Antero Resources Corporation (NYSE:AR) Q3 2023 Earnings Call Transcript

Paul Rady: Yes. Nothing new to what they’ve guided publicly on. They’re doing some work on one of the three downstream units that’s expected to be wrapped up by the end of the year. So 2024, we expect to see significantly higher and more stable volumes from us going to that facility. And so you would expect to see that show up in our net production. We also have a handful of other customers that will be calling on us for more ethane on contracts that are ramping up in 2024 as well. So I think you’ll see a combination of the shell cracker effect as well as others in the net production in 2024 on the ethane side.

Michael Kennedy: Yes. And then further to that, when it comes to the ethane cracker, we always risk that quite heavily. And that’s why you’ve seen with – even with the startup delays that we’ve had this year with the ethane cracker, we’re still well ahead of production guidance and we actually guided our ethane volumes down recently. So the production that we’re talking about levels will be risked for further kind of just startup – your typical startup issues. And then if the ethane cracker actually does perform a little bit better in the year, that’ll just be upside the volumes.

David Deckelbaum: Thanks, Mike. You answered my questions probably. I appreciate it, guys.

Michael Kennedy: Yes. Thanks.

Operator: The next question is from Jean Ann Salisbury of Bernstein. Please proceed with your question.

Jean Ann Salisbury: Hi. Good morning. As you mentioned we’re seeing LPG export capacity tightness along the Gulf Coast. How much flexibility does Antero have to export more from the East Coast which I think has a little bit more spare capacity?

Paul Rady: Well. We do a pretty good job with that, in particular in the time of the year where you want to export as much as possible, which is the shoulder months, spring through summer and into the fall. There’s times of the year where we’re spending 85%, 90% of our propane to the international dock. So hard to really get much above that. But you want to leave some flexibility for domestic and for variations in production month to month, but we try and maximize that as much as we can during the non-heating season.

Jean Ann Salisbury: Okay. That makes sense. And then you kind of touched on this on an earlier question, but your local gas realizations were a little bit lower due to maintenance at Cove Point in Tennessee. Was that kind of this perfect storm where it was also kind of poor basis because of the high storage and is that like a lot more maintenance than usual in the season? Or do you view it as just everything is more volatile now that everything’s quite full, that when there’s any maintenance event, it kind of blows out?

Paul Rady: Yes, that was a good way to put it. That was the perfect storm, the backup volumes from Cove Point and TECO [ph] and then the backup volumes from Tennessee and the TECO just led to really wide basis. It was historic. It was the high – whitespaces we’ve seen at TECO. So all of that is subsided though, going in the Q4 with Cove Point being back on in Tennessee flowing so.

Jean Ann Salisbury: Great. That’s all for me. Thanks.

Michael Kennedy: Yes.

Operator: The next question is from Jacob Roberts of Tudor, Pickering and Holt. Please proceed with your question.

Jacob Roberts: Good morning.

Michael Kennedy: Good morning.

Jacob Roberts: We appreciate the macro commentary and the detail you guys gave in the near to medium term. Just curious, and maybe a 2025 plus time frame, what you would need to see in the forward curve to potentially allocate more capital to dryer areas?