U.S. Markets closed

Antero Resources (AR) Q2 Earnings Miss on Lower Gas Prices

Zacks Equity Research

Antero Resources Corporation AR reported adjusted second-quarter 2019 loss per share of 21 cents, wider than the Zacks Consensus Estimate of a loss of 11 cents. The figure was also wider than the year-ago loss of a penny.

Total operating revenues amounted to $1,299.7 million, beating the Zacks Consensus Estimate of $999 million. Moreover, the top line improved from the year-ago quarter’s $989.3 million.

The weak bottom-line performance can be attributed to higher operating expenses and a decline in realized commodity prices, partially offset by increased natural gas equivalent production.

Antero Resources Corporation Price, Consensus and EPS Surprise

Antero Resources Corporation Price, Consensus and EPS Surprise

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

Production Rises

Total production through second-quarter 2019 was recorded at 294 billion cubic feet equivalent (Bcfe), almost 70.7% natural gas, which is 28% higher than 229 Bcfe a year ago. Natural gas production increased to 208 billion cubic feet (Bcf) from 167 Bcf in the June quarter of 2018.

Production of oil in second-quarter 2019 was reported at 940 thousand barrels (MBbl), up 49% from 632 MBbl in the prior-year period. Its production of 3,720 MBbl of C2 Ethane was 13% higher than 3,290 MBbl in the year-ago quarter. The company’s output of 9,576 MBbl of C3+ NGLs in the June quarter of 2019 was 49% higher than 6,414 MBbl a year ago.

Realized Prices (Excluding Derivatives Settlements) Decline

Natural gas equivalent price realization in the quarter was $3.09 per thousand cubic feet equivalent (Mcfe), down 8% from $3.35 in the year-earlier period. Realized prices for natural gas decreased 6% to $2.66 per thousand cubic feet from $2.83 a year ago.

The company’s oil price realization in the quarter was reported at $52.19 per Bbl, down 15% from $61.55 a year ago. Its realized price for C3+ NGLs declined to $28.57 per Bbl from $34.81 in the prior-year quarter. Realized price for C2 Ethane decreased 18% to $8.16 per Bbl from $9.93 a year ago.

Operating Expenses Surge

Total expenses in the quarter under review rose to $1,199.7 million from $1,022.1 million in the year-ago period. This rise can be attributed to a 35.4% year-over-year jump in lease operating expenses to roughly $40.9 million. Moreover, operating cost related to gathering, compression, processing and transportation rose 84.2% year over year to $566.8 million

Capital Spending & Financials

For drilling and completion operations, the company spent $303 million through second-quarter 2019.

As of Jun 30, 2019, Antero Resources had no cash and cash equivalents. It had a long-term debt of $3,602.4 million, with a debt-to-capitalization ratio of 30.2%. 

Guidance

The company expects full-year cash production expenses, which incorporate lease operating expenses, gathering, compression, processing, transportation costs and others in the $2.15-$2.20 per Mcfe range, lower than the prior expectation of $2.15-$2.25. It expects capital expenditure for the remaining quarters of 2019 to be slightly above the $300-million mark. The company projects net natural gas equivalent production through 2019 in the range of 3.15-3.25 Bcfe/d.

Zacks Rank and Stocks to Consider

Currently, Antero Resources has a Zacks Rank #4 (Sell). Some better-ranked stocks in the energy sector are given below:

Transportadora de Gas del Sur S.A. TGS is a midstream energy firm. In the trailing four quarters, the company delivered average positive earnings surprise of 114%. The company has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MPLX LP MPLX provides midstream infrastructures to upstream companies. Its bottom line in 2019 is expected to improve 23.6% from a year ago. The company has a Zacks Rank #2 (Buy).

Montage Resources Corporation MR is an upstream energy company. Its top line in 2019 is expected to improve nearly 22.2% from a year ago. The company has a Zacks Rank #2.

This Could Be the Fastest Way to Grow Wealth in 2019

Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.

These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.

Click here to see these breakthrough stocks now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Eclipse Resources Corporation (MR) : Free Stock Analysis Report
 
MPLX LP (MPLX) : Free Stock Analysis Report
 
Transportadora De Gas Sa Ord B (TGS) : Free Stock Analysis Report
 
Antero Resources Corporation (AR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research