AR - Earnings call transcript Q2 2019 | Antero Resources Corporation

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Operator

Greetings, and welcome to the Antero Resources Second Quarter 2019 Earnings Call. At this time, all participants are in a listen only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Mr. President Vice Senior Kennedy, of Finance. Michael you. Thank

may You begin.

Michael Kennedy

then I Antero's you a earnings investor you the XXXX call joining highlights, today's will few reviewed Q&A. our to up presentation homepage we have for for call. us direct www.anteroresources.com during second and operational conference and going the quarter website open through that at where like it provided for would Thank minutes financial we'll call. of also We'll to new spend a separate be

and Actual Before remind which we beyond is such performance that of factors statements. our Antero call will and and start outcomes expressed, are to our on comments, I regarding in forward-looking you Antero subject differ many risks implied will would Antero's are like impact uncertainties, from control. to make Such statements. first based judgments this statements could of results the materially are that future a during current forecast what or of number management

call Please measures. press refer non-GAAP disclosures the to financial reconciliations most financial may measures. comparable regarding to earnings for important GAAP release certain our also Today's measures, such including contain

Chairman me and today Joining call Paul CEO; are President the Glen and Warren, CFO. Rady, on and

to I will Paul. call now turn the over

Paul Rady

and and strategy highlight will on Thanks discussing focus financial highlight X capital the today. for with including spending going long-term first announced our further in realizations full Mike. talking East XXXX costs towards quarter today our savings and on outlook. Thank quarter position I'm our listening you I to we've call the reduce service. cost following target. achievements my price and our will cost will In He I'll through time hedge by that then well our our Glen expanded conclude items premium everyone Mariner operating NGL second initiatives. about comments, to key provide the achieved to some recently savings spend detail

strategy. long-term maximizing by generate I'd flow ability discussing to cash like We our free our basis. on remain to start sustained focused a on

five to strip in plan our place. to at through funding and This to sustainable we attractive At forecast while free look our hedges payment the way basis year transportation we gas cash the best strong in water firm today, sheet. have current of cash 'XX. commodity $XXX our production in growth expected commitments maximum earn prices, term development from near primarily grow million this allows out the As operations natural Cal to we fill us flow balance on is preserve flow a deliver

flow XXXX and yearend we development into be maintain marketing yield. X our production per to $XXX if flexible strip equivalent well our at result capital Once free to significant million. would free elect required ability to over in $XXX with plans even cash flow. day, of Bcf a generate prices To This to We're generate transport grow cash provide would do XX% firm expense context, some today's in in and over more cash the just approximately flow so free 'XX or we essentially than eliminate positioned commodity be Cal less net XXXX. million forecast our

sustained pipeline delivering to us downshifting commitments of and cash to opposed today with cash flow our free one flow long-term deliver year CapEx to free As maintenance positions unfilled strategy remaining, generation.

remain initiatives. maximizing savings Regardless cost committed cycles, value. commodity well our to turn we to of price let's Now

to materially quarters, reducing with every the costs internal several we undertook maximize goal of well associated review our last the returns. cost Over with of an expense

a lateral feet. length number that Let's titled numbers turn to Reductions. slide XX,XXX Targeted Marcellus all these Well note three Cost Please of assume

XXXX well costs well budgeted by approximately costs. $X.X lateral XX% $X.X to million a basis or foot targeting We XX% per to our on reduction to in a million are of XXXX per compared

'XX. savings initiatives, water efficiency peer target to among the and low These per On will beginning a have come Appalachian per cost by target continued a come per XXXX to be the of or reduction combination $X.XX this position foot to Meeting is savings us feet from $X.XX Cal reached will deflation million of service end expected feet. of of budgeted million a at into of million translates basis XXXX $X $X.XX from costs XXXX a our cost group. the gains. our curve This

achieved talk and about Now a let's take already today. what step back we've

Through of savings was of waterfall budget. the well January on we've our per approximately page, cost in first feet the XX $X.XX begin assumed year, we half $XXX,XXX well, the Following XXXX with that at which the our brings to per achieved million our planned estimated at activity. with feet. $X.XX well any behind progress second AFE, lowering us XXXX back costs without CapEx to was XXXX per the in guidance change half XXXX our million already driver May, our This current

enhanced both this are reflects our completion very to expect achievement gains operational of from during ability target service AFE and of to realized schedule. our feet ahead water half expected savings the From to first range cost initiatives, deflation we team's was We're XXXX optimization. XXXX. This significantly million per decline back $X.XX Cal management of These by of $X.XX million and flow both 'XX. $X.XX further feet of additional water on proud XXXX to that come continued the lateral, million costs current on efficiency deliver well our to savings per primarily

of Initiatives Breakdown. cost of a look slide talked take titled Cost well On the at to Reduction number timing let's but major well category. the We our our four about Now components of closer of each provide savings, a magnitude wanted cost savings. breakdown I

midpoint the $X.X targeted can million of reductions our $X.X cost breakdown of by well assuming You see category the to million.

back design. well cost for are produced completion well approximately optimized We water management, flow per $XXX,XXX as and targeting in well more as efficient reductions

freshwater water produced additional at through between of completions; three, to On and the portions existing Historically, first, infrastructure. the party expect blending $X secondly, constructing and per system and our of in and costs used water to side reuse water and water flow back $X companies repurposing combination cost pipeline trucking reduce transport we third to to a we've our of produced barrel. a the flow back polishing transport water

services XX third trucking the paid Midstream. Over months, to the while of a companies. for situation we for last party for Antero savings the water on This per with provides basis, million barrel scope and material and flow Antero $XXX have produced nearly also expanding opportunity improvement business significant back a

driven by a for lengths mostly and we reservoir XXX is design down going XX now in per cost new effective completion production maximize it and a usage XX expect plan proppant evidence of barrels XX to conductivity, range We've proppant, any the the either performing pilots degradation both piloting not all optimizes cost amount began our earlier we efficient acreage pilots our After which completions this foot in to or reduce successful mesh the in of do used not to seen driven using manner. water and The we most in in optimal XX of fracture and forward. foot barrels type design. completion by of water per design the On EURs analyze test completion used to year, to water completions, to across from returns.

gains. improvements. our also and efficiency service is lower and true reduced costs while commodity often Appalachian realize And The This second down. lowered deflationary in byproduct is initiative especially is cost a continuing programs prices of component service overlooked producers to where savings service activity industry cost have well of cost go efficiency the environment, deflation basin, capital

we've finalized of Given contract reduce reduction vendor maintained in Antero the extensive vendors. that resilient will savings has from the partners one and In relationships meaningful all excellent a conversations with our additional to our expenses. logistics in vendor remained supplier. we was early working producers was XXXX, through total mile areas costs. it of find cycles, last began more with a to basin sand these sand The Further premier sand sourcing come recently result with

our highlighted Efficiencies, Marcellus as XXXX. number On continue Completion achieved team's Drilling we the calls, to have operational during surpass efficiency titled quarter our during five that gains, highlights we advancements second of many Slide and of the earnings efficiency many expectations. the gains

one per from approximately XXXX a of day, improvement our During drilled single XXXX over XX% the mile that's lateral every feet quarter we average. averaged little mile, day,

In believe addition, average world day, record of in lateral averaged we're achieved by X.X and feet XXXX. in X.X XXXX is per of we a day proud what stages one total we of. stages day again, increased extremely per drilling the which day a from per stages Completion

drill to continue longer We laterals.

range. The per are the also the expenses. During cost XX,XXX feet at produced longest costs management reduce our by midpoint water These service $XXX,XXX able combined lease drill approximately to Marcellus expected gains lateral were assuming to reduce target well with the sideways. of ever well, deflation, efficiency will quarter enhanced we operating

we how well well a clarify and we it, perforating about terms in flow the cost LOE. talked it we me water recover When begin Let complete as water back the of well to turn we in and line. and after stimulating

the recycle produced the and flow part the XX the days for considered of capitalized recycle the water well, as as is first days back XX track and is water LOE. account track to categorize water the to it We cost cost and we and After well as it cost.

XX% XXXX more In me operating LOE. LOE of So half bit a represented costs let total lease of approximately expenses. about first little talk the water produced

water annualized produced we expect on equates least least an Assuming to budget 'XX Antero Cal XX% This new $XX costs. provides savings expanded reduced 'XX LOE at services, Cal by to compared of Midstream at the be million basis. in to

in Comparison, Slide and there well number producers but Well trends Keep captured of are the Cost well what our future useful. are to targets. capitalized Peer Appalachian cost a snapshot that peer mind in variance as among costs six LOE, provides a is titled Marcellus versus Appalachian cost

can of gas lowest to cost the ranking us average in see, becoming lowest natural well cost will in our the As producers one world. from you cost target basin move an new the

some the $XXX history that fully of for at the While today, achieved have realized company's from initiatives results lowest costs, spending in seeing as these we already we on quarter million quarter. recognize focus not we're capital the costs been our

Over last near XXX standing growth. months accomplished cash drilling $X.XX base. was and XX billion, while our flow our which feet highlighting delivered was CapEx the attractive This asset the cubic of levels of efficiency equivalent completion capital production million

CapEx D&C line quarterly Going a second rate million range. forward, in the run million $XXX to anticipate the $XXX approximately spend with quarter we in

increase cost continue target summary, The intense lower an lead the capital value D&C well low through of guidance completion in similar to deliver completed reduction in costs. at in end total 'XX is focus XXXX well our Cal $X.X during capital billion to of a a longer In on XXXX, 'XX. maximizing to we $X.X XX% capital billion will completions is with Cal and but to despite actually laterals. due spend expected to prioritize of decline footage in range and drilling year lateral to a next The number

to With turn to going it that, over his for comments. Glen I'm

Glen Warren

Paul. you, Thank

was one shipper We hold current second on global of day service giving period X premium The LPG the XXX,XXX East our pipeline on this prices to markets. barrels access of in X, quarter full first East with reporting price Mariner making Mariner us a to largest us the capacity pipeline. about third the

to Belvieu guidance the realizations quarter side on premium were slide a we Inflexion gallon In on for to Belvieu Pricing. shown hand NGL barrel CX+ realized CX+ a in Point relative pricing. price full slide, pricing right per Belvieu XX% year barrel we Mont the Mont of titled of volumes average to for and seven NGL the provide Mont the number XXXX. exported and That's $XX.XX pricing, table of a an quarter. realized $X.XX the the During $X.XX NGL per Marketing per unhedged premium as

Belvieu a premium you see positive blended gallon. can to $X.XX slightly flat per it's As of to essentially a on basis,

the international had $X that the a has the Antero's Belvieu. northeast. Now Mont from only XXX,XXX not to supply. a the pricing flowing service in northeast the per in differentials. ME barrels our Since NGL on in NGL a to NGL impact The flipping price at February almost this evacuates improvement from of improved ME let's premium of of by but barrel, of X on look basin from strengthening take the also market, in ME approximately of a in over year, discount day XX% is X basin's differentials This X sales

eight number Northeast Differentials. NGL On slide Improvement titled in

X. ME You that price see improvement the ME following of the can over line in right. realizations significant to startup dotted is X the vertical

year, first the First averaged improved half per prices the of versus per half flipped XXXX to our the barrel an a Mont price $X.XX prior to realizations index. Belvieu over to and barrel the premium XXXX at realized to Belvieu. approximate softer during discount Mont seen domestic by $X relative Despite

depicted chart, ME price first their realizations by years NGL XXXX. our the In although over on that about improved the NGL four per have on Belvieu, following CX+ in of startup of past and line can have not see in addition, you this basin the XX% $X have to CX+ averaged but discount also realizations X. improved the orange barrel, half

to X. completion a the XXXX the ME of the capacity total project will expected day forward end to XXX,XXX with of pipeline ME on full X increase XXXX, Looking barrels by

NGL increase we to This to supply, XXX,XXX and our which percentage further day increments up our price the boost a XX,XXX the barrel to of is to barrels a increase basin pricing would in evacuate as would capacity production expected to expected would barrels time, international the capacity, much option that as regional to us At have expansion day take in a which that also firm by Antero's XX% higher range XXXX. on year of exposure differentials. XX% XX,XXX

us to peer deliver significant to going leading Our realizations NGL on international give forward. the ME volumes exposure positions LPG which highest markets, us price X

international is titled benchmark per that contango the it, For on and summary shipping. years. respectively Mont visibility $X.XX we over have on international the next Update into markets. hope in homepage, for presentation who of of publishing propane curve a prices website prices been new better provides this We Belvieu the Pricing our And which commodity a XX% oil $X.XX premium we provide northwest NGL of have at those the to International futures and short, of are propane missed the butane. butane couple net LPG In helps volumes of and sell to gallon on our you Weekly

Coast. in Belvieu touch to due Mont briefly, is NGL current limited along Gulf week like the pricing export I'd capacity to the macro on NGL the

Mont of the expect do Northeast, Coast quarter come during third impacted X expected strengthening of to terminal. the to Although completion Belvieu and the service that exports is year, stranded negatively fourth Belvieu through expansion along XXXX. relief see projects export persist prices supply the through capacity pricing. Mariner into are Gulf soft in East will by fundamental the we this online the of the NGL increased quarter, fourth the quarter Mont to The on providing full In we provide

to expect these prices domestic upside We to well. projects as provide

yearend We PDH Europe be of we terminals. six to In as expect strengthening imports complete also quarters. also is see summary, international prices to service the additional country strengthening are to in and China up in improve placed new to while year, NGL by plants we fundamental pricing are India in see this expected expected

Peer titled Turning to Hedge nine Protection. slide number Leading

hedge quarter second and XXX we XXXX positions. natural to the During added our gas our

net of price per important XXXX approximate average We growth It's price $X.XX an hedged than are we annual an offset realizations. XX% year. average this XXXX hedge MMBtu depicted to XX% you pricing XX. of Based over annual and that hedged hedge $X.XX through to continue our production on expense now approximately number at in XX% net expense at realizations in assuming marketing note offset strip per can MMBtu, slide as marketing will XXXX, with our today, on see more our

our in gas. XXX% is natural slide hedged significantly production on of This Have bear market investment the producer in and than important and It's XXXX XX is only protection gas an peers. as shown in more XXXX on a for US notable traded Appalachian that hedge attribute XXXX remain we XX. publicly that expected most numbers

XX slide Low for titled Position Environment. Price on Moving to Strong Financial number

position in history. is sheet the company's strongest Our in our balance

absolute last $XXX in low have over over two by times resulting years, million debt We reduced few the leverage.

year We our flow. billion ownership have us steady X.X AM over provides of per value that in million cash $XXX of

million Our facility. and only borrowing April the billion was the billion with at during on spring $X.X base $X.X that at was XXX reaffirmed redetermination commitments unchanged an drawn

We of of of the base inventory. the available. depth strength highlights our resilience have our over and asset This drilling $X.X billion and liquidity

to on call ahead. well I the further questions, we outlook reductions over cost like and our capital look turning would comment as to Before

million As a low the for mentioned, CapEx $XXX of was quarterly Paul us.

expect commodity cost CapEx $XXX million initiative we in the On However, deliver measured underway, while in support the billion an annualized savings next range with quarterly well XXXX. range cost position assuming the the to over million $XXX strip. new several through flow cash results hedge growth production this XXXX, CapEx low the to our well near spending of in current $X.X basis, in billion strong to The years $X.X reduced levels. combined

$XXX we pricing million $XXX for balance and our XXXX, payment receiving in the earn Antero to from anticipate million reminder support water litigation, Midstream gas the further approximately a natural sheet. As out providing

Our sheet. focus remains balance strong on maintaining a

have base plan lead flexibility asset on strong to our adjust We maintenance the environment. the on and depending estimates. Lower development to the our cost price commodity CapEx a reduction well

slide to key titled We Bcf million. that's day a $XX at production maintenance and now approximately CapEx a number Decline Turning flat be Projections. project Rate Maintenance XX X.X to

In summary, strength. environments. we maintaining please slide macro balance XX resilient a number through today, achieved Model. Business Has Despite built business Resilient and We've diversity significant titled is Built sheet to market that product while headwinds and scale AR all a turn the

and affords conditions. to versus flexibility and us Our and leading us our sustained market downturns. ownership attributes substantial midstream peer under provide book group hedge peer protection provides succeed liquidity These differentiate varying through

significant free very the as well flow sustainable cash over a are to positioned company generate We long-term.

With for the I'll turn questions. over call operator the

Operator

you. Thank

session. be We question-and-answer [Operator our Instructions] now conducting will

Our from state Fitzpatrick question. your SunTrust. comes Welles Please with first question

Welles Fitzpatrick

Hey, good morning.

Paul Rady

Good morning.

Welles Fitzpatrick

of kind moving CapEx a the little forward? of batch improving The Utica begins that to larger Is since any share guys bit there Utica you dollars get a chance of last seem disclosed. to the rig be

Glen Warren

at and of number end a something monitor a chance. capital pads better cost There's you're day, end operating that the much from low cost are our general locations we in and do have area the That's we of certainly standpoint. same But of the Utica at an a curve. very completing off the

gas really quarter develop six right in look and rich, much strong. brought you really like now probably massed in to we're Utica we So to which well the the the very dry those we just on as and liquids but alluding Marcellus, wells,

Welles Fitzpatrick

that little To your it the liquid point NGL down on recovery a was that is the driven? liquids, like Marcellus or looks quarter-over-quarter, is bit cap location

Michael Kennedy

was don't I driven. it recovery NGL believe

just that a variants jump Btu pretty little XXXX at to bring numbers. and so quarterly we to XX, to see impact the can chunky, and well you're just think quarter going going pads, completions back XX you from I on so that's from quarter Btu vary. when it obviously, are on the as XXXX it to Those forth, a

Welles Fitzpatrick

XX% Okay, one just Okay, XX% of to for but think me, guide multiyear something a I of obviously at a one And it previous sort then last perfect. guidance, higher much for growth, soft should had commodity should price. to costs. you're Should we are of prices moving doing forward? vis-a-vis that that How that Obviously, offset think the we – but forward? lower, reframe a be lot we thinking going how

Glen Warren

I that of for several press much growth. the can years very release, focused think in sort on you CAGR XX% materials Yeah, the production over the all from see we're next

as not certainly the and over additional flow years not that think in we upside we're coming which be and cash that other looking commodity we not prices, the at deleveraging we improvement And will accelerating capital for growth will captured case. in just fact, plan. quarters for we're uses if see So

Welles Fitzpatrick

time. so for sense, much your thanks Makes

Glen Warren

Thank you.

Paul Rady

Thank you.

Operator

Stifel. Please Jane Our question with state comes from next question. your Trotsenko

Jane Trotsenko

with. production to and Good you an remainder question the can easy XXXX? morning. cadence have over CapEx I start discuss of Maybe

Glen Warren

XXXX? see you're asking sorry; how much we year reduction in the I'm

Jane Trotsenko

for about and think production production CapEx should XQ I'm CapEx XQ talking How cadence. about No, we and also spending? and quarter-over-quarter

Glen Warren

at Yeah, for right well, mean, year you I can our on the see we're guidance production.

for we that $XXX capital each pretty I call, the in little year we we quarters, and bit many in quarter, the next this really. see flat over then in we $XXX So that the to stated a as think you'll through million million, as expect run that maybe expect

Jane Trotsenko

fair of equally spread the over two year be remainder remaining be to would spread that say so Okay, would the the CapEx quarters? it spending the out out, like pretty over

Glen Warren

message pretty the that's it's think I Jane, flat. exactly, Yeah,

Jane Trotsenko

Okay.

year how given if given well or maybe of Okay. strong QQ about very should to full Are mid expected, I'm the then production think low And the in just range production cadence you we – that was expecting production, on come high end given year very curious side your guidance? guidance, full QQ end? now strong production, on the

Michael Kennedy

The mid really liked pads on And we've think range bit numbers a earlier cadence. expected. we've I expectation. the And is been depends good the quarterly on talking results. also a bring than

end. some productivity the So to rising we've of no, in of the starting the see we're but well, seen not that, to high

mid good point's place think the to I a be.

Jane Trotsenko

And my offload fees regarding use near FTE the Okay, see you gathering last opportunity future? do gathering of an some to maybe question FTE perfect. fees the in is and in commitments

Paul Rady

contracted We always there in have FTE to the it's is – is contract far the as But that. prices desirable. spreads have look so this difficult less at environment at so

Jane Trotsenko

you Okay, thank much. so

Paul Rady

Thank you.

Operator

question with state Stewart next Holly Please comes question. Our Weil. your Howard Scotia from

Holly Stewart

Good morning, gentlemen.

Paul Rady

Good morning.

Holly Stewart

that percent missed just hitting I water all think LOE that water Maybe was you but a what percentage? savings I number for that, of up, made gave the produced that Paul, on

Paul Rady

LOE. It was of percent eight XX%, zero

Holly Stewart

And better. water chain value then Okay, my the number. admittedly, big entire could of understanding be

sort using in mind, long us, in wasn't our of help talking remember with per we So foot completions. that I more ago mean, that water can that it about I you were

So has so I done give that maybe far? then for And the guess pilots what sense a changed? us you've

Paul Rady

from away as Yeah, well use? bore say, is, fractures sand, changed you near interaction connected. well water really you how it's the the And said has much go depending go the remarks, the the in fracks fracks converse or the are on that wells further we what better between as more well, conductivity, on wider bore, the we with out

What the, the meshes in of And and mesh. the wide we is cut virtually is. we a but when we industry no XXX outs bores little quite coarser the of it requires are off we with see seeing some and we pretty jobs way the bit So industry that, mesh going that we the saw between screen The can go on things we could with less water. half just some well do to as so back that XXX across simpler, length get we designs, didn't use by the quickly water. the our need

So on just able back bit, with cut water, to or the and mesh on and mostly that's we were a cut proppant XXX XX% little stick XX%, the working well.

Holly Stewart

Do you have an estimate of terms is of how helping much that in specifically costs? low

Paul Rady

We there. have a component

Let's out pulling his see number. Mike's

Michael Kennedy

the well about per on because water in because $XXX,XXX then produced have XXX, the put in his just savings it's and less produced he further water actual lower now total. water $XXX,XXX you so water

Paul Rady

Right, first of coming that the first we the call days XXX that back. XX explaining we call so – remember, were water flow the we back,

the that those clean but Mike truck savings about definitely next the so that's talked amount up important to beyond for days, XXX. XX of us. is it's And then and material the costs cash both, factor And are the cost, it's so an the first part LOE well for

Holly Stewart

you you, Yeah, lower Maybe detail that's opposed in higher this the is one FTE for as release to cost the cost I about on project. very helpful. Glen. utilizing know the talked

to know I you understand just us if some us So but color want some, give help can that? projects, don't of just kind you those around comments. reference maybe

Glen Warren

tight then home, that. as seen of simple in as the best the some pricing what we've basin and backs chasing best Yeah, the the I some that's and have keeping you're molecules the gas are net you second the the I other closer day, differentials our to in just in when it's quarter, think think

Holly Stewart

high lot least AM to just the just me, around then within raise, ownership But happiness simplification on you kind sort finally historically, year, helpful. Okay, a XXXX. just raise know And the with maybe AM okay, maybe a or here. thoughts I level thoughts there's that's high that for ownership. going that of use the so on capital, level, around DT And at of maybe

Paul Rady

the ownership. like We

million stream $XXX the growing see dividend of or over can presumably time. You so and

So of it'd sell particularly it be at tough today kind aXX% to yield.

to us what So let tough for it's getting I'm at. but go,

inclined see So it really upside tremendous and amount today. to anything we with And of that we're not ownership do in enjoy AM.

think I stand pat we'll now. So for

Holly Stewart

thanks perfect, Okay, guys.

Paul Rady

you. Thank

Operator

Our Pleas Bryan comes next state question. Singer with from Goldman your Sachs. question

Brian Singer

morning. Good you. Thank

Paul Rady

Good morning.

Brian Singer

with you Can own urgency the XXXX? coming balance see regards to how and a bit options evolving, your sheet particularly talk due see how more inXXXX the of and debt you you level

Glen Warren

great bonds of that we've those years. those through Yeah, each course, they got of alluding at end two to. of on And rates you're the come

got the So on the so on a bond tremendous of and in a of our last we've three up think got more month any tough years about with We've our almost other we'll more us amount pick and our that keeps spots at market. real there. it's half half two or liquidity the on very banks wanting credit bank night years to obviously maturity the no by and so like a one, XXXX sense so run optimistic be urgency And means. We had facility. and strong credit into that. group, But I facility, that's not get something

we're good concerned. So far as as that's in all shape

Brian Singer

then then the development and upside the risks proceeds billion the just you of budget, you to $XXX $X.X what XXXX? with downside the any them? or those timeline receiving litigation production point couple billion the expect to to that with what if in receive the or ups million exploration regards are proceeds, And to regards follow earlier, to made $X.X And thanks. of to growth Great, do get a you to

Glen Warren

talk production the mean, Yeah, that's on a a we I CAGR production, XX% the and on about multiyear look.

few side or of or next X% the that. either But So I years. think, for outlook give the kind you take that's handicap can X% that, of

much few that thatX.X an very X.X in – years of billion that to next So that time I need think that deliver billion X.X stays don't increase XX% year production that really – the over levels over billion track. then range. us of we and in to And over next similar to billion range much you'll sort keeps X.X see on and average growth, a

we good So feel about that.

Paul Rady

And the on litigation. then

Glen Warren

publicly those about the if far talk wouldn't we pretty yeah, front, they litigation the down On road. weren't

utility course, much the a of And a I in always and it later. can that time sooner other come of can would or on risk so very so say. appeal, always could was WGL. ended was there they That good side the year XXXX. think trial a favor the handicapping And come biggest I piece the with be But our that the jury in could – that's would

Paul Rady

Jersey. The South other one's

Glen Warren

The similar South that well you but pretty can one kind other Brian, that's XX-K is read there, about described of Jersey, in circumstance.

Brian Singer

Thank you very much.

Glen Warren

Thank you.

Paul Rady

you. Thank

Operator

Partners. state Chandra question Guggenheim your with next comes from question. the Please Our

Subash Chandra

challenged. Yeah, vocabulary is also hi, my word

So to a my ask disposal in I that bodies, cetera. the water water at guess, et few cleaning clear just wanted a least is up it is in clarification, some for understanding One it into nearby putting and water business. the pathways there's to

The it print aspects you on in recycling, savings is could of discussed are stuff is are there of the aspects all? XXX% of easing the today? and be finally, challenges? or XXXX? water it. other of Second the Is kind might are you of clarify remaining occurring these all, handling it then And first other But what application where future water into

Glen Warren

Good question, Subash.

Michael Kennedy

Good questions, yeah.

Glen Warren

what's on think good I on. a tutorial No, going that's

of of is loop. way I miles to is the area, Paul. So from first north XX I'll as move is from mean, shortening we're really in some But I Clearwater. that think rich kind it, to we that development I some XX, the away think of mean what doing liquids turn the about as we

think area. $X where So it all there taking than you to trucking right it the back can a be rather might reusing $X, Clearwater, it $X, barrel, the in essentially we're as of

local as that's So the always completion. to back And right it next reuse. it into goes referred

the trucking out. bit of loop and for to are And the cleanup the shortening doing water the also presumed So the taking be lower fees a just we're locally.

Paul Rady

Yeah, and lower the can and produced Clearwater the right, back duplicate flow of effluent the cleanup that's down blending completions. take the doing fees be it using water but because as future by just blending we taking as just as well, can not and advantage in does, it

up clean savings and we side, big to we're as keeping to Glen a that savings use the the down tracking big economic. and the polishing on be So little it development is said, blending where more because and can then close on

Glen Warren

about, then be terms vary over with fairway completing just then in and that locally it And freshwater, wells It's very. call at what XX-XX the be it to the XX-XX. would time, going and that rich of clean in talking can we're will we liquids water

some asked are of that is some I it blending locally yeah, We in Subash year. not water, whole about this proportionally. think we'll concept. And just doing And treat be the

Paul Rady

it. stepping we're Yeah, into

And those up a in quarters in we this development third number north. As speak, the Cal completing here have we pads of to and are 'XX. are we area focus fourth of that

doing And blending those and wholesome it more polishing step so be Cal 'XX. we'll a there. And way through into in

Subash Chandra

development down apply boil water these wells? XXXX. ish the to well XXX Okay, all to savings guess I so it plan these Do for

Paul Rady

working concentrated. If the possible, yes. gotXX to quite is that We logistics, fortunate on position work our we're hard acreage

So have of the pads other. we distant issue each don't from

transfer use between the pad. But one only can hookups. next back And right next for the complete so door for water we in water efficient to flow way, pads as it's midstream that pad, we for that not

so but yes, it year. the savings, goal savings, only cost do throughout be the savings to well board. XXX way the And next that and focus wells will on not the all those LOE apply nice So XXX,

Subash Chandra

over that up I'll couple let sink I'll probably in. Okay, weeks. follow offline next

is now? that XXXX pretty is the Just that another that pads, Is right follow the simultaneous operations, on common guidance? larger the into up built on

Paul Rady

on it have ends we that to often. once completing different gap don't I cycle other. and either do or recently, nothing we're we're We've on the think end one the done completing there's on all But that pad flexibility in that same the drilling And we time. two it, maps and bunch having at have enough of we've where done crews' we're

So we're same maps on. of that. about built But to do it's probably we do our pads that XX%

Subash Chandra

Okay, Thanks, thank guys. you.

Operator

your question Sean with Guggenheim next question. Please comes Our Securities. Sneeden from state

Sean Sneeden

thanks taking for the questions. Hi,

Paul Rady

Sure, thanks,

Sean Sneeden

noncore term, maintain for you How I guys leverage guess. the you comfortable with you of may picked near quarter, a pretty stuff balance outspend address Glen, where leverage – but maybe down? funding sounds are have trying think you units check have way, think near it's to keep when a in been just slowing typically them of the may about the the for we're it thinking and have conservative about, up on of term bit AM are that or sheet, like kind some levers, in about to little different when liquidity you and level in Utica

Glen Warren

Yeah, we've to the right, us the slow talking on continue all the pace and enables down, I that's in cards. about and efficiencies reducing well capital been really not that about. mean, what is that's improving costs this

free stage not that's that's hedge around. it's cash in of to million using needs, the terms due being kicked – in something a the probably next in three, our years, profile several and the strap So really And dollars, cash and all the that. it's flow flow, outspend over four hundred not that's

it's number. So real a big not

the EBITDA quarters, that actual a bit the don't commodity data the come much, So itself, just down. everyone past has for we that increasing see few with down over price coming it's

that's come down it's a really denominator So the bit.

sheet we're where So And you'll to growing with continue very fine. not we're well. It's comfortable hedge managing we as us are. the balance opportunistically just see tremendously. And

for they're far could divestitures and there's but is but mentioned, that, position. from is I'm or we gives consider But open to a you of open a sorry, like to and look in innovation. say The door I I'd happen. door don't kinds of time things. of inventory that, As our of those we think unparalleled We position our needle big out the yes, go big it all know, time, sell you sort us whatever. chunk the movers, those always initiative not for at as,

Sean Sneeden

on is FTE then ethane, current levels? that strip, And you there? what those that's you above are to your it just and can fair remind prices reject helpful minimums assume just Understood in us

Paul Rady

barrels a XX,XXX sales. XX,XXX, recovering we're is Yeah, for firm day. of much And that

a Antero both there. to a Our parties, sales here for different Sarnia. – to FTE, Belvieu. firm transport including facilitate number to using which laid a sales so internationally, on also ethane we're XX,XXX and and off, some day of from Mont Xx XX,XXX barrels day, we net We've have that domestically barrels two But we internationally have

little flexibility we above have coming must have sales bit our where eye on of a and we're an also know, to the some But as the higher – our of reject Btu recover. to are than you within ethane. So firm out sales ethane, now, always revenue the a But we can the And you firm stream on recover accept, plants. certainly little right numbers more. say again, stay spec fulfill to

Sean Sneeden

average remind makes us of that the sales firm it, can And arrangements you tenure sense. what the Got is?

Paul Rady

be Pittsburgh, I XX to yeah, would a just base of XX years. a is would that'll upcoming provider say there. the say I cracker And even XX year west for more supply. contract that so and we're shell

And some – of our

Michael Kennedy

XX. It's

Paul Rady

we contracts. but with that contracts with others me, Excuse are XX, with with Ineos, XX have Borealis, international typically year

Sean Sneeden

color Appreciate Thanks. Perfect. the guys.

Paul Rady

you. Thank

Operator

question from Please your next Henschke comes with Our [ph]. state Matt question. McGuire

Unidentified Analyst

Hi, thanks.

Your XXXX flow cash that $XXX excluding onetime suggest other impacting outspend be fee comments on than assumptions? any preliminary Can help the you million outspend color on items. transport free drivers may provide

Glen Warren

do and stay brakes we flow free year. know outlined have lot the think of simply our early call. in a rather course that, firm I don't next to transports I generate we'll if still in We the want to next and we transport we drilling fill economic as missed Yeah, than to hit the year. cash but have to still fill you so

Unidentified Analyst

year-over-year the I change any that can or you assumptions Okay, in any Btu assumption or any guess other is provide? color output there other

Paul Rady

No, of can't think any.

Unidentified Analyst

to of was moving free year? CX+ cash Okay a given bit flow your assumption I for sensitivity could pricing wondering provide mention if to and on helps say question. pricing, NGL you your $X $XX just change last my then next in

Michael Kennedy

XX.X dollar about barrels, it's so Yeah, about be so barrels day, if a of will million. XXX,XXX it $XX hits that's million XXX –

Unidentified Analyst

That's thanks. I have. all Okay,

Operator

from Our Baird. with Bellamy Bellamy your Ethan comes question. next with state Ethan Please question

Ethan Bellamy

last your Gentlemen, or pricing? hedges? you longer of And on quarter your just in a decline do on miss put December, XXXX data you on gas the new go It some stick forward XXXX bullish the looks more Are a gas that unloaded on the second on view strategy. there pessimistic timing hedges rare was rates? like you off hedging in as

Paul Rady

optimistic. business, one this be in has to be to Well

So we are but we're thinkers and defensive. positive optimistic, also

added definitely So only were a not it's the but does target, when hedges it we happen. price that

to just 'XX. we through of so be hedges And the added sheet Cal balance protective

You're right.

we just ahead As market that. miss, was that in that would were a of did or putting paid We we we debt yes, hold forward have we back decisions. But hindsight, always best mark setup maybe an would we in million of have when one on so wouldn't or a and And on down have to to to seeing to we hedges monetize terms so. we every XXX learn delevering been been the – positive $XXX that doing December. supply just have and those, would eye our month in where that the off better million some from not by credit have was metrics. But demand

Glen Warren

not It's Yeah, than the it's really a I – the then expected. sentiment. overall think demand softer bit been just has really been and supply

sides, kind of off caught I So us that's guess.

Ethan Bellamy

seemingly of doesn't the the incremental strategy, of out consistent have business. in you kind Okay. guys I'm urgency about of the laid prices. seem kind from to improvements with hearing clients then, the terms stock that the And in nice, some decline But

You laying preserve selling here? of any potentially like declines FTE. moves strategic asset address potential some JV there that capital acreage Are arrest and might midstream off available the other sales to you capital help

Glen Warren

Well, I $Xbillion we're in and there's times mind, that, but mean, well all of over X.X we liquidity. of keep levered have

a about of working sense can't more done, mean, but So of I those And to always which kinds sure, they're strategic we things. we're we're really dramatic there's publicly on things, different lots talk until urgency do of lot a not at always alternatives. looking real of

Ethan Bellamy

Okay, thanks Glen.

Glen Warren

you. Thank

Operator

to turn Kennedy for it ladies remarks. and I'll Michael now back gentlemen. you, Thank closing

Michael Kennedy

us joining I'd today. like to everyone thank for

further free out feel any again. to to questions, have you reach please If Thanks us.

Operator

great parties today's may Thank you Have disconnect. concludes a conference. This All day. now you.

Antero Resources (AR) 1 Aug 192019 Q2 Earnings call transcript