Citadel Advisors adds position in Antero Resources

Citadel Advisors and Antero Resources

Citadel Advisors’ new stock purchases include Workday, Inc. (WDAY) and Liberty TripAdvisors (LTRPA). The hedge fund exited positions in United Rentals (URI) and Akron, Inc. (AKRX). Citadel Advisors also increased positions in Tesoro Petroleum Co. (TSO), Actavis Plc (ACT), Antero Resources Corp. (AR), and Anadarko Petroleum (APC). The firm decreased positions in Apple (AAPL), Citigroup (C), and Invesco Ltd. (IVZ).

Citadel Advisors increased its position in Antero Resources by $344 million for 3Q14.

Citadel Advisors adds position in Antero Resources

About Antero Resources

Antero Resources is an independent exploration and production company. It’s engaged in the exploitation, development, and acquisition of natural gas liquids, or NGLs, and oil properties located in the Appalachian Basin.

Antero Resources is headquartered in Denver, Colorado. It’s focused on creating value through the development of a large portfolio of repeatable, low-cost, liquids-rich drilling opportunities in two of the premier shale plays in North America.

Major oil and gas producers in the Marcellus Shale include Cabot Oil & Gas Corporation (COG), Anadarko Petroleum Corporation (APC), and Antero Resources Corp. Many of these producers are also part of the Energy Select SPDR ETF (XLE) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

Antero Resources filed an IPO

On October 27, Antero Resources announced the initial public offering, or IPO, of Antero Midstream Partners LP (AM).

The midstream company will own the gathering and compression assets. It will use them to service Antero Resources. Antero Resources is part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). It’s also part of the iShares U.S. Energy ETF (IYE).

At first, the IPO offered 37,500,000 common units. The units were priced between $19 and $21. Later, this increased to 40,000,000 common units. The units were priced at $25.

Antero Resources expected that the partnership would raise $1 billion. It exceeded the goal because underwriters exercised their greenshoe option.

A greenshoe option is when the issuer in an underwriting agreement, Antero Resources in this case, agrees to give the underwriter the right to sell investors more shares than originally planned. This typically happens when the demand for the security issue proves to be higher than anticipated.

For Antero Resources, the partnership sold an additional 6,000,000 common units. It brought the total amount raised to $1.15 billion. Therefore, Antero Resources officially became the biggest master limited partnership, or MLP, IPO ever—after it emerged that the underwriters exercised their greenshoe option to buy more stock from the company.

3Q14 results

Antero Resources’ 3Q14 results missed estimates. The reported net income was $203.9 million for 3Q14. This was substantially higher than the revenue generated in the same period for 2013. It was $120.9 million in 3Q13.

Its daily gas production had an average of 1,080 million cubic feet equivalent per day, or MMcfe/d. This was a 91% increase—compared to the same quarter last year. Its net daily liquid production was 25,000 barrels per day, or bpd. It increased by 217%—compared to the same quarter last year.

The next part in this series will discuss Citadel Advisors’ increased position in Anadarko Petroleum.