Antero Resources — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income was $367 million, compared to $76 million in the third quarter of 2025.
• Adjusted Net Income was $256 million (Non-GAAP), compared to $48 million in the prior year period.
• Adjusted EBITDAX was $634 million (Non-GAAP), a 99% increase from the third quarter of 2025 ($318 million).
• Net cash provided by operating activities was $575 million, up from $310 million in the third quarter of 2025.
• Adjusted Free Cash Flow was $215 million (Non-GAAP), a 137% increase from $91 million in the third quarter of 2025.
• Total cash operating costs were $2.05 per Mcfe, a 16% decrease ($0.39 per Mcfe) from $2.44 per Mcfe in the third quarter of 2025.
• Net debt was $2.78 billion as of September 30, 2026, compared to $1.31 billion as of September 30, 2025.
• Total debt increased to $2.78 billion from $1.31 billion, driven by the addition of a $1 billion term loan and $750 million in 5.400% senior notes due 2036, offset by the repayment of the credit facility and 7.625% senior notes due 2029.
• Total revenue was $1.56 billion, a 29% increase from $1.21 billion in the third quarter of 2025.
• Operating income was $392 million, a 232% increase from $118 million in the third quarter of 2025.

Guidance and Future Outlook:

• Fourth quarter 2026 net daily natural gas equivalent production is expected to be approximately 4.3 Bcfe/d, reflecting estimated curtailments of 15 to 20 Bcfe due to low regional pricing.
• Fourth quarter 2026 natural gas realized price is expected to be a $(0.15) to $(0.25) per Mcf discount to NYMEX.
• Fourth quarter 2026 cash production expense is expected to range from $2.10 to $2.20 per Mcfe.
• Fourth quarter 2026 drilling and completion capital expenditures are expected to range from $325 million to $350 million.
• The company targets a full-year 2026 drilling and completion capital budget of $1.2 billion.
• High single-digit production growth is expected in 2027.
• The company expects to achieve $140 million of its $300 million margin enhancement target by mid-2027.
• The company is targeting the optimization of over 1 Bcf/d of firm transportation in 2027, following the optimization of 400 MMcf/d in the third quarter of 2026.

Business Segments and Product Lines:

• Net production averaged 4.2 Bcfe/d in the third quarter of 2026, a company record and a 23% increase from the prior year period.
• Production included 222 MBbl/d of liquids.
• The company completed its longest horizontal lateral length in company history at approximately 25,000 feet.
• Antero placed 22 Marcellus wells on sales with an average lateral length of 17,600 feet.
• Five wells have been online for approximately 60 days with an average rate of 30 MMcfe/d per well.
• The company entered into 265 MMcf/d of premium priced supply contracts tied to in-basin demand at Clarington, Ohio.
• In July 2026, Antero acquired properties in its West Virginia development footprint for approximately $315 million, adding 125 MMcfe/d of net production and 3,500 net undeveloped acres.
• The Overriding Royalty Interest (ORRI) sold in 2020 achieved its return hurdles in the second quarter of 2026, with 85% of distributions reverting to Antero as of July 1, 2026, estimated to add $60 million in annualized Free Cash Flow.
• The Volumetric Production Payment (VPP) expires on August 1, 2027, expected to add approximately 35 MMcf/d of net production and $30 million in annualized Free Cash Flow.
• Drilling and completion capital expenditures for the quarter were $324 million.
• Land investment was $35 million, adding approximately 8,000 net acres and 35 incremental net drilling locations at an average cost of $750,000 per location.

Market and Competitive Landscape:

• NYMEX natural gas prices declined 4% year-over-year, yet the company achieved a 27% improvement in unhedged EBITDAX margin to $1.28 per Mcfe from $1.01 per Mcfe in the prior year period.
• Average realized natural gas price before hedges was $2.63 per Mcf, compared to $3.12 per Mcf in the third quarter of 2025.
• Average realized C3+ NGL price before hedges was $42.18 per barrel, up 15% from $36.60 per barrel in the prior year period.
• Average realized oil price before hedges was $70.17 per barrel, up 39% from $50.65 per barrel in the prior year period.
• The company maintains a hedge portfolio including 1,082,000 MMBtu/d for 2027 at a weighted average price of $3.82/MMBtu and 398,000 MMBtu/d for 2028 at $3.48/MMBtu.
• The company added 147,000 MMBtu/d for 2027 at $3.54/MMBtu and 133,000 MMBtu/d for 2028 at $3.49/MMBtu during the third quarter.

Risks and Challenges:

• Production curtailments of approximately 10 Bcfe occurred in the third quarter due to low regional pricing.
• The company faces risks related to commodity price volatility, inflation, supply chain disruptions, and environmental risks.
• Forward-looking statements regarding future production, costs, and financial results are subject to uncertainties including geopolitical events, regulatory changes, and the ability to integrate acquired assets.
• The company notes that Adjusted Free Cash Flow and Adjusted EBITDAX are non-GAAP measures and should not be considered in isolation or as substitutes for GAAP measures.

Management Commentary and Tone:

• CEO Michael Kennedy described the year as "remarkable," citing nearly 1 Bcfe/d growth in net production over the last twelve months through accretive transactions and efficiency gains.
• Management highlighted a reduction in cost structure by approximately $0.40 per Mcfe, driving higher margins.
• CFO Brendan Krueger noted substantial progress in the first year of the margin enhancement initiative, achieving a $0.39 per Mcfe reduction in cash costs despite a 4% decline in NYMEX natural gas prices.
• Management expressed confidence that the business strategy of product diversity, reduced cost structure, and prudent hedging will decrease earnings volatility and drive peer-leading Free Cash Flow per share growth.

Other Key Points:

• Antero purchased 1.6 million shares for approximately $56 million during the quarter at an average weighted price of $34.15 per share.
• Approximately $821 million of capacity remains under the share repurchase program.
• The company reduced its share count by over 5 million shares over the last twelve months.
• Leverage was maintained at approximately 1.0x.
• The company achieved a 47% decrease in drilling days per well and a 280% increase in completion stages per day on the HG asset compared to the prior operator.
• The company set a drilling speed record averaging under 4 days per 10,000 feet drilled on an entire pad.
• The company achieved a company record for daily production on a pad at 273 MMcf/d.
• Equity in earnings of unconsolidated affiliate was $110.7 million for the quarter, up from $29.1 million in the prior year period.
• The company incurred $552,000 in transaction expenses during the quarter.