AR - Earnings call transcript Q2 2021 | Antero Resources Corporation

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Operator

Greetings and welcome to Antero Resources Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I'll now turn the conference over to host Brendan Krueger, Vice President of Finance and Treasurer of Antero Resources. you. Thank

begin. may You

Brendan Krueger

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

start beyond differ materially our important uncertainties, subject to in also that such results impact statements will including Please judgments financial to we a control. from to or reconciliations of forward-looking disclosures measures, Actual statements. measures. management comments, Before current GAAP what contain first Today's I'd risks are that outcomes are forecast which Such remind and comparable release for implied may during will the earnings press number of like most future you measures. are statements. many call non-GAAP such expressed, Antero could our factors to based performance financial regarding Antero's on this certain our and of call, regarding and make the is Antero refer

the over call President Liquids the Marketing of Rady, Joining Chairman, I CFO; Vice Cannelongo, now President Paul. call turn Paul on today are Kennedy, and me Dave and CEO; and Michael to will Transportation.

Paul Rady

Brendan. Thanks,

begin exposure rising Let's to commodity prices. three, number with slide best titled

free business EBITDAX and $XXX $XXX delivered of million. models flow During quarter, cash our the second million of

and natural have we leverage CX+ significant rising the highlight results NGL prices. financial gas Our to

$XX.XX our a quarter, barrel, the increase CX+ During year XXX% per ago the price from NGL averaged period. second

these at price unhedged for realizations led realized realized strong our guidance to portfolio an led premium Further, is NYMEX. in NYMEX to to price NYMEX. relative full transportation firm per now an to in in for to MCF Our a increase premium to $X.XX $X.XX gas natural per previous $X.XX $X.XX an than Appalachian MCF realize basin, guidance. premium the our differentials the XXXX, range we higher widening the which expect of Despite year to

transportation premium constraints, flow to prices. periods assurance only delivers capacity but of during portfolio firm pipeline realized Our NYMEX-based not provides markets

portfolio are commodity October The for bullish prices. on hedged NGLs in our year, entering our X we XXXX this the of natural natural is on have the and gain mass little currently fundamentals gas FT gas low exposure ahead, efficient of that to the hedge both profile Looking Antero no a way makes combination history into and have and teams direct the least to and NYMEX after propane company XXXX. value to very hedged our this and remained outlook our testament most winter. This side NGLs heading the

illustrates four, turn let's which to Now portfolio. number Antero's of the benefits firm transportation slide

As portfolio pricing reduced basis illustrated on the differentials. has realized Appalachian significantly compared when volatility, chart, to our FT especially

premium This gas to During from which NYMEX. better the in and peer-leading NGL were per Appalachian advantage has price pricing, MCF EBITDAX that and both rich consistently competitive allowed prices. natural $X.XX upside per liquids focus capture $X.XX MMBtu pricing back resulted quarter, than generate margins, realizations Antero was second and this in-basin of

net future. wide Appalachian gas and shown the future and details into which has Importantly, green. the volatility no to we basis the the been in Appalachia versus shown environment this growth continue year differentials Slide in over in the basis green in to five see takeaway production, is number in overall last red, occurring for compared an capacity basis potential historical

out. capacity, basis overall blows when see, exceeds As takeaway production the you the can

you yellow, growth environment. even volatile, very this in basis year, last that circled in been at Looking no see has

discount to at due of the to side to shut to future widen our the prices rising As and gain price-related uncertainty projects results direct is prices. hand like the on the expect a What peers best capacity, depicted see MVP. Appalachian realized futures attributes continue we or tight right takeaway Antero NYMEX page, way of ins exposure firm who by to in to being wide transportation. NYMEX are These short, prices

lower. the slide in and to the to six, dramatic top our Turning number completion gains well chart helping let's drive that the discuss efficiency drilling left. are with cost Starting

averaging Note just per second increase compared a lateral also This continued length represents feet, drill well. us steady Utica. for in of an the XX,XXX lateral the progression record new quarter, average Marcellus to XX,XXX our average length feet and under length in our well higher, is XXXX. record During its per XX% lateral both lateral which

chart XXXX the drilled the more right, Moving quarter. the per on we than during day averaged feet lateral top second to

XXXX Our average. day company continued a for was the completion efficiency improve to also the record to X.X stages compared quarter averaging which per quarter, and a increase during XX% a

increase average per that, turn over for year comments. and XXXX to Cannelongo, has in of our With to day day quarter. to our President each Vice Marketing his per second Liquids feet Dave drill going Transportation, the out continued Finally, feet it I'm averaged and

Dave Cannelongo

continued quarter, market pricing, NGL In NGL the crude all we today. in We the into steady second first natural in to a climb underlying tightness higher and and take pricing. this third continued by quarter the trends gas bullish of strength Paul. the during year during products market, driven prices quarter for LPG Thanks, that the saw shape highlighted fundamental the in have through

As highest XXXX we pricing CX+ a for result, since since seen ethane. early sustained the experienced and XXXX we have have for NGLs

year levels deficit that last large thus titled will injection fundamentals. seven season are US insufficient the The number remain the bill I you been XX% while days year. than far Propane refer on to to total make first quarter. has this XX% historical in average, up storage market discussed this lower propane propane slide we five supply the below to the Focusing of inventories time market,

barrels a barrels this end that show US the assume million XX the million early the last most the at this slide, during injection XXXX. consultants of On We season. a observed anticipate fall forward, that weekly peak in reach XX October. million industry XXXX, same repeat reaches storage midpoint of then the XX.X Looking of to withdrawals US we year winter level of will that range of propane

levels with would a historical directly minimum in next below the levels five the This crop reminder, XXXX. history, was season. US seen similar storage XXXX, an XXXX As polar US vortex. only XX to below season storage only February, underwhelming temperatures supply This export winter and assuming barrels of of to to spring, overshadowed demand million would five This following unprecedented nine days historic materially days and those was low significantly in supply ending while about believe actually days small observed in the is of year are Ultimately, lowest which result the the season, translate that of in in cold recent than about the we storage, the a the graph. withdrawal reaching memories level. XX.X followed there drying XXXX substantially scenario in warmer is probability by illustrated very overall norms spring

months to to clearly shortages. scenario higher the However, avoid propane curtail need and even Belvieu prices move indicates coming this Mont over domestic a exports

not conservative strip waterborne I latest butane forward the case that pricing, seeing propane the do with on. are just and reflect the we in LPG for freight touched market currently the fundamentals at a Looking price

dislocation, bullish pricing pricing, the advantage essentially beginning take continued October our our XXXX beyond, winter we remain into to X next we outlook unhedged look Given on LPG the of through this and view for we and on year. on and NGL as see

XXXX. is demand naphtha Asian Far eight, prices of inelastic After were metric winter over by Last has stronger during Index in on to winter, inventory historically levels. of even naphtha for of if Belvieu As driven and This XXX% prices implies even this Belvieu East last forward the FEI prices, peak at region. the relationships fees pricing basis Asian winter a year's potential the winter. propane December Asian trading dollars per to number pricing the relative taking shown Mont Asian $X.XX reached approximately decade, naphtha per with into propane market, we slide XXX% in XXX% see Mont play dock US tighter to costs currently months Asian this of again account shipping or on curve in the of $X.XX basis, the gallon FEI past on climbing winter, assumption of ton upside propane out

petrochemical last year and margins Finally, and lower for butane. turning to market, Northwest cracking as feedstocks to cracking margins Northeast naphtha the such US, over the other have from in Asia Europe ethane, compared the trended propane

very forward. or near from uplift believe build for capacity years. Europe, cracker away away that result, capacity This propane from risk XXXX, multiple in some online materialize over limited, period directly barrels should as this as an is possible the propane same and combined to incremental also and are during XXX,XXX a addition XXXX, demand time, constraints more higher and barrels ahead to barrels a floor As from that believe this day global to a now and further day indicating new time of will to flexibility same with being projects prices. as At on barrels Mont the of in pool by turn of the new demand downside other added global continues steam than demand Mike. in a capacity XXXX that, new time, Therefore, is demand the done our have we look online, currently PDH but we Overall, with have propane the international North is for Belvieu XXX,XXX America the crackers market [indiscernible] impacted propane of winter we previous are and the unhindered switching including to day at we to it reaching we Antero fronts. crackers already on LPG only a of Vietnam. all system, PDH I benefit use. to in XXX,XXX continues an continues move most so the switch as come feedstocks LPG day Not XXX,XXX which a XXXX feedstock much petrochemical in shipping macro demand to benefit China a steam a through With coming for non-China pricing, of in across we in

Michael Kennedy

number our a is nine on like to strength highlighting Thanks, slide balance I'd significant which sheet for start Antero. Dave.

XX in transitioned offering free sale our senior we Antero's note of use successfully Over XXXX due to a cash months, flow have In May, profile. maturity senior asset rebalanced notes due we note the and XXX to XXXX. substantial from all executed senior generation, redeem the million program, last proceeds

is maturity next our until offering, this not Following XXXX.

free we of further During over million our cash enhancing generated $XXX the second position. flow financial quarter,

the right second the a liquidity with This received with along $X.X earlier was reduction leverage liquids Total This quarter. brings left of billion. second As This end strategy depicted the $X.X to top at top a a discussed the by X.X and Antero's quarter slide slide, LTM result debt EBITDAX transaction LTM in to ORRI total end just net direct combined the end over used differentiated billion realizations. approximately second this portion the the down billion. our debt quarter. increasing year transportation times reduction provides $X times of free improvement from the flow million best-in-class an $X.X during illustrates at of quadrant development of was the resulted contingency reduce improvement XXXX. billion improvement X.X focus over to during portfolio business at the the the $XX EBITDAX payment from on price end million decreased that of on to firm that at cash debt to debt year $XXX from with The Paul quarter,

look ahead, cash debt. and we total continue As maximizing to flow we reducing free expect

XXXX times end in leveraged is achieve below and XXXX in early we one-times and XXXX. below of $X our to absolute X.X below expected Our fall target by billion debt year

sheet slide turn strength slide Now positioning. peers. relative XX balance titled, highlights to The put to into top financial to let's the perspective, financial number first of results quarter our

$X.X peers. billion ranks of the you see left, total On our second among our debt

The the chart the the of peers. on year-to-date. financial Appalachian hand right of the ranks on net bottom against debt-to-EBITDAX of performance However, X.X focuses page shows that side page times our first our

on that through flow we ranks make procedures, heavily million during which the certification XXXX cash EBITDAX all above XXXX nicely and XX our titled, flow growth our have strip. Antero's cash a is XX and loss progress have in looking goals, aligns forecast are rising aim to slide emissions. quarter $XXX with and cash certification. Project free substantial methane goals the happy to TrustWell These on the is at announce increase our flow highlights reducing Antero. cash exposure be GHG we in This results natural environmental the shown NGL net have which of number XXXX well Free exposure cash first produce the and is of period, goals. in by and high also zero certification Further, which $XXX flow gas. enhanced third free with we over free are year flow time emissions, over The By Antero's the exciting We begin The price to leading free our year we we commodity of in XXXX, a pilot our peers ESG million targeting in profile. peer free through XXXX. include $XXX using substantial the and outlook program leak titled backward-dated in is free of flow completed cash This futures in process carbon million TrustWell environment. We natural gas Canary's validate slide now financial strips highlighted a party natural industry intensity, and towards free of and signifying cash fourth the Antero's to of set review cash half despite to peers. XXXX. our achieving XXXX, flow higher standards even flow lowest out process in rates. expected also annual other an $X.X the above We're commodity group initiatives first gas in for long-term producers as generated number billion

titled financial this are in complete to XXXX. our Slide plan in also operating To investment our for Antero. with number momentum we the publish TCFD highlights impressive today summarize results continues We following position summarizes key XX and XXXX of later performance analysis the ESG strength execution.

billion as and We an maturity to our exposure new and XXXX attractive fourth reduced we facility four approximately is XXXX and senior the scale, significant providing strengthening prices. by have gas The $X.X commodity billion, issued beginning producer our extension years. X.X our program, natural NGL in largest producer credit notes date average XXXX, largest maturities. and redeemed undrawn debt the of the second Since deleveraging over to of an result by US

as leverage X.X achieve goal by We end approach under expect times than we much to XXXX, our X debt the of of sooner under billion anticipated.

a substantial generation Lastly, ESG forecasting place the and assuming operational, NGL the today's with ESG free group to natural backward-dated we're strip financial and strip, performance. flow prices, flow metrics small cash questions. of sustained which that, scale, a billion With These call over leverage, of will leading cash free $X.X includes low among over XXXX. Antero gas E&Ps generation now turn and operator I for significant through

Operator

question. Please with state your Instructions] you. comes Thank Securities. [Operator from first Chandra Subash Our question Northland

Subash Chandra

morning, grand what big trying with guess, drove the start a number, I significant. things, I do relatively scheme Good was maybe Hi. but just in It you budget. is What land everybody. to the not there? Yeah. decision the to and of are hoping

Paul Rady

Hey, Yeah, do, well. we're it drilling relatively small good very Subash. what to morning, amount, is is going but trying our

drilling our And to we're in here so tracks that up the blocking areas units. developing perfect small just and it's there just continued

Subash Chandra

should Are we be recurring this budget you finding, cost might expect a in similar basis? doing on a that, one-time that a or that

Paul Rady

but years. for I next am least the not us set sure it'll at up two

Michael Kennedy

ability is continue for transport having and really type to to of liquids think forward or of locations that's about M&A because and performance develop seen having the and and not have and M&A areas this you've to way recent ensures we to the constrained really the rely too, other development. future some Yeah, our inventory, really without it going on

Subash Chandra

perhaps but some up of what flat I as stay Okay. numbers look could which figure then number the just just like from given from surge sort Mariner, the a And Would I us goes the that guidance out hard or might modeling on, the on provide here? to very GP&T, to etc. strip? guess, offset for is in specifically down you question from mean, outside or by pricing

Michael Kennedy

the taxes. of and commodity fuel and costs prices of increase and taxes rise GP&T really the in ad valorem Yeah, was because the severance

the the backwardation So QX is and in prices then and no if we level continued continue, similar future. strip a to see there in these QX guided and what high you'd QX

marketing would it's page, does and long-term So assumptions on our off it's year average backwardation probably that a bit. out to that in production cash for for little the occur XXX but then five guidance to of net years, flat and What XXX is unless have total period, expense, XXX. kind is we the year the come XXX out this

GP&T of some that down marketing expenses as down that So, comes and comes then well.

backwardation backwardation the the assuming at So, off as GP&T should occurs. come

Subash Chandra

That was helpful. Mike. Thanks

just if the this did I'm go sneak Just one I not quarter? sure I'm if up for but hedges third in correctly can NGL because interpreting

Paul Rady

did, they Yeah, Subash.

second in ourselves So, prices, in used such I a little we think the strong, early NGL backward-dated high such prices. bit and to we although we were pinched quarter, seeing weren't

let's we make So go doesn't away. this said, sure

third the happens put And security that's in well, for So but prices can hindsight, the backward-dated quarter. we we when got stay what second hedge or you you see, in flat curve and increase. did and hedges

commodities gas again, on So, side. both that shout was liquid the our and group, the a side decision to out then. our on But

touch the next can and but hedging prices that or season. the are gas going four NGLs and so Cannelongo the months fundamentals year into as for good So, we capitalize gas quarter, side to XX And ago so October on and in crisis I ask Dave outlook the NGL know X of then wide fourth we open last beyond, beginning the just describe. borrowing our on that the we side, COVID were was beginnings the on didn't you and

of and lot some people things gas out hedged haven't one and time have that was but a of unwound that as we during So liquids well. some hedged any the that did natural

a products streams. So, on we're reflection that both bullish

Subash Chandra

forward looking to October. guys. I'm Paul. you. Thanks, Thank

Paul Rady

Yeah. Thank you.

Operator

you. Thank

Our Please question with next Securities. comes Dingmann question. Neal state your Truist from

Neal Dingmann

could My me, for about that price talk Mike just bit about the wondering, maybe outlook about price just slide call quite sort long-term one, - Will secondly, you I'm it how - your likely assuming Can you like sort about that. assumptions. NGL on you for talk morning, that could talk little And a you looks about then number the Paul, assumptions? NGL that you're relatively production, think, about to you question, same, now? if maybe right thinking the actually conservative, of could To talking you XX, - going is Good all. just the mix? maybe of assumptions? you're annual they look the on as flat, be

Michael Kennedy

the Yes, on strip. prices, NGL just the outlook, looking the at follows it

there XX%, it heavy of the $XX and right 'XX on so barrel. if ethane, goes $XX, half and strip It's and very backward-dated. $XX NGL very the propane, which then so and for and no $XX, the our down $XX, barrel, it's now about $XX second So, you about down is $XX and remember, then to

the mix production, backward-dated cash between like assumes strip, $X.X gas So and of billion flow. on we free even flat over that's get that where same mentioned, and liquids, you this and

$XX mix, case, current heavily $XX. backward-dated to $XX, production to it's capital strip maintenance So,

Paul Rady

fundamentals, good And naturally, that the demand, outlined momentum in Cannelongo little the the a liquids about strip markets backward-dated ago. we the feel it bit but Dave is a

at our front backward-dated, the the will front hope the one prices debt reap accelerate the that continue be prices, on will would if the curve forward of to we curve So but very repayment. higher highest to roll it'll of lives

Michael Kennedy

backwardation strip. - the XXX in timeframes. Yeah, and the just those we're It's gas gas 'XX, it 'XX in NYMEX 'XX and is following

Neal Dingmann

be And mix of production, Speakers]. as annual assume the Okay. then the same that would the can we [Multiple approximately

Michael Kennedy

Yes.

Neal Dingmann

I of the think move - very, FT NGL that, understand solid given answer to to you focused, this, guys but just an again, ability, your opportunity very lastly, do are I forward And it operators. like I of then going you know constrained some position, have ample I there is mean, seems that some I already around much not move as cadence Paul, the are do to to with people kind able FT, because other know your the and

comes You about and be now may talk give that sits FT maybe you. operations that to your optionality where the might it when

Paul Rady

us our our with you of give flexibility. as does drilling With gas as on. of it operational direct more know, partner the as their fills ours comes advantages Yeah, that well partnership, was as one production that drilling FT certainly of the their

some a at have also So, that. of of buys Clarington. third then lot marketing they benefit, they we healthy gas like And party but group fill places that do a

there's very that to it So market, we gas a premium Clarington spread, prices. paying a they're in buy Chicago take MX were we even certainly good and to and

Chicago, definitely the is in and to also Gulf, taking the market which market. gas to to So of course taking a filling, based NYMEX it Cove Point,

with with working gas charge them. associated and distressed capitalizing the third-party filling and and FT to any So that's offset demand unutilized

Neal Dingmann

Very good. you Thank both.

Operator

Our Please question Sachs. your with from Umang comes Goldman question. next state Choudhary

Umang Choudhary

morning, Can your good with billion once for cash debt you year? my My really first a thank to next achieve you question sub-$X and target of us and Hi, the framework framework is taking help on early questions. shareholders. for return you

Michael Kennedy

Yeah, question. good

debt should in so from XXXX. early first this down paying it more anticipated are much We even quarter than rapidly be and

think we it'd of mid-'XX, kind accelerated. that's so be I previously, been thought

'XX 'XX, monitor move free same on cash the will how XX% XXXX those on cash for the at the will current to approaching we'll basis. and certain But how markets be valuation, returning four on yield for for ways we'll value EV capital. free be flow to we flow enterprise and over we yield XX% years we and on say where opportunistic, So forward. and evaluating continue based value even the of our on an trade return I about people capital times valuation, EBITDA a time, see depending

we know, we those as to saw back year attractive a buy look XX% you and as history Now have trying we advantage today's well company, the dislocation levels. dislocations. take And of of at share so of almost last did buybacks do

Umang Choudhary

That it. then on how like my dry Got question that gas between up does And then your your is liquid gas NGLs on bullish around for and makes a year, guess natural we'd sense. activity gas in year, activity next determine area? levels and natural love your follow next general. thoughts given area I outlook

Paul Rady

are development on with have lot there NGLs are quick lot Yes, locations gas, the rich our on know, the the go still points capacity are for liquids quite BCF dry of a in the feed it's at rich with it grow, of the in the help economics out that our still natural that that fairway, a there But continues a outlook fundamentally, projects on now to a outlook reluctant roughly that right we us do are because stronger - a relatively along gas we gas. we've power appetite to coal strong, the a spreads good But our right then gas you of reasons. but we'll so inventory to area, liquids little time. now, liquids, same and research drawing to LNG towards And on which as it's drill those side. gas, if some continuing - do. apparently LNG definitely just there's in to very FID People We higher we of course the we natural our in switch see due fairway burn board the fixed, XXXX and while know liquids strong gas economics Gulf drilling have there and and more fundamental see the facilities. of liquids day, than roughly to under other ESG fixed seen very XX are

showing six So BCF LNG quite roughly fundamentals we're And pretty in exports burn, gas discipline roughly out that those day but are associated up natural bit is a we good that Mexico, production power are XX good realms. gas strong. seeing feed between a will BCF and a to XX a gas the that, that feel is there day which so BCF in gas used the natural remain the and day of yes, too, basins at there pretty are people

Umang Choudhary

That's it. Thank you. Got helpful.

Operator

Thank you.

ahead question. question from [indiscernible]. go Our next with comes Please your

Unidentified Participant

Thanks for questions taking Good morning, guys. the today.

Michael Kennedy

Hi, David.

Unidentified Participant

highlighting an before in that see the we those absolute curve of economics really strong the curious Mike, track active now, of lighter if the compelling reflecting actually, and you're your you especially might reality to you of were right program hit see record some as metrics, happening you share debt your that just that isn't buybacks. I'm going given valuation experience? view that

Michael Kennedy

also All really a debt that's priority of true but what's we true is want low and ours. that's

contemplate we're achieve to return that of below we X going So, billion sort capital. before on any

Unidentified Participant

just fact curious, that is of naphtha, propane commented an when more where those is around of flexibility time the would your further see already other incremental Also really demands don't markets just the Appreciate centered being dislocation case those guys With you I remarks, you on that that priorities. the NGL risk interesting, in switch, market. around discussions you and on and - from thought being see it was propane really product. in crackers just your you FEI over do relationships, look the at China, like sort versus the in idiosyncratic PDH prepared

Dave Cannelongo

David, great question.

didn't exactly week your it what consecutive That's in and we those we in two, was three witnessed see last a assessment levels row. you're think months just for for I year or there. right a

year that that last And of backseat, really narrative propane year, to able taken and that relevant continue. strong that half. demand is cold should around demand forward with was only really cracker steam and previously, And as additional a prices. you assessment we part as the that switching with temperatures product risk so that over a would the we the And purpose, upside, the historical going it's agree we've [ph] less and relationship growth, petrochemical on see petrochemical being hit consume LPG, seen

Unidentified Participant

I guess in my that last will vein, one. be and this

where you price importance reflecting particularly the things in increase curve foreign would doing able are seeing your markets for contracts effectively you you and an in conversations not or the to of in have securing product, levels where set that? be just might Given be at demand that like interest inbounds, an securing

Dave Cannelongo

markets are Inbounds, mean, buyer we've looking inventory they wanted think on to. even vessel accelerate loading the and the immediate at date, due just I more increasing. levels loaded and going to the hasn't certainly were try of that that to yes, destination I a where term, can't that

interest able term that demanded. that to values. us higher which like if - don't see us, long need flexibility there. volume to keep we the those We to on believe yes, to going is current the gives the anything So, our winter that allows I to seasonal the strategy do months, export during be side know prices we're do contract

So, not we like reality that contract we'll to give long-term this at as ultimately think we'd be and be that for recognize point. a sure We we willing flexibility there that move will along. prices prices up and [indiscernible],

Unidentified Participant

Appreciate guys sub-$X the and plan comments billion have you time. some Hope the for the party.

Michael Kennedy

planning start Thanks, David. We'll now.

Unidentified Participant

Yep.

Operator

with state Our question. from Arun next question Jayaram JPMorgan. Please comes your

Arun Jayaram

could generating levels XX did evolve to I in see you free And gas note you leverage Paul, that and if much balance a Antero's the as lot I cash sheet flow. of you're wanted to philosophy a see heard hadn't hedge you if morning. elaborate how added on good lower you of Yeah, months, hedging gets you correctly.

a the unusual lot that's bit So exposure. focus circumstances, given of an of on gas historical your a hedging

Paul Rady

good Yeah, Arun. morning, Good question.

did and for the - hedger leading it last curve years But of number more little historically, it years over in a for worked I the nat was or we gas. We imagine, so was a have when XX very we were the so well. Contango been, really

$X games I think cash billion. our are nearing

but consistently now little the on picture into close going to of you its a a can highest very And front front, the you're hedging So, of it prices backwardation. time, if been bit the than successful more to live curve. was it's or for backward-dated rather reap a

momentum, live as as And at what we the and industry really of and or that least that, certainly for just I as our and a will the so. priority to has for have front sheet term well fundamentals near through the at of evolved, the we XX but which rest look high months as curve, on more balance so mentioned, delivering, do the after think, is accelerate last says us I the been

for least at gas, decline. flirting I'm with the sure over and run out nat it patient is, and $X XX for Cal be now, it's not continuous on So, is

So, we're no hurry. in

Cal We so BCF Cal day for unhedged in X.X and are virtually day a a X.X roughly half-edged, XX. expected of XX then out BCF

So, a We inventory I exhaustion M&A. as the factors well of we the plays, spurring all mentioned, in is are which see enjoying number as fundamentals.

over XX so that XX supply power So, and good burn to just to more and and Mexico, is we just go NGLs to the on day a to year feel going that calls be there's in range we being on LNG, and, BCF of more have little to BCF that go ride good fundamentals go half, we've gas very bit natural luxury I changed mentioned think and patient before, to a a the too, as last and upside there. I the

Arun Jayaram

what's think think Paul, know call up, how it, your about you And you your premium I of follow - as your could that? talk premium for half did you expect you've NYMEX, my driving relative gas do molecules for more kind that we of that the importantly, about about second to XXXX? mentioned Great. you year. And the bump

Michael Kennedy

just or when that is that. markets where Yeah, gas. we strip no the on that follow We differentials we the better update differentials sell

So those improvement. the we where and the sell the have so improved markets gas that's

similar Looking out still it's into XXXX, premium. a

the we're I think around forward. going $X.XX premium

to quarter. in off it years. those the second We going in to this to premium then $X.XX raised out year. $X.XX guidance But up did back we a we So forward, $X.XX

Arun Jayaram

Great. Thanks lot, a Mike.

Michael Kennedy

Yep.

Operator

Please next question Partners. question. David your Pickering from state Heikkinen Energy comes Our with

David Heikkinen

Thanks. morning, Good everybody.

lateral just XX, particularly considering length. to Looking on XXXX to your XXXX really XXXX and slide that'll lateral plan, given a XXXX stretch to drilled you feet continued at be your completed,

post have 'XX in I'm completed you plan? have You you give us lengths given but guidance back, count about as lateral can in well you some far curious, a the drop or how as think

Michael Kennedy

they're XX,XXX feet mentioned barriers XX,XXX I feet without to this around here. XX,XXX we quarter, think Yeah, they're any

David Heikkinen

further lengthening? no So,

Michael Kennedy

I on we'll achieve, try our to XX,XXX but to practice, is think we would go current would try XX,XXX longer. No, position, to drill to the feet what but current in that's wells ability based acreage

Paul Rady

books longer. not the the talking and to in will average number try so the there's wells we'll of is a board XX be five, be but plan go do on range have XX,XXX will probably Yeah, we the in those a somewhere plus that out that Mike of foot Marcellus, foot handful or in that least at across XX,XXX in and XX XX,XXX that range.

David Heikkinen

Okay. All had. I you. Thank

Michael Kennedy

you. Thank

Operator

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

Holly Stewart

and any first us for just GP&T the think can Mike, the remind offs Maybe gentlemen. the probably I you to that - for morning, coming one are then Mike. impact line? roll FT of Good

Michael Kennedy

X, capacity big event a day. on our no, to October occurs million goes XXX Yeah, when that's from XXX REX

accelerating, the So do on you math $X.XX. we're that, about it's when

million - million about $XX million $X.X XXX year, a a quarter. that's So

So rolling and that's we one big next off some have Columbia well. the as

when X a actually So, down is but the of one march production, steady meets meet XXXX when the after that it's - FT the October our to we year. big this

Holly Stewart

environment given great. now, then thinking year in Okay, you're any on next And levels? how CapEx can talk we're impact you about right that's and inflationary about those that just Helpful. just the

Michael Kennedy

is it No, maintenance capital. still

You should for that at foreseeable future. assume the we're

next was for drilling stay and that to at earn-out. four the capacity remember You JV to maintenance capital FT of some us at some years, allowed to volumes still what grow achieve least midstream and meet really

being enjoying. second So no we're gas liquids already largest the de-leveraging producers, capital fourth have that need seeing the level, off maintenance rapid largest to we the and come scale that

and So, beyond. 'XX maintenance is the plan capital for definitely

Holly Stewart

any but expect don't inflationary sort Okay, pressures number. of that on

Michael Kennedy

they place to well are obviously inflationary, reduce No, we in have offset - if cost them. measures and there any don't should we inflationary see

Holly Stewart

you, Okay, guys. great. Thank

Michael Kennedy

Yep.

Paul Rady

Thanks, Holly.

Operator

Thank you.

Holt. Tudor, comes question. question Jeoffrey Lambujon Pickering, next with Please Our your state from

Jeoffrey Lambujon

for Good taking my question. everyone. morning, Thanks

you As been performance terms maintenance market, generally of seeing of equity has and remaining at commodity mentioned, industry the guys benefits capital. in the

on in it assumed I bit lack you in the forward growth picture execute on outlook know objectives to or capital, the your of relates about cash next curve, are allocation you mentioned as allows get multi-year years, free just debt since to to so from flow returns. thereof? the few wanting over So how but reduction shift a just drill capital flow to cash free to bigger drill-bit the mindset lot cash thinking the you what's profile given the more the maintenance your is

Michael Kennedy

Like maintenance I really efficiencies We've mentioned, everything it's seeing. capital. got we're enjoying Yeah, we're really lined out well.

the midstream All are need commitments. no commitments from to needed of our or develop field place, in make transport more to

it's well for So us. working really out

debt substantially from see get to debt, capital out so deviation of you So that of basically any we down be we of mentioned, opportunities as don't plan. And around well. will do lot to to that a sort there return as

going pursue. that's to So what we're

Jeoffrey Lambujon

you. Thank

Michael Kennedy

you. Thank

Operator

question-and-answer closing the session. That's I'll back remarks. for Brendan you. to end of turn Krueger it our now Thank

Brendan Krueger

with today's call. Thank questions. reach you all. any out for Thank joining on Please you us further

Operator

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

Antero Resources (AR) 29 Jul 212021 Q2 Earnings call transcript