Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 26, 2023

ANTERO RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		001-36120		80-0162034
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

1615 Wynkoop Street

Denver, Colorado 80202

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (303) 357-7310

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 Per Share		AR		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02

Results of Operations and Financial Condition

On July 26, 2023, Antero Resources Corporation issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated by reference herein, announcing its financial and operational results for the quarter ended June 30, 2023.

The information in this Current Report, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act unless specifically identified therein as being incorporated therein by reference.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Antero Resources Corporation press release dated July 26, 2023.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ANTERO RESOURCES CORPORATION

	By:	/s/ Michael N. Kennedy
		Michael N. Kennedy
		Chief Financial Officer and Senior Vice President – Finance

Dated: July 26, 2023

Exhibit 99.1

Antero Resources Announces Second Quarter 2023 Financial and Operational Results and Increased Production Guidance

Denver, Colorado, July 26, 2023—Antero Resources Corporation (NYSE: AR) (“Antero Resources,” “Antero,” or the “Company”) today announced its second quarter 2023 financial and operating results. The relevant consolidated financial statements are included in Antero Resources’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

Second Quarter 2023 Highlights:

Net production averaged 3.4 Bcfe/d

Liquids production averaged 192 MBbl/d, an increase of 16% from the year ago period

Natural gas production averaged 2.2 Bcf/d, flat from the year ago period

Realized a pre-hedge natural gas equivalent price of $2.89 per Mcfe, a $0.79 per Mcfe premium to NYMEX pricing

Realized a C3+ NGL price of $34.16 per barrel

Realized a pre-hedge natural gas price of $2.14 per Mcf, a $0.04 per Mcf premium to NYMEX pricing

Net loss was $83 million, Adjusted Net Loss was $84 million (Non-GAAP)

Adjusted EBITDAX was $113 million (Non-GAAP); net cash provided by operating activities was $155 million

Averaged over 11 completion stages per day per completion crew during the second quarter, a 3% increase sequentially and an increase of 40% compared to the 2022 average

Net Debt to trailing last twelve month Adjusted EBITDAX was 0.8x (Non-GAAP)

2023 Guidance Updates:

Increasing full year 2023 production guidance by 100 MMcfe/d, or 3%, to a range of 3.35 to 3.4 Bcfe/d

Decreasing cash production costs by $0.05 per Mcfe to a range of $2.35 to $2.45 per Mcfe

Decreasing realized natural gas price premium to NYMEX Henry Hub by $0.05 per Mcf to $0.00 to $0.10 per Mcf

Paul Rady, Chairman, CEO and President of Antero Resources commented, “Our second quarter results continue to build on the operational momentum that we achieved in the first quarter. During the quarter, we achieved a number of new company quarterly drilling and completion records, including footage drilled in a 24-hour period and completion stages pumped per day. These operational efficiencies are expected to result in lower maintenance capital expenditures going forward. Further, the continued strength in our well performance allows us to increase our 2023 production guidance by 3%, while maintaining the same capital budget.”

Mr. Rady continued, “The industry has responded to lower commodity prices through meaningful reductions in rig and completion activity. Looking ahead, we expect natural gas demand to increase on higher LNG exports and natural gas fired electric power burn, which in turn should further balance the market and support natural gas prices. We are uniquely positioned to benefit from increasing NYMEX prices with 75% of our natural gas being sold at Antero’s premium delivery points in the LNG corridor.”

Michael Kennedy, CFO of Antero Resources said, “Antero’s improved capital efficiency is expected to result in 2024 capital requirements that are 10% below our 2023 capital guidance. This capital program will target maintaining our increased 2023 production guidance. Further, the capital efficiency gains are expected to result in positive Free Cash Flow in 2023, and when combined with a higher natural gas strip, generate substantial Free Cash Flow in 2024. As a reminder, we target returning 50% of our Free Cash Flow to our shareholders.”

For a discussion of the non-GAAP financial measures including Adjusted Net Income, Adjusted EBITDAX, Free Cash Flow and Net Debt please see “Non-GAAP Financial Measures.”

2023 Guidance Update

Antero is increasing its full year 2023 production guidance to 3.35 to 3.4 Bcfe/d, an increase at the midpoint of 100 MMcfe/d, or 3%. The higher expected volumes are driven by strong well performance and capital efficiency gains, which more than offset lower ethane volumes due to the timing of the Shell ethane cracker.

Antero is decreasing its cash production expense guidance by $0.05 per Mcfe to a range of $2.35 to $2.45 per Mcfe reflecting lower fuel costs and production tax. Antero is also decreasing its natural gas realized price guidance by $0.05 per Mcf, to a range of $0.00 to $0.10 per Mcf due to the lower natural gas strip that reduces the BTU uplift Antero realizes.

	Full Year 2023 – Prior				Full Year 2023 – Revised
Full Year 2023 Guidance	Low		High		Low		High
Net Production (Bcfe/d)		3.25		3.30		3.35		3.4
Net Natural Gas Production (Bcf/d)		2.10		2.15		2.2		2.225
Net Liquids Production (Bbl/d)		184,000		195,000		188,000		199,000
Net Daily C3+ NGL Production		105,000		110,000		110,000		115,000
Net Daily Ethane Production (Bbl/d)		70,000		75,000		67,500		72,500
Net Daily Oil Production (Bbl/d)		9,000		10,000		10,500		11,500

Cash Production Expense ($/Mcfe)	$	2.40	$	2.50	$	2.35	$	2.45
Natural Gas Realized Price Expected Premium to NYMEX ($/Mcf)	$	0.05	$	0.15	$	0.00	$	0.10

Note: Any 2023 guidance items not discussed in this release are unchanged from previously stated guidance.

Free Cash Flow

During the second quarter of 2023, Free Cash Flow was ($159) million.

	Three Months Ended June 30,
	2022			2023
Net cash provided by operating activities	$	922,712			155,263
Less: Net cash used in investing activities		(259,717	)		(287,236	)
Plus: Contract termination		2,096			4,441
Less: Proceeds from sale of assets, net		—			(220	)
Less: Distributions to non-controlling interests in Martica		(31,541	)		(31,745	)
Free Cash Flow	$	633,550			(159,497	)
Changes in Working Capital ⁽¹⁾		32,279			(52,709	)
Free Cash Flow before Changes in Working Capital	$	665,829			(212,206	)

(1)

Working capital adjustments in the second quarter of 2022 include a decrease of $43 million in changes in current assets and liabilities and an increase of $11 million in accounts payable and accrued liabilities for additions to property and equipment. Working capital adjustments in the second quarter of 2023 include a $51 million net increase in current assets and liabilities and a $2 million increase in accounts payable and accrued liabilities for additions to property and equipment.

During the first half of 2023, Free Cash Flow was $14 million.

	Six Months Ended June 30,
	2022			2023
Net cash provided by operating activities	$	1,488,385			499,165
Less: Net cash used in investing activities		(474,834	)		(638,040	)
Plus: Payments for derivative monetizations		—			202,339
Plus: Contract termination		2,104			33,991
Less: Proceeds from sale of assets, net		(195	)		(311	)
Less: Distributions to non-controlling interests in Martica		(67,298	)		(83,084	)
Free Cash Flow	$	948,162			14,060
Changes in Working Capital ⁽¹⁾		182,753			(202,474	)
Free Cash Flow before Changes in Working Capital	$	1,130,915			(188,414	)

(1)

Working capital adjustments in the first half of 2022 include decreases of $179 million and $4 million for changes in current assets and liabilities and accounts payable and accrued liabilities for additions to property and equipment. Working capital adjustments in the first half of 2023 include a $211 million net increase in current assets and liabilities and a $9 million decrease in accounts payable and accrued liabilities for additions to property and equipment.

Return of Capital Program

Antero purchased 0.7 million shares for $16 million during the second quarter of 2023. Shares purchased during the quarter were used to offset tax withholding obligations related to the vesting of equity awards to Antero employees. Since the inception of the share repurchase program in the first quarter of 2022, Antero has purchased 31.1 million shares for approximately $1 billion, or 10% of common shares outstanding. The Company currently has approximately $1 billion of remaining capacity under the announced share repurchase program.

	Program to Date 1Q22 – 2Q23			Second Quarter 2023
Total shares purchased (MM) ⁽¹⁾		31.1			0.7
Share purchases ($MM)		1,043			16
% of common shares outstanding ⁽²⁾		10	%		NM

⁽¹⁾	The total shares purchased during the period ended January 1, 2022 through June 30, 2023 and three months ended June 30, 2023 includes 3.2 million and 0.7 million shares of our common stock, respectively, related to satisfying tax withholding obligations incurred upon the vesting of equity awards held by our employees.
⁽²⁾	Shares outstanding as of June 30, 2023.

Second Quarter 2023 Financial Results

Net daily natural gas equivalent production in the second quarter averaged 3.4 Bcfe/d, including 192 MBbl/d of liquids, an increase of 5% from the second quarter of 2022. As a result of Antero’s focus on its liquids-rich Marcellus acreage, liquids volumes increased by 16%, while natural gas volumes were flat, each compared to the year ago period.

Antero’s average realized natural gas price before hedging was $2.14 per Mcf, a $0.04 per Mcf premium to the average first-of-month (“FOM”) NYMEX Henry Hub price.

The following table details average net production and average realized prices for the three months ended June 30, 2023:

	Three Months Ended June 30, 2023
	Natural Gas (MMcf/d)		Oil (Bbl/d)		C3+ NGLs (Bbl/d)		Ethane (Bbl/d)		Natural Gas Equivalent (MMcfe/d)
Average Net Production		2,242		10,670		111,813		70,484		3,400

											Combined
											Natural
											Gas
	Natural Gas		Oil			C3+ NGLs			Ethane		Equivalent
Average Realized Prices	($/Mcf)		($/Bbl)			($/Bbl)			($/Bbl)		($/Mcfe)
Average realized prices before settled derivatives	$	2.14	$	59.69		$	34.16		$	7.82	$	2.89
NYMEX average price ⁽¹⁾	$	2.10	$	73.78							$	2.10
Premium / (Discount) to NYMEX	$	0.04	$	(14.09	)						$	0.79

Settled commodity derivatives ⁽²⁾	$	0.02	$	(0.29	)	$	(0.05	)	$	—	$	0.01
Average realized prices after settled derivatives	$	2.16	$	59.40		$	34.11		$	7.82	$	2.90
Premium / (Discount) to NYMEX	$	0.06	$	(14.38	)						$	0.80

	(1)	The average index prices for natural gas and oil represent the New York Mercantile Exchange average first-of-month price and the Energy Information Administration calendar month average West Texas Intermediate future price, respectively.
	(2)	These commodity derivative instruments include contracts attributable to Martica Holdings LLC (“Martica”), Antero’s consolidated variable interest entity. All gains or losses from Martica’s derivative instruments are fully attributable to the noncontrolling interests in Martica, which includes portions of the natural gas and all oil and C3+ NGL derivative instruments during the three months ended June 30, 2023.

Antero’s average realized C3+ NGL price was $34.16 per barrel. Antero shipped 54% of its total C3+ NGL net production on Mariner East 2 (“ME2”) for export and realized a $0.07 per gallon premium to Mont Belvieu pricing on these volumes at Marcus Hook, PA. Antero sold the remaining 46% of C3+ NGL net production at a $0.10 per gallon discount to Mont Belvieu pricing at Hopedale, OH. The resulting blended price on 112 MBbl/d of net C3+ NGL production was a $0.01 per gallon discount to Mont Belvieu pricing.

	Three Months Ended June 30, 2023
	Pricing Point	Net C3+ NGL Production (Bbl/d)		% by Destination			Premium (Discount) To Mont Belvieu ($/Gal)
Propane / Butane exported on ME2	Marcus Hook, PA		60,469		54	%	$	0.07
Remaining C3+ NGL volume	Hopedale, OH		51,344		46	%	$	(0.10	)
Total C3+ NGLs/Blended Premium			111,813		100	%	$	(0.01	)

All-in cash expense, which includes lease operating, gathering, compression, processing, and transportation, production and ad valorem taxes was $2.35 per Mcfe in the second quarter, a 10% decrease compared to $2.61 per Mcfe average during the second quarter of 2022. The decrease was due primarily to lower production tax and lower fuel costs as a result of lower commodity prices. Net marketing expense was $0.07 per Mcfe in the second quarter, a decrease from $0.09 per Mcfe during the second quarter of 2022. The decrease in net marketing expense was due to reduced firm transportation commitments between periods.

Second Quarter 2023 Operating Results

Antero placed 26 horizontal Marcellus wells to sales during the second quarter with an average lateral length of 12,800 feet. Of the wells placed to sales, 20 of these wells have been on line for at least 60 days. The average 60-day rate per well was 26.5 MMcfe/d with approximately 1,236 Bbl/d of liquids per well assuming 25% ethane recovery. The remaining six wells were completed in early June. Pad highlights include:

A six well pad with an average lateral length of 15,900 feet had an average 60-day rate per well of 29.0 MMcfe/d, including approximately 1,744 Bbl/d of liquids per well assuming 25% ethane recovery

A seven well pad with an average lateral length of 12,700 feet had an average 60-day rate per well of 27.2 MMcfe/d, including approximately 1,436 Bbl/d of liquids per well assuming 25% ethane recovery

Drilling and completion activity during the second quarter of 2023 set numerous company records. These records include average stages per day for the quarter at 11.2 stages per day, average stages per day of an entire pad of 12.1 stages per day and a one-day record of 16 stages per day achieved in June. Drilling performance also improved during the quarter, averaging 6,055 lateral feet per day in the second quarter, up 8% from the first quarter 2023 average. Antero has achieved seven of its top 12 lateral feet per day records in 2023, including a high of 12,340 lateral feet per day.

Second Quarter 2023 Capital Investment

Antero’s accrued drilling and completion capital expenditures for the three months ended June 30, 2023, were $247 million. Through the first half of 2023, the Company has completed 2,467 of 4,209 stages, or 59%, of its 2023 budgeted completion stages.

In addition to capital invested in drilling and completion activities, the Company invested $36 million in land during the second quarter. During the quarter, Antero added approximately 8,000 net acres, representing over 27 incremental drilling locations at an average cost of $1 million per location. Through the first half of 2023, Antero has added approximately 20,000 net acres representing over 75 incremental drilling locations at an average cost of less than $1 million per location. Antero’s organic leasing efforts focus on acreage in close proximity to its current development plan. These incremental locations more than offset Antero’s maintenance capital plan that requires an average of 60 to 65 wells per year. In addition, these efforts allow Antero to increase the average lateral length in its development program, which is expected to average 14,500 feet for wells drilled in 2023, or 7% longer than the 2022 average of 13,600 feet. The Company believes this organic leasing program is the most cost effective approach to lengthening its core inventory position.

Commodity Derivative Positions

Antero did not enter into any new natural gas, NGL or oil hedges during the second quarter of 2023.

Please see Antero’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, for more information on all commodity derivative positions. For detail on current commodity positions, please see the Hedge Profile presentations at www.anteroresources.com.

Conference Call

A conference call is scheduled on Thursday, July 27, 2023 at 9:00 am MT to discuss the financial and operational results. A brief Q&A session for security analysts will immediately follow the discussion of the results. To participate in the call, dial in at 877-407-9079 (U.S.), or 201-493-6746 (International) and reference “Antero Resources.” A telephone replay of the call will be available until Thursday, August 3, 2023 at 9:00 am MT at 877-660-6853 (U.S.) or 201-612-7415 (International) using the conference ID: 13740094. To access the live webcast and view the related earnings conference call presentation, visit Antero's website at www.anteroresources.com. The webcast will be archived for replay until Thursday, August 3, 2023 at 9:00 am MT.

Presentation

An updated presentation will be posted to the Company's website before the conference call. The presentation can be found at www.anteroresources.com on the homepage. Information on the Company's website does not constitute a portion of, and is not incorporated by reference into this press release.

Non-GAAP Financial Measures

Adjusted Net Income

Adjusted Net Income as set forth in this release represents net income, adjusted for certain items. Antero believes that Adjusted Net Income is useful to investors in evaluating operational trends of the Company and its performance relative to other oil and gas producing companies. Adjusted Net Income is not a measure of financial performance under GAAP and should not be considered in isolation or as a substitute for net income as an indicator of financial performance. The GAAP measure most directly comparable to Adjusted Net Income is net income. The following table reconciles net income to Adjusted Net Income (in thousands):

	Three Months Ended June 30,
	2022			2023
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	765,135			(83,084	)
Net income and comprehensive income attributable to noncontrolling interests		46,898			15,151
Unrealized commodity derivative gains		(293,665	)		(4,803	)
Amortization of deferred revenue, VPP		(9,375	)		(7,618	)
Loss (gain) on sale of assets		71			(220	)
Impairment of property and equipment		23,363			15,710
Equity-based compensation		8,171			13,512
Loss on early extinguishment of debt		4,414			—
Equity in earnings of unconsolidated affiliate		(14,713	)		(19,098	)
Contract termination		2,096			4,441
Tax effect of reconciling items ⁽¹⁾		64,914			(414	)
		597,309			(66,423	)
Martica adjustments ⁽²⁾		(34,637	)		(17,255	)
Adjusted Net Income (Loss)	$	562,672			(83,678	)

Diluted Weighted Average Shares Outstanding ⁽³⁾		334,561			300,141

	(1)	Deferred taxes were approximately 23% and 21% for 2022 and 2023, respectively.
	(2)	Adjustments reflect noncontrolling interest in Martica not otherwise adjusted in amounts above.
	(3)	Diluted weighted average shares outstanding does not include securities that would have had an anti-dilutive effect on the computation of income (loss) per share - diluted. Anti-dilutive weighted average shares outstanding for the three months ended June 30, 2022 and 2023 were 0.4 million and 15.3 million, respectively.

Net Debt

Net Debt is calculated as total long-term debt less cash and cash equivalents. Management uses Net Debt to evaluate the Company’s financial position, including its ability to service its debt obligations.

The following table reconciles consolidated total long-term debt to Net Debt as used in this release (in thousands):

	December 31,			June 30,
	2022			2023
Credit Facility	$	34,800			359,900
8.375% senior notes due 2026		96,870			96,870
7.625% senior notes due 2029		407,115			407,115
5.375% senior notes due 2030		600,000			600,000
4.250% convertible senior notes due 2026		56,932			39,426
Unamortized debt issuance costs		(12,241	)		(11,041	)
Total long-term debt	$	1,183,476			1,492,270
Less: Cash and cash equivalents		—			—
Net Debt	$	1,183,476			1,492,270

Free Cash Flow

Free Cash Flow is a measure of financial performance not calculated under GAAP and should not be considered in isolation or as a substitute for cash flow from operating, investing, or financing activities, as an indicator of cash flow or as a measure of liquidity. The Company defines Free Cash Flow as net cash provided by operating activities, less net cash used in investing activities, which includes drilling and completion capital and leasehold capital, plus payments for early contract termination or derivative monetization, less proceeds from asset sales or derivative monetization and less distributions to non-controlling interests in Martica.

The Company has not provided projected net cash provided by operating activities or a reconciliation of Free Cash Flow to projected net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP. The Company is unable to project net cash provided by operating activities for any future period because this metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. The Company is unable to project these timing differences with any reasonable degree of accuracy without unreasonable efforts.

Free Cash Flow is a useful indicator of the Company’s ability to internally fund its activities, service or incur additional debt and estimate return of capital. There are significant limitations to using Free Cash Flow as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect the Company’s net income, the lack of comparability of results of operations of different companies and the different methods of calculating Free Cash Flow reported by different companies. Free Cash Flow does not represent funds available for discretionary use because those funds may be required for debt service, land acquisitions and lease renewals, other capital expenditures, working capital, income taxes, exploration expenses, and other commitments and obligations.

Adjusted EBITDAX

Adjusted EBITDAX is a non-GAAP financial measure that we define as net income (loss), adjusted for certain items detailed below.

Adjusted EBITDAX as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. Adjusted EBITDAX should not be considered in isolation or as a substitute for operating income or loss, net income or loss, cash flows provided by operating, investing, and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Adjusted EBITDAX provides no information regarding our capital structure, borrowings, interest costs, capital expenditures, working capital movement, or tax position. Adjusted EBITDAX does not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital, income taxes, exploration expenses, and other commitments and obligations. However, our management team believes Adjusted EBITDAX is useful to an investor in evaluating our financial performance because this measure:

is widely used by investors in the oil and natural gas industry to measure operating performance without regard to items excluded from the calculation of such term, which may vary substantially from company to company depending upon accounting methods and the book value of assets, capital structure and the method by which assets were acquired, among other factors;

helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital and legal structure from our operating structure;

is used by our management team for various purposes, including as a measure of our operating performance, in presentations to our Board of Directors, and as a basis for strategic planning and forecasting: and

is used by our Board of Directors as a performance measure in determining executive compensation.

There are significant limitations to using Adjusted EBITDAX as a measure of performance, including the inability to analyze the effects of certain recurring and non-recurring items that materially affect our net income or loss, the lack of comparability of results of operations of different companies, and the different methods of calculating Adjusted EBITDAX reported by different companies.

The GAAP measures most directly comparable to Adjusted EBITDAX are net income (loss) and net cash provided by operating activities. The following table represents a reconciliation of Antero’s net income (loss), including noncontrolling interest, to Adjusted EBITDAX and a reconciliation of Antero’s Adjusted EBITDAX to net cash provided by operating activities per our consolidated statements of cash flows, in each case, for the three months ended June 30, 2022 and 2023. Adjusted EBITDAX also excludes the noncontrolling interests in Martica, and these adjustments are disclosed in the table below as Martica related adjustments.

	Three Months Ended June 30,
	2022			2023
Reconciliation of net income (loss) to Adjusted EBITDAX:
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	765,135			(83,084	)
Net income and comprehensive income attributable to noncontrolling interests		46,898			15,151
Unrealized commodity derivative gains		(293,665	)		(4,803	)
Amortization of deferred revenue, VPP		(9,375	)		(7,618	)
Loss (gain) on sale of assets		71			(220	)
Interest expense, net		34,213			27,928
Loss on early extinguishment of debt		4,414			—
Income tax expense (benefit)		225,571			(29,833	)
Depletion, depreciation, amortization and accretion		174,199			172,610
Impairment of property and equipment		23,363			15,710
Exploration expense		862			743
Equity-based compensation expense		8,171			13,512
Equity in earnings of unconsolidated affiliate		(14,713	)		(19,098	)
Dividends from unconsolidated affiliate		31,284			31,284
Contract termination, transaction expense and other		2,129			4,444
		998,557			136,726
Martica related adjustments ⁽¹⁾		(45,305	)		(23,625	)
Adjusted EBITDAX	$	953,252			113,101

Reconciliation of our Adjusted EBITDAX to net cash provided by operating activities:
Adjusted EBITDAX	$	953,252			113,101
Martica related adjustments ⁽¹⁾		45,305			23,625
Interest expense, net		(34,213	)		(27,928	)
Amortization of debt issuance costs, debt discount and debt premium		1,064			861
Exploration expense		(862	)		(743	)
Changes in current assets and liabilities		(43,224	)		51,144
Contract termination, transaction expense and other		(2,129	)		(4,444	)
Other items		3,519			(353	)
Net cash provided by operating activities	$	922,712			155,263

⁽¹⁾

Adjustments reflect noncontrolling interests in Martica not otherwise adjusted in amounts above.

	Twelve
	Months Ended
	June 30,
	2023
Reconciliation of net income to Adjusted EBITDAX:
Net income and comprehensive income attributable to Antero Resources Corporation	$	1,420,402
Net income and comprehensive income attributable to noncontrolling interests		161,502
Unrealized commodity derivative gains		(1,075,160	)
Payments for derivative monetizations		202,339
Amortization of deferred revenue, VPP		(34,107	)
Gain on sale of assets		(1,697	)
Interest expense, net		107,074
Loss on early extinguishment of debt		30,959
Loss on convertible note inducement		255
Income tax expense		308,563
Depletion, depreciation, amortization, and accretion		681,266
Impairment of property and equipment		135,176
Exploration expense		3,388
Equity-based compensation expense		49,153
Equity in earnings of unconsolidated affiliate		(69,215	)
Dividends from unconsolidated affiliate		125,138
Contract termination, transaction expense and other		59,973
		2,105,009
Martica related adjustments ⁽¹⁾		(135,332	)
Adjusted EBITDAX	$	1,969,677

⁽¹⁾

Adjustments reflect noncontrolling interests in Martica not otherwise adjusted in amounts above.

Drilling and Completion Capital Expenditures

For a reconciliation between cash paid for drilling and completion capital expenditures and drilling and completion accrued capital expenditures during the period, please see the capital expenditures section below (in thousands):

	Three Months Ended June 30,
	2022		2023
Drilling and completion costs (cash basis)	$	208,949		244,437
Change in accrued capital costs		7,842		2,316
Adjusted drilling and completion costs (accrual basis)	$	216,791		246,753

Notwithstanding their use for comparative purposes, the Company’s non-GAAP financial measures may not be comparable to similarly titled measures employed by other companies.

Antero Resources is an independent natural gas and natural gas liquids company engaged in the acquisition, development and production of unconventional properties located in the Appalachian Basin in West Virginia and Ohio. In conjunction with its affiliate, Antero Midstream (NYSE: AM), Antero is one of the most integrated natural gas producers in the U.S. The Company’s website is located at www.anteroresources.com.

This release includes "forward-looking statements." Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under Antero Resources’ control. All statements, except for statements of historical fact, made in this release regarding activities, events or developments Antero Resources expects, believes or anticipates will or may occur in the future, such as those regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management, return of capital, expected results, future commodity prices, future production targets, realizing potential future fee rebates or reductions, including those related to certain levels of production, future earnings, leverage targets and debt repayment, future capital spending plans, improved and/or increasing capital efficiency, estimated realized natural gas, NGL and oil prices, expected drilling and development plans, projected well costs and cost savings initiatives, future financial position, the participation level of our drilling partner and the financial and production results to be achieved as a result of that drilling partnership, the other key assumptions underlying our projections, and future marketing opportunities, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All forward-looking statements speak only as of the date of this release. Although Antero Resources believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Except as required by law, Antero Resources expressly disclaims any obligation to and does not intend to publicly update or revise any forward-looking statements.

Antero Resources cautions you that these forward-looking statements are subject to all of the risks and uncertainties, incident to the exploration for and development, production, gathering and sale of natural gas, NGLs and oil, most of which are difficult to predict and many of which are beyond the Antero Resources’ control. These risks include, but are not limited to, commodity price volatility, inflation, supply chain or other disruption, lack of availability and cost of drilling, completion and production equipment and services and cost of drilling, completion and production equipment and services, environmental risks, drilling and completion and other operating risks, marketing and transportation risks, regulatory changes or changes in law, the uncertainty inherent in estimating natural gas, NGLs and oil reserves and in projecting future rates of production, cash flows and access to capital, the timing of development expenditures, conflicts of interest among our stockholders, impacts of geopolitical and world health events, cybersecurity risks, our ability to achieve our greenhouse gas reduction targets and the costs associated therewith, the state of markets for, and availability of, verified quality carbon offsets and the other risks described under the heading "Item 1A. Risk Factors" in Antero Resources’ Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

For more information, contact Daniel Katzenberg, Director - Finance and Investor Relations of Antero Resources at (303) 357-7219 or dkatzenberg@anteroresources.com.

ANTERO RESOURCES CORPORATION

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

				(Unaudited)
	December 31,			June 30,
	2022			2023
Assets
Current assets:
Accounts receivable	$	35,488			36,887
Accrued revenue		707,685			323,440
Derivative instruments		1,900			3,099
Prepaid expenses and other current assets		42,452			21,302
Total current assets		787,525			384,728
Property and equipment:
Oil and gas properties, at cost (successful efforts method):
Unproved properties		997,715			1,017,828
Proved properties		13,234,777			13,615,891
Gathering systems and facilities		5,802			5,802
Other property and equipment		83,909			91,255
		14,322,203			14,730,776
Less accumulated depletion, depreciation and amortization		(4,683,399	)		(4,854,565	)
Property and equipment, net		9,638,804			9,876,211
Operating leases right-of-use assets		3,444,331			3,262,253
Derivative instruments		9,844			7,934
Investment in unconsolidated affiliate		220,429			218,196
Other assets		17,106			17,488
Total assets	$	14,118,039			13,766,810
Liabilities and Equity
Current liabilities:
Accounts payable	$	77,543			60,911
Accounts payable, related parties		80,708			95,360
Accrued liabilities		461,788			366,038
Revenue distributions payable		468,210			359,487
Derivative instruments		97,765			35,509
Short-term lease liabilities		556,636			553,953
Deferred revenue, VPP		30,552			28,878
Other current liabilities		1,707			6,728
Total current liabilities		1,774,909			1,506,864
Long-term liabilities:
Long-term debt		1,183,476			1,492,270
Deferred income tax liability, net		759,861			792,149
Derivative instruments		345,280			59,224
Long-term lease liabilities		2,889,854			2,711,735
Deferred revenue, VPP		87,813			74,337
Other liabilities		59,692			61,903
Total liabilities		7,100,885			6,698,482
Commitments and contingencies
Equity:
Stockholders' equity:
Preferred stock, $0.01 par value; authorized - 50,000 shares; none issued		—			—
Common stock, $0.01 par value; authorized - 1,000,000 shares; 297,393 shares issued and 297,359 outstanding as of December 31, 2022, and 300,359 shares issued and outstanding as of June 30, 2023		2,974			3,004
Additional paid-in capital		5,838,848			5,803,634
Retained earnings		913,896			1,019,256
Treasury stock, at cost; 34 shares and zero shares as of December 31, 2022 and June 30, 2023, respectively		(1,160	)		—
Total stockholders' equity		6,754,558			6,825,894
Noncontrolling interests		262,596			242,434
Total equity		7,017,154			7,068,328
Total liabilities and equity	$	14,118,039			13,766,810

ANTERO RESOURCES CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

(In thousands, except per share amounts)

	Three Months Ended June 30,
	2022			2023
Revenue and other:
Natural gas sales	$	1,558,994			437,130
Natural gas liquids sales		702,388			397,733
Oil sales		89,185			57,962
Commodity derivative fair value gains (losses)		(265,662	)		8,284
Marketing		106,150			43,793
Amortization of deferred revenue, VPP		9,375			7,618
Other revenue and income		1,255			785
Total revenue		2,201,685			953,305
Operating expenses:
Lease operating		25,253			28,748
Gathering, compression, processing and transportation		656,212			663,975
Production and ad valorem taxes		81,842			36,158
Marketing		131,298			66,175
Exploration and mine expenses		1,394			743
General and administrative (including equity-based compensation expense of $8,171 and $13,512 in 2022 and 2023, respectively)		44,439			53,901
Depletion, depreciation and amortization		173,395			171,406
Impairment of property and equipment		23,363			15,710
Accretion of asset retirement obligations		804			1,204
Contract termination		2,096			4,441
Loss (gain) on sale of assets		71			(220	)
Total operating expenses		1,140,167			1,042,241
Operating income (loss)		1,061,518			(88,936	)
Other income (expense):
Interest expense, net		(34,213	)		(27,928	)
Equity in earnings of unconsolidated affiliate		14,713			19,098
Loss on early extinguishment of debt		(4,414	)		—
Total other expense		(23,914	)		(8,830	)
Income (loss) before income taxes		1,037,604			(97,766	)
Income tax benefit (expense)		(225,571	)		29,833
Net income (loss) and comprehensive income (loss) including noncontrolling interests		812,033			(67,933	)
Less: net income and comprehensive income attributable to noncontrolling interests		46,898			15,151
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	765,135			(83,084	)

Income (loss) per share—basic	$	2.46			(0.28	)
Income (loss) per share—diluted	$	2.29			(0.28	)

Weighted average number of shares outstanding:
Basic		310,535			300,141
Diluted		334,561			300,141

ANTERO RESOURCES CORPORATION

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Six Months Ended June 30,
	2022			2023
Cash flows provided by (used in) operating activities:
Net income including noncontrolling interests	$	637,337			193,269
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion, depreciation, amortization and accretion		345,031			341,070
Impairments		45,825			31,270
Commodity derivative fair value losses (gains)		1,277,042			(134,476	)
Losses on settled commodity derivatives		(844,713	)		(10,787	)
Payments for derivative monetizations		—			(202,339	)
Deferred income tax expense		171,707			32,288
Equity-based compensation expense		12,820			26,530
Equity in earnings of unconsolidated affiliate		(39,891	)		(36,779	)
Dividends of earnings from unconsolidated affiliate		62,569			62,569
Amortization of deferred revenue		(18,647	)		(15,151	)
Amortization of debt issuance costs, debt discount and debt premium		2,515			1,732
Settlement of asset retirement obligations		(886	)		(633	)
Loss (gain) on sale of assets		1,857			(311	)
Loss on early extinguishment of debt		15,068			—
Loss on convertible note inducement		—			86
Changes in current assets and liabilities:
Accounts receivable		53,623			(1,399	)
Accrued revenue		(360,612	)		384,245
Other current assets		(22,566	)		21,294
Accounts payable including related parties		50,378			12,701
Accrued liabilities		37,203			(102,668	)
Revenue distributions payable		40,166			(108,723	)
Other current liabilities		22,559			5,377
Net cash provided by operating activities		1,488,385			499,165
Cash flows provided by (used in) investing activities:
Additions to unproved properties		(72,072	)		(110,447	)
Drilling and completion costs		(393,506	)		(517,591	)
Additions to other property and equipment		(11,162	)		(9,058	)
Proceeds from asset sales		195			311
Change in other assets		1,711			(1,255	)
Net cash used in investing activities		(474,834	)		(638,040	)
Cash flows provided by (used in) financing activities:
Repurchases of common stock		(293,051	)		(75,356	)
Repayment of senior notes		(658,906	)		—
Borrowings on bank credit facilities, net		70,800			325,100
Convertible note inducement		—			(86	)
Distributions to noncontrolling interests in Martica Holdings LLC		(67,298	)		(83,084	)
Employee tax withholding for settlement of equity compensation awards		(64,819	)		(27,357	)
Other		(277	)		(342	)
Net cash provided by (used in) financing activities		(1,013,551	)		138,875
Net increase in cash and cash equivalents		—			—
Cash and cash equivalents, beginning of period		—			—
Cash and cash equivalents, end of period	$	—			—

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	89,326			51,927
Decrease in accounts payable and accrued liabilities for additions to property and equipment	$	(3,504	)		(8,353	)

The following table sets forth selected financial data for the three months ended June 30, 2022 and 2023:

	Three Months Ended						Amount of
	June 30,						Increase			Percent
	2022			2023			(Decrease)			Change
Revenue:
Natural gas sales	$	1,558,994			437,130			(1,121,864	)		(72	)%
Natural gas liquids sales		702,388			397,733			(304,655	)		(43	)%
Oil sales		89,185			57,962			(31,223	)		(35	)%
Commodity derivative fair value gains (losses)		(265,662	)		8,284			273,946			*
Marketing		106,150			43,793			(62,357	)		(59	)%
Amortization of deferred revenue, VPP		9,375			7,618			(1,757	)		(19	)%
Other revenue and income		1,255			785			(470	)		(37	)%
Total revenue		2,201,685			953,305			(1,248,380	)		(57	)%
Operating expenses:
Lease operating		25,253			28,748			3,495			14	%
Gathering and compression		223,650			211,691			(11,959	)		(5	)%
Processing		219,100			262,642			43,542			20	%
Transportation		213,462			189,642			(23,820	)		(11	)%
Production and ad valorem taxes		81,842			36,158			(45,684	)		(56	)%
Marketing		131,298			66,175			(65,123	)		(50	)%
Exploration and mine expenses		1,394			743			(651	)		(47	)%
General and administrative (excluding equity-based compensation)		36,268			40,389			4,121			11	%
Equity-based compensation		8,171			13,512			5,341			65	%
Depletion, depreciation and amortization		173,395			171,406			(1,989	)		(1	)%
Impairment of property and equipment		23,363			15,710			(7,653	)		(33	)%
Accretion of asset retirement obligations		804			1,204			400			50	%
Contract termination		2,096			4,441			2,345			112	%
Loss (gain) on sale of assets		71			(220	)		(291	)		*
Total operating expenses		1,140,167			1,042,241			(97,926	)		(9	)%
Operating income (loss)		1,061,518			(88,936	)		(1,150,454	)		*
Other earnings (expenses):
Interest expense, net		(34,213	)		(27,928	)		6,285			(18	)%
Equity in earnings of unconsolidated affiliate		14,713			19,098			4,385			30	%
Loss on early extinguishment of debt		(4,414	)		—			4,414			*
Total other expense		(23,914	)		(8,830	)		15,084			(63	)%
Income (loss) before income taxes		1,037,604			(97,766	)		(1,135,370	)		*
Income tax benefit (expense)		(225,571	)		29,833			255,404			*
Net income (loss) and comprehensive income (loss) including noncontrolling interests		812,033			(67,933	)		(879,966	)		*
Less: net income and comprehensive income attributable to noncontrolling interests		46,898			15,151			(31,747	)		(68	)%
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	765,135			(83,084	)		(848,219	)		*

Adjusted EBITDAX	$	953,252			113,101			(840,151	)		(88	)%

* Not meaningful

The following table sets forth selected financial data for the three months ended June 30, 2022 and 2023:

	Three Months Ended				Amount of
	June 30,				Increase			Percent
	2022		2023		(Decrease)			Change
Production data ^(1) (2):
Natural gas (Bcf)		203		204		1			*
C2 Ethane (MBbl)		4,025		6,414		2,389			59	%
C3+ NGLs (MBbl)		10,156		10,175		19			*
Oil (MBbl)		906		971		65			7	%
Combined (Bcfe)		294		309		15			5	%
Daily combined production (MMcfe/d)		3,228		3,400		172			5	%
Average prices before effects of derivative settlements ⁽³⁾:
Natural gas (per Mcf)	$	7.67		2.14		(5.53	)		(72	)%
C2 Ethane (per Bbl) ⁽⁴⁾	$	22.42		7.82		(14.60	)		(65	)%
C3+ NGLs (per Bbl)	$	60.28		34.16		(26.12	)		(43	)%
Oil (per Bbl)	$	98.49		59.69		(38.80	)		(39	)%
Weighted Average Combined (per Mcfe)	$	8.00		2.89		(5.11	)		(64	)%
Average realized prices after effects of derivative settlements ⁽³⁾:
Natural gas (per Mcf)	$	4.94		2.16		(2.78	)		(56	)%
C2 Ethane (per Bbl) ⁽⁴⁾	$	22.42		7.82		(14.60	)		(65	)%
C3+ NGLs (per Bbl)	$	59.84		34.11		(25.73	)		(43	)%
Oil (per Bbl)	$	97.73		59.40		(38.33	)		(39	)%
Weighted Average Combined (per Mcfe)	$	6.10		2.90		(3.20	)		(52	)%
Average costs (per Mcfe):
Lease operating	$	0.09		0.09		—			*
Gathering and compression	$	0.76		0.68		(0.08	)		(11	)%
Processing	$	0.75		0.85		0.10			13	%
Transportation	$	0.73		0.61		(0.12	)		(16	)%
Production and ad valorem taxes	$	0.28		0.12		(0.16	)		(57	)%
Marketing expense, net	$	0.09		0.07		(0.02	)		(22	)%
General and administrative (excluding equity-based compensation)	$	0.12		0.13		0.01			8	%
Depletion, depreciation, amortization and accretion	$	0.59		0.56		(0.03	)		(5	)%

(1)	Production data excludes volumes related to the VPP.

(2)	Oil and NGLs production was converted at 6 Mcf per Bbl to calculate total Bcfe production and per Mcfe amounts. This ratio is an estimate of the equivalent energy content of the products and may not reflect their relative economic value.

(3)

Average prices reflect the before and after effects of our settled commodity derivatives. Our calculation of such after effects includes gains on settlements of commodity derivatives, which do not qualify for hedge accounting because we do not designate or document them as hedges for accounting purposes.

(4)	The average realized price for the three months ended June 30, 2023 includes $6 million of proceeds related to a take-or-pay contract. Excluding the effect of these proceeds, the average realized price for ethane before and after the effects of derivatives would have been $7.65 per Bbl.

Cover	Jul. 26, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 26, 2023
Entity File Number	001-36120
Entity Registrant Name	ANTERO RESOURCES CORPORATION
Entity Central Index Key	0001433270
Entity Tax Identification Number	80-0162034
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1615 Wynkoop Street
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80202
City Area Code	303
Local Phone Number	357-7310
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 Per Share
Trading Symbol	AR
Security Exchange Name	NYSE
Entity Emerging Growth Company	false