What changed in this filing

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Item 1. Financial Statements

2022-10-26 compared with 2022-07-27 · 214 added, 165 removed, 988 unchanged (28% of the section changed)

39 unchanged sentences

We caution investors that these forward-looking statements are subject to all of the risks and uncertainties incidental to our business, most of which are difficult to predict and many of which are beyond our control.

These risks include, but are not limited to, commodity price volatility, inflation, availability of drilling, completion and production equipment and services, environmental risks, drilling and completion and other operating risks, marketing and transportation risks, regulatory changes or changes in law, the uncertainty inherent in estimating natural gas, NGLs and oil reserves and in projecting future rates of production, cash flows and access to capital, the timing of development expenditures, conflicts of interest among our stockholders, impacts of world health events (including the COVID-19 pandemic), cybersecurity risks, the state of markets for, and availability of, verified quality carbon offsets and the other risks described or referenced under the heading “Item 1A.

These risks include, but are not limited to, commodity price volatility, inflation, availability and cost of drilling, completion and production equipment and services, environmental risks, drilling and completion and other operating risks, marketing and transportation risks, regulatory changes or changes in law, the uncertainty inherent in estimating natural gas, NGLs and oil reserves and in projecting future rates of production, cash flows and access to capital, the timing of development expenditures, conflicts of interest among our stockholders, impacts of world health events (including the COVID-19 pandemic), cybersecurity risks, the state of markets for, and availability of, verified quality carbon offsets and the other risks described or referenced under the heading “Item 1A.

Risk Factors” herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”), which is on file with the Securities and Exchange Commission (“SEC”).

12 unchanged sentences

(In thousands)

September 30,

Current assets:

42 unchanged sentences

authorized - 1,000,000 shares;

313,930 and 308,812 shares issued and outstanding as of December 31, 2021 and June 30, 2022, respectively

313,930 shares and 303,131 shares issued and outstanding as of December 31, 2021 and September 30, 2022, respectively

Additional paid-in capital

Accumulated deficit

Retained earnings (accumulated deficit)

Total stockholders' equity

5 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended June 30,

Three Months Ended September 30,

Revenue and other:

2 unchanged sentences

Commodity derivative fair value losses

( 1,250,466 )

Amortization of deferred revenue, VPP

Other income (loss)

Total revenue

16 unchanged sentences

Loss on early extinguishment of debt

Loss on convertible note equitization

Loss on convertible note inducement

Transaction expense

12 unchanged sentences

(In thousands, except per share amounts)

Six Months Ended June 30,

Nine Months Ended September 30,

Revenue and other:

19 unchanged sentences

Operating income (loss)

( 1,232,484 )

Other income (expense):

2 unchanged sentences

Loss on early extinguishment of debt

Loss on convertible note equitizations

Loss on convertible note inducement and equitizations

Transaction expense

1 unchanged sentence

Income (loss) before income taxes

( 1,449,698 )

Income tax benefit (expense)

Net income (loss) and comprehensive income (loss) including noncontrolling interests

( 1,112,130 )

net income (loss) and comprehensive income (loss) attributable to noncontrolling interests

Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation

( 1,088,284 )

Income (loss) per share—basic

22 unchanged sentences

Balances, June 30, 2021

Equity component of 2026 Convertible Notes, net

Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes

Distributions to noncontrolling interest

Equity-based compensation

Net loss and comprehensive loss

Balances, September 30, 2021

( 1,518,762 )

Balances, December 31, 2021

13 unchanged sentences

Balances, June 30, 2022

Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes

Conversion of 2026 Convertible Notes

Repurchases and retirements of common stock

Equity-based compensation

Distributions to noncontrolling interest

Net income and comprehensive income

Balances, September 30, 2022

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows provided by (used in) operating activities:

Net income (loss) including noncontrolling interests

( 1,112,130 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

2 unchanged sentences

Losses on settled commodity derivatives

( 1,484,660 )

Payments for derivative monetizations

8 unchanged sentences

Loss on early extinguishment of debt

Loss on convertible note equitizations

Loss on convertible note inducement and equitizations

Changes in current assets and liabilities:

20 unchanged sentences

( 1,424,354 )

Borrowings (repayments) on bank credit facilities, net

( 1,011,313 )

Borrowings (repayments) on bank credit facilities, net

Payment of debt issuance costs

Sale of noncontrolling interest

Distributions to noncontrolling interests in Martica Holdings LLC

Employee tax withholding for settlement of equity compensation awards

Convertible note equitizations

Convertible note inducement and equitizations

Net cash used in financing activities

5 unchanged sentences

Cash paid during the period for interest

Increase (decrease) in accounts payable and accrued liabilities for additions to property and equipment

Increase in accounts payable and accrued liabilities for additions to property and equipment

See accompanying notes to unaudited condensed consolidated financial statements.

10 unchanged sentences

These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete consolidated financial statements.

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2021 and June 30, 2022, results of operations for the three and six months ended June 30, 2021 and 2022 and cash flows for the six months ended June 30, 2021 and 2022.

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2021 and September 30, 2022, results of operations for the three and nine months ended September 30, 2021 and 2022 and cash flows for the nine months ended September 30, 2021 and 2022.

The Company has no items of other comprehensive income or loss;

therefore, its net income or loss is equal to its comprehensive income or loss.

Operating results for the period ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for natural gas, NGLs and oil, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, the impacts of COVID-19 and other factors.

Operating results for the period ended September 30, 2022 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for natural gas, NGLs and oil, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, the impacts of COVID-19 and other factors.

Principles of Consolidation

7 unchanged sentences

As of December 31, 2021, the book overdrafts included within accounts payable and revenue distributions payable were $ 5 million and $ 52 million, respectively.

As of June 30, 2022, the book overdrafts included within accounts payable and revenue distributions payable were $ 63 million and $ 50 million, respectively.

As of September 30, 2022, the book overdrafts included within accounts payable and revenue distributions payable were $ 61 million and $ 159 million, respectively.

Earnings (Loss) Per Common Share

7 unchanged sentences

The following is a reconciliation of the Company’s earnings (loss) attributable to common stockholders for basic and diluted earnings (loss) per share (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Net income (loss) attributable to Antero Resources Corporation—common shareholders

( 1,088,284 )

Interest expense for 2026 Convertible Notes

1 unchanged sentence

Net income (loss) attributable to Antero Resources Corporation—common shareholders and assumed conversions

( 1,088,284 )

Income (loss) per share—basic

3 unchanged sentences

The following is a reconciliation of the Company’s basic weighted average shares outstanding to diluted weighted average shares outstanding during the periods presented (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Basic weighted average number of shares outstanding

8 unchanged sentences

(1) The potential dilutive effects of these awards were excluded from the computation of diluted earnings (loss) per common share because the inclusion of these awards would have been anti-dilutive.

The Company recognizes deferred tax assets and liabilities for temporary differences resulting from net operating loss carryforwards for income tax purposes and the differences between the financial statement and tax basis of assets and liabilities.

The effect of changes in tax laws or tax rates is recognized in income during the period such changes are enacted.

Deferred tax assets are

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

On July 8, 2022, Pennsylvania enacted new tax laws that are effective January 1, 2023 on a prospective basis that reduce the state’s corporate income tax rate.

As a result of this tax law change, the Company’s net deferred income tax liability was reduced by $ 21 million with a corresponding charge to income tax expense in the unaudited condensed consolidated financial statements during the three and nine months ended September 30, 2022.

Recently Issued Accounting Standards

3 unchanged sentences

It is effective for interim and annual reporting periods beginning after December 31, 2021.

The Company adopted

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

the standard effective January 1, 2022 under the modified retrospective transition method, which impacts only the debt instruments outstanding on the adoption date.

The Company adopted the standard effective January 1, 2022 under the modified retrospective transition method, which impacts only the debt instruments outstanding on the adoption date.

Upon adoption of this new standard, the Company reclassified $ 24 million, net of deferred income taxes and equity issuance costs, from additional paid-in capital and increased long-term debt by $ 27 million, reduced deferred income tax liability by $ 6 million and reduced accumulated deficit by $ 3 million as of January 1, 2022.

Additionally, annual interest expense for the 2026 Convertible Notes beginning January 1, 2022 is based on an effective interest rate of 4.9 % as compared to 15.1 % for the three and six months ended June 30, 2021.

In December 2019, the FASB issued ASU No.

15 unchanged sentences

For each subsequent year through 2024, Antero Resources will propose a capital budget and estimated IRR for all wells to be spud during such year and, subject to the mutual agreement of the parties that the estimated IRR for the year exceeds a specified return, QL will be obligated to participate in such tranche.

Antero Resources develops and manages the drilling program associated with each tranche, including the selection of wells.

Antero Resources develops and manages the drilling program associated with each

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

tranche, including the selection of wells.

Additionally, for each annual tranche in which QL participates, Antero Resources and QL will enter into assignments, bills of sale and conveyances pursuant to which QL will be conveyed a proportionate working interest percentage in each well spud in that year, which conveyances will not be subject to any reversion.

4 unchanged sentences

Subject to the preceding sentence, for any wells included in a tranche, QL is obligated and responsible for its working interest share of costs and liabilities, and is entitled to its working interest share of revenues, associated with such wells for the life of such wells.

If Antero Resources presents a capital budget for an annual tranche with an estimated IRR equal to or exceeding a specified

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

return that QL in good faith believes is less than such specified return and QL elects not to participate, Antero Resources will not be obligated to offer QL the opportunity to participate in subsequent annual tranches.

The Company has accounted for the drilling partnership as a conveyance under ASC 932 and such conveyances are recorded in the unaudited condensed consolidated financial statements as QL obtains its proportionate working interest in each well.

No gain or loss was recognized for the interests conveyed during the three and six months ended June 30, 2021 and 2022.

If Antero Resources presents a capital budget for an annual tranche with an estimated IRR equal to or exceeding a specified return that QL in good faith believes is less than such specified return and QL elects not to participate, Antero Resources will not be obligated to offer QL the opportunity to participate in subsequent annual tranches.

The Company has accounted for the drilling partnership as a conveyance under ASC 932, Extractive Activities—Oil and Gas , and such conveyances are recorded in the unaudited condensed consolidated financial statements as QL obtains its proportionate working interest in each well.

No gain or loss was recognized for the interests conveyed during the three and nine months ended September 30, 2021 and 2022.

Disaggregation of Revenue

1 unchanged sentence

See Note 16—Reportable Segments to the unaudited condensed financial statements for more information on reportable segments.

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Reportable Segment

10 unchanged sentences

( 1,238,532 )

( 2,225,678 )

( 1,775,862 )

Total revenue

4 unchanged sentences

For the Company’s product sales that have a contract term of one year or less, the Company utilized the practical expedient in ASC 606, which does not require the disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

1 unchanged sentence

Accordingly, the Company’s contracts do not give rise to contract assets or liabilities.

As of December 31, 2021 and June 30, 2022, the Company’s receivables from contracts with customers were $ 591 million and $ 952 million, respectively.

As of December 31, 2021 and September 30, 2022, the Company’s receivables from contracts with customers were $ 591 million and $ 924 million, respectively.

(5) Equity Method Investment

Summary of Equity Method Investment

As of June 30, 2022, Antero owned approximately 29.1 % of Antero Midstream Corporation’s (“Antero Midstream”) common stock, which is reflected in Antero’s unaudited condensed consolidated financial statements using the equity method of accounting.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 30, 2022, Antero owned approximately 29.1 % of Antero Midstream Corporation’s (“Antero Midstream”) common stock, which is reflected in Antero’s unaudited condensed consolidated financial statements using the equity method of accounting.

The following table sets forth a reconciliation of Antero’s investment in unconsolidated affiliate (in thousands):

3 unchanged sentences

Elimination of intercompany profit

Balance as of June 30, 2022 (1)

(1) The fair value of the Company’s investment in Antero Midstream as of December 31, 2021 and June 30, 2022 was $ 1.3 billion based on the quoted market share price of Antero Midstream.

Balance as of September 30, 2022 (1)

(1) The fair value of the Company’s investment in Antero Midstream as of December 31, 2021 and September 30, 2022 was $ 1.3 billion based on the quoted market share price of Antero Midstream.

Summarized Financial Information of Antero Midstream

1 unchanged sentence

Balance Sheet

September 30,

Current assets

5 unchanged sentences

Statement of Operations

Six Months Ended June 30,

Nine Months Ended September 30,

Operating expenses

Income from operations

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(6) Accrued Liabilities

Accrued liabilities consisted of the following items (in thousands):

September 30,

Capital expenditures

6 unchanged sentences

Total accrued liabilities

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(7) Long-Term Debt

Long-term debt consisted of the following items (in thousands):

September 30,

Credit Facility (a)

11 unchanged sentences

On October 26, 2021, Antero Resources entered into an amended and restated senior secured revolving credit facility (the “Credit Facility”).

As of December 31, 2021 and June 30, 2022, the Credit Facility had a borrowing base of $ 3.5 billion and lender commitments of $ 1.5 billion.

The borrowing base was re-affirmed in the semi-annual redetermination in April 2022.

As of December 31, 2021 and September 30, 2022, the Credit Facility had a borrowing base of $ 3.5 billion and lender commitments of $ 1.5 billion.

The borrowing base was re-affirmed in the semi-annual redetermination in October 2022.

The maturity date of the Credit Facility is the earlier of (i) October 26, 2026 and (ii) the date that is 180 days prior to the earliest stated redemption date of any series of the Company’s then outstanding senior notes.

As of June 30, 2022, the Credit Facility had an available borrowing capacity of $ 924 million.

As of September 30, 2022, the Credit Facility had an available borrowing capacity of $ 986 million.

The Credit Facility contains requirements with respect to leverage and current ratios, and certain covenants, including restrictions on our ability to incur debt and limitations on our ability to pay dividends unless certain customary conditions are met, in each case, subject to customary carve-outs and exceptions.

Antero Resources was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2021 and June 30, 2022.

Antero Resources was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2021 and September 30, 2022.

The senior secured revolving credit facility agreement in effect prior to October 26, 2021 provided for borrowing under either an Alternate Base Rate or as a Eurodollar Loan (as each term is defined in the agreement), and the Credit Facility provides for borrowing at either an Adjusted Term Secured Overnight Financing Rate (“SOFR”), an Adjusted Daily Simple SOFR or an Alternate Base Rate (each as defined in the Credit Facility).

The Credit Facility provides for interest only payments until maturity at which time all outstanding borrowings are due.

Interest was payable at a variable rate based on LIBOR or the Alternative Base Rate (as defined in the agreement), determined by election at the time of borrowing, plus an applicable margin rate under the senior secured revolving credit facility agreement in effect prior to October 26, 2021.

Interest was payable at a variable rate based on LIBOR or the Alternative Base Rate (as defined in

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

the agreement), determined by election at the time of borrowing, plus an applicable margin rate under the senior secured revolving credit facility agreement in effect prior to October 26, 2021.

Interest is payable at a variable rate based on SOFR or the Alternate Base Rate, determined by election at the time of borrowing, plus an applicable margin rate under the Credit Facility.

3 unchanged sentences

As of December 31, 2021, Antero Resources had no borrowings under the Credit Facility and outstanding letters of credit of $ 531 million.

As of June 30, 2022, Antero Resources had an outstanding balance under the Credit Facility of $ 71 million, with a weighted average interest rate of 3.95 %, and had outstanding letters of credit of $ 505 million.

As of September 30, 2022, Antero Resources had an outstanding balance under the Credit Facility of $ 9 million, with a weighted average interest rate of 5.20 %, and had outstanding letters of credit of $ 505 million.

(b) 5.125 % Senior Notes Due 2022

1 unchanged sentence

On September 18, 2014, Antero Resources issued an additional $ 500 million of the 2022 Notes at 100.5 % of par.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

repurchased or otherwise fully redeemed all of the 2022 Notes between 2019 and the first quarter of 2021.

The Company repurchased or otherwise fully redeemed all of the 2022 Notes between 2019 and the first quarter of 2021.

Interest on the 2022 Notes was payable on June 1 and December 1 of each year.

12 unchanged sentences

On January 4, 2021, Antero Resources issued $ 500 million of 8.375 % senior notes due July 15, 2026 (the “2026 Notes”) at par .

The Company redeemed $ 175 million of the 2026 Notes on July 1, 2021 and repurchased $ 13 million of the 2026 Notes during the second quarter of 2022, and as of June 30, 2022, $ 312 million principal amount of the 2026 Notes remained outstanding.

The Company redeemed $ 175 million of the 2026 Notes on July 1, 2021 and repurchased $ 221 million of the 2026 Notes during the second and third quarters of 2022, and as of September 30, 2022, $ 104 million principal amount of the 2026 Notes remained outstanding.

See “—Debt Repurchase Program” below for more information.

8 unchanged sentences

On January 26, 2021, Antero Resources issued $ 700 million of 7.625 % senior notes due February 1, 2029 (the “2029 Notes”) at par .

The Company redeemed $ 116 million of the 2029 Notes during the fourth quarter of 2021 and repurchased $ 50 million of the 2029 Notes during the second quarter of 2022, and as of June 30, 2022, $ 534 million principal amount of the 2029 Notes remained outstanding.

The Company redeemed $ 116 million of the 2029 Notes during the fourth quarter of 2021 and repurchased $ 168 million of the 2029 Notes during the second and third quarters of 2022, and as of September 30, 2022, $ 416 million principal amount of the 2029 Notes remained outstanding.

See “—Debt Repurchase Program” below for more information.

The 2029 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility.

The 2029 Notes are unsecured and

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility.

The 2029 Notes rank pari passu to Antero Resources’ other outstanding senior notes.

5 unchanged sentences

If Antero Resources undergoes a change of control followed by a rating decline, the holders of the 2029 Notes will have the right to require Antero Resources to repurchase all or a portion of the notes at a price equal to 101 % of the principal amount of the 2029 Notes, plus accrued and unpaid interest.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(g) 5.375 % Senior Notes Due 2030

12 unchanged sentences

During 2021, the Company completed the equitization transactions described below under “—Partial Equitizations of 2026 Convertible Notes,” that extinguished $ 206 million principal amount of the 2026 Convertible Notes.

On June 29, 2022, a noteholder elected to convert $ 4 million in aggregate principal amount of the 2026 Convertible Notes pursuant to their terms.

The Company elected to settle this conversion by issuing approximately 1 million shares of common stock to the noteholder.

As of June 30, 2022, $ 78 million principal amount of the 2026 Convertible Notes remained outstanding.

During the nine months ended September 30, 2022, $ 20 million aggregate principal amount of the 2026 Convertible Notes were converted pursuant to their terms, and an additional $ 5 million aggregate principal amount of the 2026 Convertible Notes were induced into conversion by the Company.

The Company elected to settle these conversions by issuing approximately 6 million shares of common stock to the noteholders together with a cash inducement premium of $ 0.2 million.

As of September 30, 2022, $ 57 million principal amount of the 2026 Convertible Notes remained outstanding.

The 2026 Convertible Notes were issued pursuant to an indenture and are senior, unsecured obligations of Antero Resources.

3 unchanged sentences

The initial conversion rate is 230.2026 shares of Antero Resources’ common stock per $1,000 principal amount of 2026 Convertible Notes, subject to adjustment upon the occurrence of specified events.

As of June 30, 2022, the if-converted value of the 2026 Convertible Notes was $ 547 million, which exceeded the principal amount of the 2026 Convertible Notes by $ 470 million.

As of September 30, 2022, the if-converted value of the 2026 Convertible Notes was $ 400 million, which exceeded the principal amount of the 2026 Convertible Notes by $ 343 million.

The 2026 Convertible Notes will mature on September 1, 2026, unless earlier repurchased, redeemed or converted.

Before May 1, 2026, noteholders will have the right to convert their 2026 Convertible Notes only upon the occurrence of the following events:

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

● during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on September 30, 2020, if the Last Reported Sale Price per share of Antero Resources’ common stock exceeds 130 % of the Conversion Price for each of at least 20 Trading Days (whether or not consecutive) during the 30 consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding calendar quarter (the “Stock Price Condition”);

2 unchanged sentences

● upon the occurrence of certain specified corporate events as set forth in the indenture governing the 2026 Convertible Notes.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

From and after May 1, 2026, noteholders may convert their 2026 Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, Antero Resources may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash, shares of Antero Resources’ common stock or a combination of cash and shares of Antero Resources’ common stock, at Antero Resources’ election, in the manner and subject to the terms and conditions provided in the indenture governing the 2026 Convertible Notes.

The 2026 Convertible Notes have met the Stock Price Condition allowing holders of the 2026 Convertible Notes to exercise their conversion right as of June 30, 2022.

The 2026 Convertible Notes have met the Stock Price Condition allowing holders of the 2026 Convertible Notes to exercise their conversion right as of September 30, 2022.

The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the indenture governing the 2026 Convertible Notes.

11 unchanged sentences

Issuance costs attributable to the equity component were recorded as a charge to additional paid-in capital within the condensed consolidated balance sheet and statement of stockholders’ equity.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Effective January 1, 2022, the Company adopted ASU 2020-06 whereby the Company reclassified the equity component of the 2026 Convertible Notes outstanding on such date, net of deferred income taxes and equity issuance costs, from additional paid-in capital to long-term debt.

5 unchanged sentences

The Company accounted for this transaction as an inducement of the 2026 Convertible Notes, and as a result, the Company recorded a $ 39 million loss on convertible note equitization in the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 for the consideration paid in excess of the original terms of the 2026 Convertible Notes.

Additionally, the January Equitization Transactions

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

resulted in a loss on early extinguishment of debt of $ 41 million in the unaudited condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2021.

Additionally, the January Equitization Transactions resulted in a loss on early extinguishment of debt of $ 41 million in the unaudited condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2021.

On May 13, 2021, the Company completed a registered direct offering (the “May Share Offering”) of an aggregate of 11.6 million shares of its common stock at a price of $ 11.01 per share to certain holders of the 2026 Convertible Notes.

4 unchanged sentences

The 2026 Convertible Notes consist of the following (in thousands):

September 30,

Liability component:

6 unchanged sentences

See Note 2—Summary of Significant Accounting Policies to the unaudited condensed consolidated financial statements.

Interest expense recognized on the 2026 Convertible Notes related to the stated interest rate, amortization of the debt discount and debt issuance costs totaled $ 3 million and $ 1 million for the three months ended June 30, 2021 and 2022, respectively, and $ 7 million and $ 2 million for the six months ended June 30, 2021 and 2022, respectively.

Interest expense recognized on the 2026 Convertible Notes related to the stated interest rate, amortization of the debt discount and debt issuance costs totaled $ 2 million and $ 1 million for the three months ended September 30, 2021 and 2022, respectively, and $ 9 million and $ 3 million for the nine months ended September 30, 2021 and 2022, respectively.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(i) Debt Repurchase Program

2 unchanged sentences

The 2023 Notes were fully retired as of June 1, 2021.

During the third quarter of 2021, the Company redeemed $ 175 million of its 2026 Notes at a redemption price of 108.375 % of the principal amount thereof, plus accrued and unpaid interest, and recognized a loss on early debt extinguishment of $ 17 million during the three months ended September 30, 2021.

During the first quarter of 2022, the Company redeemed the remaining $ 585 million aggregate principal amount of its 2025 Notes at a redemption price of 101.25 % of the principal amount thereof, plus accrued and unpaid interest and recognized a loss on early debt extinguishment of $ 11 million.

During the second quarter of 2022, the Company repurchased $ 13 million of its 2026 Notes and $ 50 million of its 2029 Notes at a weighted average premium of 106 % and recognized a loss on early debt extinguishment of $ 4 million.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

During the second quarter of 2022, the Company repurchased $ 13 million aggregate principal amount of its 2026 Notes and $ 50 million aggregate principal amount of its 2029 Notes at a weighted average of 106 % of the principal amount thereof and recognized a loss on early debt extinguishment of $ 4 million.

During the third quarter of 2022, the Company repurchased through its previously disclosed tender offer and open market transactions (i) $ 208 million aggregate principal amount of its 2026 Notes at a weighted average of 109 % of the principal amount thereof, plus accrued and unpaid interest, and $ 118 million aggregate principal amount of its 2029 Notes at a weighted average of 107 % of the principal amount thereof, plus accrued and unpaid interest .

For the three and nine months ended September 30, 2022, the Company recognized a loss on early debt extinguishment from these repurchases of $ 30 million and $ 45 million, respectively.

(8) Asset Retirement Obligations

6 unchanged sentences

Revisions to prior estimates

Asset retirement obligations—June 30, 2022

Asset retirement obligations—September 30, 2022

Asset retirement obligations are included in Other liabilities on the Company’s condensed consolidated balance sheets.

8 unchanged sentences

Further, any shares withheld or surrendered in payment of any taxes relating to awards that were outstanding under either the 2013 Plan as of June 17, 2020 or are granted under the 2020 Plan (other than stock options and stock appreciation rights), will again be available for new awards under the 2020 Plan.

A total of 8,459,269 shares were available for future grant under the 2020 Plan as of June 30, 2022.

A total of 8,406,240 shares were available for future grant under the 2020 Plan as of September 30, 2022.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Antero Midstream Partners LP’s (“Antero Midstream Partners”) general partner was authorized to grant up to 10,000,000 common units representing limited partner interests in Antero Midstream Partners under the Antero Midstream Partners LP Long-Term Incentive Plan (the “AMP Plan”) to non-employee directors of its general partner and certain officers, employees and consultants of Antero Midstream Partners and its affiliates (which includes Antero Resources).

1 unchanged sentence

Each RSU award under the AM Plan represents a right to receive one share of Antero Midstream common stock.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

The Company’s equity-based compensation expense, by type of award, is as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Converted AM RSU Awards (1)

7 unchanged sentences

( 2,564,930 )

Total awarded and unvested—June 30, 2022

As of June 30, 2022, there was approximately $ 47 million of unamortized equity-based compensation expense related to unvested RSUs.

Total awarded and unvested—September 30, 2022

As of September 30, 2022, there was approximately $ 41 million of unamortized equity-based compensation expense related to unvested RSUs.

That expense is expected to be recognized over a weighted average period of approximately 2.4 years.

4 unchanged sentences

During the second quarter of 2022, the market-based performance condition for the 2019 Absolute TSR PSUs was met at 200 % of target and the 2019 Absolute TSR PSUs were converted into approximately 2 million shares of common stock.

In April 2022, the Company granted PSU awards to certain of its senior management and executive officers that vest based on Antero Resources’ absolute TSR determined as of the last day of each of three one-year performance periods ending on April 15, 2023, April 15, 2024 and April 15, 2025, and one cumulative three-year performance period ending on April 15, 2025, in each case, subject to certain continued employment criteria (“2022 Absolute TSR PSUs”).

The number of shares of common stock that may ultimately be earned following the end of the cumulative three-year performance period with respect to the 2022 Absolute TSR PSUs ranges from zero to 200 % of the target number of 2022 Absolute TSR PSUs originally granted.

Expense related to these PSUs is recognized on a graded-vested basis over the term of each performance period.

Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period.

In April 2022, the Company granted PSU awards to certain of its senior management and executive officers that vest based on Antero Resources’ absolute total shareholder return determined as of the last day of each of three one-year performance periods ending on April 15, 2023, April 15, 2024 and April 15, 2025, and one cumulative three-year performance period ending on April 15, 2025, in each case, subject to certain continued employment criteria (“2022 Absolute TSR PSUs”).

The number of shares of common stock that may ultimately be earned following the end of the cumulative three-year performance period with respect to the 2022

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Absolute TSR PSUs ranges from zero to 200 % of the target number of 2022 Absolute TSR PSUs originally granted.

Expense related to these PSUs is recognized on a graded-vested basis over the term of each performance period.

Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period.

The following table presents the assumptions used in the Monte Carlo valuation model and the grant date fair value information for the 2022 Absolute TSR PSUs:

6 unchanged sentences

Expense related to the Leverage Ratio PSUs is recognized on a graded-vested basis over the term of each performance period that reflects the number of shares of common stock that are expected to be issued at the end of each measurement period, and such expense is reversed if the likelihood of achieving the performance condition becomes improbable.

As of June 30, 2022, the likelihood of achieving the performance conditions related to the Leverage Ratio PSUs was probable.

As of September 30, 2022, the likelihood of achieving the performance conditions related to the Leverage Ratio PSUs was probable.

Summary Information for Performance Share Unit Awards

5 unchanged sentences

Cancelled (unearned)

Total awarded and unvested—June 30, 2022

As of June 30, 2022, there was approximately $ 15 million of unamortized equity-based compensation expense related to unvested PSUs.

Total awarded and unvested—September 30, 2022

As of September 30, 2022, there was approximately $ 15 million of unamortized equity-based compensation expense related to unvested PSUs.

That expense is expected to be recognized over a weighted average period of approximately 1.6 years.

2 unchanged sentences

Total awarded and unvested—December 31, 2021

Total awarded and unvested—June 30, 2022

As of June 30, 2022, there was less than $ 0.1 million of unamortized equity-based compensation expense related to unvested Converted AM RSU Awards.

That expense is expected to be recognized over a weighted average period of 0.5 years, and the Company’s proportionate share will be allocated to it as it is recognized.

Total awarded and unvested—September 30, 2022

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 30, 2022, there was less than $ 0.1 million of unamortized equity-based compensation expense related to unvested Converted AM RSU Awards.

That expense is expected to be recognized over a weighted average period of 0.3 years, and the Company’s proportionate share will be allocated to it as it is recognized.

Stock Options

2 unchanged sentences

Outstanding—December 31, 2021

Outstanding—June 30, 2022

Vested—June 30, 2022

Exercisable—June 30, 2022

Outstanding—September 30, 2022

Vested—September 30, 2022

Exercisable—September 30, 2022

(1) Intrinsic values are based on the exercise price of the options and the closing price of Antero Resources’ common stock on the referenced dates.

As of June 30, 2022, all stock options were fully vested resulting in no unamortized equity-based compensation expense.

As of September 30, 2022, all stock options were fully vested resulting in no unamortized equity-based compensation expense.

In January 2020, the Company granted cash awards of approximately $ 3 million to certain executives under the 2013 Plan, and compensation expense for these awards is recognized ratably over the vesting period for each of three tranches through January 20, 2023.

In July 2020, the Company granted additional cash awards in the aggregate of $ 3 million to certain non-executive employees under the 2020 Plan that vest ratably over four years .

As of December 31, 2021 and June 30, 2022, the Company has recorded approximately $ 2 million and $ 1 million, respectively, in Other liabilities in the condensed consolidated balance sheets related to unvested cash awards.

As of December 31, 2021 and September 30, 2022, the Company has recorded approximately $ 2 million and $ 1 million, respectively, in Other liabilities in the condensed consolidated balance sheets related to unvested cash awards.

(10) Fair Value

The carrying values of accounts receivable and accounts payable as of December 31, 2021 and June 30, 2022 approximated market values because of their short-term nature.

The carrying values of the amounts outstanding under the Credit Facility as of December 31, 2021 and June 30, 2022 approximated fair value because the variable interest rates are reflective of current market conditions.

The carrying values of accounts receivable and accounts payable as of December 31, 2021 and September 30, 2022 approximated market values because of their short-term nature.

The carrying values of the amounts outstanding under the Credit Facility as of December 31, 2021 and September 30, 2022 approximated fair value because the variable interest rates are reflective of current market conditions.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

The following table sets forth the fair value and carrying value of the senior notes and 2026 Convertible Notes (in thousands):

December 31, 2021

June 30, 2022

September 30, 2022

2026 Convertible Notes

1 unchanged sentence

(2) Carrying values are presented net of unamortized debt issuance costs and debt discounts or premiums.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

See Note 9—Equity-Based Compensation and Cash Awards to the unaudited condensed consolidated financial statements for information regarding the fair value of equity-based awards.

8 unchanged sentences

This market risk exposure is generally offset by the change in market prices of natural gas, NGLs and oil recognized upon the ultimate sale of the Company’s production.

The Company was party to various fixed price commodity swap contracts that settled during the three and six months ended June 30, 2021 and 2022.

The Company was party to various fixed price commodity swap contracts that settled during the three and nine months ended September 30, 2021 and 2022.

The Company enters into these swap contracts when management believes that favorable future sales prices for the Company’s production can be secured.

2 unchanged sentences

In addition, the Company has entered into basis swap contracts in order to hedge the difference between the New York Mercantile Exchange (“NYMEX”) index price and a local index price.

Under these basis swap agreements, when actual commodity prices upon settlement exceed the fixed price provided by the swap contracts, the Company receives the difference from the counterparty.

When actual commodity prices upon settlement are less than the contractually provided fixed price, the Company pays the difference to the counterparty.

The Company’s derivative contracts have not been designated as hedges for accounting purposes;

therefore, all gains and losses are recognized in the Company’s statements of operations.

As of June 30, 2022, the Company’s fixed price swap positions excluding Martica, the Company’s consolidated VIE, were as follows:

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 30, 2022, the Company’s fixed price swap positions excluding Martica, the Company’s consolidated VIE, were as follows:

Commodity / Settlement Period

Contracted Volume

July-December 2022

October-December 2022

January-December 2023

In addition, the Company has a swaption agreement, which entitles the counterparty the right, but not the obligation, to enter into a fixed price swap agreement on December 21, 2023 to purchase 427,500 MMBtu per day at a price of $ 2.77 per MMBtu for the year ending December 31, 2024.

As of June 30, 2022, the Company’s natural gas basis swap positions, which settle on the pricing index to basis differential of the Columbia Gas Transmission pipeline (“TCO”) to the NYMEX Henry Hub natural gas price were as follows:

The Company also has a call option and an embedded put option tied to NYMEX pricing for the production volumes associated with the Company’s retained interest in the volumetric production payment transaction (“VPP”) properties.

The put option was embedded within another contract, and since the embedded put option was not clearly and closely related to its host contract, the Company bifurcated this derivative instrument and reflects it at fair value in the unaudited condensed consolidated financial statements.

As of September 30, 2022, the Company’s call option and embedded put option arrangements were as follows:

Commodity / Settlement Period

Contracted Volume

October-December 2022

January-December 2023

January-December 2024

January-December 2025

January-December 2026

As of September 30, 2022, the Company’s natural gas basis swap positions, which settle on the pricing index to basis differential of the Columbia Gas Transmission pipeline (“TCO”) to the NYMEX Henry Hub natural gas price were as follows:

Weighted Average

3 unchanged sentences

Hedged Differential

July-December 2022

October-December 2022

January-December 2023

2 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2022, the Company’s fixed price swap positions for Martica, the Company’s consolidated VIE, were as follows:

As of September 30, 2022, the Company’s fixed price swap positions for Martica, the Company’s consolidated VIE, were as follows:

Commodity / Settlement Period

Contracted Volume

July-December 2022

October-December 2022

January-December 2023

1 unchanged sentence

January-March 2025

July-December 2022

October-December 2022

Mont Belvieu Propane-OPIS Non-TET

Natural Gasoline

July-December 2022

October-December 2022

Mont Belvieu Natural Gasoline-OPIS Non-TET

1 unchanged sentence

Mont Belvieu Natural Gasoline-OPIS Non-TET

July-December 2022

October-December 2022

West Texas Intermediate

5 unchanged sentences

West Texas Intermediate

Embedded Derivatives

The VPP includes an embedded put option tied to NYMEX pricing for the production volumes associated with the Company’s retained interest in the VPP properties of 78,069,000 MMBtu remaining through December 31, 2026 at a weighted average strike price of $ 2.55 per MMBtu.

The embedded put option is not clearly and closely related to the host contract, and therefore, the Company bifurcated this derivative instrument and reflects it at fair value in the unaudited condensed consolidated financial statements.

ANTERO RESOURCES CORPORATION

2 unchanged sentences

Balance Sheet

September 30,

Asset derivatives not designated as hedges for accounting purposes:

18 unchanged sentences

(2) As of December 31, 2021, approximately $ 55 million of commodity derivative liabilities, including $ 31 million of current commodity derivatives and $ 24 million of noncurrent commodity derivatives, are attributable to the Company’s consolidated VIE, Martica.

As of June 30, 2022, approximately $ 88 million of commodity derivative liabilities, including $ 53 million of current commodity derivatives and $ 35 million of noncurrent commodity derivatives, are attributable to the Company’s consolidated VIE, Martica.

As of September 30, 2022, approximately $ 84 million of commodity derivative liabilities, including $ 53 million of current commodity derivatives and $ 31 million of noncurrent commodity derivatives, are attributable to the Company’s consolidated VIE, Martica.

The following table sets forth the gross values of recognized derivative assets and liabilities, the amounts offset under master netting arrangements with counterparties, and the resulting net amounts presented in the condensed consolidated balance sheets as of the dates presented, all at fair value (in thousands):

December 31, 2021

June 30, 2022

September 30, 2022

Net Amounts of

12 unchanged sentences

The following table sets forth a summary of derivative fair value gains and losses and where such values are recorded in the unaudited condensed consolidated statements of operations (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Commodity derivative fair value losses (1)

( 1,238,384 )

( 2,228,076 )

( 1,732,720 )

Embedded derivative fair value losses (1)

22 unchanged sentences

The Company’s lease assets and liabilities consisted of the following items (in thousands):

September 30,

Balance Sheet Classification

26 unchanged sentences

Total finance lease obligation

(1) Gas gathering lines and compressor stations leases includes $ 1.5 billion related to Antero Midstream as of December 31, 2021 and June 30, 2022.

(1) Gas gathering lines and compressor station leases includes $ 1.5 billion related to Antero Midstream as of December 31, 2021 and September 30, 2022.

See “—Related party lease disclosure” for additional discussion.

(2) Financing lease assets are recorded net of accumulated amortization of $ 2 million and $ 1 million as of December 31, 2021 and June 30, 2022, respectively.

(2) Financing lease assets are recorded net of accumulated amortization of $ 2 million and $ 1 million as of December 31, 2021 and September 30, 2022, respectively.

The processing plants, gathering lines and compressor stations that are classified as lease liabilities are classified as such under ASC 842, Leases , because Antero (i) is the sole customer of the assets and (ii) makes the decisions that most impact the economic performance of the assets.

3 unchanged sentences

Costs associated with operating and finance leases were included in the unaudited condensed consolidated statement of operations and comprehensive loss (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Classification

27 unchanged sentences

The following table presents the Company’s supplemental cash flow information related to leases (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease obligations

Increase (decrease) to existing right-of-use assets and lease obligations from operating lease modifications, net (1)

(1) During the six months ended June 30, 2021, the weighted average discount rate for remeasured operating leases decreased from 5.9 % as of December 31, 2020 to 4.1 % as of June 30, 2021.

During the six months ended June 30, 2022, the weighted average discount rate for remeasured operating leases increased from 4.5 % as of December 31, 2021 to 5.1 % as of June 30, 2022.

Increase to existing right-of-use assets and lease obligations from operating lease modifications, net (1)

(1) During the nine months ended September 30, 2021, the weighted average discount rate for remeasured operating leases decreased from 14.4 % as of December 31, 2020 to 5.5 % as of September 30, 2021.

During the nine months ended September 30, 2022, the weighted average discount rate for remeasured operating leases decreased from 5.6 % as of December 31, 2021 to 5.2 % as of September 30, 2022.

ANTERO RESOURCES CORPORATION

1 unchanged sentence

(d) Maturities of Lease Liabilities

The table below is a schedule of future minimum payments for operating and financing lease liabilities as of June 30, 2022 (in thousands):

The table below is a schedule of future minimum payments for operating and financing lease liabilities as of September 30, 2022 (in thousands):

Operating Leases

6 unchanged sentences

December 31, 2021

June 30, 2022

September 30, 2022

Operating Leases

9 unchanged sentences

Upon completion of the initial contract term, the gathering and compression agreement will continue in effect from year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement, by either the Company or Antero Midstream on or before the 180 th day prior to the anniversary of such effective date.

The Company did no t achieve the quarterly volumetric target for either the first or second quarter of 2021, and therefore, did not earn a rebate for the three and six months ended June 30, 2021.

For the three and six months ended June 30, 2022, the Company earned rebates of $ 12 million and $ 24 million, respectively, by achieving the quarterly volumetric target during the first and second quarters of 2022.

Gathering and compression fees paid by Antero related to this agreement were $ 184 million and $ 164 million for the three months ended June 30, 2021 and 2022, respectively.

For the six months ended June 30, 2021 and 2022, gathering and compression fees paid by Antero related to this agreement were $ 361 million and $ 327 million, respectively.

As of December 31, 2021 and June 30, 2022, $ 54 million and $ 51 million, respectively, was included within Accounts payable, related parties on the condensed consolidated balance sheet as due to Antero Midstream related to this agreement.

The Company did no t achieve the quarterly volumetric target for either the first, second or third quarter of 2021, and therefore, did not earn any rebates for the three and nine months ended September 30, 2021.

For the three and nine months ended September 30, 2022, the Company earned rebates of $ 12 million and $ 36 million, respectively, by achieving the quarterly volumetric target during each of the first, second and third quarters of 2022.

Gathering and compression fees paid by Antero related to this agreement were $ 178 million and $ 164 million for the three months ended September 30, 2021 and 2022, respectively.

For the nine months ended September 30, 2021 and 2022, gathering and compression fees paid by Antero related to this agreement were $ 539 million and $ 492 million, respectively.

As of December 31, 2021 and September 30, 2022, $ 54 million and $ 53 million, respectively, was included within Accounts payable, related parties on the condensed consolidated balance sheet as due to Antero Midstream related to this agreement.

ANTERO RESOURCES CORPORATION

1 unchanged sentence

(13) Commitments

The following table sets forth a schedule of future minimum payments for firm transportation, drilling rig and completion services, processing, gathering and compression, and office and equipment agreements, which include leases that have a lease term in excess of one year as of June 30, 2022 (in thousands)

Gathering and

Operating and

9 unchanged sentences

however, the Company will record in the unaudited condensed consolidated financial statements its proportionate share of costs based on its working interest.

(b) Processing, Gathering, and Compression Service Commitments

The Company has entered into various long- term gas processing, gathering and compression service agreements.

(b) Processing, Gathering, Compression and Water Service Commitments

The Company has entered into various long- term gas processing, gathering, compression and water service agreements.

Certain of these agreements were determined to be leases.

12 unchanged sentences

See Note 12—Leases to the unaudited condensed consolidated financial statements for more information on the Company’s operating and finance leases .

Contract Terminations

The Company incurs costs associated with the delay or cancellation of drilling and completion contracts with third-party contractors.

These costs are recorded in Contract termination and included in the statement of operations and comprehensive loss.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

There are no remaining payment obligations related to these delayed or cancelled drilling and completion contracts as of June 30, 2022.

Contract Terminations

The Company incurs costs associated with the delay or cancellation of certain contracts with third-parties.

These costs are recorded in Contract termination and included in the statement of operations and comprehensive income (loss).

There are no remaining payment obligations related to these delayed or cancelled contracts as of September 30, 2022.

(14) Contingencies

56 unchanged sentences

The summarized operating results of the Company’s reportable segments are as follows (in thousands):

Three Months Ended June 30, 2021

Elimination of

Three Months Ended September 30, 2021

Equity Method

Investment in

Transactions and

Elimination of

Unconsolidated

3 unchanged sentences

Lease operating

Gathering, compression, processing and transportation

Gathering, compression, processing, transportation and water handling

General and administrative

5 unchanged sentences

Capital expenditures for segment assets

Three Months Ended June 30, 2022

Elimination of

Three Months Ended September 30, 2022

Equity Method

Investment in

Transactions and

Elimination of

Unconsolidated

3 unchanged sentences

Lease operating

Gathering, compression, processing and transportation

Gathering, compression, processing, transportation and water handling

General and administrative

7 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Equity Method

Elimination of

Investment in

Transactions and

Elimination of

Unconsolidated

3 unchanged sentences

Lease operating

Gathering, compression, processing and transportation

Gathering, compression, processing, transportation and water handling

General and administrative

1 unchanged sentence

Impairment of oil and gas properties

Impairment of midstream assets

Total operating expenses

Operating income (loss)

( 1,167,590 )

( 1,232,484 )

Equity in earnings of unconsolidated affiliates

Capital expenditures for segment assets

Six Months Ended June 30, 2022

Elimination of

Nine Months Ended September 30, 2022

Equity Method

Investment in

Transactions and

Elimination of

Unconsolidated

3 unchanged sentences

Lease operating

Gathering, compression, processing and transportation

Gathering, compression, processing, transportation and water handling

General and administrative

9 unchanged sentences

As of December 31, 2021

Elimination of

Equity Method

Investment in

Transactions and

Elimination of

Unconsolidated

1 unchanged sentence

( 5,544,001 )

As of June 30, 2022

Elimination of

As of September 30, 2022

Equity Method

Investment in

Transactions and

Elimination of

Unconsolidated

12 unchanged sentences

December 31, 2021

June 30, 2022

September 30, 2022

Accounts receivable, non-guarantor subsidiaries

10 unchanged sentences

Statement of Operations

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

Operating expenses

3 unchanged sentences

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-Q

Item 1. Financial Statements