Rady, Warren File To IPO Antero Resources And Its Vast Appalachian-Shale Holding

Proved, probable and possible reserves are estimated to total more than 26 Tcfe.

Paul Rady and Glen Warren plan to IPO their Marcellus- and Utica-focused Antero Resources Corp. in a fund-raise that is estimated to bring in some $1 billion toward paying $436 million of bank debt and further surfacing the company’s roughly 26.1 trillion cubic feet equivalent (Tcfe) of gas, gas-liquids and oil reserves.

Rady, who is chairman and chief executive, and Warren, president and chief financial officer, founded the Denver-based shale player in 2002 after selling their three-year-old Pennaco Energy Inc.’s Rockies-focused gas portfolio to Marathon Oil Co. for $500 million in cash in 2001. In 2005, they sold their two-year-old Antero’s Barnett-shale holdings for more than $1 billion in cash and stock to XTO Energy Inc., now a business unit of ExxonMobil Corp.

Rady, whose energy career began as a geologist, and Warren, whose began as a landman, both for Amoco Corp., then went to work on other shale plays with some of the XTO proceeds and private-equity funding from Warburg Pincus LLC, Yorktown Partners LLC and Lehman Brothers Merchant Banking Group that is now Trilantic Capital Partners.

Ultimately, their hunt would lead to focusing entirely on the Marcellus in Appalachia. Last year, to further focus on its existing Marcellus and newer Utica-shale potential, Antero sold its portfolios in the Arkoma Basin to Vanguard Natural Resources LLC for $445 million and in the Piceance Basin to an undisclosed private buyer for $316 million.

Currently, Antero holds some 317,000 net acres in the Marcellus play and some 94,000 net acres prospective for production from the Utica, according to its S-1 filing Thursday. “In addition, we estimate that approximately 194,000 net acres of our Marcellus shale leasehold are prospective for the slightly shallower Upper Devonian shale,” the company reports.

Year-end 2012 proved reserves were 4.9 Tcfe, 21% proved developed and 75% natural gas. It estimates its leasehold offers more than 4,900 potential horizontal well locations. To date, the company has made 170 successful horizontal Marcellus wells out of 170 attempts and it currently has 15 rigs at work for it in Appalachia.

“We have begun to apply the expertise and approach we employ in the Marcellus shale to the Utica shale, and we believe we will be able to achieve similar success. We have drilled and completed eight horizontal wells in the Utica shale with a 100% success rate without encountering any faulting.”

First-quarter production averaged 383 million cubic feet equivalent per day, mostly gas with the balance being gas liquids and oil. It also owns and operates gathering pipelines and four gas-compression stations.

Lead underwriters of the IPO are Barclays Capital Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC. Additional underwriters are Credit Suisse Securities (USA) LLC, Jefferies LLC and Wells Fargo Securities LLC.

Editor’s Note: For more on Rady’s and Warren’s past success, see “ Money By The Numbers ,” Oil and