Street View: Brokerages upbeat on Antero’s HG Energy deal, Utica sale seen boosting scale

Shares of Antero Resources AR.N and Antero Midstream AM.N flat in premarket Tuesday after AR to buy HG Energy’s assets for $2.8 bln and AM to buy HG’s midstream assets for $1.1 bln

AR also plans to sell its Ohio Utica upstream assets for $800 million, midstream assets for $400 mln to Infinity Natural Resources INR.N , Northern Oil & Gas NOG.N

GAS DEAL SEES PORTFOLIO STREAMLINING, VALUE UPSIDE

Morningstar (Shares remain rated two stars) analysts raise AR’ fair value estimate to $26 from $25, citing HG Energy deal’s appeal on free cash flow and net asset value

Adds all-cash purchase preserves AR’s credit rating by avoiding bond market

TD Cowen (PT: $46) sees the deal as overwhelmingly positive for AR, as it will remain under-levered while free cash flow improves in 2027 at strip by 39%

Adds, assets offer a number of logical, adjacent synergies, and valuation now looks incrementally better at 3.9x 2027 EBITDAX vs. peers at 4.5x

Enverus Intelligence says the transactions have clear strategic rationale, allowing AR to block up its core Marcellus position and add more than 400 locations, while divesting Ohio Utica assets to streamline its portfolio