$AR, #natgas. Why i think Antero Resources is a screaming buy right now. I’ve been bullish the name since around Nov and its gone nowhere but down. However, fundamentally they have posted some amazing cost cutting. In December thanks the AR/AM cost cutting, $AR got a $350m
Gift over 4 years. In December they posted cost cutting at the ML conference with a 2020 goal of $300m
Barely 2 months later (yesterday) they posted $520m cost cutting goal for 2020 which they did in this qtr’s earning release.
Now the market doesn’t care that AR$ is stupidly cheap, has a -ve equity value when you take into account their stake in $AM, or their 1.1$bn hedge gains. The question is all about how will they make their 2021/2022 maturity schedule. Now mgmt has explained that they have a lot
Liquidity with being able to monetize their AM stake, sell some of their hedges or sell royalties & or put some of the maturities on their revolver. The stock is -40% ytd because of this and of course a weak gas price despite being 94% hedged on gas this year at 2.87$ and
93% next year at $2.8/MMbtu. The play from all the bears is this company is going down and going to 0 because they are going bankrupt. So i will end on this one killer point. The mgmt in the last 2 years has bought back 10% yes 10% of shares o/s and in the last 4 mos has
Bought back 6% of the shares o.s. These are the shares o/s from the 10k. Special thanks to @mailboxmoney6 for the heads up on the recent share count.
Dec 31 2017; shares o/s 316.4m (ending year) Fully Diluted
Dec 31 2018 shares o/s 308.6m
Dec 31 2019 shares o/s 295.9m (of which 8m decrease q4)
Feb 7 2020 shares o/s 286.7m
So if you were going to go belly up would you buy 18m shares since Oct 19 (or 4 mos) and aggressively so esp given all the black out windows in the last 2 mos.Also why not mention that you bought almost the same # in 1/20 that you did in all of 2019???? Because you want the stock
To Be down so you can buy more. After all US MGMT TEAMS are the most promotional ever & you just bought back 6% of s/o and you keep quiet about it?? Really? I verified the shares o/s of 286.7m with IR before writing this tweet. It’s confirmed. So in ending i believe that mgmt
IS pretty close to getting an asset sale completed or perhaps they want to take the co private. In either case their massive aggressive share buyback does not jive with a co that is about to go belly up. For Pete’s sake they acquired 10% of the shares/o in just 26 mos & 6% in the
Last 4 mos!!! Short $ar at your peril. Unlike $RRC where ceo owns practically no shares, and is only compensated for debt reduction, & Shares o/s are flat over 3 years AR mgmt has skin in the game. They are aggressively taking advantage of this pessimism to add shareholder value
The bears will say that mgmt is dilusional and that is why they are buying stock. Well they own 16% of the equity & together with $Am stake have a ton of real skin in the game. In addition they made $5bn in hedge gains trading gas whilst the revered $COG lost 300$M trading gas
Over past 7 years. So call them stupid if you want. I just doubled my position today.
