Firm Transportation Agreements

In this document, we emphasized our view – that at some point, fixed transport from the Appalachians would be seen as a commitment and not an asset, because new pipes have been put into service, production growth has become moderate and prices in the basin are approaching markets historically considered „premium“. For some parties, business transportation costs, if deducted from the net improvement in the price received, could put these parties in a less favourable position than those that have decided to remain exempt from these agreements. We say „potential“ because a significant market share in the Appalachians could bring other benefits and an increase in market share in the Appalachians would not have been possible without solid ownership. The table below shows the differences between prices in the watershed and certain „premium“ markets that producers now have access to with fixed transport. The graph is superimposed on two lines that are similar to both the cheapest corporate transportation and the cheapest business transportation to these high-end regions. While there have been periods when producers have absolutely benefited from their commitments, it is worth asking more detailed questions to producers in order to understand not only the costs of unused capacity, but also the costs of the capacity used and whether this capacity will affect the future performance of firms by pulling cash flows down. Non-supplied services are services such as electricity and natural gas supply, which must be available at any time during an agreement period. In addition, the service is not subject to a prior claim from another customer and receives the same priority as any other corporate service. Conditional service is similar to fixed service, as it is booked and premium to inruptible service. However, it may have limitations, z.B.

times when it would be limited before fixed service, but depending on the inruptible service. The cost per unit with this service is called fixed rate or uninterrupted rate. The opposite of fixed service is a non-fixed service, also called switchable service or available service. The unit costs of this service are called non-fixed or switchable rates. The switchable charge is the part of the load of a public service that comes from customers with a switchable service. Speaking of the future, it is high time that the market paid more attention to the long-term effects of the contractual commitments made and made by producers. The table below shows debts and contractual commitments for a select group of public producers in Appalachia. These agreements, which include firm transport obligations, reinforce the decision to drill or not, with real complexity. At the fourth quarter earnings auction for Antero Resources (NYSE:AR), the Company received many of the same guidance that other E-P`s public companies highlighted during the quarter, including drilling and closing performance and a disciplined drilling plan that could allow growth while returning capital to shareholders and freeing itself from debt. But when it came time to ask the question and answer part of the call, the first question about the call was not about the operation, but about the trial, the costs associated with the vast portfolio of the corporate transportation company, which was the company in one of the slides that were reserved for the call (see below).

Antero, like many Appalachian producers, has a marketing segment that is responsible for maximizing the value of the company`s natural gas and liquids production. As part of this strategy, the company decided to subscribe to fixed capabilities for long-haul tubes. This fixed transport capacity has recently received particular attention, as the way the market thinks of fixed transport capacity has evolved over time. Appalachia was limited for the better part of a decade before Rover was fully in service last year.

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