What changed in this filing

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Item 1A. Risk Factors

2021-02-17 compared with 2020-02-12 · 445 added, 414 removed, 211 unchanged (80% of the section changed)

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Furthermore, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, cash flows and results of operations.

Commodity Prices

Natural gas, NGLs, and oil price volatility, or a substantial or prolonged period of low natural gas, NGLs, and oil prices, may adversely affect our business, financial condition or results of operations and our ability to meet our capital expenditure obligations and financial commitments.

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● the price and quantity of imports of foreign, and exports of domestic, oil, natural gas and NGLs, including liquefied natural gas;

● political conditions in or affecting other producing countries, including conflicts in the Middle East, Africa, South America and Russia;

● political conditions in or affecting other producing countries, including conflicts in or among the Middle East, Africa, South America and Russia;

● the level of global exploration and production;

● the level of global inventories;

● events that impact global market demand (e.g., the reduced demand following the recent coronavirus outbreaks);

● events that impact global market demand (e.g., the reduced demand resulting from the COVID-19 pandemic);

● prevailing prices on local price indexes in the areas in which we operate;

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● domestic, local and foreign governmental regulation and taxes.

The daily spot prices for NYMEX Henry Hub natural gas ranged from a high of $4.25 per MMBtu to a low of $1.75 per MMBtu in 2019, and the daily spot prices for NYMEX West Texas Intermediate crude oil ranged from a high of $66.24 per barrel to a low of $46.31 per barrel during the same period.

The daily spot prices for NYMEX Henry Hub natural gas ranged from a high of $3.14 per MMBtu to a low of $1.33 per MMBtu in 2020, and the daily spot prices for NYMEX West Texas Intermediate crude oil ranged from a high of $63.27 per barrel to a low of negative $36.98 per barrel during the same period.

In addition, the market price for natural gas in the Appalachian Basin continues to be lower relative to NYMEX Henry Hub as a result of the significant increases in the supply of natural gas in the Northeast region in recent years.

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Due to the volatility of commodity prices, we are unable to predict future potential movements in the market prices for natural gas, oil and NGLs at our ultimate sales points and, thus, cannot predict the ultimate impact of prices on our operations.

Prolonged low, and/or significant or extended declines in, natural gas, NGLs, and oil prices may adversely affect our revenues, operating income, cash flows and financial position, particularly if we are unable to control our development costs during periods of lower natural gas, NGLs, and oil prices.

adjustments to the value of our assets and could cause us to incur non-cash impairment charges to earnings in future periods, similar to the $1.0 billion impairment charge we recognized in the third quarter of 2019.

Reductions in cash flows from lower commodity prices have required us to incur additional borrowings and reduce our capital spending and could further reduce our production and our reserves, negatively affecting our future rate of growth.

periods of lower natural gas, NGLs, and oil prices.

Declines in prices could also adversely affect our drilling activities and the amount of natural gas, NGLs, and oil that we can produce economically, which may result in our having to make significant downward adjustments to the value of our assets and could cause us to incur non-cash impairment charges to earnings in future periods, similar to the aggregate $1.3 billion impairment charges we recognized in 2019.

Reductions in cash flows from lower commodity prices have required us to reduce our capital spending and could reduce our production and our reserves, negatively affecting our future rate of growth.

Lower prices for natural gas, NGLs, and oil may also adversely affect our credit ratings and result in a reduction in our borrowing capacity and access to other capital.

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Further, adverse economic and market conditions could negatively affect the collectability of our trade receivables and cause our hedge counterparties to be unable to perform their obligations or to seek bankruptcy protection.

Increases in natural gas, NGLs, and oil prices may be accompanied by or result in increased well drilling costs, increased production taxes, increased lease operating expenses, increased volatility in seasonal gas price spreads for our storage assets and increased end-user conservation or conversion to alternative fuels.

Increases in natural gas, NGLs, and oil prices may be accompanied by or result in increased well drilling costs, increased production taxes, increased lease operating expenses, increased volatility in seasonal gas price spreads and increased end-user conservation or conversion to alternative fuels.

In addition, to the extent we have hedged our current production at prices below the current market price, we are unable to benefit fully from an increase in the price of natural gas.

Currently, we receive significant incremental cash flows as a result of our hedging activity.

To the extent we are unable to obtain future hedges at effective prices consistent with those we have received to date and commodity prices do not improve, our cash flows may be adversely impacted.

Furthermore, our derivative activities could result in financial losses or could reduce our earnings.

In certain circumstances, we may have to make cash payments under our hedging arrangements and these payments could be significant.

To achieve more predictable cash flows and reduce our exposure to downward price fluctuations, as of December 31, 2020, we had entered into forward swap contracts for approximately 1.2 Tcfe of our projected natural gas production through December 31, 2023 and basis swap contracts for approximately 73 Bcfe through December 31, 2024.

Historically, we have realized a significant benefit from our hedge positions.

For example, for the years ended December 31, 2019 and 2020, we received approximately $325 million and $795 million, respectively, in revenues from cash settled derivatives pursuant to our hedging arrangements, including $9 million for certain natural gas hedges that were monetized prior to their contractual settlement dates during the year ended December 31, 2020.

Many of the hedge agreements that resulted in these realized gains for the years ended December 31, 2019 and 2020 were executed at times when spot and future prices were higher than prices that we are currently able to obtain in the futures market, and the prices at which we have been able to hedge future production have decreased as a result.

Sustained weaknesses in commodity prices adversely affect our ability to hedge future production.

If we are unable to enter into new hedge contracts in the future at favorable pricing and for sufficient volumes, our financial condition and results of operations could be materially adversely affected.

Additionally, because we have financial derivatives in place to hedge against price declines for a significant part of our estimated future production, we have fixed or limited a significant part of our overall future revenues.

Assuming our 2021 production is the same as our production in 2020, approximately 92% of our production for 2021 will be hedged through either forward swaps or basis swaps.

If natural gas prices upon settlement of our derivative contracts exceed the price at which we have hedged our commodities, we will be obligated to make cash payments to our hedge counterparties, which could, in certain circumstances, be significant for our natural gas contracts.

For example, during the year ended December 31, 2020, we paid approximately $19 million, net, related to cash settled derivatives pursuant to our hedging arrangements due to increased commodity prices.

If development drilling costs increase significantly because of inflation, increased demand for oilfield services, increased costs to comply with regulations governing our industry or other factors, the payments we receive under these derivative contracts may not be sufficient to cover our costs.

If commodity prices decrease to a level such that our future undiscounted cash flows from our properties are less than their carrying value for a significant period of time, we will be required to take write-downs of the carrying values of our properties.

Accounting rules require that we periodically review the carrying value of our properties for possible impairment if the estimated future undiscounted cash flows are less than the carrying value of our properties.

Based on specific market factors and circumstances at the time of prospective impairment reviews, and the continuing evaluation of development plans, production data, economics and other factors, we may be required to write-down the carrying value of our properties.

A write-down constitutes a non- cash charge to earnings.

For example, see the discussion of the impairment charges we recorded in 2018 and 2019 with respect to our Utica Shale properties in Note 2—Significant Accounting Policies to the consolidated financial statements.

We may incur significant impairment charges in the future, which could have a material adverse effect on our results of operations for the periods in which such charges are taken.

The imbalance between the supply of and demand for oil, natural gas and NGLs has caused extreme market volatility and may result in increased costs and decreased availability of storage capacity.

The lack of a market or available storage for certain of our products could cause interruptions in our operations, including temporary curtailments or shut-ins, or force us to sell our production at below-market prices, which could adversely affect our financial condition and results of operations.

The marketing of our natural gas, NGLs, and oil production is substantially dependent upon the existence of adequate markets for our products.

In response to the COVID-19 pandemic, governments have tried to slow the spread of the virus by imposing social distancing guidelines, travel restrictions and stay-at-home orders, which have caused a significant decrease in the demand for natural gas, NGLs, and oil.

The imbalance between the supply of and demand for these products, as well as the uncertainty around the extent and timing of an economic recovery have caused extreme market volatility and a substantial adverse effect on commodity prices.

Also, as a result of this imbalance, the industry has experienced and may experience in the future storage capacity constraints with respect to certain NGL products and oil.

If we are unable to sell our production or enter into additional storage arrangements on commercially reasonable terms or at all, we could be forced to temporarily shut in a portion of our production, or delay or discontinue drilling plans and commercial production following a discovery of hydrocarbons or sell our production at below-market prices.

Although our production is more heavily weighted to natural gas, the lack of a market or available storage for any one NGL product or oil could result in temporary shut-ins as we may be unable to curtail the production of individual products in a meaningful way without reducing the production of other products.

We are unable to determine the extent or duration of any such curtailments.

Any such shut in or curtailment, or any inability to obtain favorable terms for delivery of the natural gas, NGLs and oil we produce, could adversely affect our financial condition and results of operations.

The development of our estimated proved undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate.

Therefore, our estimated proved undeveloped reserves may not be ultimately developed or produced.

As of December 31, 2020, 33% of our total estimated proved reserves were classified as proved undeveloped.

Our approximately 5.8 Tcfe of estimated proved undeveloped reserves will require an estimated $1.5 billion of development capital over the next five years.

Moreover, the development of probable and possible reserves will require additional capital expenditures and such reserves are less certain to be recovered than proved reserves.

Development of these undeveloped reserves may take longer and require higher levels of capital expenditures than we currently anticipate.

Delays in the development of our reserves, increases in costs to drill and develop such reserves, or decreases in commodity prices will reduce the value of our estimated proved undeveloped reserves and future net revenues estimated for such reserves and may result in some projects becoming uneconomic.

In addition, delays in the development of reserves could require us to reclassify our proved undeveloped reserves as unproved reserves.

Reserve estimates depend on many assumptions that may turn out to be inaccurate.

Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.

The process of estimating oil and gas reserves is complex.

It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices.

Any significant inaccuracies in these interpretations or assumptions could materially affect our estimated quantities and present value of our reserves.

To prepare our estimates, we must project production rates and timing of development expenditures.

We must also analyze available geological, geophysical, production and engineering data.

The extent, quality and reliability of this data can vary.

The process also requires economic assumptions about matters such as realized prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.

Actual future production, realized prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable reserves will vary from our estimates.

Any significant variance could materially affect the estimated quantities and present value of our reserves.

In addition, we may adjust our reserve estimates to reflect production history, results of exploration and development, existing commodity prices and other factors, many of which are beyond our control.

Investors should not assume that the present value of future net revenues from our reserves is the current market value of our estimated reserves.

We generally base the estimated discounted future net cash flows from our reserves on prices and costs on the date of the estimate.

Actual future prices and costs may differ materially from those used in the present value estimate.

The standardized measure of discounted future net cash flows from our proved reserves is not the same as the current market value of our estimated oil and gas reserves.

Investors should not assume that the standardized measure of discounted future net cash flows from our proved reserves is the current market value of our estimated oil and gas reserves.

In accordance with SEC requirements, we based the discounted future net cash flows from our proved reserves on the twelve-month unweighted arithmetic average of the first-day-of-the-month price for the preceding twelve months without giving effect to derivative transactions.

Actual future net cash flows from our properties will be affected by factors such as the actual prices we receive for natural gas, NGLs, and oil, the amount, timing and cost of actual production and changes in governmental regulations or taxation.

In addition, the 10% discount factor we use when calculating the standardized measure is based on SEC guidelines, and may not be the most appropriate discount factor based on interest rates in effect from time to time and risks associated with us or the oil and gas industry in general.

Unless we replace our reserves with new reserves and develop those reserves, our reserves and, eventually, production will decline, which would adversely affect our future cash flows and results of operations.

Producing oil and gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors.

Unless we conduct successful ongoing exploration and development activities or continually acquire properties containing proved reserves, our proved reserves will decline as those reserves are produced.

Our future reserves and production, and therefore, our future cash flow and results of operations are highly dependent on our success in efficiently developing our current reserves and economically finding or acquiring additional recoverable reserves.

We may not be able to develop, find or acquire sufficient additional reserves to replace our current and future production, and any such acquisition and development may be offset by any asset disposition, including those contemplated by our asset sale program.

If we are unable to replace our current and future production, the value of our reserves will decrease, and our business, financial condition and results of operations would be adversely affected.

Approximately 58% of our net leasehold acreage is undeveloped, and that acreage may not ultimately be developed or become commercially productive, which could cause us to lose rights under our leases as well as have a material adverse effect on our oil and natural gas reserves and future production and, therefore, our future cash flow and income.

Approximately 58% of our net leasehold acreage is undeveloped, or acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

We have proved undeveloped reserves of 913 Bcfe related to such acreage that is subject to renewal prior to drilling.

In addition, approximately 25% of our natural gas leases related to our Appalachian Basin acreage require us to drill wells that are commercially productive, and if we are unsuccessful in drilling such wells, we could lose our rights under such leases.

Our future oil and gas reserves and production and, therefore, our future cash flow and income are highly dependent on successfully developing our undeveloped leasehold acreage.

For more information on our future potential acreage expirations, see “Item 1.

Business and Properties—Our Properties and Operations—Undeveloped Acreage Expirations.”

Business Operations

Drilling for and producing oil and gas are high risk activities with many uncertainties that could adversely affect our business, financial condition or results of operations.

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Our decisions to purchase, explore, or develop prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations.

For a discussion of the uncertainty involved in these processes, see “—Reserve estimates depend on many assumptions that may turn out to be inaccurate.

For a discussion of the uncertainty involved in these processes, see “—Reserves—Reserve estimates depend on many assumptions that may turn out to be inaccurate.

Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.” In addition, our cost of drilling, completing and operating wells is subject to operational uncertainties.

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● pressure or irregularities in geological formations;

● shortages of, or delays in, obtaining equipment and qualified personnel or in obtaining water for hydraulic fracturing activities;

● shortages of, or delays in, obtaining equipment, qualified personnel or water for hydraulic fracturing activities;

● equipment failures or accidents;

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Certain of these risks can cause substantial losses, including personal injury or loss of life, damage to or destruction of property, natural resources and equipment, environmental contamination or loss of wells and regulatory fines or penalties.

Properties that we decide to drill may not yield natural gas or oil in commercially viable quantities.

Properties that we decide to drill that do not yield natural gas or oil in commercially viable quantities may adversely affect our financial condition, results of operations and cash flows.

There is no way to predict in advance of drilling and testing whether any particular prospect will yield natural gas or oil in sufficient quantities to recover drilling or completion costs or to be economically viable.

The use of seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether natural gas or oil will be present or, if present, whether natural gas or oil will be present in commercial quantities.

Properties that we decide to drill may not yield natural gas, NGLs or oil in commercially viable quantities, which may adversely affect our financial condition, results of operations and cash flows.

Prior to drilling and testing a prospect, we are unable to predict with certainty whether any particular prospect will yield natural gas, NGLs or oil in sufficient quantities to recover drilling or completion costs or to be economically viable.

Seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether natural gas or oil will be present or, if present, whether natural gas or oil will be present in commercial quantities.

We cannot make any assurances that the analogies we draw from available data from other wells, more fully explored prospects or producing fields will be applicable to our drilling prospects.

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● increase in the cost of, or shortages or delays in the availability of, electricity, supplies, materials, drilling or workover rigs, equipment and services.

Market conditions or operational impediments may hinder our access to natural gas, NGLs, and oil markets or delay our production.

Market conditions or the unavailability of satisfactory natural gas, NGLs, and oil transportation arrangements may hinder our access to natural gas, NGLs, and oil markets or delay our production.

The availability of a ready market for our natural gas and oil production depends on a number of factors, including the demand for and supply of natural gas, NGLs, and oil and the proximity of reserves to pipelines and terminal facilities.

Our ability to market our production depends in substantial part on the availability and capacity of gathering systems, pipelines, processing facilities and other transportation services owned and operated by third parties, including Antero Midstream.

Our failure to obtain such services on acceptable terms could materially harm our business.

We may be required to shut in wells due to lack of a market or inadequacy or unavailability of natural gas, NGLs, and oil pipelines or gathering or processing system capacity or third-party transportation services, including with respect to services provided to us by Antero Midstream.

In addition, if natural gas, NGLs, or oil quality specifications for the pipelines with which we connect change so as to restrict our ability to transport our production, our access to natural gas, NGLs, and oil markets could be impeded.

If our production becomes shut in for any of these or other reasons, we would be unable to realize revenue from those wells until other arrangements were made to deliver the products to market.

The development of our estimated proved undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate.

Therefore, our estimated proved undeveloped reserves may not be ultimately developed or produced.

At December 31, 2019, 38% of our total estimated proved reserves were classified as proved undeveloped.

Our approximately 7.1 Tcfe of estimated proved undeveloped reserves will require an estimated $2.6 billion of development capital over the next five years.

Moreover, the development of probable and possible reserves will require additional capital expenditures and such reserves are less certain to be recovered than proved reserves.

Development of these undeveloped reserves may take longer and require higher levels of capital expenditures than we currently anticipate.

Delays in the development of our reserves, increases in costs to drill and develop such reserves, or decreases in commodity prices will reduce the PV- 10 value of our estimated proved undeveloped reserves and future net revenues estimated for such reserves and may result in some projects becoming uneconomic.

In addition, delays in the development of reserves could cause us to have to reclassify our proved undeveloped reserves as unproved reserves.

Market conditions or operational impediments, such as the unavailability of satisfactory transportation arrangements or necessary infrastructure, may hinder our access to natural gas, NGLs, and oil markets or delay our production.

The availability of a ready market for our natural gas, NGLs and oil production depends on a number of factors, including the demand for and supply of natural gas, NGLs, and oil and the proximity of reserves to, and capacity of, pipelines, other transportation facilities, gathering and processing, fractionation facilities and the availability of other third-party transportation services.

The capacity of transmission, gathering and processing and fractionation facilities and the availability of third-party transportation services may be insufficient to accommodate potential production from existing and new wells, which may result in substantial discounts in the prices we receive for our natural gas, NGLs, and oil.

While our investment in midstream infrastructure through Antero Midstream is

intended to address access to and potential curtailments on existing midstream infrastructure, we also deliver to and are serviced by third-party natural gas, NGLs, and oil transmission, gathering, processing, storage and fractionation facilities and transportation services that are limited in number, geographically concentrated and subject to significant risks.

These risks include the availability of capital, materials and qualified contractors and work force, as well as weather conditions, natural gas, NGLs, and oil price volatility, delays in obtaining permits and other government approvals, title and property access problems, geology, public opposition to infrastructure development, compliance by Antero Midstream and/or third parties with their contractual obligations to us and other factors.

An extended interruption of access to or service from pipelines and facilities operated by Antero Midstream and/or third parties, or of transportation services provided by Antero Midstream and/or third parties for any reason, including our failure to obtain such services on acceptable terms, cyber-attacks on such pipelines and facilities or service interruptions due to gas quality, could materially harm our business by causing delays in producing and selling our natural gas, NGLs, and oil.

In such an event, we might have to shut in our wells awaiting a pipeline connection or capacity and/or sell our production at prices lower than market prices or at prices lower than we currently project, all of which could adversely affect our business, financial condition and results of operations.

If we shut-in or curtail production for any of these or other reasons, we would be unable to realize revenue from those wells until other arrangements were made to deliver the products to market.

Our ability to produce natural gas, NGLs, and oil economically and in commercial quantities is dependent on the availability of adequate supplies of water for drilling and completion operations and access to water and waste disposal or recycling facilities and services at a reasonable cost.

Restrictions on our ability to obtain water or dispose of produced water and other waste may have an adverse effect on our financial condition, results of operations and cash flows.

The hydraulic fracture stimulation process on which we depend to produce commercial quantities of natural gas, NGLs, and oil requires the use and disposal of significant quantities of water.

The availability of water recycling facilities and other disposal alternatives to receive all of the water produced from our wells may affect our production.

Our inability to secure sufficient amounts of water, or to dispose of or recycle the water used in our operations, or to timely obtain water sourcing permits or other rights, could adversely impact our operations.

Additionally, the imposition of new environmental initiatives and regulations could include restrictions on our ability to obtain water or dispose of waste and adversely affect our business and operating results.

Our identified potential well locations are scheduled out over many years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.

In addition, we may not be able to obtain the substantial amount of capital necessary to drill our potential well locations.

Our management team has specifically identified and scheduled certain well locations as an estimation of our future multi- year drilling activities on our existing acreage.

These well locations represent a significant part of our development strategy.

Our ability to drill and develop these locations depends on a number of uncertainties, including natural gas, NGLs, and oil prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, unitization agreements, lease acquisitions, surface agreements, gathering system and pipeline transportation constraints, access to and availability of water sourcing and distribution systems, regulatory approvals and other factors.

Because of these uncertainties, we do not know if the numerous potential well locations we have identified will ever be drilled or if we will be able to produce natural gas, NGLs or oil from these or any other potential well locations.

In addition, unless production is established within the spacing units covering the undeveloped acres on which some of the potential locations are obtained, the leases for such acreage will expire.

As such, our actual drilling activities may materially differ from those presently identified.

For more information on our future potential acreage expirations, see “Item 1.

Business and Properties—Our Properties and Operations—Undeveloped Acreage Expirations.”

As of December 31, 2020, we had 2,133 identified potential horizontal well locations located in our proved, probable, and possible reserve base.

As a result of the limitations described above, we may be unable to drill many of our potential well locations.

In addition, we will require significant additional capital over a prolonged period to pursue the development of these locations, and we may not be able to obtain or generate the capital required to do so.

Any drilling activities we are able to conduct on these potential locations may not be successful or result in our ability to add additional proved reserves to our overall proved reserves, or may result in a downward revision of our estimated proved reserves, which could have a material adverse effect on our future business and results of operations.

For more information on our identified potential well locations, see “Item 1.

Business and Properties—Our Properties and Operations—Estimated Proved Reserves—Identification of Potential Well Locations.”

We may incur losses as a result of title defects in the properties in which we invest.

When we acquire oil and gas leases or interests, we typically do not incur the expense of retaining lawyers to examine the title to the mineral interest at the time of acquisition.

Rather, before attempting to acquire a lease in a specific mineral interest, we rely upon the judgment of oil and gas lease brokers or landmen who perform the fieldwork in examining records in the appropriate governmental office.

Leases in the Appalachian Basin are particularly vulnerable to title deficiencies due to the long history of land ownership in the area, resulting in extensive and complex chains of title.

The existence of a material title deficiency can render a lease worthless and can adversely affect our financial condition, results of operations and cash flows.

While we do typically obtain title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title may not be discovered until after a well is drilled, in which case we may lose the lease and the right to produce all or a portion of the minerals under the property.

Increased attention to ESG matters and conservation measures may adversely impact our business.

Increasing attention to climate change, societal expectations on companies to address climate change, investor and societal expectations regarding voluntary ESG disclosures, and consumer demand for alternative forms of energy may result in increased costs, reduced demand for our products, reduced profits, increased investigations and litigation, and negative impacts on our stock price and access to capital markets.

Increasing attention to climate change and environmental conservation, for example, may result in demand shifts for oil and natural gas products and additional governmental investigations and private litigation against us.

To the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation of or contribution to the asserted damage, or to other mitigating factors.

Moreover, while we create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.

Such ratings are used by some investors to inform their investment and voting decisions.

Unfavorable ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.

Also, institutional lenders may decide not to provide funding for fossil fuel energy companies based on climate change related concerns, which could affect our access to capital for potential growth projects.

We may incur substantial losses and be subject to substantial liability claims as a result of our operations.

Additionally, we may not be insured for, or our insurance may be inadequate to protect us against, these risks.

We are not insured against all risks.

Losses and liabilities arising from uninsured and underinsured events could materially and adversely affect our business, financial condition, results of operations and cash flows.

Our oil and gas exploration and production activities are subject to all of the operating risks associated with drilling for and producing oil and gas, including the possibility of:

● environmental hazards, such as uncontrollable releases of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater, air and shoreline contamination;

● abnormally pressured formations;

● mechanical difficulties, such as stuck oilfield drilling and service tools and casing collapse;

● fires, explosions and ruptures of pipelines;

● personal injuries and death;

● natural disasters;

● terrorist attacks targeting natural gas and oil related facilities and infrastructure.

Any of these risks could adversely affect our ability to conduct operations or result in substantial loss to us as a result of claims for:

● injury or loss of life;

● damage to and destruction of property, natural resources and equipment;

● pollution and other environmental damage;

● regulatory investigations and penalties;

● suspension of our operations;

● repair and remediation costs.

We may elect not to obtain insurance for any or all of these risks if we believe that the cost of available insurance is excessive relative to the risks presented.

In addition, pollution and environmental risks generally are not fully insurable.

The occurrence of an event that is not fully covered by insurance could have a material adverse effect on our business, financial condition and results of operations.

Competition in the oil and gas industry is intense, making it more difficult for us to acquire properties, market products and secure trained personnel.

Our ability to acquire additional prospects and to find and develop reserves in the future will depend on our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment for acquiring properties, marketing products and securing trained personnel.

Also, there is substantial competition for capital available for investment in the oil and natural gas industry.

Many of our competitors possess and employ financial, technical and personnel resources substantially greater than ours.

Those companies may be able to pay more for productive natural gas properties and exploratory prospects and to evaluate, bid for and purchase a greater number of properties and prospects than our financial or personnel resources permit.

In addition, other companies may be able to offer better compensation packages to attract and retain qualified personnel than we are able to offer.

The cost to attract and retain qualified personnel may increase substantially in the future.

We may not be successful in the future in acquiring prospective reserves, developing reserves, marketing hydrocarbons, attracting and retaining quality personnel and raising additional capital, which could have a material adverse effect on our business.

Strategic determinations, including the allocation of capital and other resources to strategic opportunities and repayment of indebtedness, are challenging, and our failure to appropriately allocate capital and resources among our various initiatives may adversely affect our financial condition.

Our future success depends on whether we can identify optimal strategies for our business.

In developing our 2021 business plan, we considered allocating capital and other resources to various aspects of our businesses, including well development, exploratory activities, corporate items, repayment of indebtedness and other alternatives.

Notwithstanding the determinations made in the development of our 2021 plan, business opportunities not previously identified periodically come to our attention, including possible acquisitions and dispositions.

If we fail to identify optimal business strategies, including the appropriate corporate structure or the appropriate rate of reserve development, or fail to optimize our capital investment and capital raising opportunities and to use our other resources to further our business strategies, our financial condition may be adversely affected.

Moreover, economic or other circumstances may change from those contemplated by our 2021 plan, and our failure to recognize or respond to those changes may limit our ability to achieve our objectives.

We periodically engage in acquisitions, dispositions and other strategic transactions, including joint ventures.

These transactions involve various inherent risks, such as our ability to obtain the necessary regulatory approvals;

the timing of and conditions imposed upon us by regulators in connection with such approvals;

the assumption of potential environmental or other liabilities;

and our ability to realize the benefits expected from the transactions.

In addition, prevailing market conditions and other factors could negatively impact the benefits we receive from transactions.

Competition for acquisition opportunities in our industry is intense and may increase the cost of, or cause us to refrain from, completing acquisitions.

Our inability to complete a transaction or to achieve our strategic or financial goals in any transaction could have significant adverse effects on our financial position, results of operations and cash flows.

A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially adversely affect our business.

The global or national outbreak of an infectious disease, such as COVID-19, may cause disruptions to our business and operational plans, which may include (i) shortages of employees, (ii) unavailability of contractors and subcontractors, (iii) interruption of supplies from third parties upon which we rely, (iv) recommendations of, or restrictions imposed by, government and health authorities, including quarantines, to address the COVID-19 pandemic and (v) restrictions that we and our contractors and subcontractors impose, including facility shutdowns, to ensure the safety of employees and others.

While it is not possible to predict their extent or duration, these disruptions may have a material adverse effect on our business, financial condition and results of operations.

Further, the effects of COVID-19 and concerns regarding its global spread have negatively impacted global demand for crude oil and natural gas, which has and could continue to contribute to price volatility, impact the price we receive for natural gas, NGLs, and oil and materially and adversely affect the demand for and marketability of our production, as well as lead to temporary curtailment or shut-ins of production due to lack of downstream demand or storage capacity.

Additionally, to the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth in this “Item 1A.

Risk Factors.”

Terrorist or cyber-attacks and threats could have a material adverse effect on our business, financial condition or results of operations.

Terrorist or cyber- attacks may significantly affect the energy industry, including our operations and those of our suppliers and customers, as well as general economic conditions, consumer confidence and spending, and market liquidity.

Strategic targets, such as energy- related assets, may be at greater risk of future attacks than other targets in the United States.

Our insurance may not protect us against such occurrences.

We depend on digital technology in many areas of our business and operations, including, but not limited to, estimating quantities of oil and gas reserves, processing and recording financial and operating data, oversight and analysis of drilling operations, and communications with our employees and third-party customers or service providers.

Deliberate attacks on our assets, or security breaches in our systems or infrastructure, or the systems or infrastructure of third-parties or the cloud, could lead to the corruption or loss of our proprietary and potentially sensitive data, delays in production or delivery of our production to customers, difficulty in completing and settling transactions, challenges in maintaining our books and records, environmental damage, communication interruptions, or other operational disruptions and third-party liabilities.

Cybersecurity attacks in particular are becoming more sophisticated and include, but are not limited to, malicious software, ransomware, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information and corruption of data.

As cyber-attacks continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerabilities to cyber-attacks.

In particular, our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for our personnel, information, facilities and infrastructure may result in increased capital and operating costs.

To date we have not experienced any material losses relating to cyber-attacks;

however, there can be no assurance that we will not suffer such losses in the future.

Consequently, it is possible that any of these occurrences, or a combination of them, could have a material adverse effect on our business, financial condition and results of operations.

Our producing properties are concentrated in the Appalachian Basin, making us vulnerable to risks associated with operating in one major geographic area.

Our producing properties are geographically concentrated in the Appalachian Basin in West Virginia and Ohio.

As of December 31, 2020, all of our total estimated proved reserves were attributable to properties located in this area.

As a result of this concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in this area caused by, and costs associated with, governmental regulation, state and local political activities, processing or transportation capacity constraints, market limitations, availability of equipment and personnel, water shortages or other drought related conditions or interruption of the processing or transportation of natural gas, NGLs, or oil.

In addition, a number of areas within the Appalachian Basin have historically been subject to mining operations.

For example, third-parties may engage in subsurface coal and other mining operations near or under our properties, which could cause subsidence or other damage to our properties, adversely impact our drilling operations or adversely impact third-party midstream activities on which we rely.

In such event, our operations may be impaired or interrupted, and we may not be able to recover the costs incurred as a result of temporary shut-ins or the plugging and abandonment of any of our wells.

Furthermore, the existence of mining operations near our properties could require coordination to avoid adverse impacts as a result of drilling and mining in close

These restrictions on our operations, and any similar restrictions, could cause delays or interruptions or prevent us from executing our business strategy, which could materially adversely affect our results of operations and financial position.

Due to the concentrated nature of our portfolio of properties, a number of our properties could experience any of the same conditions at the same time, resulting in a relatively greater impact on our results of operations than they might have on other companies that have a more diversified portfolio of properties.

Customer Concentration and Credit Risk

Our hedging transactions expose us to counterparty credit risk and may become more costly or unavailable to us.

As of December 31, 2020, the estimated fair value of our commodity net derivative contracts was approximately $22 million, and included the following net derivative assets by bank counterparty:

Morgan Stanley - $35 million;

Canadian Imperial Bank of Commerce - $25 million;

Scotiabank - $14 million;

Natixis - $5 million;

DNB Capital - $2 million;

and Truist $1 million.

As described above, we enter into certain derivative instruments in the ordinary course operations of our business.

Our hedging transactions expose us to risk of financial loss if a counterparty fails to perform under a derivative contract.

Disruptions in the financial markets could lead to sudden decreases in a counterparty’s liquidity, which could make them unable to perform under the terms of the derivative contract and we may not be able to realize the benefit of the derivative contract.

Derivative instruments also expose us to the risk of financial loss in some circumstances, including when there is an increase in the differential between the underlying price in the derivative instrument and actual prices received or when there are issues with regard to legal enforceability of such instruments.

The use of derivatives may, in some cases, require the posting of cash collateral with counterparties.

If we enter into derivative instruments that require cash collateral and commodity prices or interest rates change in a manner adverse to us, our cash otherwise available for use in our operations would be reduced, which could limit our ability to make future capital expenditures and make payments on our indebtedness, and which could also limit the size of our borrowing base.

Future collateral requirements will depend on arrangements with our counterparties, highly volatile oil, NGLs and natural gas prices, and interest rates.

In addition, derivative arrangements could limit the benefit we would receive from increases in the prices for natural gas, NGLs, and oil, which could also have an adverse effect on our financial condition.

If natural gas, NGLs, or oil prices upon settlement of our derivative contracts exceed the price at which we have hedged our commodities, we will be obligated to make cash payments to our hedge counterparties, which could, in certain circumstances, be significant.

In addition, U.S.

regulators adopted a final rule in November 2019 implementing a new approach for calculating the exposure amount of derivative contracts under the applicable agencies’ regulatory capital rules, referred to as the standardized approach for counterparty credit risk (“SA-CCR”).

As adopted, certain financial institutions are required to comply with the new SA-CCR rules beginning on January 1, 2022.

The new rules could significantly increase the capital requirements for certain participants in the over-the-counter derivatives market in which we participate.

These increased capital requirements could result in significant additional costs being passed through to end-users like us or reduce the number of participants or products available to us in the over-the-counter derivatives market.

The effects of these regulations could reduce our hedging opportunities, or substantially increase the cost of hedging, which could adversely affect our business, financial condition and results of operations.

The inability of our significant customers to meet their obligations to us may adversely affect our financial results.

In addition to credit risk related to receivables from commodity derivative contracts, our principal exposures to credit risk are through receivables resulting from the sale of our natural gas, NGLs, and oil production that we market to energy companies, end users, and refineries ($380 million as of December 31, 2020).

We are also subject to credit risk due to concentration of receivables with several significant customers.

The largest purchaser of our products during the year ended December 31, 2020 accounted for approximately 11% of our product revenues.

We do not require all of our customers to post collateral.

The inability or failure of our significant customers to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results.

We are required to pay fees to our service providers based on minimum volumes under long-term contracts regardless of actual volume throughput.

We have various firm transportation and gas processing, gathering and compression service agreements in place, each with minimum volume delivery commitments.

Lower commodity prices may lead to reductions in our drilling and completion program, which may result in insufficient production to fully utilize our firm transportation and processing capacity.

Our firm transportation agreements expire at various dates from 2021 to 2058 and our gas processing, gathering, and compression services agreements expire at various dates from 2021 to 2038.

We are obligated to pay fees on minimum volumes to certain of our service providers regardless of actual volume throughput.

As of December 31, 2020, our long- term contractual obligations under agreements with minimum volume commitments totaled over $12.7 billion over the term of the contracts.

If we have insufficient production to meet the minimum volumes or are otherwise unable to fulfill all or a portion of our volume commitments, our cash flow from operations will be reduced, which may require us to reduce or delay our planned investments and capital expenditures or seek alternative means of financing, all of which may have a material adverse effect on our results of operations.

Assuming 2021 production is unchanged from 2020 production, we estimate that we will incur annual net marketing costs of $0.08 per Mcfe to $0.10 per Mcfe in 2021 for unutilized transportation capacity depending on the amount of unutilized capacity that can be marketed to third parties or utilized to transport third party gas and capture positive basis differentials.

Additionally, our net marketing expense could increase depending on utilization of our transportation capacity based on future production and how much, if any, future excess transportation can be marketed to third parties.

We may be limited in our ability to choose gathering operators, processing and fractionation services providers and water services providers in our areas of operations pursuant to our agreements with Antero Midstream.

Pursuant to the gas gathering and compression agreement that we have entered into with Antero Midstream, we have dedicated the gathering and compression of all of our current and future natural gas production in West Virginia, Ohio and Pennsylvania to Antero Midstream, so long as such production is not otherwise subject to a pre- existing dedication.

Further, pursuant to the right of first offer agreement that we have entered into with Antero Midstream, Antero Midstream has a right to bid to provide certain processing and fractionation services in respect of all of our current and future gas production (as long as it is not subject to a pre- existing dedication) and will be entitled to provide such services if its bid matches or is more favorable to us than terms proposed by other parties.

As a result, we will be limited in our ability to use other gathering and compression operators in West Virginia, Ohio and Pennsylvania, even if such operators can offer us more efficient service.

We will also be limited in our ability to use other processing and fractionation services providers in any area to the extent Antero Midstream is able to offer a competitive bid.

Pursuant to the Water Services Agreement that we have entered into with Antero Midstream, we have dedicated the provision of fresh water and wastewater services in defined service areas in Ohio and West Virginia to Antero Midstream.

Additionally, the Water Services Agreement provides Antero Midstream with a right of first offer on any future areas of operation outside of those defined areas.

As a result, we will be limited in our ability to use other water services providers in the dedication areas of Ohio and West Virginia or other future areas of operation, even if such providers can offer us more favorable pricing or more efficient service.

The unavailability or high cost of additional drilling rigs, completion services, equipment, supplies, personnel, and oilfield services could adversely affect our ability to execute our exploration and development plans within our budget and on a timely basis.

The demand for qualified and experienced field personnel to drill wells and conduct field operations, geologists, geophysicists, engineers, and other professionals in the oil and natural gas industry can fluctuate significantly, often in correlation with natural gas and oil prices, causing periodic shortages.

Historically, there have been shortages of drilling and workover rigs, pipe and other equipment as demand for rigs and equipment has increased along with the number of wells being drilled.

We cannot predict whether these conditions will exist in the future and, if so, what their timing and duration will be.

Such shortages could delay or cause us to incur significant expenditures that are not provided for in our capital budget, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Interruptions in operations at facilities that process our gas may adversely affect our business, financial condition and results of operations.

We have agreements with processing facilities, including those owned by MPLX and the Joint Venture, to accommodate our current operations as well as future development plans.

Any significant interruptions at these facilities could cause us to curtail our

future development and production plans, which could adversely affect our business, financial condition and results of operations.

The operations of the processing facilities could be partially or completely shut down, temporarily or permanently, as the result of circumstances not within the operator’s control, such as:

● unscheduled turnarounds or catastrophic events, including damages to facilities, related equipment and surrounding properties caused by earthquakes, tornadoes, hurricanes, floods, fires, severe weather, explosions and other natural disasters;

● restrictions imposed by governmental authorities or court proceedings;

● labor difficulties that result in a work stoppage or slowdown;

● disruption in the supply of power, water and other resources necessary to operate the facilities;

● damage to the facilities resulting from NGLs that do not comply with applicable specifications;

● inadequate fractionation capacity or market access to support production volumes, including lack of availability of rail cars, barges, trucks and pipeline capacity, or market constraints, including reduced demand or limited markets for certain NGL products;

● terrorist or cyber-attacks.

Acquisitions, Divestitures and Takeovers

We may be subject to risks in connection with acquisitions of properties.

The successful acquisition of producing properties requires an assessment of several factors, including:

● recoverable reserves;

● future natural gas, NGLs, and oil prices and their applicable differentials;

● operating costs;

● potential environmental and other liabilities.

The accuracy of these assessments is inherently uncertain.

In connection with these assessments, we perform a review of the subject properties that we believe to be generally consistent with industry practices.

Our review will not reveal all existing or potential problems nor will it permit us to become sufficiently familiar with the properties to fully assess their deficiencies and capabilities.

Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken.

Even when problems are identified, the seller may be unwilling or unable to provide effective contractual protection against all or part of the problems.

We often are not entitled to contractual indemnification for environmental liabilities and acquire properties on an “as is” basis.

We may be unable to make attractive acquisitions or successfully integrate acquired businesses, and any inability to do so may disrupt our business.

In the future, we may acquire businesses that complement or expand our current business.

We may not be able to identify attractive acquisition opportunities.

Even if we do identify attractive acquisition opportunities, we may not be able to complete the acquisition or do so on commercially acceptable terms.

The success of any completed acquisition will depend on our ability to effectively integrate the acquired business into our existing operations.

The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources.

In addition, possible future acquisitions may be larger and for purchase prices significantly higher than those paid for earlier acquisitions.

No assurance can be given that we will be able to identify suitable acquisition opportunities, negotiate acceptable terms, obtain financing for acquisitions on acceptable terms or successfully acquire identified targets.

Our failure to achieve consolidation savings, to successfully integrate the acquired businesses and assets

into our existing operations or to minimize any unforeseen operational difficulties could have a material adverse effect on our business, financial condition and results of operations.

In addition, the agreements governing our debt impose certain limitations on our ability to enter into mergers or combination transactions.

Such agreements also limit our ability to incur certain indebtedness, which could indirectly limit our ability to engage in acquisitions of businesses.

Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals , which may adversely affect the market price of our common stock.

Certain provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our stockholders.

Among other things, our certificate of incorporation and bylaws:

● provide advance notice procedures with regard to stockholder nominations of candidates for election as directors or other stockholder proposals to be brought before meetings of our stockholders, which may preclude our stockholders from bringing certain matters before our stockholders at an annual or special meeting;

● provide our board of directors the ability to authorize issuance of preferred stock in one or more series, which makes it possible for our board of directors to issue, without stockholder approval, preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us and which may have the effect of deterring hostile takeovers or delaying changes in control or management of us;

● provide that the authorized number of directors may be changed only by resolution of our board of directors ;

● provide that, subject to the rights of holders of any series of preferred stock to elect directors or fill vacancies in respect of such directors as specified in the related preferred stock designation, all vacancies, including newly created directorships be filled by the affirmative vote of holders of a majority of directors then in office, even if less than a quorum, or by the sole remaining director, and will not be filled by our stockholders;

● provide that, subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, if any, any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of our stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders;

● provide for our board of directors to be divided into three classes of directors, with each class as nearly equal in number as possible, serving staggered three-year terms;

● provide that, subject to the rights of the holders of shares of any series of preferred stock, if any, to remove directors elected by such series of preferred stock pursuant to our certificate of incorporation (including any preferred stock designation thereunder), directors may be removed from office at any time, only for cause and by the holders of a majority of the voting power of all outstanding voting shares entitled to vote generally in the election of directors;

● provide that special meetings of our stockholders may only be called by the Chief Executive Officer, the Chairman of our board of directors or our board of directors pursuant to a resolution adopted by a majority of the total number of directors that we would have if there were no vacancies;

● provide that (i) the Sponsors and their affiliates are permitted to participate (directly or indirectly) in venture capital and other direct investments in corporations, joint ventures, limited liability companies and other entities conducting business of any kind, nature or description, (ii) the Sponsors and their affiliates are permitted to have interests in, participate with, aid and maintain seats on the boards of directors or similar governing bodies of any such investments, in each case that may, are or will be competitive with our business and the business of our subsidiaries or in the same or similar lines of business as us and our subsidiaries, or that could be suitable for us or our subsidiaries and (iii) we have, subject to limited exceptions, renounced, to the fullest extent permitted by law, any interest or expectancy in, or in being offered an opportunity to participate in, such corporate opportunities;

● provide that the provisions of our certificate of incorporation can only be amended or repealed by the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of our common stock entitled to vote thereon, voting together as a single class;

● provide that our bylaws can be altered or repealed by (a) our board of directors or (b) our stockholders upon the affirmative vote of holders of at least 66 2/3% of the voting power of our common stock outstanding and entitled to vote thereon, voting together as a single class.

We have elected not to be subject to the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), regulating corporate takeovers.

In general, the provisions of Section 203 of the DGCL prohibit a Delaware corporation, including those whose securities are listed for trading on the New York Stock Exchange, from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:

● prior to such time, the business combination or the transaction which resulted in the stockholder becoming an interested stockholder is approved by our board of directors ;

● upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding certain specified shares);

● on or after such time the business combination is approved by our board of directors and authorized at a meeting of stockholders by the holders of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 of the DGCL permits a Delaware corporation to elect not to be governed by the provisions of Section 203.

Pursuant to our certificate of incorporation, we expressly elected not to be governed by Section 203.

Accordingly, we are not subject to any anti-takeover effects or protections of Section 203 of the DGCL, although no assurance can be given that we will not elect to be governed by Section 203 of the DGCL pursuant to an amendment to our certificate of incorporation in the future.

Certain of our stockholders have investments in our affiliates that may conflict with the interests of other stockholders.

Rady, Glen C.

and certain funds affiliated with Yorktown (collectively, the “Sponsors”) in the aggregate own a significant number of shares of common stock of Antero Midstream.

Rady and Warren and an individual affiliated with Yorktown serve as members of our board of directors and the board of directors of Antero Midstream.

The Sponsors also own a significant portion of the shares of our common stock.

As a result of their investments in Antero Midstream, the Sponsors may have conflicting interests with other stockholders.

Conflicts of interest could arise in the future between us, on the one hand, and the Sponsors, on the other hand, regarding, among other things, decisions related to our financing, capital expenditures and business plans, the terms of our agreements with Antero Midstream and its subsidiaries and the pursuit of potentially competitive business activities or business opportunities.

Provisions of our 2026 Convertible Notes could delay or prevent an otherwise beneficial takeover of us.

Certain provisions of our 2026 Convertible Notes (as defined herein) and the indenture governing such notes could make a third-party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a “Fundamental Change” (as defined in the indenture governing such notes), then holders of our 2026 Convertible Notes will have the right to require us to repurchase their 2026 Convertible Notes for cash.

In addition, if a takeover constitutes a “Make-Whole Fundamental Change” (as defined in such indenture), then we may be required to temporarily increase the conversion rate.

In either case, and in other cases, our obligations under the 2026 Convertible Notes and the indenture governing such notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us, including in a transaction that holders of our 2026 Convertible Notes or holders of our common stock may view as favorable.

We may be unable to dispose of assets on attractive terms and may be required to retain liabilities for certain matters.

Our business and financing plans may periodically include divesting certain assets.

However, we do not completely control the timing of divestitures, and delays in completing divestitures may reduce the benefits we may receive from them, such as reducing management distractions by selling non-core assets and the receipt of cash proceeds that reduce debt and contribute to our liquidity.

Various factors could materially affect our ability to dispose of assets if and when we decide to do so, including the availability of purchasers willing to purchase the assets at prices acceptable to us, particularly in times of reduced and volatile commodity prices.

Capital Structure and Access to Capital

Our exploration and development projects require substantial capital expenditures.

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We make, and expect to continue to make, substantial capital expenditures for the exploration, development, production, and acquisition of oil and gas reserves.

Our cash flow used in investing activities related to drilling, completions, and land expenditures was approximately $1.3 billion in 2019.

Our board of directors has approved a capital budget for 2020 of $1.2 billion that includes $1.15 billion for drilling and completion and $50 million for leasehold expenditures.

Our cash flow used in investing activities related to drilling, completions, and land expenditures was approximately $871 million in 2020.

Our board of directors has approved a net capital budget for 2021 of $635 million that includes $590 million for drilling and completion and $45 million for leasehold expenditures.

Our capital budget excludes acquisitions.

We expect to fund these capital expenditures with cash generated by operations, borrowings under the Credit Facility, our asset sales program and dividends from Antero Midstream;

We expect to fund these capital expenditures with cash generated by operations, and dividends from Antero Midstream, which we do not control the timing or amount of, if any;

however, our financing needs may require us to alter or increase our capitalization substantially through the issuance of debt or equity securities or the sale of assets.

The actual amount and timing of our future capital expenditures may differ materially from our capital budget as a result of, among other things, commodity prices, actual drilling results, the availability of drilling rigs and other services and equipment, and regulatory, technological, and competitive developments.

A reduction in commodity prices from current levels may result in a decrease in our actual capital expenditures, which would negatively impact our ability to grow production.

Furthermore, we have previously announced our intention to retire a portion of our outstanding senior notes.

Although we intend to finance such retirement primarily with proceeds from asset sales, any borrowings incurred under the Credit Facility for such retirement or other refinancings of debt may limit our ability to fund our capital budget.

A reduction in commodity prices from current levels may result in a decrease in our actual capital expenditures, which would negatively impact our ability to maintain production.

For additional discussion of the risks regarding our ability to obtain funding, please read “—The borrowing base under the Credit Facility may be reduced if commodity prices decline, which could hinder or prevent us from meeting our future capital needs.

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The issuance of additional indebtedness would require that a portion of our cash flow from operations be used for the payment of interest and principal on our indebtedness, thereby reducing our ability to use cash flow from operations to fund working capital, capital expenditures and acquisitions.

Our cash flow from operations and access to capital are subject to a number of variables, including:

Our cash flows from operations and access to capital are subject to a number of variables, including:

● our proved reserves;

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If additional capital is needed, we may not be able to obtain debt or equity financing on terms acceptable to us, if at all.

If cash flow generated by our operations or available borrowings under the Credit Facility are not sufficient to meet our capital requirements, the failure to obtain additional financing could result in a curtailment of our operations relating to development of our properties, which in turn could lead to a decline in our reserves and production, and could adversely affect our business, financial condition and results of operations.

Certain of our stockholders have investments in our affiliates that may conflict with the interests of other stockholders.

Rady, Glen C.

and certain funds affiliated with Yorktown (collectively, the “Sponsors”) own a significant number of shares of common stock of Antero Midstream.

Rady and Warren and an individual affiliated with Yorktown serve as members of our board of directors and the board of directors of Antero Midstream.

The Sponsors also own a significant portion of the shares of our common stock.

As a result of their investments in Antero Midstream, the Sponsors may have conflicting interests with other stockholders.

Conflicts of interest could arise in the future between us, on the one hand, and the Sponsors, on the other hand, regarding, among other things, decisions related to our financing, capital expenditures, and growth plans, the terms of our agreements with Antero Midstream and its subsidiaries and the pursuit of potentially competitive business activities or business opportunities.

If cash flows generated by our operations or available borrowings under the Credit Facility are not sufficient to meet our capital requirements, the failure to obtain additional financing could result in a curtailment of our operations relating to development of our properties, which in turn could lead to a decline in our reserves and production, and could adversely affect our business, financial condition and results of operations.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on, or to refinance, our indebtedness obligations, including the Credit Facility and our senior notes, depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and certain financial, business and other factors beyond our control.

We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including the senior notes.

Our ability to make scheduled payments on, or to refinance, our indebtedness obligations, including the Credit Facility, our senior notes and our 2026 Convertible Notes, depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and certain financial, business and other factors beyond our control.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness, including the senior notes.

For example, we recently announced an asset sale program, the proceeds of which will be used to retire a portion of our indebtedness.

Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets, including the market for senior unsecured notes, and our financial condition at such time.

For example, the proceeds of our asset sale program were used to retire a portion of our indebtedness.

Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets, including the market for debt securities, and our financial condition at such time.

Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.

The terms of existing or future debt instruments, including the indentures governing our senior notes, may restrict us from adopting some of these alternatives.

The terms of existing or future debt instruments, including the indentures governing our senior notes and our 2026 Convertible Notes, may restrict us from adopting some of these alternatives.

In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness and may result in us having to post collateral with, or provide letters of credit to, certain transactional counterparties.

In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.

The Credit Facility and the indentures governing our senior notes place certain restrictions on our ability to dispose of assets and our use of the proceeds from such disposition.

The Credit Facility and the indentures governing our senior notes and our 2026 Convertible Notes place certain restrictions on our ability to dispose of assets and our use of the proceeds from such disposition.

We may not be able to consummate those dispositions and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due.

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The borrowing base under the Credit Facility is currently $2.85 billion, and lender commitments under the Credit Facility are $2.64 billion.

Our borrowing base is redetermined by the lenders each April based on certain factors, including our reserves and hedge position, with the next borrowing base redetermination scheduled to occur in April 2020.

Our borrowing base is redetermined semi-annually by the lenders each April and October based on certain factors, including our reserves and hedge position, with the next borrowing base redetermination scheduled to occur in April 2021.

Our borrowing base may decrease as a result of a decline in natural gas, NGLs, or oil prices, operating difficulties, declines in reserves, lending requirements or regulations, the issuance of new indebtedness or for any other reason.

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As a result, we may be unable to implement our drilling and development plan, make acquisitions or otherwise carry out our business plan, which could have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness.

In addition, a downgrade to our corporate credit rating, similar to the December 2019 downgrade by Moody’s Investors Services, could require us to post additional collateral in the form of letters of credit or cash as financial assurance of our performance under certain contractual arrangements, such as pipeline transportation contracts.

In addition, a downgrade to our credit rating could require us to post additional collateral in the form of letters of credit or cash as financial assurance of our performance under certain contractual arrangements, such as pipeline transportation contracts.

An increase in our outstanding letters of credit may impact our available liquidity under our Credit Facility.

We may be unable to access the equity or debt capital markets, including the market for senior unsecured notes, to meet our obligations.

We may be unable to access the equity or debt capital markets to meet our obligations.

Declines in commodity prices may cause the financial markets to exert downward pressure on stock prices and credit capacity for companies throughout the energy industry.

For example, for portions of 2020, the market for senior unsecured notes was unfavorable for high-yield issuers such as us.

Our plans for growth may require access to the capital and credit markets, including the ability to issue senior unsecured notes.

Although the market for high-yield debt securities experienced periods of improvement in 2019, if the high-yield market deteriorates, or if we are unable to access alternative means of debt or equity financing on acceptable terms, we may be unable to implement our drilling and development plan, make acquisitions or otherwise carry out our business plan, which could have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness.

Our development plan may require access to the capital and credit markets.

Although the market for high-yield debt securities experienced periods of improvement in 2020, if the high-yield market deteriorates, or if we are unable to access alternative means of debt or equity financing on acceptable terms or at all, we may be unable to implement our development plan or otherwise carry out our business plan, which could have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness.

Restrictions in our existing and future debt agreements could limit our growth and our ability to engage in certain activities.

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In addition, the Credit Facility requires us to maintain certain financial ratios or to reduce our indebtedness if we are unable to comply with such ratios.

These restrictions, together with those in the indentures governing our senior notes, may also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities.

We may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictive covenants under the indentures governing our senior notes and the Credit Facility impose on us.

The Credit Facility limits the amounts we can borrow up to a borrowing base amount, which the lenders, in their sole discretion, determine on an annual basis based upon projected revenues from the oil and natural gas properties and commodity derivatives securing our loan.

These restrictions, together with those in the indentures governing our senior notes and our 2026 Convertible Notes, may also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities.

The Credit Facility limits the amounts we can borrow up to a borrowing base amount, which the lenders, in their sole discretion, determine on a semi-annual basis based upon projected revenues from the oil and natural gas properties and commodity derivatives securing our loan.

The lenders can unilaterally adjust the borrowing base and the borrowings permitted to be outstanding under the Credit Facility.

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Disruptions and volatility in the global financial markets may lead to a contraction in credit availability impacting our ability to finance our operations.

We require continued access to capital.

A significant reduction in cash flows from operations or the availability of credit could materially and adversely affect our ability to achieve our planned growth and operating results.

Currently, we receive significant incremental cash flows as a result of our hedging activity.

To the extent we are unable to obtain future hedges at effective prices consistent with those we have received to date and natural gas prices do not improve, our cash flows may be adversely impacted.

Furthermore, our derivative activities could result in financial losses or could reduce our earnings.

In certain circumstances, we may have to make cash payments under our hedging arrangements and these payments could be significant and could result in operating costs exceeding revenues.

To achieve more predictable cash flows and reduce our exposure to downward price fluctuations, as of December 31, 2019, we had entered into forward swap contracts for approximately 1.8 Tcfe of our projected natural gas, NGLs, and oil production through December 31, 2023 and basis swap contracts for approximately 0.2 Tcfe through December 31, 2024.

Historically, we have realized a significant benefit from our hedge positions.

For example, for the years ended December 31, 2018 and 2019, we received approximately $613 million and $325 million, respectively, in revenues from cash settled derivatives pursuant to our hedging arrangements, including $370 million for certain natural gas hedges that were monetized prior to their contractual settlement dates during the year ended December 31, 2018.

Many of the hedge agreements that resulted in these realized gains for the years ended December 31, 2018 and 2019 were executed at times when spot and future prices were higher than prices that we are currently able to obtain in the futures market, and the prices at which we have been able to hedge future production have decreased as a result.

Sustained weaknesses in commodity prices adversely affect our ability to hedge future production.

Additionally, since we have financial derivatives in place in order to hedge against price declines for a significant part of our estimated future production, we have fixed or limited a significant part of our overall future revenues.

Approximately 70% of our estimated production for 2020 is hedged through either forward swaps or basis swaps.

Our hedging transactions expose us to counterparty credit risk and may become more costly or unavailable to us.

As of December 31, 2019, the estimated fair value of our commodity net derivative contracts was approximately $746 million, primarily including the following net asset values by bank counterparty:

Wells Fargo - $215 million;

JP Morgan - $134 million;

Morgan Stanley - $121 million;

Citigroup - $117 million;

Scotiabank - $58 million;

Canadian Imperial Bank of Commerce - $44 million;

PNC - $29 million;

BNP Paribas - $21 million;

Natixis - $10 million;

and SunTrust $7 million.

As described above, we enter into certain derivative instruments in the ordinary course operations of our business.

Our hedging transactions expose us to risk of financial loss if a counterparty fails to perform under a derivative contract.

Derivative instruments also expose us to the risk of financial loss in some circumstances, including when there is an increase in the differential between the underlying price in the derivative instrument and actual prices received or there are issues with regard to legal enforceability of such instruments.

The use of derivatives may, in some cases, require the posting of cash collateral with counterparties.

If we enter into derivative instruments that require cash collateral and commodity prices or interest rates change in a manner adverse to us, our cash

otherwise available for use in our operations would be reduced which could limit our ability to make future capital expenditures and make payments on our indebtedness, and which could also limit the size of our borrowing base.

Future collateral requirements will depend on arrangements with our counterparties, highly volatile oil, NGLs and natural gas prices, and interest rates.

In addition, U.S.

As adopted, certain financial institutions are required to comply with the new SA-CCR rules beginning on January 1, 2022.

The new rules could significantly increase the capital requirements for certain participants in the over-the-counter derivatives market in which we participate.

We are required to pay fees to our service providers based on minimum volumes under long-term contracts regardless of actual volume throughput.

We have various firm transportation and gas processing, gathering and compression service agreements in place, each with minimum volume delivery commitments.

Lower commodity prices may lead to reductions in our drilling program, which may result in insufficient production to fully utilize our firm transportation and processing capacity.

Our firm transportation agreements expire at various dates from 2021 to 2058, our gas processing, gathering, and compression services agreements expire at various dates from 2020 to 2038.

We are obligated to pay fees on minimum volumes to our service providers regardless of actual volume throughput.

As of December 31, 2019, our long- term contractual obligations under agreements with minimum volume commitments totaled over $18 billion over the term of the contracts.

If we have insufficient production to meet the minimum volumes, our cash flow from operations will be reduced, which may require us to reduce or delay our planned investments and capital expenditures or seek alternative means of financing, all of which may have a material adverse effect on our results of operations.

Based on current projected 2020 annual production guidance, we estimate that we could incur annual net marketing costs of $0.10 per Mcfe to $0.12 per Mcfe in 2020 for unutilized transportation capacity depending on the amount of unutilized capacity that can be marketed to third parties or utilized to transport third party gas and capture positive basis differentials.

As a result, we will be limited in our ability to use other gathering and compression operators in West Virginia, Ohio and Pennsylvania, even if such operators are able to offer us more efficient service.

We will also be limited in our ability to use other processing and fractionation services providers in any area to the extent Antero Midstream is able to offer a competitive bid.

Additionally, the Water Services Agreement provides Antero Midstream with a right of first offer on any future areas of operation outside of those defined areas.

As a result, we will be limited in our ability to use other water services providers in the dedication areas of Ohio and West Virginia or other future areas of operation, even if such providers are able to offer us more favorable pricing or more efficient service.

If additional takeaway pipelines under construction or other pipeline projects are not completed, our future growth may be limited.

We have secured sufficient long-term firm takeaway capacity on major pipelines that are in existence or currently under construction in each of our core operating areas to accommodate our current development plan.

Any unavailability of existing takeaway pipelines could cause us to curtail our future development and production plans, which could adversely affect our business, financial condition and results of operations.

Restrictions on our ability to obtain water or dispose of produced water and other waste may have an adverse effect on our financial condition, results of operations and cash flows.

The hydraulic fracture stimulation process on which we depend to produce commercial quantities of natural gas, NGLs, and oil requires the use and disposal of significant quantities of water.

The availability of water recycling facilities and other disposal alternatives to receive all of the water produced from our wells may affect our production.

For example, Antero Midstream idled its wastewater treatment facility and related landfill in September 2019, which limits Antero Midstream’s available outlets to dispose of our produced water.

A significant reduction in net cash provided by operating activities or the availability of credit could materially and adversely affect our ability to achieve our development plan and operating results.

We may be unable to raise the funds necessary to repurchase the 2026 Convertible Notes for cash following a fundamental change, or to pay any cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the 2026 Convertible Notes or pay cash upon their conversion.

Holders of our 2026 Convertible Notes may, subject to a limited exception, require us to repurchase their 2026 Convertible Notes following a fundamental change at a cash repurchase price generally equal to 100% of the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any.

In addition, upon conversion, we will satisfy part or all of our conversion obligation in cash unless we elect to settle conversions solely in shares of our common stock.

We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2026 Convertible Notes or pay the cash amounts due upon conversion.

In addition, applicable law, regulatory authorities and the agreements governing our other

indebtedness, may restrict our ability to repurchase the 2026 Convertible Notes or pay the cash amounts due upon conversion.

Our inability to satisfy our obligations under the 2026 Convertible Notes could affect the trading price of our common stock.

Our failure to repurchase the 2026 Convertible Notes or to pay the cash amounts due upon conversion when required will constitute a default under the indenture governing the 2026 Convertible Notes.

A default under this indenture or the occurrence of the fundamental change itself could also lead to a default under agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full.

We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the 2026 Convertible Notes.

Compliance with Regulations

Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing as well as governmental reviews of such activities could result in increased costs and additional operating restrictions or delays in the completion of oil and natural gas wells and adversely affect our production.

Hydraulic fracturing is an important and common practice that is used to stimulate production of natural gas and/or oil from dense subsurface rock formations.

Hydraulic fracturing is an important and common practice that is used to stimulate production of natural gas and/or oil from low permeability subsurface rock formations.

The hydraulic fracturing process involves the injection of water, sand, and chemicals under pressure through a cased and cemented wellbore into targeted subsurface formations to fracture the surrounding rock and stimulate production.

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In addition, the EPA finalized rules in June 2016 that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly owned wastewater treatment plants.

Certain governmental reviews have been conducted or are underway that focus on environmental aspects of hydraulic fracturing practices.

For example, in December 2016, the EPA released its final report on the potential impacts of hydraulic fracturing on drinking water resources.

The final report concluded that “water cycle” activities associated with hydraulic fracturing may impact drinking water resources under certain limited circumstances.

Because the report did not find a direct link between hydraulic fracturing and contamination of groundwater resources, this years-long study report does not appear to provide any basis for further regulation of hydraulic fracturing at the federal level.

In addition, Congress has from time to time considered legislation to provide for federal regulation of hydraulic fracturing under the SDWA and to require disclosure of the chemicals used in the hydraulic fracturing process.

New legislation regulating hydraulic fracturing may be considered again in future, though we cannot predict when or the scope of any such legislation at this time.

At the state level, several states have adopted or are considering legal requirements that could impose more stringent permitting, disclosure, and well construction requirements on hydraulic fracturing activities.

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If new or more stringent federal, state, or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, we could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development, or production activities, and perhaps even be precluded from drilling wells.

Reserve estimates depend on many assumptions that may turn out to be inaccurate.

Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.

The process of estimating oil and gas reserves is complex.

It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices.

Any significant inaccuracies in these interpretations or assumptions could materially affect our estimated quantities and present value of our reserves.

In order to prepare our estimates, we must project production rates and timing of development expenditures.

We must also analyze available geological, geophysical, production and engineering data.

The extent, quality and reliability of this data can vary.

The process also requires economic assumptions about matters such as realized prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.

Actual future production, realized prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable reserves will vary from our estimates.

Any significant variance could materially affect the estimated quantities and present value of our reserves.

Investors should not assume that the present value of future net revenues from our reserves is the current market value of our estimated reserves.

We generally base the estimated discounted future net cash flows from our reserves on prices and costs on the date of the estimate.

Actual future prices and costs may differ materially from those used in the present value estimate.

Our identified potential well locations are scheduled out over many years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.

In addition, we may not be able to obtain the substantial amount of capital that would be necessary to drill our potential well locations.

Our management team has specifically identified and scheduled certain well locations as an estimation of our future multi- year drilling activities on our existing acreage.

These well locations represent a significant part of our growth strategy.

Because of these uncertain factors, we do not know if the numerous potential well locations we have identified will ever be drilled or if we will be able to produce natural gas or oil from these or any other potential well locations.

In addition, unless production is established within the spacing units covering the undeveloped acres on which some of the potential locations are obtained, the leases for such acreage will expire.

As such, our actual drilling activities may materially differ from those presently identified.

For more information on our future potential acreage expirations, see “Item 1.

Business and Properties—Our Properties and Operations—Undeveloped Acreage Expirations.”

As of December 31, 2019, we had 2,385 identified potential horizontal well locations located in our proved, probable, and possible reserve base.

As a result of the limitations described above, we may be unable to drill many of our potential well locations.

In addition, we will require significant additional capital over a prolonged period in order to pursue the development of these locations, and we may not be able to obtain or generate the capital required to do so.

Any drilling activities we are able to conduct on these potential locations may not be successful or result in our ability to add additional proved reserves to our overall proved reserves or may result in a downward revision of our estimated proved reserves, which could have a material adverse effect on our future business and results of operations.

For more information on our identified potential well locations, see “Item 1.

Business and Properties—Our Properties and Operations—Estimated Proved Reserves—Identification of Potential Well Locations.”

Approximately 65% of our net leasehold acreage is undeveloped, and that acreage may not ultimately be developed or become commercially productive, which could cause us to lose rights under our leases as well as have a material adverse effect on our oil and natural gas reserves and future production and, therefore, our future cash flow and income.

Approximately 65% of our net leasehold acreage is undeveloped, or acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

We have proved undeveloped reserves of 687 Bcfe related to such acreage that is subject to renewal prior to drilling.

In addition, approximately 30% and 29% of our natural gas leases related to our Marcellus and Utica acreage, respectively, require us to drill wells that are commercially productive, and if we are unsuccessful in drilling such wells, we could lose our rights under such leases.

Our future oil and gas reserves and production and, therefore, our future cash flow and income are highly

dependent on successfully developing our undeveloped leasehold acreage.

For more information on our future potential acreage expirations, see “Item 1.

Business and Properties—Our Properties and Operations—Undeveloped Acreage Expirations.”

The standardized measure of discounted future net cash flows from our proved reserves is not the same as the current market value of our estimated oil and gas reserves.

Investors should not assume that the standardized measure of discounted future net cash flows from our proved reserves is the current market value of our estimated oil and gas reserves.

In accordance with SEC requirements, we based the discounted future net cash flows from our proved reserves on the twelve month unweighted arithmetic average of the first-day-of-the-month price for the preceding twelve months without giving effect to derivative transactions.

Our producing properties are concentrated in the Appalachian Basin, making us vulnerable to risks associated with operating in one major geographic area.

Our producing properties are geographically concentrated in the Appalachian Basin in West Virginia and Ohio.

At December 31, 2019, all of our total estimated proved reserves were attributable to properties located in this area.

In addition, a number of areas within the Appalachian Basin have historically been subject to mining operations.

Furthermore, the existence of mining operations near our properties could require coordination to avoid adverse impacts as a result of drilling and mining in close proximity.

Due to the concentrated nature of our portfolio of natural gas properties, a number of our properties could experience any of the same conditions at the same time, resulting in a relatively greater impact on our results of operations than they might have on other companies that have a more diversified portfolio of properties.

Interruptions in operations at facilities that process our gas may adversely affect our business, financial condition and results of operations.

We have agreements with processing facilities, including those owned by MPLX and the Joint Venture to accommodate our current operations as well as future development plans.

Any significant interruptions at these facilities could cause us to curtail our future development and production plans, which could adversely affect our business, financial condition and results of operations.

The operations of the processing facilities could be partially or completely shut down, temporarily or permanently, as the result of circumstances not within the operator’s control, such as:

● restrictions imposed by governmental authorities or court proceedings;

● labor difficulties that result in a work stoppage or slowdown;

● disruption in the supply of power, water and other resources necessary to operate the facilities;

● damage to the facilities resulting from NGLs that do not comply with applicable specifications;

● terrorist or cyber-attacks.

Our failure to develop, obtain, access or maintain the necessary infrastructure to successfully deliver natural gas, NGLs, and oil to market may adversely affect our business, financial condition or results of operations.

Our delivery of natural gas, NGLs, and oil depends upon the availability, proximity and capacity of pipelines, other transportation facilities and gathering and processing and fractionation facilities and the availability of other third-party transportation services.

The capacity of transmission, gathering and processing and fractionation facilities and availability of third-party transportation services may be insufficient to accommodate potential production from existing and new wells, which may result in substantial discounts in the prices we receive for our natural gas, NGLs, and oil.

While our investment in midstream infrastructure through Antero Midstream is intended to address access to and potential curtailments on existing midstream infrastructure, we also deliver to and are serviced by third-party natural gas, NGLs, and oil transmission, gathering, processing, storage and fractionation facilities and transportation services that are limited in number, geographically concentrated and subject to significant risks.

An extended interruption of access to or service from pipelines and facilities operated by Antero Midstream and/or third parties, or of transportation services provided by Antero Midstream and/or third parties for any reason, including cyber-attacks on such pipelines and facilities or service interruptions due to gas quality, could result in adverse consequences to us, such as delays in producing and selling our natural gas, NGLs, and oil.

We may incur losses as a result of title defects in the properties in which we invest.

It is our practice in acquiring oil and gas leases or interests not to incur the expense of retaining lawyers to examine the title to the mineral interest at the time of acquisition.

Rather, we rely upon the judgment of oil and gas lease brokers or landmen who perform the fieldwork in examining records in the appropriate governmental office before attempting to acquire a lease in a specific mineral interest.

Leases in the Appalachian Basin are particularly vulnerable to title deficiencies due to the long history of land ownership in the area, resulting in extensive and complex chains of title.

Additionally, there are claims against us alleging that certain acquired leases that are held by production are invalid due to production from the producing horizons being insufficient to hold title to the formation rights that we have purchased.

The existence of a material title deficiency can render a lease worthless and can adversely affect our financial condition, results of operations and cash flows.

A write-down constitutes a non- cash charge to earnings.

For example, see the discussion of the impairment charges we recorded in 2018 and 2019 with respect to our Utica Shale properties in Note 2 to the consolidated financial statements.

We may incur significant impairment charges in the future, which could have a material adverse effect on our results of operations for the periods in which such charges are taken.

Producing oil and gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors.

Our future gas reserves and production, and therefore our future cash flow and results of operations, are highly dependent on our success in efficiently developing our current reserves and economically finding or acquiring additional recoverable reserves.

If we are unable to replace our current and future production, the value of our reserves will decrease, and our business, financial condition and results of operations would be adversely affected.

Conservation measures and technological advances could reduce demand for oil and gas products.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and gas products, technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas.

The impact of the changing demand for oil and gas services and products may have a material adverse effect on our business, financial condition, results of operations and cash flows.

The inability of our significant customers to meet their obligations to us may adversely affect our financial results.

We are also subject to credit risk due to concentration of receivables with several significant customers.

The largest purchaser of our products during the year ended December 31, 2019 accounted for approximately 16% of our product revenues.

We do not require all of our customers to post collateral.

The inability or failure of our significant customers to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results.

Our operations may be exposed to significant delays, costs and liabilities as a result of environmental and occupational health and safety requirements applicable to our business activities.

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If we were not able to recover the resulting costs through insurance or increased revenues, our business, financial condition or results of operations could be adversely affected.

We may incur substantial losses and be subject to substantial liability claims as a result of our operations.

Additionally, we may not be insured for, or our insurance may be inadequate to protect us against, these risks.

We are not insured against all risks.

Losses and liabilities arising from uninsured and underinsured events could materially and adversely affect our business, financial condition, results of operations and cash flows.

Our oil and gas exploration and production activities are subject to all of the operating risks associated with drilling for and producing oil and gas, including the possibility of:

● abnormally pressured formations;

● mechanical difficulties, such as stuck oilfield drilling and service tools and casing collapse;

● fires, explosions and ruptures of pipelines;

● personal injuries and death;

● natural disasters;

● terrorist attacks targeting natural gas and oil related facilities and infrastructure.

Any of these risks could adversely affect our ability to conduct operations or result in substantial loss to us as a result of claims for:

● injury or loss of life;

● damage to and destruction of property, natural resources and equipment;

● pollution and other environmental damage;

● regulatory investigations and penalties;

● suspension of our operations;

● repair and remediation costs.

We may elect not to obtain insurance for any or all of these risks if we believe that the cost of available insurance is excessive relative to the risks presented.

In addition, pollution and environmental risks generally are not fully insurable.

The occurrence of an event that is not fully covered by insurance could have a material adverse effect on our business, financial condition and results of operations.

We are subject to complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities.

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Our business is subject to federal, state and local laws and regulations as interpreted and enforced by governmental authorities possessing jurisdiction over various aspects of the exploration for, and the production, processing and transportation of natural gas, NGLs, and oil.

For example, following the election of President Biden and a Democratic majority in both houses of Congress, it is possible that our operations may be subject to greater environmental, health and safety restrictions, particularly with regards to hydraulic fracturing, permitting and GHG emissions.

Failure to comply with such laws and regulations, including any evolving interpretation and enforcement by governmental authorities, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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Such potential regulations could increase our operating costs, reduce our liquidity, delay or halt our operations or otherwise alter the way we conduct our business, which could in turn have a material adverse effect on our financial condition, results of operations and cash flows.

Historically, there have been shortages of drilling and workover rigs, pipe and other equipment as demand for rigs and equipment has increased along with the number of wells being drilled.

We cannot predict whether these conditions will exist in the future and, if so, what their timing and duration will be.

A change in the jurisdictional characterization of some of our assets by federal, state or local regulatory agencies or a change in policy by those agencies may result in increased regulation of our assets, which may cause our revenues to decline and operating expenses to increase.

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Should we fail to comply with all applicable FERC administered statutes, rules, regulations and orders, we could be subject to substantial penalties and fines.

Under the EPAct of 2005, FERC has civil penalty authority under the NGA to impose penalties for current violations of up to $1,291,894 per day for each violation and disgorgement of profits associated with any violation.

Under the EPAct of 2005, FERC has civil penalty authority under the NGA to impose penalties for current violations of up to approximately $1.3 million per day for each violation and disgorgement of profits associated with any violation.

While our systems have not been regulated by FERC under the NGA, FERC has adopted regulations that may subject certain of our otherwise non- FERC jurisdictional facilities to FERC annual reporting requirements.

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Our operations are subject to a series of risks related to climate change that could result in increased operating costs, limit the areas in which we may conduct oil and natural gas exploration and production activities, and reduce demand for our products.

In response to findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment, the EPA has adopted regulations under existing provisions of the federal Clean Air Act that, among other things, establish PSD construction and Title V operating permit reviews for certain large stationary sources that are already potential major sources of certain principal, or criteria, pollutant emissions.

The threat of climate change continues to attract considerable attention in the United States and in foreign countries.

In the United States, no comprehensive climate change legislation has been implemented at the federal level.

However, President Biden has highlighted addressing climate change as a priority of his administration, which includes certain potential initiatives for climate change legislation to be proposed and passed into law.

Moreover, federal regulators, state and local governments, and private parties have taken (or announced that they plan to take) actions that have or may have a significant influence on our operations.

For example, in response to findings that emissions of carbon dioxide, methane and other GHGs endanger public health and the environment, the EPA has adopted regulations under existing provisions of the federal Clean Air Act that, among other things, establish PSD

construction and Title V operating permit reviews for certain large stationary sources that are already potential major sources of certain principal, or criteria, pollutant emissions.

Facilities required to obtain PSD permits for their GHG emissions also will be required to meet “best available control technology” standards that will be established by the states or, in some cases, by the EPA for those emissions.

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In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified onshore and offshore oil and gas production sources in the United States on an annual basis, which include certain of our operations.

For example, in December 2015, the EPA finalized rules that added new sources to the scope of the GHG monitoring and reporting rule.

These new sources include gathering and boosting facilities, as well as completions and workovers of hydraulically fractured wells.

The revisions also include the addition of well identification reporting requirements for certain facilities.

These changes to EPA’s GHG emissions reporting rule could result in increased compliance costs.

In June 2016, the EPA finalized new regulations, known as Subpart OOOOa, that establish emission standards for methane and volatile organic compounds from new and modified oil and natural gas production and natural gas processing and transmission facilities.

The EPA’s rule package includes first-time standards to address emissions of methane from equipment and processes across the source category, including hydraulically fractured oil and natural gas well completions.

In addition, the rule package extends existing VOC standards under the EPA’s Subpart OOOO to include previously unregulated equipment within the oil and natural gas

source category.

There have been several attempts to delay or modify these regulations.

Most recently, in August 2019, the EPA proposed amendments to the 2016 standards that, among other things, would remove sources in the transmission and storage segment from the oil and gas source category and rescind the methane-specific requirements applicable to sources in the production and processing segments of the industry.

As an alternative, the EPA also proposed to rescind the methane-specific requirements that apply to all sources in the oil and gas industry, without removing the transmission and storage sources from the current source category.

Under either alternative, the EPA plans to retain emissions limits for VOCs.

Legal challenges to any final rulemaking that rescinds the 2016 standards are expected.

As a result of the foregoing, substantial uncertainty exists with respect to implementation of the EPA’s 2016 methane rule.

However, given the long-term trend toward increasing regulation, future federal GHG regulations of the oil and gas industry remain a possibility, and several states, including West Virginia and Ohio, have separately imposed or are considering imposing their own regulations on methane emissions from oil and gas production activities.

While Congress has from time to time considered legislation to reduce emissions of GHGs, there has not been significant activity in the form of federal legislation in recent years.

Nevertheless, increasing scientific and public concern over the threat of climate change has increased the possibility of political action related to climate change.

For example, various pledges have been made by candidates running for the Democratic nomination for President of the United States in 2020.

These have included promises to pursue actions that would be adverse to oil and gas production and processing activities, though the extent of any such actions cannot be predicted at this time.

In the absence of federal climate legislation, a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions by means of cap and trade programs that typically require major sources of GHG emissions, such as electric power plants, to acquire and surrender emission allowances in return for emitting those GHGs.

Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would impact our business, any such future laws and regulations imposing reporting obligations on, or limiting emissions of GHGs from, our equipment and operations could require us to incur costs to reduce emissions of GHGs associated with our operations.

Substantial limitations on GHG emissions or transitions to alternative forms of energy could also adversely affect demand for the oil and natural gas we produce and lower the value of our reserves.

Depending on the severity of any such limitations, the effect on the value of our reserves could be significant.

On an international level, the United States is one of almost 200 nations that, in December 2015, agreed to an international climate change agreement in Paris, France, that calls for countries to set their own GHG emissions targets and be transparent about the measures each country will use to achieve its GHG emissions targets (“Paris Agreement”).

The Paris Agreement was signed by the United States in April 2016 and entered into force on November 4, 2016;

however, the Paris Agreement does not impose any binding obligations on its participants.

Moreover, in November 2019, the United States formally initiated the yearlong process to withdraw from the Paris Agreement.

However, the United States may subsequently choose to reenter the Paris Agreement or a separately negotiated agreement, though the terms of any such agreement are uncertain at this time.

Separately, increased attention to climate change risks has increased the possibility of claims brought by public and private entities against oil and gas companies in connection with their GHG emissions.

While we are not currently party to any such private litigation, we could be named in future actions making similar claims of liability.

Moreover, to the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to the company’s causation of or contribution to the asserted damage, or to other mitigating factors.

Notwithstanding potential risks related to climate change, the International Energy Agency estimates that oil and gas will continue to represent a major share of global energy use through 2040, and other private sector studies project continued growth in demand for the next two decades.

However, recent activism directed at shifting funding away from companies with energy-related assets could result in limitations or restrictions on certain sources of funding for the energy sector.

Increased scrutiny because of climate change related concern could result in a loss of certain investors.

In addition, institutional lenders may, of their own accord, elect not to provide funding for fossil fuel energy companies based on climate change related concerns, which could affect our access to capital for potential growth projects.

The EPA’s rule package included first-time standards to address emissions of methane from equipment and processes across the source category, including hydraulically fractured oil and natural gas well completions.

In addition, the rule package extended existing VOC standards under the EPA’s Subpart OOOO to include previously unregulated equipment within the oil and natural gas source category.

In September 2020, the EPA finalized amendments to the 2016 standards that removed the transmission and storage segment from the oil and natural gas source category and rescinded the methane-specific requirements for production and processing facilities.

However, President Biden signed an executive order on his first day in office calling for the suspension, revision, or rescission of the September 2020 rule and the reinstatement or issuance of methane emission standards for new, modified, and existing oil and gas facilities.

Given the long-term trend toward increasing regulation, future federal GHG regulations of the oil and gas industry remain a possibility, and several states, including West Virginia and Ohio, have separately imposed or are considering imposing their own regulations on methane emissions from oil and gas production activities.

Additionally, President Biden has issued executive orders recommitting the United States to the Paris Agreement and directing the federal government to begin formulating the United States’ nationally determined emissions reduction target under the agreement.

The impacts of this order, and any legislation or regulation promulgated to fulfill the United States commitments under the Paris Agreement, cannot be predicted at this time.

Concern over the threat of climate change has also resulted in increasing political risks in the United States, including climate-change related pledges made by President Biden and other public office representatives.

These have included promises to pursue actions to limit emissions and curtail the production of oil and gas, such as through the cessation of leasing federal land for hydrocarbon development.

On January 27, 2021, President Biden signed an executive order calling for substantial action on climate change, including, among other things, the increased use of zero-emissions vehicles by the federal government, the elimination of subsidies provided to the fossil fuel industry, and increased emphasis on climate-related risks across agencies and economic sectors.

Other actions that could be pursued include more restrictive requirements for the development of pipeline infrastructure or LNG export facilities, as well as more restrictive GHG emissions limitations for oil and gas facilities.

Increasingly, fossil fuel companies are also exposed to litigation risks associated with the threat of climate change.

A number of cities and other local governments have brought suits against the largest fossil fuel companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change.

Suits have also been brought against such companies under shareholder and consumer protection laws, alleging that the companies have been aware of the adverse effects of climate change but failed to adequately disclose those impacts.

We are not currently party to any such litigation, but could be named in future actions making similar claims of liability.

Additionally, in response to concerns related to climate change, companies in the fossil fuel sector may be exposed to increasing financial risks.

Financial institutions, including investment advisors and certain sovereign wealth, pension, and endowment funds, may elect in the future to shift some or all of their investment into non-fossil fuel related sectors.

Institutional lenders who provide financing to fossil-fuel energy companies have also become more attentive to sustainable lending practices, and some of them may elect in future not to provide funding for fossil fuel energy companies.

There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector.

Recently, the Federal Reserve announced that it has joined the Network for Greening the Financial System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector.

A material reduction in the capital available to the fossil fuel industry could make it more difficult to secure funding for exploration, development, production, transportation and processing activities, which could result in decreased demand for our products or otherwise adversely impact our financial performance.

The adoption and implementation of new or more stringent international, federal or state legislation, regulations or other regulatory initiatives related to climate change or GHG emissions from oil and natural gas facilities could result in increased costs of compliance or costs of consumption, thereby reducing demand for our products.

Additionally, political, litigation, and financial risks

may result in (i) restriction or cancellation of certain oil and natural gas production activities, (ii) incurrence of obligations for alleged damages resulting from climate change, or (iii) impairment of our ability to continue operating in an economic manner.

One or more of these developments could have a material adverse effect on our business, financial condition and results of operation.

Finally, it should be noted that a number of scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, floods, droughts and other extreme climatic events;

if any such effects were to occur, they have the potential to cause physical damage to our assets or affect the availability of water and thus could have an adverse effect on our exploration and production operations.

In addition, while our consideration of changing weather conditions and inclusion of safety factors in design is intended to reduce the uncertainties that climate change and other events may potentially introduce, our ability to mitigate the adverse impacts of these events depends in part on the effectiveness of our facilities and our disaster preparedness and response and business continuity planning, which may not have considered or be prepared for every eventuality.

Regulations related to the protection of wildlife adversely could adversely affect our ability to conduct drilling activities in some of the areas where we operate.

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These constraints and the resulting shortages or high costs could delay our operations and materially increase our operating and capital costs.

Competition in the oil and gas industry is intense, making it more difficult for us to acquire properties, market products and secure trained personnel.

Also, there is substantial competition for capital available for investment in the oil and natural gas industry.

Many of our competitors possess and employ financial, technical and personnel resources substantially greater than ours.

In addition, other companies may be able to offer better compensation packages to attract and retain qualified personnel than we are able to offer.

The cost to attract and retain qualified personnel may increase substantially in the future.

We may not be able to compete successfully in the future in acquiring prospective reserves, developing reserves, marketing hydrocarbons, attracting and retaining quality personnel and raising additional capital, which could have a material adverse effect on our business.

Terrorist or cyber-attacks and threats could have a material adverse effect on our business, financial condition or results of operations.

Strategic targets, such as energy- related assets, may be at greater risk of future attacks than other targets in the United States.

Our insurance may not protect us against such occurrences.

To date we have not experienced any material losses relating to cyber-attacks;

however, there can be no assurance that we will not suffer such losses in the future.

Consequently, it is possible that any of these occurrences, or a combination of them, could have a material adverse effect on our business, financial condition and results of operations.

Human Capital

The loss of senior management or technical personnel could adversely affect operations.

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Our officers and employees provide services to both us and Antero Midstream.

All of our executive officers and other personnel provide corporate, general and administrative services to Antero Midstream and, when providing services to Antero Midstream, are concurrently employed by us and Antero Midstream pursuant to the terms of a services agreement.

All of our executive officers and certain other personnel provide corporate, general and administrative services to Antero Midstream and, when providing services to Antero Midstream, are concurrently employed by us and Antero Midstream pursuant to the terms of a services agreement.

In addition, certain of our operational personnel are seconded to Antero Midstream pursuant to the terms of a secondment agreement and are concurrently employed by us and Antero Midstream during such secondment.

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If such officers and employees do not devote sufficient attention to the management and operation of our business, our financial results may suffer.

We may be subject to risks in connection with acquisitions of properties.

The successful acquisition of producing properties requires an assessment of several factors, including:

● recoverable reserves;

● future natural gas, NGLs, and oil prices and their applicable differentials;

● operating costs;

● potential environmental and other liabilities.

The accuracy of these assessments is inherently uncertain.

In connection with these assessments, we perform a review of the subject properties that we believe to be generally consistent with industry practices.

Our review will not reveal all existing or potential problems nor will it permit us to become sufficiently familiar with the properties to fully assess their deficiencies and capabilities.

Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken.

Even when problems are identified, the seller may be unwilling or unable to provide effective contractual protection against all or part of the problems.

We often are not entitled to contractual indemnification for environmental liabilities and acquire properties on an “as is” basis.

We may be unable to make attractive acquisitions or successfully integrate acquired businesses, and any inability to do so may disrupt our business and hinder our ability to grow.

In the future, we may acquire businesses that complement or expand our current business.

We may not be able to identify attractive acquisition opportunities.

Even if we do identify attractive acquisition opportunities, we may not be able to complete the acquisition or do so on commercially acceptable terms.

The success of any completed acquisition will depend on our ability to effectively integrate the acquired business into our existing operations.

The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources.

In addition, possible future acquisitions may be larger and for purchase prices significantly higher than those paid for earlier acquisitions.

Our failure to achieve consolidation savings, to successfully integrate the acquired businesses and assets into our existing operations or to minimize any unforeseen operational difficulties could have a material adverse effect on our business, financial condition and results of operations.

In addition, the Credit Facility and the indentures governing our senior notes impose certain limitations on our ability to enter into mergers or combination transactions.

The Credit Facility and the indentures governing our senior notes also limit our ability to incur certain indebtedness, which could indirectly limit our ability to engage in acquisitions of businesses.

Our future growth prospects are dependent upon our ability to identify optimal strategies for our business.

In developing our 2020 business plan, we considered allocating capital and other resources to various aspects of our businesses, including well development, reserve acquisitions, exploratory activities, midstream infrastructure, corporate items, repayment of indebtedness and other alternatives.

We also considered our likely sources of capital, including potential asset sales.

Notwithstanding the

determinations made in the development of our 2020 plan, business opportunities not previously identified periodically come to our attention, including possible acquisitions and dispositions.

If we fail to identify optimal business strategies, including the appropriate corporate structure, appropriate rate of reserve development, or fail to optimize our capital investment and capital raising opportunities and the use of our other resources in furtherance of our business strategies, our financial condition and growth rate may be adversely affected.

Moreover, economic or other circumstances may change from those contemplated by our 2020 plan, and our failure to recognize or respond to those changes may limit our ability to achieve our objectives.

We periodically engage in acquisitions, dispositions and other strategic transactions, including joint ventures.

These transactions involve various inherent risks, such as our ability to obtain the necessary regulatory approvals;

the timing of and conditions imposed upon us by regulators in connection with such approvals;

the assumption of potential environmental or other liabilities;

and our ability to realize the benefits expected from the transactions.

In addition, various factors including prevailing market conditions could negatively impact the benefits we receive from transactions.

Competition for acquisition opportunities in our industry is intense and may increase the cost of, or cause us to refrain from, completing acquisitions.

Joint venture arrangements may restrict our operational and corporate flexibility.

Moreover, joint venture arrangements involve various risks and uncertainties, such as committing us to fund operating and/or capital expenditures, the timing and amount of which we may have little control over, and our joint venture partners may not satisfy their obligations to the joint venture.

Our future tax liability may be greater than expected if our net operating loss (“NOL”) carryforwards are limited, we do not generate expected deductions, or tax authorities challenge certain of our tax positions.

As of December 31, 2020, we have U.S.

federal and state NOL carryforwards of $2.3 billion and $2.0 billion, respectively, some of which expire at various dates from 2032 to 2040 while others have no expiration date.

We currently expect to be able to utilize these NOL carryforwards and generate deductions to offset our future taxable income.

This expectation is based upon assumptions we have made regarding, among other things, our income, capital expenditures and net working capital, and upon our NOL carryforwards not becoming subject to future limitation under Section 382 of the Internal Revenue Code of 1986, as amended (“ Section 382 ”), or otherwise.

Section 382 generally imposes an annual limitation on the amount of NOL carryforwards that may be used to offset taxable income when a corporation has undergone an “ownership change” (as determined under Section 382).

An ownership change generally occurs if one or more stockholders (or groups of stockholders) who are each deemed to own at least 5% of such corporation’s stock change their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

In the event that we were to undergo an ownership change, utilization of our NOL carryforwards would be subject to an annual limitation under Section 382, determined by multiplying the value of our stock at the time of the ownership change by the applicable long-term tax-exempt rate in effect during the month in which the ownership change occurs, subject to certain adjustments, which could result in a portion of our NOL carryforwards expiring prior to their utilization.

Any unused annual limitation may be carried over to later years.

Any limitation on our ability to utilize our NOL carryforwards against income or gain we generate in the future could result in future income tax expense that could adversely affect our operating results and cash flows.

Furthermore, any significant variance in our interpretation of current income tax laws, including as result of the release of final Treasury Regulations or other interpretive guidance implementing the Tax Cuts and Jobs Act, or a challenge of one or more of our tax positions by the IRS or other tax authorities could affect our tax position.

While we expect to be able to utilize our NOL carryforwards and generate deductions to offset our future taxable income, in the event that deductions are not generated as expected, one or more of our tax positions are successfully challenged by the IRS (in a tax audit or otherwise), or our NOL carryforwards are subject to future limitation (including due to an ownership change under Section 382), our future tax liability may be greater than expected.

Potential future legislation or the imposition of new or increased taxes or fees may generally affect the taxation of natural gas and oil exploration and development companies and may adversely affect our operations and cash flows.

In past years, federal and state level legislation has been proposed that would, if enacted into law, make significant changes to tax laws, including to certain key U.S.

federal and state income tax provisions currently available to natural gas and oil exploration and development companies.

For example, President Biden has set forth several tax proposals that would, if enacted into law, make significant changes to U.S.

Such proposals include, but are not limited to, (i) an increase in the U.S.

income tax rate applicable to corporations and (ii) the elimination of tax subsidies for fossil fuels.

Congress could consider some or all of these proposals in connection with tax reform to be undertaken by the Biden administration.

It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect.

Additionally, states in which we operate or own assets may impose new or increased taxes or fees on natural gas and oil extraction.

The passage of any legislation as a result of these proposals and other similar changes in U.S.

federal income tax laws or the imposition of new or increased taxes or fees on natural gas and oil extraction could adversely affect our operations and cash flows.

General Risks

The price of our common stock may be volatile, and you could lose a significant portion of your investment.

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● the level of any dividends we may declare;

● quarterly variations in the rate of growth of our financial indicators, such as dividends per share of our common stock, net income and revenues;

● quarterly variations in the rate of growth of our financial indicators, such as net income and revenues;

● levels of indebtedness;

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● domestic and international economic, legal and regulatory factors related to our performance.

Sales of a substantial amount of shares of our common stock in the public market could adversely affect the market price of our shares.

Sales of a substantial amount of shares of our common stock in the public market or grants to our directors and officers under the AR LTIP, or the perception that these sales or grants may occur, could reduce the market price of shares of our common stock.

All of the shares of our common stock are freely tradable without restriction or further registration under the Securities Act, unless the shares are held by any of our “affiliates” as such term is defined in Rule 144 under the Securities Act.

We cannot predict the size of future issuances of our common stock or securities convertible into our common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock.

There may be future dilution of our common stock, which could adversely affect the market price of shares of our common stock.

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We may also acquire interests in other companies by using a combination of cash and shares of our common stock or only shares.

We may also issue securities

convertible into, or exchangeable for, or that represent the right to receive, shares of our common stock.

We may also issue securities convertible into, or exchangeable for, or that represent the right to receive, shares of our common stock.

For example, the 2026 Convertible Notes may become convertible at the option of holders prior to their scheduled terms under certain circumstances.

Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.

In addition, the existence of the 2026 Convertible Notes may encourage short selling by market participants because the conversion of the 2026 Convertible Notes could be used to satisfy short positions, or anticipated conversion of the 2026 Convertible Notes into shares of our common stock could depress the price of our common stock.

Any of these events may dilute the ownership interests of our stockholders, reduce our earnings per share or have an adverse effect on the price of shares of our common stock.

Sales of a substantial amount of shares of our common stock in the public market could adversely affect the market price of our shares.

Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock.

Among other things, our certificate of incorporation and bylaws:

● provide that the authorized number of directors may be changed only by resolution of our board of directors ;

● provide for our board of directors to be divided into three classes of directors, with each class as nearly equal in number as possible, serving staggered three-year terms;

● provide that special meetings of our stockholders may only be called only by the Chief Executive Officer, the Chairman of our board of directors or our board of directors pursuant to a resolution adopted by a majority of the total number of directors that we would have if there were no vacancies;

may, are or will be competitive with our business and the business of our subsidiaries or in the same or similar lines of business as us and our subsidiaries, or that could be suitable for us or our subsidiaries and (iii) we have, subject to limited exceptions, renounced, to the fullest extent permitted by law, any interest or expectancy in, or in being offered an opportunity to participate in, such corporate opportunities;

Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the “Court of Chancery”) will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our certificate of incorporation or our bylaws as to which the DGCL confers jurisdiction on the Court of Chancery or (iv) any action asserting a claim against us governed by the internal affairs doctrine, in each such case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.

Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the “Court of Chancery”) will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws as to which the DGCL confers jurisdiction on the Court of Chancery or (iv) any action asserting a claim against us governed by the internal affairs doctrine, in each such case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.

The foregoing provision does not apply to claims under the Securities Act, the Exchange Act or any claim for which the U.S.

federal courts have exclusive jurisdiction.

Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provisions of certificate of incorporation described in the preceding sentence.

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Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition and results of operations.

We have elected not to be subject to the provisions of Section 203 of the DGCL, regulating corporate takeovers.

In general, the provisions of Section 203 of the DGCL prohibit a Delaware corporation, including those whose securities are listed for trading on the NYSE, from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:

● prior to such time, the business combination or the transaction which resulted in the stockholder becoming an interested stockholder is approved by our board of directors ;

Section 203 of the DGCL permits a Delaware corporation to elect not to be governed by the provisions of Section 203.

Pursuant to our certificate of incorporation, we expressly elected not to be governed by Section 203.

We may issue preferred stock, which may have terms that could adversely affect the voting power or value of our common stock.

Our certificate of incorporation authorizes our board of directors to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine.

over our common stock respecting dividends and distributions, as our board of directors may determine.

The terms of one or more classes or series of our preferred stock could adversely impact the voting power or value of our common stock.

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Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of our preferred stock could affect the residual value of our common stock.

Final regulations relating to and interpretations of provisions of the Tax Cuts and Jobs Act may vary from our current interpretation of such legislation.

federal income tax legislation enacted in Public Law No.

115-97, commonly referred to as the Tax Cuts and Jobs Act, is highly complex and subject to interpretation.

The presentation of our financial condition and results of operations is based upon our current interpretation of the provisions contained in the Tax Cuts and Jobs Act.

The Treasury Department and the Internal Revenue Service have issued, and are expected to continue to issue, final regulations and additional interpretive guidance with respect to the provisions of the Tax Cuts and Jobs Act.

Any significant variance of our current interpretation of such provisions from any future final regulations or interpretive guidance could result in a change to the presentation of our financial condition and results of operations and could negatively affect our business.

As of December 31, 2019, we have U.S.

federal and state NOL carryforwards of $2.2 billion and $2.0 billion, respectively, some of which expire at various dates from 2032 to 2038 while others have no expiration date.

We expect to be able to utilize these NOL carryforwards and generate deductions to offset our future taxable income.

This expectation is based upon assumptions we have made regarding, among other things, our income, capital expenditures and net working capital, and the current expectation that our NOL carryforwards will not become subject to future limitations under Section 382 of the Internal Revenue Code of 1986 or otherwise.

Additionally, any significant variance in our interpretation of current income tax laws, including as result of the release of final Treasury Regulations or other interpretive guidance implementing the Tax Cuts and Jobs Act, or a challenge of one or more of our tax positions by the IRS or other tax authorities could affect our tax position.

While we expect to be able to utilize our NOL carryforwards and generate deductions to offset our future taxable income, in the event that deductions are not generated as expected, one or more of our tax positions are successfully challenged by the IRS (in a tax audit or otherwise), or our NOL carryforwards are subject to future limitations, our future tax liability may be greater than expected.

Changes to state tax laws in response to the Tax Cuts and Jobs Act or that impose new or increased taxes or fees on natural gas and oil extraction may result in an increase in the state taxes we pay.

Currently, many states conform their calculation of corporate taxable income to the calculation of corporate taxable income at the U.S.

federal level.

Due to changes to U.S.

federal income tax laws as a result of the Tax Cuts and Jobs Act, certain states may change or modify the calculation of corporate taxable income at the state level.

Any resulting increase in costs due to such changes could have an adverse effect on our financial position, results of operations and cash flows.

Additionally, states in which we operate or own assets may impose new or increased taxes or fees on natural gas and oil extraction, which could negatively affect our future cash flows and financial condition.

UNRESOLVED STAFF COMMENTS

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LEGAL PROCEEDINGS

The information required by this item is included in Note 15 to the consolidated financial statements and is incorporated herein.

The information required by this item is included in Note 16—Contingencies to the consolidated financial statements and is incorporated herein.

MINE SAFETY DISCLOSURES

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors