Antero Resources Reports Wider Loss but Beats Revenue Estimates in Q3 2024

Antero Resources Corporation (AR) announced an adjusted loss of 12 cents per share for the third quarter of 2024. This result fell short of the Zacks Consensus Estimate, which anticipated a loss of only 3 cents. The company’s performance also declined from the previous year, when it reported earnings of 8 cents.

Despite the loss, Antero Resources achieved total revenues of $1,056 million, surpassing the anticipated $1,043 million. However, this figure marked a decrease from last year’s revenue of $1,126 million.

Earnings Decline Driven by Production and Price Drop

The company’s disappointing earnings arose mainly from lower total gas equivalent production and reduced commodity prices. They did, however, manage to mitigate some losses through a reduction in total operating expenses.

Antero Resources Corporation Price and Consensus

Antero Resources Corporation price-consensus-chart | Antero Resources Corporation Quote

Production Levels

In Q3, Antero produced a total of 313 billion cubic feet equivalent (Bcfe), down from 320 Bcfe in the same quarter last year. This was slightly better than the estimate of 309 Bcfe.

Natural gas production, making up 64% of total output, hit 200 Bcf, a 4% decline from 208 Bcf a year earlier. Notably, this figure was above our estimate of 196 Bcf.

The company’s oil production dropped to 856 thousand barrels (MBbls), a decline of 7% from last year’s 918 MBbls, while estimates had been set at 920 MBbls.

On a brighter note, production of C2 Ethane rose by 9%, reaching 7,302 MBbls compared to 6,696 MBbls last year, though it fell short of the estimate of 7,388 MBbls.

Additionally, Antero reported 10,793 MBbls of C3+ NGLs, a slight decrease of 2% from 10,977 MBbls posted last year but higher than our estimate of 10,513 MBbls.

Realized Prices

During the quarter, Antero’s weighted natural-gas-equivalent price realization fell to $3.14 per thousand cubic feet equivalent (Mcfe), down from $3.32 a year prior, but better than our estimated $2.98.

Natural gas prices realized dropped 14% to $2.13 per Mcf, compared to $2.48 a year ago, exceeding our estimate of $2.05.

The company’s oil price realization stood at $61.59 per barrel (Bbl), down from $68.22 a year prior and lower than our projection of $68.43.

In contrast, the realized price for C3+ NGLs rose to $41.30 per Bbl from $36.81 last year, exceeding our estimate of $39.26. However, C2 Ethane’s realized price fell to $8.01 per Bbl from $11.73, also lower than our estimate of $10.39.

Operating Expenses Decline

Antero reported a decrease in total operating expenses to $1,062 million from $1,070 million a year ago, although our estimate was slightly higher at $1,047.6 million.

Average lease operating costs dropped to 9 cents per Mcfe, showing a 10% reduction from 10 cents last year. However, gathering and compression costs rose 6% to 72 cents per Mcfe.

Transportation expenses saw a 3.3% decline year over year to 58 cents per Mcfe, while processing costs increased by 5.6% to 88 cents per Mcfe.

Capital Expenditures and Financials

In the third quarter, Antero invested $148 million in drilling and completion operations. As of September 30, 2024, the company reported no cash and cash equivalents, alongside long-term debt of $1.62 billion.

Future Guidance

For 2024, Antero has revised its drilling and completion capital budget from the original range of $650-$700 million to $640-$660 million. The production guidance stays steady at 3.375-3.425 Bcfe per day, along with anticipated higher liquid volumes.

Zacks Rank and Notable Alternatives

Currently, AR holds a Zacks Rank of #4 (Sell).

In contrast, some better-rated stocks in the energy sector include Archrock Inc. (AROC), The Williams Companies, Inc. (WMB), and FuelCell Energy (FCEL). Archrock stands out with a Zacks Rank of #1 (Strong Buy), while both The Williams Companies and FuelCell Energy hold a Zacks Rank of #2 (Buy) each.

Archrock focuses on midstream natural gas compression in the U.S., delivering contract compression services and generating steady fee-based revenues.

The Williams Companies, Inc. operates as a significant energy infrastructure provider, focused on natural gas and liquids through a vast pipeline system exceeding 33,000 miles.

FuelCell Energy specializes in clean energy solutions, producing power through low-carbon methods that combine various fuel sources, making it a key player in the shift toward sustainable energy.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.