What changed in this filing

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Item 9A. Controls and Procedures

2023-02-15 compared with 2022-02-16 · 463 added, 498 removed, 1351 unchanged (42% of the section changed)

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As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d- 15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures and is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC.

time periods specified in the rules and forms of the SEC.

Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2022 at a level of reasonable assurance.

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OTHER INFORMATION

Second Amended and Restated Bylaws

On February 14, 2023, the Board approved an amendment and restatement of the Company's bylaws (as amended and restated, the “A&R Bylaws”), effective as of such date.

Among other matters, the A&R Bylaws:

● revise procedures and disclosure requirements for the nomination of directors to address new Rule 14a-19 of the Exchange Act;

● clarify the advance notice procedures and requirements for a stockholder’s notice;

● make other minor administrative, modernizing, clarifying and conforming changes, including to better conform the A&R Bylaws to the DGCL.

The foregoing summary of the amendments to the Company’s bylaws does not purport to be complete and is qualified in its entirety by reference to the complete text of the A&R Bylaws, a copy of which is filed as Exhibit 3.2 to this Annual Report on Form 10-K and is incorporated herein by reference.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

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001-36120) filed on October 17, 2013) .

Amended and Restated Bylaws of Antero Resources Corporation (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K (Commission File No.

001-36120) filed on October 17, 2013).

Second Amended and Restated Bylaws of Antero Resources Corporation, dated February 14, 2023.

Indenture related to the 5.0% Senior Notes due 2025, dated as of December 21, 2016, by and among Antero Resources Corporation, the several guarantors named therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (Commission File No.

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001-36120) filed on July 29, 2020).

Description of Exhibit

(incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (Commission File No.

Indenture related to the 4.25% Convertible Senior Notes due 2026, dated as of August 21, 2020, by and among Antero Resources Corporation, the several guarantors named therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (Commission File No.

001-36120) filed on August 21, 2020).

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001-36120) filed on February 12, 2020).

Indenture related to the 7.625% Senior Notes due 2029, dated as of January 26, 2021, by and among Antero Resources Corporation, the several guarantors named therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (Commission File No.

Description of Exhibit

by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (Commission File No.

001-36120) filed on February 1, 2021).

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Second Amended and Restated Services Agreement, effective as of March 13, 2019, by and among Antero Midstream Partners LP, Antero Midstream Corporation, Antero Midstream Partners GP LLC and Antero Resources Corporation (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K (Commission File No.

Description of Exhibit

001-36120) filed on February 12, 2020).

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001-36120) filed on February 25, 2015).

Form of Performance Share Unit Grant Notice and Performance Share Unit Agreement (Form for Special Retention Awards) under the Antero Resources Corporation Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission File No.

001-36120) filed on February 12, 2016).

Global Amendment to Grant Notices and Award Agreements Under the Antero Resources Corporation Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (Commission File No.

Description of Exhibit

(Commission File No.

001-36120) filed on October 26, 2016).

20 unchanged sentences

001-36120) filed on October 28, 2020).

Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the Antero Resources

Description of Exhibit

Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (Commission File No.

Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the Antero Resources Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (Commission File No.

001-36120) filed on October 28, 2020).

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001-36120) filed on July 28, 2021).

Form of Performance Share Unit Grant Notice and Performance Share Unit Agreement under the Antero Resources Corporation 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (Commission File No.

001-36120) filed on July 27, 2022).

Subsidiaries of Antero Resources Corporation.

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Consent of KPMG LLP.

Consent of KPMG LLP .

Consent of DeGolyer and MacNaughton.

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Report of DeGolyer and MacNaughton, dated as of January 21, 2022, for proved reserves as of December 31, 2021 (incorporated by reference to Exhibit 99.1 to the Company’s Annual Report on Form 10-K (Commission File No.

Description of Exhibit

36120) filed on February 16, 2022).

1 unchanged sentence

001-36120) filed on February 17, 2021).

Financial Statements of Antero Midstream Corporation

The following financial information from this Form 10-K of Antero Resources Corporation for the year ended December 31, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language):

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Loss, (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements, tagged as blocks of text.

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements, tagged as blocks of text.

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

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(principal financial officer)

Vice President, Accounting and Chief Accounting Officer

Senior Vice President–Accounting and Chief Accounting Officer

February 15, 2023

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INDEX TO FINANCIAL STATEMENTS

Audited Historical Consolidated Financial Statements as of December 31, 2020 and 2021 and for the Years Ended December 31, 2019, 2020 and 2021

Audited Consolidated Financial Statements as of December 31, 2021 and 2022 and for the Years Ended December 31, 2020, 2021 and 2022

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss )

Consolidated Statements of Equity

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Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Antero Resources Corporation and subsidiaries (the Company) as of December 31, 2020 and 2021, the related consolidated statements of operations and comprehensive loss, equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of Antero Resources Corporation and subsidiaries (the Company) as of December 31, 2021 and 2022, the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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For the year ended December 31, 2022, the Company recorded depletion expense related to proved oil and gas properties of $738 million.

The Company’s internal reservoir engineers estimate proved oil and gas reserves, and the Company engages external reservoir engineering specialists to perform an independent evaluation of those proved oil and gas reserve estimates.

Estimating proved oil and gas reserves requires the expertise of professional petroleum reservoir engineers, who take into consideration forecasted production, operating cost assumptions and estimated proved oil and gas reserves, and the Company engages external reservoir engineering specialists to perform an independent evaluation of those proved oil and gas reserve estimates.

We identified the assessment of the impact of estimated oil and gas reserves on depletion expense related to proved oil and gas properties as a critical audit matter.

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Derivative instruments

Other current assets

Prepaid expenses and other current assets

Total current assets

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Total liabilities

Commitments and contingencies (Notes 15 and 16)

Commitments and contingencies

Stockholders' equity:

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authorized - 1,000,000 shares;

268,672 shares and 313,930 shares issued and outstanding as of December 31, 2020 and 2021 , respectively

313,930 shares issued and outstanding as of December 31, 2021, and 297,393 shares issued and 297,359 shares outstanding as of December 31, 2022

Additional paid-in capital

Accumulated deficit

Retained earnings (accumulated deficit)

Treasury stock, at cost;

zero shares and 34 shares as of December 31, 2021and 2022, respectively

Total stockholders' equity

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ANTERO RESOURCES CORPORATION

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands, except per share amounts)

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( 1,936,509 )

( 1,615,836 )

Amortization of deferred revenue, VPP

Gathering, compression, water handling and treatment

Total revenue

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Depletion, depreciation and amortization

Impairment of oil and gas properties

Impairment of midstream assets

Impairment of property and equipment

Accretion of asset retirement obligations

Contract termination and rig stacking

(Gain) loss on sale of assets

Contract termination

Loss (gain) on sale of assets

Total operating expenses

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Gain (loss) on early extinguishment of debt

Loss on convertible note equitizations

Loss on the sale of equity method investment shares

Gain on deconsolidation of Antero Midstream Partners LP

Water earnout

Loss on convertible note inducement and equitizations

Impairment of equity method investment

Transaction expense

Total other income (expense)

Loss before income taxes

Total other expense

Income (loss) before income taxes

( 1,657,893 )

Income tax benefit

Net loss and comprehensive loss including noncontrolling interests

Income tax benefit (expense)

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

( 1,260,411 )

net income and comprehensive income attributable to noncontrolling interests

Net loss and comprehensive loss attributable to Antero Resources Corporation

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

( 1,267,897 )

Loss per share—basic

Loss per share—diluted

Income (loss) per share—basic

Income (loss) per share—diluted

Weighted average number of shares outstanding:

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(In thousands)

Retained Earnings

Treasury Stock

Noncontrolling

Balances, December 31, 2019

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

Issuance of common units by Antero Midstream Partners LP upon vesting of equity-based compensation awards, net of units withheld for income taxes

Effect of deconsolidation of Antero Midstream Partners LP

( 1,120,916 )

Distributions to noncontrolling interest

Repurchases and retirements of common stock

Equity-based compensation

Net income (loss) and comprehensive income (loss)

Balances, December 31, 2019

Issuance of common units in Martica Holdings, LLC

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

Distributions to noncontrolling interest

Distributions to noncontrolling interests

Repurchases and retirements of common stock

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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

Distributions to noncontrolling interests

Net income (loss) and comprehensive income (loss)

Balances, December 31, 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

Conversion of 2026 Convertible Notes

Repurchases and retirements of common stock

Equity-based compensation

Distributions to noncontrolling interests

Net income and comprehensive income

Balances, December 31, 2022

See accompanying notes to consolidated financial statements.

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Cash flows provided by (used in) operating activities:

Net loss including noncontrolling interests

Net income (loss) including noncontrolling interests

( 1,260,411 )

Adjustments to reconcile net loss to net cash provided by operating activities:

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

Depletion, depreciation, amortization and accretion

Commodity derivative fair value losses (gains)

Gains (losses) on settled commodity derivatives

Settled commodity derivative gains (losses)

( 1,183,400 )

( 1,911,065 )

Proceeds from (payments for) derivative monetizations

Deferred income tax benefit

Deferred income tax expense (benefit)

Equity-based compensation expense

Equity in (earnings) loss of unconsolidated affiliate

Distributions/dividends of earnings from unconsolidated affiliate

Dividends of earnings from unconsolidated affiliate

Amortization of deferred revenue

Amortization of debt issuance costs, debt discount, debt premium and other

(Gain) loss on sale of assets

Loss on the sale of equity method investment shares

Water earnout

Gain on deconsolidation of Antero Midstream Partners LP

( 1,406,042 )

Settlement of asset retirement obligations

Loss (gain) on sale of assets

(Gain) loss on early extinguishment of debt

Loss on convertible note equitizations

Loss on convertible note inducement and equitizations

Changes in current assets and liabilities:

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Accrued revenue

Other current assets

Prepaids and other current assets

Accounts payable including related parties

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Drilling and completion costs

( 1,254,118 )

Additions to water handling and treatment systems

Additions to gathering systems and facilities

Additions to other property and equipment

Settlement of water earnout

Investments in unconsolidated affiliates

Proceeds from sale of common stock of Antero Midstream Corporation

Proceeds from the Antero Midstream Partners LP Transactions

Proceeds from asset sales

Proceeds from VPP sale, net

Change in other liabilities

Change in other assets

Change in other liabilities

Net cash used in investing activities

( 1,041,490 )

Cash flows provided by (used in) financing activities:

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( 1,554,657 )

( 1,027,559 )

Borrowings (repayments) on bank credit facilities, net

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Employee tax withholding for settlement of equity compensation awards

Convertible note equitizations

Net cash provided by (used in) financing activities

Effect of deconsolidation of Antero Midstream Partners LP

Convertible note inducement and equitizations

Net cash used in financing activities

( 2,107,730 )

Net increase in cash and cash equivalents

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Cash and cash equivalents, end of period

ANTERO RESOURCES CORPORATION

Consolidated Statements of Cash Flows (Continued)

(In thousands)

Year Ended December 31,

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Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

The accompanying consolidated financial statements of the Company have been prepared in accordance with GAAP.

In the opinion of management, the accompanying 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 2022, and its results of operations and cash flows for the years ended December 31, 2020, 2021 and 2022.

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Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Antero Resources Corporation, its wholly owned subsidiaries, any entities in which the Company owns a controlling interest and its variable interest entity (“VIE”), Martica Holdings LLC (“Martica”), for which the Company is the primary beneficiary.

The accompanying consolidated financial statements include the accounts of Antero Resources Corporation, its wholly owned subsidiaries and its VIE, Martica, for which the Company is the primary beneficiary.

All significant intercompany accounts and transactions have been eliminated in the Company’s consolidated financial statements.

Through March 12, 2019, Antero Midstream Partners LP (“Antero Midstream Partners”), a publicly traded limited partnership, was included in the consolidated financial statements of Antero.

Prior to the Closing (defined in Note 3—Deconsolidation of Antero Midstream Partners LP to the consolidated financial statements), the Company’s ownership of Antero Midstream Partners common units represented approximately a 53 % limited partner interest in Antero Midstream Partners, and Antero Resources consolidated Antero Midstream Partners’ financial position and results of operations into its consolidated financial statements.

The Simplification Transactions resulted in the exchange of the limited partner interest Antero Resources owned in Antero Midstream Partners for common stock of Antero Midstream Corporation (“Antero Midstream”) representing an approximate 31 % interest as of March 13, 2019.

As a result, Antero Resources’ controlling interest in Antero Midstream Partners was converted to an interest in Antero Midstream that provides significant influence, but not control, over Antero Midstream.

Thus, effective March 13, 2019, Antero no longer consolidates Antero Midstream Partners in its consolidated financial statements and accounts for its interest in Antero Midstream Corporation using the equity method of accounting.

As of December 31, 2020 and 2021, the Company had a 29.2 % and 29.1 % interest, respectively, in Antero Midstream.

See Note 6—Equity Method Investments and Note 3—Deconsolidation of Antero Midstream Partners LP to the consolidated financial statements for further discussion on equity method investments and the Simplification Transactions, respectively.

For the years ended December 31, 2020, 2021 and 2022, the Company determined that Martica is a VIE for which Antero is the primary beneficiary.

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● Antero provides accounting, administrative and other services to Martica under a Management Services Agreement.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

The Company accounts for its interest in Antero Midstream Corporation (“Antero Midstream”) using the equity method of accounting.

As of December 31, 2021 and 2022, the Company had a 29.1 % interest in Antero Midstream.

Investments in entities for which the Company exercises significant influence, but not control, are accounted for under the equity method.

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Such investments are included in Investment in unconsolidated affiliate on the Company’s consolidated balance sheets.

Income (loss) from investees that are accounted for under the equity method is included in Equity in earnings (loss) of unconsolidated affiliates on the Company’s consolidated statements of operations and cash flows.

When Antero records its proportionate share of net income or net loss, it is recorded in equity in earnings (loss) of unconsolidated affiliates in the statements of operations and the carrying value of that investment on the Company’s balance sheet.

Income (loss) from investees that are accounted for under the equity method is included in Equity in earnings (loss) of unconsolidated affiliate on the Company’s consolidated statements of operations and cash flows.

When Antero records its proportionate share of net income or net loss, it is recorded in equity in earnings (loss) of unconsolidated affiliate in the statements of operations and the carrying value of that investment on the Company’s balance sheet.

When a distribution is received, it is recorded as a reduction to the carrying value of that investment on the Company’s balance sheet.

The Company’s equity in earnings of unconsolidated affiliates is adjusted for intercompany transactions and the basis differences recognized due to the difference between the cost of the equity method investment in Antero Midstream and the amount of underlying equity in the net assets of Antero Midstream Partners as of the date of deconsolidation.

The Company accounts for distributions received from equity method investees under the “nature of the distribution” approach.

See Note 5—Equity Method Investments to the consolidated financial statements for further discussion on equity method investments.

The Company accounts for distributions received from equity method investees under the “nature of the distribution”

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Under this approach, distributions received from equity method investees are classified on the basis of the nature of the activity or activities of the investee that generated the distribution as either a return on investment (classified as cash inflows from operating activities) or a return of investment (classified as cash inflows from investing activities).

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The Company classifies book overdrafts in accounts payable and revenue distributions payable within its consolidated balance sheets, and classifies the change in accounts payable associated with book overdrafts as an operating activity within its consolidated statements of cash flows.

As of December 31, 2020, the book overdraft included within accounts payable and revenue distributions payable were $ 7 million and $ 18 million, respectively.

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

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 December 31, 2022, the book overdrafts included within accounts payable and revenue distributions payable were $ 28 million and $ 43 million, respectively.

Oil and Gas Properties

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Oil and gas lease acquisition costs are also capitalized.

Exploration costs, including personnel and other internal costs, geological and geophysical expenses, delay rentals for gas and oil leases, and costs associated with unsuccessful lease acquisitions are charged to expense as incurred.

Exploratory drilling costs are initially capitalized,

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

but charged to expense if the Company determines that the well does not contain reserves in commercially viable quantities.

The Company reviews exploration costs related to wells-in- progress at the end of each quarter and makes a determination, based on known results of drilling at that time, whether the costs should continue to be capitalized pending further well testing and results, or charged to expense.

During the year ended December 31, 2019, the Company recorded an impairment expense of $ 26 million for design and initial costs related to pads that are no longer planned to be placed into service.

The Company incurred no such expenses during the years ended December 31, 2020 and 2021.

Exploratory drilling costs are initially capitalized, but expensed if the Company determines that the well does not contain reserves in commercially viable quantities.

The Company reviews exploration costs related to wells-in- progress at the end of each quarter and determines, based on known results of drilling at that time, whether the costs should continue to be capitalized pending further well testing and results, or expensed.

The sale of a partial interest in a proved property is accounted for as a normal retirement, and no gain or loss is recognized as long as this treatment does not significantly affect the units-of- production amortization rate.

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Impairment of unproved properties was $ 224 million, $ 91 million and $ 98 million for the years ended December 31, 2020, 2021 and 2022, respectively.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

The Company evaluates the carrying amount of its proved natural gas, NGLs and oil properties for impairment on a geological reservoir basis whenever events or changes in circumstances indicate that a property’s carrying amount may not be recoverable.

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Factors used to estimate fair value may include estimates of proved reserves, estimated future commodity prices, future production estimates and anticipated capital expenditures, using a commensurate discount rate.

The carrying amount of the Company’s proved properties in the Utica Shale exceeded the estimated undiscounted future cash flows based on future commodity prices as of September 30, 2019.

The Company estimated the fair value of the Utica Shale assets based on sales of other properties, estimates of proved reserves, estimated future commodity prices and future production estimates.

As a result, the Company recorded an impairment expense of $ 881 million related to proved properties in the Utica Shale during the third quarter of 2019.

The Company did not incur any impairment expenses related to proved properties in the Utica Shale for the years ended December 31, 2020 and 2021.

The Company did not record any impairment expenses associated with its proved properties in the Marcellus Shale during the years ended December 31, 2019, 2020 and 2021.

The Company did not incur any impairment expenses associated with its proved properties during the years ended December 31, 2020, 2021 and 2022.

As of December 31, 2022, the Company did not have capitalized costs related to exploratory wells-in-progress that have been deferred for longer than one year pending determination of proved reserves.

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If the carrying values of the assets are deemed not recoverable, the carrying values are reduced to the estimated fair values, which are based on discounted future cash flows using assumptions as to revenues, costs and discount rates typical of third-party market participants, which is a Level 3 fair value measurement.

Impairment of long-lived assets other than oil and gas properties was $ 15 million for the year ended December 31, 2019, which was associated with midstream assets.

In December 2022, the Company commenced a strategic evaluation of the sand mine at which time, such mine was idled.

Accordingly , the Company performed an impairment analysis as of December 31, 2022, and recorded impairment expense of $ 48 million.

There were no such impairments for the years ended December 31, 2020 and 2021.

3 unchanged sentences

A gain or loss is recognized upon the sale or disposal of other property and equipment.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Debt Issuance Costs

12 unchanged sentences

The Company records derivative instruments on the consolidated balance sheets as either assets or liabilities measured at fair value and records changes in the fair value of derivatives in current earnings as they occur.

Changes in the fair value of commodity derivatives, including gains or losses on settled derivatives, are classified as revenues on the Company’s consolidated statements of operations.

Changes in the fair value of commodity

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

derivatives, including gains or losses on settled derivatives, are classified as revenues on the Company’s consolidated statements of operations.

The Company’s derivatives have not been designated as hedges for accounting purposes.

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The Company maintains control of the natural gas during gathering, compression, processing and transportation.

The Company’s sales contracts provide that

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

it receives a specific index price adjusted for pricing differentials.

The Company’s sales contracts provide that it receives a specific index price adjusted for pricing differentials.

The Company transfers control of the product at the delivery point and recognizes revenue based on the contract price.

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The Company has concluded that it is the principal in these arrangements and therefore, the Company recognizes revenue on a gross basis, with costs to purchase and transport natural gas and NGLs presented as marketing expenses.

Contracts to sell third party gas and NGLs are generally subject to similar terms as contracts to sell the Company’s produced natural gas and NGLs.

Contracts to sell third-party gas and NGLs are generally subject to similar terms as contracts to sell the Company’s produced natural gas and

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

The Company satisfies performance obligations to the purchaser by transferring control of the product at the delivery point and recognizes revenue based on the contract price received from the purchaser.

8 unchanged sentences

See Note 3—Transactions to the consolidated financial statements for further discussion of the VPP.

Gathering, Compression, Water Handling and Treatment Revenue

Substantially all revenues from the gathering, compression, water handling and treatment operations were derived from transactions for services Antero Midstream Partners provided to the Company’s exploration and production operations through March 12, 2019 and were eliminated in consolidation.

Effective March 13, 2019, Antero Midstream Partners is no longer consolidated in Antero’s results.

See Note 3 —Deconsolidation of Antero Midstream Partners LP and Note 18—Reportable Segments to the consolidated financial statements for further discussion on the Simplification Transactions and the Company’s reportable segments, respectively.

The portion of such fees shown in the Company’s consolidated financial statements prior to March 13, 2019 represent amounts charged to interest owners in Antero-operated wells, as well as fees charged to other third parties for water handling and treatment services provided by Antero Midstream Partners or usage of Antero Midstream Partners’ gathering and compression systems.

For gathering and compression revenue, Antero Midstream Partners satisfied its performance obligations and recognized revenue when low pressure volumes were delivered to a compressor station, high pressure volumes were delivered to a processing

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

plant or transmission pipeline, and compression volumes were delivered to a high pressure line.

Revenue was recognized based on the per Mcf gathering or compression fee charged by Antero Midstream Partners in accordance with the gathering and compression agreement.

For water handling and treatment revenue, Antero Midstream Partners satisfied its performance obligations and recognized revenue when the fresh water volumes were delivered to the hydration unit of a specified well pad and the wastewater volumes were delivered to its wastewater treatment facility.

For services contracted through third-party providers, Antero Midstream Partners’ performance obligation was satisfied when the services performed by the third-party providers were completed.

Revenue was recognized based on the per barrel fresh water delivery or wastewater treatment fee charged by Antero Midstream Partners in accordance with the water services agreement.

Concentrations of Credit Risk

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The Company has not experienced significant credit losses on its receivables.

The Company’s sales to major customers (purchases in excess of 10% of total sales) for the years ended December 31, 2019, 2020 and 2021 are as follows:

The Company’s sales to major customers (purchases in excess of 10% of total sales) are as follows:

Year Ended December 31,

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(1) Six One Commodities LLC acquired WGL Midstream during the year ended December 31, 2021.

WGL Midstream was the Company's major customer during the years ended December 31, 2019 and 2020.

Sabine Pass Liquefaction LLC was not a major customer during the year ended December 31, 2021.

WGL Midstream was the Company's major customer during the year ended December 31, 2020.

Sabine Pass Liquefaction LLC was not a major customer during the years ended December 31, 2021 and 2022.

The Company is also exposed to credit risk on its commodity derivative portfolio.

Any default by the counterparties to these derivative contracts when they become due could have a material adverse effect on the Company’s financial condition and results of operations.

The Company has economic hedges in place with 10 different counterparties.

The Company has economic hedges in place with four different counterparties.

As of December 31, 2022, the Company did not have any commodity derivative assets with bank counterparties under our Credit Facility (as defined below in Note 7—Long-Term Debt).

The estimated fair value of commodity derivative assets has been risk-adjusted using a discount rate based upon the respective published credit default swap rates (if available, or if not available, a discount rate based on the applicable Reuters bond rating) as of December 31, 2021 for each of the European and American banks.

The Company believes that all of these institutions currently are acceptable credit risks.

The Company believes that the counterparty currently is an acceptable credit risk.

The Company, at times, may have cash in banks in excess of federally insured amounts.

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

The Company recognizes deferred tax assets and liabilities for temporary differences resulting from NOL 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 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

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

reduce the state’s corporate income tax rate.

As a result of this tax law change together with changes in the Company’s apportionment to Pennsylvania, the Company’s net deferred income tax liability was reduced by $ 41 million with a corresponding income tax benefit during the year ended December 31, 2022.

Unrecognized tax benefits represent potential future tax obligations for uncertain tax positions taken on previously filed tax returns that may not ultimately be sustained.

3 unchanged sentences

This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., those measured at fair value in a business combination, the initial recognition of asset retirement obligations, and impairments of proved oil and gas properties and other long- lived assets).

Fair value is the price that the Company estimates would be received to sell an asset or paid to transfer a

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

liability in an orderly transaction between market participants at the measurement date.

Fair value is the price that the Company estimates would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

A fair value hierarchy is used to prioritize inputs to valuation techniques used to estimate fair value.

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and (iii) midstream services through the Company’s equity method investment in Antero Midstream.

Through March 12, 2019, the results of Antero Midstream Partners were included in the consolidated financial statements of Antero.

Effective March 13, 2019, Antero no longer consolidated the results of Antero Midstream Partners in Antero’s results;

however, the Company’s segment disclosures include the Company’s equity method investment in Antero Midstream due to its significance to the Company’s operations.

See Note 3—Deconsolidation of Antero Midstream Partners LP and Note 18—Reportable Segments to the consolidated financial statements for further discussion on the Simplification Transactions and the Company’s reportable segments, respectively.

See Note 17—Reportable Segments to the consolidated financial statements for more information.

All of the Company’s assets are located in the United States and substantially all of its production revenues are attributable to customers located in the United States;

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Earnings (loss) per common share—basic for each period is computed by dividing net income (loss) attributable to Antero by the basic weighted average number of shares outstanding during the period.

Earnings (loss) per common share—diluted for each period is computed after giving consideration to the potential dilution from outstanding equity awards and shares of common stock issuable upon conversion of the 2026 Convertible Notes (as defined below in Note 8—Long-Term Debt).

Earnings (loss) per common share—diluted for each period is computed after giving consideration to the potential dilution from (i) outstanding equity awards using the treasury stock method and (ii) shares of common stock issuable upon conversion of the 2026 Convertible Notes (as defined below in Note 7—Long-Term Debt) using the if-converted method.

The Company includes restricted stock unit (“RSU”) awards, performance share unit (“PSU”) awards and stock options in the calculation of diluted weighted average shares outstanding based on the number of common shares that would be issuable if the end of the period was also the end of the performance period required for the vesting of the awards.

The potential dilutive effect of the 2026 Convertible Notes is calculated using the (i) treasury stock method for the year ended December 31, 2020 as a result of the Company’s intent to settle the principal amount of such convertible notes in cash upon conversion during year ended December 31, 2020, and (ii) if-converted method for the year ended December 31, 2021, as a result of the partial equitizations of the 2026 Convertible Notes during the year ended December 31, 2021.

The potential dilutive effect of the 2026 Convertible Notes is calculated using the (i) treasury stock method for the year ended December 31, 2020 as a result of the Company’s intent to settle the principal amount of such convertible notes in cash upon conversion during the year ended December 31, 2020, and (ii) if-converted method for the years ended December 31, 2021 and 2022, as a result of the partial equitizations of the 2026 Convertible Notes during the year ended December 31, 2021 and the adoption of ASU No.

2020-06 (as defined below) on January 1, 2022.

See Note 7—Long-Term Debt for further discussion on the equitization transactions.

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Notes to Consolidated Financial Statements (Continued)

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):

Year Ended December 31,

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

( 1,267,897 )

Interest expense for 2026 Convertible Notes

Tax-effect of interest expense for 2026 Convertible Notes

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

( 1,267,897 )

Income (loss) per share—basic

Income (loss) per share—diluted

Weighted average common shares outstanding—basic

Weighted average common shares outstanding—diluted

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):

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Dilutive effect of PSUs

Dilutive effect of outstanding stock options

Dilutive effect of 2026 Convertible Notes

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Weighted average number of outstanding securities excluded from calculation of diluted earnings per common share (1) :

Outstanding stock options

Stock options

2026 Convertible Notes (2)

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See Note 7—Long-Term Debt to the consolidated financial statements for further discussion on this transaction.

Treasury Share Retirement

Treasury Stock and Share Retirement

Treasury stock purchases are recorded at cost.

The Company retires treasury shares acquired through share repurchases and returns those shares to the status of authorized but unissued.

When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired first to additional paid-in capital and then to accumulated earnings (deficit) thereafter.

The portion allocable to additional paid-in capital is determined by applying a percentage, determined by dividing the number of shares to be retired by the number of shares outstanding, to the balance of additional paid-in capital as of retirement.

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The Company recognizes compensation cost related to all equity-based awards in the financial statements based on their estimated grant date fair value.

The Company is authorized to grant various types of equity-based compensation awards including stock options, stock appreciation rights, restricted stock awards, restricted share unit awards, performance share unit awards, dividend equivalent awards and other types of awards.

The Company is authorized to grant various types of equity-based compensation awards including

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

stock options, stock appreciation rights, restricted stock awards, restricted share unit awards, performance share unit awards, dividend equivalent awards and other types of awards.

The grant date fair values are determined based on the type of award and may utilize market prices on the date of grant, Black-Scholes option-pricing model, Monte Carlo simulations or other acceptable valuation methodologies, as appropriate for the type of equity-based award.

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

See Note 10—Equity-Based Compensation and Cash Awards to the consolidated financial statements for additional information regarding the Company’s equity-based compensation.

Recently Issued Accounting Standard

Convertible Instruments

See Note 9 —Equity-Based Compensation and Cash Awards to the consolidated financial statements for more information regarding the Company’s equity-based compensation.

Recently Issued Accounting Standards

Convertible Debt Instruments

In August 2020, the FASB issued ASU No.

2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which eliminates the cash conversion model in ASC 470-20, Debt with Conversion and Other Options , that require separate accounting for conversion features, and instead, allows the debt instrument and conversion features to be accounted for as a single debt instrument.

2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , (“ASU 2020-06”) which eliminates the cash conversion model in ASC 470-20, Debt with Conversion and Other Options , that require separate accounting for conversion features, and instead, allows the debt instrument and conversion features to be accounted for as a single debt instrument.

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

The Company will adopt the standard effective January 1, 2022 under the modified retrospective transition method.

Upon adoption of this new standard, the Company will reclassify $ 24 million, net of deferred income taxes and equity

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

issuance costs, from additional paid-in capital and increase long-term debt by $27 million, reduce deferred income tax liability by $6 million and reduce accumulated deficit by $3 million as of January 1, 2022.

Additionally, annual interest expense for the 2026 Convertible Notes beginning January 1, 2022 will be based on an effective interest rate of 4.9 % as compared to 15.3 % for the year ended December 31, 2021.

The Company does not believe that adoption of the standard will impact its operational strategies or development prospects.

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 15.3 % for the years ended December 31, 2020 and 2021.

In December 2019, the FASB issued ASU No.

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The Company adopted this ASU on January 1, 2021, and it did not have a material impact on the Company's consolidated financial statements.

(3) Deconsolidation of Antero Midstream Partners LP

On March 12, 2019, Antero Midstream GP LP and Antero Midstream Partners completed (the “Closing”) the transactions contemplated by the Simplification Agreement, dated as of October 9, 2018, by and among Antero Midstream GP LP, Antero Midstream Partners and certain of their affiliates (the “Simplification Agreement”), pursuant to which (i) Antero Midstream GP LP was converted from a limited partnership to a corporation under the laws of the State of Delaware and changed its name to Antero Midstream Corporation, and (ii) an indirect, wholly owned subsidiary of Antero Midstream Corporation was merged with and into Antero Midstream Partners, with Antero Midstream Partners surviving the merger as an indirect, wholly owned subsidiary of Antero Midstream Corporation (together, along with the other transactions contemplated by the Simplification Agreement, the “ Simplification Transactions”).

In connection with the Closing, Antero received $ 297 million in cash and 158.4 million shares of Antero Midstream Corporation common stock in consideration for 98,870,335 common units representing limited partnership interests in Antero Midstream Partners.

The Company recorded a gain on deconsolidation of $ 1.4 billion calculated as the sum of (i) the cash proceeds received, (ii) the fair value of the Antero Midstream common stock received at the Closing, and (iii) the elimination of the noncontrolling interest, less the carrying amount of the investment in Antero Midstream Partners.

The fair value of Antero’s retained equity method investment on March 13, 2019 in Antero Midstream was $ 2.0 billion based on the market price of the shares received on March 12, 2019.

See Note 6—Equity Method Investments to the consolidated financial statements for further discussion on equity method investments.

Antero Midstream Partners’ results of operations are no longer consolidated in the Company’s consolidated statement of operations and comprehensive income (loss) beginning March 13, 2019.

Because Antero Midstream Partners does not meet the requirements of a discontinued operation, Antero Midstream Partners’ results of operations continued to be included in the Company’s consolidated statement of operations and comprehensive income (loss) through March 12, 2019.

(3) Transactions

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The Company received a $ 51 million cash distribution during each of the years ended December 31, 2020 and 2021.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

The ORRIs include an overriding royalty interest of 1.25 % of the Company’s working interest in all of its operated proved developed properties in West Virginia and Ohio, subject to certain excluded wells (the “Initial PDP Override”), and an overriding royalty interest of 3.75 % of the Company’s working interest in all of its undeveloped properties in West Virginia and Ohio (the “Development Override”).

Wells turned to sales after April 1, 2020 and prior to the later of (a) the date on which the Company turns to sales 2.2 million lateral feet (net to the Company’s interest) of horizontal wells burdened by the Development Override or (b) the earlier of (i) April 1, 2023 or (ii) the date on which the Company turns to sales 3.82 million lateral feet (net to the Company’s interest) of horizontal wells are subject to the Development Override.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

The ORRIs also include an additional overriding royalty interest of 2.00 % of the Company’s working interest in the properties underlying the Initial PDP Override (the “Incremental Override”).

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Drilling Partnership

On February 17, 2021, Antero Resources announced the formation of a drilling partnership with QL Capital Partners (“QL”), an affiliate of Quantum Energy Partners, for the Company’s 2021 through 2024 drilling program .

On February 17, 2021, Antero Resources announced the formation of a drilling partnership with QL, an affiliate of Quantum Energy Partners, for the Company’s 2021 through 2024 drilling program .

Under the terms of the arrangement, each year in which QL participates represents an annual tranche, and QL will be conveyed a working interest in any wells spud by Antero Resources during such tranche year.

For 2021 and 2022, Antero Resources and QL agreed to the estimated internal rate of return (“IRR”) of the Company’s capital budget for each annual tranche, and QL agreed to participate in the 2021 and 2022 tranches.

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.

For 2021, 2022 and 2023, Antero Resources and QL agreed to the estimated IRR of the Company’s capital budget for each annual tranche, and QL agreed to participate in the 2021, 2022 and 2023 tranches.

For 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.

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.

Under the terms of the arrangement, QL funded 20 % and 15 % of development capital for wells spud in 2021 and 2022, respectively, will fund development capital of (i) 15 % in for wells spud in 2023 and (ii) if they participate in 2024, between 15 % and 20 % for wells spud in 2024, which funding amounts represent QL’s proportionate working interest in such wells.

Additionally, Antero Resources may receive a carry in the form of a one-time payment from QL for each annual tranche if the IRR for such tranche exceeds certain specified returns, which will be determined no earlier than October 31 and no later than December 1 following the end of each tranche year.

During the year ended December 31, 2022, the Company received a carry of $ 29 million attributable to the 2021

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

percentage in each well spud in that year, which conveyances will not be subject to any reversion.

Under the terms of the arrangement, QL funded 20 % of development capital for wells spud in 2021, is expected to fund 15 % in 2022 and between 15 % and 20 % of development capital spending for wells spud on an annual basis from 2023 through 2024, which funding amounts represent QL’s proportionate working interest in such wells.

Additionally, Antero Resources may receive a carry in the form of a one-time payment from QL for each annual tranche if the IRR for such tranche exceeds certain specified returns, which will be determined no earlier than October 31 and no later December 1 following the end of each tranche year .

All of the wells spud during each calendar year period will be a separate annual tranche.

1 unchanged sentence

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 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 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 year ended December 31, 2021.

No gain or loss was recognized for the interests conveyed during the years ended December 31, 2021 and 2022.

Disaggregation of Revenue

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Exploration and production

Gathering and compression (1)

Equity method investment in Antero Midstream

Water handling and treatment (1)

Equity method investment in Antero Midstream

Total revenue from contracts with customers

1 unchanged sentence

( 1,890,248 )

( 1,573,071 )

Total revenue

Gathering and compression and water handling and treatment revenues were included through March 12, 2019.

See Note 3—Deconsolidation of Antero Midstream Partners to the consolidated financial statements for further discussion on the Simplification Transactions.

Transaction Price Allocated to Remaining Performance Obligations

2 unchanged sentences

therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.

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

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Contract Balances

2 unchanged sentences

As of December 31, 2021 and 2022, the Company’s receivables from contracts with customers were $ 591 million and $ 708 million, respectively.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

(5) Equity Method Investment

(a) Summary of Equity Method Investment

As of December 31, 2021, Antero owned approximately 29.1 % of Antero Midstream’s common stock, which is reflected in Antero’s consolidated financial statements using the equity method of accounting.

As of December 31, 2021 and 2022, Antero owned approximately 29.1 % of Antero Midstream’s common stock, which is reflected in Antero’s 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):

Balances as of December 31, 2019

Equity in loss of unconsolidated affiliate

Balance as of December 31, 2020

Equity in earnings of unconsolidated affiliate

Dividends from unconsolidated affiliate

Impairment (1)

Elimination of intercompany profit

4 unchanged sentences

Balance as of December 31, 2022 (1)

(1) Other-than-temporary impairment of the Company’s investment in Antero Midstream to reduce the carrying value of such investment to fair value, which was based on the quoted market share price of Antero Midstream as of March 31, 2020 (Level 1).

(1) The fair value of the Company’s investment in Antero Midstream as of December 31, 2021 and 2022 was $ 1.3 billion and $ 1.5 billion, respectively, based on the quoted market share price of Antero Midstream.

8 unchanged sentences

Total liabilities and stockholders' equity

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Statement of Operations

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Net income (loss)

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

(6) Accrued Liabilities

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Interest expense, net

Accrued production and ad valorem taxes

Production and ad valorem taxes

General and administrative expense

Derivative settlements payable

Accrued general and administrative expense

Total accrued liabilities

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Credit Facility (a)

5.125 % senior notes due 2022 (b)

5.625 % senior notes due 2023 (c)

5.00 % senior notes due 2025 (d)

9 unchanged sentences

Antero Resources has a senior secured revolving credit facility with a consortium of bank lenders.

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

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

Borrowings under the Credit Facility are subject to borrowing base limitations based on the collateral value of Antero Resources’ assets and are subject to regular semi-annual redeterminations.

As of December 31, 2021, the borrowing base under the New Credit Facility was $ 3.5 billion and lender commitments were $ 1.5 billion.

The next redetermination of the borrowing base is scheduled to occur in April 2022.

As of December 31, 2022, the borrowing base under the Credit Facility was $ 3.5 billion and lender commitments were $ 1.5 billion.

The borrowing base was re-affirmed in the semi-annual redetermination in October 2022 and the next redetermination of the borrowing base is scheduled to occur in April 2023.

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 .

The Credit Facility contains requirements with respect to leverage and current ratios, and certain covenants, including

As of December 31, 2022, the Credit Facility had an available borrowing capacity of $ 961 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 2022.

The Credit Facility 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 in effect on and after October 26, 2021 provides for borrowing at either an Adjusted Term 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

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

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 Prior Credit Facility as of December 31, 2020 and New Credit Facility as of December 31, 2021.

The Prior Credit Facility provides for borrowing under either an Alternate Base Rate or as a Eurodollar Loan (as each term is defined in the Prior Credit Facility), and the New 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 New Credit Facility).

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

Interest is payable at a variable rate based on (i) LIBOR or the Alternate Base Rate, determined by Antero Resources’ election at the time of borrowing, plus an applicable margin rate under the Prior Credit Facility and (ii) SOFR or the Alternate Base Rate, determined by Antero Resources’ election at the time of borrowing, plus an applicable margin rate under the New Credit Facility.

by election at the time of borrowing, plus an applicable margin rate under the Credit Facility 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 on or after October 26, 2021.

Interest at the time of borrowing is determined with reference to the Antero Resources’ then-current leverage ratio subject to certain exceptions.

Commitment fees on the unused portion of the Credit Facility are due quarterly at rates ranging from (i) 0.300 % to 0.375 % with respect to the Prior Credit Facility, determined with reference to borrowing base utilization and (ii) 0.375 % to 0.500 % with respect to the New Credit Facility, determined with reference to borrowing base utilization, both rates subject to certain exceptions based on the leverage ratio then in effect.

The New Credit Facility includes fall away covenants, lower interest rates and reduced collateral requirements that Antero Resources may elect if Antero Resources is assigned an Investment Grade Rating (as defined in the New Credit Facility).

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

As of December 31, 2020, Antero Resources had an outstanding balance under the Credit Facility of $ 1.0 billion, with a weighted average interest rate of 3.26 %, and outstanding letters of credit of $ 730 million.

Commitment fees on the unused portion of the Credit Facility are due quarterly at rates ranging from 0.375 % to 0.500 % with respect to the Credit Facility, determined with reference to borrowing base utilization subject to certain exceptions based on the leverage ratio then in effect.

The Credit Facility includes fall away covenants, lower interest rates and reduced collateral requirements that Antero Resources may elect if Antero Resources is assigned an Investment Grade Rating (as defined in the Credit Facility).

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

As of December 31, 2022, Antero Resources had an outstanding balance under the Credit Facility of $ 35 million, with a weighted average interest rate of 6.42 %, and outstanding letters of credit of $ 504 million.

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.

The Company 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, and the 2022 Notes were fully retired as of February 10, 2021.

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

See “—Debt Repurchase Program” below for further details on 2022 Notes repurchases.

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

5.625 % Senior Notes Due 2023

On March 17, 2015, Antero Resources issued $ 750 million of 5.625 % senior notes due June 1, 2023 (the “2023 Notes”) at par .

The Company repurchased or otherwise fully redeemed all of the 2023 Notes between 2020 and the second quarter of 2021.

The Company repurchased or otherwise fully redeemed all of the 2023 Notes between 2020 and the second quarter of 2021, and the 2023 Notes were fully retired as of June 1, 2021.

Interest on the 2023 Notes was payable on June 1 and December 1 of each year.

See “—Debt Repurchase Program” below for further details on 2023 Notes repurchases and redemption.

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

5.00 % Senior Notes Due 2025

On December 21, 2016, Antero Resources issued $ 600 million of 5.00 % senior notes due March 1, 2025 (the “2025 Notes”) at par .

The Company repurchased $ 15 million of the 2025 Notes from time to time during 2020 and 2021, and as of December 31, 2021, $ 585 million principal amount of the 2025 Notes remained outstanding.

The 2025 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility.

The 2025 Notes rank pari passu to Antero Resources’ other outstanding senior notes.

The 2025 Notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero Resources’ existing subsidiaries that guarantee the Credit Facility and certain of its future restricted subsidiaries.

Interest on the 2025 Notes is payable on March 1 and September 1 of each year.

Antero Resources may redeem all or part of the 2025 Notes at any time at redemption prices ranging from 102.5 % currently to 100.00 % on or after March 1, 2023, which option the Company exercised on January 27, 2022 with its notice to redeem all remaining 2025 Notes on March 1, 2022.

See “—Subsequent Event” below for further details on the 2025 Notes redemption.

If Antero Resources undergoes a change of control followed by a rating decline, the holders of the 2025 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 2025 Notes, plus accrued and unpaid interest.

The Company repurchased or otherwise redeemed all of the 2025 Notes between 2020 and the first quarter of 2022, and the 2025 Notes were fully retired as of March 1, 2022.

Interest on the 2025 Notes was payable on March 1 and September 1 of each year.

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

8.375 % Senior Notes Due 2026

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 as of December 31, 2021, $ 325 million principal

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

amount of the 2026 Notes remained outstanding.

See “—Debt Repurchase Program” below for further details on the 2026 Notes redemption.

The Company redeemed $ 175 million principal amount of the 2026 Notes on July 1, 2021 and redeemed or repurchased $ 228 million principal amount of the 2026 Notes during the year ended December 31, 2022, and as of December 31, 2022, $ 97 million principal amount of the 2026 Notes remained outstanding.

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

The 2026 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility.

7 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 on November 2, 2021, and as of December 31, 2021, $ 584 million principal amount of the 2029 Notes remained outstanding.

See “—Debt Repurchase Program” below for further details on the 2029 Notes redemption.

The Company redeemed $ 116 million of the 2029 Notes during the year ended December 31, 2021 and repurchased $ 177 million of the 2029 Notes during the year ended December 31, 2022, and as of December 31, 2022, $ 407 million principal amount of

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

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.

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On September 2, 2020, Antero Resources issued an additional $ 37.5 million of the 2026 Convertible Notes.

During the year ended December 31, 2021, the Company completed the equitization transactions described below under “—Partial Equitizations of 2026 Convertible Notes,” that extinguished $ 206 million principal amount of the

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

2026 Convertible Notes, and as of December 31, 2021, $ 82 million principal amount of the 2026 Convertible Notes remained outstanding.

During the year ended December 31, 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 December 31, 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.

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

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

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 Consolidated Financial Statements (Continued)

● 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”) ;

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The liability component was recorded at the estimated fair value of a similar debt instrument without the conversion feature.

The difference between the principal amount of the 2026 Convertible Notes and the estimated fair value of the liability component was recorded as a debt discount and will be amortized to interest expense, together with debt issuance costs, over the term of the 2026 Convertible Notes using the effective interest method, with an effective interest rate of 15.1 % per annum.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

issuance date, the fair value of the 2026 Convertible Notes was estimated at $ 172 million, resulting in a debt discount at inception of $ 116 million.

The difference between the principal amount of the 2026 Convertible Notes and the estimated fair value of the liability component was recorded as a debt discount and was amortized to interest expense, together with debt issuance costs, over the term of the 2026 Convertible Notes using the effective interest method, with an effective interest rate of 15.3 % per annum.

As of the issuance date, the fair value of the 2026 Convertible Notes was estimated at $ 172 million, resulting in a debt discount at inception of $ 116 million.

The equity component, representing the value of the conversion option, was computed by deducting the fair value of the liability component from the initial proceeds of the 2026 Convertible Notes issuance.

This equity component was recorded, net of deferred taxes and issuance costs, in additional paid-in capital within the consolidated balance sheet and statement of stockholders’ equity and will not be remeasured as long as it continues to meet the conditions for equity classification.

This equity component was recorded, net of deferred taxes and issuance costs, in additional paid-in capital within the consolidated balance sheet and statement of stockholders’ equity.

Transaction costs related to the 2026 Convertible Notes issuance were allocated to the liability and equity components based on their relative fair values.

Issuance costs attributable to the liability component were recorded within debt issuance costs on the consolidated balance sheet and are amortized over the term of the 2026 Convertible Notes using the effective interest method.

Issuance costs attributable to the liability component were recorded within debt issuance costs on the consolidated balance sheet and were amortized over the term of the 2026 Convertible Notes using the effective interest method.

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

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

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

capital to long-term debt.

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

Partial Equitizations of 2026 Convertible Notes

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(1) As of December 31, 2021, the equity component attributable to the outstanding 2026 Convertible Notes was recorded in additional paid-in capital net of $ 1 million of issuance costs and $ 8 million of deferred taxes.

As of December 31, 2021, the equity component attributable to the outstanding 2026 Convertible Notes was recorded in additional paid-in capital net of $ 1 million of issuance costs and $ 8 million of deferred taxes.

Interest expense recognized on the 2026 Convertible Notes related to the stated interest rate, amortization of the debt discount

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

and debt issuance costs totaled $ 8 million and $ 11 million for the years ended December 31, 2020 and 2021, respectively.

Upon adoption of ASU 2020-06 on January 1, 2022, the equity component was reclassified from additional paid-in capital to long-term debt and fully offset the remaining discount on the 2026 Convertible Notes.

See Note 2—Summary of Significant Accounting Policies to the 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 $ 8 million, $ 11 million and $ 3 million for the years ended December 31, 2020, 2021 and 2022, respectively.

Debt Repurchase Program

During the year ended December 31, 2020, Antero Resources repurchased $ 1.4 billion aggregate principal amount of debt at a weighted average discount of 13 % , which purchases included a portion of the 2021 Notes, 2022 Notes, 2023 Notes and 2025 Notes.

The Company recognized a gain of approximately $ 176 million for the year ended December 31, 2020 on the early extinguishment of the debt repurchased.

The Company recognized a gain of approximately $ 176 million for the year ended December 31, 2020 on the early extinguishment of

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

the debt repurchased.

Repurchases of the principal amount of debt during year ended December 31, 2020 include repurchases of $ 367 million aggregate principal amount of the 2021 Notes, 2022 Notes and 2023 Notes through previously disclosed tender offers at a weighted average discount of 10 %.

During the first quarter of 2021, the Company redeemed the remaining $ 661 million of the 2022 Notes at par, plus accrued and unpaid interest, and as a result, the 2022 Notes were fully retired as of February 10, 2021.

The Company redeemed the remaining $ 574 million of the 2023 Notes at par, plus accrued and unpaid interest, during the second quarter of 2021.

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

During the third quarter of 2021, the Company redeemed $ 175 million of the principal amount 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 fourth quarter of 2021, the Company redeemed $ 116 million of the principal amount of its 2029 Notes at a redemption price of 107.625 % of the principal amount thereof, plus accrued and unpaid interest, and recognized a loss on early debt extinguishment of $ 10 million.

Subsequent Event

On January 27, 2022, Antero Resources announced that it will redeem all $ 585 million in aggregate principal amount of its 2025 Notes at a redemption price of 101.25 % of the principal amount thereof, plus accrued and unpaid interest on March 1, 2022.

Immediately following the redemption, the 2025 Notes will be fully retired.

The $ 7 million premium to the principal amount to be redeemed along with the write-off of unamortized debt issuance costs will be included in our loss on early debt extinguishment during the first quarter of 2022.

During the year ended December 31, 2021, the Company redeemed or repurchased through open market transactions (i) the remaining $ 661 million aggregate principal amount of its 2022 Notes at par, plus accrued and unpaid interest, (ii) the remaining $ 574 million aggregate principal amount of the 2023 Notes at par, plus accrued and unpaid interest, (iii) $ 5 million aggregate principal amount of its 2025 Notes at a weighted average redemption price of 102 % of the principal amount thereof, plus accrued and unpaid interest, (iv) $ 175 million aggregate principal amount of its 2026 Notes at a redemption price of 108.375 % of the principal amount thereof, plus accrued and unpaid interest and (v) $ 116 million aggregate principal amount of its 2029 Notes at a redemption price of 107.625 % of the principal amount thereof, plus accrued and unpaid interest.

For such redemptions and repurchases, the Company recognized a $ 31 million loss on early extinguishment of debt.

During the year ended December 31, 2022, the Company redeemed or repurchased through its previously disclosed tender offer and open market transactions (i) 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, (ii) $ 228 million aggregate principal amount of its 2026 Notes at a weighted average redemption price of 109 % of the principal amount thereof, plus accrued and unpaid interest and (iii) $ 177 million aggregate principal amount of its 2029 Notes at a weighted average redemption price of 106 % of the principal amount thereof, plus accrued and unpaid interest.

For such redemptions and repurchases, the Company recognized a $ 46 million loss on early extinguishment of debt.

(8) Asset Retirement Obligations

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Settlement of obligations

Obligations on sold properties

Revisions to prior estimates

Ending balance

Revisions to prior estimates in 2020 and 2021 are primarily due to an increase in estimated well lives.

Revisions to prior estimates in 2021 and 2022 are primarily due to increases in estimated well lives.

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

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The 2020 Plan provides for the reservation of 10,050,000 shares of the Company’s common stock, plus the number of certain shares that become available again for delivery from the 2013 Plan in accordance with the share recycling provisions described below.

The share recycling provisions allow for all or any portion of an award (including an award granted under the 2013 Plan that was

The share recycling provisions allow for all or any portion of an award (including an award granted under the 2013 Plan that was outstanding as of June 17, 2020) that expires or is cancelled, forfeited, exchanged, settled for cash, or otherwise terminated without actual delivery of the shares to be considered not delivered and thus available for new awards under the 2020 Plan.

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.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

outstanding as of June 17, 2020) that expires or is cancelled, forfeited, exchanged, settled for cash, or otherwise terminated without actual delivery of the shares to be considered not delivered and thus available for new awards under the 2020 Plan.

A total of 7,601,417 shares were available for future grant under the 2020 Plan as of December 31, 2022.

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).

As part of the Simplification Transactions, each outstanding phantom unit award under the AMP Plan, was assumed by Antero Midstream and converted into 1.8926 RSUs (all such RSUs, the “Converted AM RSU Awards”) under the Antero Midstream Corporation Long Term Incentive Plan (the “AM Plan”).

Antero Resources deconsolidated Antero Midstream Partners on March 12, 2019, and on such date, each outstanding phantom unit award under the AMP Plan, was assumed by Antero Midstream and converted into 1.8926 RSUs (all such RSUs, the “Converted AM RSU Awards”) under the Antero Midstream Corporation Long Term Incentive Plan (the “AM Plan”).

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

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Converted AM RSU Awards (1)

Stock options

Equity awards issued to directors

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(1) Antero Resources recognized compensation expense for equity awards granted under both the 2013 Plan and the AMP Plan because the awards under the AMP Plan are accounted for as if they are distributed by Antero Midstream Partners to Antero Resources.

Antero Resources allocates a portion of equity-based compensation expense related to grants prior to the Simplification Transactions to Antero Midstream Partners based on its proportionate share of Antero Resources’ labor costs.

Through March 12, 2019, the total amount of equity-based compensation is included in the consolidated financial statements of Antero Resources;

and effective March 13, 2019 (date of deconsolidation), the amount allocated to Antero Midstream Partners is no longer reflected in Antero Resources’ consolidated financial statements.

See Note 3—Deconsolidation of Antero Midstream Partners to the consolidated financial statements for further discussion on the Simplification Transactions.

Antero Resources allocates a portion of equity-based compensation expense related to grants prior March 13, 2019 (date of deconsolidation) to Antero Midstream Partners based on its proportionate share of Antero Resources’ labor costs.

The total fair value of the Company’s vested equity awards for the years ended December 31, 2020, 2021 and 2022 were $ 2 million, $ 34 million and $ 158 million, respectively.

(a) Restricted Stock Unit Awards

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The grant date fair values of these awards are determined based on the closing price of Antero Resources’ common stock on the date of the grant.

The weighted average grant date fair value per share for RSUs granted during the years ended December 31, 2020, 2021 and 2022 were $ 2.57 , $ 9.63 and $ 35.64 , respectively.

A summary of RSU award activity is as follows:

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(b) Performance Share Unit Awards

Performance Share Unit Awards Based on Stock Price Targets

In 2016, the Company granted PSUs to certain of its executive officers that were based on stock price targets.

The vesting of these PSUs was conditioned on the closing price of Antero Resources’ common stock achieving specific price thresholds over 10 -day periods, subject to the following vesting restrictions:

no PSUs could vest before the first anniversary of the grant date;

no more than one-third of the PSUs could vest before the second anniversary of the grant date;

and no more than two-thirds of the PSUs could vest before the third anniversary of the grant date.

Any PSUs that had not vested by the fifth anniversary of the grant date expired in 2021.

Expense related to these PSUs was recognized on a graded basis over three years .

Performance Share Unit Awards Based on Total Shareholder Return

In 2017, the Company granted PSUs to certain of its employees and executive officers that would vest based on the total shareholder return (“TSR”) of Antero Resources’ common stock relative to the TSR of a peer group of companies over a three-year performance period.

The number of shares of common stock that were available to be earned ranged from zero to 200 % of the PSUs granted.

Expense related to these PSUs was recognized on a straight-line basis over three years .

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

One of the performance conditions was met, and vesting for one-third of these PSUs was achieved.

Performance Share Unit Awards Based on Total Shareholder Return and Return on Capital Employed

In 2018, the Company granted PSUs to certain of its employees and executive officers, a portion of which would vest based on the Company’s absolute total shareholder return (“TSR”), with target payout achieved if the price per share of Antero Resources’ common stock reaches 125 % of the beginning price (as defined in the award agreement) at the end of a three-year performance period (“2018 TSR PSUs”).

The performance conditions for the 2017 PSUs were not met, and no vesting was achieved.

In 2018, the Company granted PSUs to certain of its employees and executive officers, a portion of which would vest based on the Company’s absolute TSR, with target payout achieved if the price per share of Antero Resources’ common stock reaches 125 % of the beginning price (as defined in the award agreement) at the end of a three-year performance period (“2018 TSR PSUs”).

The number of awards actually earned with respect to the 2018 TSR PSUs were subject to further adjustment based on the TSR of Antero Resources’ common stock relative to the TSR of a peer group of companies over the same period.

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

The other portion of the PSUs granted in 2018 would vest based on the Company’s actual return on capital employed (“ROCE”) (as defined in the award agreement) over a three-year period as compared to a targeted ROCE (“ROCE PSUs”).

The number of shares of common stock that could ultimately be earned with respect to the ROCE PSUs ranged from zero to 200 % of the target number of ROCE PSUs originally granted.

Expense related to the ROCE PSUs was recognized based on the number of shares of common stock that were expected to be issued at the end of the measurement period, and was reversed if the likelihood of achieving the performance condition decreased.

As of December 31, 2019, the likelihood of achieving the performance conditions related to the ROCE PSUs decreased to a level below probable and therefore, expense was not recognized during the years ended December 31, 2020 and 2021.

The performance conditions for the 2018 TSR PSUs and ROCE PSUs were not met, and no vesting for these awards was achieved.

Performance Share Unit Awards Based on Total Shareholder Return

In 2016 and 2017, the Company granted PSUs to certain of its employees and executive officers that would vest based on the TSR of Antero Resources’ common stock relative to the TSR of a peer group of companies over a three-year performance period.

The number of shares of common stock that were available to be earned ranged from zero to 200 % of the PSUs granted.

Expense related to these PSUs was recognized on a straight-line basis over three years .

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

The performance conditions for the 2016 and 2017 PSUs were not met, and no vesting was achieved.

The performance conditions for the 2018 TSR PSUs were not met, and no vesting for these awards was achieved.

In 2019, the Company granted PSUs to certain of its employees and executive officers that vest based on Antero Resources’ absolute TSR, with target payout achieved if the price per share of Antero Resources’ common stock reaches 125 % of the beginning price (as defined in the award agreement) at the end of a three-year performance period.

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

During 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 2020, the Company granted PSU awards to certain of its 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, 2021, April 15, 2022 and April 15, 2023, and one cumulative three-year performance period ending on April 15, 2023, in each case, subject to the executive officer’s continued employment through April 15, 2023.

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Expense related to these PSUs is recognized on a graded-vested basis over approximately three years .

Forfeitures are accounted for as they

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

occur by reversing the expense previously recognized for awards that were forfeited during the period.

The performance condition for the performance period ending April 15, 2021 was met, and 150 % vesting was achieved for the award tranche.

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

The performance conditions for the performance periods ending April 15, 2021 and April 15, 2022 were met, and 150 % vesting was achieved for these award tranches.

Additionally, in 2020, the Company granted PSUs to certain of its executive officers that vest based on Antero Resources’ TSR relative to the TSR of certain peer companies determined as of the last day of each of three one-year performance periods ending on April 15, 2021, April 15, 2022, and April 15, 2023, and one cumulative three-year performance period ending on April 15, 2023, in each case, subject to the executive officer’s continued employment through April 15, 2023.

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

The performance condition for the performance period ending April 15, 2021 was met, and 150 % vesting was achieved for the award tranche.

The performance condition for the performance periods ending April 15, 2021 and April 15, 2022 were met, and 150 % vesting was achieved for these award tranches.

In 2021, the Company granted PSU awards to certain of its 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, 2022, April 15, 2023, and April 15, 2024, and one cumulative three-year performance period ending on April 15, 2024, in each case, subject to the executive officer’s continued employment through April 15, 2024.

1 unchanged sentence

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

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

forfeited during the period.

The performance condition for the performance period ending April 15, 2022 was met, and 200 % vesting was achieved for this award tranche.

In 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.

Additionally, in 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 December 31, 2023, December 31, 2024 and December 31, 2025, and one cumulative three-year performance period ending on December 31, 2025, in each case, subject to certain continued employment criteria (“2023 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 2023 Absolute TSR PSUs ranges from zero to 200 % of the target number of 2023 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.

Performance Share Unit Awards Based on Leverage Ratio

In April 2021, the Company granted PSUs to certain of its executive officers that vest based on the Company’s total debt less cash and cash equivalents divided by the Company’s Adjusted EBITDAX ( as defined in the award agreement ) determined as of the last day of each of three one-year performance periods ending on December 31, 2021, December 31, 2022, and December 31, 2023, in each case, subject to the executive officer’s continued employment through December 31, 2023 (“Leverage Ratio PSUs”).

The number of shares of common stock that may ultimately be earned with respect to the Leverage Ratio PSUs ranges from zero to 200 % of the target number of Leverage Ratio PSUs originally granted.

Expense related to the Leverage Ratio PSUs is recognized based on 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.

In 2021, the Company granted PSUs to certain of its executive officers that vest based on the Company’s total debt less cash and cash equivalents divided by the Company’s Adjusted EBITDAX (as defined in the award agreement) determined as of the last day of each of three one-year performance periods ending on December 31, 2021, December 31, 2022, and December 31, 2023, in each case, subject to the executive officer’s continued employment through December 31, 2023 (“2021 Leverage Ratio PSUs”).

The number of shares of common stock that may ultimately be earned following the end of the third performance period with respect to the 2021 Leverage Ratio PSUs ranges from zero to 200 % of the target number of 2021 Leverage Ratio PSUs originally granted.

Expense related to the 2021 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.

The performance conditions for the performance periods ending December 31, 2021 and December 31, 2022 were met, and 200 % vesting was achieved for these award tranches.

As of December 31, 2022, the likelihood of achieving the performance conditions related to the Leverage Ratio PSUs was probable.

In 2022, the Company granted PSUs to certain of its senior management and executive officers that vest based on the Company’s total debt less cash and cash equivalents divided by the Company’s Adjusted EBITDAX ( as defined in the award agreement ) determined as of the last day of each of three one-year performance periods ending on December 31, 2022, December 31, 2023 and December 31, 2024, in each case, subject to certain continued employment criteria (“2022 Leverage Ratio PSUs”).

The number of shares of common stock that may ultimately be earned following the end of the third performance period with respect to the 2022 Leverage Ratio PSUs ranges from zero to 200 % of the target number of 2022 Leverage Ratio PSUs originally granted.

Expense related to the 2022 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.

The performance condition for the performance period ending December 31, 2022 was met, and 200 % vesting was achieved for this award tranche.

As of December 31, 2022, the likelihood of achieving the performance conditions related to the 2022 Leverage Ratio PSUs was probable.

Additionally, in 2022, the Company granted PSUs to certain of its senior management and executive officers that vest based on the Company’s total debt less cash and cash equivalents divided by the Company’s Adjusted EBITDAX ( as defined in the award agreement ) determined as of the last day of each of three one-year performance periods ending on December 31, 2023, December 31, 2024 and December 31, 2025, in each case, subject to certain continued employment criteria (“2023 Leverage Ratio PSUs”).

The number of shares of common stock that may ultimately be earned following the end of the third performance period with respect to the 2023 Leverage Ratio PSUs ranges from zero to 200 % of the target number of 2023 Leverage Ratio PSUs originally granted.

Expense related to the 2023 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

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

reversed if the likelihood of achieving the performance condition becomes improbable.

As of December 31, 2022, the likelihood of achieving the performance conditions related to the 2023 Leverage Ratio PSUs was probable.

Summary Information for Performance Share Unit Awards

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Total awarded and unvested—December 31, 2021

Cancelled (unearned)

( 1,210,712 )

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The grant-date fair value for the ROCE-based and Adjusted EBITDAX-based PSUs was based on the closing price of Antero Resources’ common stock on the date of the grant, assuming target achievement of the performance condition.

The weighted average grant date fair value per share for PSUs granted during the years ended December 31, 2020, 2021 and 2022 were $ 2.97 , $ 9.71 and $ 37.96 , respectively.

The following table presents information regarding the weighted average fair values for market-based PSUs, and the assumptions used to determine the fair values:

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31,

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That expense is expected to be recognized over a weighted average period of approximately 1.9 years.

Phantom units granted by Antero Midstream Partners vested subject to the satisfaction of service requirements, upon the completion of which common units in Antero Midstream Partners were delivered to the holder of the phantom units.

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The grant date fair values of these awards were determined based on the closing price of Antero Midstream Partners’ common units on the date of grant.

In connection with the closing of the Simplification Transactions, the Board of Directors of Antero Midstream adopted the AM Plan.

In accordance with the terms of the Simplification Transactions, each outstanding phantom unit under the AMP Plan was assumed by Antero Midstream and converted into 1.8926 restricted stock units under the AM Plan.

On March 12, 2019, the Board of Directors of Antero Midstream adopted the AM Plan, and as a result, each outstanding phantom unit under the AMP Plan was assumed by Antero Midstream and converted into 1.8926 restricted stock units under the AM Plan.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

A summary of the Converted AM RSU Awards is as follows:

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Total awarded and unvested—December 31, 2022

As of December 31, 2021, there was $ 0.4 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 approximately 0.3 years, and the Company’s proportionate share will be allocated to it as it is recognized

As of December 31, 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 during the first quarter of 2023, and the Company’s proportionate share will be allocated to it as it is recognized.

(d) Stock Options

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Stock options were granted with an exercise price equal to or greater than the market price of Antero Resources’ common stock on the dates of grant.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

A summary of stock option activity is as follows:

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

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

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

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

2026 Convertible Notes

1 unchanged sentence

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

See Note 9—Equity-Based Compensation and Cash Awards to the consolidated financial statements for information regarding the fair value of derivative financial instruments.

See Note 11—Derivative Instruments to the consolidated financial statements for information regarding the fair value of derivative financial instruments.

12 unchanged sentences

In addition, the Company has entered into basis swap contracts in order to hedge the difference between the 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;

4 unchanged sentences

January-December 2023

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

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.

The Company 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 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 December 31, 2022, the Company’s call option and embedded put option arrangements were as follows:

Commodity / Settlement Period

Contracted Volume

January-December 2023

January-December 2024

January-December 2025

January-December 2026

As of December 31, 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:

6 unchanged sentences

January-December 2024

In addition, the Company had a swaption agreement, which entitled 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.

In January 2023, the Company executed an early settlement of this swaption agreement and made a cash payment of $ 202 million.

As of December 31, 2022, the Company’s fixed price swap positions for Martica, the Company’s consolidated VIE, were as follows:

3 unchanged sentences

January-December 2024

January-March 2025

January-March 2022

Mont Belvieu Purity Ethane-OPIS

January-December 2022

Mont Belvieu Propane-OPIS Non-TET

Natural Gasoline

2 unchanged sentences

January-December 2023

Mont Belvieu Natural Gasoline-OPIS Non-TET

January-December 2022

West Texas Intermediate

1 unchanged sentence

West Texas Intermediate

January-December 2024

West Texas Intermediate

January-March 2025

2 unchanged sentences

Notes to Consolidated Financial Statements (Continued)

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 88,748,000 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 reflected it at fair value in the consolidated financial statements.

The table below presents a summary of the fair values of the Company’s derivative instruments and where such values are recorded in the consolidated balance sheets (in thousands):

1 unchanged sentence

Asset derivatives not designated as hedges for accounting purposes:

Commodity derivatives—current

Derivative instruments

Embedded derivatives—current

Derivative instruments

Commodity derivatives—noncurrent

Derivative instruments

Embedded derivatives—noncurrent

7 unchanged sentences

Total liability derivatives (1)

Net derivatives asset (liability) (1)

Net derivatives liability (1)

(1) The fair value of derivative instruments was determined using Level 2 inputs.

3 unchanged sentences

December 31, 2021

Net Amounts of

Amounts Offset

(Liabilities) on

Balance Sheet

Commodity derivative assets

Embedded derivative assets

Commodity derivative liabilities

December 31, 2022

Net Amounts of

Amounts Offset

1 unchanged sentence

Balance Sheet

Commodity derivative assets

1 unchanged sentence

Commodity derivative liabilities

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

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

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

Year Ended December 31,

1 unchanged sentence

( 1,886,551 )

( 1,524,250 )

Embedded derivative fair value gains (losses) (1)

2 unchanged sentences

Proceeds received from and payments for the monetizations are classified as operating cash flows on the Company’s consolidated statement of cash flows for the years ended December 31, 2020 and 2021.

There were no commodity derivatives monetizations in the year ended December 31, 2019.

There were no commodity derivatives monetizations during the year ended December 31, 2022.

The Company’s commodity derivative position presented in Note 11(a) above reflects the volume and adjusted fixed price indices after the 2020 and 2021 monetizations.

4 unchanged sentences

The exercise of the lease renewal options is at the Company’s sole discretion.

The depreciable lives of the leased assets are limited by the expected lease term, unless there are a transfer of title or purchase option reasonably certain of exercise.

The depreciable lives of the leased assets are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain of the Company’s lease agreements include minimum payments based on a percentage of produced volumes over contractual levels and others include rental payments adjusted periodically for inflation.

40 unchanged sentences

Total finance lease obligation

(1) Gas gathering lines and compressor stations leases includes $ 1.1 billion and $ 1.5 billion related to Antero Midstream as of December 31, 2020 and 2021 , respectively.

(1) Gas gathering lines and compressor stations includes $ 1.5 billion and $ 1.4 billion of leases related to Antero Midstream as of December 31, 2021 and 2022, respectively.

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

(2) Financing lease assets are recorded net of accumulated amortization of $ 3 million and $ 2 million as of December 31, 2020 and 2021 , 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 is the sole customer of the assets and because Antero makes the decisions that most impact the economic performance of the assets.

(2) Financing lease assets are recorded net of accumulated amortization of approximately $ 2 million and $ 1 million as of 2021 and 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.

ANTERO RESOURCES CORPORATION

12 unchanged sentences

Statement of operations

Contract termination and rig stacking

Contract termination

Operating lease cost

16 unchanged sentences

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

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

Year Ended December 31,

7 unchanged sentences

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

(1) During the year ended December 31, 2019, the weighted average discount rate for remeasured operating leases increased from 6.0 % as of January 1, 2019 to 12.4 % as of December 31, 2019 .

(1) During the year ended December 31, 2020, the weighted average discount rate for remeasured operating leases increased from 10.0 % as of December 31, 2019 to 14.4 % as of December 31, 2020.

During the year ended December 31, 2021, the weighted average discount rate for remeasured operating leases decreased from 14.4 % as of December 31, 2020 to 5.0 % as of December 31, 2021.

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

ANTERO RESOURCES CORPORATION

17 unchanged sentences

(f) Related Party Lease Disclosure

The Company has a gathering and compression agreement with Antero Midstream, whereby Antero Midstream receives a low-pressure gathering fee per Mcf, a high-pressure gathering fee per Mcf, and a compression fee per Mcf, in each case subject to annual adjustments based on the consumer price index.

If and to the extent the Company requests that Antero Midstream construct new high pressure lines and compressor stations, the gathering and compression agreement contains options at Antero Midstream’s election for either (i) minimum volume commitments that require Antero Resources to utilize or pay for 75 % of the high pressure gathering capacity and 70 % of the compression capacity of such new construction for 10 years or (ii) a cost of service fee that allows the Antero Midstream to earn a 13 % rate of return on such new construction over seven years .

In December 2019, the Company and Antero Midstream agreed to extend the initial term of the gathering and compression agreement to 2038 and established a growth incentive fee program whereby low-pressure gathering fees will be reduced from 2020 through 2023 to the extent the Company achieves certain volumetric targets at certain points during such time.

The Company has gathering and compression service agreements with Antero Midstream that include:

(i) the second amended and restated gathering and compression agreement dated December 8, 2019 (the “2019 gathering and compression agreement”), (ii) gathering and compression agreements from Antero Midstream’s acquisition of certain Marcellus gathering and compression assets (the “Marcellus gathering and compression agreements”) and (iii) a compression agreement from Antero Midstream’s acquisition of certain Utica compressors (the “Utica compression agreement” and, together with the 2019 gathering and compression agreement and the Marcellus gathering and compression agreements, the “gathering and compression agreements”).

Pursuant to the gathering and compression agreements with Antero Midstream, the Company has dedicated substantially all of its current and future acreage in West Virginia, Ohio and Pennsylvania to Antero Midstream for gathering and compression services.

The 2019 gathering and compression agreement has an initial term through 2038, the Marcellus gathering and compression agreements expire between 2024 and 2031, and the Utica compression agreement has two dedicated areas that expire in 2024 and 2030.

Upon expiration of each of the Marcellus gathering and compression service agreements and the Utica compression agreement, Antero Midstream will continue to provide gathering and compression services under the 2019 gathering and compression agreement.

Under the gathering and compression agreements, Antero Midstream receives a low-pressure gathering fee per Mcf, a high-pressure gathering fee per Mcf and a compression fee per Mcf, as applicable, subject to annual adjustments based on the consumer price index.

If and to the extent the Company requests that Antero Midstream construct new low pressure lines, high pressure lines and compressor stations, the gathering and compression agreement contains options at Antero Midstream’s election for either (i) minimum volume commitments that require Antero Resources to utilize or pay for 75 % of the high pressure gathering capacity and 70 % of the compression capacity of the requested capacity of such new construction for 10 years or (ii) a cost of service fee that allows the Antero Midstream to earn a 13 % rate of return on such new construction over seven years .

The 2019 gathering and compression agreement includes a growth incentive fee program whereby low-pressure gathering fees will be reduced from 2020 through 2023 to the extent the Company achieves certain quarterly volumetric targets.

The Company’s throughput on acquired assets is not considered in low pressure gathering volume targets.

Upon completion of the initial contract term, the 2019 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 achieved the volumetric targets during each quarter for the year ended December 31, 2020, and earned rebates of $ 48 million.

The Company achieved the volumetric target during the fourth quarter of 2021, and earned a rebate of $ 12 million.

For the years ended December 31, 2019, 2020 and 2021, gathering and compression fees paid by Antero related to this agreement were $ 643 million, $ 679 million and $ 705 million, respectively.

As of December 31, 2020 and 2021, $ 55 million and $ 54 million was included within Accounts payable, related parties, respectively, on the consolidated balance sheet as due to Antero Midstream related to this agreement.

The Company earned fee rebates for the years

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

ended December 31, 2020, 2021 and 2022 of $ 48 million, $ 12 million and $ 48 million, respectively.

For the years ended December 31, 2020, 2021 and 2022, gathering and compression fees paid by Antero related to these agreements were $ 679 million, $ 705 million and $ 660 million, respectively.

As of December 31, 2021 and 2022, $ 54 million and $ 59 million, respectively was included within Accounts payable, related parties, on the consolidated balance sheet as due to Antero Midstream related to these agreements.

(13) Income Taxes

The Company’s income tax benefit consisted of the following (in thousands):

The Company’s income tax expense (benefit) consisted of the following (in thousands):

Year Ended December 31,

Current income tax expense (benefit)

Deferred income tax benefit

Total income tax benefit

Deferred income tax expense (benefit)

Total income tax expense (benefit)

Income tax expense (benefit) differs from the amount that would be computed by applying the U.S.

2 unchanged sentences

Federal income tax expense (benefit)

State income tax expense (benefit), net of federal benefit

State income tax expense (benefit), net of federal effect

Change in state tax rate, net of federal effect

Nondeductible equity-based compensation

Equity-based compensation

Dividends received deduction

Noncontrolling interest

Deconsolidation adjustment

Noncontrolling interests

Change in valuation allowance

Nondeductible loss on 2026 Convertible Notes equitization

Total income tax benefit

Nondeductible loss on 2026 Convertible Notes equitizations and inducement

Total income tax expense (benefit)

Deferred income taxes reflect the impact of temporary differences between assets and liabilities for financial reporting purposes and such amounts as measured by tax laws.

10 unchanged sentences

Deferred tax liabilities:

Unrealized gains on derivative instruments

Oil and gas properties

3 unchanged sentences

Net deferred tax liabilities

In assessing the realizability of deferred tax assets, management considers whether some portion or all of the deferred tax assets will be realized based on a more-likely-than-not standard of judgment.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the Company’s temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

strategies in making this assessment.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the Company’s temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Based upon the projections of future taxable income over the periods in which the deferred tax assets are deductible, management believes that the Company will not realize the benefits of certain of these deductible differences and has recorded a valuation allowance of approximately $ 50 million and $ 57 million as of December 31, 2021 and 2022, respectively.

15 unchanged sentences

(14) 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 December 31, 2021 (in thousands).

Gathering and

The following table sets forth a schedule of future minimum payments for the Company’s contractual obligations, which include leases that have a lease term in excess of one year as of December 31, 2022 (in thousands):

Operating and

1 unchanged sentence

Transportation

and Water Service

Financing Leases

5 unchanged sentences

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

Processing, Gathering, and Compression Service Commitments

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

Certain of these agreements were determined to be leases.

The minimum payment obligations under the agreements that are not leases are presented in this column.

In January 2023, the Company executed an early termination of its firm transportation commitment of 200,000 MMBtu per day on the Equitrans pipeline and made a cash payment of $ 24 million.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

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.

The minimum payment obligations under the agreements that are not leases are presented in this column.

The values in the table represent the gross amounts that the Company is committed to pay;

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

Land Payment Obligations

The Company has entered into various land acquisition agreements.

Certain of these agreements contain minimum payment obligations over various terms.

The values in the table represent the minimum payments due under these arrangements.

None of these agreements were determined to be leases.

Leases, including Imputed Interest

Operating and Finance Leases, including Imputed Interest

The Company has obligations under contracts for services provided by drilling rigs and completion fleets, processing, gathering, and compression services agreements, and office and equipment leases.

2 unchanged sentences

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

Contract Terminations and Rig Stacking

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 rig stacking and included in the statement of operations and comprehensive loss.

There are no remaining payment obligations related to these delayed or cancelled drilling and completion contracts as of December 31, 2021.

The Company has entered into various land acquisition and sand supply agreements.

Certain of these agreements contain minimum payment obligations over various terms.

The values in the table represent the minimum payments due under these arrangements.

None of these agreements were determined to be leases.

(e) 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 December 31, 2022.

(15) Contingencies

Environmental

In June 2018, the Company received a Notice of Violation (“NOV”) from the U.S.

Environmental Protection Agency (“EPA”) Region III for alleged violations of the federal Clean Air Act and the West Virginia State Implementation Plan.

In June 2018, the Company received a Notice of Violation (“NOV”) from the EPA Region III for alleged violations of the federal Clean Air Act and the West Virginia State Implementation Plan.

The NOV alleges that combustion devices at these facilities did not meet applicable air permitting requirements.

3 unchanged sentences

The Company’s operations at these facilities are not suspended, and management does not expect these matters to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

In March 2015 and December 2017, the Company filed lawsuits against South Jersey Gas Company and South Jersey Resources Group, LLC (collectively, “SJGC”) in United States District Court in Colorado seeking relief for breach of contracts and damages for amounts that SJGC short paid the Company.

The contractual price for gas was based on specified indices in the contracts and SJGC began short paying the Company based on price indices unilaterally selected by SJGC and not the applicable index specified in the contracts.

On May 8, 2017, a jury in the United States District Court in Colorado returned a unanimous verdict finding in favor of Antero Resources’ positions in the initial lawsuit against SJGC and the Tenth Circuit Court of Appeals affirmed the judgment of the trial court.

SJGC declined further appeal and stipulated to the liability in the second suit.

During the year ended December 31, 2019, the Company and its royalty owners received a gross settlement of $ 82 million from SJGC, which was in full satisfaction and discharge of judgments entered in favor of the Company in the above described lawsuits.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

The Company and Washington Gas Light Company and WGL Midstream, Inc.

4 unchanged sentences

In March of 2017, WGL filed a lawsuit against the Company in Colorado district court claiming that the Company breached contractual obligations by failing to deliver “TCO pool” gas, ultimately seeking damages of more than $ 40 million.

Subsequently, after WGL failed to take certain volumes of gas required under the Contracts, the Company filed a separate lawsuit against WGL to recover damages that WGL refused to pay.

Subsequently, after WGL failed to take certain volumes of gas required under the Contracts, the Company filed a separate lawsuit against WGL to

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

recover damages that WGL refused to pay.

These two lawsuits were consolidated and tried in June 2019.

3 unchanged sentences

In February 2021, the Company and its royalty owners received a gross payment of approximately $ 107 million from WGL, which was in full satisfaction and discharge of the June 2019 judgment entered in favor of the Company.

The Company is party to various other legal proceedings and claims in the ordinary course of its business, including, but not limited to, royalty claims.

The Company is party to various other legal proceedings and claims in the ordinary course of its business.

The Company believes that certain of these matters will be covered by insurance and that the outcome of other matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

In addition, pending litigation against operators in the Appalachian Basin, including the Company, could have an impact on the methods for determining the amount of permitted post-production costs and types of costs that may be deducted from royalty payments, among other things.

A ruling was recently received in an immaterial case to which the Company is a party, and the Company continues to analyze how this decision may impact other cases to which the Company is a party.

The Company cannot predict how these issues may ultimately be resolved, and therefore is also unable to estimate any potential damages, if any, that may result.

(16) Related Parties

Antero Midstream Partners’ operations comprised substantially all of the operations reflected in the gathering and processing, and water handling and treatment, results through March 12, 2019.

Effective March 13, 2019, Antero Resources accounts for Antero Midstream as an equity method investment.

See Note 3—Deconsolidation of Antero Midstream Partners LP to the consolidated financial statements for more discussion on the Simplification Transactions.

Substantially all of Antero Midstream Partners’ and Antero Midstream’s revenues were and are derived from transactions with Antero Resources.

Substantially all of Antero Midstream’s revenues were and are derived from transactions with Antero Resources.

See Note 17—Reportable Segments to the consolidated financial statements for the operating results of the Company’s reportable segments.

(17) Reportable Segments

See Note 2(t)—Summary of Significant Accounting Policies—Reportable Segments and Geographic Information to the consolidated financial statements for a description of the Company’s determination of its reportable segments.

Revenues from midstream services were primarily derived from intersegment transactions for services provided to the Company’s exploration and production operations prior to the closing of the Simplification Transactions.

Through March 12, 2019, Antero Resources included the results of Antero Midstream Partners in its consolidated financial statements.

Effective March 13, 2019, Antero no longer consolidates the results of Antero Midstream in its results;

however, the Company’s segment disclosures include the results of the Company’s unconsolidated affiliates due to their significance to the Company’s operations.

See Note 3—Deconsolidation of Antero Midstream Partners LP to the consolidated financial statements for further discussion on the Simplification Transactions.

Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market excess firm transportation capacity to third parties.

Operating segments are evaluated based on their contribution to consolidated results, which is primarily determined by the respective operating income (loss) of each segment.

Summary of Reportable Segments

The Company’s operations, which are located in the United States, are organized into three reportable segments:

(i) the exploration, development and production of natural gas, NGLs and oil;

(ii) marketing and utilization of excess firm transportation capacity and (iii) midstream services through the Company’s equity method investment in Antero Midstream.

Substantially all of the Company’s production revenues are attributable to customers located in the United States;

however, some of the Company’s production revenues are attributable to customers who then transport the Company’s production to foreign countries for resale or consumption.

These segments are monitored separately by management for performance and are consistent with internal financial reporting.

These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations.

Management evaluates the performance of the Company’s business segments based on operating income (loss).

General and administrative expenses were allocated to the midstream segment based on the nature of the expenses and on a combination of the segments’ proportionate share of the Company’s consolidated property and equipment, capital expenditures and labor costs, as applicable.

2 unchanged sentences

Intersegment sales were transacted at prices which approximate market.

Accounting policies for each segment are the same as the Company’s accounting policies described in Note 2—Summary of Significant Accounting Policies to the consolidated financial statements.

Exploration and Production

The exploration and production segment is engaged in the development, production, exploration and acquisition of natural gas, NGLs and oil properties located in the Appalachian Basin.

The Company targets large, repeatable resource plays where horizontal drilling and advanced fracture stimulation technologies provide the means to economically develop and produce natural gas, NGLs and oil from unconventional formations.

Where feasible, the Company purchases and sells third-party natural gas and NGLs and markets its excess firm transportation capacity, or engages third-parties to conduct these activities on the Company’s behalf, in order to optimize the revenues from these transportation agreements.

The Company has entered into long-term firm transportation agreements for a significant portion of its

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

policies for each segment are the same as the Company’s accounting policies described in Note 2—Summary of Significant Accounting Policies to the consolidated financial statements.

current and expected future production in order to secure guaranteed capacity to favorable markets.

Equity Method Investment in Antero Midstream

The Company receives midstream services through its equity method investment in Antero Midstream.

Antero Midstream owns, operates and develops midstream energy infrastructure primarily to service the Company’s production and completion activity in the Appalachian Basin.

Antero Midstream’s assets consist of gathering pipelines, compressor stations, interests in processing and fractionation plants and water handling assets.

Antero Midstream provides midstream services to Antero Resources under long-term contracts.

Reportable Segments Financial Information

The operating results and assets of the Company’s reportable segments were as follows (in thousands):

1 unchanged sentence

Equity Method

Elimination of

Investment in

Transactions and

Elimination of

Unconsolidated

Corporation (1)

Sales and revenues:

2 unchanged sentences

Lease operating

Gathering, compression, processing, and transportation

Gathering, compression, processing, transportation and water handling

General and administrative

Depletion, depreciation and amortization

Impairment of oil and gas properties

Impairment of midstream assets

Impairment of property and equipment

Impairment of goodwill

Total operating expenses

1 unchanged sentence

Operating loss

Equity in earnings of unconsolidated affiliates

Investments in unconsolidated affiliates

Segment assets

( 5,227,701 )

Equity in earnings (loss) of unconsolidated affiliates

Capital expenditures for segment assets

(1) Includes the consolidated results of Antero Midstream Partners through March 12, 2019 and results of the Company’s equity method investment in Antero Midstream effective March 13, 2019.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 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

Depletion, depreciation and amortization

Impairment of oil and gas properties

Impairment of midstream assets

Impairment of property and equipment

Total operating expenses

( 1,018,357 )

Operating loss

Equity in earnings (loss) of unconsolidated affiliates

Investments in unconsolidated affiliates

Segment assets

( 5,610,912 )

Operating income (loss)

Equity in earnings of unconsolidated affiliates

Capital expenditures for segment assets

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2022

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

Depletion, depreciation and amortization

Impairment of oil and gas properties

Impairment of property and equipment

Total operating expenses

1 unchanged sentence

Equity in earnings of unconsolidated affiliates

Capital expenditures for segment assets

As of December 31, 2021

Elimination of

Equity Method

Investment in

Transactions and

Unconsolidated

Investments in unconsolidated affiliates

Segment assets

( 5,544,001 )

Capital expenditures for segment assets

As of December 31, 2022

Elimination of

Equity Method

Investment in

Transactions and

Unconsolidated

Investments in unconsolidated affiliates

( 5,791,320 )

(18) Subsidiary Guarantors

Antero Resources’ senior notes are fully and unconditionally guaranteed by Antero Resources’ existing subsidiaries that guarantee the Credit Facility.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

surviving entity in such transaction to a person that is not Antero or a restricted subsidiary of Antero, such subsidiary guarantor will be released from its obligations under its subsidiary guarantee if the sale or other disposition does not violate the covenants set forth in the indentures governing the notes.

In the event a subsidiary guarantor is sold or disposed of (whether by merger, consolidation, the sale of a sufficient amount of its capital stock so that it no longer qualifies as a “Subsidiary” of Antero (as defined in the indentures governing the notes) or the sale of all or substantially all of its assets (other than by lease)) and whether or not the subsidiary guarantor is the surviving entity in such transaction to a person that is not Antero or a restricted subsidiary of Antero, such subsidiary guarantor will be released from its obligations under its subsidiary guarantee if the sale or other disposition does not violate the covenants set forth in the indentures governing the notes.

In addition, a subsidiary guarantor will be released from its obligations under the indentures and its guarantee, upon the release or discharge of the guarantee of other Indebtedness (as defined in the indentures governing the notes) that resulted in the creation of such guarantee, except a release or discharge by or as a result of payment under such guarantee;

2 unchanged sentences

The Company’s wholly owned subsidiaries are not restricted from making distributions to the Company.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Balance Sheet

December 31, 2022

Accounts receivable, non-guarantor subsidiaries

Accounts receivable, related parties

Other current assets

Total current assets

Current assets

Noncurrent assets

Accounts payable, non-guarantor subsidiaries

Accounts payable, related parties

6 unchanged sentences

Operating expenses

Loss from operations

Net loss and comprehensive loss including noncontrolling interests

Net loss and comprehensive loss attributable to Antero Resources Corporation

Income from operations

Net income and comprehensive income including noncontrolling interests

Net income and comprehensive income attributable to Antero Resources Corporation

(19) Supplemental Information on Oil and Gas Producing Activities (Unaudited)

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The amounts shown include the Company’s net working interests in all of its oil and gas properties.

(a) Capitalized Costs Relating to Oil and Gas Producing Activities

Capitalized Costs Relating to Oil and Gas Producing Activities

Year Ended December 31,

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Net capitalized costs

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

(b) Costs Incurred in Certain Oil and Gas Activities

Costs Incurred in Certain Oil and Gas Activities

Year Ended December 31,

Acquisition costs:

Proved property

Unproved property

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Total costs incurred

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

Results of Operations for Oil and Gas Producing Activities

Year Ended December 31,

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Results of operations

(d) Oil and Gas Reserves

Oil and Gas Reserves

Net proved oil and gas reserves for the years ended December 31, 2020, 2021 and 2022 were prepared by the Company’s reserve engineers and audited by DeGolyer and MacNaughton (“D&M”) utilizing data compiled by the Company.

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December 31, 2022 (1)

(1) Proved reserves for the noncontrolling interest in Martica as of December 31, 2020 were 254 Bcfe, which consists of 159 Bcf of natural gas, 15 MMBbl of NGLs and 0.5 MMBbl of oil and condensate.

Proved reserves for the noncontrolling interest in Martica as of December 31, 2021 were 167 Bcfe, which consists of 101 Bcf of natural gas, 11 MMBbl of NGLs and 0.4 MMBbl of oil and condensate.

(1) Proved reserves for the noncontrolling interests in Martica as of December 31, 2020 were 254 Bcfe, which consisted of 159 Bcf of natural gas, 15 MMBbl of NGLs and 0.5 MMBbl of oil and condensate.

Proved reserves for the noncontrolling interests in Martica as of December 31, 2021 were 167 Bcfe, which consisted of 101 Bcf of natural gas, 11 MMBbl of NGLs and 0.4 MMBbl of oil and condensate.

Proved reserves for the noncontrolling interests in Martica as of December 31, 2022 were 92 Bcfe, which consisted of 71 Bcf of natural gas, 3 MMBbl of NGLs and 0.2 MMBbl of oil and condensate.

Proved developed reserves:

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December 31, 2022 (2)

(1) Proved developed reserves for the noncontrolling interest in Martica as of December 31, 2020 were 181 Bcfe, which consists of 110 Bcf of natural gas, 11 MMBbl of NGLs and 0.3 MMBbl of oil and condensate.

Proved developed reserves for the noncontrolling interest in Martica as of December 31, 2021 were 133 Bcfe, which consists of 78 Bcf of natural gas, 9 MMBbl of NGLs and 0.2 MMBbl of oil and condensate.

(2) Proved undeveloped reserves for the noncontrolling interest in Martica as of December 31, 2020 were 73 Bcfe, which consists of 49 Bcf of natural gas, 4 MMBbl of NGLs and 0.2 MMBbl of oil and condensate.

Proved undeveloped reserves for the noncontrolling interest in Martica as of December 31, 2021 were 34 Bcfe, which consists of 23 Bcf of natural gas, 2 MMBbl of NGLs and 0.2 MMBbl of oil and condensate.

(1) Proved developed reserves for the noncontrolling interests in Martica as of December 31, 2020 were 181 Bcfe, which consisted of 110 Bcf of natural gas, 11 MMBbl of NGLs and 0.3 MMBbl of oil and condensate.

Proved developed reserves for the noncontrolling interests in Martica as of December 31, 2021 were 133 Bcfe, which consisted of 78 Bcf of natural gas, 9 MMBbl of NGLs and 0.2 MMBbl of oil and condensate.

Proved developed reserves for the noncontrolling interests in Martica as of December 31, 2022 were 91 Bcfe, which consisted of 70 Bcf of natural gas, 3 MMBbl of NGLs and 0.2 MMBbl of oil and condensate.

(2) Proved undeveloped reserves for the noncontrolling interests in Martica as of December 31, 2020 were 73 Bcfe, which consisted of 49 Bcf of natural gas, 4 MMBbl of NGLs and 0.2 MMBbl of oil and condensate.

Proved undeveloped reserves for the noncontrolling interests in Martica as of December 31, 2021 were 34 Bcfe, which consisted of 23 Bcf of natural gas, 2 MMBbl of NGLs and 0.2 MMBbl of oil and condensate.

Proved undeveloped reserves for the noncontrolling interests in Martica as of December 31, 2022 were 1 Bcfe, which consisted entirely of natural gas.

Significant changes in proved reserves for the years ended December 31, 2020, 2021 and 2022 include the following:

Year Ended December 31, 2019 Proved Reserve Changes

2020 Proved Reserve Changes

● Extensions, discoveries, and other additions of 1,105 Bcfe resulted from delineation and development drilling in the Appalachian Basin.

● Net downward revisions of 940 Bcfe include:

● Upward revisions of 63 Bcfe related to well performance.

● Net downward revisions of 1,705 Bcfe related to optimization to the Company’s five-year development plan.

This figure includes upward revisions of 595 Bcfe for previously proved undeveloped properties reclassified from non-proved properties due to their addition to the Company’s five-year development plan, and downward revisions of 2,300 Bcfe for locations that were not developed within five years of initial booking as proved reserves.

o Net downward revision of 1,126 Bcfe due to decreases in prices for natural gas, NGLs and oil.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

● Downward revisions of 157 Bcfe were due to increases in prices for natural gas, NGLs and oil.

● Upward revisions of 315 Bcfe are due to an increase in the Company’s assumed future ethane recovery.

● Downward revisions of 164 Bcfe are due to the deconsolidation of Antero Midstream Partners.

Deconsolidation of Antero Midstream Partners resulted in Antero Resources recording the full fees paid to Antero Midstream Partners for services rendered and no longer including future capital expenditures associated with Antero Midstream Partners’ assets in future development costs.

Prior to deconsolidation, Antero Resources’ consolidated reserves included the elimination of full fees paid by Antero Resources to Antero Midstream Partners and the inclusion of the operating costs and capital incurred by Antero Midstream Partners.

Year Ended December 31, 2020 Proved Reserve Changes

● Extensions, discoveries, and other additions of 1,105 Bcfe resulted from delineation and development drilling in the Appalachian Basin.

● Net downward revisions of 940 Bcfe include:

● Net downward revision of 1,126 Bcfe due to decreases in prices for natural gas, NGLs and oil.

● Net downward revision of 922 Bcfe for locations that were not developed within five years of initial booking as proved reserves.

● Upward revisions of 485 Bcfe are due to an increase in the Company’s assumed future ethane recovery.

● Net upward revision of 132 Bcfe due to schedule optimization primarily driven by previously proved undeveloped properties reclassified from non-proved to proved undeveloped.

● Net upward performance revisions of 491 Bcfe.

o Net downward revision of 922 Bcfe for locations that were not developed within five years of initial booking as proved reserves.

o Net upward performance revisions of 491 Bcfe.

o Upward revisions of 485 Bcfe are due to an increase in the Company’s assumed future ethane recovery.

o Net upward revision of 132 Bcfe due to schedule optimization primarily driven by previously proved undeveloped properties reclassified from non-proved to proved undeveloped.

● Sales of reserves of 113 Bcfe related to the VPP.

Year Ended December 31, 2021 Proved Reserve Changes

2021 Proved Reserve Changes

● Extensions, discoveries, and other additions of 472 Bcfe resulted from delineation and development drilling in the Appalachian Basin.

● Net upward revisions of 1,486 Bcfe include:

● Upward revisions of 149 Bcfe due to increases in prices for natural gas, NGLs and oil.

● Upward revisions of 121 Bcfe are due to an increase in the Company’s assumed future ethane recovery.

● Net upward performance revisions of 565 Bcfe.

● Net upward revision of 651 Bcfe related to optimization to the Company’s five-year development plan.

o Net upward revision of 651 Bcfe related to optimization to the Company’s five-year development plan.

This figure includes upward revisions of 1,475 Bcfe for previously proved undeveloped properties reclassified from non-proved properties due to their addition to the Company’s five-year development plan, and downward revisions of 824 Bcfe for locations that were not developed within five years of initial booking as proved reserves.

o Net upward performance revisions of 565 Bcfe.

o Upward revisions of 149 Bcfe due to increases in prices for natural gas, NGLs and oil.

o Upward revisions of 121 Bcfe are due to an increase in the Company’s assumed future ethane recovery.

● Sales of reserves of 670 Bcfe related to the drilling partnership.

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

(e) Standardized Measure of Discounted Future Net Cash Flow

2022 Proved Reserve Changes

● Extensions, discoveries, and other additions of 604 Bcfe resulted from delineation and development drilling in the Appalachian Basin.

● Net upward revisions of 596 Bcfe include:

o Net upward revisions of previous estimates of 414 Bcfe primarily due to changes in ownership interests.

o Net upward revision of 92 Bcfe related to optimization to the Company’s five-year development plan.

This figure includes upward revisions of 692 Bcfe for previously proved undeveloped properties reclassified from non-proved properties due to their addition to the Company’s five-year development plan, and downward revisions of 600 Bcfe for locations that were not developed within five years of initial booking as proved reserves.

o Upward revisions of 88 Bcfe are due to an increase in the Company’s assumed future ethane recovery.

o Upward revisions of 2 Bcfe due to increases in prices for natural gas, NGLs and oil.

Standardized Measure of Discounted Future Net Cash Flow

The standardized measure relating to proved oil and reserves was prepared in accordance with the provisions of ASC 932.

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Future production and development costs represent the estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, assuming continuation of existing economic conditions.

Future income tax expenses were computed by applying statutory income tax rates to the difference between pretax net cash flows relating to the Company’s proved reserves and the tax basis of proved oil and gas properties.

Future income tax expenses

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

were computed by applying statutory income tax rates to the difference between pretax net cash flows relating to the Company’s proved reserves and the tax basis of proved oil and gas properties.

In addition, the effects of available NOL carryforwards and alternative minimum tax credits were used in computing future income tax expense.

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(1) Based on the 12-month average of the first-day-of-the-month prices used in the computation of PV-10 as of December 31, 2020, the future taxable net income generated over the life of the Company’s proved reserves was expected to be less than its NOL carryforward deductions and therefore, under the standardized measure, there was no deduction for federal or state income taxes.

(2) The standardized measure of discounted future net cash flows for the noncontrolling interest in Martica was $ 359 million and $ 501 million for the years ended December 31, 2020 and 2021, respectively.

(2) The standardized measure of discounted future net cash flows for the noncontrolling interests in Martica were $ 359 million, $ 501 million and $ 458 million for the years ended December 31, 2020, 2021 and 2022, respectively.

The Company used the following 12-month weighted average prices to estimate its total equivalent reserves (per Mcfe):

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12-month weighted average price

ANTERO RESOURCES CORPORATION

Notes to Consolidated Financial Statements (Continued)

(f) Changes in Standardized Measure of Discounted Future Net Cash Flow

Changes in Standardized Measure of Discounted Future Net Cash Flow

The changes in the Standardized Measure relating to proved oil and natural gas reserves, which were prepared in accordance with the provisions of ASC 932, are as follows (in millions):

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End of year (1)

(1) Includes $ 3.3 billion in increased production costs due to the deconsolidation of Antero Midstream Partners for the year ended December 31, 2019.

(2) Includes $ 185 million in increased future development costs due to the deconsolidation of Antero Midstream Partners for the year ended December 31, 2019.

(3) The standardized measure for the noncontrolling interest in Martica was $ 359 million and $ 501 million for the years ended December 31, 2020 and 2021, respectively.

(1) The standardized measure for the noncontrolling interests in Martica were $ 359 million, $ 501 million and $ 458 million for the years ended December 31, 2020, 2021 and 2022, respectively.

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

What changed 10-K

Item 9A. Controls and Procedures