What changed in this filing

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Item 1A. Risk Factors

2022-02-16 compared with 2021-02-17 · 163 added, 106 removed, 550 unchanged (33% of the section changed)

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Natural gas, NGLs and oil are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand.

Historically, the markets for these commodities have been volatile.

These markets will likely continue to be volatile in the future.

The prices we receive for our production, and the levels of our production, depend on numerous factors beyond our control.

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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 $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.

The daily spot prices for NYMEX Henry Hub natural gas ranged from a high of $23.86 per MMBtu to a low of $2.43 per MMBtu in 2021 , and the daily spot prices for NYMEX West Texas Intermediate crude oil ranged from a high of $85.64 per barrel to a low of $47.47 per barrel during the same period.

While oil and natural gas prices were generally higher in 2021 than they were in 2020, the markets for these commodities have historically been volatile, and these markets will likely continue to be volatile in the future.

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.

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.

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.

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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.

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, NGLs and oil.

We have received 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.

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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.

To achieve more predictable cash flows and reduce our exposure to downward price fluctuations, as of December 31, 2021, we had entered into forward swap contracts for approximately 438 Bcf of our projected natural gas production through December 31, 2023 and basis swap contracts for approximately 58 Bcf through December 31, 2024.

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

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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.

For example, during the year ended December 31, 2021 , we paid approximately $1.2 billion, 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.

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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.

For example, see the discussion of the impairment charges we recorded in 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 at the beginning of the COVID-19 pandemic caused extreme market volatility, increased costs and decreased availability of storage capacity.

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.

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

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, caused extreme market volatility and a substantial adverse effect on commodity prices in 2020.

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

Without sufficient transportation and storage capacity, many producers were forced to temporarily shut in portions of our their production or sell portions of their production at below-market prices.

The extent to which the pandemic will impact our business results and operations remains uncertain in light of the rapidly evolving environment, duration and severity of the spread of the virus and emerging variants, effectiveness of vaccine and booster shots, public acceptance of safety protocols and government measures, including vaccine mandates, designed to slow and contain the spread of COVID-19, among others.

As vaccines have become widely available, social distancing guidelines, travel restrictions and stay-at-home orders have eased, activity in the global economy has increased, demand for oil, natural gas and NGLs and related commodity pricing has improved and storage capacity constraints have subsided.

However, a worsening of the COVID-19 pandemic or other circumstances that could give rise to an imbalance between the supply of and demand for our products 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.

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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.

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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.

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.

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, cyberattacks 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.

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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.

The availability of water may change over time in ways that we cannot control, including as a result of climate change-related effects such as shifting weather patterns.

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.

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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, 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, negative impacts on our stock price and reduced 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.

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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, we have established a net zero goal by 2025 with respect to our Scope 1 (direct) and Scope 2 (indirect from the purchase of energy) GHG emissions, and we could face unexpected material costs as a result of our efforts to meet this goal and any future revisions to it.

We continue to evaluate a range of technology and other measures, such as carbon offsets, that could assist with meeting this goal.

Given uncertainties related to the use of emerging technologies, the state of markets for and the availability of verified quality carbon offsets, we cannot predict whether or not we will be able to timely meet our net zero goal, if at all.

While we may participate in various voluntary frameworks and certification programs to improve the ESG profile of our operations and products, we cannot guarantee that such participation or certification will have the intended results on our or our products’ ESG profile.

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.

Such ratings may be 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.

Moreover, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively or recruit or retain employees, which may adversely affect our operations.

Such ESG matters may also impact Antero Midstream and our customers, which may adversely impact our business, financial condition or results of operations.

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

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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.

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.

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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.

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

Terrorist attacks or cyberattacks 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.

We also collect and store sensitive data in the ordinary course of our business, including personally identifiable information of our employees as well as our proprietary business information and that of our customers, suppliers, investors and other stakeholders.

The secure processing, maintenance and transmission of information is critical to our operations, and we monitor our key information technology systems in an effort to detect and prevent cyberattacks, security breaches or unauthorized access.

Despite our security measures, our information technology systems may undergo cyberattacks or security breaches including as a result of employee error, malfeasance or other threat vectors, which 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.

Moreover, we may not be able to anticipate, detect or prevent all cyberattacks, particularly because the methodologies used by attackers change frequently or may not be recognized until such attack is underway, and because attackers are increasingly using technologies specifically designed to circumvent cybersecurity measures and avoid detection.

Cybersecurity attacks are also becoming more sophisticated and include, but are not limited to, ransomware, credential stuffing, spear phishing, social engineering and other attempts to gain unauthorized access to data for purposes of extortion or other malfeasance.

As cyberattacks 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 cyberattacks.

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;

A cyberattack or security breach could result in liability under data privacy laws, regulatory penalties, damage to our reputation or lss of confidence in us, or additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which could have a material and adverse effect on our business, financial condition or results of operations.

To date we have not experienced any material losses relating to cyberattacks;

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

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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

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.

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.

Negative public perception regarding us and/or our industry could have an adverse effect on our operations.

Opposition toward oil and natural gas drilling and development activities generally has been growing globally and is particularly pronounced in the U.S., and companies in our industry are often the target of activist efforts from both individuals and non-governmental organizations regarding safety, human rights, environmental matters, sustainability and business practices.

Negative public perception regarding us and/or our industry may lead to increased litigation and regulatory, legislative and judicial scrutiny, which may, in turn, lead to new local, state and federal laws, regulations, guidelines and enforcement interpretations in safety, environmental, royalty and surface use areas.

These actions may cause operational delays or restrictions, increased operating costs, additional regulatory burdens and increased risk of litigation.

Moreover, governmental authorities exercise considerable discretion in the timing and scope of permit issuance and the public may engage in the permitting process, including through intervention in the courts.

Negative public perception could cause the permits we need to conduct our operations to be withheld, delayed, challenged or burdened by requirements that restrict our ability to profitably conduct our business.

In addition, anti-development activists are working to, among other things, reduce access to federal and state government lands and delay or cancel

certain operations, such as drilling and development.

If activism against oil and natural gas exploration and development persists or increases, there could be a material adverse effect on our business, financial condition and results of operations.

Customer Concentration and Credit Risk

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 ($559 million as of December 31, 2021 ).

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, 2021 accounted for approximately 10% 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 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 of December 31, 2021, the estimated fair value of our commodity net derivative contracts was a liability of $727 million, and we did not have any derivative assets with bank counterparties under our Credit Facility.

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

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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.

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

In addition, FERC regulates interstate natural gas transportation rates, and terms and conditions of

transportation service, which affects the marketing of the natural gas we produce, as well as the prices we receive for sales of our natural gas.

Transportation rates on FERC-regulated pipelines are subject to change, and depending on the amount of any increase, such an increase in rates could have an adverse effect on our results of operations.

As of December 31, 2021, our long-term contractual obligations under agreements with minimum volume commitments totaled over $11.2 billion over the term of the contracts.

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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.

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.

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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.

The demand for qualified and experienced field personnel to drill and complete 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.

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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.

In addition, as the rate of inflation has increased in the U.S., the cost of the good and services and labor we use in our operations has also increased, increasing our operating costs.

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

We have agreements with processing and fractionation facilities, including those owned by MPLX, LP 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:

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● 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.

● terrorist attacks or cyberattacks.

Acquisitions, Divestitures and Takeovers

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● 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 our Board of Directors the ability to authorize issuance of preferred stock in one or more series, which makes it possible for our B oard 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 ;

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● 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 (i) Yorktown Partners LLC (“Yorktown”) 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) Yorktown 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;

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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 ;

● prior to such time, the business combination or the transaction which resulted in the stockholder becoming an interested stockholder is approved by our B oard 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);

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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.

Rady and an individual affiliated with Yorktown serve as members of our Board of Directors and the Board of Directors of Antero Midstream.

Rady and Yorktown also own a significant portion of the shares of our common stock.

As a result of their investments in Antero Midstream, Mr.

Rady and Yorktown may have conflicting interests with other stockholders.

Conflicts of interest could arise in the future between us, on the one hand, and Mr.

Rady and Yorktown, 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.

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Our cash flow used in investing activities related to drilling, completions and land expenditures was approximately $716 million in 2021 .

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 Board of Directors has approved a net capital budget for 2022 of $740 million to $775 million.

Our budget includes:

a range of $675 million to $700 million for drilling and completion and a range of $65 million to $75 million for leasehold expenditures.

Our capital budget excludes acquisitions.

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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.

For additional discussion of the risks regarding our ability to obtain funding, 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.

We may also be required to post additional collateral as financial assurance of our performance under certain contractual arrangements, which could adversely impact available liquidity under our Credit Facility.”

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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, 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.

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 and 2026 Convertible Notes.

Our ability to make scheduled payments on, or to refinance, our indebtedness, 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.

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 and 2026 Convertible Notes.

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.

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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.

Although the market for high-yield debt securities improved in 2021 as compared to 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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Any increase in the borrowing base requires the consent of the lenders holding 100% of the commitments.

For additional discussion of the risks regarding our ability to obtain funding under the Credit Facility, 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.

For additional discussion of the risks regarding our ability to obtain funding under the Credit Facility, see “—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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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.

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.

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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.

For example, President Biden has made action on environmental matters, and climate change in particular, a focus of his administration, and our operations may be subject to greater environmental, health and safety restrictions, particularly with regards to hydraulic fracturing, permitting and GHG emissions.

For more information on these matters, see “Item 1.

Business and Properties—Regulation of the Oil and Natural Gas Industry—Regulation of Environmental and Occupational Safety and Health Matters.” 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.

Changes to existing or new regulations may unfavorably impact us.

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Additional rules and legislation pertaining to those and other matters may be considered or adopted by FERC from time to time.

Failure to comply with those regulations in the future could subject us to civil penalty liability, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Failure to comply with those regulations in the future could subject us to

civil penalty liability, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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.

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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.

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.

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.

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 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.

The federal regulation of methane from oil and gas facilities has been subject to substantial uncertainty in recent years.

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

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.

Subsequently, the U.S.

Congress approved, and President Biden has signed into law, a resolution under the Congressional Review Act to repeal the September 2020 revisions to the methane standards, effectively reinstating the prior standards.

In response to President Biden’s executive order, in November 2021, the EPA issued a proposed rule that, if finalized, would establish Quad Ob new source and Quad Oc first-time existing source standards of performance for methane and VOC emissions for the crude oil and natural gas source category.

Owners or operators of affected emission units or processes would have to comply with specific standards of performance that may include leak detecting using optical gas imaging and subsequent repair requirements, reduction of regulated emissions through capture and control systems, zero-emission requirements for certain equipment or processes and operations and maintenance requirements.

The EPA plans to issue a supplemental proposal enhancing the proposed rulemaking in 2022 that will contain proposed rule text, which was not included in the November 2021 proposed rule and anticipates issuing a final rule by the end of 2022.

Once finalized, the regulations are likely to be subject to legal challenge and will also need to be incorporated into the states’ implementation plans, which will need to be approved by the EPA in individual rulemakings that could also be subject to legal challenge.

As a result, we cannot predict the scope of any final methane regulatory requirements or the cost to comply with such requirements.

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.

Internationally, the United Nations-sponsored “Paris Agreement” requires member states to individually determine and submit non-binding emissions reduction targets every five years after 2020.

President Biden has recommitted the United States to the Paris Agreement and, in April 2021, announced a goal of reducing the United States’ emissions by 50-52% below 2005 levels by 2030.

In November 2021, the international community gathered again in Glasgow at the 26 th Conference to the Parties on the UN Framework Convention on Climate Change (“COP26”), during which multiple announcements were made, including a call for parties to eliminate certain fossil fuel subsidies and pursue further action on non-CO2 GHGs.

Relatedly, the United States and European Union jointly announced the launch of the “Global Methane Pledge,” which aims to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy sector.

The impacts of these orders, pledges, agreements and any legislation or regulation promulgated to fulfill the United States’ commitments under the Paris Agreement, COP26 or other international conventions 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.

provided to the fossil fuel industry and increased emphasis on climate-related risks across agencies and economic sectors.

Additionally, in November 2021, the Biden Administration released “The Long-Term Strategy of the United States:

Pathways to Net-Zero Greenhouse Gas Emissions by 2050,” which establishes a roadmap to net zero emissions in the United States by 2050 through, among other things, improving energy efficiency;

decarbonizing energy sources via electricity, hydrogen, and sustainable biofuels;

and reducing non-CO2 GHG emissions, such as methane and nitrous oxide.

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.

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

A number of parties have brought suits against fossil fuel companies in state or federal court for alleged contributions to, or failures to disclose the impacts of, climate change.

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

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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.

Many of the largest U.S.

banks have made net zero commitments and have announced that they will be assessing financed emissions across their portfolios and taking steps quantify and reduce those emissions.

In addition, at COP26, the GFANZ announced that commitments from over 450 firms across 45 countries had resulted in over $130 trillion in capital committed to net zero goals.

The various sub-alliances of GFANZ generally require participants to set short-term, sector-specific targets to transition their financing, investing and/or underwriting activities to net zero emissions by 2050.

These and other developments in the financial sector could lead to some lenders restricting access to capital for or divesting from certain industries or companies, including the oil and natural gas sector, or requiring that borrowers take additional steps to reduce their GHG emissions.

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.

For example, the Federal Reserve has joined the Network for Greening the Financial System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector and, in November 2021, issued a statement in support of the efforts of the NGFS to identify key issues and potential solutions for the climate-related challenges most relevant to central banks and supervisory authorities .

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.

In addition, the SEC has announced that it will propose rules that, amongst other matters, will establish a framework for the reporting of climate risks.

However, no such rules have been proposed to date and we cannot predict what any such rules may require.

To the extent the rules impose additional reporting obligations, we could face increased costs.

Separately, the SEC has also announced that is scrutinizing existing climate-change related disclosures in public filings, increasing the potential for enforcement if the SEC were to allege an issuer’s existing climate disclosures misleading or deficient .

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.

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.

Moreover, climate change may also result in various physical risks such as the increased frequency or intensity of extreme weather events or changes in meteorological and hydrological patterns, that could adversely impact our financial condition and operations, as well as those of our suppliers or customers.

Such physical risks may result in damage to our facilities, or otherwise adversely impact our operations, such as if we become subject to water use curtailments in response to drought, or demand for our products, such as to the extent warmer winters reduce the demand for energy for heating purposes.

Such physical risks may also impact the infrastructure on which we rely to produce or transport our products.

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

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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.

Our sand mine is subject to the Federal Mine Safety and Health Act of 1977 and amending legislation, which impose stringent health and safety standards.

We currently own one sand mine that is operated by a third party and is subject to the Federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New Emergency Response Act of 2006, which imposes stringent health and safety standards on numerous aspects of mineral extraction and processing operations, including the training of personnel, operating procedures, operating equipment and other matters.

This Act, as amended, is a strict liability statute and any failure to comply with such existing or any future standards, or any more stringent interpretation or enforcement thereof, could have a material adverse effect on sand mining operations or otherwise significantly restrict mineral extraction and processing operations.

Human Capital

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The loss of the services of our senior management or technical personnel, including Paul M.

Rady, our Chairman and Chief Executive Officer, and Glen C.

Warren, Jr., our President and Chief Financial Officer, could have a material adverse effect on our business, financial condition and results of operations.

Rady, our Chairman, President and Chief Executive Officer, could have a material adverse effect on our business, financial condition and results of operations.

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

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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.

Related Parties

Conflicts of interest will arise from time to time between Antero Midstream and us, and Antero Midstream may favor its own interests to the detriment of us and our stockholders.

All of our officers and certain of our directors are also officers or directors of Antero Midstream.

Conflicts of interest will arise between Antero Midstream and us.

Our directors and officers who are also directors and officers of Antero Midstream have a fiduciary duty to manage Antero Midstream in a manner that is beneficial to Antero Midstream.

In resolving these actual or apparent conflicts of interest, these directors and officers may choose strategies that favor Antero Midstream over our interests and the interests of our stockholders.

The resolution of any conflicts of interest between Antero Midstream and its subsidiaries, on one hand, and us and our subsidiaries, on the other, to the extent we can resolve them, may be costly and reduce the amount of time and attention that our directors and officers may spend in operating our business, which, in each case, may adversely affect our business.

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, 2021, 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.

federal and state NOL carryforwards of $2.3 billion and $2.0 billion, respectively.

Some of the U.S.

federal NOL carryforwards expire at various dates from 2032 to 2037 while others have no expiration date.

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

federal taxable income.

The state NOL carryforwards expire at various dates from 2025 to 2041.

We do not expect to be able to utilize certain of these NOL carryforwards due to changes in state tax law.

Therefore, the Company has placed a valuation allowance on those NOL carryforwards in the amount of $1.2 billion.

These expectations are 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).

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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.

While we expect to be able to utilize (i) our U.S.

federal NOL carryforwards, (ii) a portion of our state NOL carryforwards and (iii) 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.

In past years, U.S.

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.

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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.

income tax rate applicable to corporations (such as us) from 21% 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.

Additionally, the U.S.

Congress passed legislation in 2021, which legislation includes provisions that would, if ultimately enacted, impact the U.S.

federal income taxation of corporations.

Among other items, this includes provisions that would impose a minimum tax on book income of certain corporations and an excise tax on certain corporate stock repurchases that would be borne by the corporation repurchasing such stock.

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

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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.

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.

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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Not applicable.

LEGAL PROCEEDINGS

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

MINE SAFETY DISCLOSURES

Not applicable.

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