What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-10-25 compared with 2023-07-26 · 196 added, 154 removed, 921 unchanged (28% of the section changed)

7 unchanged sentences

Mine Safety Disclosures

Other Information

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

2 unchanged sentences

Words such as “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

When considering these forward-looking statements, investors should keep in mind the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q.

When considering these forward-looking statements, investors should keep in mind the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2022.

These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events.

6 unchanged sentences

● natural gas, natural gas liquids (“NGLs”) and oil prices;

● impacts of geopolitical events, including the Russia-Ukraine conflict, and world health events;

● impacts of geopolitical events, including the conflicts in Ukraine and in the Middle East, and world health events;

● timing and amount of future production of natural gas, NGLs and oil;

31 unchanged sentences

(In thousands, except per share amounts)

September 30,

Current assets:

42 unchanged sentences

authorized - 1,000,000 shares;

297,393 shares issued and 297,359 outstanding as of December 31, 2022, and 300,359 shares issued and outstanding as of June 30, 2023

297,393 shares issued and 297,359 outstanding as of December 31, 2022, and 300,386 shares issued and outstanding as of September 30, 2023

Additional paid-in capital

1 unchanged sentence

Treasury stock, at cost;

34 shares and zero shares as of December 31, 2022 and June 30, 2023, respectively

34 shares and zero shares as of December 31, 2022 and September 30, 2023, respectively

Total stockholders' equity

3 unchanged sentences

ANTERO RESOURCES CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

(In thousands, except per share amounts)

Three Months Ended June 30,

Three Months Ended September 30,

Revenue and other:

14 unchanged sentences

Accretion of asset retirement obligations

Contract termination

Contract termination and loss contingency

Loss (gain) on sale of assets

Other operating expense

Total operating expenses

Operating income (loss)

Operating income

Other income (expense):

2 unchanged sentences

Loss on early extinguishment of debt

Loss on convertible note inducement

Total other expense

Income (loss) before income taxes

Income tax benefit (expense)

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

Income before income taxes

Income tax expense

Net income and comprehensive income including noncontrolling interests

net income and comprehensive income attributable to noncontrolling interests

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

Income (loss) per share—basic

Income (loss) per share—diluted

Net income and comprehensive income attributable to Antero Resources Corporation

Income per share—basic

Income per share—diluted

Weighted average number of shares outstanding:

3 unchanged sentences

(In thousands, except per share amounts)

Six Months Ended June 30,

Nine Months Ended September 30,

Revenue and other:

15 unchanged sentences

Accretion of asset retirement obligations

Contract termination

Contract termination and loss contingency

Loss (gain) on sale of assets

38 unchanged sentences

Balances, June 30, 2022

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

Conversion of 2026 Convertible Notes

Repurchases and retirements of common stock

Equity-based compensation

Distributions to noncontrolling interests

Net income and comprehensive income

Balances, September 30, 2022

See accompanying notes to unaudited condensed consolidated financial statements.

17 unchanged sentences

Balances, June 30, 2023

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

Conversion of 2026 Convertible Notes

Equity-based compensation

Distributions to noncontrolling interest

Net income and comprehensive income

Balances, September 30, 2023

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows provided by (used in) operating activities:

4 unchanged sentences

Losses on settled commodity derivatives

( 1,484,660 )

Payments for derivative monetizations

6 unchanged sentences

Settlement of asset retirement obligations

Contract termination and loss contingency

Loss (gain) on sale of assets

20 unchanged sentences

Repayment of senior notes

( 1,011,313 )

Borrowings on bank credit facilities, net

Payment of debt issuance costs

Convertible note inducement

8 unchanged sentences

Cash paid during the period for interest

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

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

See accompanying notes to unaudited condensed consolidated financial statements.

10 unchanged sentences

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

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2022 and June 30, 2023, results of operations for the three and six months ended June 30, 2022 and 2023 and cash flows for the six months ended June 30, 2022 and 2023.

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2022 and September 30, 2023, results of operations for the three and nine months ended September 30, 2022 and 2023 and cash flows for the nine months ended September 30, 2022 and 2023.

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

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

Operating results for the period ended June 30, 2023 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for natural gas, NGLs and oil, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments and other factors.

Operating results for the period ended September 30, 2023 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for natural gas, NGLs and oil, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments and other factors.

Principles of Consolidation

7 unchanged sentences

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

As of June 30, 2023, the book overdrafts included within accounts payable and revenue distributions payable were $ 33 million and $ 16 million, respectively.

As of September 30, 2023, the book overdrafts included within accounts payable and revenue distributions payable were $ 35 million and $ 19 million, respectively.

Income (Loss) Per Common Share

7 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

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

Three Months Ended September 30,

Nine Months Ended September 30,

Net income attributable to Antero Resources Corporation—common shareholders

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

Income (loss) per share—basic

Income (loss) per share—diluted

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

Income per share—basic

Income per share—diluted

Weighted average common shares outstanding—basic

1 unchanged sentence

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Basic weighted average number of shares outstanding

5 unchanged sentences

Stock options

2026 Convertible Notes

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

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Recently Issued Accounting Standard

3 unchanged sentences

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

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

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.

18 unchanged sentences

For 2021, 2022 and 2023, 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, 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.

For 2024, Antero Resources will propose a capital budget and estimated IRR

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

between 15 % and 20 % for wells spud in 2024, which funding amounts represent QL’s proportionate working interest in such wells.

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.

Under the terms of the arrangement, QL funded 20 % and 15 % of development capital for wells spud in 2021 and 2022, respectively, and will fund development capital of (i) 15 % 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.

4 unchanged sentences

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

No gain or loss was recognized for the interests conveyed during the three and six months ended June 30, 2022 and 2023.

No gain or loss was recognized for the interests conveyed during the three and nine months ended September 30, 2022 and 2023.

Disaggregation of Revenue

1 unchanged sentence

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Reportable Segment

17 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 or less.

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

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

1 unchanged sentence

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

As of December 31, 2022 and June 30, 2023, the Company’s receivables from contracts with customers were $ 708 million and $ 323 million, respectively.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

As of December 31, 2022 and September 30, 2023, the Company’s receivables from contracts with customers were $ 708 million and $ 373 million, respectively.

(5) Equity Method Investment

Summary of Equity Method Investment

As of June 30, 2023, Antero owned 29.0 % of Antero Midstream’s common stock, which is reflected in Antero’s unaudited condensed consolidated financial statements using the equity method of accounting.

As of September 30, 2023, Antero owned 29.0 % of Antero Midstream’s common stock, which is reflected in Antero’s unaudited condensed consolidated financial statements using the equity method of accounting.

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

3 unchanged sentences

Elimination of intercompany profit

Balance as of June 30, 2023 (1)

(1) The fair value of the Company’s investment in Antero Midstream as of December 31, 2022 and June 30, 2023 was $ 1.5 billion and $ 1.6 billion, respectively, based on the quoted market share price of Antero Midstream .

Balance as of September 30, 2023 (1)

(1) The fair value of the Company’s investment in Antero Midstream as of December 31, 2022 and September 30, 2023 was $ 1.5 billion and $ 1.7 billion, respectively, based on the quoted market share price of Antero Midstream .

(6) Accrued Liabilities

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

September 30,

Capital expenditures

6 unchanged sentences

Total accrued liabilities

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(7) Long-Term Debt

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

September 30,

Credit Facility (a)

9 unchanged sentences

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, 2022 and June 30, 2023, the Credit Facility had a borrowing base of $ 3.5 billion and lender commitments of $ 1.5 billion.

The borrowing base was re-

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

affirmed in the semi-annual redetermination in April 2023.

As of December 31, 2022 and September 30, 2023, the Credit Facility had a borrowing base of $ 3.5 billion and lender commitments of $ 1.5 billion.

During the semi-annual redetermination in October 2023, the borrowing base was re-affirmed at $ 3.5 billion and lender commitments increased to $ 1.6 billion.

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

As of June 30, 2023, the Credit Facility had an available borrowing capacity of $ 638 million.

As of September 30, 2023, the Credit Facility had an available borrowing capacity of $ 524 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, 2022 and June 30, 2023.

Antero Resources was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2022 and September 30, 2023.

The Credit Facility provides for borrowing at either an Adjusted Term Secured Overnight Financing Rate (“SOFR”), an Adjusted Daily Simple SOFR or an Alternate Base Rate (each as defined in the Credit Facility).

5 unchanged sentences

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.

As of June 30, 2023, Antero Resources had an outstanding balance under the Credit Facility of $ 360 million, with a weighted average interest rate of 7.44 %, and outstanding letters of credit of $ 502 million.

As of September 30, 2023, Antero Resources had an outstanding balance under the Credit Facility of $ 474 million, with a weighted average interest rate of 7.68 %, and outstanding letters of credit of $ 502 million.

(b) 5.00 % Senior Notes Due 2025

3 unchanged sentences

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

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

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 or otherwise repurchased $ 403 million principal amount of the 2026 Notes during 2021 and 2022, and as of June 30, 2023, $ 97 million principal amount of the 2026 Notes remained outstanding.

The Company redeemed or otherwise repurchased $ 403 million principal amount of the 2026 Notes during 2021 and 2022, and as of September 30, 2023, $ 97 million principal amount of the 2026 Notes remained outstanding.

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

8 unchanged sentences

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

The Company redeemed or otherwise repurchased $ 293 million principal amount of the 2029 Notes during 2021 and 2022, and as of June 30, 2023, $ 407 million principal amount of the 2029 Notes remained outstanding.

The Company redeemed or otherwise repurchased $ 293 million principal amount of the 2029 Notes during 2021 and 2022, and as of September 30, 2023, $ 407 million principal amount of the 2029 Notes remained outstanding.

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

1 unchanged sentence

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

The 2029 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

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

restricted subsidiaries.

Interest on the 2029 Notes is payable on February 1 and August 1 of each year.

13 unchanged sentences

If Antero Resources undergoes a change of control followed by a rating decline, the holders of the 2030 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 2030 Notes, plus accrued and unpaid interest.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(f) 4.25 % Convertible Senior Notes Due 2026

3 unchanged sentences

The Company extinguished $ 206 million principal amount of the 2026 Convertible Notes in 2021.

In addition, between 2022 and the second quarter of 2023, $ 43 million aggregate principal amount of the 2026 Convertible Notes were converted pursuant to their terms or induced into conversion by the Company.

In addition, between 2022 and the third quarter of 2023, $ 43 million aggregate principal amount of the 2026 Convertible Notes were converted pursuant to their terms or induced into conversion by the Company.

See “—Conversions and Inducements,” for more information.

As of June 30, 2023, $ 39 million principal amount of the 2026 Convertible Notes remained outstanding.

As of September 30, 2023, $ 39 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.

2 unchanged sentences

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

As of June 30, 2023, the if-converted value of the 2026 Convertible Notes was $ 209 million, which exceeded the principal amount of the 2026 Convertible Notes by $ 170 million.

As of September 30, 2023, the if-converted value of the 2026 Convertible Notes was $ 230 million, which exceeded the principal amount of the 2026 Convertible Notes by $ 191 million.

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

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

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

the 30 consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding calendar quarter (the “Stock Price Condition”);

● 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”);

● during the five consecutive Business Days immediately after any 10 consecutive Trading Day period (such 10 consecutive Trading Day period, the “Measurement Period”) if the Trading Price per $1,000 principal amount of 2026 Convertible Notes, as determined following a request by a noteholder in accordance with the procedures set forth below, for each Trading Day of the Measurement Period was less than 98 % of the product of the Last Reported Sales Price per share of common stock on such Trading Day and the conversion rate on such Trading Day;

3 unchanged sentences

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

The 2026 Convertible Notes have met the Stock Price Condition allowing holders of the 2026 Convertible Notes to exercise their conversion right as of June 30, 2023.

The 2026 Convertible Notes have met the Stock Price Condition allowing holders of the 2026 Convertible Notes to exercise their conversion right as of September 30, 2023.

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

In addition, following certain corporate events, as described in the indenture governing the 2026 Convertible Notes, that occur prior to the maturity date, Antero Resources will increase the conversion rate for a holder who elects to convert its 2026 Convertible Notes in connection with such a corporate event.

If certain corporate events that constitute a Fundamental Change occur, then noteholders may require Antero Resources to repurchase their 2026 Convertible Notes at a cash repurchase price equal to the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the Fundamental Change Repurchase Date.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the Fundamental Change Repurchase Date.

The definition of Fundamental Change includes certain business combination transactions involving Antero Resources and certain de-listing events with respect to Antero Resources’ common stock.

10 unchanged sentences

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

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Conversions and Inducements

During the first quarter of 2023, $ 9 million aggregate principal amount of the 2026 Convertible Notes were converted pursuant to their terms, and an additional $ 9 million aggregate principal amount of the 2026 Convertible Notes were induced into conversion by the Company.

During the nine months ended September 30, 2023, $ 9 million aggregate principal amount of the 2026 Convertible Notes were converted pursuant to their terms, and an additional $ 9 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 4 million shares of common stock to the noteholders together with a cash inducement premium of $ 0.1 million.

There were no conversions of the 2026 Convertible Notes during the second quarter of 2023 or the first or second quarters of 2022.

There were no conversions of the 2026 Convertible Notes during the nine months ended September 30, 2022.

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

September 30,

unamortized debt issuance costs

Net carrying value

Interest expense recognized on the 2026 Convertible Notes related to the stated interest rate, amortization of the debt discount and debt issuance costs totaled $ 1 million and $ 0.5 million for the three months ended June 30, 2022 and 2023, respectively, and $ 2 million and $ 1 million for the six months ended June 30, 2022 and 2023, respectively.

Interest expense recognized on the 2026 Convertible Notes related to the stated interest rate and debt issuance costs totaled $ 1 million and $ 0.5 million for the three months ended September 30, 2022 and 2023, respectively, and $ 3 million and $ 2 million for the nine months ended September 30, 2022 and 2023, respectively.

(g) Debt Repurchase Program

1 unchanged sentence

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

There were no debt repurchases or redemptions during the first or second quarters of 2023.

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

For the three and nine months ended September 30, 2022, the Company recognized a loss on early debt

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

extinguishment from these repurchases of $ 30 million and $ 45 million, respectively.

There were no debt repurchases or redemptions during the three and nine months ended September 30, 2023.

(8) Asset Retirement Obligations

5 unchanged sentences

Revisions to prior estimates

Asset retirement obligations—June 30, 2023

Asset retirement obligations—September 30, 2023

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

6 unchanged sentences

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.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

otherwise terminated without actual delivery of the shares to be considered not delivered and thus, available for new awards under the 2020 Plan.

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.

A total of 6,835,261 shares were available for future grant under the 2020 Plan as of June 30, 2023.

A total of 6,896,996 shares were available for future grant under the 2020 Plan as of September 30, 2023.

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

1 unchanged sentence

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

As of June 30, 2023, all Converted AM RSU Awards were fully vested.

As of September 30, 2023, all Converted AM RSU Awards were fully vested.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Converted AM RSU Awards (1)

3 unchanged sentences

Antero Resources allocates a portion of equity-based compensation expense related to grants prior to March 12, 2019 (date of deconsolidation) to Antero Midstream Partners based on its proportionate share of Antero Resources’ labor costs.

As of June 30, 2023, all Converted AM RSU Awards were fully vested, and there is no remaining unamortized expense attributable to these awards.

As of September 30, 2023, all Converted AM RSU Awards were fully vested, and there is no remaining unamortized expense attributable to these awards.

Restricted Stock Unit Awards

2 unchanged sentences

( 2,214,806 )

Total awarded and unvested—June 30, 2023

As of June 30, 2023, there was $ 76 million of unamortized equity-based compensation expense related to unvested RSUs.

Total awarded and unvested—September 30, 2023

As of September 30, 2023, there was $ 65 million of unamortized equity-based compensation expense related to unvested RSUs.

That expense is expected to be recognized over a weighted average period of 2.0 years.

2 unchanged sentences

In March 2023, the Company granted PSU awards to certain of its senior management and executive officers that vest based on Antero Resources’ absolute total shareholder return (“TSR”) determined as of the last day of each of three one-year performance periods ending on March 7, 2024, March 7, 2025 and March 7, 2026, and one cumulative three-year performance period ending on March 7, 2026, in each case, subject to certain continued employment criteria (“2023 Absolute TSR PSUs”).

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

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.

5 unchanged sentences

Weighted average fair value of awards granted—Absolute TSR

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Performance Share Unit Awards Based on Leverage Ratio

2 unchanged sentences

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

As of June 30, 2023, the likelihood of achieving the performance conditions related to the 2023 Leverage Ratio PSUs was probable.

As of September 30, 2023, the likelihood of achieving the performance conditions related to the 2023 Leverage Ratio PSUs was probable.

Summary Information for Performance Share Unit Awards

1 unchanged sentence

Total awarded and unvested—December 31, 2022

Total awarded and unvested—June 30, 2023

(1) During the three months ended June 30, 2023, the PSUs granted in 2020 that were based on absolute TSR and relative TSR met the performance criteria to achieve vesting at 112 % and 126 % of target, respectively, and converted into approximately 0.4 million shares of the Company’s common stock.

As of June 30, 2023, there was $ 29 million of unamortized equity-based compensation expense related to unvested PSUs.

Total awarded and unvested—September 30, 2023

(1) During the nine months ended September 30, 2023, the PSUs granted in 2020 that were based on absolute TSR and relative TSR met the performance criteria to achieve vesting at 112 % and 126 % of target, respectively, and converted into approximately 0.4 million shares of the Company’s common stock.

As of September 30, 2023, there was $ 26 million of unamortized equity-based compensation expense related to unvested PSUs.

That expense is expected to be recognized over a weighted average period of 1.5 years.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Converted AM RSU Awards

1 unchanged sentence

Total awarded and unvested—December 31, 2022

Total awarded and unvested—June 30, 2023

As of June 30, 2023, all Converted AM RSU Awards were fully vested resulting in no unamortized equity-based compensation expense.

Total awarded and unvested—September 30, 2023

As of September 30, 2023, all Converted AM RSU Awards were fully vested resulting in no unamortized equity-based compensation expense.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

Stock Options

A summary of the stock option activity is as follows:

(in thousands) (1)

Outstanding—December 31, 2022

Outstanding—September 30, 2023

Vested—September 30, 2023

Exercisable—September 30, 2023

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

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

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

As of December 31, 2022 and June 30, 2023, the Company has recorded $ 1 million and $ 0.4 million, respectively, in Accrued liabilities in the condensed consolidated balance sheets related to unvested cash awards.

As of December 31, 2022 and September 30, 2023, the Company has recorded $ 1 million and $ 0.4 million, respectively, in accrued liabilities in the condensed consolidated balance sheets related to unvested cash awards.

(10) Fair Value

The carrying values of accounts receivable and accounts payable as of December 31, 2022 and June 30, 2023 approximated market values because of their short-term nature.

The carrying values of the amounts outstanding under the Credit Facility as of December 31, 2022 and June 30, 2023 approximated fair value because the variable interest rates are reflective of current market conditions.

The carrying values of accounts receivable and accounts payable as of December 31, 2022 and September 30, 2023 approximated market values because of their short-term nature.

The carrying values of the amounts outstanding under the Credit Facility as of December 31, 2022 and September 30, 2023 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):

December 31, 2022

June 30, 2023

September 30, 2023

2026 Convertible Notes

(1) Fair values are based on Level 2 market data inputs.

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

(2) Carrying values are presented net of unamortized debt issuance costs.

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

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

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(11) Derivative Instruments

1 unchanged sentence

In addition, the Company periodically enters into contracts that contain embedded features that are required to be bifurcated and accounted for separately as derivatives.

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(a) Commodity Derivative Positions

3 unchanged sentences

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

The Company was party to various fixed price commodity swap contracts that settled during the three and six months ended June 30, 2022 and 2023.

The Company was party to various fixed price commodity swap contracts that settled during the three and nine months ended September 30, 2022 and 2023.

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

6 unchanged sentences

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

As of June 30, 2023, the Company’s fixed price swap positions excluding Martica, the Company’s consolidated VIE, were as follows:

As of September 30, 2023, the Company’s fixed price swap positions excluding Martica, the Company’s consolidated VIE, were as follows:

Commodity / Settlement Period

Contracted Volume

July-December 2023

October-December 2023

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 volumetric production payment transaction (“VPP”) properties.

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

As of June 30, 2023, the Company’s call option and embedded put option arrangements were as follows:

As of September 30, 2023, the Company’s call option and embedded put option arrangements were as follows:

Commodity / Settlement Period

Contracted Volume

July-December 2023

October-December 2023

January-December 2024

3 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2023, 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:

As of September 30, 2023, the Company’s natural gas basis swap positions, which settle on the pricing index to basis differential of the Columbia Gas Transmission pipeline (“TCO”) to the NYMEX Henry Hub natural gas price were as follows:

Weighted Average

3 unchanged sentences

Hedged Differential

July-December 2023

October-December 2023

January-December 2024

As of June 30, 2023, the Company’s fixed price swap positions for Martica, the Company’s consolidated VIE, were as follows:

As of September 30, 2023, the Company’s fixed price swap positions for Martica, the Company’s consolidated VIE, were as follows:

Commodity / Settlement Period

Contracted Volume

July-December 2023

October-December 2023

January-December 2024

1 unchanged sentence

Natural Gasoline

July-December 2023

October-December 2023

Mont Belvieu Natural Gasoline-OPIS Non-TET

July-December 2023

October-December 2023

West Texas Intermediate

5 unchanged sentences

Balance Sheet

September 30,

Asset derivatives not designated as hedges for accounting purposes:

13 unchanged sentences

(2) As of December 31, 2022, $ 47 million of commodity derivative liabilities, including $ 28 million of current commodity derivatives and $ 19 million of noncurrent commodity derivatives, are attributable to the Company’s consolidated VIE, Martica.

As of June 30, 2023, $ 17 million of commodity derivative liabilities, including $ 10 million of current commodity derivatives and $ 7 million of noncurrent commodity derivatives, are attributable to the Company’s consolidated VIE, Martica.

As of September 30, 2023, $ 15 million of commodity derivative liabilities, including $ 9 million of current commodity derivatives and $ 6 million of noncurrent commodity derivatives, are attributable to the Company’s consolidated VIE, Martica.

ANTERO RESOURCES CORPORATION

2 unchanged sentences

December 31, 2022

June 30, 2023

September 30, 2023

Net Amounts of

10 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Commodity derivative fair value gains (losses) (1)

( 1,732,720 )

Embedded derivative fair value gains (losses) (1)

Embedded derivative fair value losses (1)

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

Commodity derivative fair value gains (losses) for the six months ended June 30, 2023, includes a loss of $ 202 million related to the early settlement of the Company’s natural gas swaption agreement during the first quarter of 2023.

Commodity derivative fair value gains (losses) for the nine months ended September 30, 2023, includes a loss of $ 202 million related to the early settlement of the Company’s natural gas swaption agreement during the first quarter of 2023.

The payment for this early settlement is classified as an operating cash flow on the Company’s condensed consolidated statement of cash flows.

19 unchanged sentences

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

September 30,

Balance Sheet Classification

28 unchanged sentences

Total finance lease liabilities

(1) Gas gathering lines and compressor stations includes $ 1.4 billion related to Antero Midstream as of December 31, 2022 and June 30, 2023.

(1) Gas gathering lines and compressor stations includes $ 1.4 billion and $ 1.3 billion related to Antero Midstream as of December 31, 2022 and September 30, 2023, respectively.

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

(2) Financing lease assets are recorded net of accumulated amortization of $ 1 million as of December 31, 2022 and June 30, 2023 .

(2) Financing lease assets are recorded net of accumulated amortization of $ 1 million as of December 31, 2022 and September 30, 2023 .

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

3 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Classification

27 unchanged sentences

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

Six Months Ended June 30,

Nine Months Ended September 30,

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

5 unchanged sentences

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

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

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

During the six months ended June 30, 2023, the weighted average discount rate for remeasured operating leases increased from 5.2 % as of December 31, 2022 to 5.8 % as of June 30, 2023.

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

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

During the nine months ended September 30, 2023, the weighted average discount rate for remeasured operating leases increased from 5.1 % as of December 31, 2022 to 5.8 % as of September 30, 2023.

ANTERO RESOURCES CORPORATION

1 unchanged sentence

(d) Maturities of Lease Liabilities

The table below is a schedule of future minimum payments for operating and financing lease liabilities as of June 30, 2023 (in thousands):

The table below is a schedule of future minimum payments for operating and financing lease liabilities as of September 30, 2023 (in thousands):

Operating Leases

Financing Leases

Remainder of 2023

Total lease payments

3 unchanged sentences

December 31, 2022

June 30, 2023

September 30, 2023

Operating Leases

19 unchanged sentences

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 of the first and second quarters of 2022 and 2023, and earned fee rebates of $ 12 million for the three months ended June 30, 2022 and 2023 and $ 24 million for the six months ended June 30, 2022 and 2023.

Gathering and compression fees paid by Antero related to these agreements were $ 164 million and $ 185 million for the three months ended June 30, 2022 and 2023, respectively.

For the six months ended June 30, 2022 and 2023, gathering and compression fees paid by Antero related to this agreement were $ 327 million and $ 361 million, respectively.

As of December 31, 2022 and June 30, 2023, $ 59 million and $ 69 million, respectively, was included within Accounts payable, related parties on the condensed consolidated balance sheet as due to Antero Midstream related to these agreements.

The Company achieved the first threshold volumetric target during each of the first, second and third quarters of 2022 and 2023, and earned fee rebates of $ 12 million for the three months ended September 30, 2022 and 2023 and $ 36 million for the nine months ended September 30, 2022 and 2023.

Gathering and compression fees paid by Antero related to these agreements were $ 164 million and $ 189 million for the three months ended September 30, 2022 and 2023, respectively.

For the nine months ended September 30, 2022 and 2023, gathering and compression fees paid by Antero related to this agreement were $ 492 million and $ 550 million, respectively.

As of December 31, 2022 and September 30, 2023, $ 59 million and $ 63 million, respectively, was included within Accounts payable, related parties on the condensed consolidated balance sheet as due to Antero Midstream related to these agreements.

(13) Commitments

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 June 30, 2023 (in thousands):

Operating and

30 unchanged sentences

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

During the six months ended June 30, 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.

There are no remaining payment obligations related to these delayed or cancelled contracts as of June 30, 2023.

During the third quarter of 2022, the Company cancelled the construction of the Smithburg 2 gas processing plant and made a cash payment of $ 12 million.

During the first quarter of 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.

There are no remaining payment obligations related to any delayed or cancelled contracts as of September 30, 2023.

(14) Contingencies

Environmental

(a) Environmental

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

8 unchanged sentences

In addition, pending litigation against the Company and other similarly situated peer operators could have an impact on the methods for determining the amount of permitted post-production costs and types of costs that have been, and 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.

While the amounts claimed could be material, we are unable to predict with certainty the ultimate outcome of such claims and proceedings.

Rulings were recently received in two cases to which the Company is a party, and where the plaintiffs alleged, and the court found, that certain post-production costs may not be deducted:

a non-class action lawsuit in West Virginia and a class action lawsuit in Ohio.

In each case, the alleged damages were not material.

The Company will continue to challenge the legal conclusions reached in each of these cases with respect to deductibility of post-production costs, and continues to analyze how these decisions may impact other cases to which the Company is a party.

At this time, 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.

The Company accrues for litigation, claims and proceedings when liability is both probable and the amount can be reasonably estimated, and does not currently have any material amounts accrued with respect to its pending litigation matters.

(15) Related Parties

8 unchanged sentences

(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.

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

however, some of the Company’s production revenues were 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.

2 unchanged sentences

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.

General and administrative expenses related to the marketing segment are not allocated because they are immaterial.

General and administrative expenses related to the marketing segment were not allocated because they are immaterial.

Other income, income taxes and interest expense are primarily managed and evaluated on a consolidated basis.

15 unchanged sentences

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Equity Method

14 unchanged sentences

Capital expenditures for segment assets

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Equity Method

16 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Equity Method

14 unchanged sentences

Capital expenditures for segment assets

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Equity Method

24 unchanged sentences

( 5,791,320 )

As of June 30, 2023

As of September 30, 2023

Equity Method

15 unchanged sentences

December 31, 2022

June 30, 2023

September 30, 2023

Current assets

6 unchanged sentences

Statement of Operations

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2023

Operating expenses

3 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements