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Antero Resources (AR) Q4 Earnings Miss on Lower Production

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Antero Resources Corporation (AR - Free Report) reported fourth-quarter 2021 adjusted earnings per share of 46 cents, missing the Zacks Consensus Estimate of 64 cents.  However, the bottom line turned around from the year-ago loss of 5 cents.

Total quarterly revenues of $2,394 million beat the Zacks Consensus Estimate of $1,469 million. The top line also increased from the year-ago quarter’s $1,309 million.

The lower-than-expected earnings can be attributed to lower gas-equivalent production volumes. The positives were partially offset by higher realizations of commodity prices.

Antero Resources Corporation Price, Consensus and EPS Surprise

 

Overall Production

Total production through the December-end quarter was recorded at 294 billion cubic feet equivalent (Bcfe), which declined 13% from 336 Bcfe a year ago. Natural gas production (accounting for 69.7% of the total output) fell 9% year over year to 205 Bcf.

Oil production for the fourth quarter was 689 thousand barrels (MBbls), down 38% from 1,104 MBbls in the prior-year period. Its production of 4,130 MBbls of C2 Ethane was 18% lower than 5,023 MBbls in the year-ago quarter. The company’s output of 9,872 MBbls of C3+ NGLs for the quarter was 19% lower than 12,174 MBbls a year ago.

Realized Prices (Excluding Derivative Settlements)

Weighted natural-gas-equivalent price realization for the quarter was $6.48 per thousand cubic feet equivalent (Mcfe), higher than the year-earlier figure of $2.96. Realized prices for natural gas rose 124% to $5.89 per Mcf from $2.63 a year ago.

The company’s oil price realization for the quarter was $69.53 per barrel (Bbl), up 126% from $30.83 a year ago. Its realized price for C3+ NGLs improved to $58.25 per Bbl from $27.64 in the prior-year quarter. Realized price for C2 Ethane increased 202% to $16.81 per Bbl from $5.56 a year ago.

Operating Expenses

Total operating expenses for the quarter under review declined 2% to $1,137.9 million from $1,163.9 million in the year-ago period.

Average lease operating costs for the quarter were 9 cents per Mcfe, up 13% year over year. The same for gathering and compression rose 11% year over year to 72 cents per Mcfe.

Transportation expenses rose 13% from the prior-year quarter to 76 cents per Mcfe. Processing costs increased 3% year over year to 65 cents.

Capex & Financials

For drilling and completion operations, the company spent $152 million through fourth-quarter 2021. As of Dec 31, 2021, Antero had no cash and cash equivalents. It had long-term debt of $2.1 billion, with a debt to capitalization of 27%.

Reserves

As of 2021-end, Antero Resources had an estimated proved reserve base of 17.7 trillion cubic feet of gas equivalent, reflecting a 1% increase from 2020 levels. About 58% of the proved reserve was natural gas, with 41% NGLs and 1% crude oil. Of the total estimated proved reserve base, 72% was classified as proved developed.

Guidance

For 2022, Antero Resources expects net daily natural gas-equivalent production of 3.2-3.3 Bcfe/d. Also, net daily natural gas production is expected to be 2.2-2.25 Bcf/d.

The company anticipates total exploration and production capital of $740-775 million for the year. It expects to generate $1.5-$1.7 billion of free cash flow in 2022.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that turned in strong bottom-line numbers in the fourth quarter and presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Valero Energy Corporation (VLO - Free Report) is the largest independent refiner and marketer of petroleum products in the United States. VLO reported fourth-quarter 2021 adjusted earnings of $2.47 per share, beating the Zacks Consensus Estimate of $1.79 per share.

Valero is expected to see an earnings growth of 152.7% in 2022. VLO has witnessed three upward revisions in the past 60 days. It currently has a Zacks Style Score of A for Growth and Momentum. At the quarter-end, Valero Energy had cash and cash equivalents of $4,122 million.

ConocoPhillips (COP - Free Report) , based in Houston, TX, is primarily involved in the exploration and production of oil and natural gas. COP recently reported fourth-quarter 2021 adjusted earnings per share of $2.27, comfortably beating the Zacks Consensus Estimate of $2.20.

ConocoPhillips’ earnings for 2022 are expected to soar 62.1% year over year. COP currently has a Zacks Style Score of A for Growth, and B for Value and Momentum. As of Dec 31, 2021, ConocoPhillips had $5,028 million in total cash and cash equivalents.

Exxon Mobil Corporation (XOM - Free Report) is a leading integrated energy company in the world. XOM reported fourth-quarter 2021 earnings per share of $2.05 (excluding identified items), beating the Zacks Consensus Estimate of $1.96 per share.

ExxonMobil’s earnings for 2022 are expected to soar 27.3% year over year. At the fourth-quarter end, total cash and cash equivalents were $6.8 billion, and debt amounted to $47.7 billion. ExxonMobil has significantly lower debt exposure than other integrated majors.