Financial Data and Key Metrics Changes - Antero Resources generated approximately $800 million in free cash flow during Q3 2022, which was utilized to reduce debt by over $400 million and repurchase $380 million of stock [23] - Year-to-date debt reduction totaled nearly $1 billion, with a total reduction of $2.6 billion since the debt reduction program began in Q4 2019, bringing total debt down to less than $1.2 billion [8][24] - The company announced a $1 billion increase in its share repurchase program, raising the total to $2 billion, reflecting confidence in business predictability [8] Business Line Data and Key Metrics Changes - Antero's firm transportation portfolio allowed the company to achieve a $0.49 per Mcf premium to NYMEX Henry Hub in Q3 2022, despite industry-wide basis differentials [12] - The company spent $46 million on land acquisitions in Q3, adding 25 additional drilling locations at less than $1 million per location, contributing to a total of approximately 60 new drilling locations added year-to-date [11] Market Data and Key Metrics Changes - U.S. NGL production is expected to grow by 8% year-over-year from 2022 to 2023, while production in the rest of the world is anticipated to decline by 2% [18] - Propane inventories are now in line with five-year average levels, but days of supply remain 13% below the five-year average [17] Company Strategy and Development Direction - Antero Resources focuses on maintaining a strong balance sheet while returning significant cash to shareholders, with a commitment to a maintenance capital level rather than accelerating production [9][31] - The company emphasizes organic land acquisitions over larger transactions to avoid diluting equity and maintain a strong inventory position [10] Management's Comments on Operating Environment and Future Outlook - Management expects regional basis differentials to remain wide in 2023 due to pipeline capacity constraints, but Antero's firm transportation capacity will help mitigate price volatility [13][15] - The company anticipates no cash taxes in 2023, with the first cash taxes expected in 2024, allowing for continued capital returns to shareholders [24] Other Important Information - Antero has reduced its methane leak loss rate by 65% and is on track to achieve net zero on Scope 1 and Scope 2 GHG emissions by 2025 [24][25] - The company is ranked 1 for the lowest GHG intensity among its peers, highlighting its commitment to ESG initiatives [25] Q&A Session Summary Question: Expectations for higher differentials in 2023 - Management expects higher differentials for the industry but anticipates similar performance to 2022 for Antero [26][27] Question: Thoughts on accelerating production in 2023 - Management is committed to maintenance capital levels and does not plan to accelerate production despite having impressive inventory [31] Question: Free cash flow outlook and CapEx - Management expects around 10% inflation for CapEx in 2023 and plans to maintain a similar level of free cash flow usage for debt repayment and share buybacks [34][36] Question: Production expectations for 2023 - Production is expected to be similar to 2022 levels, with a slight increase due to accelerated activity in Q4 2022 [52] Question: Liquidity limitations on buybacks - There are no liquidity constraints on share buybacks, and the majority of free cash flow will be directed towards this [54] Question: Incremental ethane barrels expected in Q4 - Management expects ethane production to increase from 55,000 barrels in Q3 to approximately 75,000 barrels in Q4 [56]

Financial Data and Key Metrics Changes - Antero Resources expects to generate over $2.5 billion of free cash flow in 2022, with a similar level anticipated for 2023, bringing the five-year cumulative free cash flow target to approximately $10 billion, aligning with the current market cap [21][22][24] - The company has significantly reduced its absolute debt and leverage, with a leverage ratio expected to go below 0.5 this year [24][22] - Antero's share repurchase program authorized up to $1 billion, with approximately $100 million repurchased at an average price of $27.11 during Q1 [22][24] Business Line Data and Key Metrics Changes - Antero has not added any natural gas hedges since 2020, remaining less than 50% hedged on expected 2022 natural gas production and virtually unhedged on all commodities in 2023 [12][21] - The company is currently selling nearly 1 Bcf a day of natural gas to LNG facilities, with 2.3 Bcf a day of firm transportation to LNG fairways, representing about 75% of Antero's total natural gas production [8][17][18] Market Data and Key Metrics Changes - Natural gas prices have reached their highest levels since 2008, with monthly NYMEX prices touching 13-year highs, supported by global supply concerns and geopolitical tensions [14][17] - U.S. natural gas supplies averaged around 93.5 Bcf per day, resulting in a storage level of approximately 1.45 Tcf at the end of the withdrawal season [14][15] Company Strategy and Development Direction - Antero is focused on maintaining a strong balance sheet and generating free cash flow, transitioning from growth to a return of capital to shareholders [9][21] - The company aims to capture the upside from growing LNG and LPG export demand through its industry-leading firm transportation portfolio [13][20] Management's Comments on Operating Environment and Future Outlook - Management remains bullish on commodity prices due to limited capital access, supply chain constraints, and low global storage levels, which are expected to support higher prices moving forward [11][12] - The company does not plan to hedge any commodities in the foreseeable future, opting instead to remain unhedged to benefit from rising prices [35][55] Other Important Information - Antero has a significant ownership stake of approximately 29% in AM, which is considered a valuable asset in the LNG story [68] - The company has $2.3 billion of net operating losses (NOLs) that will delay cash tax payments until late 2023 [66] Q&A Session Summary Question: Potential cash returns to shareholders this year - Management indicated that with current commodity prices, they could efficiently repay approximately $800 million to $900 million of debt this year, allowing for significant share repurchases [28] Question: NGL and gas pricing dynamics - A one-time adjustment affected realized prices, but management expects future pricing to align closely with benchmarks [30][32] Question: Future hedging strategies - Management confirmed no plans to hedge, maintaining a bullish outlook on commodity prices [35] Question: LNG premium and market dynamics - Management noted that while there are no specific hubs to watch, they are pleased with their current delivery points and are studying potential opportunities [40] Question: Cash flow and dividend considerations - Management emphasized the focus on share buybacks due to the undervaluation of the stock, with dividends not currently prioritized [62] Question: Incremental LNG projects and transportation - Management stated that there are no significant pipeline expansions planned from Appalachia, but they are well-positioned with existing transportation capacity [64][65]

Antero Resources Corp (NYSE:AR) Q4 2021 Earnings Conference Call February 17, 2022 11:00 AM ET Company Participants Brendan Krueger - VP, Finance & Treasurer Paul Rady - Co-Founder, President, Chairman & CEO David Cannelongo - VP, Liquids Marketing & Transportation Michael Kennedy - SVP, Finance & CFO Conference Call Participants Arun Jayaram - JPMorgan Chase & Co. Gregg Brody - Bank of America Merrill Lynch Neal Dingmann - Truist Securities Holly Stewart - Scotia Howard Weil Umang Choudhary - Goldman Sachs ...