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Antero's (AR) Q3 Earnings Miss Estimates, Revenues Beat

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Antero Resources Corporation (AR - Free Report) reported third-quarter adjusted earnings of $1.63 per share, missing the Zacks Consensus Estimate of $1.91.  However, the bottom line significantly improved from the year-ago quarter’s earnings of 19 cents.

Total quarterly revenues of $2,065 million beat the Zacks Consensus Estimate of $1,982 million. The top line increased from the year-ago quarter’s $534 million.

Lower-than-expected quarterly earnings can be attributed to a fall in natural gas-equivalent production volumes. The negatives were offset by higher realizations of commodity prices.

Stock Buyback

Antero Resources has authorization from the board of directors to increase its share repurchase program by $1 billion to $2 billion, reflecting strong initiatives of returning capital to shareholders.

Overall Production

Total production through the September quarter was 294 billion cubic feet equivalent (Bcfe), which declined 2% from 299 Bcfe a year ago. Natural gas production (accounting for 68% of the total output) fell 2% year over year to 200 Bcf.

Oil production in the third quarter was 804 thousand barrels (MBbls), down 14% from 932 MBbls. Its production of 5,010 MBbls of C2 Ethane was 15% higher than 4,372 MBbls in the year-ago quarter. The company’s output of 9,950 MBbls of C3+ NGLs in the quarter was 3% lower than 10,258 MBbls a year ago.

Realized Prices (Excluding Derivative Settlements)

Weighted natural-gas-equivalent price realization in the quarter was $8.23 per thousand cubic feet equivalent (Mcfe), higher than the year-earlier figure of $5.15. Realized prices for natural gas rose 102% to $8.69 per Mcf from $4.31 a year ago.

The company’s oil price realization in the quarter was $83.41 per barrel (Bbl), up 37% from $60.87 a year ago. Its realized price for C3+ NGLs declined to $50.61 per Bbl from $52.68. Realized price for C2 Ethane increased 77% to $23.40 per Bbl from $13.25 a year ago.

Operating Expenses

Total operating expenses in the quarter under review increased to $1,290.5 million from $1,217.9 million in the year-ago period.

Average lease operating costs were 9 cents per Mcfe, up 13% year over year. The same for gathering and compression increased 11% to 81 cents per Mcfe.

Transportation expenses rose 18% from the prior-year quarter to 80 cents per Mcfe. Processing costs increased 19% year over year to 82 cents.

Capex & Financials

In third-quarter 2022, Antero Resources spent $195.6 million on drilling and completion operations. As of Sep 30, 2022, it had no cash and cash equivalents. It had long-term debt of $1.2 billion, with a debt to capitalization of 15.4%.


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

Zacks Rank & Stocks to Consider

Antero Resources currently carries a Zacks Rank #3 (Hold). Better-ranked players in the same space include Magellan Midstream Partners (MMP - Free Report) , EQT Corporation (EQT - Free Report) and Shell plc (SHEL - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Being a midstream energy player, Magellan Midstream’s business model is less exposed to volatility in oil and gas prices. In fact, contributions from core fee-based transportation and terminals activities have aided MMP’s results in the third quarter of this year.

In the core of gas-rich Marcellus and Utica Shales, EQT Corporation has a strong foothold. Being a leading producer of natural gas, EQT is benefiting from high natural gas prices. For 2022, it is likely to witness earnings growth of 371.7%.

Being a leading player in liquefied natural gas across the globe, Shell’s business prospects seem bright. In the energy transition front, it is playing a crucial role, setting an ambitious goal of becoming a net-zero-emissions energy business by 2050 or before. For 2022, SHEL is likely to see earnings growth of 118.4%.

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