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, along with the assumption of HG Energy’s commodity hedge book. The transaction, subject to standard closing adjustments, is scheduled to close in the second quarter of 2026 and will be effective January 1, 2026. At the same time, Antero has agreed to sell its Ohio Utica Shale upstream assets for $800 million in cash, a deal expected to close in the first quarter of 2026 with an effective date of July 1, 2025.
Antero Midstream separately announced that it will acquire HG Energy’s midstream assets for $1.1 billion in cash and will divest its Utica Shale midstream assets for $400 million. All transactions have received unanimous approval from Antero’s Board of Directors.
The acquisition adds 850 MMcfe per day of expected 2026 production in West Virginia’s core Marcellus footprint and includes 385,000 net acres adjacent to Antero’s existing 475,000 net core Marcellus acres. The company expects more than 400 remaining gross locations with high net revenue interests and average lateral lengths of 20,300 feet. Management said the additional inventory lengthens Antero’s drilling runway by five years at maintenance capital levels.
The company identified an estimated $950 million in potential synergies over ten years, including approximately $550 million in capital efficiencies from development optimization, drilling and completion savings, and reduced tangible costs. Another $400 million in synergies is tied to reduced net marketing expense, improved water handling efficiency expected to lower operating costs, and projected tax benefits.
Antero said the acquisition supports its plans to maintain an investment-grade balance sheet in 2026 with leverage of less than 1.0 times. The company highlighted that roughly 90 percent of HG Energy’s natural gas production is hedged in 2026 and 2027 at average NYMEX prices of $4.00 and $3.88, respectively, which it believes will help protect future cash flows.
Management emphasized that the acquisition is accretive across key financial metrics. The upstream assets were purchased at a 3.7x 2026 estimated EBITDAX multiple, with an expected Free Cash Flow yield above 18 percent. Over the next two years, Antero projects average Free Cash Flow accretion of more than 30 percent. The company also expects the transaction to reduce its corporate cash cost structure by roughly $0.25 per Mcfe and enhance margins by approximately $0.15 to $0.20 per Mcfe, excluding synergies.
The Utica divestiture, valued at an estimated 8 times 2026 EBITDAX and approximately 7 percent Free Cash Flow yield based on Antero’s limited drilling plans for the region, will contribute proceeds to help finance the HG acquisition.
Pro forma production for 2026 is expected to average between 4,200 and 4,225 MMcfe per day after accounting for the loss of Utica production beginning April 1, 2026, and the addition of HG Energy volumes.
Antero plans to fund the acquisition using Free Cash Flow, proceeds from the Utica divestiture, borrowings under its revolving credit facility, and a fully underwritten three-year $1.5 billion term loan arranged by Royal Bank of Canada and JPMorgan Chase Bank. The company currently has about $1.3 billion of available liquidity under its revolving credit facility.
Support: Advisors to the transactions include RBC Capital Markets, Lazard, Vinson & Elkins, Jefferies, Wells Fargo, Truist, and Kirkland & Ellis.
KEY QUOTES:
“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 three 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.”
Michael Kennedy, President and CEO of Antero Resources
“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.”
Brendan Krueger, CFO of Antero Resources
