’s positions in its lawsuits against SJGC. On July 21, 2017, the court entered a final judgment in Antero’s favor. SJGC will have 30 days from the entry of final judgment to file an appeal. Through June 30, 2017, the Company estimates that it is owed approximately $60 million more than SJGC have paid using the indexes unilaterally selected by them. The Company and Washington Gas Light Company and WGL Midstream, Inc. (collectively, “WGL”) are also involved in a pricing dispute involving contracts that the Company began delivering gas under in January 2016. The Company has invoiced WGL at the index price specified in the contract and WGL has paid the Company based on that invoice price; however, WGL asserted that the index price was no longer appropriate under the contracts and that an undefined alternative index was more appropriate for the delivery point of the gas. In July 2016, the matter was referred to arbitration by the Colorado district court. In January 2017, the arbitration panel ruled in the Company’s favor. As a result, the index price has remained as specified in the contracts and there will be no adjustments to the invoices that have been paid by WGL. The arbitration panel’s award was confirmed by a Colorado district court. In March of 2017, WGL filed a second lawsuit against the Company in Colorado district court seeking relief for breach of contract and damages of more than $30 million, alleging that the Company breached its contractual obligations under two long term gas contracts by failing to deliver “TCO pool” gas. The Company will vigorously defend this lawsuit and believes it has numerous compelling defenses to WGL’s claims, including without limitation, that WGL’s claims were already decided against them in the arbitration. On July 12, 2017, the Company asserted counterclaims against WGL based on WGL’s failure to take receipt of the quantity of gas required under the contracts since April 2017. In instances when WGL has failed to take receipt of the quantity of gas required under the contracts, the Company has resold the gas and invoiced WGL for cover damages pursuant to the contract standard, but WGL has refused to pay. Through June 30, 2017, these damages amounted to approximately $17 million. The Company will seek to recover those damages and others as part of its counterclaims against WGL. The Company is party to various other legal proceedings and claims in the ordinary course of its business. The Company believes that certain of these matters will be covered by insurance and that the outcome of other matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Information | |
Segment Information | (11) See Note 2(f) for a description of the Company’s determination of its reportable segments. Revenues from gathering and processing and water handling and treatment operations are primarily derived from intersegment transactions for services provided to the Company’s exploration and production operations. Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market excess firm transportation capacity to third parties. Operating segments are evaluated based on their contribution to consolidated results, which is primarily determined by the respective operating income of each segment. General and administrative expenses are allocated to the gathering and processing and water handling and treatment segments based on the nature of the expenses and on a combination of the segments’ proportionate share of the Company’s consolidated property and equipment, capital expenditures, and labor costs, as applicable. General and administrative expenses related to the marketing segment are not allocated because they are immaterial. Other income, income taxes, and interest expense are primarily managed and evaluated on a consolidated basis. Intersegment sales are transacted at prices which approximate market. Accounting policies for each segment are the same as the Company’s accounting policies described in Note 2 to the condensed consolidated financial statements. The operating results and assets of the Company’s reportable segments were as follows for the three months ended June 30, 2016 and 2017 (in thousands): Exploration Gathering and Water handling and treatment Marketing Elimination of Consolidated Three months ended June 30, 2016: Sales and revenues: Third-party $ (343,394) 3,131 163 90,902 — (249,198) Intersegment 3,899 68,785 64,730 — (137,414) — Total $ (339,495) 71,916 64,893 90,902 (137,414) (249,198) Operating expenses: Lease operating $ 12,257 — 34,317 — (34,531) 12,043 Gathering, compression, processing, and transportation 267,738 6,997 — — (68,675) 206,060 Depletion, depreciation, and amortization 173,015 17,172 7,175 — — 197,362 General and administrative 47,167 10,138 3,168 — (371) 60,102 Other 37,848 450 4,294 125,977 (3,461) 165,108 Total 538,025 34,757 48,954 125,977 (107,038) 640,675 Operating income (loss) $ (877,520) 37,159 15,939 (35,075) (30,376) (889,873) Equity in earnings of unconsolidated affiliates $ — 484 — — — 484 Segment assets $ 11,919,732 1,598,826 569,624 23,045 (552,447) 13,558,780 Capital expenditures for segment assets $ 375,247 48,614 41,589 — (30,183) 435,267 Exploration Gathering and Water handling and treatment Marketing Elimination of Consolidated Three months ended June 30, 2017: Sales and revenues: Third-party $ 737,229 2,324 868 49,968 — 790,389 Intersegment 3,911 96,438 94,137 — (194,486) — Total $ 741,140 98,762 95,005 49,968 (194,486) 790,389 Operating expenses: Lease operating $ 17,189 — 41,444 — (41,641) 16,992 Gathering, compression, processing, and transportation 353,216 9,910 — — (96,379) 266,747 Depletion, depreciation, and amortization 170,446 22,494 8,242 — — 201,182 General and administrative 49,531 10,705 4,084 — (221) 64,099 Other 39,251 12 4,532 77,421 (3,590) 117,626 Total 629,633 43,121 58,302 77,421 (141,831) 666,646 Operating income (loss) $ 111,507 55,641 36,703 (27,453) (52,655) 123,743 Equity in earnings of unconsolidated affiliates $ — 3,623 — — — 3,623 Segment assets $ 13,430,135 2,065,899 711,735 14,357 (779,905) 15,442,221 Capital expenditures for segment assets $ 584,832 88,806 58,497 — (52,487) 679,648 The operating results and assets of the Company’s reportable segments were as follows for the six months ended June 30, 2016 and 2017 (in thousands): Exploration Gathering and Water handling and treatment Marketing Elimination of Consolidated Six months ended June 30, 2016: Sales and revenues: Third-party $ 274,550 6,718 420 190,118 — 471,806 Intersegment 7,724 134,825 130,919 — (273,468) — Total $ 282,274 141,543 131,339 190,118 (273,468) 471,806 Operating expenses: Lease operating $ 23,589 — 75,031 — (75,284) 23,336 Gathering, compression, processing, and transportation 535,183 14,167 — — (134,552) 414,798 Depletion, depreciation, and amortization 340,567 34,240 14,137 — — 388,944 General and administrative 90,719 19,473 6,924 — (727) 116,389 Other 73,013 899 8,498 263,910 (6,857) 339,463 Total 1,063,071 68,779 104,590 263,910 (217,420) 1,282,930 Operating income (loss) $ (780,797) 72,764 26,749 (73,792) (56,048) (811,124) Equity in earnings of unconsolidated affiliates $ — 484 — — — 484 Segment assets $ 11,919,732 1,598,826 569,624 23,045 (552,447) 13,558,780 Capital expenditures for segment assets $ 825,077 97,300 78,625 — (55,612) 945,390 Exploration Gathering and Water handling and treatment Marketing Elimination of Consolidated Six months ended June 30, 2017: Sales and revenues: Third-party $ 1,864,280 4,863 933 115,892 — 1,985,968 Intersegment 8,351 185,558 177,182 — (371,091) — Total $ 1,872,631 190,421 178,115 115,892 (371,091) 1,985,968 Operating expenses: Lease operating $ 32,931 — 80,066 — (80,454) 32,543 Gathering, compression, processing, and transportation 700,984 18,024 — — (185,432) 533,576 Depletion, depreciation, and amortization 345,415 42,418 16,078 — — 403,911 General and administrative 100,587 20,843 8,403 — (1,036) 128,797 Other 92,869 12 8,876 167,414 (7,116) 262,055 Total 1,272,786 81,297 113,423 167,414 (274,038) 1,360,882 Operating income (loss) $ 599,845 109,124 64,692 (51,522) (97,053) 625,086 Equity in earnings of unconsolidated affiliates $ — 5,854 — — — 5,854 Segment assets $ 13,430,135 2,065,899 711,735 14,357 (779,905) 15,442,221 Capital expenditures for segment assets $ 1,041,782 155,365 95,451 — (96,716) 1,195,882 |
Subsidiary Guarantors
Subsidiary Guarantors | 6 Months Ended |
Jun. 30, 2017 | |
Subsidiary Guarantors | |
Subsidiary Guarantors | (12) Subsidiary Guarantors Antero’s wholly-owned subsidiaries each have fully and unconditionally guaranteed Antero’s senior notes. Antero Midstream and its subsidiaries have been designated as unrestricted subsidiaries under the Credit Facility and the indentures governing Antero’s senior notes, and do not guarantee any of Antero’s obligations (see Note 5). In the event a subsidiary guarantor is sold or disposed of (whether by merger, consolidation, the sale of a sufficient amount of its capital stock so that it no longer qualifies as a “Subsidiary” of the Company (as defined in the indentures governing the notes) or the sale of all or substantially all of its assets (other than by lease)) and whether or not the subsidiary guarantor is the surviving entity in such transaction to a person which is not Antero or a restricted subsidiary of Antero, such subsidiary guarantor will be released from its obligations under its subsidiary guarantee if the sale or other disposition does not violate the covenants set forth in the indentures governing the notes. In addition, a subsidiary guarantor will be released from its obligations under the indentures and its guarantee, upon the release or discharge of the guarantee of other Indebtedness (as defined in the indentures governing the notes) that resulted in the creation of such guarantee, except a release or discharge by or as a result of payment under such guarantee; if Antero designates such subsidiary as an unrestricted subsidiary and such designation complies with the other applicable provisions of the indentures governing the notes or in connection with any covenant defeasance, legal defeasance or satisfaction and discharge of the notes. The following Condensed Consolidating Balance Sheets at December 31, 2016 and June 30, 2017, and the related Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2016 and 2017 and Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2016 and 2017 present financial information for Antero on a stand-alone basis (carrying its investment in subsidiaries using the equity method), financial information for the subsidiary guarantors, financial information for the non-guarantor subsidiaries, and the consolidation and elimination entries necessary to arrive at the information for the Company on a consolidated basis. Antero’s wholly-owned subsidiaries are not restricted from making distributions to the Parent. Condensed Consolidating Balance Sheet December 31, 2016 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 17,568 — 14,042 — 31,610 Accounts receivable, net 28,442 — 1,240 — 29,682 Intercompany receivables 3,193 — 64,139 (67,332) — Accrued revenue 261,960 — — — 261,960 Derivative instruments 73,022 — — — 73,022 Other current assets 5,784 — 529 — 6,313 Total current assets 389,969 — 79,950 (67,332) 402,587 Property and equipment: Natural gas properties, at cost (successful efforts method): Unproved properties 2,331,173 — — — 2,331,173 Proved properties 9,726,957 — — (177,286) 9,549,671 Water handling and treatment systems — — 744,682 — 744,682 Gathering systems and facilities 17,929 — 1,705,839 — 1,723,768 Other property and equipment 41,231 — — — 41,231 12,117,290 — 2,450,521 (177,286) 14,390,525 Less accumulated depletion, depreciation, and amortization (2,109,136) — (254,642) — (2,363,778) Property and equipment, net 10,008,154 — 2,195,879 (177,286) 12,026,747 Derivative instruments 1,731,063 — — — 1,731,063 Investments in subsidiaries (420,429) — — 420,429 — Contingent acquisition consideration 194,538 — — (194,538) — Investments in unconsolidated affiliates — — 68,299 — 68,299 Other assets, net 21,087 — 5,767 — 26,854 Total assets $ 11,924,382 — 2,349,895 (18,727) 14,255,550 Liabilities and Equity Current liabilities: Accounts payable $ 21,648 — 16,979 — 38,627 Intercompany payable 64,139 — 3,193 (67,332) — Accrued liabilities 332,162 — 61,641 — 393,803 Revenue distributions payable 163,989 — — — 163,989 Derivative instruments 203,635 — — — 203,635 Other current liabilities 17,134 — 200 — 17,334 Total current liabilities 802,707 — 82,013 (67,332) 817,388 Long-term liabilities: Long-term debt 3,854,059 — 849,914 — 4,703,973 Deferred income tax liability 950,217 — — — 950,217 Contingent acquisition consideration — — 194,538 (194,538) — Derivative instruments 234 — — — 234 Other liabilities 54,540 — 620 — 55,160 Total liabilities 5,661,757 — 1,127,085 (261,870) 6,526,972 Equity: Stockholders' equity: Partners' capital — — 1,222,810 (1,222,810) — Common stock 3,149 — — — 3,149 Additional paid-in capital 5,299,481 — — — 5,299,481 Accumulated earnings 959,995 — — — 959,995 Total stockholders' equity 6,262,625 — 1,222,810 (1,222,810) 6,262,625 Noncontrolling interest in consolidated subsidiary — — — 1,465,953 1,465,953 Total equity 6,262,625 — 1,222,810 243,143 7,728,578 Total liabilities and equity $ 11,924,382 — 2,349,895 (18,727) 14,255,550 Condensed Consolidating Balance Sheet June 30, 2017 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 22,657 — 17,533 — 40,190 Accounts receivable, net 15,257 — 1,237 — 16,494 Intercompany receivables 2,989 — 79,062 (82,051) — Accrued revenue 218,621 — — — 218,621 Derivative instruments 452,005 — — — 452,005 Other current assets 8,279 — 294 — 8,573 Total current assets 719,808 — 98,126 (82,051) 735,883 Property and equipment: Natural gas properties, at cost (successful efforts method): Unproved properties 2,309,839 — — — 2,309,839 Proved properties 10,767,934 — — (274,002) 10,493,932 Water handling and treatment systems — — 840,183 — 840,183 Gathering systems and facilities 17,929 — 1,866,783 — 1,884,712 Other property and equipment 48,537 — — — 48,537 13,144,239 — 2,706,966 (274,002) 15,577,203 Less accumulated depletion, depreciation, and amortization (2,454,668) — (312,690) — (2,767,358) Property and equipment, net 10,689,571 — 2,394,276 (274,002) 12,809,845 Derivative instruments 1,600,165 — — — 1,600,165 Investments in subsidiaries 603,549 — — (603,549) — Contingent acquisition consideration 201,654 — — (201,654) — Investments in unconsolidated affiliates — — 259,697 — 259,697 Other assets, net 26,793 — 9,838 — 36,631 Total assets $ 13,841,540 — 2,761,937 (1,161,256) 15,442,221 Liabilities and Equity Current liabilities: Accounts payable $ 36,490 — 15,077 — 51,567 Intercompany payable 79,062 — 2,989 (82,051) — Accrued liabilities 341,256 — 77,096 — 418,352 Revenue distributions payable 203,151 — — — 203,151 Derivative instruments 3,279 — — — 3,279 Other current liabilities 16,507 — 204 — 16,711 Total current liabilities 679,745 — 95,366 (82,051) 693,060 Long-term liabilities: Long-term debt 4,346,524 — 945,449 — 5,291,973 Deferred income tax liability 1,100,382 — — — 1,100,382 Contingent acquisition consideration — — 201,654 (201,654) — Derivative instruments 172 — — — 172 Other liabilities 53,257 — 515 — 53,772 Total liabilities 6,180,080 — 1,242,984 (283,705) 7,139,359 Equity: Stockholders' equity: Partners' capital — — 1,518,953 (1,518,953) — Common stock 3,154 — — — 3,154 Additional paid-in capital 6,435,047 — — — 6,435,047 Accumulated earnings 1,223,259 — — — 1,223,259 Total stockholders' equity 7,661,460 — 1,518,953 (1,518,953) 7,661,460 Noncontrolling interests in consolidated subsidiary — — — 641,402 641,402 Total equity 7,661,460 — 1,518,953 (877,551) 8,302,862 Total liabilities and equity $ 13,841,540 — 2,761,937 (1,161,256) 15,442,221 Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three Months Ended June 30, 2016 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Revenue: Natural gas sales $ 229,787 — — — 229,787 Natural gas liquids sales 94,713 — — — 94,713 Oil sales 16,740 — — — 16,740 Gathering, compression, water handling and treatment — — 136,809 (133,515) 3,294 Marketing 90,902 — — — 90,902 Commodity derivative fair value losses (684,634) — — — (684,634) Other income 3,899 — — (3,899) — Total revenue (248,593) — 136,809 (137,414) (249,198) Operating expenses: Lease operating 12,257 — 34,317 (34,531) 12,043 Gathering, compression, processing, and transportation 267,738 — 6,997 (68,675) 206,060 Production and ad valorem taxes 16,175 — 1,283 — 17,458 Marketing 125,977 — — — 125,977 Exploration 1,109 — — — 1,109 Impairment of unproved properties 19,944 — — — 19,944 Depletion, depreciation, and amortization 173,222 — 24,140 — 197,362 Accretion of asset retirement obligations 620 — — — 620 General and administrative 47,167 — 13,306 (371) 60,102 Accretion of contingent acquisition consideration — — 3,461 (3,461) — Total operating expenses 664,209 — 83,504 (107,038) 640,675 Operating income (loss) (912,802) — 53,305 (30,376) (889,873) Other income (expenses): Equity in earnings of unconsolidated affiliates — — 484 — 484 Interest (58,910) — (3,878) 193 (62,595) Equity in net income of subsidiaries (1,026) — — 1,026 — Total other expenses (59,936) — (3,394) 1,219 (62,111) Income (loss) before income taxes (972,738) — 49,911 (29,157) (951,984) Provision for income tax benefit 376,494 — — — 376,494 Net income (loss) and comprehensive income (loss) including noncontrolling interests (596,244) — 49,911 (29,157) (575,490) Net income and comprehensive income attributable to noncontrolling interests — — — 20,754 20,754 Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation $ (596,244) — 49,911 (49,911) (596,244) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three Months Ended June 30, 2017 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Revenue: Natural gas sales $ 454,257 — — — 454,257 Natural gas liquids sales 170,819 — — — 170,819 Oil sales 26,512 — — — 26,512 Gathering, compression, water handling and treatment — — 193,767 (190,575) 3,192 Marketing 49,968 — — — 49,968 Commodity derivative fair value gains 85,641 — — — 85,641 Other income 3,911 — — (3,911) — Total revenue 791,108 — 193,767 (194,486) 790,389 Operating expenses: Lease operating 17,189 — 41,444 (41,641) 16,992 Gathering, compression, processing, and transportation 353,216 — 9,910 (96,379) 266,747 Production and ad valorem taxes 21,599 — 954 — 22,553 Marketing 77,421 — — — 77,421 Exploration 1,804 — — — 1,804 Impairment of unproved properties 15,199 — — — 15,199 Depletion, depreciation, and amortization 170,670 — 30,512 — 201,182 Accretion of asset retirement obligations 649 — — — 649 General and administrative 49,531 — 14,789 (221) 64,099 Accretion of contingent acquisition consideration — — 3,590 (3,590) — Total operating expenses 707,278 — 101,199 (141,831) 666,646 Operating income 83,830 — 92,568 (52,655) 123,743 Other income (expenses): Equity in earnings of unconsolidated affiliates — — 3,623 — 3,623 Interest (59,735) — (9,015) 168 (68,582) Equity in net income (loss) of subsidiaries (10,408) — — 10,408 — Total other expenses (70,143) — (5,392) 10,576 (64,959) Income before income taxes 13,687 — 87,176 (42,079) 58,784 Provision for income tax expense (18,819) — — — (18,819) Net income (loss) and comprehensive income (loss) including noncontrolling interests (5,132) — 87,176 (42,079) 39,965 Net income and comprehensive income attributable to noncontrolling interests — — — 45,097 45,097 Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation $ (5,132) — 87,176 (87,176) (5,132) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Six Months Ended June 30, 2016 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Revenue and other: Natural gas sales $ 484,563 — — — 484,563 Natural gas liquids sales 167,778 — — — 167,778 Oil sales 26,919 — — — 26,919 Gathering, compression, water handling and treatment — — 272,882 (265,744) 7,138 Marketing 190,118 — — — 190,118 Commodity derivative fair value losses (404,710) — — — (404,710) Other income 7,724 — — (7,724) — Total revenue and other 472,392 — 272,882 (273,468) 471,806 Operating expenses: Lease operating 23,589 — 75,031 (75,284) 23,336 Gathering, compression, processing, and transportation 535,183 — 14,167 (134,552) 414,798 Production and ad valorem taxes 34,202 — 2,540 — 36,742 Marketing 263,910 — — — 263,910 Exploration 2,123 — — — 2,123 Impairment of unproved properties 35,470 — — — 35,470 Depletion, depreciation, and amortization 340,981 — 47,963 — 388,944 Accretion of asset retirement obligations 1,218 — — — 1,218 General and administrative 90,719 — 26,397 (727) 116,389 Accretion of contingent acquisition consideration — — 6,857 (6,857) — Total operating expenses 1,327,395 — 172,955 (217,420) 1,282,930 Operating income (loss) (855,003) — 99,927 (56,048) (811,124) Other income (expenses): Equity in earnings of unconsolidated affiliates — — 484 — 484 Interest (118,733) — (7,582) 436 (125,879) Equity in net income of subsidiaries 758 — — (758) — Total other expenses (117,975) — (7,098) (322) (125,395) Income (loss) before income taxes (972,978) — 92,829 (56,370) (936,519) Provision for income tax benefit 371,679 — — — 371,679 Net income (loss) and comprehensive income (loss) including noncontrolling interests (601,299) — 92,829 (56,370) (564,840) Net income and comprehensive income attributable to noncontrolling interests — — — 36,459 36,459 Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation $ (601,299) — 92,829 (92,829) (601,299) Condensed Consolidating Statement of Operations and Comprehensive Income Six Months Ended June 30, 2017 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Revenue and other: Natural gas sales $ 920,921 — — — 920,921 Natural gas liquids sales 365,471 — — — 365,471 Oil sales 53,472 — — — 53,472 Gathering, compression, water handling and treatment — — 368,536 (362,740) 5,796 Marketing 115,892 — — — 115,892 Commodity derivative fair value gains 524,416 — — — 524,416 Other income 8,351 — — (8,351) — Total revenue and other 1,988,523 — 368,536 (371,091) 1,985,968 Operating expenses: Lease operating 32,931 — 80,066 (80,454) 32,543 Gathering, compression, processing, and transportation 700,984 — 18,024 (185,432) 533,576 Production and ad valorem taxes 45,574 — 1,772 — 47,346 Marketing 167,414 — — — 167,414 Exploration 3,911 — — — 3,911 Impairment of unproved properties 42,098 — — — 42,098 Depletion, depreciation, and amortization 345,863 — 58,048 — 403,911 Accretion of asset retirement obligations 1,286 — — — 1,286 General and administrative 100,587 — 29,246 (1,036) 128,797 Accretion of contingent acquisition consideration — — 7,116 (7,116) — Total operating expenses 1,440,648 — 194,272 (274,038) 1,360,882 Operating income 547,875 — 174,264 (97,053) 625,086 Other income (expenses): Equity in earnings of unconsolidated affiliates — — 5,854 — 5,854 Interest (117,738) — (17,851) 337 (135,252) Equity in net income of subsidiaries (16,708) — — 16,708 — Total other expenses (134,446) — (11,997) 17,045 (129,398) Income before income taxes 413,429 — 162,267 (80,008) 495,688 Provision for income tax expense (150,165) — — — (150,165) Net income and comprehensive income including noncontrolling interests 263,264 — 162,267 (80,008) 345,523 Net income and comprehensive income attributable to noncontrolling interests — — — 82,259 82,259 Net income and comprehensive income attributable to Antero Resources Corporation $ 263,264 — 162,267 (162,267) 263,264 Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2016 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net cash provided by operating activities $ 465,719 — 168,599 (55,612) 578,706 Cash flows used in investing activities: Additions to unproved properties (58,195) — — — (58,195) Drilling and completion costs (765,586) — — 55,612 (709,974) Additions to water handling and treatment systems — — (78,625) — (78,625) Additions to gathering systems and facilities (331) — (96,969) — (97,300) Additions to other property and equipment (1,296) — — — (1,296) Investments in unconsolidated affiliates — — (45,044) — (45,044) Change in other assets (44,835) — (3,090) — (47,925) Distributions from non-guarantor subsidiary 51,296 — — (51,296) — Net cash used in investing activities (818,947) — (223,728) 4,316 (1,038,359) Cash flows provided by financing activities: Issuance of common stock 752,599 — — — 752,599 Sale of common units in Antero Midstream Partners LP by Antero Resources Corporation 178,000 — — — 178,000 Borrowings (repayments) on bank credit facility, net (567,000) — 140,000 — (427,000) Payments of deferred financing costs (96) — — — (96) Distributions — — (82,977) 51,296 (31,681) Employee tax withholding for settlement of equity compensation awards (4,802) — (17) — (4,819) Other (2,496) — (76) — (2,572) Net cash provided by financing activities 356,205 — 56,930 51,296 464,431 Net increase in cash and cash equivalents 2,977 — 1,801 — 4,778 Cash and cash equivalents, beginning of period 16,590 — 6,883 — 23,473 Cash and cash equivalents, end of period $ 19,567 — 8,684 — 28,251 Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2017 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net cash provided by operating activities $ 509,364 — 234,938 (96,716) 647,586 Cash flows used in investing activities: Additions to proved properties (179,318) — — — (179,318) Additions to unproved properties (129,876) — — — (129,876) Drilling and completion costs (726,024) — — 96,716 (629,308) Additions to water handling and treatment systems — — (95,451) — (95,451) Additions to gathering systems and facilities — — (155,365) — (155,365) Additions to other property and equipment (6,564) — — — (6,564) Investments in unconsolidated affiliates — — (191,364) — (191,364) Change in other assets (7,648) — (4,804) — (12,452) Net distributions from subsidiaries 63,145 — — (63,145) — Other 2,156 — — — 2,156 Net cash used in investing activities (984,129) — (446,984) 33,571 (1,397,542) Cash flows provided by financing activities: Issuance of common units by Antero Midstream Partners LP — — 246,585 — 246,585 Borrowings on bank credit facility, net 490,000 — 95,000 — 585,000 Distributions — — (125,014) 63,145 (61,869) Employee tax withholding for settlement of equity compensation awards (7,501) — (932) — (8,433) Other (2,645) — (102) — (2,747) Net cash provided by financing activities 479,854 — 215,537 63,145 758,536 Net decrease in cash and cash equivalents 5,089 — 3,491 — 8,580 Cash and cash equivalents, beginning of period 17,568 — 14,042 — 31,610 Cash and cash equivalents, end of period $ 22,657 — 17,533 — 40,190 |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2017 | |
Commitments | |
Commitments | (13) The table below is a schedule of future minimum payments for firm transportation, drilling rig and completion services, processing, gathering and compression, and office and equipment agreements, as well as leases that have remaining lease terms in excess of one year as of June 30, 2017 (in millions). Firm Processing, Drilling rigs and completion Office and equipment (a) (b) (c) (d) Total Remainder of 2017 $ 319 200 52 6 577 2018 893 401 75 13 1,382 2019 1,107 340 40 11 1,498 2020 1,127 337 — 9 1,473 2021 1,106 321 — 8 1,435 2022 1,053 317 — 8 1,378 Thereafter 9,561 1,502 — 17 11,080 Total $ 15,166 3,418 167 72 18,823 (a) Firm Transportation The Company has entered into firm transportation agreements with various pipelines in order to facilitate the delivery of its production to market. These contracts commit the Company to transport minimum daily natural gas or NGLs volumes at negotiated rates, or pay for any deficiencies at specified reservation fee rates. The amounts in this table are based on the Company’s minimum daily volumes at the reservation fee rate. The values in the table represent the gross amounts that the Company is committed to pay; however, the Company will record in the consolidated financial statements its proportionate share of costs based on its working interest. (b) Processing, Gathering, and Compression Service Commitments The Company has entered into various long‑term gas processing agreements for certain of its production that will allow it to realize the value of its NGLs. The minimum payment obligations under the agreements are presented in the table. The Company has various gathering and compression service agreements with third parties that provide for payments based on volumes gathered or compressed. The minimum payment obligations under these agreements are presented in the table. The values in the table represent the gross amounts that the Company is committed to pay; however, the Company will record in the consolidated financial statements its proportionate share of costs based on its working interest. The values in the table also include minimum processing fees to be paid to the Joint Venture owned by Antero Midstream and MarkWest, and Antero Midstream’s commitments for the construction of its advanced wastewater treatment complex. The table does not include intracompany commitments. Future capital contributions to unconsolidated affiliates are excluded from the table as neither the amounts nor the timing of the obligations can be determined in advance (c) Drilling Rig Service Commitments The Company has obligations under agreements with service providers to procure drilling rigs and completion services. The values in the table represent the gross amounts that the Company is committed to pay; however, the Company will record in the consolidated financial statements its proportionate share of costs based on its working interest. (d) Office and Equipment Leases The Company leases various office space and equipment under capital and operating lease arrangements. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2017 | |
Related Parties | |
Related Parties | (14) Related Parties Certain of the Company’s shareholders, including members of its executive management group, own a significant interest in the Company and, either through their representatives or directly, serve as members of the Board of Directors for Antero and the Boards of Directors for the general partners of Antero Midstream and AMGP. These same groups or individuals own limited partners interests in Antero Midstream and common shares and other interests in AMGP, which indirectly owns the incentive distribution rights in Antero Midstream. Antero’s executive management group also manages the operations and business affairs of Antero Midstream and AMGP. Antero Midstream’s operations comprise substantially all of the operations of the gathering and processing and the water handling and treatment segments. Substantially all of the revenues for those segments are derived from transactions with Antero. Please see Note 11 for the operating results of the Company’s reportable segments. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | (a) These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC applicable to interim financial information and should be read in the context of the December 31, 2016 consolidated financial statements and notes thereto for a more complete understanding of the Company’s operations, financial position, and accounting policies. The December 31, 2016 consolidated financial statements have been filed with the SEC in the Company’s 2016 Form 10-K. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2016 and June 30, 2017, the results of its operations for the three and six months ended June 30, 2016 and 2017, and its cash flows for the six months ended June 30, 2016 and 2017. The Company has no items of other comprehensive income or loss; therefore, its net income or loss is identical to its comprehensive income or loss. Operating results for the period ended June 30, 2017 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for natural gas, NGLs, and oil, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, and other factors. The Company’s statement of cash flows for the six months ended June 30, 2016 includes reclassifications within current liabilities that were made to conform to the six months ended June 30, 2017 presentation. The Company’s exploration and production activities are accounted for under the successful efforts method. As of the date these financial statements were filed with the SEC, the Company completed its evaluation of potential subsequent events for disclosure and no items requiring disclosure were identified. |
Principles of Consolidation | (b) The accompanying condensed consolidated financial statements include the accounts of Antero, its wholly-owned subsidiaries, any entities in which the Company owns a controlling interest, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. We have determined that Antero Midstream is a VIE for which Antero is the primary beneficiary. Therefore, Antero Midstream’s accounts are included in the Company’s condensed consolidated financial statements. Antero is the primary beneficiary of Antero Midstream based on its power to direct the activities that most significantly impact Antero Midstream’s economic performance, and its obligation to absorb losses or right to receive benefits of Antero Midstream that could be significant to the Partnership. Antero Midstream was formed to own, operate, and develop midstream energy assets to service Antero’s production under long-term service contracts. Antero owned 58.4% of the outstanding limited partner interests in Antero Midstream at June 30, 2017. Antero Midstream GP LP (“AMGP”) indirectly controls the general partnership interest in Antero Midstream as well as Antero IDR Holdings LLC (“IDR LLC”), which owns the incentive distribution rights in Antero Midstream. AMGP has not provided, and is not expected to provide, financial support to Antero Midstream. Antero’s officers and management group also act as management of Antero Midstream and AMGP. Antero and Antero Midstream have contracts with 20-year initial terms and automatic renewal provisions, whereby Antero has dedicated the rights for gathering and compression, and water delivery and handling, services to Antero Midstream on a fixed-fee basis. Such dedications cover a substantial portion of Antero’s current acreage and future acquired acreage, in each case, except for acreage that was already dedicated to other parties prior to entering into the service contracts or that was acquired subject to a pre-existing dedication. The contracts call for Antero to present, in advance, its drilling and completion plans in order for Antero Midstream to develop gathering and compression, water delivery and handling, and gas processing assets to service Antero’s operations. Consequently, the drilling and completion capital investment decisions made by Antero control the development and operation of all of Antero Midstream’s assets. Because of these contractual obligations and the capital requirements related to these obligations, Antero Midstream has and, for the foreseeable future, will devote substantially all of its resources to servicing Antero’s operations. Additionally, revenues from Antero provide substantially all of Antero Midstream’s financial support and, therefore, its ability to finance its operations. As a result of the long-term contractual commitment to support Antero’s substantial growth plans, Antero Midstream will be practically and physically constrained from providing any substantive amount of services to third-parties. Therefore, Antero controls the activities that most significantly impact Antero Midstream’s economic performance. Antero does not control AMGP and does not have any investment in AMGP. All significant intercompany accounts and transactions have been eliminated in the Company’s condensed consolidated financial statements. Noncontrolling interest in the Company’s condensed consolidated financial statements represents the interests in Antero Midstream which are owned by the public and the holder of Antero Midstream’s incentive distribution rights. Noncontrolling interests in consolidated subsidiaries is included as a component of equity in the Company’s condensed consolidated balance sheets. Investments in entities for which the Company exercises significant influence, but not control, are accounted for under the equity method. Such investments are included in Investments in unconsolidated affiliates on the Company’s condensed consolidated balance sheets. Income from equity method investees is included in Equity in earnings of unconsolidated affiliates on the Company’s condensed consolidated statements of operations and cash flows. |
Use of Estimates | (c) The preparation of condensed consolidated financial statements in conformity with GAAP requires that management formulate estimates and assumptions which affect revenues, expenses, assets, and liabilities, and the disclosure of contingent assets and liabilities. Changes in facts and circumstances or discovery of new information may result in revised estimates, and actual results could differ from those estimates. The Company’s condensed consolidated financial statements are based on a number of significant estimates including estimates of natural gas, NGLs, and oil reserve quantities, which are the basis for the calculation of depletion and impairment of oil and gas properties. Reserve estimates, by their nature, are inherently imprecise. Other items in the Company’s condensed consolidated financial statements which involve the use of significant estimates include derivative assets and liabilities, accrued revenue, deferred income taxes, equity-based compensation, asset retirement obligations, depreciation, amortization, and commitments and contingencies. |
Risks and Uncertainties | (d) Historically, the markets for natural gas, NGLs, and oil have experienced significant price fluctuations. Price fluctuations can result from variations in weather, levels of production, availability of transportation capacity to other regions of the country, and various other factors. Increases or decreases in the prices the Company receives for its production could have a significant impact on the Company’s future results of operations and reserve quantities. |
Derivative Financial Instruments | (e) In order to manage its exposure to natural gas, NGLs, and oil price volatility, the Company enters into derivative transactions from time to time, which may include commodity swap agreements, basis swap agreements, collar agreements, and other similar agreements related to the price risk associated with the Company’s production. To the extent legal right of offset exists with a counterparty, the Company reports derivative assets and liabilities on a net basis. The Company has exposure to credit risk to the extent that the counterparty is unable to satisfy its settlement obligations. The Company actively monitors the creditworthiness of counterparties and assesses the impact, if any, on its derivative position. The Company records derivative instruments on the condensed consolidated balance sheets as either assets or liabilities measured at fair value and records changes in the fair value of derivatives in current earnings as they occur. Changes in the fair value of commodity derivatives, including gains or losses on settled derivatives, are classified as revenues on the Company’s condensed consolidated statements of operations. The Company’s derivatives have not been designated as hedges for accounting purposes. |
Industry Segments and Geographic Information | (f) Management has evaluated how the Company is organized and managed and has identified the following segments: (1) the exploration, development, and production of natural gas, NGLs, and oil; (2) gathering and processing; (3) water handling and treatment; and (4) marketing of excess firm transportation capacity. All of the Company’s assets are located in the United States and substantially all of its production revenues are attributable to customers located in the United States. |
Earnings (loss) per common share | (g) Earnings (loss) per common share —basic for each period is computed by dividing net income (loss) attributable to Antero by the basic weighted average number of shares outstanding during the period. Earnings (loss) per common share—assuming dilution for each period is computed after giving consideration to the potential dilution from outstanding equity awards, calculated using the treasury stock method. The Company includes performance share unit awards in the calculation of diluted weighted average shares outstanding based on the number of common shares that would be issuable if the end of the period was also the end of the performance period required for the vesting of such awards. During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards is antidilutive. The following is a reconciliation of the Company’s basic weighted average shares outstanding to diluted weighted average shares outstanding during the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 Basic weighted average number of shares outstanding 281,786 315,401 279,418 315,179 Add: Dilutive effect of non-vested restricted stock units — — — 710 Add: Dilutive effect of outstanding stock options — — — — Add: Dilutive effect of performance stock units — — — 38 Diluted weighted average number of shares outstanding 281,786 315,401 279,418 315,927 Weighted average number of outstanding equity awards excluded from calculation of diluted earnings per common share(1): Non-vested restricted stock and restricted stock units 6,982 5,105 6,862 1,596 Outstanding stock options 706 679 713 681 Performance stock units 724 1,213 471 896 (1) The potential dilutive effects of these awards were excluded from the computation of earnings (loss) per common share—assuming dilution because the inclusion of these awards would have been anti-dilutive. When the Company incurs a net loss, all outstanding equity awards are excluded from the calculation of diluted loss per common share because the inclusion of such awards would be anti-dilutive. |
Cash and Cash Equivalents | (h) The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short term nature of these instruments. From time to time, the Company may be in the position of a “book overdraft” in which outstanding checks exceed cash and cash equivalents. The Company classifies book overdrafts within accounts payable within its condensed consolidated balance sheets, and classifies the change in accounts payable associated with book overdrafts as an operating activity within its condensed consolidated statements of cash flows. |
Income Taxes | (i) For the three and six months ended June 30, 2016, the Company’s overall effective tax rate was different than the statutory rate of 35% primarily due to the effects of noncontrolling interest income and state tax rates. For the three and six months ended June 30, 2017, the Company’s overall effective tax rate was different than the statutory rate of 35% primarily due to the effects of noncontrolling interest income, state tax rates, and permanent differences on vested equity compensation awards |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |
Reconciliation of basic weighted average shares outstanding to diluted weighted average shares outstanding | The following is a reconciliation of the Company’s basic weighted average shares outstanding to diluted weighted average shares outstanding during the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 Basic weighted average number of shares outstanding 281,786 315,401 279,418 315,179 Add: Dilutive effect of non-vested restricted stock units — — — 710 Add: Dilutive effect of outstanding stock options — — — — Add: Dilutive effect of performance stock units — — — 38 Diluted weighted average number of shares outstanding 281,786 315,401 279,418 315,927 Weighted average number of outstanding equity awards excluded from calculation of diluted earnings per common share(1): Non-vested restricted stock and restricted stock units 6,982 5,105 6,862 1,596 Outstanding stock options 706 679 713 681 Performance stock units 724 1,213 471 896 (1) The potential dilutive effects of these awards were excluded from the computation of earnings (loss) per common share—assuming dilution because the inclusion of these awards would have been anti-dilutive. When the Company incurs a net loss, all outstanding equity awards are excluded from the calculation of diluted loss per common share because the inclusion of such awards would be anti-dilutive. |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accrued Liabilities | |
Schedule of accrued liabilities | Accrued liabilities as of December 31, 2016 and June 30, 2017 consisted of the following items (in thousands): December 31, 2016 June 30, 2017 Capital expenditures $ 159,811 173,981 Gathering, compression, processing, and transportation expenses 75,223 83,474 Marketing expenses 52,822 30,123 Interest expense 35,533 45,628 Other 70,414 85,146 $ 393,803 418,352 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Long-Term Debt. | |
Schedule of long-term debt | Long-term debt was as follows at December 31, 2016 and June 30, 2017 (in thousands): December 31, 2016 June 30, 2017 Antero: Bank credit facility(a) $ 440,000 930,000 5.375% senior notes due 2021(b) 1,000,000 1,000,000 5.125% senior notes due 2022(c) 1,100,000 1,100,000 5.625% senior notes due 2023(d) 750,000 750,000 5.00% senior notes due 2025(e) 600,000 600,000 Net unamortized premium 1,749 1,655 Net unamortized debt issuance costs (37,690) (35,131) Antero Midstream: Bank credit facility(g) 210,000 305,000 5.375% senior notes due 2024(h) 650,000 650,000 Net unamortized debt issuance costs (10,086) (9,551) $ 4,703,973 5,291,973 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Asset Retirement Obligations | |
Schedule of reconciliation of asset retirement obligations | The following is a reconciliation of the Company’s asset retirement obligations for the six months ended June 30, 2017 (in thousands): Asset retirement obligations—December 31, 2016 $ 32,736 Obligations incurred for wells drilled and producing properties acquired 2,824 Accretion expense 1,286 Asset retirement obligations—June 30, 2017 $ 36,846 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity-Based Compensation | |
Schedule of equity-based compensation expense | The Company’s equity-based compensation expense, by type of award, was as follows for the three and six months ended June 30, 2016 and 2017 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 Restricted stock unit awards $ 18,146 18,681 35,613 36,906 Stock options 641 616 1,301 1,236 Performance share unit awards 2,466 2,748 3,349 4,883 Antero Midstream phantom unit awards 4,013 4,443 8,001 8,486 Equity awards issued to directors 550 487 1,022 967 Total expense $ 25,816 26,975 49,286 52,478 |
Summary of restricted stock and restricted stock unit awards activity | Weighted Aggregate Number of grant date intrinsic value Total awarded and unvested—December 31, 2016 5,353,447 $ 31.77 $ 126,609 Granted 757,694 $ 22.23 Vested (826,675) $ 44.32 Forfeited (195,400) $ 23.96 Total awarded and unvested—June 30, 2017 5,089,066 $ 28.56 $ 109,975 |
Summary of stock option activity | Weighted Weighted average Intrinsic Stock exercise contractual value Outstanding at December 31, 2016 687,929 $ 50.46 8.12 $ — Granted — $ — Exercised — $ — Forfeited (10,458) $ 50.00 Expired — $ — Outstanding at June 30, 2017 677,471 $ 50.47 7.61 $ — Vested or expected to vest as of June 30, 2017 677,471 $ 50.47 7.61 $ — Exercisable at June 30, 2017 364,855 $ 50.70 7.52 $ — |
Summary of Performance Stock Unit activity | Number of Weighted Total awarded and unvested—December 31, 2016 785,301 $ 29.75 Granted 558,021 $ 26.21 Vested (41,666) $ 27.38 Forfeited (8,623) $ 29.86 Total awarded and unvested—June 30, 2017 1,293,033 $ 28.30 |
Schedule of weighted average fair value assumptions used for PSUs granted | The following table present information regarding the weighted average fair value for PSUs granted during the six months ended June 30, 2017 and the assumptions used to determine the fair values. Six Months Ended June 30, 2017 Dividend yield — % Volatility 42 % Risk-free interest rate 1.40 % Weighted average fair value of awards granted $ 26.21 |
Schedule of outstanding unvested restricted stock awards vesting schedule | Number of Weighted Aggregate Total awarded and unvested—December 31, 2016 1,331,961 $ 27.31 $ 41,131 Granted 340,773 $ 32.45 Vested (73,080) $ 21.34 Forfeited (48,760) $ 28.85 Total awarded and unvested—June 30, 2017 1,550,894 $ 28.68 $ 51,459 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Schedule of outstanding commodity derivatives | As of June 30, 2017, the Company’s fixed price natural gas, NGLs, and oil swap positions from July 1, 2017 through December 31, 2023 were as follows (abbreviations in the table refer to the index to which the swap position is tied, as follows: NYMEX=Henry Hub; CGTLA=Columbia Gas Louisiana Onshore; CCG=Chicago City Gate; Mont Belvieu-Ethane=Mont Belvieu Purity Ethane; Mont Belvieu-Propane=Mont Belvieu Propane; NYMEX-WTI=West Texas Intermediate): Natural gas Oil Natural Gas Weighted Three months ending September 30, 2017: NYMEX ($/MMBtu) 1,370,000 — — $ 3.33 CGTLA ($/MMBtu) 420,000 — — $ 4.20 CCG ($/MMBtu) 70,000 — — $ 4.45 NYMEX-WTI ($/Bbl) — 3,000 — $ 54.75 Mont Belvieu-Ethane ($/Gallon) — — 20,000 $ 0.25 Mont Belvieu-Propane ($/Gallon) — — 27,500 $ 0.39 Total 1,860,000 3,000 47,500 Three months ending December 31, 2017: NYMEX ($/MMBtu) 1,370,000 — — $ 3.46 CGTLA ($/MMBtu) 420,000 — — $ 4.37 CCG ($/MMBtu) 70,000 — — $ 4.68 NYMEX-WTI ($/Bbl) — 3,000 — $ 54.75 Mont Belvieu-Ethane ($/Gallon) — — 20,000 $ 0.25 Mont Belvieu-Propane ($/Gallon) — — 27,500 $ 0.40 Total 1,860,000 3,000 47,500 Year ending December 31, 2018: NYMEX ($/MMBtu) 2,002,500 — $ 3.91 Mont Belvieu-Propane ($/Gallon) — 2,000 $ 0.65 Total 2,002,500 2,000 Year ending December 31, 2019: NYMEX ($/MMBtu) 2,330,000 $ 3.70 Year ending December 31, 2020: NYMEX ($/MMBtu) 1,417,500 $ 3.63 Year ending December 31, 2021: NYMEX ($/MMBtu) 710,000 $ 3.31 Year ending December 31, 2022: NYMEX ($/MMBtu) 850,000 $ 3.16 Year ending December 31, 2023: NYMEX ($/MMBtu) 90,000 $ 2.91 |
Summary of the fair values of derivative instruments, which are not designated as hedges for accounting purposes | December 31, 2016 June 30, 2017 Balance sheet Fair value Balance sheet Fair value (In thousands) (In thousands) Asset derivatives not designated as hedges for accounting purposes: Commodity contracts Current assets $ 73,022 Current assets 452,005 Commodity contracts Long-term assets 1,731,063 Long-term assets 1,600,165 Total asset derivatives 1,804,085 2,052,170 Liability derivatives not designated as hedges for accounting purposes: Commodity contracts Current liabilities 203,635 Current liabilities 3,279 Commodity contracts Long-term liabilities 234 Long-term liabilities 172 Total liability derivatives 203,869 3,451 Net derivatives $ 1,600,216 2,048,719 |
Schedule of gross amounts of recognized derivative assets and liabilities, the amounts offset under netting arrangements with counterparties, and the resulting net amounts | The following table presents the gross values of recognized derivative assets and liabilities, the amounts offset under master netting arrangements with counterparties, and the resulting net amounts presented in the consolidated balance sheets as of the dates presented, all at fair value (in thousands): December 31, 2016 June 30, 2017 Gross Gross amounts Net amounts Gross Gross amounts Net amounts Commodity derivative assets $ 1,914,245 (110,160) 1,804,085 $ 2,161,257 (109,087) 2,052,170 Commodity derivative liabilities $ (324,667) 120,798 (203,869) $ (3,451) — (3,451) |
Summary of derivative fair value gains (losses) | The following is a summary of derivative fair value gains and where such values are recorded in the condensed consolidated statements of operations for the three and six months ended June 30, 2016 and 2017 (in thousands): Statement of Three months ended June 30, Six months ended June 30, location 2016 2017 2016 2017 Commodity derivative fair value gains (losses) Revenue $ (684,634) 85,641 $ (404,710) 524,416 |
TCOminusNYMEX | |
Tabular disclosure of commodity derivatives basis differential positions which settle on the pricing index to basis differential of Columbia Gas (TCO) to the NYMEX Henry Hub natural gas price. | Natural gas Hedged Differential ($/MMBtu) Six months ending December 31, 2017: 125,000 $ (0.51) |
NYMEXminusTCO | |
Tabular disclosure of pertinent information about commodity derivatives basis differential positions which settle on the pricing index to basis differential of Columbia Gas (TCO) to the NYMEX Henry Hub natural gas price | Natural gas Hedged Differential ($/MMBtu) Six months ending December 31, 2017: 125,000 $ 0.38 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Information | |
Schedule of operating results and assets of reportable segments | The operating results and assets of the Company’s reportable segments were as follows for the three months ended June 30, 2016 and 2017 (in thousands): Exploration Gathering and Water handling and treatment Marketing Elimination of Consolidated Three months ended June 30, 2016: Sales and revenues: Third-party $ (343,394) 3,131 163 90,902 — (249,198) Intersegment 3,899 68,785 64,730 — (137,414) — Total $ (339,495) 71,916 64,893 90,902 (137,414) (249,198) Operating expenses: Lease operating $ 12,257 — 34,317 — (34,531) 12,043 Gathering, compression, processing, and transportation 267,738 6,997 — — (68,675) 206,060 Depletion, depreciation, and amortization 173,015 17,172 7,175 — — 197,362 General and administrative 47,167 10,138 3,168 — (371) 60,102 Other 37,848 450 4,294 125,977 (3,461) 165,108 Total 538,025 34,757 48,954 125,977 (107,038) 640,675 Operating income (loss) $ (877,520) 37,159 15,939 (35,075) (30,376) (889,873) Equity in earnings of unconsolidated affiliates $ — 484 — — — 484 Segment assets $ 11,919,732 1,598,826 569,624 23,045 (552,447) 13,558,780 Capital expenditures for segment assets $ 375,247 48,614 41,589 — (30,183) 435,267 Exploration Gathering and Water handling and treatment Marketing Elimination of Consolidated Three months ended June 30, 2017: Sales and revenues: Third-party $ 737,229 2,324 868 49,968 — 790,389 Intersegment 3,911 96,438 94,137 — (194,486) — Total $ 741,140 98,762 95,005 49,968 (194,486) 790,389 Operating expenses: Lease operating $ 17,189 — 41,444 — (41,641) 16,992 Gathering, compression, processing, and transportation 353,216 9,910 — — (96,379) 266,747 Depletion, depreciation, and amortization 170,446 22,494 8,242 — — 201,182 General and administrative 49,531 10,705 4,084 — (221) 64,099 Other 39,251 12 4,532 77,421 (3,590) 117,626 Total 629,633 43,121 58,302 77,421 (141,831) 666,646 Operating income (loss) $ 111,507 55,641 36,703 (27,453) (52,655) 123,743 Equity in earnings of unconsolidated affiliates $ — 3,623 — — — 3,623 Segment assets $ 13,430,135 2,065,899 711,735 14,357 (779,905) 15,442,221 Capital expenditures for segment assets $ 584,832 88,806 58,497 — (52,487) 679,648 The operating results and assets of the Company’s reportable segments were as follows for the six months ended June 30, 2016 and 2017 (in thousands): Exploration Gathering and Water handling and treatment Marketing Elimination of Consolidated Six months ended June 30, 2016: Sales and revenues: Third-party $ 274,550 6,718 420 190,118 — 471,806 Intersegment 7,724 134,825 130,919 — (273,468) — Total $ 282,274 141,543 131,339 190,118 (273,468) 471,806 Operating expenses: Lease operating $ 23,589 — 75,031 — (75,284) 23,336 Gathering, compression, processing, and transportation 535,183 14,167 — — (134,552) 414,798 Depletion, depreciation, and amortization 340,567 34,240 14,137 — — 388,944 General and administrative 90,719 19,473 6,924 — (727) 116,389 Other 73,013 899 8,498 263,910 (6,857) 339,463 Total 1,063,071 68,779 104,590 263,910 (217,420) 1,282,930 Operating income (loss) $ (780,797) 72,764 26,749 (73,792) (56,048) (811,124) Equity in earnings of unconsolidated affiliates $ — 484 — — — 484 Segment assets $ 11,919,732 1,598,826 569,624 23,045 (552,447) 13,558,780 Capital expenditures for segment assets $ 825,077 97,300 78,625 — (55,612) 945,390 Exploration Gathering and Water handling and treatment Marketing Elimination of Consolidated Six months ended June 30, 2017: Sales and revenues: Third-party $ 1,864,280 4,863 933 115,892 — 1,985,968 Intersegment 8,351 185,558 177,182 — (371,091) — Total $ 1,872,631 190,421 178,115 115,892 (371,091) 1,985,968 Operating expenses: Lease operating $ 32,931 — 80,066 — (80,454) 32,543 Gathering, compression, processing, and transportation 700,984 18,024 — — (185,432) 533,576 Depletion, depreciation, and amortization 345,415 42,418 16,078 — — 403,911 General and administrative 100,587 20,843 8,403 — (1,036) 128,797 Other 92,869 12 8,876 167,414 (7,116) 262,055 Total 1,272,786 81,297 113,423 167,414 (274,038) 1,360,882 Operating income (loss) $ 599,845 109,124 64,692 (51,522) (97,053) 625,086 Equity in earnings of unconsolidated affiliates $ — 5,854 — — — 5,854 Segment assets $ 13,430,135 2,065,899 711,735 14,357 (779,905) 15,442,221 Capital expenditures for segment assets $ 1,041,782 155,365 95,451 — (96,716) 1,195,882 |
Subsidiary Guarantors (Tables)
Subsidiary Guarantors (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Subsidiary Guarantors | |
Schedule of condensed consolidated balance sheets | Condensed Consolidating Balance Sheet December 31, 2016 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 17,568 — 14,042 — 31,610 Accounts receivable, net 28,442 — 1,240 — 29,682 Intercompany receivables 3,193 — 64,139 (67,332) — Accrued revenue 261,960 — — — 261,960 Derivative instruments 73,022 — — — 73,022 Other current assets 5,784 — 529 — 6,313 Total current assets 389,969 — 79,950 (67,332) 402,587 Property and equipment: Natural gas properties, at cost (successful efforts method): Unproved properties 2,331,173 — — — 2,331,173 Proved properties 9,726,957 — — (177,286) 9,549,671 Water handling and treatment systems — — 744,682 — 744,682 Gathering systems and facilities 17,929 — 1,705,839 — 1,723,768 Other property and equipment 41,231 — — — 41,231 12,117,290 — 2,450,521 (177,286) 14,390,525 Less accumulated depletion, depreciation, and amortization (2,109,136) — (254,642) — (2,363,778) Property and equipment, net 10,008,154 — 2,195,879 (177,286) 12,026,747 Derivative instruments 1,731,063 — — — 1,731,063 Investments in subsidiaries (420,429) — — 420,429 — Contingent acquisition consideration 194,538 — — (194,538) — Investments in unconsolidated affiliates — — 68,299 — 68,299 Other assets, net 21,087 — 5,767 — 26,854 Total assets $ 11,924,382 — 2,349,895 (18,727) 14,255,550 Liabilities and Equity Current liabilities: Accounts payable $ 21,648 — 16,979 — 38,627 Intercompany payable 64,139 — 3,193 (67,332) — Accrued liabilities 332,162 — 61,641 — 393,803 Revenue distributions payable 163,989 — — — 163,989 Derivative instruments 203,635 — — — 203,635 Other current liabilities 17,134 — 200 — 17,334 Total current liabilities 802,707 — 82,013 (67,332) 817,388 Long-term liabilities: Long-term debt 3,854,059 — 849,914 — 4,703,973 Deferred income tax liability 950,217 — — — 950,217 Contingent acquisition consideration — — 194,538 (194,538) — Derivative instruments 234 — — — 234 Other liabilities 54,540 — 620 — 55,160 Total liabilities 5,661,757 — 1,127,085 (261,870) 6,526,972 Equity: Stockholders' equity: Partners' capital — — 1,222,810 (1,222,810) — Common stock 3,149 — — — 3,149 Additional paid-in capital 5,299,481 — — — 5,299,481 Accumulated earnings 959,995 — — — 959,995 Total stockholders' equity 6,262,625 — 1,222,810 (1,222,810) 6,262,625 Noncontrolling interest in consolidated subsidiary — — — 1,465,953 1,465,953 Total equity 6,262,625 — 1,222,810 243,143 7,728,578 Total liabilities and equity $ 11,924,382 — 2,349,895 (18,727) 14,255,550 Condensed Consolidating Balance Sheet June 30, 2017 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 22,657 — 17,533 — 40,190 Accounts receivable, net 15,257 — 1,237 — 16,494 Intercompany receivables 2,989 — 79,062 (82,051) — Accrued revenue 218,621 — — — 218,621 Derivative instruments 452,005 — — — 452,005 Other current assets 8,279 — 294 — 8,573 Total current assets 719,808 — 98,126 (82,051) 735,883 Property and equipment: Natural gas properties, at cost (successful efforts method): Unproved properties 2,309,839 — — — 2,309,839 Proved properties 10,767,934 — — (274,002) 10,493,932 Water handling and treatment systems — — 840,183 — 840,183 Gathering systems and facilities 17,929 — 1,866,783 — 1,884,712 Other property and equipment 48,537 — — — 48,537 13,144,239 — 2,706,966 (274,002) 15,577,203 Less accumulated depletion, depreciation, and amortization (2,454,668) — (312,690) — (2,767,358) Property and equipment, net 10,689,571 — 2,394,276 (274,002) 12,809,845 Derivative instruments 1,600,165 — — — 1,600,165 Investments in subsidiaries 603,549 — — (603,549) — Contingent acquisition consideration 201,654 — — (201,654) — Investments in unconsolidated affiliates — — 259,697 — 259,697 Other assets, net 26,793 — 9,838 — 36,631 Total assets $ 13,841,540 — 2,761,937 (1,161,256) 15,442,221 Liabilities and Equity Current liabilities: Accounts payable $ 36,490 — 15,077 — 51,567 Intercompany payable 79,062 — 2,989 (82,051) — Accrued liabilities 341,256 — 77,096 — 418,352 Revenue distributions payable 203,151 — — — 203,151 Derivative instruments 3,279 — — — 3,279 Other current liabilities 16,507 — 204 — 16,711 Total current liabilities 679,745 — 95,366 (82,051) 693,060 Long-term liabilities: Long-term debt 4,346,524 — 945,449 — 5,291,973 Deferred income tax liability 1,100,382 — — — 1,100,382 Contingent acquisition consideration — — 201,654 (201,654) — Derivative instruments 172 — — — 172 Other liabilities 53,257 — 515 — 53,772 Total liabilities 6,180,080 — 1,242,984 (283,705) 7,139,359 Equity: Stockholders' equity: Partners' capital — — 1,518,953 (1,518,953) — Common stock 3,154 — — — 3,154 Additional paid-in capital 6,435,047 — — — 6,435,047 Accumulated earnings 1,223,259 — — — 1,223,259 Total stockholders' equity 7,661,460 — 1,518,953 (1,518,953) 7,661,460 Noncontrolling interests in consolidated subsidiary — — — 641,402 641,402 Total equity 7,661,460 — 1,518,953 (877,551) 8,302,862 Total liabilities and equity $ 13,841,540 — 2,761,937 (1,161,256) 15,442,221 |
Schedule of condensed consolidated statement of operations and comprehensive income (loss) | Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three Months Ended June 30, 2016 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Revenue: Natural gas sales $ 229,787 — — — 229,787 Natural gas liquids sales 94,713 — — — 94,713 Oil sales 16,740 — — — 16,740 Gathering, compression, water handling and treatment — — 136,809 (133,515) 3,294 Marketing 90,902 — — — 90,902 Commodity derivative fair value losses (684,634) — — — (684,634) Other income 3,899 — — (3,899) — Total revenue (248,593) — 136,809 (137,414) (249,198) Operating expenses: Lease operating 12,257 — 34,317 (34,531) 12,043 Gathering, compression, processing, and transportation 267,738 — 6,997 (68,675) 206,060 Production and ad valorem taxes 16,175 — 1,283 — 17,458 Marketing 125,977 — — — 125,977 Exploration 1,109 — — — 1,109 Impairment of unproved properties 19,944 — — — 19,944 Depletion, depreciation, and amortization 173,222 — 24,140 — 197,362 Accretion of asset retirement obligations 620 — — — 620 General and administrative 47,167 — 13,306 (371) 60,102 Accretion of contingent acquisition consideration — — 3,461 (3,461) — Total operating expenses 664,209 — 83,504 (107,038) 640,675 Operating income (loss) (912,802) — 53,305 (30,376) (889,873) Other income (expenses): Equity in earnings of unconsolidated affiliates — — 484 — 484 Interest (58,910) — (3,878) 193 (62,595) Equity in net income of subsidiaries (1,026) — — 1,026 — Total other expenses (59,936) — (3,394) 1,219 (62,111) Income (loss) before income taxes (972,738) — 49,911 (29,157) (951,984) Provision for income tax benefit 376,494 — — — 376,494 Net income (loss) and comprehensive income (loss) including noncontrolling interests (596,244) — 49,911 (29,157) (575,490) Net income and comprehensive income attributable to noncontrolling interests — — — 20,754 20,754 Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation $ (596,244) — 49,911 (49,911) (596,244) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three Months Ended June 30, 2017 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Revenue: Natural gas sales $ 454,257 — — — 454,257 Natural gas liquids sales 170,819 — — — 170,819 Oil sales 26,512 — — — 26,512 Gathering, compression, water handling and treatment — — 193,767 (190,575) 3,192 Marketing 49,968 — — — 49,968 Commodity derivative fair value gains 85,641 — — — 85,641 Other income 3,911 — — (3,911) — Total revenue 791,108 — 193,767 (194,486) 790,389 Operating expenses: Lease operating 17,189 — 41,444 (41,641) 16,992 Gathering, compression, processing, and transportation 353,216 — 9,910 (96,379) 266,747 Production and ad valorem taxes 21,599 — 954 — 22,553 Marketing 77,421 — — — 77,421 Exploration 1,804 — — — 1,804 Impairment of unproved properties 15,199 — — — 15,199 Depletion, depreciation, and amortization 170,670 — 30,512 — 201,182 Accretion of asset retirement obligations 649 — — — 649 General and administrative 49,531 — 14,789 (221) 64,099 Accretion of contingent acquisition consideration — — 3,590 (3,590) — Total operating expenses 707,278 — 101,199 (141,831) 666,646 Operating income 83,830 — 92,568 (52,655) 123,743 Other income (expenses): Equity in earnings of unconsolidated affiliates — — 3,623 — 3,623 Interest (59,735) — (9,015) 168 (68,582) Equity in net income (loss) of subsidiaries (10,408) — — 10,408 — Total other expenses (70,143) — (5,392) 10,576 (64,959) Income before income taxes 13,687 — 87,176 (42,079) 58,784 Provision for income tax expense (18,819) — — — (18,819) Net income (loss) and comprehensive income (loss) including noncontrolling interests (5,132) — 87,176 (42,079) 39,965 Net income and comprehensive income attributable to noncontrolling interests — — — 45,097 45,097 Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation $ (5,132) — 87,176 (87,176) (5,132) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Six Months Ended June 30, 2016 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Revenue and other: Natural gas sales $ 484,563 — — — 484,563 Natural gas liquids sales 167,778 — — — 167,778 Oil sales 26,919 — — — 26,919 Gathering, compression, water handling and treatment — — 272,882 (265,744) 7,138 Marketing 190,118 — — — 190,118 Commodity derivative fair value losses (404,710) — — — (404,710) Other income 7,724 — — (7,724) — Total revenue and other 472,392 — 272,882 (273,468) 471,806 Operating expenses: Lease operating 23,589 — 75,031 (75,284) 23,336 Gathering, compression, processing, and transportation 535,183 — 14,167 (134,552) 414,798 Production and ad valorem taxes 34,202 — 2,540 — 36,742 Marketing 263,910 — — — 263,910 Exploration 2,123 — — — 2,123 Impairment of unproved properties 35,470 — — — 35,470 Depletion, depreciation, and amortization 340,981 — 47,963 — 388,944 Accretion of asset retirement obligations 1,218 — — — 1,218 General and administrative 90,719 — 26,397 (727) 116,389 Accretion of contingent acquisition consideration — — 6,857 (6,857) — Total operating expenses 1,327,395 — 172,955 (217,420) 1,282,930 Operating income (loss) (855,003) — 99,927 (56,048) (811,124) Other income (expenses): Equity in earnings of unconsolidated affiliates — — 484 — 484 Interest (118,733) — (7,582) 436 (125,879) Equity in net income of subsidiaries 758 — — (758) — Total other expenses (117,975) — (7,098) (322) (125,395) Income (loss) before income taxes (972,978) — 92,829 (56,370) (936,519) Provision for income tax benefit 371,679 — — — 371,679 Net income (loss) and comprehensive income (loss) including noncontrolling interests (601,299) — 92,829 (56,370) (564,840) Net income and comprehensive income attributable to noncontrolling interests — — — 36,459 36,459 Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation $ (601,299) — 92,829 (92,829) (601,299) Condensed Consolidating Statement of Operations and Comprehensive Income Six Months Ended June 30, 2017 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Revenue and other: Natural gas sales $ 920,921 — — — 920,921 Natural gas liquids sales 365,471 — — — 365,471 Oil sales 53,472 — — — 53,472 Gathering, compression, water handling and treatment — — 368,536 (362,740) 5,796 Marketing 115,892 — — — 115,892 Commodity derivative fair value gains 524,416 — — — 524,416 Other income 8,351 — — (8,351) — Total revenue and other 1,988,523 — 368,536 (371,091) 1,985,968 Operating expenses: Lease operating 32,931 — 80,066 (80,454) 32,543 Gathering, compression, processing, and transportation 700,984 — 18,024 (185,432) 533,576 Production and ad valorem taxes 45,574 — 1,772 — 47,346 Marketing 167,414 — — — 167,414 Exploration 3,911 — — — 3,911 Impairment of unproved properties 42,098 — — — 42,098 Depletion, depreciation, and amortization 345,863 — 58,048 — 403,911 Accretion of asset retirement obligations 1,286 — — — 1,286 General and administrative 100,587 — 29,246 (1,036) 128,797 Accretion of contingent acquisition consideration — — 7,116 (7,116) — Total operating expenses 1,440,648 — 194,272 (274,038) 1,360,882 Operating income 547,875 — 174,264 (97,053) 625,086 Other income (expenses): Equity in earnings of unconsolidated affiliates — — 5,854 — 5,854 Interest (117,738) — (17,851) 337 (135,252) Equity in net income of subsidiaries (16,708) — — 16,708 — Total other expenses (134,446) — (11,997) 17,045 (129,398) Income before income taxes 413,429 — 162,267 (80,008) 495,688 Provision for income tax expense (150,165) — — — (150,165) Net income and comprehensive income including noncontrolling interests 263,264 — 162,267 (80,008) 345,523 Net income and comprehensive income attributable to noncontrolling interests — — — 82,259 82,259 Net income and comprehensive income attributable to Antero Resources Corporation $ 263,264 — 162,267 (162,267) 263,264 |
Schedule of condensed consolidated statement of cash flows | Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2016 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net cash provided by operating activities $ 465,719 — 168,599 (55,612) 578,706 Cash flows used in investing activities: Additions to unproved properties (58,195) — — — (58,195) Drilling and completion costs (765,586) — — 55,612 (709,974) Additions to water handling and treatment systems — — (78,625) — (78,625) Additions to gathering systems and facilities (331) — (96,969) — (97,300) Additions to other property and equipment (1,296) — — — (1,296) Investments in unconsolidated affiliates — — (45,044) — (45,044) Change in other assets (44,835) — (3,090) — (47,925) Distributions from non-guarantor subsidiary 51,296 — — (51,296) — Net cash used in investing activities (818,947) — (223,728) 4,316 (1,038,359) Cash flows provided by financing activities: Issuance of common stock 752,599 — — — 752,599 Sale of common units in Antero Midstream Partners LP by Antero Resources Corporation 178,000 — — — 178,000 Borrowings (repayments) on bank credit facility, net (567,000) — 140,000 — (427,000) Payments of deferred financing costs (96) — — — (96) Distributions — — (82,977) 51,296 (31,681) Employee tax withholding for settlement of equity compensation awards (4,802) — (17) — (4,819) Other (2,496) — (76) — (2,572) Net cash provided by financing activities 356,205 — 56,930 51,296 464,431 Net increase in cash and cash equivalents 2,977 — 1,801 — 4,778 Cash and cash equivalents, beginning of period 16,590 — 6,883 — 23,473 Cash and cash equivalents, end of period $ 19,567 — 8,684 — 28,251 Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2017 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net cash provided by operating activities $ 509,364 — 234,938 (96,716) 647,586 Cash flows used in investing activities: Additions to proved properties (179,318) — — — (179,318) Additions to unproved properties (129,876) — — — (129,876) Drilling and completion costs (726,024) — — 96,716 (629,308) Additions to water handling and treatment systems — — (95,451) — (95,451) Additions to gathering systems and facilities — — (155,365) — (155,365) Additions to other property and equipment (6,564) — — — (6,564) Investments in unconsolidated affiliates — — (191,364) — (191,364) Change in other assets (7,648) — (4,804) — (12,452) Net distributions from subsidiaries 63,145 — — (63,145) — Other 2,156 — — — 2,156 Net cash used in investing activities (984,129) — (446,984) 33,571 (1,397,542) Cash flows provided by financing activities: Issuance of common units by Antero Midstream Partners LP — — 246,585 — 246,585 Borrowings on bank credit facility, net 490,000 — 95,000 — 585,000 Distributions — — (125,014) 63,145 (61,869) Employee tax withholding for settlement of equity compensation awards (7,501) — (932) — (8,433) Other (2,645) — (102) — (2,747) Net cash provided by financing activities 479,854 — 215,537 63,145 758,536 Net decrease in cash and cash equivalents 5,089 — 3,491 — 8,580 Cash and cash equivalents, beginning of period 17,568 — 14,042 — 31,610 Cash and cash equivalents, end of period $ 22,657 — 17,533 — 40,190 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Principles of Consolidation (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Basis of Presentation | |||
Other comprehensive income (loss) | $ 0 | $ 0 | |
Antero Midstream Partners LP | |||
Basis of Presentation | |||
Antero Resources ownership in Antero Midstream | 58.40% | 60.90% | |
Term of contract with Antero Midstream | 20 years |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - EPS and New Accounting Principle (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Earnings per share | |||||
Basic weighted average number of shares outstanding | 315,401 | 281,786 | 315,179 | 279,418 | |
Weighted Average Number of Shares Outstanding, Diluted | 315,401 | 281,786 | 315,927 | 279,418 | |
U.S. Statutory federal income tax rate (as a percent) | 35.00% | 35.00% | |||
Other Assets, Noncurrent | $ 36,631 | $ 36,631 | $ 26,854 | ||
Long-term debt | $ 5,291,973 | 5,291,973 | $ 4,703,973 | ||
Changes in accrued liabilities | 4,204 | $ (3,362) | |||
Employee tax withholding for settlement of equity compensation awards | $ (8,433) | $ (4,819) | |||
Restricted stock and restricted stock unit | |||||
Earnings per share | |||||
Add: Dilutive effect of non-vested restricted stock units | 710 | ||||
Weighted Average Anti-dilutive Awards | 5,105 | 6,982 | 1,596 | 6,862 | |
Stock options | |||||
Earnings per share | |||||
Weighted Average Anti-dilutive Awards | 679 | 706 | 681 | 713 | |
Performance share unit awards | |||||
Earnings per share | |||||
Add: Dilutive effect of non-vested restricted stock units | 38 | ||||
Weighted Average Anti-dilutive Awards | 1,213 | 724 | 896 | 471 |
Antero Midstream Partners LP (D
Antero Midstream Partners LP (Details) $ in Thousands | Feb. 06, 2017USD ($)shares | Sep. 23, 2015USD ($)bbl | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)shares | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | May 26, 2016 |
Antero Midstream Partners LP | ||||||||
Investments in unconsolidated affiliates | $ 259,697 | $ 259,697 | $ 68,299 | |||||
Equity in earnings of unconsolidated affiliate | 3,623 | $ 484 | 5,854 | $ 484 | ||||
Issuance of common stock | 752,599 | |||||||
Consideration: | ||||||||
Amount borrowed on bank credit facility | $ 585,000 | (427,000) | ||||||
Equity Transactions | ||||||||
Proceeds From Sale Of Interest In Partnership Unit | $ 178,000 | |||||||
Antero Midstream Partners LP | ||||||||
Antero Midstream Partners LP | ||||||||
Number of additional shares of common stock issued (in shares) | shares | 6,900,000 | |||||||
Issuance of common stock | $ 223,000 | |||||||
Antero Resources ownership in Antero Midstream | 58.40% | 60.90% | ||||||
Antero Midstream Partners LP | Contingent Consideration Period One | ||||||||
Consideration: | ||||||||
Contingent consideration | $ 125,000 | |||||||
Threshold number of barrels of water to trigger contingent consideration payment | bbl | 176,295,000 | |||||||
Antero Midstream Partners LP | Contingent Consideration Period Two | ||||||||
Consideration: | ||||||||
Contingent consideration | $ 125,000 | |||||||
Threshold number of barrels of water to trigger contingent consideration payment | bbl | 219,200,000 | |||||||
Antero Midstream Partners LP | At the Market Program | ||||||||
Equity Transactions | ||||||||
Units sold under At the Market program (in units) | shares | 700,031 | |||||||
Proceeds from issuance of common units | $ 23,100 | |||||||
Remaining capacity under equity distribution agreement | 159,900 | 159,900 | ||||||
Antero Midstream Partners LP | Maximum | At the Market Program | ||||||||
Equity Transactions | ||||||||
Aggregate dollar amount of common units available for issuance and sale under equity distribution agreement | 250,000 | |||||||
Appalachia joint venture | ||||||||
Antero Midstream Partners LP | ||||||||
Ownership percentage | 50.00% | |||||||
Appalachia joint venture | Antero Midstream Partners LP | ||||||||
Antero Midstream Partners LP | ||||||||
Investments in unconsolidated affiliates | 192,100 | 192,100 | ||||||
Equity in earnings of unconsolidated affiliate | 800 | |||||||
Percentage of interest held by joint venture in third party fractionator in Ohio | 33.33% | |||||||
Appalachia joint venture | MarkWest | Antero Midstream Partners LP | ||||||||
Antero Midstream Partners LP | ||||||||
Ownership percentage | 50.00% | |||||||
Regional gathering pipeline | Antero Midstream Partners LP | ||||||||
Antero Midstream Partners LP | ||||||||
Ownership percentage | 15.00% | |||||||
Investments in unconsolidated affiliates | $ 67,600 | 67,600 | ||||||
Equity in earnings of unconsolidated affiliate | $ 5,100 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Accrued capital expenditures | $ 173,981 | $ 159,811 |
Accrued gathering, compression, processing, and transportation expenses | 83,474 | 75,223 |
Accrued marketing expenses | 30,123 | 52,822 |
Accrued interest expense | 45,628 | 35,533 |
Other accrued liabilities | 85,146 | 70,414 |
Total accrued liabilities | $ 418,352 | $ 393,803 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 6 Months Ended | ||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 21, 2016 | Sep. 13, 2016 | Mar. 17, 2015 | Sep. 18, 2014 | May 06, 2014 | Nov. 05, 2013 | |
Long- term Debt | |||||||||
Long-term debt | $ 5,291,973,000 | $ 4,703,973,000 | |||||||
Issue price as percentage of par value | 100.00% | ||||||||
Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Net unamortized premium | 1,655,000 | 1,749,000 | |||||||
Net unamortized debt issuance costs | (35,131,000) | (37,690,000) | |||||||
Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Net unamortized debt issuance costs | (9,551,000) | (10,086,000) | |||||||
Midstream Credit Facility Member | Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Bank credit facility long-term debt | 305,000,000 | $ 210,000,000 | |||||||
Maximum amount of the Credit Facility | $ 1,500,000,000 | ||||||||
Weighted average interest rate (as a percent) | 2.62% | 2.23% | |||||||
Midstream Credit Facility Member | Minimum | Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Commitment fees on the unused portion (as a percent) | 0.25% | ||||||||
Midstream Credit Facility Member | Maximum | Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Commitment fees on the unused portion (as a percent) | 0.375% | ||||||||
Bank credit facility | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Bank credit facility long-term debt | $ 930,000,000 | $ 440,000,000 | |||||||
Current borrowing base | 4,750,000,000 | ||||||||
Lender commitments | $ 4,000,000,000 | ||||||||
Weighted average interest rate (as a percent) | 2.99% | 2.44% | |||||||
Outstanding letters of credit | $ 706,000,000 | $ 710,000,000 | |||||||
Bank credit facility | Minimum | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Commitment fees on the unused portion (as a percent) | 0.375% | ||||||||
Bank credit facility | Maximum | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Commitment fees on the unused portion (as a percent) | 0.50% | ||||||||
5.375% senior notes due 2021 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Long-term notes payable | $ 1,000,000,000 | 1,000,000,000 | |||||||
Interest rate (as a percent) | 5.375% | ||||||||
Senior notes issued | $ 1,000,000,000 | ||||||||
Issue price as percentage of par value | 100.00% | ||||||||
Redemption price | 104.031% | ||||||||
Redemption price at which notes may be required to be repurchased in event of change of control | 101.00% | ||||||||
5.375% senior notes due 2021 | On or after November 1, 2019 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 100.00% | ||||||||
Stand-alone revolving note | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Maximum amount of the Credit Facility | $ 25,000,000 | ||||||||
Outstanding balance | $ 0 | ||||||||
Stand-alone revolving note | Lender's Prime Rate | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Basis spread on variable rate (as a percent) | 1.00% | ||||||||
5.125 senior notes due 2022 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Long-term notes payable | $ 1,100,000,000 | 1,100,000,000 | |||||||
Interest rate (as a percent) | 5.125% | ||||||||
Senior notes issued | $ 500,000,000 | $ 600,000,000 | |||||||
Issue price as percentage of par value | 100.50% | 100.00% | |||||||
Redemption price at which notes may be required to be repurchased in event of change of control | 101.00% | ||||||||
5.125 senior notes due 2022 | On or after June 1, 2017 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 103.844% | ||||||||
5.125 senior notes due 2022 | On or after June 1, 2020 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 100.00% | ||||||||
5.625% senior notes due 2023 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Long-term notes payable | $ 750,000,000 | 750,000,000 | |||||||
Interest rate (as a percent) | 5.625% | ||||||||
Senior notes issued | $ 750,000,000 | ||||||||
Issue price as percentage of par value | 100.00% | ||||||||
Redemption price at which notes may be required to be repurchased in event of change of control | 101.00% | ||||||||
5.625% senior notes due 2023 | On Or Before June 1, 2018 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Percentage of the principal amount of the debt instrument which the entity may redeem with the proceeds from certain equity offerings | 35.00% | ||||||||
Redemption price of the debt instrument if redeemed with the proceeds of certain equity offerings (as a percent) | 105.625% | ||||||||
5.625% senior notes due 2023 | On or after June 1, 2018 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 104.219% | ||||||||
5.625% senior notes due 2023 | On Or After June 1, 2021 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 100.00% | ||||||||
5.625% senior notes due 2023 | Prior to June 1, 2018 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 100.00% | ||||||||
5.375% senior notes due 2024 | Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Long-term notes payable | $ 650,000,000 | 650,000,000 | |||||||
Interest rate (as a percent) | 5.375% | ||||||||
Senior notes issued | $ 650,000,000 | ||||||||
Issue price as percentage of par value | 100.00% | ||||||||
Redemption price at which notes may be required to be repurchased in event of change of control | 101.00% | ||||||||
5.375% senior notes due 2024 | On or after September 15, 2019 | Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Redemption price | 104.031% | ||||||||
5.375% senior notes due 2024 | On or after September 15, 2022 | Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Redemption price | 100.00% | ||||||||
5.375% senior notes due 2024 | On or before September 15, 2019 | Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Percentage of the principal amount of the debt instrument which the entity may redeem with the proceeds from certain equity offerings | 35.00% | ||||||||
Redemption price of the debt instrument if redeemed with the proceeds of certain equity offerings (as a percent) | 105.375% | ||||||||
5.375% senior notes due 2024 | Prior to September 15, 2019 | Antero Midstream Partners LP | |||||||||
Long- term Debt | |||||||||
Redemption price | 100.00% | ||||||||
5.00% senior notes due 2025 | |||||||||
Long- term Debt | |||||||||
Long-term notes payable | $ 600,000,000 | $ 600,000,000 | |||||||
5.00% senior notes due 2025 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Long-term notes payable | $ 600,000,000 | ||||||||
Interest rate (as a percent) | 5.00% | ||||||||
Redemption price at which notes may be required to be repurchased in event of change of control | 101.00% | ||||||||
5.00% senior notes due 2025 | Prior to March 1, 2020 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 100.00% | ||||||||
5.00% senior notes due 2025 | On or before March 1, 2020 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Percentage of the principal amount of the debt instrument which the entity may redeem with the proceeds from certain equity offerings | 35.00% | ||||||||
Redemption price of the debt instrument if redeemed with the proceeds of certain equity offerings (as a percent) | 105.00% | ||||||||
5.00% senior notes due 2025 | On or after March 1, 2020 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 103.75% | ||||||||
5.00% senior notes due 2025 | On or after March1, 2023 | Antero Resources Corporation | |||||||||
Long- term Debt | |||||||||
Redemption price | 100.00% |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Asset Retirement Obligations | ||||
Asset retirement obligations - beginning of period | $ 32,736 | |||
Obligations incurred for wells drilled and producing properties acquired | 2,824 | |||
Accretion expense | $ 649 | $ 620 | 1,286 | $ 1,218 |
Asset retirement obligations - end of period | $ 36,846 | $ 36,846 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock-based compensation expense | ||||
Number of stock-based compensation awards authorized | 16,906,500 | 16,906,500 | ||
Number of shares available for future grant under the Plan | 7,645,937 | 7,645,937 | ||
Equity based compensation expense recognized | $ 26,975 | $ 25,816 | $ 52,478 | $ 49,286 |
Midstream Plan | ||||
Stock-based compensation expense | ||||
Number of stock-based compensation awards authorized | 10,000,000 | 10,000,000 | ||
Number of shares available for future grant under the Plan | 7,667,042 | 7,667,042 | ||
Restricted stock awards | ||||
Stock-based compensation expense | ||||
Equity based compensation expense recognized | $ 18,681 | 18,146 | $ 36,906 | 35,613 |
Performance share unit awards | ||||
Stock-based compensation expense | ||||
Equity based compensation expense recognized | 2,748 | 2,466 | 4,883 | 3,349 |
Stock options | ||||
Stock-based compensation expense | ||||
Equity based compensation expense recognized | 616 | 641 | 1,236 | 1,301 |
Antero Midstream Partners Phantom Unit Awards | ||||
Stock-based compensation expense | ||||
Equity based compensation expense recognized | 4,443 | 4,013 | 8,486 | 8,001 |
Equity awards issued to directors | ||||
Stock-based compensation expense | ||||
Equity based compensation expense recognized | $ 487 | $ 550 | $ 967 | $ 1,022 |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted Stock and RSU Awards (Details) - Restricted stock and restricted stock unit $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Number of shares | |
Total granted and unvested at the beginning of the period (in shares) | shares | 5,353,447 |
Granted (in shares) | shares | 757,694 |
Vested (in shares) | shares | (826,675) |
Forfeited (in shares) | shares | (195,400) |
Total awarded and unvested at the end of the period (in shares) | shares | 5,089,066 |
Weighted average grant date fair value | |
Total granted and unvested at the beginning of the period (in dollars per share) | $ / shares | $ 31.77 |
Granted (in dollars per share) | $ / shares | 22.23 |
Vested (in dollars per share) | $ / shares | 44.32 |
Forfeited (in dollars per share) | $ / shares | 23.96 |
Total awarded and unvested at the end of the period (in dollars per share) | $ / shares | $ 28.56 |
Aggregate intrinsic value | |
Total awarded and unvested at the beginning of the period | $ | $ 126,609 |
Total awarded and unvested at the end of the period | $ | 109,975 |
Additional equity compensation to be recognized over the remaining period | $ | $ 105,600 |
Weighted average period for recognizing unrecognized stock-based compensation expense | 1 year 10 months 24 days |
Equity-Based Compensation - Sto
Equity-Based Compensation - Stock Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Stock options | ||
Outstanding at the beginning of the period (in shares) | 687,929 | |
Options forfeited (in shares) | (10,458) | |
Outstanding at the end of the period (in shares) | 677,471 | 687,929 |
Vested or expected to vest (in shares) | 677,471 | |
Exercisable (in shares) | 364,855 | |
Weighted average exercise price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 50.46 | |
Options forfeited (in dollars per share) | 50 | |
Outstanding at the end of the period (in dollars per share) | 50.47 | $ 50.46 |
Vested or expected to vest (in dollars per share) | 50.47 | |
Exercisable (in dollars per share) | $ 50.70 | |
Weighted average remaining contractual life | ||
Outstanding | 7 years 7 months 10 days | 8 years 1 month 13 days |
Vested or expected to vest | 7 years 7 months 10 days | |
Exercisable | 7 years 6 months 7 days | |
Additional disclosures | ||
Unrecognized stock-based compensation expense | $ 4 | |
Weighted average period for recognizing unrecognized stock-based compensation expense | 1 year 9 months 18 days | |
Minimum | ||
Stock-based compensation | ||
Vesting period | 1 year | |
Maximum | ||
Stock-based compensation | ||
Vesting period | 4 years | |
Contractual life | 10 years |
Equity-Based Compensation - PSU
Equity-Based Compensation - PSU awards (Details) $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Performance share unit awards | |
Number of units | |
Total granted and unvested at the beginning of the period (in shares) | shares | 785,301 |
Granted (in shares) | shares | 558,021 |
Vested (in shares) | shares | (41,666) |
Forfeited (in shares) | shares | (8,623) |
Total awarded and unvested at the end of the period (in shares) | shares | 1,293,033 |
Weighted average grant date fair value | |
Total granted and unvested at the beginning of the period (in dollars per share) | $ 29.75 |
Granted (in dollars per share) | 26.21 |
Vested (in dollars per share) | 27.38 |
Forfeited (in dollars per share) | 29.86 |
Total awarded and unvested at the end of the period (in dollars per share) | $ 28.30 |
Additional disclosures | |
Additional equity compensation to be recognized over the remaining period | $ | $ 24.2 |
Weighted average period for recognizing unrecognized stock-based compensation expense | 2 years 3 months 18 days |
Weighted-average assumptions used to calculate fair value of performance share units granted | |
Volatility (as a percent) | 42.00% |
Risk-free interest rate (as a percent) | 1.40% |
Weighted average fair value of awards granted (in dollars per share) | $ 26.21 |
Price target performance share unit awards | |
Number of successive days closing stock price must achieve specific thresholds for PSUs to vest per schedule | 10 days |
Vesting period | 3 years |
Price target performance share unit awards | Vesting before first anniversary | Maximum | |
Number of PSUs that may vest, as a percent | 0.00% |
Price target performance share unit awards | Vesting before the second anniversary | Maximum | |
Number of PSUs that may vest, as a percent | 33.33% |
Price target performance share unit awards | Vesting before the third anniversary | |
Number of PSUs that may vest, as a percent | 66.67% |
TSR performance share unit awards | |
Vesting period | 3 years |
TSR performance share unit awards | Maximum | |
Number of PSUs that may be earned as compared to the number of PSUs granted, as a percent | 200.00% |
TSR performance share unit awards | Minimum | |
Number of PSUs that may be earned as compared to the number of PSUs granted, as a percent | 0.00% |
Equity-Based Compensation - Pha
Equity-Based Compensation - Phantom Unit Awards (Details) - Antero Midstream Partners Phantom Unit Awards $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Number of units | |
Total granted and unvested at the beginning of the period (in shares) | shares | 1,331,961 |
Granted (in shares) | shares | 340,773 |
Vested (in shares) | shares | (73,080) |
Forfeited (in shares) | shares | (48,760) |
Total awarded and unvested at the end of the period (in shares) | shares | 1,550,894 |
Weighted average grant date fair value | |
Total granted and unvested at the beginning of the period (in dollars per share) | $ / shares | $ 27.31 |
Granted (in dollars per share) | $ / shares | 32.45 |
Vested (in dollars per share) | $ / shares | 21.34 |
Forfeited (in dollars per share) | $ / shares | 28.85 |
Total awarded and unvested at the end of the period (in dollars per share) | $ / shares | $ 28.68 |
Aggregate intrinsic value | |
Outstanding at the beginning of the period | $ | $ 41,131 |
Outstanding at the end of the period | $ | 51,459 |
Additional equity compensation to be recognized over the remaining period | $ | $ 34,400 |
Weighted average period for recognizing unrecognized stock-based compensation expense | 2 years 3 months 18 days |
Financial Instruments (Details)
Financial Instruments (Details) - Recurring - Level 2 market data - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Antero Resources Corporation | ||
Financial Instruments | ||
Fair value of senior notes | $ 3,500 | |
Antero Midstream Partners LP | ||
Financial Instruments | ||
Fair value of senior notes | $ 668 | $ 657 |
Derivative Instruments - Commod
Derivative Instruments - Commodity derivatives (Details) | Jun. 30, 2017bbl / dMMBTU / d$ / bbl$ / gal$ / MMBTU |
TCOminusNYMEX | Year ending December 31, 2017 | Basis Differential Positions | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 125,000 |
Weighted average index price | $ / MMBTU | 0.51 |
NYMEXminusTCO | Year ending December 31, 2017 | Basis Differential Positions | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 125,000 |
Weighted average index price | $ / MMBTU | 0.38 |
Swaps | Natural gas | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 1,860,000 |
Swaps | Natural gas | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 1,860,000 |
Swaps | Natural gas | Year ending December 31, 2018 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 2,002,500 |
Swaps | Natural gas | NYMEX | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 1,370,000 |
Weighted average index price | $ / MMBTU | 3.33 |
Swaps | Natural gas | NYMEX | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 1,370,000 |
Weighted average index price | $ / MMBTU | 3.46 |
Swaps | Natural gas | NYMEX | Year ending December 31, 2018 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 2,002,500 |
Weighted average index price | $ / MMBTU | 3.91 |
Swaps | Natural gas | NYMEX | Year ending December 31, 2019 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 2,330,000 |
Weighted average index price | $ / MMBTU | 3.70 |
Swaps | Natural gas | NYMEX | Year ending December 31, 2020 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 1,417,500 |
Weighted average index price | $ / MMBTU | 3.63 |
Swaps | Natural gas | NYMEX | Year Ending December 31, 2021 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 710,000 |
Weighted average index price | $ / MMBTU | 3.31 |
Swaps | Natural gas | NYMEX | Year ending December 31, 2022 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 850,000 |
Weighted average index price | $ / MMBTU | 3.16 |
Swaps | Natural gas | NYMEX | Year ending December 31, 2023 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 90,000 |
Weighted average index price | $ / MMBTU | 2.91 |
Swaps | Natural gas | CGTLA | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 420,000 |
Weighted average index price | $ / MMBTU | 4.20 |
Swaps | Natural gas | CGTLA | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 420,000 |
Weighted average index price | $ / MMBTU | 4.37 |
Swaps | Natural gas | CCG | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 70,000 |
Weighted average index price | $ / MMBTU | 4.45 |
Swaps | Natural gas | CCG | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | 70,000 |
Weighted average index price | $ / MMBTU | 4.68 |
Swaps | Natural gas liquids | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 47,500 |
Swaps | Natural gas liquids | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 47,500 |
Swaps | Natural gas liquids | Year ending December 31, 2018 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 2,000 |
Swaps | Ethane | Mont Belvieu-Ethane | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 20,000 |
Weighted average index price | $ / gal | 0.25 |
Swaps | Ethane | Mont Belvieu-Ethane | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 20,000 |
Weighted average index price | $ / gal | 0.25 |
Swaps | Propane | Mont Belvieu-Propane | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 27,500 |
Weighted average index price | $ / gal | 0.39 |
Swaps | Propane | Mont Belvieu-Propane | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 27,500 |
Weighted average index price | $ / gal | 0.40 |
Swaps | Propane | Mont Belvieu-Propane | Year ending December 31, 2018 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 2,000 |
Weighted average index price | $ / gal | 0.65 |
Swaps | Oil | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 3,000 |
Swaps | Oil | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 3,000 |
Swaps | Oil | WTI-NYMEX member | Three months ending September 30, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 3,000 |
Weighted average index price | $ / bbl | 54.75 |
Swaps | Oil | WTI-NYMEX member | Three months ending December 31, 2017 | |
Derivative Instruments | |
Notional amount (MMBtu/Bbls per day) | bbl / d | 3,000 |
Weighted average index price | $ / bbl | 54.75 |
Derivative Instruments - Fair v
Derivative Instruments - Fair value (Details) $ in Thousands | Jun. 30, 2017USD ($)item | Dec. 31, 2016USD ($)item |
Fair value of derivative instruments | ||
Current portion of fair value of derivative assets | $ 452,005 | $ 73,022 |
Noncurrent portion of fair value of derivative assets | 1,600,165 | 1,731,063 |
Total asset derivatives | 2,052,170 | 1,804,085 |
Current portion of fair value of derivative liabilities | 3,279 | 203,635 |
Noncurrent portion of fair value of derivative liabilities | 172 | 234 |
Total liability derivatives | 3,451 | 203,869 |
Derivatives not designated as hedges for accounting purposes | Net fair value of commodity derivative assets position | ||
Fair value of derivative instruments | ||
Current portion of fair value of derivative assets | 452,005 | 73,022 |
Noncurrent portion of fair value of derivative assets | 1,600,165 | 1,731,063 |
Total asset derivatives | 2,052,170 | 1,804,085 |
Current portion of fair value of derivative liabilities | 3,279 | 203,635 |
Noncurrent portion of fair value of derivative liabilities | 172 | 234 |
Total liability derivatives | 3,451 | 203,869 |
Net derivatives | $ 2,048,719 | $ 1,600,216 |
Derivatives designated as hedges for accounting purposes | ||
Fair value of derivative instruments | ||
Number of derivative instruments held designated as hedges | item | 0 | 0 |
Derivative Instruments - Assets
Derivative Instruments - Assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Commodity derivative assets | ||
Gross amounts on balance sheet | $ 2,161,257 | $ 1,914,245 |
Gross amounts offset on balance sheet | (109,087) | (110,160) |
Total asset derivatives | 2,052,170 | 1,804,085 |
Commodity derivative liabilities | ||
Gross amounts on balance sheet | (3,451) | (324,667) |
Gross amounts offset on balance sheet | 120,798 | |
Total liability derivatives | $ (3,451) | $ (203,869) |
Derivative Instruments - Fair46
Derivative Instruments - Fair value gains (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Summary of realized and unrealized gains (losses) on derivative instruments | ||||
Commodity derivative fair value gains (losses) | $ 85,641 | $ (684,634) | $ 524,416 | $ (404,710) |
Revenue | ||||
Summary of realized and unrealized gains (losses) on derivative instruments | ||||
Commodity derivative fair value gains (losses) | $ 85,641 | $ (684,634) | $ 524,416 | $ (404,710) |
Contingencies (Details)
Contingencies (Details) - Pending Litigation $ in Millions | Jul. 21, 2017 | Jun. 30, 2017USD ($)contractlawsuit | Mar. 31, 2017USD ($)contract |
SJGC | |||
Contingencies | |||
Number of lawsuits | lawsuit | 2 | ||
Number of long term gas contracts | contract | 2 | ||
Time period from the entry of final judgment to fila an appeal | 30 days | ||
WGL | |||
Contingencies | |||
Number of long term gas contracts | contract | 2 | ||
WGL | Minimum | |||
Contingencies | |||
Damages sought | $ 30 | ||
Potential Positive Outcome of Litigation | SJGC | |||
Contingencies | |||
Additional accounts receivable | $ 60 | ||
Potential Positive Outcome of Litigation | WGL | |||
Contingencies | |||
Additional accounts receivable | $ 17 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Sales and revenues: | |||||
Sales and revenues | $ 790,389 | $ (249,198) | $ 1,985,968 | $ 471,806 | |
Operating expenses: | |||||
Lease operating | 16,992 | 12,043 | 32,543 | 23,336 | |
Gathering, compression, processing, and transportation | 266,747 | 206,060 | 533,576 | 414,798 | |
Depletion, depreciation, and amortization | 201,182 | 197,362 | 403,911 | 388,944 | |
General and administrative expense | 64,099 | 60,102 | 128,797 | 116,389 | |
Other operating expenses | 262,055 | 339,463 | |||
Total operating expenses | 666,646 | 640,675 | 1,360,882 | 1,282,930 | |
Operating income (loss) | 123,743 | (889,873) | 625,086 | (811,124) | |
Equity in earnings of unconsolidated affiliate | 3,623 | 484 | 5,854 | 484 | |
Segment assets | 15,442,221 | 13,558,780 | 15,442,221 | 13,558,780 | $ 14,255,550 |
Capital expenditures for segment assets | 1,195,882 | 945,390 | |||
Exploration and production | |||||
Sales and revenues: | |||||
Sales and revenues | 737,229 | (343,394) | 1,864,280 | 274,550 | |
Gathering and compression | |||||
Sales and revenues: | |||||
Sales and revenues | 2,324 | 3,131 | 4,863 | 6,718 | |
Fresh Water Distribution | |||||
Sales and revenues: | |||||
Sales and revenues | 868 | 163 | 933 | 420 | |
Marketing | |||||
Sales and revenues: | |||||
Sales and revenues | 49,968 | 90,902 | 115,892 | 190,118 | |
Operating segments | |||||
Sales and revenues: | |||||
Sales and revenues | 790,389 | (249,198) | |||
Operating expenses: | |||||
Lease operating | 16,992 | 12,043 | |||
Gathering, compression, processing, and transportation | 266,747 | 206,060 | |||
Depletion, depreciation, and amortization | 201,182 | 197,362 | |||
General and administrative expense | 64,099 | 60,102 | |||
Other operating expenses | 117,626 | 165,108 | |||
Total operating expenses | 666,646 | 640,675 | |||
Operating income (loss) | 123,743 | (889,873) | |||
Equity in earnings of unconsolidated affiliate | 3,623 | 484 | 5,854 | 484 | |
Segment assets | 15,442,221 | 13,558,780 | 15,442,221 | 13,558,780 | |
Capital expenditures for segment assets | 679,648 | 435,267 | |||
Operating segments | Exploration and production | |||||
Sales and revenues: | |||||
Sales and revenues | 741,140 | (339,495) | 1,872,631 | 282,274 | |
Operating expenses: | |||||
Lease operating | 17,189 | 12,257 | 32,931 | 23,589 | |
Gathering, compression, processing, and transportation | 353,216 | 267,738 | 700,984 | 535,183 | |
Depletion, depreciation, and amortization | 170,446 | 173,015 | 345,415 | 340,567 | |
General and administrative expense | 49,531 | 47,167 | 100,587 | 90,719 | |
Other operating expenses | 39,251 | 37,848 | 92,869 | 73,013 | |
Total operating expenses | 629,633 | 538,025 | 1,272,786 | 1,063,071 | |
Operating income (loss) | 111,507 | (877,520) | 599,845 | (780,797) | |
Segment assets | 13,430,135 | 11,919,732 | 13,430,135 | 11,919,732 | |
Capital expenditures for segment assets | 584,832 | 375,247 | 1,041,782 | 825,077 | |
Operating segments | Gathering and compression | |||||
Sales and revenues: | |||||
Sales and revenues | 98,762 | 71,916 | 190,421 | 141,543 | |
Operating expenses: | |||||
Gathering, compression, processing, and transportation | 9,910 | 6,997 | 18,024 | 14,167 | |
Depletion, depreciation, and amortization | 22,494 | 17,172 | 42,418 | 34,240 | |
General and administrative expense | 10,705 | 10,138 | 20,843 | 19,473 | |
Other operating expenses | 12 | 450 | 12 | 899 | |
Total operating expenses | 43,121 | 34,757 | 81,297 | 68,779 | |
Operating income (loss) | 55,641 | 37,159 | 109,124 | 72,764 | |
Equity in earnings of unconsolidated affiliate | 3,623 | 484 | 5,854 | 484 | |
Segment assets | 2,065,899 | 1,598,826 | 2,065,899 | 1,598,826 | |
Capital expenditures for segment assets | 88,806 | 48,614 | 155,365 | 97,300 | |
Operating segments | Fresh Water Distribution | |||||
Sales and revenues: | |||||
Sales and revenues | 95,005 | 64,893 | 178,115 | 131,339 | |
Operating expenses: | |||||
Lease operating | 41,444 | 34,317 | 80,066 | 75,031 | |
Depletion, depreciation, and amortization | 8,242 | 7,175 | 16,078 | 14,137 | |
General and administrative expense | 4,084 | 3,168 | 8,403 | 6,924 | |
Other operating expenses | 4,532 | 4,294 | 8,876 | 8,498 | |
Total operating expenses | 58,302 | 48,954 | 113,423 | 104,590 | |
Operating income (loss) | 36,703 | 15,939 | 64,692 | 26,749 | |
Segment assets | 711,735 | 569,624 | 711,735 | 569,624 | |
Capital expenditures for segment assets | 58,497 | 41,589 | 95,451 | 78,625 | |
Operating segments | Marketing | |||||
Sales and revenues: | |||||
Sales and revenues | 49,968 | 90,902 | 190,118 | ||
Operating expenses: | |||||
Other operating expenses | 77,421 | 125,977 | 167,414 | 263,910 | |
Total operating expenses | 77,421 | 125,977 | 167,414 | 263,910 | |
Operating income (loss) | (27,453) | (35,075) | (51,522) | (73,792) | |
Segment assets | 14,357 | 23,045 | 14,357 | 23,045 | |
Elimination of intersegment transaction | |||||
Sales and revenues: | |||||
Sales and revenues | (194,486) | (137,414) | (371,091) | (273,468) | |
Operating expenses: | |||||
Lease operating | (41,641) | (34,531) | (80,454) | (75,284) | |
Gathering, compression, processing, and transportation | (96,379) | (68,675) | (185,432) | (134,552) | |
General and administrative expense | (221) | (371) | (1,036) | (727) | |
Other operating expenses | (3,590) | (3,461) | (7,116) | (6,857) | |
Total operating expenses | (141,831) | (107,038) | (274,038) | (217,420) | |
Operating income (loss) | (52,655) | (30,376) | (97,053) | (56,048) | |
Segment assets | (779,905) | (552,447) | (779,905) | (552,447) | |
Capital expenditures for segment assets | (52,487) | (30,183) | (96,716) | (55,612) | |
Elimination of intersegment transaction | Exploration and production | |||||
Sales and revenues: | |||||
Sales and revenues | 3,911 | 3,899 | 8,351 | 7,724 | |
Elimination of intersegment transaction | Gathering and compression | |||||
Sales and revenues: | |||||
Sales and revenues | 96,438 | 68,785 | 185,558 | 134,825 | |
Elimination of intersegment transaction | Fresh Water Distribution | |||||
Sales and revenues: | |||||
Sales and revenues | $ 94,137 | $ 64,730 | 177,182 | $ 130,919 | |
Elimination of intersegment transaction | Marketing | |||||
Sales and revenues: | |||||
Sales and revenues | $ 115,892 |
Subsidiary Guarantors - Balance
Subsidiary Guarantors - Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 40,190 | $ 31,610 | $ 28,251 | $ 23,473 |
Accounts receivable, net | 16,494 | 29,682 | ||
Accrued revenue | 218,621 | 261,960 | ||
Derivative instruments | 452,005 | 73,022 | ||
Other current assets | 8,573 | 6,313 | ||
Total current assets | 735,883 | 402,587 | ||
Unproved properties | 2,309,839 | 2,331,173 | ||
Proved properties | 10,493,932 | 9,549,671 | ||
Water handling and treatment systems | 840,183 | 744,682 | ||
Gathering systems and facilities | 1,884,712 | 1,723,768 | ||
Other property and equipment | 48,537 | 41,231 | ||
Property and equipment, gross | 15,577,203 | 14,390,525 | ||
Less accumulated depletion, depreciation, and amortization | (2,767,358) | (2,363,778) | ||
Property and equipment, net | 12,809,845 | 12,026,747 | ||
Derivative instruments | 1,600,165 | 1,731,063 | ||
Investments in unconsolidated affiliates | 259,697 | 68,299 | ||
Other assets, net | 36,631 | 26,854 | ||
Total assets | 15,442,221 | 14,255,550 | 13,558,780 | |
Liabilities and Stockholders' Equity | ||||
Accounts payable | 51,567 | 38,627 | ||
Accrued liabilities | 418,352 | 393,803 | ||
Revenue distributions payable | 203,151 | 163,989 | ||
Derivative Liability, Current | 3,279 | 203,635 | ||
Other current liabilities | 16,711 | 17,334 | ||
Total current liabilities | 693,060 | 817,388 | ||
Long-term debt | 5,291,973 | 4,703,973 | ||
Deferred income tax liability | 1,100,382 | 950,217 | ||
Derivative instruments | 172 | 234 | ||
Other liabilities | 53,772 | 55,160 | ||
Total liabilities | 7,139,359 | 6,526,972 | ||
Common stock | 3,154 | 3,149 | ||
Additional paid-in capital | 6,435,047 | 5,299,481 | ||
Accumulated earnings | 1,223,259 | 959,995 | ||
Total stockholders' equity | 7,661,460 | 6,262,625 | ||
Noncontrolling interest in consolidated subsidiary | 641,402 | 1,465,953 | ||
Total equity | 8,302,862 | 7,728,578 | ||
Total liabilities and equity | 15,442,221 | 14,255,550 | ||
Eliminations | ||||
Current assets: | ||||
Intercompany receivables | (82,051) | (67,332) | ||
Total current assets | (82,051) | (67,332) | ||
Proved properties | (274,002) | (177,286) | ||
Property and equipment, gross | (274,002) | (177,286) | ||
Property and equipment, net | (274,002) | (177,286) | ||
Investment in subsidiaries | (603,549) | 420,429 | ||
Contingent acquisition consideration asset | (201,654) | (194,538) | ||
Total assets | (1,161,256) | (18,727) | ||
Liabilities and Stockholders' Equity | ||||
Intercompany payable | (82,051) | (67,332) | ||
Total current liabilities | (82,051) | (67,332) | ||
Contingent acquisition consideration liability | (201,654) | (194,538) | ||
Total liabilities | (283,705) | (261,870) | ||
Partners' capital | (1,518,953) | (1,222,810) | ||
Total stockholders' equity | (1,518,953) | (1,222,810) | ||
Noncontrolling interest in consolidated subsidiary | 641,402 | 1,465,953 | ||
Total equity | (877,551) | 243,143 | ||
Total liabilities and equity | (1,161,256) | (18,727) | ||
Antero Resources Corporation | Reportable legal entity | ||||
Current assets: | ||||
Cash and cash equivalents | 22,657 | 17,568 | 19,567 | 16,590 |
Accounts receivable, net | 15,257 | 28,442 | ||
Intercompany receivables | 2,989 | 3,193 | ||
Accrued revenue | 218,621 | 261,960 | ||
Derivative instruments | 452,005 | 73,022 | ||
Other current assets | 8,279 | 5,784 | ||
Total current assets | 719,808 | 389,969 | ||
Unproved properties | 2,309,839 | 2,331,173 | ||
Proved properties | 10,767,934 | 9,726,957 | ||
Gathering systems and facilities | 17,929 | 17,929 | ||
Other property and equipment | 48,537 | 41,231 | ||
Property and equipment, gross | 13,144,239 | 12,117,290 | ||
Less accumulated depletion, depreciation, and amortization | (2,454,668) | (2,109,136) | ||
Property and equipment, net | 10,689,571 | 10,008,154 | ||
Derivative instruments | 1,600,165 | 1,731,063 | ||
Investment in subsidiaries | 603,549 | (420,429) | ||
Contingent acquisition consideration asset | 201,654 | 194,538 | ||
Other assets, net | 26,793 | 21,087 | ||
Total assets | 13,841,540 | 11,924,382 | ||
Liabilities and Stockholders' Equity | ||||
Accounts payable | 36,490 | 21,648 | ||
Intercompany payable | 79,062 | 64,139 | ||
Accrued liabilities | 341,256 | 332,162 | ||
Revenue distributions payable | 203,151 | 163,989 | ||
Derivative Liability, Current | 3,279 | 203,635 | ||
Other current liabilities | 16,507 | 17,134 | ||
Total current liabilities | 679,745 | 802,707 | ||
Long-term debt | 4,346,524 | 3,854,059 | ||
Deferred income tax liability | 1,100,382 | 950,217 | ||
Derivative instruments | 172 | 234 | ||
Other liabilities | 53,257 | 54,540 | ||
Total liabilities | 6,180,080 | 5,661,757 | ||
Common stock | 3,154 | 3,149 | ||
Additional paid-in capital | 6,435,047 | 5,299,481 | ||
Accumulated earnings | 1,223,259 | 959,995 | ||
Total stockholders' equity | 7,661,460 | 6,262,625 | ||
Total equity | 7,661,460 | 6,262,625 | ||
Total liabilities and equity | 13,841,540 | 11,924,382 | ||
Non-Guarantor Subsidiaries | Reportable legal entity | ||||
Current assets: | ||||
Cash and cash equivalents | 17,533 | 14,042 | $ 8,684 | $ 6,883 |
Accounts receivable, net | 1,237 | 1,240 | ||
Intercompany receivables | 79,062 | 64,139 | ||
Other current assets | 294 | 529 | ||
Total current assets | 98,126 | 79,950 | ||
Water handling and treatment systems | 840,183 | 744,682 | ||
Gathering systems and facilities | 1,866,783 | 1,705,839 | ||
Property and equipment, gross | 2,706,966 | 2,450,521 | ||
Less accumulated depletion, depreciation, and amortization | (312,690) | (254,642) | ||
Property and equipment, net | 2,394,276 | 2,195,879 | ||
Investments in unconsolidated affiliates | 259,697 | 68,299 | ||
Other assets, net | 9,838 | 5,767 | ||
Total assets | 2,761,937 | 2,349,895 | ||
Liabilities and Stockholders' Equity | ||||
Accounts payable | 15,077 | 16,979 | ||
Intercompany payable | 2,989 | 3,193 | ||
Accrued liabilities | 77,096 | 61,641 | ||
Other current liabilities | 204 | 200 | ||
Total current liabilities | 95,366 | 82,013 | ||
Long-term debt | 945,449 | 849,914 | ||
Contingent acquisition consideration liability | 201,654 | 194,538 | ||
Other liabilities | 515 | 620 | ||
Total liabilities | 1,242,984 | 1,127,085 | ||
Partners' capital | 1,518,953 | 1,222,810 | ||
Total stockholders' equity | 1,518,953 | 1,222,810 | ||
Total equity | 1,518,953 | 1,222,810 | ||
Total liabilities and equity | $ 2,761,937 | $ 2,349,895 |
Subsidiary Guarantors - Stateme
Subsidiary Guarantors - Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Natural gas sales | $ 454,257 | $ 229,787 | $ 920,921 | $ 484,563 |
Natural gas liquids sales | 170,819 | 94,713 | 365,471 | 167,778 |
Oil sales | 26,512 | 16,740 | 53,472 | 26,919 |
Gathering, processing, and water handling and treatment | 3,192 | 3,294 | 5,796 | 7,138 |
Marketing Revenue | 49,968 | 90,902 | 115,892 | 190,118 |
Commodity derivative fair value gains (losses) | 85,641 | (684,634) | 524,416 | (404,710) |
Total revenue | 790,389 | (249,198) | 1,985,968 | 471,806 |
Operating expenses: | ||||
Lease operating | 16,992 | 12,043 | 32,543 | 23,336 |
Gathering, compression, processing, and transportation | 266,747 | 206,060 | 533,576 | 414,798 |
Production and ad valorem taxes | 22,553 | 17,458 | 47,346 | 36,742 |
Marketing | 77,421 | 125,977 | 167,414 | 263,910 |
Exploration | 1,804 | 1,109 | 3,911 | 2,123 |
Impairment of unproved properties | 15,199 | 19,944 | 42,098 | 35,470 |
Depletion, depreciation, and amortization | 201,182 | 197,362 | 403,911 | 388,944 |
Accretion of asset retirement obligations | 649 | 620 | 1,286 | 1,218 |
General and administrative | 64,099 | 60,102 | 128,797 | 116,389 |
Total operating expenses | 666,646 | 640,675 | 1,360,882 | 1,282,930 |
Operating income (loss) | 123,743 | (889,873) | 625,086 | (811,124) |
Income Loss From Equity Method Investments | 3,623 | 484 | 5,854 | 484 |
Interest | (68,582) | (62,595) | (135,252) | (125,879) |
Total other expenses | (64,959) | (62,111) | (129,398) | (125,395) |
Income (loss) before income taxes | 58,784 | (951,984) | 495,688 | (936,519) |
Provision for income tax (expense) benefit | (18,819) | 376,494 | (150,165) | 371,679 |
Net income (loss) and comprehensive income (loss) including noncontrolling interest | 39,965 | (575,490) | 345,523 | (564,840) |
Net income and comprehensive income attributable to noncontrolling interest | 45,097 | 20,754 | 82,259 | 36,459 |
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | (5,132) | (596,244) | 263,264 | (601,299) |
Reportable legal entity | Antero Resources Corporation | ||||
Revenue: | ||||
Natural gas sales | 454,257 | 229,787 | 920,921 | 484,563 |
Natural gas liquids sales | 170,819 | 94,713 | 365,471 | 167,778 |
Oil sales | 26,512 | 16,740 | 53,472 | 26,919 |
Marketing Revenue | 49,968 | 90,902 | 115,892 | 190,118 |
Commodity derivative fair value gains (losses) | 85,641 | (684,634) | 524,416 | (404,710) |
Other income | 3,911 | 3,899 | 8,351 | 7,724 |
Total revenue | 791,108 | (248,593) | 1,988,523 | 472,392 |
Operating expenses: | ||||
Lease operating | 17,189 | 12,257 | 32,931 | 23,589 |
Gathering, compression, processing, and transportation | 353,216 | 267,738 | 700,984 | 535,183 |
Production and ad valorem taxes | 21,599 | 16,175 | 45,574 | 34,202 |
Marketing | 77,421 | 125,977 | 167,414 | 263,910 |
Exploration | 1,804 | 1,109 | 3,911 | 2,123 |
Impairment of unproved properties | 15,199 | 19,944 | 42,098 | 35,470 |
Depletion, depreciation, and amortization | 170,670 | 173,222 | 345,863 | 340,981 |
Accretion of asset retirement obligations | 649 | 620 | 1,286 | 1,218 |
General and administrative | 49,531 | 47,167 | 100,587 | 90,719 |
Total operating expenses | 707,278 | 664,209 | 1,440,648 | 1,327,395 |
Operating income (loss) | 83,830 | (912,802) | 547,875 | (855,003) |
Interest | (59,735) | (58,910) | (117,738) | (118,733) |
Equity in net income of subsidiaries | (10,408) | (1,026) | (16,708) | 758 |
Total other expenses | (70,143) | (59,936) | (134,446) | (117,975) |
Income (loss) before income taxes | 13,687 | (972,738) | 413,429 | (972,978) |
Provision for income tax (expense) benefit | (18,819) | 376,494 | (150,165) | 371,679 |
Net income (loss) and comprehensive income (loss) including noncontrolling interest | (5,132) | (596,244) | 263,264 | (601,299) |
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | (5,132) | (596,244) | 263,264 | (601,299) |
Reportable legal entity | Non-Guarantor Subsidiaries | ||||
Revenue: | ||||
Gathering, processing, and water handling and treatment | 193,767 | 136,809 | 368,536 | 272,882 |
Total revenue | 193,767 | 136,809 | 368,536 | 272,882 |
Operating expenses: | ||||
Lease operating | 41,444 | 34,317 | 80,066 | 75,031 |
Gathering, compression, processing, and transportation | 9,910 | 6,997 | 18,024 | 14,167 |
Production and ad valorem taxes | 954 | 1,283 | 1,772 | 2,540 |
Depletion, depreciation, and amortization | 30,512 | 24,140 | 58,048 | 47,963 |
General and administrative | 14,789 | 13,306 | 29,246 | 26,397 |
Accretion of contingent acquisition consideration | 3,590 | 3,461 | 7,116 | 6,857 |
Total operating expenses | 101,199 | 83,504 | 194,272 | 172,955 |
Operating income (loss) | 92,568 | 53,305 | 174,264 | 99,927 |
Income Loss From Equity Method Investments | 3,623 | 484 | 5,854 | 484 |
Interest | (9,015) | (3,878) | (17,851) | (7,582) |
Total other expenses | (5,392) | (3,394) | (11,997) | (7,098) |
Income (loss) before income taxes | 87,176 | 49,911 | 162,267 | 92,829 |
Net income (loss) and comprehensive income (loss) including noncontrolling interest | 87,176 | 49,911 | 162,267 | 92,829 |
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | 87,176 | 49,911 | 162,267 | 92,829 |
Eliminations | ||||
Revenue: | ||||
Gathering, processing, and water handling and treatment | (190,575) | (133,515) | (362,740) | (265,744) |
Other income | (3,911) | (3,899) | (8,351) | (7,724) |
Total revenue | (194,486) | (137,414) | (371,091) | (273,468) |
Operating expenses: | ||||
Lease operating | (41,641) | (34,531) | (80,454) | (75,284) |
Gathering, compression, processing, and transportation | (96,379) | (68,675) | (185,432) | (134,552) |
General and administrative | (221) | (371) | (1,036) | (727) |
Accretion of contingent acquisition consideration | (3,590) | (3,461) | (7,116) | (6,857) |
Total operating expenses | (141,831) | (107,038) | (274,038) | (217,420) |
Operating income (loss) | (52,655) | (30,376) | (97,053) | (56,048) |
Interest | 168 | 193 | 337 | 436 |
Equity in net income of subsidiaries | 10,408 | 1,026 | 16,708 | (758) |
Total other expenses | 10,576 | 1,219 | 17,045 | (322) |
Income (loss) before income taxes | (42,079) | (29,157) | (80,008) | (56,370) |
Net income (loss) and comprehensive income (loss) including noncontrolling interest | (42,079) | (29,157) | (80,008) | (56,370) |
Net income and comprehensive income attributable to noncontrolling interest | 45,097 | 20,754 | 82,259 | 36,459 |
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation | $ (87,176) | $ (49,911) | $ (162,267) | $ (92,829) |
Subsidiary Guarantors - Cash Fl
Subsidiary Guarantors - Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Condensed consolidated statement of cash flows | ||
Net cash provided by operating activities | $ 647,586 | $ 578,706 |
Cash flows used in investing activities: | ||
Additions to proved properties | (179,318) | |
Additions to unproved properties | (129,876) | (58,195) |
Drilling and completion costs | (629,308) | (709,974) |
Additions to water handling and treatment systems | (95,451) | (78,625) |
Additions to gathering systems and facilities | (155,365) | (97,300) |
Additions to other property and equipment | (6,564) | (1,296) |
Investments in unconsolidated affiliates | (191,364) | (45,044) |
Change in other assets | (12,452) | (47,925) |
Proceeds from asset sales | 2,156 | |
Net cash used in investing activities | (1,397,542) | (1,038,359) |
Cash flows from financing activities: | ||
Issuance of common stock | 752,599 | |
Proceeds From Minority Shareholders | 246,585 | |
Proceeds From Sale Of Interest In Partnership Unit | 178,000 | |
Borrowings (repayments) on bank credit facility, net | 585,000 | (427,000) |
Payments of deferred financing costs | (96) | |
Distributions to noncontrolling interest in consolidated subsidiary | (61,869) | (31,681) |
Employee tax withholding for settlement of equity compensation awards | (8,433) | (4,819) |
Other | (2,747) | (2,572) |
Net cash provided by financing activities | 758,536 | 464,431 |
Net increase (decrease) in cash and cash equivalents | 8,580 | 4,778 |
Cash and cash equivalents, beginning of period | 31,610 | 23,473 |
Cash and cash equivalents, end of period | 40,190 | 28,251 |
Reportable legal entity | Antero Resources Corporation | ||
Condensed consolidated statement of cash flows | ||
Net cash provided by operating activities | 509,364 | 465,719 |
Cash flows used in investing activities: | ||
Additions to proved properties | (179,318) | |
Additions to unproved properties | (129,876) | (58,195) |
Drilling and completion costs | (726,024) | (765,586) |
Additions to gathering systems and facilities | (331) | |
Additions to other property and equipment | (6,564) | (1,296) |
Change in other assets | (7,648) | (44,835) |
Distributions from non-guarantor subsidiary | 63,145 | 51,296 |
Proceeds from asset sales | 2,156 | |
Net cash used in investing activities | (984,129) | (818,947) |
Cash flows from financing activities: | ||
Issuance of common stock | 752,599 | |
Proceeds From Sale Of Interest In Partnership Unit | 178,000 | |
Borrowings (repayments) on bank credit facility, net | 490,000 | (567,000) |
Payments of deferred financing costs | (96) | |
Employee tax withholding for settlement of equity compensation awards | (7,501) | (4,802) |
Other | (2,645) | (2,496) |
Net cash provided by financing activities | 479,854 | 356,205 |
Net increase (decrease) in cash and cash equivalents | 5,089 | 2,977 |
Cash and cash equivalents, beginning of period | 17,568 | 16,590 |
Cash and cash equivalents, end of period | 22,657 | 19,567 |
Reportable legal entity | Non-Guarantor Subsidiaries | ||
Condensed consolidated statement of cash flows | ||
Net cash provided by operating activities | 234,938 | 168,599 |
Cash flows used in investing activities: | ||
Additions to water handling and treatment systems | (95,451) | (78,625) |
Additions to gathering systems and facilities | (155,365) | (96,969) |
Investments in unconsolidated affiliates | (191,364) | (45,044) |
Change in other assets | (4,804) | (3,090) |
Net cash used in investing activities | (446,984) | (223,728) |
Cash flows from financing activities: | ||
Proceeds From Minority Shareholders | 246,585 | |
Borrowings (repayments) on bank credit facility, net | 95,000 | 140,000 |
Distributions to noncontrolling interest in consolidated subsidiary | (125,014) | (82,977) |
Employee tax withholding for settlement of equity compensation awards | (932) | (17) |
Other | (102) | (76) |
Net cash provided by financing activities | 215,537 | 56,930 |
Net increase (decrease) in cash and cash equivalents | 3,491 | 1,801 |
Cash and cash equivalents, beginning of period | 14,042 | 6,883 |
Cash and cash equivalents, end of period | 17,533 | 8,684 |
Eliminations | ||
Condensed consolidated statement of cash flows | ||
Net cash provided by operating activities | (96,716) | (55,612) |
Cash flows used in investing activities: | ||
Drilling and completion costs | 96,716 | 55,612 |
Distributions from non-guarantor subsidiary | (63,145) | (51,296) |
Net cash used in investing activities | 33,571 | 4,316 |
Cash flows from financing activities: | ||
Distributions to noncontrolling interest in consolidated subsidiary | 63,145 | 51,296 |
Net cash provided by financing activities | $ 63,145 | $ 51,296 |
Commitments (Detail)
Commitments (Detail) $ in Millions | Jun. 30, 2017USD ($) |
Future minimum payments | |
Remainder of 2017 | $ 577 |
2,018 | 1,382 |
2,019 | 1,498 |
2,020 | 1,473 |
2,021 | 1,435 |
2,022 | 1,378 |
Thereafter | 11,080 |
Total | 18,823 |
Firm transportation | |
Future minimum payments | |
Remainder of 2017 | 319 |
2,018 | 893 |
2,019 | 1,107 |
2,020 | 1,127 |
2,021 | 1,106 |
2,022 | 1,053 |
Thereafter | 9,561 |
Total | 15,166 |
Gas processing, gathering and compression | |
Future minimum payments | |
Remainder of 2017 | 200 |
2,018 | 401 |
2,019 | 340 |
2,020 | 337 |
2,021 | 321 |
2,022 | 317 |
Thereafter | 1,502 |
Total | 3,418 |
Drilling rigs and completion services | |
Future minimum payments | |
Remainder of 2017 | 52 |
2,018 | 75 |
2,019 | 40 |
Total | 167 |
Office and equipment | |
Future minimum payments | |
Remainder of 2017 | 6 |
2,018 | 13 |
2,019 | 11 |
2,020 | 9 |
2,021 | 8 |
2,022 | 8 |
Thereafter | 17 |
Total | $ 72 |