Fee

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 March 31, 2023


☐	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

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)

(303) 357-7310

(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

The registrant had 300,135,248 shares of common stock outstanding as of April 21, 2023.

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PART I—FINANCIAL INFORMATION

ANTERO RESOURCES CORPORATION

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)


			(Unaudited)
	December 31,		March 31,
	2022		2023
Assets
Current assets:
Accounts receivable	$	35,488		30,207
Accrued revenue		707,685		379,337
Derivative instruments		1,900		6,242
Prepaid expenses and other current assets		42,452		21,856
Total current assets		787,525		437,642
Property and equipment:
Oil and gas properties, at cost (successful efforts method):
Unproved properties		997,715		1,013,780
Proved properties		13,234,777		13,450,257
Gathering systems and facilities		5,802		5,882
Other property and equipment		83,909		87,091
		14,322,203		14,557,010
Less accumulated depletion, depreciation and amortization		(4,683,399)		(4,771,093)
Property and equipment, net		9,638,804		9,785,917
Operating leases right-of-use assets		3,444,331		3,401,994
Derivative instruments		9,844		9,825
Investment in unconsolidated affiliate		220,429		219,515
Other assets		17,106		16,253
Total assets	$	14,118,039		13,871,146
Liabilities and Equity
Current liabilities:
Accounts payable	$	77,543		83,685
Accounts payable, related parties		80,708		99,784
Accrued liabilities		461,788		318,084
Revenue distributions payable		468,210		381,880
Derivative instruments		97,765		28,716
Short-term lease liabilities		556,636		553,532
Deferred revenue, VPP		30,552		29,757
Other current liabilities		1,707		2,103
Total current liabilities		1,774,909		1,497,541
Long-term liabilities:
Long-term debt		1,183,476		1,312,046
Deferred income tax liability, net		759,861		822,010
Derivative instruments		345,280		75,854
Long-term lease liabilities		2,889,854		2,851,571
Deferred revenue, VPP		87,813		81,075
Other liabilities		59,692		60,657
Total liabilities		7,100,885		6,700,754
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; 297,393 shares issued and 297,359 outstanding as of December 31, 2022, and 299,321 shares issued and outstanding as of March 31, 2023		2,974		2,993
Additional paid-in capital		5,838,848		5,806,031
Retained earnings		913,896		1,102,340
Treasury stock, at cost; 34 shares and zero shares as of December 31, 2022 and March 31, 2023, respectively		(1,160)		—
Total stockholders' equity		6,754,558		6,911,364
Noncontrolling interests		262,596		259,028
Total equity		7,017,154		7,170,392
Total liabilities and equity	$	14,118,039		13,871,146

See accompanying notes to unaudited condensed consolidated financial statements.

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ANTERO RESOURCES CORPORATION

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

(In thousands, except per share amounts)


	Three Months Ended March 31,
	2022		2023
Revenue and other:
Natural gas sales	$	995,792		668,315
Natural gas liquids sales		660,305		495,435
Oil sales		63,294		51,811
Commodity derivative fair value gains (losses)		(1,011,380)		126,192
Marketing		69,038		58,529
Amortization of deferred revenue, VPP		9,272		7,533
Other revenue and income		519		533
Total revenue		786,840		1,408,348
Operating expenses:
Lease operating		17,780		29,321
Gathering, compression, processing and transportation		590,278		645,172
Production and ad valorem taxes		52,808		49,276
Marketing		98,896		81,361
Exploration and mine expenses		898		763
General and administrative (including equity-based compensation expense of $4,649 and $13,018 in 2022 and 2023, respectively)		35,691		57,261
Depletion, depreciation and amortization		168,388		167,582
Impairment of property and equipment		22,462		15,560
Accretion of asset retirement obligations		2,444		878
Contract termination		8		29,550
Loss (gain) on sale of assets		1,786		(91)
Other operating expense		—		225
Total operating expenses		991,439		1,076,858
Operating income (loss)		(204,599)		331,490
Other income (expense):
Interest expense, net		(37,713)		(25,700)
Equity in earnings of unconsolidated affiliate		25,178		17,681
Loss on early extinguishment of debt		(10,654)		—
Loss on convertible note inducement		—		(86)
Total other expense		(23,189)		(8,105)
Income (loss) before income taxes		(227,788)		323,385
Income tax benefit (expense)		53,092		(62,183)
Net income (loss) and comprehensive income (loss) including noncontrolling interests		(174,696)		261,202
Less: net income (loss) and comprehensive income (loss) attributable to noncontrolling interests		(18,277)		47,771
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	(156,419)		213,431

Income (loss) per share—basic	$	(0.50)		0.72
Income (loss) per share—diluted	$	(0.50)		0.69

Weighted average number of shares outstanding:
Basic		314,081		296,763
Diluted		314,081		311,846

See accompanying notes to unaudited condensed consolidated financial statements.

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ANTERO RESOURCES CORPORATION

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands)


					Additional		Retained Earnings
	Common Stock				Paid-in		(Accumulated		Treasury Stock				Noncontrolling		Total
	Shares		Amount		Capital		Deficit)		Shares		Amount		Interests		Equity
Balances, December 31, 2021		313,930	$	3,139		6,371,398		(617,377)		—	$	—		308,932		6,066,092
Equity component of 2026 Convertible Notes, net		—		—		(24,411)		3,229		—		—		—		(21,182)
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes		780		8		(10,385)		—		—		—		—		(10,377)
Repurchases and retirements of common stock		(3,690)		(37)		(74,745)		(25,263)		—		—				(100,045)
Equity-based compensation		—		—		4,649		—		—		—		—		4,649
Distributions to noncontrolling interests		—		—		—		—		—		—		(35,757)		(35,757)
Net loss and comprehensive loss		—		—		—		(156,419)				—		(18,277)		(174,696)
Balances, March 31, 2022		311,020	$	3,110		6,266,506		(795,830)		—	$	—		254,898		5,728,684

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

See accompanying notes to unaudited condensed consolidated financial statements.

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ANTERO RESOURCES CORPORATION

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	Three Months Ended March 31,
	2022		2023
Cash flows provided by (used in) operating activities:
Net income (loss) including noncontrolling interests	$	(174,696)		261,202
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation, amortization and accretion		170,832		168,460
Impairments		22,462		15,560
Commodity derivative fair value losses (gains)		1,011,380		(126,192)
Losses on settled commodity derivatives		(285,386)		(14,268)
Payments for derivative monetizations		—		(202,339)
Deferred income tax expense (benefit)		(57,383)		62,149
Equity-based compensation expense		4,649		13,018
Equity in earnings of unconsolidated affiliate		(25,178)		(17,681)
Dividends of earnings from unconsolidated affiliate		31,285		31,285
Amortization of deferred revenue		(9,272)		(7,533)
Amortization of debt issuance costs, debt discount and debt premium		1,451		871
Settlement of asset retirement obligations		(886)		(308)
Loss (gain) on sale of assets		1,786		(91)
Loss on early extinguishment of debt		10,654		—
Loss on convertible note inducement		—		86
Changes in current assets and liabilities:
Accounts receivable		33,244		5,282
Accrued revenue		(69,442)		328,349
Other current assets		(2,952)		20,596
Accounts payable including related parties		37,664		34,604
Accrued liabilities		(94,456)		(143,346)
Revenue distributions payable		(36,526)		(86,331)
Other current liabilities		(3,557)		529
Net cash provided by operating activities		565,673		343,902
Cash flows provided by (used in) investing activities:
Additions to unproved properties		(23,789)		(73,527)
Drilling and completion costs		(184,557)		(273,154)
Additions to other property and equipment		(7,530)		(4,631)
Proceeds from asset sales		195		91
Change in other assets		564		417
Net cash used in investing activities		(215,117)		(350,804)
Cash flows provided by (used in) financing activities:
Repurchases of common stock		(100,045)		(75,356)
Repayment of senior notes		(591,943)		—
Borrowings on bank credit facilities, net		387,700		145,300
Convertible note inducement		—		(86)
Distributions to noncontrolling interests in Martica Holdings LLC		(35,757)		(51,339)
Employee tax withholding for settlement of equity compensation awards		(10,377)		(11,459)
Other		(134)		(158)
Net cash provided by (used in) financing activities		(350,556)		6,902
Net increase in cash and cash equivalents		—		—
Cash and cash equivalents, beginning of period		—		—
Cash and cash equivalents, end of period	$	—		—

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	80,454		43,239
Decrease in accounts payable and accrued liabilities for additions to property and equipment	$	(14,449)		(9,918)

See accompanying notes to unaudited condensed consolidated financial statements.

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ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(1) Organization

Antero Resources Corporation (individually referred to as “Antero” and together with its consolidated subsidiaries “Antero Resources,” or the “Company”) is engaged in the development, production, exploration and acquisition of natural gas, NGLs and oil properties in the Appalachian Basin in West Virginia and Ohio. 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. The Company’s corporate headquarters is located in Denver, Colorado.

(2) Summary of Significant Accounting Policies

(a)	Basis of Presentation

These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information and should be read in the context of the Company’s December 31, 2022 consolidated financial statements and notes thereto for a more complete understanding of the Company’s operations, financial position and accounting policies. The Company’s December 31, 2022 consolidated financial statements were included in Antero Resources’ 2022 Annual Report on Form 10-K, which was filed with the SEC.

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 March 31, 2023, results of operations and cash flows for the three months ended March 31, 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 March 31, 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.

(b)	Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Antero Resources Corporation, its wholly owned subsidiaries and its variable interest entity (“VIE”), Martica Holdings LLC, (“Martica”), for which the Company is the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in the Company’s unaudited condensed consolidated financial statements.

(c)	Cash and Cash Equivalents

The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments. From time to time, the Company may be in the position of a “book overdraft” in which outstanding checks exceed cash and cash equivalents. The Company classifies book overdrafts in accounts payable and revenue distributions payable within its condensed consolidated balance sheets, and classifies the change in accounts payable associated with book overdrafts as an operating activity within its unaudited condensed consolidated statements of cash flows. 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 March 31, 2023, the book overdrafts included within accounts payable and revenue distributions payable were $46 million and $31 million, respectively.

(d)	Income (Loss) Per Common Share

Income (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. Income (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”)

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ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

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. During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effects of all equity awards and the 2026 Convertible Notes are anti-dilutive.

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 March 31,
	2022		2023
Net income (loss) attributable to Antero Resources Corporation—common shareholders	$	(156,419)		213,431
Add: Interest expense for 2026 Convertible Notes		—		616
Less: Tax-effect of interest expense for 2026 Convertible Notes		—		(132)
Net income (loss) attributable to Antero Resources Corporation—common shareholders and assumed conversions	$	(156,419)		213,915

Income (loss) per share—basic	$	(0.50)		0.72
Income (loss) per share—diluted	$	(0.50)		0.69

Weighted average common shares outstanding—basic		314,081		296,763
Weighted average common shares outstanding—diluted		314,081		311,846

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 March 31,
	2022	2023
Basic weighted average number of shares outstanding	314,081	296,763
Add: Dilutive effect of RSUs	—	2,150
Add: Dilutive effect of PSUs	—	1,060
Add: Dilutive effect of 2026 Convertible Notes	—	11,873
Diluted weighted average number of shares outstanding	314,081	311,846

Weighted average number of outstanding securities excluded from calculation of diluted income (loss) per common share ⁽¹⁾:
RSUs	4,878	969
PSUs	3,443	414
Stock options	351	324
2026 Convertible Notes	18,778	—

(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.

(e)	Recently Issued Accounting Standard

Convertible Debt Instruments

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which eliminates the cash conversion model in Accounting Standards Codification (“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,

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ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

2021. 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, 2023 is based on an effective interest rate of 4.9% as compared to 15.1% prior to the adoption of this new standard.

(3) Transactions

(a)	Conveyance of Overriding Royalty Interest

On June 15, 2020, the Company announced the consummation of a transaction with an affiliate of Sixth Street Partners, LLC (“Sixth Street”) relating to certain overriding royalty interests across the Company’s existing asset base (the “ORRIs”).

The ORRIs include an overriding royalty interest of 1.25% in all of the Company’s operated proved developed properties in West Virginia and Ohio, subject to certain excluded wells (the “Initial PDP Override”) as of April 1, 2020, and an overriding royalty interest of 3.75% in all of the Company’s undeveloped properties in West Virginia and Ohio (the “Development Override”) as of April 1, 2020. 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 and (b) the earlier of (i) April 1, 2023 and (ii) the date on which the Company turns to sales 3.82 million lateral feet (net to the Company’s interest) of horizontal wells burdened by the Development Override, are subject to the Development Override. As of April 1, 2023, the Company had turned to sales over 2.2 million lateral feet and less than 3.82 million lateral feet. As a result, wells turned to sales on or after April 1, 2023 will not be subject to the ORRIs.

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”). The Incremental Override (or a portion thereof, as applicable) may be re-conveyed to the Company (at the Company’s election) if certain production targets attributable to the ORRIs are achieved through March 31, 2023. Any portion of the Incremental Override that may not be re-conveyed to the Company based on the Company failing to achieve such production volumes through March 31, 2023 will remain with Martica.

Prior to Sixth Street achieving an internal rate of return of 13% and 1.5x cash-on-cash return (the “Hurdle”), Sixth Street will receive all distributions in respect of the Initial PDP Override and the Development Override, and the Company will receive all distributions in respect of the Incremental Override, unless certain production targets are not achieved, in which case Sixth Street will receive some or all of the distributions in respect of the Incremental Override. Following Sixth Street achieving the Hurdle, the Company will receive 85% of the distributions in respect of the ORRIs to which Sixth Street was entitled immediately prior to the Hurdle being achieved.

(b)	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. 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, 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.

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,

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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. 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 tranche. All of the wells spud during each calendar year period will be a separate annual tranche. Capital costs in excess of, and cost savings below, a specified percentage of budgeted amounts for each annual tranche will be for Antero Resources’ account. 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.

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 months ended March 31, 2022 and 2023.

(4) Revenue

(a)	Disaggregation of Revenue

The table set forth below presents revenue disaggregated by type and reportable segment to which it relates (in thousands). See Note 16—Reportable Segments to the unaudited condensed financial statements for more information on reportable segments.


	Three Months Ended March 31,
	2022		2023		Reportable Segment
Revenues from contracts with customers:
Natural gas sales	$	995,792		668,315	Exploration and production
Natural gas liquids sales (ethane)		67,063		72,050	Exploration and production
Natural gas liquids sales (C3+ NGLs)		593,242		423,385	Exploration and production
Oil sales		63,294		51,811	Exploration and production
Marketing		69,038		58,529	Marketing
Other revenue		—		175	Exploration and production
Total revenue from contracts with customers		1,788,429		1,274,265
Income (loss) from derivatives, deferred revenue and other sources, net		(1,001,589)		134,083
Total revenue	$	786,840		1,408,348

(b)	Transaction Price Allocated to Remaining Performance Obligations

For the Company’s product sales that have a contract term greater than one year, the Company utilized the practical expedient in ASC 606, Revenue from Contracts with Customers (“ASC 606”), which does not require the disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under the Company’s product sales contracts, each unit of product delivered to the customer represents a separate performance obligation; 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.

Under the Company’s sales contracts, the Company invoices customers after its performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company’s contracts do not give rise to contract assets or liabilities. As of December 31, 2022 and March 31, 2023, the Company’s receivables from contracts with customers were $708 million and $379 million, respectively.

Table of Contents

ANTERO RESOURCES CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

(5) Equity Method Investment

(a)	Summary of Equity Method Investment

As of March 31, 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):


Balance as of December 31, 2022 ⁽¹⁾	$	220,429
Equity in earnings of unconsolidated affiliate		17,681
Dividends from unconsolidated affiliate		(31,285)
Elimination of intercompany profit		12,690
Balance as of March 31, 2023 ⁽¹⁾	$	219,515

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

(6) Accrued Liabilities

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


			(Unaudited)
	December 31,		March 31,
	2022		2023
Capital expenditures	$	57,361		44,213
Gathering, compression, processing and transportation expenses		162,783		159,375
Marketing expenses		61,118		27,073
Interest expense, net		31,892		13,582
Production and ad valorem taxes		32,536		36,861
General and administrative expense		32,477		20,260
Derivative settlements payable		53,732		411
Other		29,889		16,309
Total accrued liabilities	$	461,788		318,084

(7) Long-Term Debt

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


			(Unaudited)
	December 31,		March 31,
	2022		2023
Credit Facility ^(a)	$	34,800		180,100
8.375% senior notes due 2026 ^(c)		96,870		96,870
7.625% senior notes due 2029 ^(d)		407,115		407,115
5.375% senior notes due 2030 ^(e)		600,000		600,000
4.25% convertible senior notes due 2026 ^(f)		56,932		39,426
Total principal		1,195,717		1,323,511
Unamortized debt issuance costs		(12,241)		(11,465)
Long-term debt	$	1,183,476		1,312,046

(a)	Senior Secured Revolving Credit Facility

Antero Resources has a senior secured revolving credit facility (the “Credit Facility”) with a consortium of banks. 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 March 31, 2023, the Credit Facility had a borrowing base of $3.5 billion and lender commitments of $1.5 billion. The borrowing base was re-


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		1
PART I—FINANCIAL INFORMATION		3
Item 1.	Financial Statements (Unaudited)	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4.	Controls and Procedures	43
PART II—OTHER INFORMATION		44
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities	44
Item 4.	Mine Safety Disclosures	44
Item 6.	Exhibits	45
SIGNATURES		46