What changed in this filing

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Item 1A. Risk Factors

2023-02-15 compared with 2022-02-16 · 138 added, 110 removed, 603 unchanged (29% of the section changed)

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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.

adjustments to the value of our assets and could cause us to incur non-cash impairment charges to earnings in future periods.

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

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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.

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

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

To achieve more predictable cash flows and reduce our exposure to downward price fluctuations, as of December 31, 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.

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

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

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

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

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

Assuming our 2022 production is the same as our production in 2021, approximately 54% of our production for 2022 will be hedged through either forward swaps or basis swaps.

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

For example, during the year ended December 31, 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.

Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks.

To achieve more predictable cash flows and reduce our exposure to downward price fluctuations, we have historically entered into hedging contracts for a significant percentage of our expected production volumes.

For example, in 2021 we hedged approximately 91% of our natural gas production, 36% of our NGL production and 29% of our oil production.

Due to our improved liquidity and leverage position as compared to past levels, the percentage of our expected production that we hedge has decreased.

For example, in 2022, we hedged approximately 49% of our natural gas production, and our NGL and oil production was unhedged.

To the extent that we engage in hedging activity in the future, we may be prevented from realizing the near-term benefits of price increases above the levels of the hedges.

If we choose not to engage in, or otherwise reduce our future use of, hedging arrangements or are unable to engage in hedging arrangements due to lack of acceptable counterparties, we may be more adversely affected by changes in commodity prices than our competitors who engage in hedging arrangements to a greater extent than we do.

Conversely, hedging transactions may expose us to the risk of financial loss in certain circumstances, including instances in which:

● production volumes are less than expected;

● commodity prices rise significantly in excess of our hedged price, resulting in significant cash payments to our hedge counterparties;

● we are unable to find available counterparties in the future;

● the creditworthiness of our hedge counterparties or their guarantors is substantially impaired;

● counterparties have credit limits that may constrain our ability to hedge additional volumes.

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

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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 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.

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.

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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.

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

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.

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

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

Leases in the Appalachian Basin are particularly vulnerable to title deficiencies due to the long history of private land ownership, severed mineral estates and inadequate records of death and heirships regarding mineral and surface land ownership in the area, resulting in extensive and complex chains of title.

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

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

Legal proceedings brought against us could result in substantial liabilities and materially and adversely impact our financial condition.

Like many oil and gas companies, we are involved in various legal proceedings, including threatened claims, such as contractual, title and royalty disputes.

For example, we are party to pending purported class action litigation that involves claimants’ alleged entitlements to, and accounting for, natural gas royalties, and that could have an impact on the methods for determining the amount of permitted post-production costs and types of cost that may be deducted from royalty payments, among other things.

The cost to settle legal proceedings (asserted or unasserted) or satisfy any resulting unfavorable judgment against us in such proceedings

could result in a substantial liability or the loss of interests, which could materially and adversely impact our cash flows, operating results and financial condition for the period in which any such effect becomes reasonably estimable.

Judgments and estimates to determine accruals or range of losses related to legal proceedings are difficult to predict and could change from one period to the next, and such changes could be material.

Current accruals may be insufficient to satisfy any such judgments.

Legal proceedings could also result in negative publicity about the Company.

Defending these actions, especially purported class actions, can be costly and can distract management and other personnel from their primary responsibilities.

In addition, many of our proceedings are in their early stages.

Where this is the case, the allegations and damage theories have not been fully developed, and are all subject to inherent uncertainties.

As a result, management’s view of the likelihood of a material and adverse financial impact from any such proceeding may change in the future.

See Note 15—Contingencies to the consolidated financial statements for more information on legal proceedings.

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

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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.

Moreover, while we may seek to only purchase carbon offsets verified by reputable third-parties, we cannot guarantee that any carbon offsets we purchase will achieve the GHG emission reductions represented, and we could face increased costs to purchase additional carbon offsets to cover any gap or loss, particularly if carbon offset markets face capacity constraints as a result of increased demand.

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.

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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.

Also, institutional lenders may decide not to provide funding for oil and natural gas 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.

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

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

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

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

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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.

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.

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.

Although we have written policies and procedures for monitoring cybersecurity risk and identifying and reporting incidents, there can be no guarantee they will be effective at preventing cyberattacks or ensuring incidents are timely identified or reported.

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.

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.

A cyberattack or security breach could result in liability under data privacy laws, regulatory penalties, damage to our reputation or loss 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;

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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.

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.

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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 ).

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 ($671 million as of December 31, 2022).

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

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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, 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

As adopted, certain financial institutions are required to comply with the new SA-CCR rules

beginning on January 1, 2022.

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

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

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

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

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

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

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

As of December 31, 2022, the estimated fair value of our total derivative assets was $12 million, and we did not have any derivative assets with bank counterparties under our Credit Facility.

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

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.

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.

As of December 31, 2022, our long- term contractual obligations under agreements with minimum volume commitments totaled approximately $11.1 billion over the term of the contracts.

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

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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.

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.

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

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

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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:

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

Interruptions in operations at facilities that process and fractionate our gas, or with pipelines or other facilities that transport or handle 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 In addition, we have gathering, compression, transportation and similar agreements with third-parties to accommodate our current operations as well as future development plans.

Any significant interruptions at these facilities or pipelines 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 or pipelines could be partially or completely shut down, temporarily or permanently, as the result of circumstances not within the operator’s nor our control, such as:

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

● restrictions imposed by governmental authorities or court proceedings;

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● terrorist attacks or cyberattacks.

While such interruptions are outside of our control, we cannot predict if our counterparties will, in any such cases, attempt to recover certain damages, whether or not they are entitled to them, which could be substantial.

Acquisitions, Divestitures and Takeovers

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

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

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

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

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

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

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

annual or special meeting of our stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders;

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

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Our cash flow used in investing activities related to drilling, completions and land expenditures was approximately $944 million in 2022.

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

Our net capital budget for 2023 is $1.025 billion to $1.075 billion.

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.

a range of $875 million to $925 million for drilling and completion and $150 million for leasehold expenditures.

Our capital budget excludes acquisitions, except for leasehold acquisitions.

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

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

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

We may not be able to generate sufficient cash flows 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, 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.

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 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.

Although the market for high-yield debt securities improved in 2021 and 2022, 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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These changes could cause our cost of doing business to increase, limit our ability to pursue acquisition opportunities, reduce cash flow used for drilling and place us at a competitive disadvantage.

For example, during 2021, we had estimated average outstanding borrowings under the Credit Facility of approximately $182 million, and the impact of a 1.0% increase in interest rates on this amount of indebtedness would result in increased interest expense for that period of approximately $2 million and a corresponding decrease in our cash flows and net income before the effects of income taxes.

For example, during

2022, we had estimated average outstanding borrowings under the Credit Facility of approximately $238 million, and the impact of a 1.0% increase in interest rates on this amount of indebtedness would result in increased interest expense for that period of approximately $2 million and a corresponding decrease in our cash flows and net income before the effects of income taxes.

Furthermore, a downgrade to our credit rating would trigger certain obligations to deliver letters of credit to certain transactional counterparties, which would adversely impact our available liquidity.

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

Under the EPAct of 2005, FERC has civil penalty authority under the NGA to impose penalties for current violations of up to approximately $1.34 million per day for each violation and disgorgement of profits associated with any violation.

Under the EPAct of 2005, FERC has civil penalty authority under the NGA to impose penalties for current violations of up to approximately $1,496,035 per day for each violation and disgorgement of profits associated with any violation.

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

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.

The Inflation Reduction Act could accelerate the transition to a low carbon economy and could impose new costs on our operations.

In August 2022, President Biden signed the IRA 2022 into law.

The IRA 2022 contains hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.

In addition, the IRA 2022 imposes the first ever federal fee on the emission of greenhouse gases through a methane emissions charge.

The IRA 2022 amends the federal Clean Air Act to impose a fee on the emission of methane from sources required to report their GHG emissions to the EPA, including those sources in the onshore petroleum and natural gas production and gathering and boosting source categories.

The methane emissions charge would start in calendar year 2024 at $900 per ton of methane, increase to $1,200 in 2025, and be set at $1,500 for 2026 and each year after.

Calculation of the fee is based on certain thresholds established in the IRA 2022.

The methane charge and the incentives for renewable energy infrastructure development could impose additional costs on our operations and further accelerate the transition of the economy away from the use of oil and natural gas towards lower- or zero-carbon emissions alternatives.

This could decrease demand for oil and gas and consequently adversely affect our business and results of operations.

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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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.

In November 2022, the EPA published a supplemental proposal which, among other items, would impose expanded

inspection, monitoring and emissions control requirement on oil and gas sites, as well as strengthen requirements related to emissions from equipment and routine flaring.

The proposal would also establish a “Super Emitter Response Program” that would require operator response to emissions events exceeding 200 pounds per hour, as detected by regulatory authorities or qualified third-parties.

The proposal is currently subject to public comment and is expected to be finalized in 2023.

Separately, certain provisions of the IRA 2022 address methane regulation by imposing the first federal fee on excess methane emissions.

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

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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.

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 oil and natural gas subsidies and pursue further action on non-CO2 GHGs.

These goals were reaffirmed at COP27 in November 2022.

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.

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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.

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

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 oil and natural gas 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:

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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 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.

Increasingly, oil and natural gas companies are exposed to litigation risks associated with the threat of climate change.

A number of parties have brought suits against oil and natural gas 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.

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

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

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

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

Additionally, in response to concerns related to climate change, companies in the oil and natural gas industry may be exposed to increasing financial risks.

Many of the largest U.S.

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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.

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 oil and natural gas industry.

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.

A material reduction in the capital available to the oil and natural gas 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 proposed a rule requiring registrants to include certain climate-related disclosures, including Scope 1, 2 and 3 GHG emissions, climate-related targets and goals, and certain climate-related financial statement metrics, in registration statements and periodic reports.

The final rule is expected in 2023, and we

cannot predict the final form and substance of the rule.

To the extent the rules impose additional reporting obligations, we could face increased costs, or restrictions or limitations on our access to capital.

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 .

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

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

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

Oil and gas operations in our operating areas can be adversely affected by regulations designed to protect various wildlife.

For example, on January 28, 2020, the U.S.

District Court for the District of Columbia ordered the USFWS to reconsider its decision to list the northern long-eared bat as threatened instead of endangered.

For example, following a 2020 court order to reconsider its decision to list the northern long-eared bat as threatened instead of endangered, the USFWS redesignated the bat as endangered in November 2022.

The designation of previously unprotected species as threatened or endangered, or redesignation of a threatened species as endangered, in areas where underlying property operations are conducted could cause us to incur increased costs arising from species protection measures or could result in constraints on our exploration and production activities.

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

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

Rady, our Chairman, Chief Executive Officer and President, 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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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.

federal NOL carryforwards expire in 2037 while others have no expiration date.

If commodity prices in 2023 are similar to those experienced in 2022, we would expect to fully utilize our U.S.

federal NOL carryforwards in 2023.

The state NOL carryforwards expire at various dates from 2024 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.

Therefore, the Company has placed a valuation allowance against $1.5 billion of these state NOL carryforwards.

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.

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

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

While we expect to be able to utilize (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, U.S.

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 the IRA 2022, 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 (i) utilize all of our U.S.

federal NOL carryforwards, (ii) utilize a portion of our state NOL carryforwards and (iii) generate deductions to offset a portion of 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.

Changes in tax laws or the interpretation thereof or the imposition of new or increased taxes or fees may increase our future tax liability and adversely affect our operations and cash flows.

From time to time, 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.

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

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

income tax rate applicable to corporations (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.

Such proposed legislative changes include, but are not limited to, (i) the elimination of the percentage depletion allowance for oil and natural gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, (iii) an extension of the amortization period for certain geological and geophysical expenditures, (iv) the elimination of certain other tax deductions and relief previously available to oil and natural gas companies and (v) an increase in the U.S.

federal income tax rate applicable to corporations.

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

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

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

In addition, the IRA 2022 includes, among other things, a corporate alternative minimum tax (the “CAMT”).

Under the CAMT, a 15% minimum tax will be imposed on certain financial statement income of “applicable corporations” in taxable years beginning after December 31, 2022.

A corporation is generally an applicable corporation subject to CAMT in any taxable year following a taxable year in which the “average annual adjusted financial statement income” of the corporation and certain of its subsidiaries and affiliates exceeds $1 billion for a specified three taxable year period.

We will not be an applicable corporation subject to CAMT in 2023.

Based on current commodity pricing, our interpretation of the CAMT and the IRA 2022 and a number of operational, economic, accounting and regulatory assumptions, we could become an applicable corporation subject to CAMT in 2025.

If we become an applicable corporation and our CAMT liability is greater than our regular U.S.

federal income tax liability for any particular tax year, the CAMT liability would effectively accelerate our future U.S.

federal income tax obligations, reducing our cash flows in that year, but provide an offsetting credit against our regular U.S.

federal income tax liability in future tax years.

As a result, our current expectation is that the impact of the CAMT is limited to potential timing differences in future tax years.

The IRA 2022 also imposes a 1% non-deductible excise tax on the fair market value of any stock repurchased by a publicly traded domestic corporation during any taxable year, with the fair market value of such repurchased stock reduced by the fair market value of certain stock issued by such corporation during such taxable year (such excise tax, the “Stock Buyback Tax”).

The Stock Buyback Tax will apply to our share repurchase program beginning in 2023.

Department of the Treasury and the Internal Revenue Service are expected to release regulations and interpretive guidance relating to the CAMT and the Stock Buyback Tax, and any significant variance from our current interpretation could result in a change in our analysis of the application of the CAMT and the Stock Buyback Tax to us and its impact on our operations and cash flows.

General Risks

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

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

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

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

For example, as of December 31, 2022, the 2026 Convertible Notes are convertible at the option of holders.

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

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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.

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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What changed 10-K

Item 1A. Risk Factors