What happened

Shares of natural gas producer Antero Resources (NYSE:AR) and its midstream arm Antero Midstream (NYSE:AM) have endured some epic volatility this year. They both cratered more than 50% in March only to rebound a jaw-dropping 345.4% (AR) and 131.7% (AM) in April, according to data provided by S&P Global Market Intelligence. Several factors fueled those big runs last month.  

So what

Antero Resources and Antero Midstream both cratered along with energy prices in March. One factor weighing on them is the concern that the plunging prices might cause Antero Resources' banks to slash the borrowing base on its credit facility. That could impact its ability to pay its bills, including the fees it owes Antero Midstream. Those fears, however, eased up in April after Antero unveiled that its banks approved its borrowing base at $2.85 billion, which left it with $1 billion of liquidity. 

A rocket launching into space.

Image source: Getty Images.

Meanwhile, the company took additional steps to shore up its financial profile in April by reducing its drilling budget once again, this time down to $750 million. That's down from its initial $1.15 billion plan and positions the company to generate $175 million of free cash flow this year at current commodity prices, which will help take some more pressure off its balance sheet. 

Despite that spending cut, Antero Resources is expected to deliver on its production guidance, which is good news for Antero Midstream because it collects volume-based fees. While the midstream company did reduce its capital spending plan, it increased its free cash flow guidance by 9% to between $375 million and $425 million. Because of that, the company continues to maintain its dividend, which yields an eye-popping 30% despite last month's rally. 

Now what

Antero Resources got some good news from its banks last month, which took some of the pressure off of its stock price. Those easing credit concerns also buoyed its midstream affiliate since it should be able to continue collecting fees from its parent and support its sky-high yield. However, neither company is out of the woods just yet, which makes them too risky for investors these days.