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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                   

Commission file number: 001-36120

Graphic

ANTERO RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

80-0162034

(State or other jurisdiction of
incorporation or organization)

(IRS Employer Identification No.)

1615 Wynkoop Street, Denver, Colorado

80202

(Address of principal executive offices)

(Zip Code)

(303357-7310

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01

AR

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes   No

Number of shares of the registrant’s common stock outstanding as of October 25, 2024 (in thousands): 311,164

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the information in this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. 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 and in our Annual Report on Form 10-K for the year ended December 31, 2023. 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. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include:

our ability to execute our business strategy;
our production and natural gas, natural gas liquids (“NGLs”) and oil reserves;
our financial strategy, liquidity and capital required for our development program;
our ability to obtain debt or equity financing on satisfactory terms to fund acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness;
our ability to execute our return of capital program;
natural gas, NGLs and oil prices;
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;
our hedging strategy and results;
our ability to meet minimum volume commitments and to utilize or monetize our firm transportation commitments;
our future drilling plans;
our projected well costs;
competition;
government regulations and changes in laws;
pending legal or environmental matters;
marketing of natural gas, NGLs and oil;
leasehold or business acquisitions;
costs of developing our properties;
operations of Antero Midstream Corporation (“Antero Midstream”);
our ability to achieve our greenhouse gas reduction targets and the costs associated therewith;
general economic conditions;
credit markets;

1

uncertainty regarding our future operating results; and
our other plans, objectives, expectations and intentions contained in this Quarterly Report on Form 10-Q.

We caution investors that these forward-looking statements are subject to all of the risks and uncertainties incidental to our business, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, supply chain or other disruption, availability and cost of drilling, completion and production equipment and services, environmental risks, drilling and completion and other operating risks, marketing and transportation risks, regulatory changes or changes in law, the uncertainty inherent in estimating natural gas, NGLs and oil reserves and in projecting future rates of production, cash flows and access to capital, the timing of development expenditures, conflicts of interest among our stockholders, impacts of geopolitical and world health events, cybersecurity risks, the state of markets for, and availability of, verified quality carbon offsets and the other risks described or referenced under the heading “Item 1A. Risk Factors” herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), which is on file with the Securities and Exchange Commission (“SEC”).

Reserve engineering is a process of estimating underground accumulations of natural gas, NGLs and oil that cannot be measured in an exact manner. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data, and the price and cost assumptions made by reservoir engineers. In addition, the results of drilling, testing and production activities, or changes in commodity prices, may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of natural gas, NGLs and oil that are ultimately recovered.

Should one or more of the risks or uncertainties described or referenced in this Quarterly Report on Form 10-Q occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

All forward-looking statements, expressed or implied, included in this Quarterly Report on Form 10-Q are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

2

PART I—FINANCIAL INFORMATION

ANTERO RESOURCES CORPORATION

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

(Unaudited)

December 31,

September 30,

  

2023

  

2024

Assets

Current assets:

Accounts receivable

$

42,619

26,156

Accrued revenue

400,805

319,177

Derivative instruments

5,175

4,706

Prepaid expenses

12,901

7,042

Other current assets

14,192

11,565

Total current assets

475,692

368,646

Property and equipment:

Oil and gas properties, at cost (successful efforts method):

Unproved properties

974,642

960,116

Proved properties

13,908,804

14,309,543

Gathering systems and facilities

5,802

5,802

Other property and equipment

98,668

105,317

14,987,916

15,380,778

Less accumulated depletion, depreciation and amortization

(5,063,274)

(5,447,104)

Property and equipment, net

9,924,642

9,933,674

Operating leases right-of-use assets

2,965,880

2,658,288

Derivative instruments

5,570

2,507

Investment in unconsolidated affiliate

222,255

226,860

Other assets

25,375

33,643

Total assets

$

13,619,414

13,223,618

Liabilities and Equity

Current liabilities:

  

Accounts payable

$

38,993

37,096

Accounts payable, related parties

86,284

92,720

Accrued liabilities

381,340

316,059

Revenue distributions payable

361,782

328,353

Derivative instruments

15,236

15,989

Short-term lease liabilities

540,060

505,652

Deferred revenue, VPP

27,101

25,709

Other current liabilities

1,295

2,377

Total current liabilities

1,452,091

1,323,955

Long-term liabilities:

Long-term debt

1,537,596

1,622,316

Deferred income tax liability, net

834,268

831,972

Derivative instruments

32,764

17,780

Long-term lease liabilities

2,428,450

2,148,608

Deferred revenue, VPP

60,712

41,816

Other liabilities

59,431

55,839

Total liabilities

6,405,312

6,042,286

Commitments and contingencies

Equity:

Stockholders' equity:

Preferred stock, $0.01 par value; authorized - 50,000 shares; none issued

Common stock, $0.01 par value; authorized - 1,000,000 shares; 303,544 and 311,031 shares issued and outstanding as of December 31, 2023 and September 30, 2024, respectively

3,035

3,110

Additional paid-in capital

5,846,541

5,894,786

Retained earnings

1,131,828

1,082,066

Total stockholders' equity

6,981,404

6,979,962

Noncontrolling interests

232,698

201,370

Total equity

7,214,102

7,181,332

Total liabilities and equity

$

13,619,414

13,223,618

See accompanying notes to unaudited condensed consolidated financial statements.

3

ANTERO RESOURCES CORPORATION

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

(In thousands, except per share amounts)

Three Months Ended September 30,

  

2023

  

2024

 

Revenue and other:

Natural gas sales

$

516,214

425,802

Natural gas liquids sales

482,570

504,200

Oil sales

62,629

52,724

Commodity derivative fair value gains

3,448

18,368

Marketing

53,068

47,160

Amortization of deferred revenue, VPP

7,701

6,812

Other revenue and income

546

854

Total revenue

1,126,176

1,055,920

Operating expenses:

Lease operating

33,484

29,597

Gathering, compression, processing and transportation

671,886

685,183

Production and ad valorem taxes

32,258

47,423

Marketing

69,542

62,144

Exploration

591

671

General and administrative (including equity-based compensation expense of $18,458 and $16,065 in 2023 and 2024, respectively)

58,425

54,627

Depletion, depreciation and amortization

176,259

170,197

Impairment of property and equipment

13,476

13,455

Accretion of asset retirement obligations

889

998

Contract termination, loss contingency and settlements

13,659

(1,517)

Gain on sale of assets

(136)

(1,297)

Other operating expense

111

342

Total operating expenses

1,070,444

1,061,823

Operating income (loss)

55,732

(5,903)

Other income (expense):

Interest expense, net

(31,634)

(28,278)

Equity in earnings of unconsolidated affiliate

22,207

25,634

Loss on early extinguishment of debt

(528)

Total other expense

(9,427)

(3,172)

Income (loss) before income taxes

46,305

(9,075)

Income tax expense

(13,663)

(1,212)

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

32,642

(10,287)

Less: net income and comprehensive income attributable to noncontrolling interests

14,834

10,157

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

$

17,808

(20,444)

Net income (loss) per common share—basic

$

0.06

(0.07)

Net income (loss) per common share—diluted

$

0.06

(0.07)

Weighted average number of common shares outstanding:

Basic

300,141

311,025

Diluted

311,534

311,025

See accompanying notes to unaudited condensed consolidated financial statements.

4

ANTERO RESOURCES CORPORATION

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

(In thousands, except per share amounts)

Nine Months Ended September 30,

  

2023

  

2024

Revenue and other:

Natural gas sales

$

1,621,659

1,274,503

Natural gas liquids sales

1,375,738

1,511,253

Oil sales

172,402

180,899

Commodity derivative fair value gains

137,924

22,229

Marketing

155,390

145,098

Amortization of deferred revenue, VPP

22,852

20,289

Other revenue and income

1,864

2,574

Total revenue

3,487,829

3,156,845

Operating expenses:

Lease operating

91,553

88,477

Gathering, compression, processing and transportation

1,981,033

2,020,906

Production and ad valorem taxes

117,692

147,524

Marketing

217,078

192,764

Exploration and mine expenses

2,097

1,916

General and administrative (including equity-based compensation expense of $44,988 and $49,293 in 2023 and 2024, respectively)

169,587

169,917

Depletion, depreciation and amortization

515,247

513,787

Impairment of property and equipment

44,746

18,958

Accretion of asset retirement obligations

2,971

2,554

Contract termination, loss contingency and settlements

47,650

3,531

Gain on sale of assets

(447)

(1,127)

Other operating expense

336

370

Total operating expenses

3,189,543

3,159,577

Operating income (loss)

298,286

(2,732)

Other income (expense):

Interest expense, net

(85,262)

(91,146)

Equity in earnings of unconsolidated affiliate

58,986

69,862

Loss on early extinguishment of debt

(528)

Loss on convertible note inducement

(86)

Total other expense

(26,362)

(21,812)

Income (loss) before income taxes

271,924

(24,544)

Income tax benefit (expense)

(46,013)

2,089

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

225,911

(22,455)

Less: net income and comprehensive income attributable to noncontrolling interests

77,756

27,307

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

$

148,155

(49,762)

Net income (loss) per common share—basic

$

0.50

(0.16)

Net income (loss) per common share—diluted

$

0.48

(0.16)

Weighted average number of common shares outstanding:

Basic

298,461

308,932

Diluted

310,958

308,932

See accompanying notes to unaudited condensed consolidated financial statements.

5

ANTERO RESOURCES CORPORATION

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands)

Additional

Common Stock

Paid-in

Retained

Treasury Stock

Noncontrolling

Total

  

Shares

  

Amount

  

Capital

  

Earnings

Shares

  

Amount

  

Interests

  

Equity

Balances, December 31, 2022

297,393

$

2,974

5,838,848

913,896

(34)

$

(1,160)

262,596

7,017,154

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

514

5

(11,464)

(11,459)

Conversion of 2026 Convertible Notes

4,030

40

17,132

17,172

Repurchases and retirements of common stock

(2,616)

(26)

(51,503)

(24,987)

34

1,160

(75,356)

Equity-based compensation

13,018

13,018

Distributions to noncontrolling interests

(51,339)

(51,339)

Net income and comprehensive income

213,431

47,771

261,202

Balances, March 31, 2023

299,321

2,993

5,806,031

1,102,340

259,028

7,170,392

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

1,038

11

(15,909)

(15,898)

Equity-based compensation

13,512

13,512

Distributions to noncontrolling interests

(31,745)

(31,745)

Net income (loss) and comprehensive income (loss)

(83,084)

15,151

(67,933)

Balances, June 30, 2023

300,359

3,004

5,803,634

1,019,256

242,434

7,068,328

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

25

(86)

(86)

Conversion of 2026 Convertible Notes

2

7

7

Equity-based compensation

18,458

18,458

Distributions to noncontrolling interests

(21,161)

(21,161)

Net income and comprehensive income

17,808

14,834

32,642

Balances, September 30, 2023

300,386

$

3,004

5,822,013

1,037,064

$

236,107

7,098,188

See accompanying notes to unaudited condensed consolidated financial statements.

6

ANTERO RESOURCES CORPORATION

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands)

Additional

Common Stock

Paid-in

Retained

Treasury Stock

Noncontrolling

Total

Shares

  

Amount

  

Capital

  

Earnings

Shares

  

Amount

  

Interests

  

Equity

Balances, December 31, 2023

303,544

$

3,035

5,846,541

1,131,828

$

232,698

7,214,102

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

552

6

(9,030)

(9,024)

Conversion of 2026 Convertible Notes

6,074

61

25,990

26,051

Equity-based compensation

16,077

16,077

Distributions to noncontrolling interests

(23,617)

(23,617)

Net income and comprehensive income

36,345

11,942

48,287

Balances, March 31, 2024

310,170

3,102

5,879,578

1,168,173

221,023

7,271,876

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

818

8

(17,339)

(17,331)

Equity-based compensation

17,151

17,151

Distributions to noncontrolling interests

(19,282)

(19,282)

Net income (loss) and comprehensive income (loss)

(65,663)

5,208

(60,455)

Balances, June 30, 2024

310,988

3,110

5,879,390

1,102,510

206,949

7,191,959

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

43

(669)

(669)

Equity-based compensation

16,065

16,065

Distributions to noncontrolling interest

(15,736)

(15,736)

Net income (loss) and comprehensive income (loss)