Antero Resources (AR) Boosts FY16 Production Outlook

Antero Resources Corporation (NYSE: AR) announced updates to its 2016 production guidance and 2017 production growth target.

Highlights Include:

• Increased 2016 net production guidance to 1.8 Bcfe/d and maintained 2017 annual production growth target of 20% to 25% over 2016 guidance
• Maintained 2016 drilling and completion capital budget at $1.3 billion while targeting a similar drilling and completion capital budget for 2017
• Reduced 2016 cash production expense guidance to $1.40 to $1.50 per Mcfe

Updated 2016 Guidance

Driven by the successful execution of Antero's development program to date, along with encouraging results from the implementation of advanced completion techniques, the Company is raising 2016 net production guidance from 1.75 Bcfe/d to 1.8 Bcfe/d. This represents a 3% increase from the previously announced guidance and a 5% increase from initial 2016 guidance. Additionally, the Company is maintaining its original drilling and completion capex budget of $1.3 billion. The increase in gas equivalent production guidance includes an increase in liquids production to 73,000 Bbl/d, or an 11% increase from previous guidance and a 22% increase from initial 2016 guidance. Antero will continue to target 20% to 25% growth in 2017 off of the increased 2016 production guidance, representing a 3% increase from the previously announced target and a targeted growth rate of 29% over initial 2016 production guidance.

The increase in production guidance in conjunction with an unchanged drilling and completion budget is primarily a function of the improved recoveries and drilling efficiencies Antero has achieved throughout the year. The improved recoveries are driven by Antero's advanced completions, which have utilized 1,200 to 1,500 pounds of proppant per foot, with recent pilots utilizing as much as 1,750 to 2,000 pounds of proppant per foot. These techniques have yielded encouraging results with wellhead EURs ranging from 2.0 to 2.3 Bcf per 1,000' of lateral as compared to the Company's 1.7 Bcf per 1,000' type curve. The drilling efficiencies include a reduction in drilling days, increases in stages completed per day and drilling longer laterals.

Throughout 2016, Antero has operated an average of six rigs in the Marcellus and one rig in the Utica, while placing 78 total wells to sales. Of the 52 wells Antero has completed in the Marcellus, 29 have used greater than 1,300 pounds of proppant per foot and have generated aggregated production in excess of the Company's current 1.7 Bcf/1,000 type curve and 2.0 Bcf/1,000 target through 140 days.

Commenting on these cost reductions and well recovery improvements, Paul Rady, Chairman and CEO, said, "As the most active operator in Appalachia, we have benefited from our ability to maintain operating momentum through the current downturn, leveraging our activity into exceptional operational improvements. We continue to see improved well costs and performance in 2016, reducing our drilling and completion cost per 1,000 foot of lateral by 33% in both the Marcellus and the Utica since 2014 and our net development costs per Mcfe by 47% and 44% in the Marcellus and Utica, respectively since 2014. While these early results are impressive, we feel there is even more room for improvement going forward through increased proppant and water intensity, longer laterals and decreased drilling days."

Mr. Rady further added, "Looking ahead to the remainder of 2016, we expect production to average 1.84 Bcfe/d in the second half of the year and plan to reaccelerate activity late in the year and build further momentum as we head into 2017. While we have seen a modest benefit from the increased recoveries from our 2016 development, we expect greater contribution in 2017 as more wells with advanced completions are brought online, while still maintaining a similar drilling and completion budget year-over-year."

The following is a comparison of the original 2016 guidance issued in January 2016, previous 2016 guidance issued in June 2016, and the revised 2016 guidance.

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