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What changed in ANTERO RESOURCES Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ANTERO RESOURCES Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+392 added−374 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-15)

Top changes in ANTERO RESOURCES Corp's 2023 10-K

392 paragraphs added · 374 removed · 300 edited across 2 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

131 edited+68 added−19 removed278 unchanged
Biggest changeWhile we expect to be able to (i) utilize all of our U.S. federal NOL carryforwards, (ii) utilize a portion of our state NOL carryforwards and (iii) generate deductions to offset a portion of our future taxable income, in the event that deductions are not generated as expected, one or more of our tax positions are successfully challenged by the IRS (in a tax audit or otherwise), or our NOL carryforwards are subject to future limitation (including due to an ownership change under Section 382), our future tax liability may be greater than expected. 43 Table of Contents Changes in tax laws or the interpretation thereof or the imposition of new or increased taxes or fees may increase our future tax liability and adversely affect our operations and cash flows.
Biggest changeWhile we expect to be able to (i) utilize all of our U.S. federal NOL carryforwards, (ii) utilize a portion of our state NOL carryforwards and (iii) generate deductions to offset a portion of our future taxable income, in the event that our NOL carryforwards are subject to future limitation (including due to an ownership change under Section 382), deductions are not generated as expected, or if one or more of our tax positions are successfully challenged by the IRS or other tax authorities (in a tax audit or otherwise), our future tax liabilities may be greater than expected, which could adversely affect our operating results and cash flows.
We may not be able to identify attractive acquisition opportunities. Even if we do identify attractive acquisition opportunities, we may not be able to complete the acquisition or do so on commercially acceptable terms. The success of any completed acquisition will depend on our ability to effectively integrate the acquired business into our existing operations.
Even if we do identify attractive acquisition opportunities, we may not be able to complete the acquisition or do so on commercially acceptable terms. The success of any completed acquisition will depend on our ability to effectively integrate the acquired business into our existing operations.
Further, many factors may curtail, delay or cancel our scheduled drilling projects, including the following: ● prolonged declines in natural gas, NGLs and oil prices; ● limitations in the market for natural gas, NGLs and oil; ● delays imposed by, or resulting from, compliance with regulatory requirements; ● pressure or irregularities in geological formations; ● shortages of, or delays in, obtaining equipment, qualified personnel or water for hydraulic fracturing activities; ● equipment failures or accidents; ● adverse weather conditions, such as blizzards, tornadoes, hurricanes and ice storms; ● issues related to compliance with environmental regulations; ● environmental hazards, such as natural gas leaks, oil spills, pipeline and tank ruptures, encountering naturally occurring radioactive materials, and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface environment; 24 Table of Contents ● limited availability of financing at acceptable terms; and ● mineral interest or other title problems.
Further, many factors may curtail, delay or cancel our scheduled drilling projects, including the following: ● prolonged declines in natural gas, NGLs and oil prices; ● limitations in the market for natural gas, NGLs and oil; ● delays imposed by, or resulting from, compliance with regulatory requirements; ● pressure or irregularities in geological formations; ● shortages of, or delays in, obtaining equipment, qualified personnel or water for hydraulic fracturing activities; ● equipment failures or accidents; ● adverse weather conditions, such as blizzards, tornadoes, hurricanes and ice storms; ● issues related to compliance with environmental regulations; ● environmental hazards, such as natural gas leaks, oil spills, pipeline and tank ruptures, encountering naturally occurring radioactive materials, and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface environment; ● limited availability of financing at acceptable terms; and ● mineral interest or other title problems.
The impacts of these orders, pledges, agreements and any legislation or regulation promulgated to fulfill the United States’ commitments under the Paris Agreement, COP26 or other international conventions cannot be predicted at this time.
The impacts of these orders, pledges, agreements and any legislation or regulation promulgated to fulfill the United States’ commitments under the Paris Agreement, COP26, COP28 or other international conventions cannot be predicted at this time.
To the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation of or contribution to the asserted damage, or to other mitigating factors.
To the extent that societal pressures or regulatory or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation of or contribution to the asserted damage, or to other mitigating factors.
We also collect and store sensitive data in the ordinary course of our business, including personally identifiable information of our employees as well as our proprietary business information and that of our customers, suppliers, investors and other stakeholders.
We also collect and store sensitive data in the ordinary course of our business, including personally identifiable information as well as our proprietary business information and that of our customers, suppliers, investors and other stakeholders.
Among other things, our certificate of incorporation and bylaws: ● provide advance notice procedures with regard to stockholder nominations of candidates for election as directors or other stockholder proposals to be brought before meetings of our stockholders, which may preclude our stockholders from bringing certain matters before our stockholders at an annual or special meeting; ● provide our Board of Directors the ability to authorize issuance of preferred stock in one or more series, which makes it possible for our B oard of Directors to issue, without stockholder approval, preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us and which may have the effect of deterring hostile takeovers or delaying changes in control or management of us; ● provide that the authorized number of directors may be changed only by resolution of our Board of Directors ; ● provide that, subject to the rights of holders of any series of preferred stock to elect directors or fill vacancies in respect of such directors as specified in the related preferred stock designation, all vacancies, including newly created directorships be filled by the affirmative vote of holders of a majority of directors then in office, even if less than a quorum, or by the sole remaining director, and will not be filled by our stockholders; ● provide that, subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, if any, any action required or permitted to be taken by our stockholders must be effected at a duly called 33 Table of Contents annual or special meeting of our stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders; ● provide for our Board of Directors to be divided into three classes of directors, with each class as nearly equal in number as possible, serving staggered three-year terms; ● provide that, subject to the rights of the holders of shares of any series of preferred stock, if any, to remove directors elected by such series of preferred stock pursuant to our certificate of incorporation (including any preferred stock designation thereunder), directors may be removed from office at any time, only for cause and by the holders of a majority of the voting power of all outstanding voting shares entitled to vote generally in the election of directors; ● provide that special meetings of our stockholders may only be called by the Chief Executive Officer, the Chairman of our Board of Directors or our Board of Directors pursuant to a resolution adopted by a majority of the total number of directors that we would have if there were no vacancies; ● provide that (i) Yorktown Partners LLC (“Yorktown”) and their affiliates are permitted to participate (directly or indirectly) in venture capital and other direct investments in corporations, joint ventures, limited liability companies and other entities conducting business of any kind, nature or description, (ii) Yorktown and their affiliates are permitted to have interests in, participate with, aid and maintain seats on the boards of directors or similar governing bodies of any such investments, in each case that may, are or will be competitive with our business and the business of our subsidiaries or in the same or similar lines of business as us and our subsidiaries, or that could be suitable for us or our subsidiaries and (iii) we have, subject to limited exceptions, renounced, to the fullest extent permitted by law, any interest or expectancy in, or in being offered an opportunity to participate in, such corporate opportunities; ● provide that the provisions of our certificate of incorporation can only be amended or repealed by the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of our common stock entitled to vote thereon, voting together as a single class; and ● provide that our bylaws can be altered or repealed by (a) our Board of Directors or (b) our stockholders upon the affirmative vote of holders of at least 66 2/3% of the voting power of our common stock outstanding and entitled to vote thereon, voting together as a single class.
Among other things, our certificate of incorporation and bylaws: ● provide advance notice procedures with regard to stockholder nominations of candidates for election as directors or other stockholder proposals to be brought before meetings of our stockholders, which may preclude our stockholders from bringing certain matters before our stockholders at an annual or special meeting; ● provide our Board of Directors the ability to authorize issuance of preferred stock in one or more series, which makes it possible for our B oard of Directors to issue, without stockholder approval, preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us and which may have the effect of deterring hostile takeovers or delaying changes in control or management of us; ● provide that the authorized number of directors may be changed only by resolution of our Board of Directors ; ● provide that, subject to the rights of holders of any series of preferred stock to elect directors or fill vacancies in respect of such directors as specified in the related preferred stock designation, all vacancies, including newly created directorships be filled by the affirmative vote of holders of a majority of directors then in office, even if less than a quorum, or by the sole remaining director, and will not be filled by our stockholders; ● provide that, subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, if any, any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of our stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders; ● provide for our Board of Directors to be divided into three classes of directors, with each class as nearly equal in number as possible, serving staggered three-year terms; ● provide that, subject to the rights of the holders of shares of any series of preferred stock, if any, to remove directors elected by such series of preferred stock pursuant to our certificate of incorporation (including any preferred stock designation thereunder), directors may be removed from office at any time, only for cause and by the holders of a majority of the voting power of all outstanding voting shares entitled to vote generally in the election of directors; ● provide that special meetings of our stockholders may only be called by the Chief Executive Officer, the Chairman of our Board of Directors or our Board of Directors pursuant to a resolution adopted by a majority of the total number of directors that we would have if there were no vacancies; ● provide that (i) Yorktown Partners LLC (“Yorktown”) and their affiliates are permitted to participate (directly or indirectly) in venture capital and other direct investments in corporations, joint ventures, limited liability companies and other entities conducting business of any kind, nature or description, (ii) Yorktown and their affiliates are permitted to have interests in, participate with, aid and maintain seats on the boards of directors or similar governing bodies of any such investments, in each case that may, are or will be competitive with our business and the business of our subsidiaries or in the same or similar lines of business as us and our subsidiaries, or that could be suitable for us or our subsidiaries and (iii) we have, subject to limited exceptions, renounced, to the fullest extent permitted by law, any interest or expectancy in, or in being offered an opportunity to participate in, such corporate opportunities; ● provide that the provisions of our certificate of incorporation can only be amended or repealed by the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of our common stock entitled to vote thereon, voting together as a single class; and ● provide that our bylaws can be altered or repealed by (a) our Board of Directors or (b) our stockholders upon the affirmative vote of holders of at least 66 2/3% of the voting power of our common stock outstanding and entitled to vote thereon, voting together as a single class. 34 Table of Contents We have elected not to be subject to the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), regulating corporate takeovers.
Approximately 52% of our net leasehold acreage is undeveloped, and that acreage may not ultimately be developed or become commercially productive, which could cause us to lose rights under our leases as well as have a material adverse effect on our oil and natural gas reserves and future production and, therefore, our future cash flow and income.
Approximately 50% of our net leasehold acreage is undeveloped, and that acreage may not ultimately be developed or become commercially productive, which could cause us to lose rights under our leases as well as have a material adverse effect on our oil and natural gas reserves and future production and, therefore, our future cash flow and income.
Our oil and gas exploration and production activities are subject to all of the operating risks associated with drilling for and producing oil and gas, including the possibility of: ● environmental hazards, such as uncontrollable releases of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater, air and shoreline contamination; 27 Table of Contents ● abnormally pressured formations; ● mechanical difficulties, such as stuck oilfield drilling and service tools and casing collapse; ● fires, explosions and ruptures of pipelines; ● personal injuries and death; ● natural disasters; and ● terrorist attacks targeting natural gas and oil related facilities and infrastructure.
Our oil and gas exploration and production activities are subject to all of the operating risks associated with drilling for and producing oil and gas, including the possibility of: ● environmental hazards, such as uncontrollable releases of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater, air and shoreline contamination; ● abnormally pressured formations; ● mechanical difficulties, such as stuck oilfield drilling and service tools and casing collapse; ● fires, explosions and ruptures of pipelines; ● personal injuries and death; ● natural disasters; and ● terrorist attacks targeting natural gas and oil related facilities and infrastructure.
For example, we are party to pending purported class action litigation that involves claimants’ alleged entitlements to, and accounting for, natural gas royalties, and that could have an impact on the methods for determining the amount of permitted post-production costs and types of cost that may be deducted from royalty payments, among other things.
For example, we are party to class action litigation that involves claimants’ alleged entitlements to, and accounting for, natural gas royalties, and that could have an impact on the methods for determining the amount of permitted post-production costs and types of cost that may be deducted from royalty payments, among other things.
The operations of the processing facilities or pipelines could be partially or completely shut down, temporarily or permanently, as the result of circumstances not within the operator’s nor our control, such as: ● unscheduled maintenance or catastrophic events, including damages to facilities, related equipment and surrounding properties caused by earthquakes, tornadoes, hurricanes, floods, fires, severe weather, explosions and other natural disasters; ● restrictions imposed by governmental authorities or court proceedings; ● labor difficulties that result in a work stoppage or slowdown; ● disruption in the supply of power, water and other resources necessary to operate the facilities; ● damage to the facilities resulting from NGLs that do not comply with applicable specifications; ● inadequate fractionation capacity or market access to support production volumes, including lack of availability of rail cars, barges, trucks and pipeline capacity, or market constraints, including reduced demand or limited markets for certain NGL products; and ● terrorist attacks or cyberattacks.
The operations of the processing facilities or pipelines could be partially or completely shut down, temporarily or permanently, as the result of circumstances not within the operator’s nor our control, such as: ● unscheduled maintenance or catastrophic events, including damages to facilities, related equipment and surrounding properties caused by earthquakes, tornadoes, hurricanes, floods, fires, severe weather, explosions and other natural disasters; ● restrictions imposed by governmental authorities or court proceedings; 32 Table of Contents ● labor difficulties that result in a work stoppage or slowdown; ● disruption in the supply of power, water and other resources necessary to operate the facilities; ● damage to the facilities resulting from NGLs that do not comply with applicable specifications; ● inadequate fractionation capacity or market access to support production volumes, including lack of availability of rail cars, barges, trucks and pipeline capacity, or market constraints, including reduced demand or limited markets for certain NGLs; and ● terrorist attacks or cyberattacks.
Increasing attention to climate change, societal expectations on companies to address climate change, investor and societal expectations regarding voluntary ESG disclosures and consumer demand for alternative forms of energy may result in increased costs, reduced demand for our products, reduced profits, increased investigations and litigation, negative impacts on our stock price and reduced access to capital markets.
Increasing attention to climate change, societal expectations on companies to address climate change, investor, regulatory and societal expectations regarding voluntary and mandatory ESG disclosures and consumer demand for alternative forms of energy may result in increased costs, reduced demand for our products, reduced profits, increased investigations and litigation, negative impacts on our stock price and reduced access to capital markets.
Approximately 52% of our net leasehold acreage is undeveloped, or acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.
Approximately 50% of our net leasehold acreage is undeveloped, or acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.
From time to time, U.S. federal and state level legislation has been proposed that would, if enacted into law, make significant changes to tax laws, including to certain key U.S. federal and state income tax provisions currently available to natural gas and oil exploration and development companies.
From time to time, U.S. federal and state level legislation has been proposed that would, if enacted into law, make significant changes to tax laws, including to certain key U.S. federal and state income tax provisions currently applicable to natural gas and oil exploration and development companies.
Lower commodity prices may lead to reductions in our drilling and completion program, which may result in insufficient production to fully utilize our firm transportation and processing capacity. Our firm transportation agreements expire at various dates from 2023 to 2058 and our gas processing, gathering, and compression services agreements expire at various dates from 2023 to 2038.
Lower commodity prices may lead to reductions in our drilling and completion program, which may result in insufficient production to fully utilize our firm transportation and processing capacity. Our firm transportation agreements expire at various dates from 2024 to 2058 and our gas processing, gathering, and compression services agreements expire at various dates from 2024 to 2038.
If we have insufficient production to meet the minimum volumes or are otherwise unable to fulfill all or a portion of our volume commitments, our cash flow from operations will be reduced, which may require us to reduce or delay our planned investments and capital expenditures or seek alternative means of financing, all of which may have a material adverse effect on our results of operations.
If we have insufficient production to meet the minimum volumes or are otherwise unable to fulfill all or a portion of our volume commitments, our cash flow from operations will be reduced, which may require us to reduce or delay our planned investments and 31 Table of Contents capital expenditures or seek alternative means of financing, all of which may have a material adverse effect on our results of operations.
MINE SAFETY DISCLOSURES The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Annual Report on Form 10-K. PART II ITEM 5.
MINE SAFETY DISCLOSURES The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Annual Report on Form 10-K. 48 Table of Contents PART II ITEM 5.
For example, as of December 31, 2022, the 2026 Convertible Notes are convertible at the option of holders. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.
For example, as of December 31, 2023, the 2026 Convertible Notes are convertible at the option of holders. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.
Moreover, while we may seek to only purchase carbon offsets verified by reputable third-parties, we cannot guarantee that any carbon offsets we purchase will achieve the GHG emission reductions represented, and we could face increased costs to purchase additional carbon offsets to cover any gap or loss, particularly if carbon offset markets face capacity constraints as a result of increased demand.
In addition, while we may seek to only purchase carbon offsets verified by reputable third parties, we cannot guarantee that any carbon offsets we purchase will achieve the GHG emission reductions represented, and we could face increased costs to purchase additional carbon offsets to cover any gap or loss, particularly if carbon offset markets face capacity constraints as a result of increased demand.
Consequently, it is possible that any of these occurrences, or a combination of them, could have a material adverse effect on our business, financial condition and results of operations. 29 Table of Contents Our producing properties are concentrated in the Appalachian Basin, making us vulnerable to risks associated with operating in one major geographic area.
Consequently, it is possible that any of these occurrences, or a combination of them, could have a material adverse effect on our business, financial condition and results of operations. Our producing properties are concentrated in the Appalachian Basin, making us vulnerable to risks associated with operating in one major geographic area.
The cost to settle legal proceedings (asserted or unasserted) or satisfy any resulting unfavorable judgment against us in such proceedings 26 Table of Contents could result in a substantial liability or the loss of interests, which could materially and adversely impact our cash flows, operating results and financial condition for the period in which any such effect becomes reasonably estimable.
The cost to settle legal proceedings (asserted or unasserted) or satisfy any resulting unfavorable judgment against us in such proceedings could result in a substantial liability or the loss of interests, which could materially and adversely impact our cash flows, operating results and financial condition for the period in which any such effect becomes reasonably estimable.
Our cash flows from operations and access to capital are subject to a number of variables, including: ● our proved reserves; ● the level of hydrocarbons we are able to produce from existing wells; ● the prices at which our production is sold; ● our ability to acquire, locate and produce new reserves; ● the value of our commodity derivative portfolio; and 35 Table of Contents ● our ability to borrow under the Credit Facility.
Our cash flows from operations and access to capital are subject to a number of variables, including: ● our proved reserves; ● the level of hydrocarbons we are able to produce from existing wells; ● the prices at which our production is sold; ● our ability to acquire, locate and produce new reserves; ● the value of our commodity derivative portfolio; and ● our ability to borrow under the Credit Facility.
Our producing properties are geographically concentrated in the Appalachian Basin in West Virginia and Ohio. As of December 31, 2022, all of our total estimated proved reserves were attributable to properties located in this area.
Our producing properties are geographically concentrated in the Appalachian Basin in West Virginia and Ohio. As of December 31, 2023, all of our total estimated proved reserves were attributable to properties located in this area.
If activism against oil and natural gas exploration and development persists or increases, there could be a material adverse effect on our business, financial condition and results of operations. Customer Concentration and Credit Risk The inability of our significant customers to meet their obligations to us may adversely affect our financial results.
If activism against oil and natural gas exploration and development persists or increases, there could be a material adverse effect on our business, financial condition and results of operations. 30 Table of Contents Customer Concentration and Credit Risk The inability of our significant customers to meet their obligations to us may adversely affect our financial results.
Such agreements also limit our ability to incur certain indebtedness, which could indirectly limit our ability to engage in acquisitions of businesses. Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals , which may adversely affect the market price of our common stock.
Such agreements also limit our ability to incur certain indebtedness, which could indirectly limit our ability to engage in acquisitions of businesses. 33 Table of Contents Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals , which may adversely affect the market price of our common stock.
We depend on digital technology in many areas of our business and operations, including, but not limited to, estimating quantities of oil and gas reserves, processing and recording financial and operating data, oversight and analysis of drilling operations, and communications with our employees and third-party customers or service providers.
We depend on digital technology in many areas of our business and operations, including, but not limited to, estimating quantities of oil and natural gas reserves, processing and recording financial and operating data, oversight and analysis of our drilling, completion and production operations and communications with our employees and third-party customers or service providers.
The borrowing base under the Credit Facility is currently $3.5 billion, and lender commitments under the Credit Facility are $1.5 billion. Our borrowing base is redetermined semi-annually by the lenders each April and October based on certain factors, including our reserves and hedge position, with the next borrowing base redetermination scheduled to occur in April 2023.
The borrowing base under the Credit Facility is currently $3.5 billion, and lender commitments under the Credit Facility are $1.6 billion. Our borrowing base is redetermined semi-annually by the lenders each April and October based on certain factors, including our reserves and hedge position, with the next borrowing base redetermination scheduled to occur in April 2024.
The loss of the services of our senior management or technical personnel, including Paul M. Rady, our Chairman, Chief Executive Officer and President, could have a material adverse effect on our business, financial condition and results of operations. 42 Table of Contents Our officers and employees provide services to both us and Antero Midstream.
The loss of the services of our senior management or technical personnel, including Paul M. Rady, our Chairman, Chief Executive Officer and President, could have a material adverse effect on our business, financial condition and results of operations. Our officers and employees provide services to both us and Antero Midstream.
A corporation is generally an applicable corporation subject to CAMT in any taxable year following a taxable year in which the “average annual adjusted financial statement income” of the corporation and certain of its subsidiaries and affiliates exceeds $1 billion for a specified three taxable year period. We will not be an applicable corporation subject to CAMT in 2023.
A corporation is generally an applicable corporation subject to CAMT in any taxable year following a taxable year in which the “average annual adjusted financial statement income” of the corporation and certain of its subsidiaries and affiliates exceeds $1 billion for a specified three taxable year period. We were not an applicable corporation subject to CAMT in 2023.
Moreover, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively or recruit or retain employees, which may adversely affect our operations. Such ESG matters may also impact Antero Midstream and our customers, which may adversely impact our business, financial condition or results of operations.
Moreover, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively or recruit or retain employees, which may adversely affect our operations. Such ESG matters may also impact Antero Midstream and our 27 Table of Contents customers, which may adversely impact our business, financial condition or results of operations.
Our certificate of incorporation authorizes our Board of Directors to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences 45 Table of Contents over our common stock respecting dividends and distributions, as our Board of Directors may determine.
Our certificate of incorporation authorizes our Board of Directors to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our Board of Directors may determine.
The successful acquisition of producing properties requires an assessment of several factors, including: ● recoverable reserves; 32 Table of Contents ● future natural gas, NGLs and oil prices and their applicable differentials; ● operating costs; and ● potential environmental and other liabilities. The accuracy of these assessments is inherently uncertain.
The successful acquisition of producing properties requires an assessment of several factors, including: ● recoverable reserves; ● future natural gas, NGLs and oil prices and their applicable differentials; ● operating costs; and ● potential environmental and other liabilities. The accuracy of these assessments is inherently uncertain.
Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.
Disclosures reliant upon such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.
Although the market for high-yield debt securities improved in 2021 and 2022, as compared to 2020, if the high-yield market deteriorates, or if we are unable to access alternative means of debt or equity financing on acceptable terms or at all, we may be unable to implement our development plan or otherwise carry out our business plan, which could have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness.
Although the market for high-yield debt securities has improved compared to 2020, if the high-yield market deteriorates, or if we are unable to access alternative means of debt or equity financing on acceptable terms or at all, we may be unable to implement our development plan or otherwise carry out our business plan, which could have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness.
As a result of their investments in Antero Midstream, Mr. Rady and Yorktown may have conflicting interests with other stockholders. 34 Table of Contents Conflicts of interest could arise in the future between us, on the one hand, and Mr.
As a result of their investments in Antero Midstream, Mr. Rady and Yorktown may have conflicting interests with other stockholders. Conflicts of interest could arise in the future between us, on the one hand, and Mr.
In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.
In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material 36 Table of Contents assets or operations to meet our debt service and other obligations.
Specific factors that may have a significant effect on the market price for our common stock include: ● our operating and financial performance and prospects and the trading price of our common stock; ● the level of any dividends we may declare; ● quarterly variations in the rate of growth of our financial indicators, such as net income and revenues; ● levels of indebtedness; ● changes in revenue or earnings estimates or publication of research reports by analysts; ● speculation by the press or investment community; ● sales of our common stock by other stockholders; 44 Table of Contents ● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, securities offerings or capital commitments; ● general market conditions; ● changes in accounting standards, policies, guidance, interpretations or principles; ● adverse changes in tax laws or regulations; and ● domestic and international economic, legal and regulatory factors related to our performance.
Specific factors that may have a significant effect on the market price for our common stock include: ● our operating and financial performance and prospects and the trading price of our common stock; ● the level of any dividends we may declare; ● quarterly variations in the rate of growth of our financial indicators, such as net income and revenues; ● levels of indebtedness; ● changes in revenue or earnings estimates or publication of research reports by analysts; ● speculation by the press or investment community; ● sales of our common stock by other stockholders; ● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, securities offerings or capital commitments; ● general market conditions; ● changes in accounting standards, policies, guidance, interpretations or principles; ● adverse changes in tax laws or regulations; and ● domestic and international economic, legal and regulatory factors related to our performance. 45 Table of Contents Sales of a substantial amount of shares of our common stock in the public market could adversely affect the market price of our shares.
As of December 31, 2022, the estimated fair value of our total derivative assets was $12 million, and we did not have any derivative assets with bank counterparties under our Credit Facility. Also, our hedging transactions expose us to risk of financial loss if a counterparty fails to perform under a derivative contract.
As of December 31, 2023, the estimated fair value of our total derivative assets was $11 million, and we did not have any derivative assets with bank counterparties under our Credit Facility. Also, our hedging transactions expose us to risk of financial loss if a counterparty fails to perform under a derivative contract.
Our principal exposures to credit risk are through receivables resulting from the sale of our natural gas, NGLs and oil production that we market to energy companies, end users, and refineries ($671 million as of December 31, 2022). We are also subject to credit risk due to concentration of receivables with several significant customers.
Our principal exposures to credit risk are through receivables resulting from the sale of our natural gas, NGLs and oil production that we market to energy companies, end users, and refineries ($384 million as of December 31, 2023). We are also subject to credit risk due to concentration of receivables with several significant customers.
In response to the COVID-19 pandemic, governments tried to slow the spread of the virus by imposing social distancing guidelines, travel restrictions and stay-at-home orders, among other actions, which caused a significant decrease in the demand for oil and to a lesser extent, natural gas and NGLs.
For example, in response to the coronavirus pandemic, governments tried to slow the spread of the virus by imposing social distancing guidelines, travel restrictions and stay-at-home orders, among other actions, which caused a significant decrease in the demand for oil and to a lesser extent, natural gas and NGLs.
These factors include the following: ● worldwide and regional economic conditions impacting the global supply and demand for natural gas, NGLs and oil; ● the price and quantity of imports of foreign, and exports of domestic, oil, natural gas and NGLs including liquefied natural gas; ● political conditions in or affecting other producing countries, including conflicts in or among the Middle East, Africa, South America and Russia; ● the level of global exploration and production; ● the level of global inventories; ● events that impact global market demand (e.g., the reduced demand resulting from the COVID-19 pandemic); ● prevailing prices on local price indexes in the areas in which we operate; ● localized and global supply and demand fundamentals and transportation availability; ● weather conditions; ● technological advances affecting energy consumption; ● the price and availability of alternative fuels; and ● domestic, local and foreign governmental regulation and taxes.
These factors include the following: ● worldwide and regional economic conditions impacting the global supply and demand for natural gas, NGLs and oil; ● the price and quantity of imports of foreign, and exports of domestic, oil, natural gas and NGLs including liquefied natural gas; ● political conditions in or affecting other producing countries, including conflicts in or among the Middle East, Africa, South America and Russia; ● the level of global exploration and production; ● the level of global inventories; ● events that impact global market demand; ● prevailing prices on local price indexes in the areas in which we operate; ● localized and global supply and demand fundamentals and transportation availability; ● weather conditions; ● technological advances affecting energy consumption; ● the price and availability of alternative fuels; and ● domestic, local and foreign governmental regulation and taxes.
These restrictions, together with those in the indentures governing our senior notes and our 2026 Convertible Notes, may also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities.
These restrictions, 37 Table of Contents together with those in the indentures governing our Senior Notes and our 2026 Convertible Notes, may also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities.
Our hedging transactions may become more costly or unavailable to us and expose us to counterparty credit risk. Derivative arrangements could limit the benefit we would receive from increases in the prices for natural gas, NGLs and oil, which could also have an adverse effect on our financial condition.
Hedging transactions may become more costly or unavailable to us and expose us to counterparty credit risk. To the extent that we engage in hedging activity in the future, derivative arrangements could limit the benefit we would receive from increases in the prices for natural gas, NGLs and oil, which could also have an adverse effect on our financial condition.
As a result, management’s view of the likelihood of a material and adverse financial impact from any such proceeding may change in the future. See Note 15—Contingencies to the consolidated financial statements for more information on legal proceedings. Increased attention to ESG matters and conservation measures may adversely impact our business.
As a result, 26 Table of Contents management’s view of the likelihood of a material and adverse financial impact from any such proceeding may change in the future. See Note 15—Contingencies to the consolidated financial statements for more information on legal proceedings. Increasing attention to ESG matters and conservation measures may adversely impact our business.
Certain provisions of our 2026 Convertible Notes (as defined herein) and the indenture governing such notes could make a third-party attempt to acquire us more difficult or expensive.
Certain provisions of our 2026 Convertible Notes and the indenture governing such notes could make a third party attempt to acquire us more difficult or expensive.
Any of these events may dilute the ownership interests of our stockholders, reduce our earnings per share or have an adverse effect on the price of shares of our common stock.
Any of these events may dilute the ownership interests of our stockholders, reduce our net income per share or have an adverse effect on the price of shares of our common stock.
A cyberattack or security breach could result in liability under data privacy laws, regulatory penalties, damage to our reputation or loss of confidence in us, or additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which could have a material and adverse effect on our business, financial condition or results of operations.
A cyberattack or security breach could result in liability resulting from data privacy or cybersecurity claims, liability under data privacy laws, regulatory penalties, damage to our reputation, long-lasting loss of confidence in us, or additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which could have a material and adverse effect on our business, financial condition or results of operations.
Business and Properties—Our Properties and Operations—Undeveloped Acreage Expirations.” As of December 31, 2022, we had 1,819 identified potential horizontal well locations located in our proved, probable and possible reserve base. As a result of the limitations described above, we may be unable to drill many of our potential well locations.
Business and Properties—Our Properties and Operations—Undeveloped Acreage Expirations.” As of December 31, 2023, we had 1,588 identified potential horizontal well locations in our proved, probable and possible reserve base. As a result of the limitations described above, we may be unable to drill many of our potential well locations.
The largest purchaser of our products during the year ended December 31, 2022 accounted for approximately 12% of our product revenues. We do not require all of our customers to post collateral. The inability or failure of our significant customers to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results.
The largest purchaser of our products during the year ended December 31, 2023 accounted for 9% of our product revenues. We do not require all of our customers to post collateral. The inability or failure of our significant customers to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results.
Also, institutional lenders may decide not to provide funding for oil and natural gas companies based on climate change related concerns, which could affect our access to capital for potential growth projects.
Also, institutional lenders may decide not to provide funding for oil and natural gas companies or the corresponding infrastructure projects based on climate change related concerns, which could affect our access to capital for potential growth projects.
Assuming 2023 production is unchanged from 2022 production, we estimate that we will incur annual net marketing costs of $0.10 per Mcfe to $0.14 per Mcfe in 2023 for unutilized transportation capacity depending on the amount of unutilized capacity that can be marketed to third-parties or utilized to transport third-party gas and capture positive basis differentials.
Assuming 2024 production is unchanged from 2023 production, we estimate that we will incur annual net marketing costs of $0.05 per Mcfe to $0.07 per Mcfe in 2024 for unutilized transportation capacity depending on the amount of unutilized capacity that can be marketed to third parties or utilized to transport third-party gas and capture positive basis differentials.
Income Taxes Our future tax liability may be greater than expected if our net operating loss (“NOL”) carryforwards are limited, we do not generate expected deductions, or tax authorities challenge certain of our tax positions. ​ As of December 31, 2022, we have U.S. federal and state NOL carryforwards of $1.0 billion and $1.9 billion, respectively.
Taxes Our future tax liabilities may be greater than expected if our net operating loss (“NOL”) carryforwards are limited, we do not generate expected deductions, or tax authorities challenge our tax positions. ​ As of December 31, 2023, we have U.S. federal and state NOL carryforwards of $1.0 billion and $1.9 billion, respectively.
Any unused annual limitation may be carried over to later years. Any limitation on our ability to utilize our NOL carryforwards against income or gain we generate in the future could result in future income tax expense that could adversely affect our operating results and cash flows.
Any unused annual limitation may be carried over to later years. Any limitation on our ability to utilize our NOL carryforwards against income or gain we generate in the future could increase our future tax liabilities and adversely affect our operating results and cash flows.
We may not be able to develop, find or acquire sufficient additional reserves to replace our current and future production, and any such acquisition and development may be offset by any asset disposition.
We may not be able to develop, find or 23 Table of Contents acquire sufficient additional reserves to replace our current and future production, and any such acquisition and development may be offset by any asset disposition.
Moreover, federal regulators, state and local governments, and private parties have taken (or announced that they plan to take) actions that have or may have a significant influence on our operations.
Moreover, federal regulators, state and local governments, and private parties 40 Table of Contents have taken (or announced that they plan to take) actions that have or may have a significant influence on our operations.
To achieve more predictable cash flows and reduce our exposure to downward price fluctuations, we have historically entered into hedging contracts for a significant percentage of our expected production volumes. For example, in 2021 we hedged approximately 91% of our natural gas production, 36% of our NGL production and 29% of our oil production.
To achieve more predictable cash flows and reduce our exposure to downward price fluctuations, we have historically entered into fixed swap hedging contracts for a significant percentage of our expected production volumes. For example, in 2021 we hedged 91%, 36% and 29% of our natural gas, NGLs and oil production, respectively.
Our common stock is listed on the New York Stock Exchange and traded under the symbol “AR.” On February 10, 2023, our common stock was held by 122 holders of record. The number of holders does not include the shareholders for whom shares of our common stock are held in a “nominee” or “street” name.
Our common stock is listed on the New York Stock Exchange and traded under the symbol “AR.” On February 9, 2024, our common stock was held by 103 holders of record. The number of holders does not include the shareholders for whom shares of our common stock are held in a “nominee” or “street” name.
Transportation rates on FERC-regulated pipelines are subject to change, and depending on the amount of any increase, such an increase in rates could have an adverse effect on our results of operations. As of December 31, 2022, our long- term contractual obligations under agreements with minimum volume commitments totaled approximately $11.1 billion over the term of the contracts.
Transportation rates on FERC-regulated pipelines are subject to change, and depending on the amount of any increase, such an increase in rates could have an adverse effect on our results of operations. As of December 31, 2023, our long- term contractual obligations under agreements with minimum volume commitments totaled $10.4 billion over the term of the contracts.
There is no assurance that we will pay any cash dividends on our common stock. Stock Performance Graph The graph below shows the cumulative total shareholder return assuming the investment of $100 on December 31, 2017 in each of our common stock, the Standard & Poor’s 500 (“S&P 500”) Index, and the Dow Jones U.S. Oil & Gas Index.
There is no assurance that we will pay any cash dividends on our common stock. 49 Table of Contents Stock Performance Graph The graph below shows the cumulative total shareholder return assuming the investment of $100 on December 31, 2018 in each of our common stock, the Standard & Poor’s 500 (“S&P 500”) Index, and the Dow Jones U.S.
To date we have not experienced any material losses relating to cyberattacks; however, there can be no assurance that we will not suffer such losses in the future.
To date, we have not experienced any material losses relating to cyberattacks; however, there can be no assurance that we will not suffer such losses in the future. No security measure is infallible.
We may incur significant delays, costs and liabilities as a result of environmental and occupational health and safety requirements applicable to our exploration, development and production activities.
Our operations may be exposed to significant delays, costs and liabilities as a result of environmental and occupational health and safety requirements applicable to our business activities. We may incur significant delays, costs and liabilities as a result of environmental and occupational health and safety requirements applicable to our exploration, development and production activities.
Moreover, economic or other circumstances may change from those contemplated by our 2023 plan, and our failure to recognize or respond to those changes may limit our ability to achieve our objectives. 28 Table of Contents We periodically engage in acquisitions, dispositions and other strategic transactions, including joint ventures.
Moreover, economic or other circumstances may change from those contemplated by our 2024 plan, and our failure to recognize or respond to those changes may limit our ability to achieve our objectives. We periodically engage in acquisitions, dispositions and other strategic transactions, including joint ventures.
Due to our improved liquidity and leverage position as compared to past levels, the percentage of our expected production that we hedge has decreased. For example, in 2022, we hedged approximately 49% of our natural gas production, and our NGL and oil production was unhedged.
Additionally, in 2022 we hedged 49% of our natural gas production, and our NGLs and oil production was unhedged. Due to our improved liquidity and leverage position as compared to past levels, the percentage of our expected production that we hedge has decreased.
These goals were reaffirmed at COP27 in November 2022. Relatedly, the United States and European Union jointly announced the launch of the “Global Methane Pledge,” which aims to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy sector.
Relatedly, the United States and European Union jointly announced the launch of the “Global Methane Pledge,” which aims to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy sector.
We have not paid or declared any dividends on our common stock. The amount and timing of future payment of cash dividends on our common stock, if any, is within the discretion of the Board of Directors and will depend on our earnings, capital requirements, financial condition and other relevant factors.
The amount and timing of future payment of cash dividends on our common stock, if any, is within the discretion of the Board of Directors and will depend on our earnings, capital requirements, financial condition and other relevant factors.
The information in this Form 10-K appearing under the heading “Stock Performance Graph” is being “furnished” pursuant to Item 2.01(e) of Regulation S-K under the Securities Act and shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 2.01(e) of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act and shall not be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act except to the extent that we specifically request that it be treated as such.
Oil & Gas Index is meaningful because it is an independent, objective view of the performance of similarly-sized energy companies. ​ The information in this Form 10-K appearing under the heading “Stock Performance Graph” is being “furnished” pursuant to Item 2.01(e) of Regulation S-K under the Securities Act and shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 2.01(e) of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act and shall not be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act except to the extent that we specifically request that it be treated as such.
Through December 31, 2022, we have repurchased 25 million shares of our common stock through our share repurchase program at a total cost of $874 million. The shares may be repurchased from time to time in open market transactions, through 46 Table of Contents privately negotiated transactions or by other means in accordance with federal securities laws.
Through December 31, 2023, we have repurchased 28 million shares of our common stock through our share repurchase program at a total cost of $949 million. The shares may be repurchased from time to time in open market transactions, through privately negotiated transactions or by other means in accordance with federal securities laws.
Given uncertainties related to the use of emerging technologies, the state of markets for and the availability of verified quality carbon offsets, we cannot predict whether or not we will be able to timely meet our net zero goal, if at all.
Given uncertainties related to the use of emerging technologies, the state of markets for and the availability of verified carbon offsets, we cannot predict whether or not we will be able to timely meet these goals, if at all.
While oil and natural gas prices were generally higher in 2022 than they were in 2021, the markets for these commodities have historically been volatile, and these markets will likely continue to be volatile in the future.
While oil and natural gas prices were substantially lower in 2023 than they were in 2022, the markets for these commodities have historically been volatile, and these markets will likely continue to be volatile in the future.
While we do typically obtain title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title may not be discovered until after a well is drilled, in which case we may lose the lease and the right to produce all or a portion of the minerals under the property.
While we do typically obtain title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title or the right to include certain interests in a unit may not be discovered until after a well is drilled, in which case we may lose the lease and the right to produce all or a portion of the minerals under the property, which may adversely impact our business, financial condition or results of operations.
In addition, a downgrade to our credit rating could require us to post additional collateral in the form of letters of credit or cash as financial assurance of our performance under certain contractual arrangements, such as pipeline transportation contracts.
In addition, a downgrade to our credit rating could require us to post additional collateral in the form of letters of credit or cash as financial assurance of our performance under certain contractual arrangements, such as pipeline transportation contracts. An increase in our outstanding letters of credit may impact our available liquidity under our Credit Facility.
For example, during 37 Table of Contents 2022, we had estimated average outstanding borrowings under the Credit Facility of approximately $238 million, and the impact of a 1.0% increase in interest rates on this amount of indebtedness would result in increased interest expense for that period of approximately $2 million and a corresponding decrease in our cash flows and net income before the effects of income taxes.
For example, during 2023, we had average outstanding borrowings under the Credit Facility of $342 million, and the impact of a 1.0% increase in interest rates on this amount of indebtedness would result in increased interest expense for that period of $3 million and a corresponding decrease in our cash flows and net income before the effects of income taxes.
Various factors could materially affect our ability to dispose of assets if and when we decide to do so, including the availability of purchasers willing to purchase the assets at prices acceptable to us, particularly in times of reduced and volatile commodity prices. Capital Structure and Access to Capital Our exploration and development projects require substantial capital expenditures.
Various factors could materially affect our ability to dispose of assets if and when we decide to do so, including the availability of purchasers willing to purchase the assets at prices acceptable to us, particularly in times of reduced and volatile commodity prices.
These increased capital requirements could result in significant additional costs being passed through to end-users like us or reduce the number of participants or products available to us in the over-the-counter derivatives market.
These rules could significantly increase the capital requirements for certain participants in the over-the-counter derivatives market in which we participate. These increased capital requirements could result in significant additional costs being passed through to end-users like us or reduce the number of participants or products available to us in the over-the-counter derivatives market.
For more information on our identified potential well locations, see “Item 1. Business and Properties—Our Properties and Operations—Estimated Proved Reserves—Identification of Potential Well Locations.” We may incur losses as a result of title defects in the properties in which we invest.
For more information on our identified potential well locations, see “Item 1. Business and Properties—Our Properties and Operations—Estimated Proved Reserves—Identification of Potential Well Locations.” We may incur losses as a result of title defects or other matters affecting the unitization of interests.
Based on current commodity pricing, our interpretation of the CAMT and the IRA 2022 and a number of operational, economic, accounting and regulatory assumptions, we could become an applicable corporation subject to CAMT in 2025.
Based on current commodity pricing, our interpretation of the CAMT and the IRA 2022 and a number of operational, economic, accounting and regulatory assumptions, we do not expect to become an applicable corporation subject to CAMT in the next three years.
The global or national outbreak of an infectious disease, such as COVID-19, may cause disruptions to our business and operational plans, which may include (i) shortages of employees, (ii) unavailability of contractors and subcontractors, (iii) interruption of supplies from third-parties upon which we rely, (iv) recommendations of, or restrictions imposed by, government and health authorities, including quarantines, to address the COVID-19 pandemic and (v) restrictions that we and our contractors and subcontractors impose, including facility shutdowns, to ensure the safety of employees and others.
World health events may cause disruptions to our business and operational plans, which may include (i) shortages of employees, (ii) unavailability of contractors and subcontractors, (iii) interruption of supplies from third parties upon which we rely, (iv) recommendations of, or restrictions imposed by, government and health authorities, including quarantines, and (v) restrictions that we and our contractors and subcontractors impose, including facility shutdowns, to ensure the safety of employees and others.
In addition, the SEC has proposed a rule requiring registrants to include certain climate-related disclosures, including Scope 1, 2 and 3 GHG emissions, climate-related targets and goals, and certain climate-related financial statement metrics, in registration statements and periodic reports.
In addition, the SEC has proposed a rule requiring registrants to include certain climate-related disclosures, including Scope 1, 2 and 3 GHG emissions, climate-related targets and goals, and certain climate-related financial statement metrics, in registration statements and periodic reports. The final rule is expected in 2024, and we cannot predict the final form and substance of the rule.
Moreover, we may not be able to anticipate, detect or prevent all cyberattacks, particularly because the methodologies used by attackers change frequently or may not be recognized until such attack is underway, and because attackers are increasingly using technologies specifically designed to circumvent cybersecurity measures and avoid detection.
Significant liability to the Company or third parties may result. We are not able to anticipate, detect or prevent all cyberattacks, particularly because the methodologies used by attackers change frequently or may not be recognized until an attack is already underway or significantly thereafter, and because attackers are increasingly using technologies specifically designed to circumvent cybersecurity measures and avoid detection.
If new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, we could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from drilling wells. 38 Table of Contents Our operations may be exposed to significant delays, costs and liabilities as a result of environmental and occupational health and safety requirements applicable to our business activities.
If new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, we could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from drilling wells.

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Biggest changeSee Note 17—Reportable Segments to the consolidated financial statements for more information. 53 Table of Contents Year Ended December 31, 2021 Compared to Year Ended December 31, 2022 The operating results of our reportable segments were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ Equity Method ​ ​ ​ ​ ​ ​ ​ Exploration ​ ​ ​ Investment in ​ Elimination of ​ ​ ​ ​ ​ and ​ ​ ​ Antero ​ Unconsolidated ​ Consolidated ​ ​ Production Marketing Midstream Affiliates Total Revenue and other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas sales ​ $ 3,442,028 ​ ​ — ​ ​ — ​ ​ — ​ ​ 3,442,028 ​ Natural gas liquids sales ​ ​ 2,147,499 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,147,499 ​ Oil sales ​ ​ 201,232 ​ ​ — ​ ​ — ​ ​ — ​ ​ 201,232 ​ Commodity derivative fair value losses ​ ​ (1,936,509) ​ ​ — ​ ​ — ​ ​ — ​ ​ (1,936,509) ​ Gathering, compression and water handling ​ ​ — ​ ​ — ​ ​ 968,874 ​ ​ (968,874) ​ ​ — ​ Marketing ​ ​ — ​ ​ 718,921 ​ ​ — ​ ​ — ​ ​ 718,921 ​ Amortization of deferred revenue, VPP ​ ​ 45,236 ​ ​ — ​ ​ — ​ ​ — ​ ​ 45,236 ​ Other income (loss) ​ ​ 1,025 ​ ​ — ​ ​ (70,672) ​ ​ 70,672 ​ ​ 1,025 ​ Total revenue ​ ​ 3,900,511 ​ ​ 718,921 ​ ​ 898,202 ​ ​ (898,202) ​ ​ 4,619,432 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ ​ 96,793 ​ ​ — ​ ​ — ​ ​ — ​ ​ 96,793 ​ Gathering and compression ​ ​ 874,023 ​ ​ — ​ ​ 65,983 ​ ​ (65,983) ​ ​ 874,023 ​ Processing ​ ​ 791,978 ​ ​ — ​ ​ — ​ ​ — ​ ​ 791,978 ​ Transportation ​ ​ 833,173 ​ ​ — ​ ​ — ​ ​ — ​ ​ 833,173 ​ Water handling ​ ​ — ​ ​ — ​ ​ 91,137 ​ ​ (91,137) ​ ​ — ​ Production and ad valorem taxes ​ ​ 197,910 ​ ​ — ​ ​ — ​ ​ — ​ ​ 197,910 ​ Marketing ​ ​ — ​ ​ 811,698 ​ ​ — ​ ​ — ​ ​ 811,698 ​ Exploration and mine expenses ​ ​ 6,566 ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,566 ​ General and administrative (excluding equity-based compensation) ​ ​ 124,569 ​ ​ — ​ ​ 50,299 ​ ​ (50,299) ​ ​ 124,569 ​ Equity-based compensation ​ ​ 20,437 ​ ​ — ​ ​ 13,539 ​ ​ (13,539) ​ ​ 20,437 ​ Depletion, depreciation and amortization ​ ​ 742,009 ​ ​ — ​ ​ 108,790 ​ ​ (108,790) ​ ​ 742,009 ​ Impairment of property and equipment ​ ​ 90,523 ​ ​ — ​ ​ 5,042 ​ ​ (5,042) ​ ​ 90,523 ​ Accretion of asset retirement obligations ​ ​ 3,820 ​ ​ — ​ ​ 460 ​ ​ (460) ​ ​ 3,820 ​ Contract termination and other expenses ​ ​ 4,305 ​ ​ — ​ ​ 3,997 ​ ​ (3,997) ​ ​ 4,305 ​ Loss (gain) on sale of assets ​ ​ (2,232) ​ ​ — ​ ​ 3,628 ​ ​ (3,628) ​ ​ (2,232) ​ Total operating expenses ​ ​ 3,783,874 ​ ​ 811,698 ​ ​ 342,875 ​ ​ (342,875) ​ ​ 4,595,572 ​ Operating income (loss) ​ $ 116,637 ​ ​ (92,777) ​ ​ 555,327 ​ ​ (555,327) ​ ​ 23,860 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity in earnings of unconsolidated affiliates ​ $ 77,085 ​ ​ — ​ ​ 90,451 ​ ​ (90,451) ​ ​ 77,085 ​ ​ ​ 54 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ Equity Method ​ ​ ​ ​ ​ ​ ​ Exploration ​ ​ ​ Investment in ​ Elimination of ​ ​ ​ ​ ​ and ​ ​ ​ Antero ​ Unconsolidated ​ Consolidated ​ ​ Production Marketing Midstream Affiliates Total Revenue and other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas sales ​ $ 5,520,419 ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,520,419 ​ Natural gas liquids sales ​ ​ 2,498,657 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,498,657 ​ Oil sales ​ ​ 275,673 ​ ​ — ​ ​ — ​ ​ — ​ ​ 275,673 ​ Commodity derivative fair value losses ​ ​ (1,615,836) ​ ​ — ​ ​ — ​ ​ — ​ ​ (1,615,836) ​ Gathering, compression and water handling ​ ​ — ​ ​ — ​ ​ 990,657 ​ ​ (990,657) ​ ​ — ​ Marketing ​ ​ — ​ ​ 416,758 ​ ​ — ​ ​ — ​ ​ 416,758 ​ Amortization of deferred revenue, VPP ​ ​ 37,603 ​ ​ — ​ ​ — ​ ​ — ​ ​ 37,603 ​ Other income (loss) ​ ​ 5,162 ​ ​ — ​ ​ (70,672) ​ ​ 70,672 ​ ​ 5,162 ​ Total revenue ​ ​ 6,721,678 ​ ​ 416,758 ​ ​ 919,985 ​ ​ (919,985) ​ ​ 7,138,436 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ ​ 99,595 ​ ​ — ​ ​ — ​ ​ — ​ ​ 99,595 ​ Gathering and compression ​ ​ 892,533 ​ ​ — ​ ​ 75,889 ​ ​ (75,889) ​ ​ 892,533 ​ Processing ​ ​ 869,744 ​ ​ — ​ ​ — ​ ​ — ​ ​ 869,744 ​ Transportation ​ ​ 843,103 ​ ​ — ​ ​ — ​ ​ — ​ ​ 843,103 ​ Water handling ​ ​ — ​ ​ — ​ ​ 104,365 ​ ​ (104,365) ​ ​ — ​ Production and ad valorem taxes ​ ​ 287,406 ​ ​ — ​ ​ — ​ ​ — ​ ​ 287,406 ​ Marketing ​ ​ — ​ ​ 531,304 ​ ​ — ​ ​ — ​ ​ 531,304 ​ Exploration and mine expenses ​ ​ 7,409 ​ ​ — ​ ​ — ​ ​ — ​ ​ 7,409 ​ General and administrative (excluding equity-based compensation) ​ ​ 137,466 ​ ​ — ​ ​ 42,471 ​ ​ (42,471) ​ ​ 137,466 ​ Equity-based compensation ​ ​ 35,443 ​ ​ — ​ ​ 19,654 ​ ​ (19,654) ​ ​ 35,443 ​ Depletion, depreciation and amortization ​ ​ 680,600 ​ ​ — ​ ​ 131,762 ​ ​ (131,762) ​ ​ 680,600 ​ Impairment of property and equipment ​ ​ 149,731 ​ ​ — ​ ​ 3,702 ​ ​ (3,702) ​ ​ 149,731 ​ Accretion of asset retirement obligations ​ ​ 4,627 ​ ​ — ​ ​ 222 ​ ​ (222) ​ ​ 4,627 ​ Loss (gain) on sale of assets ​ ​ 471 ​ ​ — ​ ​ (2,251) ​ ​ 2,251 ​ ​ 471 ​ Contract termination and other expenses ​ ​ 25,099 ​ ​ — ​ ​ 4,705 ​ ​ (4,705) ​ ​ 25,099 ​ Total operating expenses ​ ​ 4,033,227 ​ ​ 531,304 ​ ​ 380,519 ​ ​ (380,519) ​ ​ 4,564,531 ​ Operating income (loss) ​ $ 2,688,451 ​ ​ (114,546) ​ ​ 539,466 ​ ​ (539,466) ​ ​ 2,573,905 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity in earnings of unconsolidated affiliates ​ $ 72,327 ​ ​ — ​ ​ 94,218 ​ ​ (94,218) ​ ​ 72,327 ​ ​ 55 Table of Contents Exploration and Production Segment The following table sets forth selected operating data of the exploration and production segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Increase ​ Percent ​ ​ ​ 2021 2022 (Decrease) Change ​ ​ Production data (1) (2) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas (Bcf) ​ ​ 826 ​ ​ 798 ​ ​ (28) ​ (3) % ​ C2 Ethane (MBbl) ​ ​ 17,262 ​ ​ 18,818 ​ ​ 1,556 ​ 9 % ​ C3+ NGLs (MBbl) ​ ​ 40,496 ​ ​ 39,914 ​ ​ (582) ​ (1) % ​ Oil (MBbl) ​ ​ 3,521 ​ ​ 3,223 ​ ​ (298) ​ (8) % ​ Combined (Bcfe) ​ ​ 1,194 ​ ​ 1,170 ​ ​ (24) ​ (2) % ​ Daily combined production (MMcfe/d) ​ ​ 3,271 ​ ​ 3,204 ​ ​ (67) ​ (2) % ​ Average prices before effects of derivative settlements (3) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas (per Mcf) (4) ​ $ 4.17 ​ ​ 6.92 ​ ​ 2.75 ​ 66 % ​ C2 Ethane (per Bbl) (5) ​ $ 11.99 ​ ​ 20.41 ​ ​ 8.42 ​ 70 % ​ C3+ NGLs (per Bbl) ​ $ 47.92 ​ ​ 52.98 ​ ​ 5.06 ​ 11 % ​ Oil (per Bbl) ​ $ 57.15 ​ ​ 85.53 ​ ​ 28.38 ​ 50 % ​ Weighted Average Combined (per Mcfe) ​ $ 4.85 ​ ​ 7.09 ​ ​ 2.24 ​ 46 % ​ Average realized prices after effects of derivative settlements (3) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas (per Mcf) ​ $ 3.08 ​ ​ 4.54 ​ ​ 1.46 ​ 47 % ​ C2 Ethane (per Bbl) ​ $ 11.81 ​ ​ 20.38 ​ ​ 8.57 ​ 73 % ​ C3+ NGLs (per Bbl) ​ $ 41.32 ​ ​ 52.63 ​ ​ 11.31 ​ 27 % ​ Oil (per Bbl) ​ $ 52.80 ​ ​ 84.88 ​ ​ 32.08 ​ 61 % ​ Weighted Average Combined (per Mcfe) ​ $ 3.88 ​ ​ 5.46 ​ ​ 1.58 ​ 41 % ​ Average costs (per Mcfe): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ $ 0.08 ​ ​ 0.09 ​ ​ 0.01 ​ 13 % ​ Gathering and compression ​ $ 0.73 ​ ​ 0.76 ​ ​ 0.03 ​ 4 % ​ Processing ​ $ 0.66 ​ ​ 0.74 ​ ​ 0.08 ​ 12 % ​ Transportation ​ $ 0.70 ​ ​ 0.72 ​ ​ 0.02 ​ 3 % ​ Production and ad valorem taxes ​ $ 0.17 ​ ​ 0.25 ​ ​ 0.08 ​ 47 % ​ Marketing expense, net ​ $ 0.08 ​ ​ 0.10 ​ ​ 0.02 ​ 25 % ​ Depletion, depreciation, amortization and accretion ​ $ 0.62 ​ ​ 0.59 ​ ​ (0.03) ​ (5) % ​ General and administrative (excluding equity-based compensation) ​ $ 0.10 ​ ​ 0.12 ​ ​ 0.02 ​ 20 % ​ (1) Production data excludes volumes related to the VPP.
Biggest changeYear Ended December 31, 2022 Compared to Year Ended December 31, 2023 The operating results of our reportable segments were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ Equity Method ​ ​ ​ ​ ​ ​ ​ Exploration ​ ​ ​ Investment in ​ Elimination of ​ ​ ​ ​ ​ and ​ ​ ​ Antero ​ Unconsolidated ​ Consolidated ​ ​ Production Marketing Midstream Affiliate Total Revenue and other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas sales ​ $ 5,520,419 ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,520,419 ​ Natural gas liquids sales ​ ​ 2,498,657 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,498,657 ​ Oil sales ​ ​ 275,673 ​ ​ — ​ ​ — ​ ​ — ​ ​ 275,673 ​ Commodity derivative fair value losses ​ ​ (1,615,836) ​ ​ — ​ ​ — ​ ​ — ​ ​ (1,615,836) ​ Gathering, compression and water handling ​ ​ — ​ ​ — ​ ​ 919,985 ​ ​ (919,985) ​ ​ — ​ Marketing ​ ​ — ​ ​ 416,758 ​ ​ — ​ ​ — ​ ​ 416,758 ​ Amortization of deferred revenue, VPP ​ ​ 37,603 ​ ​ — ​ ​ — ​ ​ — ​ ​ 37,603 ​ Other revenue and income ​ ​ 5,162 ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,162 ​ Total revenue ​ ​ 6,721,678 ​ ​ 416,758 ​ ​ 919,985 ​ ​ (919,985) ​ ​ 7,138,436 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ ​ 99,595 ​ ​ — ​ ​ — ​ ​ — ​ ​ 99,595 ​ Gathering and compression ​ ​ 892,533 ​ ​ — ​ ​ 75,889 ​ ​ (75,889) ​ ​ 892,533 ​ Processing ​ ​ 869,744 ​ ​ — ​ ​ — ​ ​ — ​ ​ 869,744 ​ Transportation ​ ​ 843,103 ​ ​ — ​ ​ — ​ ​ — ​ ​ 843,103 ​ Water handling ​ ​ — ​ ​ — ​ ​ 104,365 ​ ​ (104,365) ​ ​ — ​ Production and ad valorem taxes ​ ​ 287,406 ​ ​ — ​ ​ — ​ ​ — ​ ​ 287,406 ​ Marketing ​ ​ — ​ ​ 531,304 ​ ​ — ​ ​ — ​ ​ 531,304 ​ Exploration and mine expenses ​ ​ 7,409 ​ ​ — ​ ​ — ​ ​ — ​ ​ 7,409 ​ General and administrative (excluding equity-based compensation) ​ ​ 137,466 ​ ​ — ​ ​ 42,471 ​ ​ (42,471) ​ ​ 137,466 ​ Equity-based compensation ​ ​ 35,443 ​ ​ — ​ ​ 19,654 ​ ​ (19,654) ​ ​ 35,443 ​ Depletion, depreciation and amortization ​ ​ 680,600 ​ ​ — ​ ​ 131,762 ​ ​ (131,762) ​ ​ 680,600 ​ Impairment of property and equipment ​ ​ 149,731 ​ ​ — ​ ​ 3,702 ​ ​ (3,702) ​ ​ 149,731 ​ Accretion of asset retirement obligations ​ ​ 4,627 ​ ​ — ​ ​ 222 ​ ​ (222) ​ ​ 4,627 ​ Contract termination, loss contingency and other operating expenses ​ ​ 25,099 ​ ​ — ​ ​ 4,705 ​ ​ (4,705) ​ ​ 25,099 ​ Loss (gain) on sale of assets ​ ​ 471 ​ ​ — ​ ​ (2,251) ​ ​ 2,251 ​ ​ 471 ​ Total operating expenses ​ ​ 4,033,227 ​ ​ 531,304 ​ ​ 380,519 ​ ​ (380,519) ​ ​ 4,564,531 ​ Operating income (loss) ​ $ 2,688,451 ​ ​ (114,546) ​ ​ 539,466 ​ ​ (539,466) ​ ​ 2,573,905 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity in earnings of unconsolidated affiliates ​ $ 72,327 ​ ​ — ​ ​ 94,218 ​ ​ (94,218) ​ ​ 72,327 ​ ​ ​ 56 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ Equity Method ​ ​ ​ ​ ​ ​ ​ Exploration ​ ​ ​ Investment in ​ Elimination of ​ ​ ​ ​ ​ and ​ ​ ​ Antero ​ Unconsolidated ​ Consolidated ​ ​ Production Marketing Midstream Affiliate Total Revenue and other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas sales ​ $ 2,192,349 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,192,349 ​ Natural gas liquids sales ​ ​ 1,836,950 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,836,950 ​ Oil sales ​ ​ 247,146 ​ ​ — ​ ​ — ​ ​ — ​ ​ 247,146 ​ Commodity derivative fair value gains ​ ​ 166,324 ​ ​ — ​ ​ — ​ ​ — ​ ​ 166,324 ​ Gathering, compression and water handling ​ ​ — ​ ​ — ​ ​ 1,041,771 ​ ​ (1,041,771) ​ ​ — ​ Marketing ​ ​ — ​ ​ 206,122 ​ ​ — ​ ​ — ​ ​ 206,122 ​ Amortization of deferred revenue, VPP ​ ​ 30,552 ​ ​ — ​ ​ — ​ ​ — ​ ​ 30,552 ​ Other revenue and income ​ ​ 2,529 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,529 ​ Total revenue ​ ​ 4,475,850 ​ ​ 206,122 ​ ​ 1,041,771 ​ ​ (1,041,771) ​ ​ 4,681,972 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ ​ 118,441 ​ ​ — ​ ​ — ​ ​ — ​ ​ 118,441 ​ Gathering and compression ​ ​ 858,462 ​ ​ — ​ ​ 95,507 ​ ​ (95,507) ​ ​ 858,462 ​ Processing ​ ​ 1,014,181 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,014,181 ​ Transportation ​ ​ 769,715 ​ ​ — ​ ​ — ​ ​ — ​ ​ 769,715 ​ Water handling ​ ​ — ​ ​ — ​ ​ 117,658 ​ ​ (117,658) ​ ​ — ​ Production and ad valorem taxes ​ ​ 158,855 ​ ​ — ​ ​ — ​ ​ — ​ ​ 158,855 ​ Marketing ​ ​ — ​ ​ 284,965 ​ ​ — ​ ​ — ​ ​ 284,965 ​ Exploration and mine expenses ​ ​ 2,700 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,700 ​ General and administrative (excluding equity-based compensation) ​ ​ 164,997 ​ ​ — ​ ​ 39,462 ​ ​ (39,462) ​ ​ 164,997 ​ Equity-based compensation ​ ​ 59,519 ​ ​ — ​ ​ 31,606 ​ ​ (31,606) ​ ​ 59,519 ​ Depletion, depreciation and amortization ​ ​ 689,966 ​ ​ — ​ ​ 136,059 ​ ​ (136,059) ​ ​ 689,966 ​ Impairment of property and equipment ​ ​ 51,302 ​ ​ — ​ ​ 146 ​ ​ (146) ​ ​ 51,302 ​ Accretion of asset retirement obligations ​ ​ 3,244 ​ ​ — ​ ​ 177 ​ ​ (177) ​ ​ 3,244 ​ Loss (gain) on sale of assets ​ ​ (447) ​ ​ — ​ ​ 6,030 ​ ​ (6,030) ​ ​ (447) ​ Contract termination, loss contingency and other operating expenses ​ ​ 29,179 ​ ​ 23,763 ​ ​ 3,264 ​ ​ (3,264) ​ ​ 52,942 ​ Total operating expenses ​ ​ 3,920,114 ​ ​ 308,728 ​ ​ 429,909 ​ ​ (429,909) ​ ​ 4,228,842 ​ Operating income (loss) ​ $ 555,736 ​ ​ (102,606) ​ ​ 611,862 ​ ​ (611,862) ​ ​ 453,130 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity in earnings of unconsolidated affiliates ​ $ 82,952 ​ ​ — ​ ​ 105,456 ​ ​ (105,456) ​ ​ 82,952 ​ ​ 57 Table of Contents Exploration and Production Segment The following table sets forth selected operating data of the exploration and production segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Amount of ​ ​ ​ ​ ​ ​ December 31, ​ Increase ​ Percent ​ ​ ​ 2022 2023 (Decrease) Change ​ ​ Production data (1) (2) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas (Bcf) ​ ​ 798 ​ ​ 815 ​ ​ 17 ​ 2 % ​ C2 Ethane (MBbl) ​ ​ 18,818 ​ ​ 24,657 ​ ​ 5,839 ​ 31 % ​ C3+ NGLs (MBbl) ​ ​ 39,914 ​ ​ 41,927 ​ ​ 2,013 ​ 5 % ​ Oil (MBbl) ​ ​ 3,223 ​ ​ 3,874 ​ ​ 651 ​ 20 % ​ Combined (Bcfe) ​ ​ 1,170 ​ ​ 1,238 ​ ​ 68 ​ 6 % ​ Daily combined production (MMcfe/d) ​ ​ 3,204 ​ ​ 3,392 ​ ​ 188 ​ 6 % ​ Average prices before effects of derivative settlements (3) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas (per Mcf) ​ $ 6.92 ​ ​ 2.69 ​ ​ (4.23) ​ (61) % ​ C2 Ethane (per Bbl) (4) ​ $ 20.41 ​ ​ 10.14 ​ ​ (10.27) ​ (50) % ​ C3+ NGLs (per Bbl) ​ $ 52.98 ​ ​ 37.85 ​ ​ (15.13) ​ (29) % ​ Oil (per Bbl) ​ $ 85.53 ​ ​ 63.80 ​ ​ (21.73) ​ (25) % ​ Weighted Average Combined (per Mcfe) ​ $ 7.09 ​ ​ 3.45 ​ ​ (3.64) ​ (51) % ​ Average realized prices after effects of derivative settlements (3) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas (per Mcf) ​ $ 4.54 ​ ​ 2.66 ​ ​ (1.88) ​ (41) % ​ C2 Ethane (per Bbl) (4) ​ $ 20.38 ​ ​ 10.14 ​ ​ (10.24) ​ (50) % ​ C3+ NGLs (per Bbl) ​ $ 52.63 ​ ​ 37.80 ​ ​ (14.83) ​ (28) % ​ Oil (per Bbl) ​ $ 84.88 ​ ​ 63.50 ​ ​ (21.38) ​ (25) % ​ Weighted Average Combined (per Mcfe) ​ $ 5.46 ​ ​ 3.43 ​ ​ (2.03) ​ (37) % ​ Average costs (per Mcfe): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ $ 0.09 ​ ​ 0.10 ​ ​ 0.01 ​ 11 % ​ Gathering and compression ​ $ 0.76 ​ ​ 0.69 ​ ​ (0.07) ​ (9) % ​ Processing ​ $ 0.74 ​ ​ 0.82 ​ ​ 0.08 ​ 11 % ​ Transportation ​ $ 0.72 ​ ​ 0.62 ​ ​ (0.10) ​ (14) % ​ Production and ad valorem taxes ​ $ 0.25 ​ ​ 0.13 ​ ​ (0.12) ​ (48) % ​ Marketing expense, net ​ $ 0.10 ​ ​ 0.06 ​ ​ (0.04) ​ (40) % ​ General and administrative (excluding equity-based compensation) ​ $ 0.12 ​ ​ 0.13 ​ ​ 0.01 ​ 8 % ​ Depletion, depreciation, amortization and accretion ​ $ 0.59 ​ ​ 0.56 ​ ​ (0.03) ​ (5) % ​ (1) Production data excludes volumes related to the VPP.
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities.
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities.
Proved undeveloped reserves include reserves that are expected to be drilled and developed within five years; wells that are not drilled within five years from booking are reclassified from proved reserves to probable reserves. Reserves are used in our depletion calculation and in assessing the carrying value of our oil and gas properties.
Proved undeveloped reserves include reserves that are expected to be drilled and developed within five years; wells that are not drilled within five years from booking are reclassified from proved reserves to probable reserves. Reserves are used in our proved properties depletion calculation and in assessing the carrying value of our oil and gas properties.
Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis. We record deferred income tax expense to the extent our deferred tax liabilities exceed our deferred tax assets.
Under this approach, deferred income tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis. We record deferred income tax expense to the extent our deferred income tax liabilities exceed our deferred income tax assets.
We record a deferred income tax benefit to the extent our deferred tax assets exceed our deferred tax liabilities. We are subject to state and federal income taxes, but are currently not in a cash tax paying position with respect to federal income taxes.
We record a deferred income tax benefit to the extent our deferred income tax assets exceed our deferred income tax liabilities. We are subject to state and federal income taxes, but are currently not in a cash tax paying position with respect to federal income taxes.
The ultimate realization of deferred tax assets is dependent upon our ability to generate future taxable income during the periods in which our deferred tax assets are deductible.
The ultimate realization of deferred income tax assets is dependent upon our ability to generate future taxable income during the periods in which our deferred income tax assets are deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment, estimates of which may be imprecise due to unforeseen future events or conditions outside of our control, including changes in commodity prices or changes to tax laws and regulations.
Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income and tax planning strategies in making this assessment, estimates of which may be imprecise due to unforeseen future events or conditions outside of our control, including changes in commodity prices or changes to tax laws and regulations.
The amount of deferred tax assets considered realizable could change based upon the amounts of taxable income actually generated, or as estimates of future taxable income change.
The amount of deferred income tax assets considered realizable could change based upon the amounts of taxable income actually generated, or as estimates of future taxable income change.
Our equity awards vest over three or four year service periods, and our equity incentive program began returning to normal levels in 2021 . See Note 9—Equity-Based Compensation and Cash Awards to the consolidated financial statements for more information. Depletion, depreciation and amortization expense .
Our equity awards vest over three or four year service periods, and our equity incentive program began returning to normal levels in 2021 . See Note 9—Equity-Based Compensation to the consolidated financial statements for more information. Depletion, depreciation and amortization expense .
Our net operating cash flows are sensitive to many variables, the most significant of which is the volatility of natural gas, NGL and oil prices, as well as volatility in the cash flows attributable to settlement of our commodity derivatives. Prices for natural gas, NGLs and oil are primarily determined by prevailing market conditions.
Our net operating cash flows are sensitive to many variables, the most significant of which is the volatility of natural gas, NGLs and oil prices, as well as volatility in the cash flows attributable to settlement of our commodity derivatives. Prices for natural gas, NGLs and oil are primarily determined by prevailing market conditions.
We record a valuation allowance when we believe all or a portion of our deferred tax assets will not be realized. In assessing the realizability of our deferred tax assets, management considers whether some portion or all of the deferred tax assets will be realized based on a more-likely-than-not standard of judgment.
We record a valuation allowance when we believe all or a portion of our deferred income tax assets will not be realized. In assessing the realizability of our deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will be realized based on a more-likely-than-not standard of judgment.
Potential future legislation or the imposition of new or increased taxes may have a significant effect on our future taxable position. The impact of any such change would be recorded in the period in which such interpretation is received or legislation is enacted. Year Ended December 31, 2020 Compared to Year Ended December 31, 2021 Refer to “Item 7.
Potential future legislation or the imposition of new or increased taxes may have a significant effect on our future taxable position. The impact of any such change would be recorded in the period in which such interpretation is received or legislation is enacted. Year Ended December 31, 2021 Compared to Year Ended December 31, 2022 Refer to “Item 7.
Our ability to make significant acquisitions for cash would require us to utilize borrowings on the Credit Facility or obtain additional equity or debt financing, which we may not be able to obtain on terms acceptable to us, or at all. The Credit Facility is funded by a syndicate of 15 banks.
Our ability to make significant acquisitions for cash would require us to utilize borrowings on the Credit Facility or obtain additional equity or debt financing, which we may not be able to obtain on terms acceptable to us, or at all. The Credit Facility is funded by a syndicate of 16 banks.
The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears beginning on page F-2 in this Annual Report on Form 10-K.
The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears beginning on page F-2 in this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
In addition, we periodically enter into contracts that contain embedded features that are required to be bifurcated and accounted for separately as derivatives. Due to our improved liquidity and leverage position as compared to past levels, the percentage of our expected production that we hedge has decreased.
In addition, we periodically enter into contracts that contain embedded features that are required to be bifurcated and accounted for separately as derivatives. Due to our improved liquidity and leverage position as compared to historical levels, the percentage of our expected production that we hedge has decreased.
Our calculation of such after effects includes gains (losses) on settlements of commodity derivatives (but does not include proceeds from the derivative monetizations in 2021), which do not qualify for hedge accounting because we do not designate or document them as hedges for accounting purposes.
Our calculation of such after effects includes gains (losses) on settlements of commodity derivatives (but does not include proceeds from the derivative monetizations in 2023), which do not qualify for hedge accounting because we do not designate or document them as hedges for accounting purposes.
Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures and is recorded, processed, summarized and reported, within the 67 Table of Contents time periods specified in the rules and forms of the SEC.
Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures and is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC.
ITEM 6. RESERVED ​ 47 Table of Contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
ITEM 6. RESERVED ​ ​ ​ 50 Table of Contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
As of December 31, 2022, we did not have any past-due receivables from, or payables to, any of the counterparties to our derivative contracts. Interest Rate Risks Our primary exposure to interest rate risk results from outstanding borrowings under the Credit Facility, which has a floating interest rate.
As of December 31, 2023, we did not have any past-due receivables from, or payables to, any of the counterparties to our derivative contracts. Interest Rate Risks Our primary exposure to interest rate risk results from outstanding borrowings under the Credit Facility, which has a floating interest rate.
Some of the key factors that could cause actual results to vary from our expectations include changes in natural gas, NGLs and oil prices, the timing of planned capital expenditures, our ability to fund our development programs, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as our ability to access them, impacts of world health events, including the COVID-19 pandemic, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business, as well as those factors discussed below, all of which are difficult to predict.
Some of the key factors that could cause actual results to vary from our expectations include changes in natural gas, NGLs and oil prices, the timing of planned capital expenditures, our ability to fund our development programs, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as our ability to access them, impacts of world health events and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business, as well as those factors discussed below, all of which are difficult to predict.
We did not record any impairments for proved properties during the years ended December 31, 2020, 2021 and 2022. Based on current future commodity prices, we currently do not anticipate having to record any impairment charge for our proved properties in the near future.
We did not record any impairments for proved properties during the years ended December 31, 2021, 2022 and 2023. Based on current future commodity prices, we currently do not anticipate having to record any impairment charge for our proved properties in the near future.
We also classify firm transportation costs related to capacity contracted for in advance of having sufficient production and infrastructure to fully 52 Table of Contents utilize this excess capacity as marketing expenses, because we market this excess capacity to third-parties.
We also classify firm 54 Table of Contents transportation costs related to capacity contracted for in advance of having sufficient production and infrastructure to fully utilize this excess capacity as marketing expenses, because we market this excess capacity to third parties.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity” in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the cash flows for the year ended December 31, 2020 compared to the year ended December 31, 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of the cash flows for the year ended December 31, 2021 compared to the year ended December 31, 2022.
Our independent reserve engineers and internal technical staff must make a number of subjective assumptions based on their professional judgment in developing reserve estimates. Reserve estimates consider recent production levels and other technical information about each field.
Our independent reserve engineers and internal technical staff must make a number of subjective assumptions based on their professional judgment in developing reserve estimates. Reserve estimates consider recent production levels and other technical information about each reservoir.
The Credit Facility has a borrowing base of $3.5 billion and current lender commitments of $1.5 billion. The borrowing base is redetermined semi-annually based on certain factors including our reserves, natural gas, NGLs and oil commodity prices, and the value of our hedge portfolio. The next redetermination of the borrowing base is scheduled to occur in April 2023.
The Credit Facility has a borrowing base of $3.5 billion and current lender commitments of $1.6 billion. The borrowing base is redetermined semi-annually based on certain factors including our reserves, natural gas, NGLs and oil commodity prices, and the value of our hedge portfolio. The next redetermination of the borrowing base is scheduled to occur in April 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the results of operations for the year ended December 31, 2020 compared to the year ended December 31, 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of the results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2022.
Borrowings under the Credit Facility are subject to borrowing base limitations based on the collateral value of our assets and are subject to regular semi-annual redeterminations. As of December 31, 2022, the borrowing base was $3.5 billion and lender commitments were $1.5 billion. The next redetermination of the borrowing base is scheduled to occur in April 2023.
Borrowings under the Credit Facility are subject to borrowing base limitations based on the collateral value of our assets and are subject to regular semi-annual redeterminations. As of December 31, 2023, the borrowing base was $3.5 billion and lender commitments were $1.6 billion. The next redetermination of the borrowing base is scheduled to occur in April 2024.
Natural Gas, NGLs and Oil Reserve Quantities and Standardized Measure of Future Cash Flows Our internal technical staff prepares the estimates of natural gas, NGLs and oil reserves and associated future net cash flows, which are audited by our independent reserve engineers.
Natural Gas, NGLs and Oil Reserve Quantities Our internal technical staff prepares the estimates of natural gas, NGLs and oil reserves and associated future net cash flows, which are audited by our independent reserve engineers.
Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2022 at a level of reasonable assurance.
Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2023 at a level of reasonable assurance.
Drilling Partnership On February 17, 2021, we announced the formation of a drilling partnership with QL Capital Partners (“QL”), an affiliate of Quantum Energy Partners, for our 2021 through 2024 drilling program.
Drilling Partnership On February 17, 2021, we announced the formation of a drilling partnership with QL, an affiliate of Quantum Energy Partners, for our 2021 through 2024 drilling program.
Additionally, for each annual tranche in which QL participates, together with QL, we 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.
Additionally, for each annual tranche, we 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.
Based on this evaluation, management of Antero Resources Corporation concluded that our internal control over financial reporting was effective as of December 31, 2022.
Based on this evaluation, management of Antero Resources Corporation concluded that our internal control over financial reporting was effective as of December 31, 2023.
To mitigate some of the potential negative impact on our cash flows caused by changes in commodity prices, we enter into financial derivative instruments for a portion of our natural gas, NGLs and oil production when management believes that favorable future prices can be secured.
We may enter into financial derivative instruments for a portion of our natural gas, NGLs and oil production when circumstances warrant and management believes that favorable future prices can be secured in order to mitigate some of the potential negative impact on our cash flows caused by changes in commodity prices.
Based on strip prices as of December 31, 2022, we believe that net cash provided from operating activities and available borrowings under the Credit Facility will be sufficient to meet our cash requirements, including normal operating needs, debt service 60 Table of Contents obligations, capital expenditures, and commitments and contingencies for at least the next 12 months.
Based on strip prices as of December 31, 2023, we believe that net cash provided from operating activities and available borrowings under the Credit Facility will be sufficient to meet our cash requirements, including normal operating needs, debt service obligations, capital expenditures and commitments and contingencies for at least the next 12 months.
Because we do not designate these derivatives as accounting hedges, they do not receive hedge accounting treatment. Consequently, all mark-to-market gains or losses, as well as cash receipts or payments on settled derivative instruments, are recognized in our statements of operations.
Because we do not designate these derivatives as accounting hedges, they do not receive hedge accounting treatment. Consequently, all mark-to-market gains or losses, as well as cash receipts or payments on settled derivative instruments, are recognized in our statements of operations and comprehensive income (loss).
Because we do not designate these derivatives as accounting hedges, they do not receive hedge accounting treatment; therefore, all mark-to- market gains or losses, as well as cash receipts or payments on settled derivative instruments, are recognized in our statements of operations.
Because we do not designate these derivatives as accounting hedges, they do not receive hedge accounting treatment; therefore, all mark to market gains or losses, as well as cash receipts or payments on settled derivative instruments, are recognized in our statements of operations and comprehensive income (loss).
If future prices decline from December 31, 2022, the fair value of our properties may be below their carrying amounts and an impairment charge may be necessary. However, we are unable to predict commodity prices with any greater precision than the futures 64 Table of Contents market.
If future prices decline from December 31, 2023, the fair value of our properties may be below their carrying amounts and an impairment charge may be necessary. However, we are unable to predict commodity prices with any greater precision than the futures market.
Impairment of oil and gas properties related to unproved properties for leases that have expired, or are expected to expire, was $224 million, $91 million and $98 million for the years ended December 31, 2020, 2021 and 2022, respectively.
Impairment of oil and gas properties related to unproved properties for leases that have expired, or are expected to expire, was $91 million, $98 million and $51 million for the years ended December 31, 2021, 2022 and 2023, respectively.
In order to manage the inflation risk currently present in the United States’ economy, the Federal Reserve has utilized monetary policy in the form of interest rate increases in an effort to bring the inflation rate in line with its stated goal of 2% on a long-term basis.
In order to manage the inflation risk present in the United States’ economy, the Federal Reserve utilized monetary policy in the form of interest rate increases beginning in March 2022 in an effort to bring the inflation rate in line with its stated goal of 2% on a long-term basis.
We finance a portion of our capital expenditures, working capital requirements and acquisitions with borrowings under our Credit Facility, which until October 26, 2021 had a variable rate of interest based on LIBOR or the Alternate Base Rate and on and after October 26, 2021 has a variable rate of interest based on SOFR ( defined below in “ —Capital Resources and Liquidity—Debt Agreements—Credit Facility”) or the Alternate Base Rate (each term as defined in the Credit Facility).
We finance a portion of our capital expenditures, working capital requirements and acquisitions with borrowings under our Credit Facility, which has a variable rate of interest based on SOFR (defined below in “—Capital Resources and Liquidity—Debt Agreements—Credit Facility”) or the Alternate Base Rate (each term as defined in the Credit Facility).
For years ended December 31, 2021 and 2022, our overall effective tax rate was different than the statutory rate of 21% primarily due to the effects of state income taxes, the dividends received deduction, equity-based compensation expenses, noncontrolling interests, the effects of a West Virginia apportionment tax law change enacted in 2021 and changes in Pennsylvania’s corporate income tax rate.
Our effective tax rate was different than the statutory rate of 21% primarily due to the effects of state income taxes, the dividends received deduction, equity-based compensation expenses, noncontrolling interests, the effects of a West Virginia apportionment tax law change enacted in 2021 and changes in Pennsylvania’s corporate income tax rate.
During the year ended December 31, 2022, we received a carry of $29 million attributable to the 2021 tranche. Capital costs in excess of, and cost savings below, a specified percentage of budgeted amounts for each annual tranche will be for our account.
We received a carry of $29 million for each of the 2021 and 2022 tranches during the years ended December 31, 2022 and 2023. Capital costs in excess of, and cost savings below, a specified percentage of budgeted amounts for each annual tranche will be for our account.
(2) Energy Information Administration calendar month average settled futures price. Hedge Position Antero Resources (Excluding Martica) We are exposed to certain commodity price risks relating to our ongoing business operations, and we use derivative instruments as we deem necessary to manage such risks.
(2) Energy Information Administration calendar month average settled futures price. Hedge Position Antero Resources (Excluding Martica) We are exposed to certain commodity price risks relating to our ongoing business operations, and we use derivative instruments when circumstances warrant to manage such risks.
During 2022, our production revenues were comprised of approximately 67% from the sale of natural gas and 33% from the sale of NGLs and oil. Natural gas, NGLs and oil prices are inherently volatile and are influenced by many factors outside of our control.
During 2022 and 2023, our production revenues were comprised of 67% and 51%, respectively, from the sale of natural gas and 33% and 49%, respectively, from the sale of NGLs and oil. Natural gas, NGLs and oil prices are inherently volatile and are influenced by many factors outside of our control.
Severance taxes are paid on produced natural gas and oil based on a percentage of sales prices (not hedged prices) or at fixed per-unit rates established by state authorities. Ad valorem taxes are paid based on the value of our reserves as well as the value of property and equipment. ● Marketing expenses .
Severance taxes are paid on produced natural gas and oil based on a percentage of sales prices, which exclude the effects of our derivative instruments, or at fixed per-unit rates established by state authorities. Ad valorem taxes are paid based on the value of our reserves as well as the value of property and equipment. ● Marketing expenses .
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.
Under the terms of the arrangement, QL funded development capital of 20%, 15% and 15% for wells spud in 2021, 2022 and 2023, respectively, and will fund 20% of development capital for wells spud in 2024, which funding amounts represent QL’s proportionate working interest in such wells.
See Note 9—Equity-Based Compensation and Cash Awards to the consolidated financial statements for more information. ● Interest expense.
See Note 9—Equity-Based Compensation to the consolidated financial statements for more information. ● Interest expense.
The average annualized interest rate incurred on the Credit Facility for borrowings during the year ended December 31, 2022 was approximately 3.9%. We estimate that a 1.0% increase in the applicable average interest rates for the year ended December 31, 2022 would have resulted in an estimated $2 million increase in interest expense. ITEM 8.
The average annualized interest rate incurred on the Credit Facility for borrowings during the year ended December 31, 2023 was 7.6%. We estimate that a 1.0% increase in the applicable average interest rates for the year ended December 31, 2023 would have resulted in an estimated $3 million increase in interest expense. ITEM 8.
Excluding the litigation proceeds, higher commodity prices (excluding the effects of derivative settlements) during the year ended December 31, 2022 accounted for an approximate $2.3 billion increase in year-over-year natural gas sales revenue (calculated as the change in the year-to-year average price excluding the net proceeds from the litigation times current year production volumes).
Lower commodity prices (excluding the effects of derivative settlements) during the year ended December 31, 2023 accounted for an approximate $3.4 billion decrease in year-over-year natural gas sales revenue (calculated as the change in the year-to-year average price excluding the net proceeds from the litigation times current year production volumes).
General and administrative expense (excluding equity-based compensation expense) increased from $125 million for the year ended December 31, 2021 to $137 million for the year ended December 31, 2022, an increase of $12 million or 10%, primarily due to higher salary and wage expense, professional service fees, office operating costs and software license costs between periods.
General and administrative expense (excluding equity-based compensation expense) increased from $137 million for the year ended December 31, 2022 to $165 million for the year ended December 31, 2023, an increase of $28 million or 20%, primarily due to higher salary and wage expense, professional service fees, office operating costs and software license costs between periods.
Marketing expense decreased from $812 million for the year ended December 31, 2021 to $531 million for the year ended December 31, 2022, a decrease of $281 million, or 35%. Marketing expense includes the cost of third-party purchased natural gas, NGLs and oil as well as firm transportation costs, including costs related to current excess firm capacity.
Marketing expense decreased from $531 million for the year ended December 31, 2022 to $285 million for the year ended December 31, 2023, a decrease of $246 million, or 46%. Marketing expense includes the cost of third-party purchased natural gas, NGLs and oil as well as firm transportation costs, including costs related to current excess firm capacity.
Net cash provided by operating activities was $1.7 billion and $3.1 billion for the years ended December 31, 2021 and 2022, respectively.
Net cash provided by operating activities was $3.1 billion and $1.0 billion for the years ended December 31, 2022 and 2023, respectively.
See Note 59 Table of Contents 13—Income Taxes to our consolidated financial statements more for information. As of December 31, 2021 and 2022, we had U.S. federal and state NOL carryforwards of $2.3 billion and $1.0 billion, respectively. Many of these NOL carryforwards expire at various dates between 2024 and 2041 while others have no expiration date.
See Note 13—Income Taxes to our consolidated financial statements more for information. 61 Table of Contents As of December 31, 2023, we had U.S. federal and state NOL carryforwards of $1.0 billion and $1.9 billion, respectively. Many of these NOL carryforwards expire at various dates between 2025 and 2041 while others have no expiration date.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Reports of Independent Registered Public Accounting Firm, Consolidated Financial Statements, and supplementary financial data required for this Item are set forth beginning on page F-2 of this Annual Report on Form 10-K and are incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Reports of Independent Registered Public Accounting Firm, Consolidated Financial Statements, and supplementary financial data required for this Item are set forth beginning on page F-2 of this Annual Report on Form 10-K and are incorporated herein by reference. ITEM 9.
If one or more banks should not be able to do so, we may not have the full availability of the Credit Facility. 2022 Capital Spending and 2023 Capital Budget For the year ended December 31, 2022, our total consolidated capital expenditures were approximately $986 million, including drilling and completion expenditures of $821 million, leasehold additions of $150 million and other capital expenditures of $15 million.
If one or more banks should not be able to do so, we may not have the full availability of the Credit Facility. 2023 Capital Spending and 2024 Capital Budget For the year ended December 31, 2023, our total consolidated capital expenditures were $1.1 billion, including drilling and completion expenditures of $909 million, leasehold additions of $148 million and other capital expenditures of $15 million.
During both periods, we recognized impairments primarily related to expiring leases as well as design and initial costs related to pads we no longer plan to place into service . Contract termination expense .
During both periods, we recognized impairments primarily related to expiring leases as well as design and initial costs related to pads we no longer plan to place into service . Contract termination, loss contingency and other operating expenses .
We monitor the economic factors that impact natural gas, NGL and oil prices, including domestic and foreign supply and demand indicators, domestic and foreign commodity inventories, the actions of Organization of Petroleum Exporting Countries and other large producing nations and the current Russia-Ukraine conflict, among others.
We monitor the economic factors that impact natural gas, NGLs and oil prices, including domestic and foreign supply and demand indicators, domestic and foreign commodity inventories, the actions of Organization of Petroleum Exporting Countries and other large producing nations and the current conflicts in Ukraine and in the Middle East, among others.
In order to manage our exposure to natural gas, NGLs and oil price volatility, we enter into derivative transactions from time to time, which may include commodity swap agreements, basis swap agreements, collar agreements and other similar agreements related to the price risk associated with our production.
Derivative Instruments In order to manage our exposure to natural gas, NGLs and oil price volatility, we may enter into derivative transactions from time to time, which agreements could include commodity fixed price swaps, basis swaps, collars or other similar instruments related to the price risk associated with our production.
Lease operating expense increased from $97 million, or $0.08 per Mcfe, for the year ended December 31, 2021 to $100 million, or $0.09 per Mcfe, for the year ended December 31, 2022, an increase of $3 million or $0.01 per Mcfe, primarily due to higher oilfield service and produced water handling costs. Gathering, compression, processing and transportation expense.
Lease operating expense increased from $100 million, or $0.09 per Mcfe, for the year ended December 31, 2022 to $118 million, or $0.10 per Mcfe, for the year ended December 31, 2023, an increase of $18 million or $0.01 per Mcfe, primarily due to higher oilfield service, workover and produced water handling costs. Gathering, compression, processing and transportation expense.
A gain or loss is recognized for all other sales of producing properties. Unproved properties with significant acquisition costs are assessed for impairment on a property by property basis, and any impairment in value is charged to expense. Impairment is assessed based on remaining lease terms, drilling results, reservoir performance, commodity price outlooks and future plans to develop acreage.
Unproved properties with significant acquisition costs are assessed for impairment on a property by property basis, and any impairment in value is charged to expense. Impairment is assessed based on remaining lease terms, drilling results, reservoir performance, commodity price outlooks and future plans to develop acreage.
As of December 31, 2022, we had an outstanding balance under the Credit Facility of $35 million and outstanding letters of credit of $504 million. 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).
As of December 31, 2023, we had an outstanding balance under the Credit Facility of $417 million and outstanding letters of credit of $501 million. 63 Table of Contents 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).
However, our supply chain has not experienced any significant interruptions as a result of the COVID-19 pandemic or global supply and demand imbalances. Inflationary pressures, particularly as they relate to certain of our long-term contracts with CPI-based adjustments, and supply chain disruptions have and could continue to result in increases to our operating and capital costs that are not fixed.
However, our supply chain has not experienced any significant interruptions as a result of such events . Inflationary pressures, particularly as they relate to certain of our long-term contracts with CPI-based adjustments, and supply chain disruptions have and could continue to result in increases to our operating and capital costs that are not fixed.
We elected to settle these conversions by issuing approximately 6 million shares of common stock to the noteholders together with a cash inducement premium of $0.2 million. See Note 7—Long-Term Debt to the unaudited condensed consolidated financial statements for more information.
We elected to settle these conversions and inducements by issuing 7 million shares of common stock 51 Table of Contents to the noteholders together with a cash inducement premium of $0.4 million. See Note 7—Long-Term Debt to the unaudited condensed consolidated financial statements for more information.
Lower natural gas production volumes accounted for an approximate $118 million decrease in year-over-year natural gas sales revenue (calculated as the change in year-to-year volumes times the prior year average price). NGLs sales .
Higher natural gas production volumes accounted for an approximate $121 million increase in year-over-year natural gas sales revenue (calculated as the change in year-to-year volumes times the prior year average price). NGLs sales .
Equity-based compensation expense increased from $20 million for the year ended December 31, 2021 to $35 million for the year ended December 31, 2022, an increase of $15 million or 73%, primarily due to an increase in the annual equity awards granted during the second quarter of 2022 as compared to prior years, which were temporarily and significantly reduced during 2020 and supplemented by our cash awards program .
Noncash equity-based compensation expense increased from $35 million for the year ended December 31, 2022 to $60 million for the year ended December 31, 2023, an increase of $25 million or 68%, primarily due to an increase in the annual equity awards granted during 2022 and 2023 as compared to prior years, which were temporarily and significantly reduced during 2020 and supplemented by our cash awards program .
For our Utica and Marcellus properties, strip pricing would have to decline by more than 30% and 40%, respectively, from year-end 2022 levels before further evaluation of those properties would be required in order to determine if an impairment charge would be necessary under GAAP.
For our Utica and Marcellus properties, strip pricing would have to decline by more than 20% and 25%, respectively, from year end 2023 levels before further evaluation of those properties would be required in order to determine if an impairment charge is necessary.
Higher commodity prices (excluding the effects of derivative settlements) during the year ended December 31, 2022 accounted for an approximate $360 million increase in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes).
Lower commodity prices (excluding the effects of derivative settlements) during the year ended December 31, 2023 accounted for an approximate $888 million decrease in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes).
Higher oil prices for the year ended December 31, 2022 excluding the effects of derivative settlements) accounted for an approximate $92 million increase in year-over-year oil revenues (calculated as the change in the year-to-year average price times current year production volumes).
Lower oil prices for the year ended December 31, 2023 excluding the effects of derivative settlements) accounted for an approximate $84 million decrease in year-over-year oil revenues (calculated as the change in the year-to-year average price times current year production volumes).
Lower ethane marketing volumes accounted for a $31 million decrease in year-over-year marketing revenues (calculated as the change in year-to-year volumes times the prior year average price), and higher ethane prices accounted for an approximate $26 million increase in year-over-year marketing revenues (calculated as the change in the year-to-year average price times current year marketing volumes). Marketing expense.
Higher oil marketing volumes accounted for a $42 million increase in year-over-year marketing revenues (calculated as the change in year-to-year volumes times the prior year average price), and lower oil prices accounted for an approximate $26 million decrease in year-over-year marketing revenues (calculated as the change in the year-to-year average price times current year marketing volumes). ​ 60 Table of Contents Marketing expense.
Current accounting guidance allows only proved natural gas, NGLs and oil reserves to be included in our financial statement disclosures. The SEC has defined proved reserves as the estimated quantities of natural gas, NGLs and oil which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
The SEC has defined proved reserves as the estimated quantities of natural gas, NGLs and oil which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
Amortization of deferred revenues associated with the VPP decreased from $45 million for the year ended December 31, 2021 to $38 million for the year ended December 31, 2022 , a decrease of $7 million or 17%, due to lower production volumes between periods.
Amortization of deferred revenues associated with the VPP decreased from $38 million for the year ended December 31, 2022 to $31 million for the year ended December 31, 2023, a decrease of $7 million or 19%, primarily due to lower production volumes attributable to the VPP properties between periods.
The estimated fair value of our commodity derivative assets has been risk adjusted using a discount rate based upon the counterparties’ respective published credit default swap rates (if available, or if not available, a discount rate based on the applicable Reuters bond rating) as of December 31, 2022. We believe that all of our counterparties currently are acceptable credit risks.
The estimated fair value of our commodity derivative assets has been risk adjusted using a discount rate based upon the counterparties’ respective published credit default swap rates (if available, or if not available, a discount rate based on the applicable Reuters bond rating) as of December 31, 2023.
Lower oil production volumes during the year ended December 31, 2022 accounted for an approximate $17 million decrease in year-over-year oil revenues (calculated as the change in year-to-year volumes times the prior year average price). Commodity derivative fair value losses. Our commodity derivatives include variable price swap contracts, swaptions, basis swap contracts, call options and embedded put options.
Higher oil production volumes during the year ended December 31, 2023 accounted for an approximate $55 million increase in year-over-year oil revenues (calculated as the change in year-to-year volumes times the prior year average price). Commodity derivative fair value losses. Our commodity derivatives included fixed price swap contracts, swaptions, basis swap contracts, call options and embedded put options.
We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the reported amounts in our consolidated financial statements that are not readily apparent from other sources.
Based on our production and our fixed price swap contracts, call option and embedded put option that settled during the year ended December 31, 2022, our revenues would have decreased by approximately $81 million for each $0.10 decrease per MMBtu in natural gas prices and $1.00 decrease per Bbl in oil and NGLs prices, excluding the effects of changes in the fair value of our derivative positions which remain open as of December 31, 2022.
Based on our production and our derivative instruments that settled during the year ended December 31, 2023, our revenues would have decreased by $148 million for each $0.10 decrease per MMBtu in natural gas prices and $1.00 decrease per Bbl in oil and NGLs prices, excluding the effects of changes in the fair value of our derivative positions which remain open as of December 31, 2023.
For the year ended December 31, 2021, commodity derivative fair value losses included $1.2 billion of net cash payments for settled derivative losses, as well as $5 million for payments on derivatives that were settled prior to their contractual settlement dates.
For the year ended December 31, 2023, commodity derivative fair value gains included $25 million of net cash payments for settled commodity derivative losses, as well as $202 million for payments on derivatives that were settled prior to their contractual settlement dates.
Martica Our consolidated VIE, Martica, also maintains a portfolio of fixed swap natural gas, NGL and oil derivatives for the benefit of the noncontrolling interests in Martica. As such, all gains and losses attributable to Martica’s derivative portfolio are fully attributable to the noncontrolling interests in Martica.
See Note 11—Derivative Instruments to the consolidated financial statements for more information. Martica Our consolidated VIE, Martica, also maintains a portfolio of fixed swap natural gas, NGLs and oil derivatives for the benefit of the noncontrolling interests in Martica. As such, all gains and losses attributable to Martica’s derivative portfolio are fully attributable to the noncontrolling interests in Martica.
See Note 7—Long Term Debt to the consolidated financial statements included in this Annual Report on Form 10-K for more information on our Credit Facility. 62 Table of Contents Senior Unsecured Notes The following table summarizes certain material terms of our senior unsecured notes and convertible notes outstanding as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible ​ ​ 2026 Notes ​ 2029 Notes ​ 2030 Notes ​ Notes ​ Outstanding principal (in thousands) ​ $ 96,870 ​ $ 407,115 ​ $ 600,000 ​ $ 56,932 ​ Interest rate ​ ​ 8.375 % ​ 7.625 % ​ 5.735 % ​ 4.25 % Maturity date ​ ​ July 15, 2026 ​ ​ February 1, 2029 ​ ​ March 1, 2030 ​ ​ September 1, 2026 ​ Interest payment dates ​ ​ Jan. 15, July 15 ​ ​ Feb. 1, Aug. 1 ​ ​ Mar. 1, Sept. 1 ​ ​ Mar. 1, Sept. 1 ​ Make-whole redemption date (1) ​ ​ January 15, 2026 ​ ​ February 1, 2027 ​ ​ March 1, 2028 ​ ​ N/A (2) ​ (1) On or after these dates, we may redeem the applicable series of notes, in whole or in part, at a redemption price equal to 100% of the principal amount redeemed, together with accrued and unpaid interest up to the redemption date.
Senior Unsecured Notes The following table summarizes certain material terms of our Senior Notes and 2026 Convertible Notes outstanding as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible ​ ​ 2026 Notes ​ 2029 Notes ​ 2030 Notes ​ Notes ​ Outstanding principal (in thousands) ​ $ 96,870 ​ $ 407,115 ​ $ 600,000 ​ $ 26,386 ​ Interest rate ​ ​ 8.375 % ​ 7.625 % ​ 5.735 % ​ 4.25 % Maturity date ​ ​ July 15, 2026 ​ ​ February 1, 2029 ​ ​ March 1, 2030 ​ ​ September 1, 2026 ​ Interest payment dates ​ ​ Jan. 15, July 15 ​ ​ Feb. 1, Aug. 1 ​ ​ Mar. 1, Sept. 1 ​ ​ Mar. 1, Sept. 1 ​ Make-whole redemption date (1) ​ ​ January 15, 2026 ​ ​ February 1, 2027 ​ ​ March 1, 2028 ​ ​ N/A (2) ​ (1) On or after these dates, we may redeem the applicable series of notes, in whole or in part, at a redemption price equal to 100% of the principal amount redeemed, together with accrued and unpaid interest up to the redemption date.
Other than as provided by the Credit Facility, we are not required to provide credit support or collateral to any of our counterparties under our derivative contracts, nor are they required to provide credit support to us.
We believe that all of the counterparties to our derivative instruments are acceptable credit risks as of December 31, 2023. Other than as provided by the Credit Facility, we are not required to provide credit support or collateral to any of our counterparties under our derivative contracts, nor are they required to provide credit support to us.

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