Antero Resources has entered into a definitive agreement to acquire the upstream assets of HG Energy II for total consideration of $2.8 billion in cash plus the assumption of HG Energy's commodity hedge book, subject to customary closing adjustments. The transaction is expected to close in the second quarter of 2026, with an effective date of January 1, 2026. In addition, Antero announced it has entered into a definitive agreement to sell its Ohio Utica Shale upstream assets for total consideration of $800 million in cash, subject to customary closing adjustments. The Utica divestiture is expected to close in the first quarter of 2026, with an effective date of July 1, 2025. Separately, Antero Midstream announced that it has entered into a definitive agreement to acquire the midstream assets from HG Energy for total consideration of $1.1 billion in cash, subject to customary closing adjustments. Antero Midstream also announced it has entered into a definitive agreement to sell its Utica Shale midstream assets for total consideration of $400 million, subject to customary closing adjustments. The transactions were unanimously approved by the Company's Board of Directors.
Transaction Highlights:
- Strategic acquisition adds 850 MMcfe/d of 2026 expected production in West Virginia's core Marcellus footprint
- 385,000 net acres offsetting Antero's existing ~475,000 net core Marcellus acreage position
- >400 remaining gross locations with high NRI's and average lateral lengths of 20,300 feet
- Lengthens inventory life by approximately 5 years at maintenance capital levels
- Identified approximately $950 million of synergies over 10 years (PV-10)
- Capital synergies of approximately $550 million inclusive of development planning optimization and D&C savings related to implementing Antero's development pace and reducing tangible costs
- Income related synergies of approximately $400 million inclusive of reduced net marketing expense, water handling optimization that is expected to reduce lease operating costs and tax benefits
- Maintains Investment Grade Balance Sheet
- Expected to maintain investment grade ratings
- Pro forma leverage target of less than 1.0x expected in 2026
- Free Cash Flow protected through commodity price hedges, including basis exposure
- Approximately 90% of HG natural gas production is hedged in 2026 and 2027 at average NYMEX prices of $4.00 and $3.88, respectively
- Acquisition is accretive on key financial metrics
- Acquired upstream assets at a 3.7x 2026E EBITDAX multiple and 18%+ 2026E Free Cash Flow Yield
- Over 30% expected average Free Cash Flow accretion over the next two years
- Expected to reduce Antero's cash cost structure by approximately $0.25 per Mcfe and improve the Company's margin by approximately $0.15 to $0.20 per Mcfe (excluding synergies)
- Divestiture of Non-core Ohio Utica Shale assets for $800 million
- Expected production of 150 MMcfe/d in 2026
- Assets divested at an approximate 8x 2026E EBITDAX multiple and 7% 2026 estimated Free Cash Flow Yield, based on Antero's limited development plan for the assets in 2026 and beyond
Michael Kennedy, President and CEO of Antero Resources commented, 'Today's acquisition expands our core acreage and enhances our position as the premier liquids developer in the Marcellus. Importantly, we have clear line of sight to financing the acquired assets with Antero's near-term Free Cash Flow generation, proceeds from the non-core Utica divestiture, and the 3-year hedged Free Cash Flow generated by the acquired assets. The acquired assets will also bolster our industry leading maintenance capital efficiency while providing us with further dry gas optionality for local demand from data centers and natural gas fired power plants.'
Brendan Krueger, CFO of Antero Resources said, 'The strategic transactions announced today are highly accretive on a per share basis across key metrics including Operating Cash Flow, Free Cash Flow and Net Asset Value. We were able to divest a non-core asset at an attractive valuation and pair the expected use of proceeds with the acquisition of assets directly in the core of where we operate today. Importantly, as a result of managing Antero's business with a strong balance sheet, executing the divestiture of the Utica assets and generating significant Free Cash Flow, we expect to reduce leverage to 1.0x or lower in 2026 based on current strip pricing.'
Source: Antero Resources
