Antero Resources Q3 2026 profit rises to $367M
HG Production contributed $801.0 million in revenue and $323.8 million in net income from its February 3, 2026 closing through September 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Antero Resources Corporation (AR) reported third-quarter 2026 revenue of $1.563 billion, compared with $1.214 billion in third-quarter 2025, and net income attributable to Antero Resources of $367.1 million, versus $76.2 million. For the first nine months, revenue was $5.068 billion and attributable net income was $1.181 billion; operating cash flow was $1.873 billion, compared with $1.260 billion a year earlier. Third-quarter revenue included $188.6 million of commodity derivative fair value gains.
Antero completed the HG Production acquisition on February 3, 2026, for adjusted cash consideration of $2.803 billion; the acquired assets contributed $801.0 million in revenue and $323.8 million in net income through September 30. The company also closed the Utica Shale asset sale on February 23, 2026, for $800 million before closing adjustments, recognizing a $61.7 million gain for the nine months. Total debt was $2.782 billion at September 30, including $451 million of commercial paper.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue reached $1.563 billion, compared with $1.214 billion in 2025.
- Moderate pointThird-quarter attributable net income was $367.1 million, versus $76.2 million.
- Moderate pointNine-month operating cash flow was $1.873 billion, versus $1.260 billion.
- Minor pointHG assets contributed $323.8 million in net income after closing.
Negative
- None.
Filing Explained
The October paper maturity had a stated facility backstop; $1.64 billion was available at September 30, and the facility was scheduled to mature in 2031.
At
The
The facility’s scheduled maturity was extended from
Key Figures
Key Terms
proportionate consolidation method financial
like-kind exchange transaction financial
fixed price swap agreements financial
three-way collar agreements financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were AR's third-quarter 2026 revenue and net income?
How much did AR pay for HG Production?
What assets were included in AR's Utica Shale sale?
What were AR's commercial paper terms at September 30, 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (IRS Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to section 12(b) of the Act: | ||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated Filer ☐ | ||
Non-accelerated Filer ☐ | Smaller Reporting Company | |
Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Number of shares of the registrant’s common stock outstanding as of October 23, 2026 (in thousands):
Table of Contents
TABLE OF CONTENTS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | | 1 | ||
PART I—FINANCIAL INFORMATION | 3 | |||
Item 1. | | Financial Statements (Unaudited) | 3 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 37 | ||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 55 | ||
Item 4. | Controls and Procedures | 57 | ||
PART II—OTHER INFORMATION | 57 | |||
Item 1. | Legal Proceedings | 57 | ||
Item 1A. | Risk Factors | 57 | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 58 | ||
Item 4. | Mine Safety Disclosures | 58 | ||
Item 5. | Other Information | 58 | ||
Item 6. | Exhibits | 59 | ||
SIGNATURES | 60 | |||
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. Words such as “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain such identifying words. When considering these forward-looking statements, investors should keep in mind the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025. These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include:
| ● | natural gas, natural gas liquids (“NGLs”) and oil prices; |
| ● | our ability to execute our business strategy; |
| ● | our production and natural gas, NGLs and oil reserves; |
| ● | our financial strategy, liquidity and capital required for our development program; |
| ● | our ability to obtain debt or equity financing on satisfactory terms to fund acquisitions, expansion projects, capital expenditures, working capital requirements and the repayment or refinancing of indebtedness; |
| ● | risks associated with the future performance of the HG Acquisition (as defined in Note 3—Transactions to the unaudited condensed consolidated financial statements); |
| ● | our ability to execute our return of capital program; |
| ● | timing and amount of future production of natural gas, NGLs and oil; |
| ● | impacts of geopolitical events, including the conflicts in Ukraine, Venezuela and in the Middle East, and world health events; |
| ● | our ability to meet minimum volume commitments and to utilize or monetize our firm transportation commitments; |
| ● | marketing of natural gas, NGLs and oil; |
| ● | our future drilling plans; |
| ● | our projected well costs; |
| ● | our hedging strategy and results; |
| ● | costs of developing our properties; |
| ● | uncertainty regarding our future operating results; |
| ● | operations of Antero Midstream Corporation (“Antero Midstream”); |
| ● | competition; |
| ● | government regulations and changes in laws; |
| ● | pending legal or environmental matters; |
| ● | leasehold or business acquisitions; |
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| ● | our ability to achieve our greenhouse gas reduction targets and the costs associated therewith; |
| ● | general economic conditions; |
| ● | credit markets; and |
| ● | our other plans, objectives, expectations and intentions contained in this Quarterly Report on Form 10-Q. |
We caution investors that these forward-looking statements are subject to all of the risks and uncertainties incidental to our business, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, supply chain or other disruption, availability and cost of drilling, completion and production equipment and services, environmental risks, drilling and completion and other operating risks, marketing and transportation risks, regulatory changes or changes in law, the uncertainty inherent in estimating natural gas, NGLs and oil reserves and in projecting future rates of production, cash flows and access to capital, the timing of development expenditures, conflicts of interest among our stockholders, impacts of geopolitical and world health events, cybersecurity risks, the state of markets for, and availability of, verified quality carbon offsets and the other risks described or referenced under the heading “Item 1A. Risk Factors” herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), which is on file with the Securities and Exchange Commission (“SEC”).
Reserve engineering is a process of estimating underground accumulations of natural gas, NGLs and oil that cannot be measured in an exact manner. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data, and the price and cost assumptions made by reservoir engineers. In addition, the results of drilling, testing and production activities, or changes in commodity prices, may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of natural gas, NGLs and oil that are ultimately recovered.
Should one or more of the risks or uncertainties described or referenced in this Quarterly Report on Form 10-Q occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.
All forward-looking statements, expressed or implied, included in this Quarterly Report on Form 10-Q are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
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PART I—FINANCIAL INFORMATION
ANTERO RESOURCES CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited) | |||||||
December 31, | September 30, | ||||||
| 2025 | | 2026 |
| |||
Assets | |||||||
Current assets: | |||||||
Restricted cash | $ | | — | ||||
Accounts receivable | |
| | ||||
Accrued revenue | | | |||||
Derivative instruments | | | |||||
Prepaid expenses | | | |||||
Current assets held for sale | | — | |||||
Other current assets | | | |||||
Total current assets | | | |||||
Property and equipment: | |||||||
Oil and gas properties, at cost (successful efforts method): | |||||||
Unproved properties | | | |||||
Proved properties | | | |||||
Other property and equipment | | | |||||
| | ||||||
Less accumulated depletion, depreciation and amortization | ( | ( | |||||
Property and equipment, net | | | |||||
Operating leases right-of-use assets | | | |||||
Derivative instruments | | | |||||
Investment in unconsolidated affiliate | | | |||||
Assets held for sale | | — | |||||
Other assets | | | |||||
Total assets | $ | | | ||||
Liabilities and Equity | |||||||
Current liabilities: | | ||||||
Accounts payable | $ | |
| | |||
Accounts payable, related parties | | | |||||
Accrued liabilities | | | |||||
Revenue distributions payable | | | |||||
Commercial paper | — | | |||||
Derivative instruments | — | | |||||
Short-term lease liabilities | | | |||||
Deferred revenue, VPP | | | |||||
Current liabilities held for sale | | — | |||||
Other current liabilities | | | |||||
Total current liabilities | | | |||||
Long-term liabilities: | |||||||
Long-term debt | | | |||||
Deferred income tax liability, net | | | |||||
Derivative instruments | — | | |||||
Long-term lease liabilities | | | |||||
Deferred revenue, VPP | | — | |||||
Liabilities held for sale | | — | |||||
Other liabilities | | | |||||
Total liabilities | | | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Stockholders' equity: | |||||||
Preferred stock, $ | |||||||
Common stock, $ | | | |||||
Additional paid-in capital | | | |||||
Retained earnings | | | |||||
Total stockholders' equity | | | |||||
Noncontrolling interests | | — | |||||
Total equity | | | |||||
Total liabilities and equity | $ | | | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO RESOURCES CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(In thousands, except per share amounts)
Three Months Ended September 30, | |||||||
| 2025 | | 2026 |
| |||
Revenue and other: | |||||||
Natural gas sales | $ | | | ||||
Natural gas liquids sales | | | |||||
Oil sales | | | |||||
Commodity derivative fair value gains | | | |||||
Marketing | | | |||||
Amortization of deferred revenue, VPP | | | |||||
Other revenue and income | | | |||||
Total revenue | | | |||||
Operating expenses: | |||||||
Lease operating | | | |||||
Gathering, compression, processing and transportation | | | |||||
Production and ad valorem taxes | | | |||||
Marketing | | | |||||
Exploration | | | |||||
General and administrative (including equity-based compensation expense of $ | | | |||||
Depletion, depreciation and amortization | | | |||||
Impairment of property and equipment | | | |||||
Accretion of asset retirement obligations | | | |||||
Contract termination, loss contingency and settlements | | | |||||
Loss (gain) on sale of assets | | ( | |||||
Other operating expense | | | |||||
Total operating expenses | | | |||||
Operating income | | | |||||
Other income (expense): | |||||||
Interest expense, net | ( | ( | |||||
Equity in earnings of unconsolidated affiliate | | | |||||
Transaction expense | — | ( | |||||
Total other income | | | |||||
Income before income taxes | | | |||||
Income tax expense | ( | ( | |||||
Net income and comprehensive income including noncontrolling interests | | | |||||
Less: net income and comprehensive income attributable to noncontrolling interests | | — | |||||
Net income and comprehensive income attributable to Antero Resources Corporation | $ | | | ||||
Net income per common share—basic | $ | | | ||||
Net income per common share—diluted | $ | | | ||||
Weighted average number of common shares outstanding: | |||||||
Basic | | | |||||
Diluted | | | |||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO RESOURCES CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(In thousands, except per share amounts)
Nine Months Ended September 30, | |||||||
| 2025 | | 2026 | ||||
Revenue and other: | |||||||
Natural gas sales | $ | | | ||||
Natural gas liquids sales | | | |||||
Oil sales | | | |||||
Commodity derivative fair value gains | | | |||||
Marketing | | | |||||
Amortization of deferred revenue, VPP | | | |||||
Other revenue and income | | | |||||
Total revenue | | | |||||
Operating expenses: | |||||||
Lease operating | | | |||||
Gathering, compression, processing and transportation | | | |||||
Production and ad valorem taxes | | | |||||
Marketing | | | |||||
Exploration | | | |||||
General and administrative (including equity-based compensation expense of $ | | | |||||
Depletion, depreciation and amortization | | | |||||
Impairment of property and equipment | | | |||||
Accretion of asset retirement obligations | | | |||||
Contract termination, loss contingency and settlements | | | |||||
Loss (gain) on sale of assets | | ( | |||||
Other operating expense | | | |||||
Total operating expenses | | | |||||
Operating income | | | |||||
Other income (expense): | |||||||
Interest expense, net | ( | ( | |||||
Equity in earnings of unconsolidated affiliate | | | |||||
Loss on early extinguishment of debt | ( | ( | |||||
Transaction expense | — | ( | |||||
Total other income | | | |||||
Income before income taxes | | | |||||
Income tax expense | ( | ( | |||||
Net income and comprehensive income including noncontrolling interests | | | |||||
Less: net income and comprehensive income attributable to noncontrolling interests | | | |||||
Net income and comprehensive income attributable to Antero Resources Corporation | $ | | | ||||
Net income per common share—basic | $ | | | ||||
Net income per common share—diluted | $ | | | ||||
Weighted average number of common shares outstanding: | |||||||
Basic | | | |||||
Diluted | | | |||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO RESOURCES CORPORATION
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(In thousands)
Additional | |||||||||||||||||||
Common Stock | Paid-in | Retained | Noncontrolling | Total | |||||||||||||||
| Shares | | Amount | | Capital | | Earnings | Interests | | Equity |
| ||||||||
Balances, December 31, 2024 | | $ | | | | | | ||||||||||||
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes | | | ( | — | — | ( | |||||||||||||
Repurchases and retirements of common stock | ( | ( | ( | ( | — | ( | |||||||||||||
Equity-based compensation | — | — | | — | — | | |||||||||||||
Distributions to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||
Net income and comprehensive income | — | — | — | | | | |||||||||||||
Balances, March 31, 2025 | | | | | | | |||||||||||||
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes | | | ( | — | — | ( | |||||||||||||
Repurchases and retirements of common stock | ( | ( | ( | ( | — | ( | |||||||||||||
Equity-based compensation | — | — | | — | — | | |||||||||||||
Distributions to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||
Net income and comprehensive income | — | — | — | | | | |||||||||||||
Balances, June 30, 2025 | | | | | | | |||||||||||||
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes | | — | ( | — | — | ( | |||||||||||||
Repurchases and retirements of common stock | ( | ( | ( | ( | ( | ||||||||||||||
Equity-based compensation | — | — | | — | — | | |||||||||||||
Distributions to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||
Net income and comprehensive income | — | — | — | | | | |||||||||||||
Balances, September 30, 2025 | | $ | | | | | | ||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO RESOURCES CORPORATION
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(In thousands)
Additional | |||||||||||||||||||
Common Stock | Paid-in | Retained | Noncontrolling | Total | |||||||||||||||
Shares | | Amount | | Capital | | Earnings | Interests | | Equity | ||||||||||
Balances, December 31, 2025 | | $ | | | | | | ||||||||||||
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes | | | ( | — | — | ( | |||||||||||||
Equity-based compensation | — | — | | — | — | | |||||||||||||
Distributions to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||
Net income and comprehensive income | — | — | — | | | | |||||||||||||
Balances, March 31, 2026 | | | | | | | |||||||||||||
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes | | — | ( | — | — | ( | |||||||||||||
Repurchases and retirements of common stock | ( | ( | ( | ( | — | ( | |||||||||||||
Equity-based compensation | — | — | | — | — | | |||||||||||||
Distributions to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||
In-kind liquidating distribution to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||
Net income and comprehensive income | — | — | — | | | | |||||||||||||
Balances, June 30, 2026 | | | | | — | | |||||||||||||
Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes | | | ( | — | — | ( | |||||||||||||
Repurchases and retirements of common stock | ( | ( | ( | ( | — | ( | |||||||||||||
Equity-based compensation | — | — | | — | — | | |||||||||||||
Net income and comprehensive income | — | — | — | | — | | |||||||||||||
Balances, September 30, 2026 | | $ | | | | — | | ||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO RESOURCES CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Nine Months Ended September 30, | |||||||
2025 | | 2026 |
| ||||
Cash flows provided by (used in) operating activities: | |||||||
Net income including noncontrolling interests | $ | | | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depletion, depreciation, amortization and accretion | | | |||||
Impairment of property and equipment | | | |||||
Commodity derivative fair value gains | ( | ( | |||||
Gains (losses) on settled commodity derivatives | ( | | |||||
Deferred income tax expense | | | |||||
Equity-based compensation expense | | | |||||
Equity in earnings of unconsolidated affiliate | ( | ( | |||||
Dividends of earnings from unconsolidated affiliate | | | |||||
Amortization of deferred revenue | ( | ( | |||||
Amortization of debt issuance costs and other | | | |||||
Settlement of asset retirement obligations | ( | ( | |||||
Contract termination, loss contingency and settlements | | | |||||
Loss (gain) on sale of assets | | ( | |||||
Loss on early extinguishment of debt | | | |||||
Changes in current assets and liabilities: | |||||||
Accounts receivable | ( | | |||||
Accrued revenue | | | |||||
Prepaid expenses and other current assets | | | |||||
Accounts payable including related parties | ( | | |||||
Accrued liabilities | ( | ( | |||||
Revenue distributions payable | | | |||||
Other current liabilities | ( | ( | |||||
Net cash provided by operating activities | | | |||||
Cash flows provided by (used in) investing activities: | |||||||
Additions to unproved properties | ( | ( | |||||
Drilling and completion costs | ( | ( | |||||
Additions to other property and equipment | ( | ( | |||||
Acquisition of HG Production | — | ( | |||||
Acquisitions of oil and gas properties | ( | ( | |||||
Proceeds from asset sales | | | |||||
Change in other assets | ( | ( | |||||
Net cash used in investing activities | ( | ( | |||||
Cash flows provided by (used in) financing activities: | |||||||
Issuances and borrowings of debt | | | |||||
Repayments of debt | ( | ( | |||||
Repurchases of common stock | ( | ( | |||||
Payment of debt issuance costs | ( | ( | |||||
Distributions to noncontrolling interests in Martica Holdings LLC | ( | ( | |||||
Employee tax withholding for settlement of equity-based compensation awards | ( | ( | |||||
Other | ( | ( | |||||
Net cash provided by (used in) financing activities | ( | | |||||
Net decrease in cash, cash equivalents and restricted cash | | ( | |||||
Cash, cash equivalents and restricted cash, beginning of period | | | |||||
Cash, cash equivalents and restricted cash, end of period | $ | | | ||||
Supplemental disclosure of cash flow information: | |||||||
Cash paid during the period for interest | $ | | | ||||
Increase (decrease) in accounts payable, accrued liabilities and other current liabilities for additions to property and equipment | $ | ( | | ||||
Increase in other current liabilities for acquisitions of oil and gas properties | $ | | — | ||||
In-kind liquidating distribution to noncontrolling interests | $ | — | | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
(1) Organization
Antero Resources Corporation (individually referred to as “Antero” and together with its consolidated subsidiaries “Antero Resources,” or the “Company”) is engaged in the development, production, exploration and acquisition of natural gas, NGLs and oil properties in the Appalachian Basin in West Virginia. The Company targets large, repeatable resource plays where horizontal drilling and advanced fracture stimulation technologies provide the means to economically develop and produce natural gas, NGLs and oil from unconventional formations. The Company’s corporate headquarters is located in Denver, Colorado.
(2) Summary of Significant Accounting Policies
(a) | Basis of Presentation |
These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC applicable to interim financial information and should be read in the context of the Company’s December 31, 2025 consolidated financial statements and notes thereto for a more complete understanding of the Company’s operations, financial position and accounting policies. The Company’s December 31, 2025 consolidated financial statements were included in Antero Resources’ 2025 Annual Report on Form 10-K, which was filed with the SEC.
These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2025 and September 30, 2026, results of operations for the three and nine months ended September 30, 2025 and 2026 and cash flows for the nine months ended September 30, 2025 and 2026. The Company has no items of other comprehensive income; therefore, its net income is equal to its comprehensive income. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the full year because of the impact of changes in prices received for natural gas, NGLs and oil, natural production declines, the uncertainty of exploration and development drilling results, changes in the fair value of derivative instruments and other factors.
(b) | Principles of Consolidation |
The accompanying unaudited condensed consolidated financial statements include the accounts of Antero Resources Corporation and its wholly owned subsidiaries, as well as the accounts of Martica Holdings LLC (“Martica”), a variable interest entity for which the Company was the primary beneficiary up to June 30, 2026 when Martica was deconsolidated following its in-kind liquidation and dissolution.
On May 1, 2026, Sixth Street Partners, LLC (“Sixth Street”) achieved its internal rate of return and cash-on-cash return (the “Hurdle”). As such, beginning May 1, 2026, Antero received
All significant intercompany accounts and transactions have been eliminated in the Company’s unaudited condensed consolidated financial statements.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
(c) | Cash and Cash Equivalents |
The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments. From time to time, the Company may be in the position of a “book overdraft” in which outstanding checks exceed cash and cash equivalents. The Company classifies book overdrafts in accounts payable and revenue distributions payable within its condensed consolidated balance sheets, and classifies the change in accounts payable associated with book overdrafts as an operating activity within its unaudited condensed consolidated statements of cash flows. As of , the book overdrafts included within accounts payable and revenue distributions payable were each $
(d) | Restricted Cash |
The Company classifies restricted cash as all cash that is legally or contractually restricted as to withdrawal or usage, including amounts deposited in escrow that are restricted from use. The Company’s restricted cash as of December 31, 2025 was classified as a current asset because the restriction on such cash was released on February 3, 2026 at the closing of the HG Acquisition (as defined in Note 3—Transactions).
(e) | Net Income Per Common Share |
Net income per common share—basic for each period is computed by dividing net income attributable to Antero by the basic weighted average number of common shares outstanding during the period. Net income per common share—diluted for each period is computed after giving consideration to the potential dilution from outstanding equity-based awards using the treasury stock method. The Company includes restricted stock unit (“RSU”) awards, performance share unit (“PSU”) awards and stock options in the calculation of diluted weighted average common shares outstanding based on the number of common shares that would be issuable if the end of the period was also the end of the performance period required for the vesting of the awards. During periods in which the Company incurs a net loss, diluted weighted average common shares outstanding are equal to basic weighted average common shares outstanding because the effects of all equity-based awards are anti-dilutive.
The following is a reconciliation of the Company’s basic weighted average common shares outstanding to diluted weighted average common shares outstanding during the periods presented (in thousands):
Three Months Ended | Nine Months Ended | ||||||||
September 30, | September 30, | ||||||||
| | 2025 | | 2026 | | 2025 | | 2026 | |
Basic weighted average number of common shares outstanding | | | | | |||||
Add: Dilutive effect of RSUs | | | | | |||||
Add: Dilutive effect of PSUs | | | | | |||||
Diluted weighted average number of common shares outstanding | | | | | |||||
Weighted average number of outstanding securities excluded from calculation of diluted net income per common share (1): | |||||||||
RSUs | | — | | | |||||
PSUs | | | | | |||||
Stock options | — | — | | — | |||||
| (1) | The potential dilutive effects of these securities were excluded from the computation of net income per common share—diluted because the inclusion of these securities would have been anti-dilutive. |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
(f) | Recently Issued Accounting Standard |
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 is intended to improve the disclosure about certain operating expenses primarily through enhanced disclosure of cost of sales and selling, general and administrative expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 can be applied on either a prospective or a retrospective basis at the Company’s election. The Company plans to adopt ASU 2024-03 on a prospective basis in the Annual Report on Form 10-K for the year ending December 31, 2027. The Company is evaluating the impact that ASU 2024-03 will have on the financial statements.
(3) Transactions
| (a) | 2025 Drilling Partnership |
On December 11, 2024, the Company entered into a drilling partnership with an unaffiliated third-party (“2025 Drilling Partnership”). Under the terms of the arrangement, the third-party participated in and funded a share of total development capital expenses for wells spud by the Company during the 2025 calendar year. For each well spud during the 2025 calendar year, the third-party received a
The Company has accounted for the 2025 Drilling Partnership as a conveyance under ASC 932 and such conveyances are recorded in the unaudited condensed consolidated financial statements as the third-party obtains its proportionate working interest in each well.
| (b) | HG Acquisition |
On December 5, 2025, the Company entered into a definitive agreement to acquire
The HG Acquisition has been accounted for using the acquisition method of accounting, with the Company identified as the acquirer of HG Production. The Company is still completing its analysis of the final purchase price allocation. Adjustments to the preliminary purchase price allocation recorded during the three and nine months ended September 30, 2026 primarily relate to additional information obtained by the Company between the Closing Date and September 30, 2026 about facts and circumstances that existed on the Closing Date, including the completion of the post-closing settlement statement and analysis of income taxes, among others. The Company expects to complete the purchase price allocation during the 12-month period following the Closing Date. The table below summarizes the preliminary purchase price and estimated fair values of assets acquired and liabilities assumed as of the Closing Date. See Note 10—Fair Value Measurement for additional information on the fair value assumptions and hierarchy used in the HG Acquisition preliminary purchase price allocation.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
As Originally | ||||||||||
(in thousands) | Reported | Adjustments | As Adjusted | |||||||
Cash consideration | $ | | ( | | ||||||
Fair value of assets acquired: | ||||||||||
Cash | | — | | |||||||
Accounts receivable | | — | | |||||||
Accrued revenue | | ( | | |||||||
Unproved properties | | ( | | |||||||
Proved properties | | ( | | |||||||
Other property and equipment | | — | | |||||||
Operating lease right-of-use asset | | — | | |||||||
Derivative instruments | | — | | |||||||
Total assets acquired | $ | | ( | | ||||||
Fair value of liabilities assumed: | ||||||||||
Accounts payable | $ | | — | | ||||||
Accounts payable, related parties | | — | | |||||||
Accrued liabilities | | | | |||||||
Revenue distributions payable | | | | |||||||
Operating lease liability | | — | | |||||||
Derivative instruments | | — | | |||||||
Deferred income tax liability (1) | | ( | — | |||||||
Other liabilities | | — | | |||||||
Total liabilities assumed | $ | | ( | | ||||||
| (1) | Upon completion of the Company’s analysis over income taxes, it was determined that at the Closing Date there were no deferred taxes to be recorded as part of this purchase price allocation. |
The Company’s financial statements include $
The following table summarizes amounts contributed by the assets acquired in the HG Acquisition to the Company’s unaudited condensed consolidated results of operations and comprehensive income upon transaction closing on the Closing Date (in thousands):
February 3, 2026 | ||||
through September 30, 2026 | ||||
Natural gas sales | $ | | ||
Natural gas liquids sales | | |||
Oil sales | | |||
Commodity derivative fair value gains | | |||
Total revenue | | |||
Net income and comprehensive income including noncontrolling interests (1) | | |||
Less: net income and comprehensive income attributable to noncontrolling interests | — | |||
Net income and comprehensive income attributable to Antero Resources Corporation (1) | $ | | ||
| (1) | Amounts include transaction expense of $ |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
(in thousands) | | 2025 | | 2026 | 2025 | | 2026 | ||||||
Pro forma revenue and other: | |||||||||||||
Natural gas sales | $ | | | | | ||||||||
Natural gas liquids sales | | | | | |||||||||
Oil sales | | | | | |||||||||
Commodity derivative fair value gains | | | | | |||||||||
Marketing | | | | | |||||||||
Amortization of deferred revenue, VPP | | | | | |||||||||
Other revenue and income | | | | | |||||||||
Pro forma total revenue | | | | | |||||||||
Pro forma net income and comprehensive income including noncontrolling interests | | | | | |||||||||
Less: pro forma net income and comprehensive income attributable to noncontrolling interests | | — | | | |||||||||
Pro forma net income and comprehensive income attributable to Antero Resources Corporation | $ | | | | | ||||||||
Pro forma net income per common share—basic | $ | | | | | ||||||||
Pro forma net income per common share—diluted | $ | | | | | ||||||||
| (c) | Utica Shale Divestiture |
On December 5, 2025, the Company entered into a purchase and sale agreement with
The Utica Shale Properties and its associated assets and liabilities were classified as held for sale as of December 31, 2025 on the Company’s consolidated balance sheet, which relate to the Company’s exploration and production reportable segment. The Utica Shale Divestiture does not qualify as a discontinued operation under FASB ASC Topic 205, Presentation of Financial Statements, as it does not represent a strategic shift that will have a major effect on the Company's operations or financial results.
The cash consideration received for the Utica Shale Divestiture less costs to sell of approximately $
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
The following table sets forth the carrying value of the Utica Shale Properties’ assets and liabilities held for sale as of December 31, 2025 (in thousands):
| December 31, 2025 | |||
Current assets: | ||||
Accounts receivable | $ | | ||
Accrued revenue | | |||
Other current assets | | |||
Long-term assets: | ||||
Unproved properties | | |||
Proved properties | | |||
Gathering systems and facilities | | |||
Other property and equipment | | |||
Less accumulated depletion, depreciation and amortization | ( | |||
Property and equipment, net | | |||
Operating leases right-of-use assets (1) | | |||
Other assets | | |||
Total assets | $ | | ||
Current liabilities: | ||||
Accounts payable | $ | | ||
Accounts payable, related parties | | |||
Accrued liabilities | | |||
Revenue distributions payable | | |||
Short-term lease liabilities | | |||
Long-term liabilities: | ||||
Long-term lease liabilities | | |||
Other liabilities | | |||
Total liabilities | $ | | ||
| (1) | Substantially all of these operating leases right-of-use-assets relate to a gas gathering line and compressor stations with Antero Midstream. See Note 12— Leases to the unaudited condensed consolidated financial statements for additional information. |
| (d) | Asset Acquisitions |
During the three months ended September 30, 2026, the Company acquired additional working and royalty interests in Antero’s core operating area for a total of approximately $
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
(4) Revenue
(a) | Disaggregation of Revenue |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2025 | | 2026 | 2025 | | 2026 | | Reportable Segment | |||||||
Revenues from contracts with customers: | |||||||||||||||
Natural gas sales | $ | | | | | Exploration and production | |||||||||
Natural gas liquids sales (ethane) | | | | | Exploration and production | ||||||||||
Natural gas liquids sales (C3+ NGLs) | | | | | Exploration and production | ||||||||||
Oil sales | | | | | Exploration and production | ||||||||||
Marketing | | | | | Marketing | ||||||||||
Other revenue | | | | | Exploration and production | ||||||||||
Total revenue from contracts with customers | | | | | |||||||||||
Income from derivatives, deferred revenue and other sources, net | | | | | |||||||||||
Total revenue | $ | | | | | ||||||||||
(b) | Transaction Price Allocated to Remaining Performance Obligations |
For the Company’s product sales that have a contract term greater than one year, the Company utilized the practical expedient in FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), which does not require the disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under the Company’s product sales contracts, each unit of product delivered to the customer represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. For the Company’s product sales that have a contract term of one year or less, the Company utilized the practical expedient in ASC 606, which does not require the disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of
(c) | Contract Balances |
Under the Company’s sales contracts, the Company invoices customers after its performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company’s contracts do not give rise to contract assets or liabilities. As of December 31, 2025 and September 30, 2026, the Company’s receivables from contracts with customers were $
(5) Equity Method Investment
As of December 31, 2025 and September 30, 2026, Antero owned
The following table sets forth a reconciliation of Antero’s investment in unconsolidated affiliate (in thousands):
Balance as of December 31, 2025 (1) | | |||
Equity in earnings of unconsolidated affiliate | | |||
Dividends from unconsolidated affiliate | ( | |||
Elimination of intercompany profit | | |||
Balance as of September 30, 2026 (1) | $ | |
| (1) | The fair value of the Company’s investment in Antero Midstream as of December 31, 2025 and September 30, 2026 was $ |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
(6) Accrued Liabilities
Accrued liabilities consisted of the following items (in thousands):
(Unaudited) | |||||||
December 31, | September 30, | ||||||
| 2025 | | 2026 |
| |||
Capital expenditures | $ | |
| | |||
Gathering, compression, processing and transportation expenses | | | |||||
Marketing expenses | | | |||||
Interest expense |
| |
| | |||
Production and ad valorem taxes | | | |||||
General and administrative expense | | | |||||
Contingencies and other |
| |
| | |||
Total accrued liabilities | $ | |
| | |||
(7) Debt
Total debt consisted of the following items (in thousands):
(Unaudited) | |||||||
December 31, | September 30, | ||||||
| 2025 | | 2026 |
| |||
Short-term: | |||||||
Commercial paper | $ | — | | ||||
Long-term: | |||||||
Credit Facility | | — | |||||
Term Loan | — | | |||||
| — | ||||||
| | ||||||
— | | ||||||
Unamortized debt issuance costs | ( | ( | |||||
Total long-term debt | | | |||||
Total debt | $ | | | ||||
| (a) | Commercial Paper |
On June 16, 2026, Antero Resources established a commercial paper program (the “Commercial Paper Program”) pursuant to which Antero Resources may issue short-term, unsecured commercial paper notes (the “Commercial Paper”). The Commercial Paper may be issued and redeemed from time to time, with the aggregate face or principal amount of the notes outstanding under the Commercial Paper Program at any time not to exceed $
During the second and third quarters of 2026, Antero Resources utilized the Commercial Paper Program to fund various short-term working capital requirements. As of September 30, 2026, Antero Resources had $
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
| (b) | Credit Facility |
On July 30, 2024, Antero Resources entered into an amendment and restatement of its senior revolving credit facility with a syndicate of bank lenders (as amended to date, the “Credit Facility”). Borrowings are unsecured and are not guaranteed by any of Antero Resources’ subsidiaries. As of September 30, 2026, the Credit Facility had lender commitments of $
The Credit Facility contains
The Credit Facility provides for borrowing at Secured Overnight Financing Rate (“SOFR”) or an Alternate Base Rate, in each case, plus an Applicable Rate (each as defined in the Credit Facility). The Credit Facility does not amortize. Interest under the Credit Facility is payable at a variable rate based on SOFR or the Alternate Base Rate, determined by election at the time of borrowing and at the end of each applicable interest period in respect of a borrowing, plus an Applicable Rate. The Applicable Rate is determined with reference to Antero Resources’ then-current senior unsecured long-term debt rating ranging from
The proceeds of the loans made under the Credit Facility may be used (i) to pay fees and expenses incurred in connection with the transactions related thereto and the refinancing of the Secured Credit Facility (defined below), (ii) to finance working capital needs and (iii) for other general corporate purposes, in each case of Antero Resources and its subsidiaries.
As of December 31, 2025, Antero Resources had an outstanding balance under the Credit Facility of $
| (c) | Term Loans |
In connection with the signing of the HG Acquisition, Antero Resources entered into a debt commitment letter dated December 5, 2025 with a syndicate of banks (collectively, the “Banks”), pursuant to which the Banks committed, subject to satisfaction of certain customary terms and conditions, to provide Antero Resources with an unsecured
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
On February 3, 2026, substantially concurrently with the consummation of the HG Acquisition, Antero Resources entered into the Term Loan. The Term Loan is unsecured and is not guaranteed by any of Antero Resources’ subsidiaries. The proceeds of the loans made under the Term Loan were used to (i) finance a portion of the consideration for the HG Acquisition and (ii) to pay fees and expenses incurred in connection with the transactions related thereto. On February 3, 2026, Antero Resources borrowed $
The Term Loan contains the same financial covenant as our Credit Facility requiring Antero Resources to maintain a ratio on a consolidated basis of total indebtedness to capitalization of
The Term Loan provides for borrowings at or an Alternate Base Rate at our option, in each case, plus the Applicable Rate (each, as defined in the Term Loan). There is a
As of September 30, 2026, Antero Resources had an outstanding balance under the Term Loan of $
| (d) |
On January 4, 2021, Antero Resources issued $
| (e) |
On January 26, 2021, Antero Resources issued $
| (f) |
On June 1, 2021, Antero Resources issued $
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
| (g) |
On January 28, 2026, Antero Resources issued $
(8) Asset Retirement Obligations
The following table presents a reconciliation of the Company’s asset retirement obligations (in thousands):
Asset retirement obligations—December 31, 2025 | | $ | | |
Obligations incurred | | |||
Obligations assumed in acquisition | | |||
Accretion expense | | |||
Settlement of obligations | ( | |||
Revisions to prior estimates | | |||
Asset retirement obligations—September 30, 2026 | $ | |
Asset retirement obligations are included in other liabilities on the Company’s condensed consolidated balance sheets.
(9) Equity-Based Compensation
On June 5, 2024, the Company’s stockholders approved the Amended and Restated Antero Resources Corporation 2020 Long Term Incentive Plan (the “AR LTIP”). The AR LTIP provides for grants of stock options (including incentive stock options), stock appreciation rights, restricted stock awards, RSU awards, vested stock awards, dividend equivalent awards and other stock-based and cash awards. The terms and conditions of the awards granted are established by the Compensation Committee of Antero Resources’ Board of Directors (the “Board”). Employees, officers, non-employee directors and other service providers of the Company and its affiliates are eligible to receive awards under the AR LTIP.
The AR LTIP provides for the reservation of
A total of
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
The Company’s equity-based compensation expense, by type of award, is as follows (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2025 | 2026 | | 2025 | 2026 | ||||||||
RSU awards | $ | | | | | ||||||||
PSU awards | | | | | |||||||||
Equity awards issued to directors | | | | | |||||||||
Total expense | $ | | | | | ||||||||
| (a) | Restricted Stock Unit Awards |
A summary of RSU award activity is as follows:
Weighted | ||||||
Average | ||||||
Number | Grant Date | |||||
| of Units | | Fair Value | | ||
Total awarded and unvested—December 31, 2025 | | $ | | |||
Granted | | | ||||
Vested | ( | | ||||
Forfeited | ( | | ||||
Total awarded and unvested—September 30, 2026 | | $ | | |||
As of September 30, 2026, there was $
(b) | Performance Share Unit Awards |
Performance Share Unit Awards Based on Total Shareholder Return
In March 2026, the Company granted PSU awards to certain of its senior management and executive officers that vest based on Antero Resources’ absolute TSR determined as of the last day of each of
The following table presents the assumptions used in the Monte Carlo valuation model and the grant date fair value information for the 2026 Absolute TSR PSUs:
Dividend yield | — | % | |||
Volatility | | % | |||
Risk-free interest rate | | % | |||
Weighted average fair value of awards granted | $ | |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
Performance Share Unit Awards Based on Leverage Ratio
In March 2026, the Company granted PSUs to certain of its senior management and executive officers that vest based on the Company’s Net Debt to EBITDAX (as defined in the award agreement) determined as of the last day of each of
Summary Information for Performance Share Unit Awards
A summary of PSU activity is as follows:
Weighted | ||||||
Average | ||||||
Number | Grant Date | |||||
| of Units | | Fair Value | | ||
Total awarded and unvested—December 31, 2025 | | $ | | |||
Granted | | | ||||
Vested (1)(2) | ( | | ||||
Forfeited (1) | ( | | ||||
Total awarded and unvested—September 30, 2026 | | $ | | |||
| (1) | During the nine months ended September 30, 2026, the PSUs granted in 2022 and 2023 based on absolute TSR performance criteria achieved vesting at |
| (2) | During the nine months ended September 30, 2026, certain PSUs granted in 2022, 2023 and 2025 based on Net Debt to EBITDAX performance criteria achieved vesting at |
As of September 30, 2026, there was $
(10) Fair Value Measurement
(a) | Senior Notes |
The following table sets forth the fair value and carrying value of the senior notes (in thousands):
(Unaudited) | |||||||||||||
December 31, 2025 | September 30, 2026 | ||||||||||||
| Fair | | Carrying | | Fair | | Carrying | ||||||
Value (1) | Value (2) | Value (1) | Value (2) | ||||||||||
2029 Notes | $ | | | — | — | ||||||||
2030 Notes | | | | | |||||||||
2036 Notes | — | — | | | |||||||||
Total | $ | | | | | ||||||||
| (1) | Fair values are based on Level 2 market data inputs. |
| (2) | Carrying values are presented net of unamortized debt issuance costs. |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
(b) | Other Assets and Liabilities |
The carrying values of restricted cash as of December 31, 2025, accounts receivable and accounts payable as of December 31, 2025 and September 30, 2026 and the amounts outstanding under the Commercial Paper Program as of September 30, 2026 approximated fair value because of their short-term nature. The carrying values of the amounts outstanding under the Credit Facility as of December 31, 2025 and the Term Loan as of September 30, 2026 approximated fair value because the variable interest rates are reflective of current market conditions.
See Note 9—Equity-Based Compensation and Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for information regarding the fair value of equity-based awards and derivative financial instruments, respectively.
| (c) | HG Acquisition |
The HG Acquisition was accounted for under the acquisition method of accounting, and as such, the Company estimated the fair value of assets acquired and liabilities assumed as of the Closing Date. See Note 3—Transactions to the unaudited condensed consolidated financial statements for additional information.
The fair value of the derivative instruments acquired in the HG Acquisition were measured using a market approach that uses a third-party pricing service and is based on inputs that are either observable in the market or can be corroborated by market data, whereby it is a Level 2 fair value measurement. The fair values of the developed and undeveloped natural gas properties acquired in the HG Acquisition were measured using discounted cash flow valuation techniques based on inputs that are not observable in the market and, as such, are Level 3 fair value measurements. Significant inputs used in the valuation of developed and undeveloped properties included commodity prices, projected reserve quantities, estimated future rates of production, projected reserve recovery factors, development plans (including timing and amount of development), future development costs, operating costs and a weighted-average cost of capital of
(11) Derivative Instruments
The Company is exposed to certain risks relating to its ongoing business operations, and it may use derivative instruments to manage its commodity price risk. In addition, the Company periodically enters into contracts that contain embedded features that are required to be bifurcated and accounted for separately as derivatives.
| (a) | Commodity Derivative Positions |
The Company periodically enters into natural gas, NGLs and oil derivative contracts with counterparties to hedge the price risk associated with its production. These derivatives are not entered into for trading purposes. To the extent that changes occur in the market prices of natural gas, NGLs and oil, the Company is exposed to market risk on these open contracts. This market risk exposure is generally offset by the change in market prices of natural gas, NGLs and oil recognized upon the ultimate sale of the Company’s production.
The Company was party to various commodity derivative contracts that settled during the three and nine months ended September 30, 2025 and 2026. The Company enters into derivative contracts when management believes that favorable future sales prices for the Company’s production can be secured. The Company’s derivative contracts have not been designated as hedges for accounting purposes; therefore, all gains and losses are recognized in the Company’s unaudited condensed consolidated statements of operations and comprehensive income.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
Fixed Price Swaps
As of September 30, 2026, the Company’s fixed price swap positions were as follows:
Weighted | ||||||||||
Commodity / Settlement Period |
| Index |
| Contracted Volume |
| Average Price | | |||
Natural Gas | ||||||||||
October-December 2026 | Henry Hub | | MMBtu/day | $ | | /MMBtu | ||||
October-December 2026 | TETCO M2 | | MMBtu/day | | /MMBtu | |||||
January-December 2027 | Henry Hub | | MMBtu/day | | /MMBtu | |||||
January-December 2027 | Dom South | | MMBtu/day | | /MMBtu | |||||
January-December 2028 | Henry Hub | | MMBtu/day | | /MMBtu | |||||
January-December 2028 | Dom South | | MMBtu/day | | /MMBtu | |||||
January-December 2028 | TETCO M2 | | MMBtu/day | | /MMBtu | |||||
January-February 2029 | Henry Hub | | MMBtu/day | | /MMBtu | |||||
Propane | ||||||||||
October-December 2026 | Mont Belvieu Propane-OPIS (1) | | Bbl/day | | /Bbl | |||||
January-February 2027 | Mont Belvieu Propane-OPIS (1) | | Bbl/day | | /Bbl | |||||
Normal Butane | ||||||||||
October-December 2026 | Mont Belvieu Normal Butane-OPIS Non-TET | | Bbl/day | | /Bbl | |||||
January-February 2027 | Mont Belvieu Normal Butane-OPIS Non-TET | | Bbl/day | | /Bbl | |||||
Isobutane | ||||||||||
October-December 2026 | Mont Belvieu Isobutane-OPIS Non-TET | | Bbl/day | | /Bbl | |||||
January-February 2027 | Mont Belvieu Isobutane-OPIS Non-TET | | Bbl/day | | /Bbl | |||||
Pentane | ||||||||||
October-December 2026 | Mont Belvieu Pentane-OPIS Non-TET | | Bbl/day | | /Bbl | |||||
January-February 2027 | Mont Belvieu Pentane-OPIS Non-TET | | Bbl/day | | /Bbl | |||||
| (1) | Includes propane swaps that are based on TET and Non-TET Mont Belview Propane-OPIS indices. |
Under the Company’s fixed price swap agreements, when actual commodity prices upon settlement exceed the fixed price provided by the contracts, the Company pays the difference to the counterparty. When actual commodity prices upon settlement are less than the contractually provided fixed price, the Company receives the difference from the counterparty.
Basis Swaps
As of September 30, 2026, the Company’s basis swap positions were as follows:
Weighted | ||||||||||
Commodity / Settlement Period |
| Index to Basis Differential |
| Contracted Volume |
| Average Price | ||||
Natural Gas | ||||||||||
October-December 2026 | NYMEX to TETCO M2 | | MMBtu/day | $ | ( | /MMBtu | ||||
October-December 2026 | NYMEX to Dom South | | MMBtu/day | ( | /MMBtu | |||||
October-December 2026 | NYMEX to TCO | | MMBtu/day | ( | /MMBtu | |||||
January-December 2027 | NYMEX to TETCO M2 | | MMBtu/day | ( | /MMBtu | |||||
January-December 2027 | NYMEX to Dom South | | MMBtu/day | ( | /MMBtu | |||||
January-December 2027 | NYMEX to TCO | | MMBtu/day | ( | /MMBtu | |||||
January-December 2028 | NYMEX to TETCO M2 | | MMBtu/day | ( | /MMBtu | |||||
January-December 2028 | NYMEX to Dom South | | MMBtu/day | ( | /MMBtu | |||||
January-December 2028 | NYMEX to TCO | | MMBtu/day | ( | /MMBtu | |||||
Under the Company’s basis swap contracts, when actual commodity prices upon settlement are lower than the fixed price provided by the contracts, the Company receives the difference from the counterparty. When actual commodity prices upon settlement are higher than the contractually provided fixed price, the Company pays the difference to the counterparty.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
Short Calls
As of September 30, 2026, the Company’s short call contract positions were as follows:
Weighted | ||||||||||
Commodity / Settlement Period |
| Index |
| Contracted Volume |
| Average Price | ||||
Natural Gas | ||||||||||
October-December 2026 | Henry Hub | | MMBtu/day | $ | | /MMBtu | ||||
January-December 2027 | Henry Hub | | MMBtu/day | | /MMBtu | |||||
Under the Company’s short call contracts, when actual commodity prices upon settlement exceed the fixed price provided by the contracts, the Company pays the difference to the counterparty.
Collars
As of September 30, 2026, the Company’s collar contract positions were as follows:
Weighted Average Price | ||||||||||||||
Commodity / Settlement Period |
| Index |
| Contracted Volume |
| Ceiling |
| Floor | ||||||
Natural Gas | ||||||||||||||
October-December 2026 (1) | Henry Hub | | MMBtu/day | $ | | /MMBtu | $ | | /MMBtu | |||||
January-December 2027 | Henry Hub | | MMBtu/day | | /MMBtu | | /MMBtu | |||||||
| (1) | Includes a call option and an embedded put option for |
Under the Company’s collar agreements, when actual commodity prices upon settlement are below the floor price provided by the contract, the Company receives the difference from the counterparty. When actual commodity prices upon settlement are above the ceiling price, the Company pays the difference to the counterparty.
Three-Way Collars
As of September 30, 2026, the Company’s three-way collar contract positions were as follows:
Contracted | Weighted Average Price | |||||||||||||||||
Commodity / Settlement Period |
| Index |
| Volume |
| Ceiling |
| Floor | | Sub-Floor | ||||||||
Natural Gas | ||||||||||||||||||
October-December 2026 | Henry Hub | | MMBtu/day | $ | | /MMBtu | $ | | /MMBtu | $ | | /MMBtu | ||||||
January-December 2027 | Henry Hub | | MMBtu/day | | /MMBtu | | /MMBtu | | /MMBtu | |||||||||
Under the Company’s three-way collar agreements, when actual commodity prices upon settlement are below the floor price provided by the contract, the Company receives the difference from the counterparty. When actual commodity prices upon settlement are above the ceiling price, the Company pays the difference to the counterparty. When actual commodity prices are below the sub-floor price, the Company pays the difference to the counterparty.
Martica
During the three months ended March 31, 2025, all of Martica’s derivative contracts expired, and therefore, after March 31, 2025, there were
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
| (b) | Summary |
The table below presents a summary of the fair values of the Company’s derivative instruments and where such values are recorded in the condensed consolidated balance sheets (in thousands).
(Unaudited) | |||||||||
December 31, | September 30, | ||||||||
| | Balance Sheet Location | | 2025 | 2026 |
| |||
Asset derivatives not designated as hedges for accounting purposes: |
|
|
|
| |||||
Commodity derivatives—current | Derivative instruments | $ | | |
| ||||
Embedded derivatives—current | Derivative instruments | | | ||||||
Commodity derivatives—noncurrent | Derivative instruments |
| | |
| ||||
Total asset derivatives (1) |
|
| | |
| ||||
|
|
|
| ||||||
Liability derivatives not designated as hedges for accounting purposes: |
|
|
| ||||||
Commodity derivatives—current | Derivative instruments |
| — | |
| ||||
Commodity derivatives—noncurrent | Derivative instruments |
| — | |
| ||||
Total liability derivatives (1) |
|
| — | |
| ||||
|
|
|
| ||||||
Net derivatives asset (1) | $ | | |
| |||||
| (1) | The fair value of derivative instruments was determined using Level 2 inputs. |
The following table sets forth the gross values of recognized derivative assets and liabilities, the amounts offset under master netting arrangements with counterparties, and the resulting net amounts presented in the condensed consolidated balance sheets as of the dates presented, all at fair value (in thousands):
(Unaudited) | |||||||||||||||||||
December 31, 2025 | September 30, 2026 | ||||||||||||||||||
Net Amounts of | |||||||||||||||||||
Gross | Gross | Net Amounts of | Gross | Gross | Assets | ||||||||||||||
Amounts | Amounts Offset | Assets on | Amounts | Amounts Offset | (Liabilities) on | ||||||||||||||
| Recognized | | Recognized | | Balance Sheet | | Recognized | | Recognized | | Balance Sheet | ||||||||
Commodity derivative assets | $ | | ( | | | ( | | ||||||||||||
Embedded derivative assets | | — | | | — | | |||||||||||||
Commodity derivative liabilities | ( | | — | ( | | ( | |||||||||||||
The following table sets forth a summary of derivative fair value gains and losses and where such values are recorded in the unaudited condensed consolidated statements of operations and comprehensive income (in thousands):
Statement of | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| Operations Location |
| 2025 |
| 2026 |
| 2025 |
| 2026 | ||||||
Commodity derivative fair value gains (1) | Revenue | $ | | | | | |||||||||
Embedded derivative fair value losses (1) | Revenue | ( | ( | ( | ( | ||||||||||
| (1) | The fair value of derivative instruments was determined using Level 2 inputs. |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
(12) Leases
The Company leases certain office space, processing plants, drilling rigs and completion services, gas gathering lines, compressor stations, and other office and field equipment. Leases with an initial term of 12 months or less are considered short-term and are not recorded on the balance sheet. Instead, the short-term leases are recognized in expense on a straight-line basis over the lease term.
Most leases include
Certain of the Company’s lease agreements include minimum payments based on a percentage of produced volumes over contractual levels and others include rental payments adjusted periodically for inflation.
The Company considers all contracts that have assets specified in the contract, either explicitly or implicitly, that the Company has substantially all of the capacity of the asset, and has the right to obtain substantially all of the economic benefits of that asset, without the lessor’s ability to have a substantive right to substitute that asset, as leased assets. For any contract deemed to include a leased asset, that asset is capitalized on the condensed consolidated balance sheet as a right-of-use asset and a corresponding lease liability is recorded at the present value of the known future minimum payments of the contract using a discount rate on the date of commencement. The leased asset classification is determined at the date of recording as either operating or financing, depending upon certain criteria of the contract.
The discount rate used for present value calculations is the discount rate implicit in the contract. If an implicit rate is not determinable, a collateralized incremental borrowing rate is used at the date of commencement. As new leases commence or previous leases are modified, the discount rate used in the present value calculation is the current period applicable discount rate.
The Company has made an accounting policy election to adopt the practical expedient for combining lease and non-lease components on an asset class basis. This expedient allows the Company to combine non-lease components such as real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises with the lease component of a lease agreement on an asset class basis when the non-lease components of the agreement cannot be easily bifurcated from the lease payment. Currently, the Company is only applying this expedient to certain office space agreements.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
| (a) | Supplemental Balance Sheet Information Related to Leases |
The Company’s lease assets and liabilities consisted of the following items (in thousands):
(Unaudited) | |||||||||
December 31, | September 30, | ||||||||
Leases |
| Balance Sheet Classification |
| 2025 |
| 2026 | |||
Operating Leases | |||||||||
Operating lease right-of-use assets: | |||||||||
Processing plants | Operating lease right-of-use assets | $ | | | |||||
Gas gathering lines and compressor stations (1) | Operating lease right-of-use assets | | | ||||||
Drilling rigs and completion services | Operating lease right-of-use assets | | | ||||||
Office space | Operating lease right-of-use assets | | | ||||||
Office, field and other equipment | Operating lease right-of-use assets | | | ||||||
Total operating lease right-of-use assets | $ | | | ||||||
Operating lease liabilities: | |||||||||
Short-term operating lease liabilities | $ | | | ||||||
Long-term operating lease liabilities | | | |||||||
Total operating lease liabilities | $ | | | ||||||
Finance Leases | |||||||||
Finance lease right-of-use assets: | |||||||||
Vehicles | $ | | | ||||||
Total finance lease right-of-use assets (2) | $ | | | ||||||
Finance lease liabilities: | |||||||||
Short-term finance lease liabilities | $ | | | ||||||
Long-term finance lease liabilities | | | |||||||
Total finance lease liabilities | $ | | | ||||||
| (1) | Gas gathering lines and compressor stations relate to Antero Midstream. See “—Related Party Lease Disclosure” for additional discussion. |
| (2) | Financing lease assets are recorded net of accumulated amortization of $ |
The processing plants, gas gathering lines and compressor stations that are classified as lease liabilities are classified as such under FASB ASC Topic 842, Leases, because Antero (i) is the sole customer of the assets and (ii) makes the decisions that most impact the economic performance of the assets.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
| (b) | Supplemental Information Related to Leases |
Costs associated with operating and finance leases were included in the unaudited condensed consolidated statement of operations and comprehensive income (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
Cost |
| Classification |
| Location |
| 2025 |
| 2026 |
| 2025 |
| 2026 |
| ||||
Operating lease cost | Statement of operations | Gathering, compression, processing and transportation | $ | | | | | ||||||||||
Operating lease cost | Statement of operations | General and administrative | | | | | |||||||||||
Operating lease cost | Statement of operations | Lease operating | | | | | |||||||||||
Operating lease cost | Balance sheet | Proved properties (1) | | | | | |||||||||||
Total operating lease cost | $ | | | | | ||||||||||||
Finance lease cost: | |||||||||||||||||
Amortization of right-of-use assets | Statement of operations | Depletion, depreciation and amortization | $ | | | | | ||||||||||
Interest on lease liabilities | Statement of operations | Interest expense, net | | | | | |||||||||||
Total finance lease cost | $ | | | | | ||||||||||||
Short-term lease payments | $ | | | | | ||||||||||||
| (1) | Capitalized costs related to drilling and completion activities. |
| (c) | Supplemental Cash Flow Information Related to Leases |
The following table presents the Company’s supplemental cash flow information related to leases (in thousands):
Nine Months Ended September 30, | |||||||
| 2025 |
| 2026 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||
Operating cash flows from operating leases | $ | | | ||||
Operating cash flows from finance leases | | | |||||
Investing cash flows from operating leases | | | |||||
Financing cash flows from finance leases | | | |||||
Noncash activities: | |||||||
Right-of-use assets obtained in exchange for new operating lease obligations | $ | | | ||||
Decrease to existing right-of-use assets and lease obligations from operating lease modifications, net (1) | $ | ( | ( | ||||
| (1) | During the nine months ended September 30, 2025, the weighted average discount rate for remeasured operating leases increased from |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
| (d) | Maturities of Lease Liabilities |
The table below is a schedule of future minimum payments for operating and financing lease liabilities as of September 30, 2026 (in thousands):
Operating Leases |
| Financing Leases | Total | |||||||
Remainder of 2026 | $ | | | | ||||||
2027 | | | | |||||||
2028 | | | | |||||||
2029 | | | | |||||||
2030 | | | | |||||||
Thereafter | | — | | |||||||
Total lease payments | | | | |||||||
Less: imputed interest | ( | ( | ( | |||||||
Total | $ | | | | ||||||
| (e) | Lease Term and Discount Rate |
The following table sets forth the Company’s weighted average remaining lease term and discount rate:
(Unaudited) | ||||||||||
December 31, 2025 | September 30, 2026 | |||||||||
Operating Leases |
| Finance Leases | Operating Leases |
| Finance Leases | |||||
Weighted average remaining lease term | ||||||||||
Weighted average discount rate | | % | | % | | % | | % | ||
| (f) | Related Party Lease Disclosure |
The Company has gathering and compression service agreements with Antero Midstream that include: (i) the second amended and restated gathering and compression agreement dated December 8, 2019, including the updates agreed to in principle as it relates to the HG Acquisition (the “2019 gathering and compression agreement”), (ii) a gathering and compression agreement from Antero Midstream’s acquisition in 2022 of certain Marcellus gathering and compression assets in an area of dedication (the “Marcellus gathering and compression agreement”) and (iii) a gathering and compression agreement from Antero Midstream’s acquisition in the second quarter of 2024 of certain central Marcellus gathering and compression assets (the “Mountaineer gathering and compression agreement”). The Company also had a compression agreement from Antero Midstream’s acquisition in 2022 of certain Utica compressors that was divested at the closing of the Utica Shale Divestiture on February 23, 2026 (the “Utica compression agreement” and together with the 2019 gathering and compression agreement, the Marcellus gathering and compression agreement and the Mountaineer gathering and compression agreement, the “gathering and compression agreements”). Pursuant to the gathering and compression agreements with Antero Midstream, the Company has dedicated substantially all of its current and future acreage in West Virginia, Ohio and Pennsylvania to Antero Midstream for gathering and compression services. The 2019 gathering and compression agreement, Marcellus gathering and compression agreement and Mountaineer gathering and compression agreement have initial terms through 2038, 2031 and 2026, respectively. Upon expiration of the Marcellus gathering and compression agreement and Mountaineer gathering and compression agreement, Antero Midstream will continue to provide gathering and compression services under the 2019 gathering and compression agreement.
Under the gathering and compression agreements, Antero Midstream receives a gathering fee per Mcf, a centralized compression fee per Mcf and high pressure gathering fee per Mcf, as applicable, subject to annual Consumer Price Index (“CPI”)-based adjustments. In addition, Antero Midstream receives fees for well pad compression that include (i) reimbursement of Antero Midstream’s third-party out-of-pocket costs plus
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
period of
Upon completion of the initial contract term, the 2019 gathering and compression agreement will continue in effect from year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement, by notice from either the Company or Antero Midstream to the other party on or before the
Gathering and compression fees paid by the Company related to these agreements were $
(13) Commitments
The following table sets forth a schedule of future minimum payments for the Company’s contractual obligations, which include leases that have a lease term in excess of one year as of September 30, 2026 (in thousands):
Processing, | |||||||||||||||||||
Gathering, | |||||||||||||||||||
Firm | Compression | Operating and | Imputed Interest | ||||||||||||||||
Transportation | and Water Service | Financing Leases | for Leases | Other | |||||||||||||||
| (a) | | (b) | | (c) | | (c) | | (d) | | Total |
| |||||||
Remainder of 2026 | $ | | | | | | | ||||||||||||
2027 | | | | | | | |||||||||||||
2028 | | | | | | | |||||||||||||
2029 | | | | | | | |||||||||||||
2030 | | | | | | | |||||||||||||
Thereafter | | | | | | | |||||||||||||
Total | $ | | | | | | | ||||||||||||
| (a) | Firm Transportation |
The Company has entered into firm transportation agreements with various pipelines in order to facilitate the delivery of its production to market. These contracts commit the Company to transport minimum daily natural gas or NGLs volumes at negotiated rates or pay for any deficiencies at specified reservation fee rates. The amounts in this table are based on the Company’s minimum daily volumes at the reservation fee rate. The values in the table represent the gross amounts that the Company is committed to pay; however, the Company will record in the unaudited condensed consolidated financial statements its proportionate share of costs based on its working interest.
| (b) | Processing, Gathering, Compression and Water Service Commitments |
The Company has entered into various long-term gas processing, gathering, compression and water service agreements. Certain of these agreements were determined to be leases. The minimum payment obligations under the agreements that are not leases are presented in this column.
The values in the table represent the gross amounts that the Company is committed to pay; however, the Company will record in the unaudited condensed consolidated financial statements its proportionate share of costs based on its working interest.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
| (c) | Operating and Finance Leases, including Imputed Interest |
The Company has obligations under contracts for services provided by drilling rigs and completion fleets, processing, gathering, and compression services agreements, and office and equipment leases. The values in the table represent the gross amounts that Antero Resources is committed to pay; however, the Company will record in its financial statements its proportionate share of costs based on its working interests. See Note 12—Leases to the unaudited condensed consolidated financial statements for additional information.
(d) | Other |
The Company enters into various other agreements from time to time, certain of which contain minimum payment obligations over various terms. The values in the table represent the minimum payments due under these arrangements. None of these agreements were determined to be leases.
(e) | Contract Terminations |
The Company incurs costs associated with the delay or cancellation of certain contracts with third-parties. These costs are recorded in contract termination, loss contingency and settlements in the unaudited condensed consolidated statements of operations and comprehensive income. There are
(14) Contingencies
| (a) | Environmental |
In June 2018, the Company received a Notice of Violation (“NOV”) from the U.S. Environmental Protection Agency (“EPA”) Region III for alleged violations of the federal Clean Air Act and the West Virginia State Implementation Plan. The NOV alleges that combustion devices at these facilities did not meet applicable air permitting requirements. Separately, in June 2018, the Company received an information request from the EPA Region III pursuant to Section 114(a) of the Clean Air Act relating to the facilities that were inspected in September 2017 as well as additional Antero Resources facilities for the purpose of determining if the additional facilities have the same alleged compliance issues that were identified during the September 2017 inspections. Subsequently, the West Virginia Department of Environmental Protection (“WVDEP”) and the EPA Region V (covering Ohio facilities) each conducted its own inspections, and the Company has separately received NOVs from WVDEP and EPA Region V related to similar issues being investigated by the EPA Region III. On February 13, 2026, the Company entered into a Consent Decree with the DOJ and WVDEP resolving the alleged violations. The Consent Decree requires Antero to pay a total penalty of approximately $
| (b) | Production Taxes |
The Company is subject to production taxes in the states in which it operates. The Company’s production tax filings in West Virginia for 2018 to 2020 tax years were subject to audit by the State of West Virginia. All assessments received in conjunction with this audit were recorded in the consolidated statement of operations and comprehensive net loss during the year ended December 31, 2024; however, the Company has filed an appeal with regard to such assessments. The Company’s production tax filings in West Virginia for 2023 and 2024 tax years are currently under audit by the State of West Virginia. At this time, the Company believes the outcome of this matter will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
| (c) | Other |
The Company is party to various legal proceedings and claims in the ordinary course of its business. The Company evaluates its legal proceedings on a regular basis and accrues a liability for such matters when the Company believes that a loss is probable and the amount of the loss can be reasonably estimated. Any such accruals are adjusted thereafter to reflect changed circumstances. In the event the Company determines that (i) a loss to the Company is probable but the amount of the loss cannot be reasonably estimated, or (ii) a loss to the Company is less likely than probable but is reasonably possible, then the Company is required to disclose the matter herein, although the Company is not required to accrue such loss.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
When able, the Company determines an estimate of reasonably possible losses or ranges of reasonably possible losses, whether in excess of any related accrued liability or where there is no accrued liability, for legal proceedings. In instances where such estimates can be made, any such estimates are based on the Company's analysis of currently available information and are subject to significant judgment and a variety of assumptions and uncertainties and may change as new information is obtained. The Company could also be responsible for interest on any amount the Company may be determined to owe, the amount of which is not determinable or estimable. The ultimate outcome of the matters described above, such as whether the likelihood of loss is remote, reasonably possible, or probable, or if and when the range of loss is reasonably estimable, is inherently uncertain. Furthermore, due to the inherent subjectivity of the assessments and unpredictability of outcomes of legal proceedings, any amounts accrued or estimated as possible losses may not represent the ultimate loss to the Company from the legal proceedings in question and the Company's exposure and ultimate losses may be higher than the amounts accrued or estimated.
The Company has been named in various lawsuits alleging royalty underpayments, some of which seek class action certification. Pending litigation against the Company and other peer operators could have an impact on the methods for determining royalty payments due to lessors under oil and gas leases, including the amount of permitted post-production costs and types of costs that have been, and may be, deducted from royalty payments, among other things. While the amounts claimed could be material, many of these proceedings are in early stages, involve multiple lease forms with varying royalty provisions and seek or may seek damages the amount of which is currently indeterminate. In a class action lawsuit to which the Company is a party, Jacklin Romeo, et al. v. Antero Resources Corporation, the U.S. District Court for the Northern District of West Virginia certified certain questions to the West Virginia Supreme Court (the “WVSC”) with respect to the interpretation of West Virginia’s implied duty to market gas where a lease lacks any express language regarding the allocation of post-production costs and the treatment of NGLs. The WVSC answered the certified questions in November 2024; however, in December 2024, Antero petitioned the WVSC for rehearing on the certified questions, which stayed the issuance of the mandate required for the November 2024 opinion to take effect. The petition for rehearing was granted by the WVSC on December 31, 2024, and oral argument on the matter was held before the WVSC on April 22, 2025. On June 11, 2025, the WVSC answered the certified questions, the effect of which broadens the scope of products for which the Company will pay royalties and limits the amount of post-production costs the Company deducts from royalty payments, in each case, under leases that do not contain language to the contrary. With respect to the Romeo matter, the Company has accrued an immaterial amount as of December 31, 2025 and September 30, 2026 for estimated damages that is recorded in contract termination, loss contingency and settlements in the unaudited condensed consolidated statements of operations and comprehensive income.
The WVSC’s answers to the certified questions in the Romeo matter could also impact past royalty payments made by the Company, as well as royalty payments owed in the future, under certain of the Company’s other leases that are not at issue in the Romeo matter. While the Company cannot predict with certainty the timing and ultimate outcome of any other currently pending claims or potential other claims relating to royalty payments under such other leases, the Company currently estimates the amount of losses that are reasonably possible associated with such other leases, could be up to $
Rulings were also previously received in two other cases to which the Company is a party, and where the plaintiffs alleged, and the court found, that certain post-production costs may not be deducted based on interpretation of specific language in the applicable leases: a non-class action lawsuit in West Virginia and a class action lawsuit in Ohio. In each case, the alleged damages were not material. The Company will continue to challenge the legal conclusions reached in each of these cases, and continues to analyze how these decisions may impact other cases to which the Company is a party. At this time, the Company cannot predict how and when the foregoing issues may ultimately be resolved, and therefore is also unable to estimate potential damages, if any, that may result.
(15) Related Parties
Substantially all of Antero Midstream’s revenues were and are derived from transactions with Antero Resources. See Note 16—Reportable Segments to the unaudited condensed consolidated financial statements for the operating results of the Company’s reportable segments.
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
In light of the nature and location of the assets and operations acquired in the HG Acquisition, the Company and Antero Midstream agreed in principle to certain updates to, and intend to modify, their existing commercial arrangements to provide for well pad compression with respect to certain wells and to provide certain water services. For well pad compression services provided by third-party-owned equipment, the Company will reimburse Antero Midstream’s third-party out-of-pocket costs plus
(16) Reportable Segments
The Company’s operations, which are located in the United States, are organized into
The operating results of the Company’s reportable segments were as follows (in thousands):
Three Months Ended September 30, 2025 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production | | Marketing | | Midstream (1) | | Affiliate | | Total | |||||||
Sales and revenues: | ||||||||||||||||
Third-party | $ | | | | ( | | ||||||||||
Intersegment | | — | | ( | | |||||||||||
Total revenue | | | | ( | | |||||||||||
Operating expenses: | ||||||||||||||||
Lease operating | | — | — | — | | |||||||||||
Gathering and compression | | — | | ( | | |||||||||||
Processing | | — | — | — | | |||||||||||
Transportation | | — | — | — | | |||||||||||
Water handling | — | — | | ( | — | |||||||||||
Production and ad valorem taxes | | — | — | — | | |||||||||||
Marketing | — | | — | — | | |||||||||||
General and administrative (excluding equity-based compensation) | | — | | ( | | |||||||||||
Equity-based compensation | | — | | ( | | |||||||||||
Facility idling | — | — | | ( | — | |||||||||||
Depletion, depreciation and amortization | | — | | ( | | |||||||||||
Impairment of property and equipment | | — | | ( | | |||||||||||
Other (2) | | — | | ( | | |||||||||||
Total operating expenses | | | | ( | | |||||||||||
Operating income (loss) | $ | | ( | | ( | | ||||||||||
Equity in earnings of unconsolidated affiliates | $ | | — | | ( | | ||||||||||
Capital expenditures for segment assets | $ | | — | | ( | | ||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
| (2) |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
Three Months Ended September 30, 2026 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production |
| Marketing |
| Midstream (1) |
| Affiliate |
| Total | |||||||
Sales and revenues: | ||||||||||||||||
Third-party | $ | | | | ( | | ||||||||||
Intersegment |
| | — | | ( | | ||||||||||
Total revenue | | | | ( | | |||||||||||
Operating expenses: | ||||||||||||||||
Lease operating | | — | — | — | | |||||||||||
Gathering and compression | | — | | ( | | |||||||||||
Processing | | — | — | — | | |||||||||||
Transportation | | — | — | — | | |||||||||||
Water handling | — | — | | ( | — | |||||||||||
Production and ad valorem taxes | | — | — | — | | |||||||||||
Marketing | — | | — | — | | |||||||||||
General and administrative (excluding equity-based compensation) | | — | | ( | | |||||||||||
Equity-based compensation | | — | | ( | | |||||||||||
Facility idling | — | — | | ( | — | |||||||||||
Depletion, depreciation and amortization | | — | | ( | | |||||||||||
Impairment of property and equipment | | — | | ( | | |||||||||||
Gain on litigation | — | — | ( | | — | |||||||||||
Other (2) | | — | | ( | | |||||||||||
Total operating expenses | | | ( | | | |||||||||||
Operating income (loss) | $ | | ( | | ( | | ||||||||||
Equity in earnings of unconsolidated affiliates | $ | | — | | ( | | ||||||||||
Capital expenditures for segment assets | $ | | — | | ( | | ||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
| (2) |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
Nine Months Ended September 30, 2025 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production |
| Marketing |
| Midstream (1) |
| Affiliate |
| Total |
| ||||||
Sales and revenues: | ||||||||||||||||
Third-party | $ | | | | ( | | ||||||||||
Intersegment |
| | — | | ( | | ||||||||||
Total revenue | | | | ( | | |||||||||||
Operating expenses: | ||||||||||||||||
Lease operating | | — | — | — | | |||||||||||
Gathering and compression | | — | | ( | | |||||||||||
Processing | | — | — | — | | |||||||||||
Transportation | | — | — | — | | |||||||||||
Water handling | — | — | | ( | — | |||||||||||
Production and ad valorem taxes | | — | — | — | | |||||||||||
Marketing | — | | — | — | | |||||||||||
General and administrative (excluding equity-based compensation) | | — | | ( | | |||||||||||
Equity-based compensation | | — | | ( | | |||||||||||
Facility idling | — | — | | ( | — | |||||||||||
Depletion, depreciation and amortization | | — | | ( | | |||||||||||
Impairment of property and equipment | | — | | ( | | |||||||||||
Other (2) | | — | | ( | | |||||||||||
Total operating expenses | | | | ( | | |||||||||||
Operating income (loss) | $ | | ( | | ( | | ||||||||||
Equity in earnings of unconsolidated affiliates | $ | | — | | ( | | ||||||||||
Capital expenditures for segment assets | $ | | — | | ( | | ||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
| (2) |
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ANTERO RESOURCES CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
Nine Months Ended September 30, 2026 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production |
| Marketing |
| Midstream (1) |
| Affiliate |
| Total |
| ||||||
Sales and revenues: | ||||||||||||||||
Third-party | $ | | | | ( | | ||||||||||
Intersegment |
| | — | | ( | | ||||||||||
Total revenue | | | | ( | | |||||||||||
Operating expenses: | ||||||||||||||||
Lease operating | | — | — | — | | |||||||||||
Gathering and compression | | — | | ( | | |||||||||||
Processing | | — | — | — | | |||||||||||
Transportation | | — | — | — | | |||||||||||
Water handling | — | — | | ( | — | |||||||||||
Production and ad valorem taxes | | — | — | — | | |||||||||||
Marketing | — | | — | — | | |||||||||||
General and administrative (excluding equity-based compensation) | | — | | ( | | |||||||||||
Equity-based compensation | | — | | ( | | |||||||||||
Facility idling | — | — | | ( | — | |||||||||||
Depletion, depreciation and amortization | | — | | ( | | |||||||||||
Impairment of property and equipment | | — | | ( | | |||||||||||
Gain on sale of assets | ( | — | ( | | ( | |||||||||||
Gain on litigation | — | ( | | — | ||||||||||||
Other (2) | | — | | ( | | |||||||||||
Total operating expenses | | | | ( | | |||||||||||
Operating income (loss) | $ | | ( | | ( | | ||||||||||
Equity in earnings of unconsolidated affiliates | $ | | — | | ( | | ||||||||||
Capital expenditures for segment assets | $ | | — | | ( | | ||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
| (2) |
The summarized assets of the Company’s reportable segments are as follows (in thousands):
As of December 31, 2025 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production |
| Marketing |
| Midstream (1) |
| Affiliate |
| Total | |||||||
Investments in unconsolidated affiliates | $ | | — | | ( | | ||||||||||
Total assets | | | | ( | | |||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s condensed consolidated financial statements. |
(Unaudited) | ||||||||||||||||
As of September 30, 2026 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production |
| Marketing |
| Midstream (1) |
| Affiliate |
| Total |
| ||||||
Investments in unconsolidated affiliates | $ | | — | | ( | | ||||||||||
Total assets | | | | ( | | |||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
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Item 2. 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 unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results, and the differences can be material. 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. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. See “Cautionary Statement Regarding Forward-Looking Statements.” Also, see the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors.” We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.
In this section, references to “Antero,” the “Company,” “we,” “us,” and “our” refer to Antero Resources Corporation and its subsidiaries, unless otherwise indicated or the context otherwise requires.
Our Company
We have assembled a portfolio of long-lived properties that are characterized by what we believe to be high repeatability and low geologic risk. We focus on unconventional reservoirs, which can generally be characterized as fractured shale formations. Our management team has worked together for many years and has a successful track record of reserve and production growth as well as significant expertise in unconventional resource plays. Our strategy is to leverage our team’s experience delineating and developing natural gas resource plays to develop our reserves and production, primarily on our existing multi-year inventory of drilling locations in the Appalachian Basin. As of September 30, 2026, we held approximately 866,000 net acres in the Appalachian Basin.
HG Acquisition
On December 5, 2025, we entered into a definitive agreement to acquire 100% of the issued and outstanding equity interests of HG Production for total cash consideration of $2.8 billion, subject to the terms and conditions thereof. The HG Acquisition included approximately 385,000 net acres in the core of the Marcellus Shale in West Virginia. This acquisition closed on the Closing Date. The HG Acquisition was funded with borrowings under the Term Loan, net proceeds of the 2036 Notes, borrowings under the Credit Facility and restricted cash. See Note 3—Transactions to our unaudited condensed consolidated financial statements for additional information. The Company’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2026 included results of operations from the assets and operations acquired in the HG Acquisition from the Closing Date through September 30, 2026.
In light of the nature and location of the assets and operations acquired in the HG Acquisition, we and Antero Midstream agreed in principle to certain updates to, and intend to modify, our existing commercial arrangements to provide for well pad compression with respect to certain wells and to provide certain water services. See Note 15—Related Parties to our unaudited condensed consolidated financial statements for additional information.
Utica Shale Divestiture
On December 5, 2025, we entered into a purchase and sale agreement with the Buyer Parties to sell our Utica Shale Properties for aggregate cash consideration of $800 million, subject to the terms and conditions thereof. The Utica Shale Properties included approximately 80,000 gross (70,000 net) acres located in Ohio and proved reserves of approximately 600 Bcfe as of December 31, 2025. The Utica Shale Divestiture closed on February 23, 2026, with an effective date of July 1, 2025. The net proceeds from the Utica Shale Divestiture were used for the repayment of long-term debt. See Note 3—Transactions to our unaudited condensed consolidated financial statements for additional information.
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Martica Hurdle Achievement and Dissolution
On May 1, 2026, Sixth Street achieved its Hurdle for Martica. As such, beginning May 1, 2026, 85% of the distributions in respect of the ORRIs to which Sixth Street was entitled immediately prior to the Hurdle being achieved reverted to us. On June 30, 2026, we elected to dissolve Martica and make in-kind liquidating distributions to Sixth Street and ourselves, which included conveyance of the ORRIs to Sixth Street and Antero Resources after giving effect to the Reversion, after which Martica was deconsolidated for our unaudited condensed consolidated financial statements. Beginning July 1, 2026, after the deconsolidation of Martica, our unaudited condensed consolidated financial statements reflect the ORRIs conveyed to us by Martica after giving effect to the Reversion, including the related earnings and cash flows. See Note 2—Summary of Significant Accounting Policies for additional information.
Financing Highlights
Issuance of 2036 Notes
On January 28, 2026, we issued $750 million of 5.400% senior notes due February 1, 2036 at a price of 99.869% of par. The 2036 Notes are unsecured and rank pari passu to our Credit Facility, Term Loan and other outstanding senior notes. The 2036 Notes are not guaranteed by any of our subsidiaries. The net proceeds from this offering were used to partially fund the HG Acquisition. See Note 3—Transactions and Note 7—Debt to our unaudited condensed consolidated financial statements for additional information.
Term Loan
On February 3, 2026, substantially concurrently with the consummation of the HG Acquisition, we entered into an unsecured three year term loan facility in an aggregate principal amount of $1.5 billion with the lenders party thereto and Royal Bank of Canada, as administrative agent. Borrowings are unsecured and are not guaranteed by any of our subsidiaries. On February 3, 2026, we borrowed $1.5 billion in a single borrowing to partially fund the HG Acquisition. The Term Loan is scheduled to mature on February 3, 2029. As of September 30, 2026, we have $1.0 billion outstanding on the Term Loan. See Note 3—Transactions and Note 7—Debt to our unaudited condensed consolidated financial statements for additional information.
Redemption of 2029 Notes
On February 24, 2026, we redeemed the remaining $365 million principal amount of the 2029 Notes at 101.271% of the principal amount thereof, plus accrued and unpaid interest, and the 2029 Notes were fully retired on such date. See Note 7—Debt to our unaudited condensed consolidated financial statements for additional information.
Commercial Paper Program
On June 16, 2026, we established the Commercial Paper Program pursuant to which we may issue short-term, unsecured commercial paper notes. The Commercial Paper may be issued and redeemed from time to time, with the aggregate face or principal amount of the notes outstanding under the Commercial Paper Program at any time not to exceed $1.65 billion. Our Credit Facility will serve as a liquidity backstop for any issuances under the Commercial Paper Program, and we intend to maintain available capacity under the Credit Facility in an amount at least equal to the aggregate outstanding borrowings under the Commercial Paper Program. See Note 7—Debt to our unaudited condensed consolidated financial statements for additional information.
Share Repurchase Program
During 2022, our Board of Directors authorized a share repurchase program that allows us to repurchase up to $2.0 billion of outstanding common stock. During the three and nine months ended September 30, 2026, we repurchased approximately 2 million and approximately 3 million shares of our common stock, respectively, at a total cost of $56 million and $94 million, respectively, through our share repurchase program. As of September 30, 2026, we have approximately $821 million of capacity remaining under our share repurchase program. 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. The timing, as well as the number and value of shares repurchased under the program, will be determined by us at our discretion and will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and applicable legal requirements.
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Market Conditions and Business Trends
Commodity Markets
Prices for natural gas, NGLs and oil that we produce significantly impact our revenues and cash flows. Benchmark prices for ethane, C3+ NGLs and oil increased while benchmark prices for natural gas decreased during the three months ended September 30, 2026 as compared to the same period of 2025. Benchmark prices for natural gas, C3+ NGLs and oil increased while benchmark prices for ethane decreased during the nine months ended September 30, 2026 as compared to the same period of 2025. 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, Venezuela and in the Middle East, among others. In the current economic environment, we expect that commodity prices for some or all of the commodities we produce could remain volatile. This volatility is beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows. However, we use derivative instruments when circumstances warrant to manage our exposure to commodity price risk. See “—Hedge Position” and Note 11—Derivative Instruments to our unaudited condensed consolidated financial statements for additional information on our derivative instruments.
The following table details the average benchmark natural gas, NGLs and oil prices:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2025 | | 2026 | | 2025 | | 2026 | ||||||
Henry Hub ($/Mcf) (1) | $ | 3.07 | 2.95 | $ | 3.39 | 3.63 | |||||||
Mont Belvieu Ethane ($/Bbl) (2) | 9.72 | 10.21 | 10.43 | 9.68 | |||||||||
Mont Belvieu C3+ NGLs ($/Bbl) (3) | 35.76 | 44.48 | 39.27 | 42.21 | |||||||||
West Texas Intermediate ($/Bbl) (4) | 64.93 | 85.79 | 66.70 | 83.57 | |||||||||
| (1) | NYMEX first of month average natural gas price. |
| (2) | Intercontinental Exchange, Inc. (“ICE”) settlement ethane Oil Price Information Service (“OPIS”) futures average price for the front month contract as published on the last trading day of the month. |
| (3) | ICE settlement propane, isobutane, normal butane and natural gasoline OPIS futures average price for the front month contract as published on the last trading day of the month. Propane and isobutane reflect TET prices, and normal butane and natural gasoline reflect non-TET prices. Propane, isobutane, normal butane and natural gasoline futures prices are weighted to approximate Antero Resources’ average C3+ NGLs composition. |
| (4) | NYMEX calendar month average settled futures price. |
Hedge Position
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. In addition, we periodically enter into contracts that contain embedded features that are required to be bifurcated and accounted for separately as derivatives. For the three months ended September 30, 2025 and 2026, 4% and 44%, respectively, of our production was hedged through commodity derivatives, excluding basis swaps. For the nine months ended September 30, 2025 and 2026, 4% and 44%, respectively, of our production was hedged through commodity derivatives, excluding basis swaps. Assuming our 2026 and 2027 production is the same as our production in 2025, approximately 54% and 35%, respectively, of our total production for such years is hedged through commodity derivatives, excluding basis swaps. In addition, for the three and nine months ended September 30, 2026, 18% and 16%, respectively, of our production was hedged with basis swap commodity derivatives. We did not have any basis swap commodity derivatives for the three and nine months ended September 30, 2025. Assuming our 2026 and 2027 production is the same as our production in 2025, approximately 20% and 15%, respectively of our total production for such years is hedged with basis swap commodity derivatives. As of September 30, 2026, the estimated fair value of our commodity derivative contracts was a net asset of $284 million. See Note 11—Derivative Instruments to our unaudited condensed consolidated financial statements for additional information.
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Economic Indicators
The economy experienced elevated inflation levels as a result of global supply and demand imbalances, where global demand outpaced supplies beginning in 2021 and continuing through 2026. During the second half of 2024, inflation rates began to approach the Federal Reserve’s stated goal of 2%, and the Federal Reserve decreased the federal funds rate by 1.75% in 2024 and 2025. Annual inflation rates have remained generally consistent at approximately 3% over that time. As a result, in September 2026, the Federal Reserve increased the federal funds rate by 0.25% in an effort to reach its stated goal for inflation of 2%.
The economy also continues to be impacted by the effects of global events. These events have often caused global supply chain disruptions with additional pressure due to trade sanctions, tariffs, other global trade restrictions and conflicts, including those in the Middle East and Venezuela, among others. While our supply chain has not experienced any significant interruptions as a result of such events, there can be no assurance that we will not experience interruptions in the future.
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. These economic variables are beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows.
Results of Operations
We have three reportable segments: exploration and production, our equity method investment in Antero Midstream and marketing. Revenues from Antero Midstream’s operations were primarily derived from intersegment transactions for services provided to our exploration and production operations by Antero Midstream. All intersegment transactions were eliminated upon consolidation, including revenues from water handling services provided by Antero Midstream, which we capitalized as proved property development costs. Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market and utilize excess firm transportation capacity. See Note 16—Reportable Segments to our unaudited condensed consolidated financial statements for additional information.
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Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2026
The operating results of our reportable segments were as follows (in thousands):
Three Months Ended September 30, 2025 |
| |||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production | | Marketing | | Midstream (1) | | Affiliate | | Total | |||||||
Revenue and other: | ||||||||||||||||
Natural gas sales | $ | 630,887 | — | — | — | 630,887 | ||||||||||
Natural gas liquids sales | 470,392 | — | — | — | 470,392 | |||||||||||
Oil sales | 31,351 | — | — | — | 31,351 | |||||||||||
Commodity derivative fair value gains | 39,243 | — | — | — | 39,243 | |||||||||||
Gathering, compression and water handling | — | — | 294,821 | (294,821) | — | |||||||||||
Marketing | — | 34,902 | — | — | 34,902 | |||||||||||
Amortization of deferred revenue, VPP | 6,368 | — | — | — | 6,368 | |||||||||||
Other revenue and income | 851 | — | — | — | 851 | |||||||||||
Total revenue | 1,179,092 | 34,902 | 294,821 | (294,821) | 1,213,994 | |||||||||||
Operating expenses: | ||||||||||||||||
Lease operating | 32,415 | — | — | — | 32,415 | |||||||||||
Gathering and compression | 231,413 | — | 29,077 | (29,077) | 231,413 | |||||||||||
Processing | 289,035 | — | — | — | 289,035 | |||||||||||
Transportation | 190,555 | — | — | — | 190,555 | |||||||||||
Water handling | — | — | 28,809 | (28,809) | — | |||||||||||
Production and ad valorem taxes | 28,884 | — | — | — | 28,884 | |||||||||||
Marketing | — | 51,068 | — | — | 51,068 | |||||||||||
Exploration | 844 | — | — | — | 844 | |||||||||||
General and administrative (excluding equity-based compensation) | 41,443 | — | 10,290 | (10,290) | 41,443 | |||||||||||
Equity-based compensation | 15,501 | — | 11,026 | (11,026) | 15,501 | |||||||||||
Depletion, depreciation and amortization | 188,778 | — | 34,465 | (34,465) | 188,778 | |||||||||||
Impairment of property and equipment | 12,228 | — | 167 | (167) | 12,228 | |||||||||||
Accretion of asset retirement obligations | 946 | — | — | — | 946 | |||||||||||
Loss on sale of assets | 171 | — | — | — | 171 | |||||||||||
Contract termination, loss contingency, settlements and other operating expenses | 12,596 | — | 494 | (494) | 12,596 | |||||||||||
Total operating expenses | 1,044,809 | 51,068 | 114,328 | (114,328) | 1,095,877 | |||||||||||
Operating income (loss) | $ | 134,283 | (16,166) | 180,493 | (180,493) | 118,117 | ||||||||||
Equity in earnings of unconsolidated affiliates | $ | 29,055 | — | 29,688 | (29,688) | 29,055 | ||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
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Three Months Ended September 30, 2026 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production |
| Marketing |
| Midstream (1) |
| Affiliate |
| Total | |||||||
Revenue and other: | ||||||||||||||||
Natural gas sales | $ | 702,721 | — | — | — | 702,721 | ||||||||||
Natural gas liquids sales | 579,842 | — | — | — | 579,842 | |||||||||||
Oil sales | 44,698 | — | — | — | 44,698 | |||||||||||
Commodity derivative fair value gains | 188,567 | — | — | — | 188,567 | |||||||||||
Gathering, compression and water handling | — | — | 327,022 | (327,022) | — | |||||||||||
Marketing | — | 40,102 | — | — | 40,102 | |||||||||||
Amortization of deferred revenue, VPP | 5,924 | — | — | — | 5,924 | |||||||||||
Other revenue and income | 983 | — | — | — | 983 | |||||||||||
Total revenue | 1,522,735 |
| 40,102 |
| 327,022 |
| (327,022) | 1,562,837 | ||||||||
Operating expenses: | ||||||||||||||||
Lease operating | 44,121 | — | — | — | 44,121 | |||||||||||
Gathering and compression | 270,055 | — | 38,553 | (38,553) | 270,055 | |||||||||||
Processing | 310,030 | — | — | — | 310,030 | |||||||||||
Transportation | 145,934 | — | — | — | 145,934 | |||||||||||
Water handling | — | — | 44,696 | (44,696) | — | |||||||||||
Production and ad valorem taxes | 30,920 | — | — | — | 30,920 | |||||||||||
Marketing | — | 55,708 | — | — | 55,708 | |||||||||||
Exploration | 911 | — | — | — | 911 | |||||||||||
General and administrative (excluding equity-based compensation) | 44,643 | — | 10,164 | (10,164) | 44,643 | |||||||||||
Equity-based compensation | 13,152 | — | 10,960 | (10,960) | 13,152 | |||||||||||
Depletion, depreciation and amortization | 241,167 | — | 37,963 | (37,963) | 241,167 | |||||||||||
Impairment of property and equipment | 1,555 | — | 2,921 | (2,921) | 1,555 | |||||||||||
Accretion of asset retirement obligations | 996 | — | — | — | 996 | |||||||||||
Loss (gain) on sale of assets | (1,153) | — | 1,158 | (1,158) | (1,153) | |||||||||||
Gain on litigation | — | — | (376,963) | 376,963 | — | |||||||||||
Contract termination, loss contingency, settlements and other operating expenses | 13,015 | — | 342 | (342) | 13,015 | |||||||||||
Total operating expenses | 1,115,346 |
| 55,708 |
| (230,206) |
| 230,206 | 1,171,054 | ||||||||
Operating income (loss) | $ | 407,389 | (15,606) | 557,228 | (557,228) | 391,783 | ||||||||||
Equity in earnings of unconsolidated affiliates | $ | 110,710 | — | 27,950 | (27,950) | 110,710 | ||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
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The following table sets forth selected operating data of the exploration and production and marketing segments:
Three Months Ended | Amount of | |||||||||||
September 30, | Increase | Percent | ||||||||||
| 2025 |
| 2026 |
| (Decrease) |
| Change |
| ||||
Production data (1) (2): | ||||||||||||
Natural gas (Bcf) | 202 | 267 | 65 | 32 | % | |||||||
C2 Ethane (MBbl) | 7,808 | 8,333 | 525 | 7 | % | |||||||
C3+ NGLs (MBbl) | 10,495 | 11,418 | 923 | 9 | % | |||||||
Oil (MBbl) | 619 | 637 | 18 | 3 | % | |||||||
Combined (Bcfe) | 315 | 390 | 75 | 24 | % | |||||||
Daily combined production (MMcfe/d) | 3,429 | 4,234 | 805 | 23 | % | |||||||
Average prices before effects of derivative settlements (3): | ||||||||||||
Natural gas (per Mcf) | $ | 3.12 | 2.63 | (0.49) | (16) | % | ||||||
C2 Ethane (per Bbl) (4) | $ | 11.05 | 11.79 | 0.74 | 7 | % | ||||||
C3+ NGLs (per Bbl) | $ | 36.60 | 42.18 | 5.58 | 15 | % | ||||||
Oil (per Bbl) | $ | 50.65 | 70.17 | 19.52 | 39 | % | ||||||
Weighted Average Combined (per Mcfe) | $ | 3.59 | 3.41 | (0.18) | (5) | % | ||||||
Average realized prices after effects of derivative settlements (3): | ||||||||||||
Natural gas (per Mcf) | $ | 3.12 | 3.15 | 0.03 | 1 | % | ||||||
C2 Ethane (per Bbl) (4) | $ | 11.05 | 11.79 | 0.74 | 7 | % | ||||||
C3+ NGLs (per Bbl) | $ | 36.60 | 41.82 | 5.22 | 14 | % | ||||||
Oil (per Bbl) | $ | 50.65 | 70.17 | 19.52 | 39 | % | ||||||
Weighted Average Combined (per Mcfe) | $ | 3.59 | 3.76 | 0.17 | 5 | % | ||||||
Average costs (per Mcfe): | ||||||||||||
Lease operating | $ | 0.10 | 0.11 | 0.01 | 10 | % | ||||||
Gathering and compression | $ | 0.73 | 0.69 | (0.04) | (5) | % | ||||||
Processing | $ | 0.92 | 0.80 | (0.12) | (13) | % | ||||||
Transportation | $ | 0.60 | 0.37 | (0.23) | (38) | % | ||||||
Production and ad valorem taxes | $ | 0.09 | 0.08 | (0.01) | (11) | % | ||||||
Marketing expense, net | $ | 0.05 | 0.04 | (0.01) | (20) | % | ||||||
General and administrative (excluding equity-based compensation) | $ | 0.13 | 0.11 | (0.02) | (15) | % | ||||||
Depletion, depreciation, amortization and accretion | $ | 0.60 | 0.62 | 0.02 | 3 | % | ||||||
| (1) | Production data excludes volumes related to the VPP. |
| (2) | Oil and NGLs production was converted at 6 Mcf per Bbl to calculate total Bcfe production and per Mcfe amounts. This ratio is an estimate of the equivalent energy content of the products and may not reflect their relative economic value. |
| (3) | Average prices reflect the before and after effects of our settled commodity derivatives. Our calculation of such after effects includes gains (losses) on settlements of commodity derivatives, which do not qualify for hedge accounting because we do not designate or document them as hedges for accounting purposes. |
| (4) | The average realized price for the three months ended September 30, 2025 includes less than $1 million of proceeds related to a take-or-pay contract. Excluding the effect of these proceeds, the average realized price for ethane before and after the effects of derivatives for the three months ended September 30, 2025 would have been $11.02 per Bbl. |
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Exploration and Production Segment
Natural gas sales. Revenues from sales of natural gas increased from $631 million for the three months ended September 30, 2025 to $703 million for the three months ended September 30, 2026, an increase of $72 million, or 11%, primarily due to $150 million of natural gas sales revenue attributable to the HG Acquisition properties and higher natural gas production volumes between periods, partially offset by the Utica Shale Divestiture and lower natural gas commodity prices between periods. Higher natural gas production volumes accounted for an approximate $204 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). Lower commodity prices (excluding the effects of derivative settlements) during the three months ended September 30, 2026 accounted for an approximate $132 million decrease in year-over-year natural gas sales revenue (calculated as the change in the year-to-year average price times current year production volumes).
NGLs sales. Revenues from sales of NGLs increased from $470 million for the three months ended September 30, 2025 to $580 million for the three months ended September 30, 2026, an increase of $110 million, or 23%, primarily due to an additional $47 million of NGLs revenue attributable to the HG Acquisition properties and higher NGLs commodity prices and production volumes between periods, partially offset by the Utica Shale Divestiture. Higher commodity prices (excluding the effects of derivative settlements) during the three months ended September 30, 2026 accounted for an approximate $70 million increase in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes). Higher NGLs production volumes accounted for an approximate $40 million increase in year-over-year revenues (calculated as the change in year-to-year volumes times the prior year average price).
Oil sales. Revenues from sales of oil increased from $31 million for the three months ended September 30, 2025 to $45 million for the three months ended September 30, 2026, an increase of $14 million, or 43%, primarily due to an additional $8 million of oil revenue attributable to the HG Acquisition properties and higher oil commodity prices between periods, partially offset by the Utica Shale Divestiture. Higher commodity prices (excluding the effects of derivative settlements) during the three months ended September 30, 2026 accounted for an approximate $13 million increase in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes). Higher oil production volumes during the three months ended September 30, 2026 accounted for an approximate $1 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 gains. Our commodity derivatives included fixed price swaps, collars, basis swaps and three-way collars, among others. 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 unaudited condensed consolidated statements of operations and comprehensive income. For the three months ended September 30, 2025 and 2026, our commodity hedges resulted in derivative fair value gains of $39 million and $189 million, respectively. For the three months ended September 30, 2025, commodity derivative fair value gains included $2 million of net cash payments for settled commodity derivative losses. For the three months ended September 30, 2026, commodity derivative fair value gains included $136 million of net cash proceeds for settled derivative gains.
Commodity derivative fair value gains or losses vary based on future commodity prices and have no cash flow impact until the derivative contracts are settled or monetized prior to settlement. Derivative asset or liability positions at the end of any accounting period may reverse to the extent future commodity prices increase or decrease from their levels at the end of the accounting period, or as gains or losses are realized through settlement. We expect continued volatility in commodity prices and the related fair value of our derivative instruments in the future.
Lease operating expense. Lease operating expense per Mcfe increased 10% from $0.10 per Mcfe for the three months ended September 30, 2025 to $0.11 per Mcfe for the three months ended September 30, 2026 primarily due to higher wastewater trucking and disposal costs due to the timing of well completions activity and increased workover costs between periods.
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Gathering, compression, processing and transportation expense. Gathering, compression, processing and transportation expense per Mcfe decreased 17% from $2.25 per Mcfe for the three months ended September 30, 2025 to $1.86 per Mcfe for the three months ended September 30, 2026 primarily due to the HG Acquisition properties that have lower compression, processing and transportation costs and certain commercial arrangements related to our firm transportation commitments due to strong end-user demand for our natural gas firm transportation capacity. The decrease in our gathering, compression, processing and transportation expense on a per unit basis was primarily a result of the following:
| ● | Gathering and compression costs decreased from $0.73 per Mcfe for the three months ended September 30, 2025 to $0.69 per Mcfe for the three months ended September 30, 2026, primarily due to lower gathering and compression expense on a per unit basis for the HG Acquisition properties and decreased fuel costs as a result of lower natural gas prices, partially offset by annual CPI-based adjustments between periods. |
| ● | Processing costs decreased from $0.92 per Mcfe for the three months ended September 30, 2025 to $0.80 per Mcfe for the three months ended September 30, 2026, primarily due to lower NGLs transportation fees related to the HG Acquisition properties between periods. |
| ● | Transportation costs decreased from $0.60 per Mcfe for the three months ended September 30, 2025 to $0.37 per Mcfe for the three months ended September 30, 2026, primarily due to lower transportation expense on a per unit basis for the HG Acquisition properties, certain commercial arrangements related to our natural gas firm transportation capacity and decreased fuel costs as a result of lower natural gas prices between periods. |
Production and ad valorem tax expense. Production and ad valorem taxes as a percentage of natural gas revenues remained relatively consistent at 5% and 4% for the three months ended September 30, 2025 and 2026, respectively.
General and administrative expense. General and administrative expense (excluding equity-based compensation expense) per Mcfe decreased 15% from $0.13 per Mcfe for the three months ended September 30, 2025 to $0.11 per Mcfe for the three months ended September 30, 2026 primarily due to higher production volumes between periods and synergies related to the HG Acquisition.
Depletion, depreciation and amortization expense (“DD&A expense”). DD&A expense per Mcfe remained relatively consistent at $0.60 per Mcfe and $0.62 per Mcfe for the three months ended September 30, 2025 and 2026, respectively.
Marketing Segment
Where feasible, we purchase and sell third-party natural gas and NGLs and market our excess firm transportation capacity, or engage third parties to conduct these activities on our behalf, in order to optimize the revenues from these transportation agreements. We have entered into long-term firm transportation agreements for a significant portion of our current and expected future production in order to secure guaranteed capacity to favorable markets.
Net marketing expense per Mcfe decreased from $0.05 per Mcfe for the three months ended September 30, 2025 to $0.04 per Mcfe for the three months ended September 30, 2026, primarily due to higher margins on our oil marketing volumes and lower fuel costs between periods, partially offset by higher demand fees on certain pipelines.
Marketing revenue. Marketing revenue increased from $35 million for the three months ended September 30, 2025 to $40 million for the three months ended September 30, 2026, an increase of $5 million, or 15%. This increase primarily resulted from higher oil marketing revenues of $8 million between periods primarily due to higher oil prices during the three months ended September 30, 2026, partially offset by decreased NGLs marketing revenues of $4 million between periods due to lower C3+ NGLs marketing volumes during the three months ended September 30, 2026.
Marketing expense. Marketing expense remained relatively consistent at $51 million and $56 million for the three months ended September 30, 2025 and 2026, respectively.
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Antero Midstream Segment
Antero Midstream revenue. Revenue from the Antero Midstream segment increased from $295 million for the three months ended September 30, 2025 to $327 million for the three months ended September 30, 2026, an increase of $32 million. This increase is primarily due to higher gathering and processing revenues and water handling revenues of $21 million and $16 million, respectively, between periods, partially offset by higher amortization of customer relationship of $5 million between periods. The increased gathering and processing revenues between periods is primarily due to higher low pressure gathering and compression volumes from the HG Acquisition and 86 wells connected to their system between periods and increased gathering and centralized compression rates as a result of annual CPI-based adjustments, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to their system between periods. The increased water handling revenues between periods is primarily due to fresh water delivery volumes for our acreage acquired in the HG Acquisition that are charged at cost plus 3% during the three months ended September 30, 2026, as well as higher blending volumes and cost of service fees, increased costs for wastewater trucking and disposal volumes and an increase to the fresh water delivery rate as a result of an annual CPI-based rate adjustment between periods.
Antero Midstream operating expense. Total operating expense related to the Antero Midstream segment, excluding the gain on litigation, increased from $114 million for the three months ended September 30, 2025 to $147 million for the three months ended September 30, 2026, an increase of $33 million. This increase is primarily due to increased gathering and well pad compression costs between periods related to assets acquired with the HG Acquisition and fresh water delivery volumes for our acreage acquired in the HG Acquisition that are charged at cost plus 3%, partially offset by the Utica Shale Divestiture. In addition, operating expenses during the three months ended September 30, 2026 include a gain on litigation of $377 million related to the receipt of damages, interest and attorneys’ fees from Veolia Water Technologies, Inc. for the Antero Clearwater Facility legal matter that concluded during the three months ended September 30, 2026.
Items Not Allocated to Segments
Interest expense. Interest expense increased from $18 million for the three months ended September 30, 2025 to $38 million for the three months ended September 30, 2026, an increase of $20 million, primarily due to borrowings to fund the HG Acquisition under the Term Loan, issuance of the 2036 Notes during the first quarter of 2026 and borrowings on our Commercial Paper Program, partially offset by the redemption of the 2029 Notes on February 24, 2026 and lower Credit Facility borrowings and rates between periods. See Note 7—Debt to the unaudited condensed consolidated financial statements for more information.
Income tax expense. Income tax expense increased from $43 million, with an effective tax rate of 34%, for the three months ended September 30, 2025 to $96 million, with an effective tax rate of 21%, for the three months ended September 30, 2026 primarily due to the increase in income before income taxes between periods. The decrease in the effective tax rate between periods was primarily due to the effects of noncontrolling interests and stock compensation expense.
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Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2026
The operating results of our reportable segments were as follows (in thousands):
Nine Months Ended September 30, 2025 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production |
| Marketing |
| Midstream (1) |
| Affiliate |
| Total |
| ||||||
Revenue and other: | ||||||||||||||||
Natural gas sales | $ | 2,099,645 | — | — | — | 2,099,645 | ||||||||||
Natural gas liquids sales | 1,512,581 | — | — | — | 1,512,581 | |||||||||||
Oil sales | 115,386 | — | — | — | 115,386 | |||||||||||
Commodity derivative fair value gains | 20,981 | — | — | — | 20,981 | |||||||||||
Gathering, compression and water handling | — | — | 891,422 | (891,422) | — | |||||||||||
Marketing | — | 94,203 | — | — | 94,203 | |||||||||||
Amortization of deferred revenue, VPP | 18,896 | — | — | — | 18,896 | |||||||||||
Other revenue and income | 2,502 | — | — | — | 2,502 | |||||||||||
Total revenue | 3,769,991 | 94,203 | 891,422 | (891,422) | 3,864,194 | |||||||||||
Operating expenses: | ||||||||||||||||
Lease operating | 103,645 | — | — | — | 103,645 | |||||||||||
Gathering and compression | 704,377 | — | 80,932 | (80,932) | 704,377 | |||||||||||
Processing | 834,230 | — | — | — | 834,230 | |||||||||||
Transportation | 569,135 | — | — | — | 569,135 | |||||||||||
Water handling | — | — | 96,898 | (96,898) | — | |||||||||||
Production and ad valorem taxes | 119,013 | — | — | — | 119,013 | |||||||||||
Marketing | — | 145,826 | — | — | 145,826 | |||||||||||
Exploration | 2,160 | — | — | — | 2,160 | |||||||||||
General and administrative (excluding equity-based compensation) | 130,071 | — | 31,630 | (31,630) | 130,071 | |||||||||||
Equity-based compensation | 46,501 | — | 34,835 | (34,835) | 46,501 | |||||||||||
Depletion, depreciation and amortization | 562,719 | — | 100,577 | (100,577) | 562,719 | |||||||||||
Impairment of property and equipment | 24,143 | — | 984 | (984) | 24,143 | |||||||||||
Accretion of asset retirement obligations | 2,827 | — | — | — | 2,827 | |||||||||||
Loss on sale of assets | 142 | — | — | — | 142 | |||||||||||
Contract termination, loss contingency, settlements and other operating expenses | 24,933 | — | 1,406 | (1,406) | 24,933 | |||||||||||
Total operating expenses | 3,123,896 | 145,826 | 347,262 | (347,262) | 3,269,722 | |||||||||||
Operating income (loss) | $ | 646,095 | (51,623) | 544,160 | (544,160) | 594,472 | ||||||||||
Equity in earnings of unconsolidated affiliates | $ | 88,279 | — | 87,724 | (87,724) | 88,279 | ||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
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Nine Months Ended September 30, 2026 | ||||||||||||||||
Equity Method | ||||||||||||||||
Exploration | Investment in | Elimination of | ||||||||||||||
and | Antero | Unconsolidated | Consolidated | |||||||||||||
| Production |
| Marketing |
| Midstream (1) |
| Affiliate |
| Total |
| ||||||
Revenue and other: | ||||||||||||||||
Natural gas sales | $ | 2,702,675 | — | — | — | 2,702,675 | ||||||||||
Natural gas liquids sales | 1,671,205 | — | — | — | 1,671,205 | |||||||||||
Oil sales | 150,972 | — | — | — | 150,972 | |||||||||||
Commodity derivative fair value gains | 384,223 | — | — | — | 384,223 | |||||||||||
Gathering, compression and water handling | — | — | 968,477 | (968,477) | — | |||||||||||
Marketing | — | 137,829 | — | — | 137,829 | |||||||||||
Amortization of deferred revenue, VPP | 17,579 | — | — | — | 17,579 | |||||||||||
Other revenue and income | 3,322 | — | — | — | 3,322 | |||||||||||
Total revenue | 4,929,976 | 137,829 | 968,477 | (968,477) | 5,067,805 | |||||||||||
Operating expenses: | ||||||||||||||||
Lease operating | 136,798 | — | — | — | 136,798 | |||||||||||
Gathering and compression | 809,393 | — | 105,116 | (105,116) | 809,393 | |||||||||||
Processing | 890,543 | — | — | — | 890,543 | |||||||||||
Transportation | 563,370 | — | — | — | 563,370 | |||||||||||
Water handling | — | — | 133,356 | (133,356) | — | |||||||||||
Production and ad valorem taxes | 149,452 | — | — | — | 149,452 | |||||||||||
Marketing | — | 190,320 | — | — | 190,320 | |||||||||||
Exploration | 2,607 | — | — | — | 2,607 | |||||||||||
General and administrative (excluding equity-based compensation) | 140,779 | — | 33,661 | (33,661) | 140,779 | |||||||||||
Equity-based compensation | 38,151 | — | 32,367 | (32,367) | 38,151 | |||||||||||
Depletion, depreciation and amortization | 674,660 | — | 109,976 | (109,976) | 674,660 | |||||||||||
Impairment of property and equipment | 6,958 | — | 3,054 | (3,054) | 6,958 | |||||||||||
Accretion of asset retirement obligations | 3,042 | — | — | — | 3,042 | |||||||||||
Gain on sale of assets | (61,719) | — | (1,500) | 1,500 | (61,719) | |||||||||||
Gain on litigation | — | — | (376,963) | 376,963 | — | |||||||||||
Contract termination, loss contingency, settlements and other operating expenses | 26,757 | — | 1,662 | (1,662) | 26,757 | |||||||||||
Total operating expenses | 3,380,791 | 190,320 | 40,729 | (40,729) | 3,571,111 | |||||||||||
Operating income (loss) | $ | 1,549,185 | (52,491) | 927,748 | (927,748) | 1,496,694 | ||||||||||
Equity in earnings of unconsolidated affiliates | $ | 170,207 | — | 86,487 | (86,487) | 170,207 | ||||||||||
| (1) | Amounts reflect those recorded in Antero Midstream’s unaudited condensed consolidated financial statements. |
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The following table sets forth selected operating data of the exploration and production and marketing segments:
Nine Months Ended | Amount of | ||||||||||||
September 30, | Increase | Percent | |||||||||||
| | 2025 | | 2026 | | (Decrease) | | Change | |||||
Production data (1) (2): | |||||||||||||
Natural gas (Bcf) | 599 | 762 | 163 | 27 | % | ||||||||
C2 Ethane (MBbl) | 22,174 | 23,065 | 891 | 4 | % | ||||||||
C3+ NGLs (MBbl) | 31,332 | 33,313 | 1,981 | 6 | % | ||||||||
Oil (MBbl) | 2,143 | 2,211 | 68 | 3 | % | ||||||||
Combined (Bcfe) | 933 | 1,113 | 180 | 19 | % | ||||||||
Daily combined production (MMcfe/d) | 3,419 | 4,078 | 659 | 19 | % | ||||||||
Average prices before effects of derivative settlements (3): | |||||||||||||
Natural gas (per Mcf) | $ | 3.50 | 3.55 | 0.05 | 1 | % | |||||||
C2 Ethane (per Bbl) (4) | $ | 11.69 | 12.56 | 0.87 | 7 | % | |||||||
C3+ NGLs (per Bbl) | $ | 40.00 | 41.47 | 1.47 | 4 | % | |||||||
Oil (per Bbl) | $ | 53.84 | 68.28 | 14.44 | 27 | % | |||||||
Weighted Average Combined (per Mcfe) | $ | 3.99 | 4.06 | 0.07 | 2 | % | |||||||
Average realized prices after effects of derivative settlements (3): | |||||||||||||
Natural gas (per Mcf) | $ | 3.47 | 3.69 | 0.22 | 6 | % | |||||||
C2 Ethane (per Bbl) (4) | $ | 11.69 | 12.56 | 0.87 | 7 | % | |||||||
C3+ NGLs (per Bbl) | $ | 40.00 | 41.37 | 1.37 | 3 | % | |||||||
Oil (per Bbl) | $ | 53.80 | 68.28 | 14.48 | 27 | % | |||||||
Weighted Average Combined (per Mcfe) | $ | 3.97 | 4.16 | 0.19 | 5 | % | |||||||
Average costs (per Mcfe): | |||||||||||||
Lease operating | $ | 0.11 | 0.12 | 0.01 | 9 | % | |||||||
Gathering and compression | $ | 0.75 | 0.73 | (0.02) | (3) | % | |||||||
Processing | $ | 0.89 | 0.80 | (0.09) | (10) | % | |||||||
Transportation | $ | 0.61 | 0.51 | (0.10) | (16) | % | |||||||
Production and ad valorem taxes | $ | 0.13 | 0.13 | — | * | ||||||||
Marketing expense, net | $ | 0.06 | 0.05 | (0.01) | (17) | % | |||||||
General and administrative (excluding equity-based compensation) | $ | 0.14 | 0.13 | (0.01) | (7) | % | |||||||
Depletion, depreciation, amortization and accretion | $ | 0.61 | 0.61 | — | * | ||||||||
*Not meaningful
| (1) | Production data excludes volumes related to the VPP. |
| (2) | Oil and NGLs production was converted at 6 Mcf per Bbl to calculate total Bcfe production and per Mcfe amounts. This ratio is an estimate of the equivalent energy content of the products and may not reflect their relative economic value. |
| (3) | Average prices reflect the before and after effects of our settled commodity derivatives. Our calculation of such after effects includes gains or losses on settlements of commodity derivatives, which do not qualify for hedge accounting because we do not designate or document them as hedges for accounting purposes. |
| (4) | The average realized price for the nine months ended September 30, 2025 includes $1 million of proceeds related to a take-or-pay contract. Excluding the effect of these proceeds, the average realized price for ethane before and after the effects of derivatives for the nine months ended September 30, 2025 would have been $11.66 per Bbl. |
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Exploration and Production Segment
Natural gas sales. Revenues from sales of natural gas increased from $2.1 billion for the nine months ended September 30, 2025 to $2.7 billion for the nine months ended September 30, 2026, an increase of $0.6 billion, or 29%, primarily due to an additional $471 million of natural gas revenue attributable to the HG Acquisition properties and higher natural gas production volumes and commodity prices between periods, partially offset by the Utica Shale Divestiture. Higher natural gas production volumes accounted for an approximate $568 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). Higher commodity prices (excluding the effects of derivative settlements) during the nine months ended September 30, 2026 accounted for an approximate $35 million increase in year-over-year natural gas sales revenue (calculated as the change in the year-to-year average price times current year production volumes).
NGLs sales. Revenues from sales of NGLs increased from $1.5 billion for the nine months ended September 30, 2025 to $1.7 billion for the nine months ended September 30, 2026, an increase of $0.2 billion, or 10%, primarily due to an additional $101 million of NGLs revenue attributable to the HG Acquisition properties and higher NGLs production volumes and commodity prices between periods, partially offset by the Utica Shale Divestiture. Higher NGLs production volumes during the nine months ended September 30, 2026 accounted for an approximate $90 million increase in year-over-year NGLs revenues (calculated as the change in year-to-year volumes times the prior year average price). Higher NGLs commodity prices (excluding the effects of derivative settlements) during the nine months ended September 30, 2026 accounted for an approximate $69 million increase in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes).
Oil sales. Revenues from sales of oil increased from $115 million for the nine months ended September 30, 2025 to $151 million for the nine months ended September 30, 2026, an increase of $36 million, or 31%, primarily due to an additional $21 million of oil revenue attributable to the HG Acquisition properties and higher oil prices and production volumes between periods, partially offset by the Utica Shale Divestiture. Higher oil prices (excluding the effects of derivative settlements) accounted for an approximate $32 million increase in year-over-year oil revenues (calculated as the change in the year-to-year average price times current year production volumes). Higher oil production volumes accounted for an approximate $4 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 gains. Our commodity derivatives included fixed price swaps, collars, basis swaps and three-way collars, among others. 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 unaudited condensed consolidated statements of operations and comprehensive income. For the nine months ended September 30, 2025 and 2026, our commodity hedges resulted in derivative fair value gains of $21 million and $384 million, respectively. For the nine months ended September 30, 2025, commodity derivative fair value gains included $19 million of net cash payments for settled derivative losses. For the nine months ended September 30, 2026, commodity derivative fair value gains included $105 million of net cash proceeds for settled derivative gains.
Commodity derivative fair value gains or losses vary based on future commodity prices and have no cash flow impact until the derivative contracts are settled or monetized prior to settlement. Derivative asset or liability positions at the end of any accounting period may reverse to the extent future commodity prices increase or decrease from their levels at the end of the accounting period, or as gains or losses are realized through settlement.
Lease operating expense. Lease operating expense per Mcfe increased 9% from $0.11 per Mcfe for the nine months ended September 30, 2025 to $0.12 per Mcfe for the nine months ended September 30, 2026 primarily due to higher wastewater trucking and disposal costs due to the timing of well completions activity and increased workover costs between periods.
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Gathering, compression, processing and transportation expense. Gathering, compression, processing and transportation expense per Mcfe decreased 9% from $2.25 per Mcfe for the nine months ended September 30, 2025 to $2.04 per Mcfe for the nine months ended September 30, 2026 primarily due to the HG Acquisition properties that have a lower compression, processing and transportation costs and certain commercial arrangements related to our firm transportation commitments due to strong end-user demand for our natural gas firm transportation capacity. The decrease in our gathering, compression, processing and transportation expense on a per unit basis was primarily a result of the following:
| ● | Gathering and compression costs on a per unit basis decreased from $0.75 per Mcfe for the nine months ended September 30, 2025 to $0.73 per Mcfe for the nine months ended September 30, 2026, primarily due to lower gathering and compression expense on a per unit basis for the HG Acquisition properties, partially offset by increased fuel costs as a result of higher natural gas prices and annual CPI-based adjustments between periods. |
| ● | Processing costs on a per unit basis decreased from $0.89 per Mcfe for the nine months ended September 30, 2025 to $0.80 per Mcfe for the nine months ended September 30, 2026, primarily due to lower NGLs transportation fees related to the HG Acquisition properties between periods. |
| ● | Transportation costs on a per unit basis decreased from $0.61 per Mcfe for the nine months ended September 30, 2025 to $0.51 per Mcfe for the nine months ended September 30, 2026, primarily due to lower transportation expense on a per unit basis for the HG Acquisition properties and certain commercial arrangements related to our natural gas firm transportation capacity, partially offset by increased fuel costs as a result of higher natural gas prices between periods. |
Production and ad valorem tax expense. Production and ad valorem taxes as a percentage of natural gas revenues remained consistent at 6% for each of the nine months ended September 30, 2025 and 2026.
General and administrative expense. General and administrative expense (excluding equity-based compensation) per Mcfe decreased 7% from $0.14 per Mcfe for the nine months ended September 30, 2025 to $0.13 per Mcfe for the nine months ended September 30, 2026 primarily due to higher production volumes between periods and synergies related to the HG Acquisition.
Depletion, depreciation and amortization expense. DD&A expense per Mcfe remained consistent at $0.61 per Mcfe for the nine months ended September 30, 2025 and 2026.
Loss (gain) on sale of assets. Loss on sale of assets was less than $1 million for the nine months ended September 30, 2025. Gain on sale of assets was $62 million for the nine months ended September 30, 2026 is primarily due to the Utica Shale Divestiture that closed on February 23, 2026. See Note 3—Transactions to the unaudited condensed consolidated financial statements for additional information.
Marketing Segment
Where feasible, we purchase and sell third-party natural gas and NGLs and market our excess firm transportation capacity, or engage third parties to conduct these activities on our behalf, in order to optimize the revenues from these transportation agreements. We have entered into long-term firm transportation agreements for a significant portion of our current and expected future production in order to secure guaranteed capacity to favorable markets.
Net marketing expense decreased from $0.06 per Mcfe for the nine months ended September 30, 2025 to $0.05 per Mcfe for the nine months ended September 30, 2026, primarily due to higher production volumes from the HG Acquisition.
Marketing revenue. Marketing revenue increased from $94 million for the nine months ended September 30, 2025 to $138 million for the nine months ended September 30, 2026, an increase of $44 million, or 46%. This increase primarily resulted from higher oil marketing revenue of $50 million between periods primarily due to higher oil prices and marketing volumes. Higher oil prices accounted for a $28 million increase in year-over-year marketing revenues (calculated as the change in the year-to-year average price times current year marketing volumes), and higher oil marketing volumes accounted for a $22 million increase in year-over-year marketing revenues (calculated as the change in year-to-year volumes times the prior year average price).
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Marketing expense. Marketing expense increased from $146 million for the nine months ended September 30, 2025 to $190 million for the nine months ended September 30, 2026, an increase of $44 million, or 31%. 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. The cost of third-party purchases increased $36 million between periods primarily due to higher oil marketing prices and volumes during the nine months ended September 30, 2026, partially offset by lower natural gas marketing volumes during the nine months ended September 30, 2026.
Antero Midstream Segment
Antero Midstream revenue. Revenue from the Antero Midstream segment increased from $891 million for the nine months ended September 30, 2025 to $968 million for the nine months ended September 30, 2026, an increase of $77 million. This increase is primarily due to higher gathering and processing revenues of $68 million and higher water handling revenues of $23 million, partially offset by higher amortization of customer relationship of $14 million between periods. The increased gathering and processing revenues between periods is primarily due to higher low pressure gathering and compression volumes from the HG Acquisition and 86 wells connected to their system between periods and increased gathering and centralized compression rates as a result of annual CPI-based adjustments, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to their system between periods. The increased water handling revenues between periods is primarily due to fresh water delivery volumes for our acreage acquired in the HG Acquisition that are charged at cost plus 3% during the nine months ended September 30, 2026, as well as higher blending volumes and cost of service fees and an increase to the fresh water delivery rate as a result of an annual CPI-based rate adjustment between periods, partially offset by decreased fresh water delivery volumes between periods due to the timing and location of our completions activity.
Antero Midstream operating expense. Total operating expense related to the Antero Midstream segment, excluding the gain on litigation, increased from $347 million for the nine months ended September 30, 2025 to $417 million for the nine months ended September 30, 2026, an increase of $70 million. This increase is primarily due to increased gathering and well pad compression costs between periods related to assets acquired with the HG Acquisition, fresh water delivery volumes for our acreage acquired in the HG Acquisition that are charged at cost plus 3% and increased wastewater trucking and disposal volumes and blending volumes and costs between periods, partially offset by the Utica Shale Divestiture. In addition, operating expenses during the nine months ended September 30, 2026 include a gain on litigation of $377 million related to the receipt of damages, interest and attorneys’ fees from Veolia Water Technologies, Inc. for the Antero Clearwater Facility legal matter that concluded during the three months ended September 30, 2026.
Items Not Allocated to Segments
Interest expense, net. Interest expense, net increased from $62 million for the nine months ended September 30, 2025 to $113 million for the nine months ended September 30, 2026, an increase of $51 million, primarily due to borrowings to fund the HG Acquisition under the Term Loan, issuance of the 2036 Notes during the first quarter of 2026 and borrowings on our Commercial Paper Program, partially offset by the redemption of the 2029 Notes on February 24, 2026 and lower Credit Facility borrowings and rates between periods. See Note 7—Debt to our unaudited condensed consolidated financial statements for more information.
Loss on early extinguishment of debt. During the nine months ended September 30, 2025, we recognized a loss on early debt extinguishment of $4 million related to the redemption of the remaining $97 million aggregate principal amount of our 2026 Notes at a redemption price of 102.094% of the principal amount thereof, plus accrued and unpaid interest, and the repurchase of $42 million aggregate principal amount of our 2029 Notes through open market transactions at a weighted average price of approximately 103% of the principal amount thereof, plus accrued and unpaid interest. During the nine months ended September 30, 2026, we recognized a loss on early debt extinguishment of $7 million related to the redemption of the remaining $365 million principal amount of our 2029 Notes at 101.271% of the principal amount thereof, plus accrued and unpaid interest. See Note 7—Debt to our unaudited condensed consolidated financial statements for more information.
Transaction expense. There were no transaction expenses incurred during the nine months ended September 30, 2025. During the nine months ended September 30, 2026, we incurred $25 million of transaction expense related to the HG Acquisition. See Note 3—Transactions to our unaudited condensed consolidated financial statements for more information.
Income tax expense. Income tax expense increased from $146 million, with an effective tax rate of 24%, for the nine months ended September 30, 2025 to $321 million, with an effective tax rate of 21%, for the nine months ended September 30, 2026 primarily due to the increase in income before income taxes between periods.
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Capital Resources and Liquidity
Sources and Uses of Cash
Our primary sources of liquidity have been through net cash provided by operating activities, borrowings under our Credit Facility and Term Loan, issuances of debt and equity securities, including issuances of notes under our Commercial Paper Program, and additional contributions from our asset sales, including our drilling partnerships. Our primary use of cash has been for the exploration, development and acquisition of oil and natural gas properties. As we develop our reserves, we continually monitor what capital resources, including equity and debt financings, are available to meet our future financial obligations, planned capital expenditure activities and liquidity requirements. Our future success in developing our proved reserves and production will be highly dependent on net cash provided by operating activities and the capital resources available to us.
Based on strip prices as of September 30, 2026, we believe that net cash provided by operating activities, issuances of notes under our Commercial Paper Program 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.
Cash Flows
The following table summarizes our cash flows (in thousands):
Nine Months Ended September 30, | |||||||
| 2025 | | 2026 | | |||
Net cash provided by operating activities | $ | 1,260,187 | 1,873,108 | ||||
Net cash used in investing activities | (854,189) | (3,308,572) | |||||
Net cash provided by (used in) financing activities | (405,998) | 1,225,464 | |||||
Net decrease in cash, cash equivalents and restricted cash | $ | — | (210,000) | ||||
Operating activities. Net cash provided by operating activities was $1.3 billion and $1.9 billion for the nine months ended September 30, 2025 and 2026, respectively. Net cash provided by operating activities increased between periods primarily due to higher natural gas, NGLs and oil revenues for the HG Acquisition properties, increased proceeds for the settlement of our commodity derivative contracts between periods, lower lease operating, gathering, compression, processing, transportation, production and ad valorem taxes for the Utica Shale Divestiture and changes in working capital, partially offset by higher lease operating, gathering, compression, processing, transportation and production and ad valorem taxes for the HG Acquisition properties, lower natural gas, NGLs and oil revenues for the Utica Shale Divestiture and higher interest expense during the nine months ended September 30, 2026.
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. Regional and worldwide economic activity, weather, infrastructure capacity to reach markets, storage capacity and other variables influence the market conditions for these products. These factors are beyond our control and are difficult to predict.
Investing activities. Net cash used in investing activities increased from $854 million for the nine months ended September 30, 2025 to $3.3 billion for the nine months ended September 30, 2026, primarily due to cash paid for the HG Acquisition of $2.8 billion during the nine months ended September 30, 2026, increased drilling and completions activity of $281 million between periods and increased acquisitions of oil and gas properties of $81 million between periods, partially offset by proceeds from the Utica Shale Divestiture of $755 million during the nine months ended September 30, 2026 and decreased oil and gas leasing activity of $11 million between periods.
Financing activities. Net cash used in financing activities was $406 million for the nine months ended September 30, 2025. Net cash provided by financing activities was $1.2 billion for the nine months ended September 30, 2026. The increase in net cash provided by financing activities between periods is primarily due to borrowings to fund the HG Acquisition on the Term Loan of $1.5 billion, the issuance of our 2036 Notes of $750 million, net borrowings on our Commercial Paper Program of $451 million during the nine months ended September 30, 2026 and lower distributions to our noncontrolling interest in Martica between periods, partially offset by higher net repayments on our Credit Facility of $394 million between periods, repayments on the Term Loan of $500 million during the nine months ended September 30, 2026, higher repurchases and
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redemptions of our senior notes of $228 million between periods and increased payments of employee tax withholdings for the settlement of equity-based compensation awards of $8 million between periods.
2026 Capital Budget, Capital Spending and Acquisitions
On February 11, 2026, we announced our capital budget for 2026 is $1.1 billion to $1.3 billion and includes: $1.0 billion for drilling and completions, $100 million for leasehold expenditures and up to $200 million for discretionary growth capital that is dependent on commodity prices. Our capital budget reflects our development plan giving effect to the closing of the HG Acquisition on the Closing Date and the closing of the Utica Shale Divestiture on February 23, 2026. We do not budget for acquisitions. During 2026, we plan to complete 70 to 80 net horizontal wells in the Appalachian Basin. We periodically review our capital expenditures and adjust our budget and its allocation based on liquidity, drilling results, leasehold acquisition opportunities and commodity prices.
For the three months ended September 30, 2026, our total consolidated capital expenditures were $374 million, including drilling and completion costs of $324 million, leasehold acquisitions of $35 million and other capital expenditures of $15 million. For the nine months ended September 30, 2026, our total consolidated capital expenditures were $958 million, including drilling and completion costs of $842 million, leasehold acquisitions of $89 million and other capital expenditures of $27 million.
Debt Agreements
See Note 7—Debt to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2025 Form 10-K for information on our debt agreements.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in Note 2—Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements. The preparation of our unaudited condensed consolidated 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. Accounting estimates and assumptions are considered to be critical if there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. 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 unaudited condensed consolidated financial statements that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our unaudited condensed consolidated financial statements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2025 Form 10-K for information on our critical accounting estimates.
Business Combinations
We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, with any remaining difference recorded as goodwill. For acquisitions, management engages an independent valuation specialist to assist with the determination of fair value of the assets acquired, liabilities assumed, and goodwill, based on recognized valuation methodologies, including but not limited to income and cost approaches as circumstances warrant. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and not later than one year from the Closing Date, we will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the Closing Date. An adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment.
The valuation of the assets acquired and liabilities assumed in a business combination requires significant judgement about commodity prices, projected reserve quantities, estimated future rates of production, projected reserve recovery factors, development plans (including timing and amount of development), future development costs, operating costs, among others, and such fair value approaches may rely on significant inputs that are not observable in the market. These assumptions affect the fair value of assets acquired and liabilities assumed and, if changed, could have a material effect on the Company’s
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financial position or results of operations. See Note 3—Transactions and Note 10—Fair Value Measurement to our unaudited condensed consolidated financial statements for more information.
Impairment of Proved Properties
We evaluate the carrying amount of our proved natural gas, NGLs and oil properties for impairment on a geological reservoir basis whenever events or changes in circumstances indicate that a property’s carrying amount may not be recoverable. If the carrying amount of our proved properties exceeds the estimated undiscounted future net cash flows (measured using futures prices at the balance sheet date), we further evaluate our proved properties and record an impairment charge if the carrying amount of our proved properties exceeds the estimated fair value of the properties.
Based on future prices as of September 30, 2026, the estimated undiscounted future net cash flows exceeded the carrying amount and no further evaluation was required. We have not recorded any impairment expenses associated with our proved properties during the nine months ended September 30, 2025 and 2026.
We believe that the estimates and assumptions related to our undiscounted future net cash flows and the fair value of our proved properties are critical because different natural gas, NGLs and oil pricing, cost assumptions or discount rates, as applicable, may affect the recognition, timing and amount of an impairment and, if changed, could have a material effect on the Company's financial position and results of operations.
New Accounting Pronouncements
See Note 2—Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements for information on new accounting pronouncements.
Off-Balance Sheet Arrangements
See Note 13—Commitments to our unaudited condensed consolidated financial statements for information on off balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risk. The term “market risk” refers to the risk of loss arising from adverse changes in natural gas, NGLs and oil prices, as well as interest rates. These disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.
Commodity Hedging Activities
Our primary market risk exposure is in the price we receive for our natural gas, NGLs and oil production. Pricing is primarily driven by spot regional market prices applicable to our U.S. natural gas production and the prevailing worldwide price for oil. Pricing for natural gas, NGLs and oil has, historically, been volatile and unpredictable, and we expect this volatility to continue in the future. The prices we receive for our production depend on many factors outside of our control, including volatility in the differences between commodity prices at sales points and the applicable index price.
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. For the three months ended September 30, 2025 and 2026, 4% and 44%, respectively, of our production was hedged through commodity derivatives, excluding basis swaps. For the nine months ended September 30, 2025 and 2026, 4% and 44%, respectively, of our production was hedged through commodity derivatives, excluding basis swaps. In addition, for the three and nine months ended September 30, 2026, 18% and 16%, respectively, of our production was hedged through basis swap commodity derivatives. We did not have any basis swap commodity derivatives for the three and nine months ended September 30, 2025.
Our financial hedging activities may include commodity derivative instruments that are intended to support natural gas, NGLs and oil prices at targeted levels and to manage our exposure to price risk associated with our production. These contracts may include commodity price swaps whereby we will receive a fixed price and pay a variable market price to the contract counterparty, collars that set a floor and ceiling price for the hedged production, basis differential swaps or three-way collars, among others. These contracts are financial instruments and do not require or allow for physical delivery of the hedged
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commodity. As of September 30, 2026, our commodity derivatives included fixed swaps, basis swaps, collars and three-way collars, among others at index-based pricing for a portion of our production. See Note 11—Derivative Instruments to our unaudited condensed consolidated financial statements for additional information.
Based on our production and our derivative instruments that settled during the nine months ended September 30, 2026, our revenues would have decreased by $85 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 September 30, 2026.
All derivative instruments, other than those that meet the normal purchase and normal sale scope exception or other derivative scope exceptions, are recorded at fair market value in accordance with GAAP and are included in our consolidated balance sheets as assets or liabilities. The fair values of our derivative instruments are adjusted for non-performance risk. 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 unaudited condensed consolidated statements of operations and comprehensive income. We present total gains or losses on commodity derivatives (for both settled derivatives and derivative positions which remain open) within operating revenues as commodity derivative fair value gains (losses) in the unaudited condensed consolidated statements of operations and comprehensive income.
Mark-to-market adjustments of derivative instruments cause earnings volatility but have no cash flow impact relative to changes in market prices until the derivative contracts are settled or monetized prior to settlement. We expect continued volatility in the fair value of our derivative instruments. Our cash flows are impacted when the associated derivative contracts are settled or monetized by making or receiving payments to or from the counterparty. As of December 31, 2025 and September 30, 2026, the estimated fair value of our commodity derivative instruments was a net asset of $81 million and $284 million, respectively, comprised of current and noncurrent assets and liabilities, as applicable.
Counterparty and Customer Credit Risk
Our principal exposures to credit risk are through receivables resulting from the following: the sale of our natural gas, NGLs and oil production ($427 million as of September 30, 2026), which we market to energy companies, end users and refineries, and commodity derivative contracts ($305 million as of September 30, 2026).
We are subject to credit risk due to the concentration of our receivables from several significant customers for sales of natural gas, NGLs and oil. While we do at times require customers to post letters of credit or other credit support in connection with their obligations, we generally do not require 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. As of September 30, 2026, we did not have any past-due receivables from any of our major customers.
In addition, we are exposed to the credit risk of our counterparties for our derivative instruments. Credit risk is the potential failure of a counterparty to perform under the terms of a derivative contract. When the fair value of a derivative contract is positive, the counterparty is expected to owe us, which creates credit risk. To minimize the credit risk in derivative instruments, it is our policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions that management deems to be competent and competitive market makers. The creditworthiness of our counterparties is subject to periodic review. As of September 30, 2026, we have commodity hedges in place with 12 different counterparties, 10 of which are lenders under the Credit Facility. We had derivative assets of $287 million with bank counterparties under our Credit Facility as of September 30, 2026. 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 September 30, 2026. We believe that all of the counterparties to our derivative instruments are acceptable credit risks as of September 30, 2026. 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. As of September 30, 2026, we did not have any past-due receivables from, or payables to, any of the counterparties to our derivative contracts.
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Interest Rate Risks
Our primary exposure to interest rate risk results from outstanding borrowings under the Credit Facility and Term Loan, which have floating interest rates. The average annualized interest rate incurred on the Credit Facility and the Term Loan for borrowings during the nine months ended September 30, 2026 was 5.3%. We estimate that a 1.0% increase in the applicable average interest rates for the nine months ended September 30, 2026 would have resulted in an estimated $10 million increase in interest expense. Additional short-term or variable-rate debt may be issued in the future, including under the Credit Facility or Commercial Paper Program, which may provide further exposure to interest rate risk.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. 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. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2026 at a level of reasonable assurance.
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 September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
The information required by this item is included in Note 14—Contingencies to our unaudited condensed consolidated financial statements and is incorporated herein.
Item 1A. Risk Factors
We are subject to certain risks and hazards due to the nature of the business activities we conduct. For a discussion of these risks, see “Item 1A. Risk Factors” in the 2025 Form 10-K. There have been no material changes to the risks described in such report. We may experience additional risks and uncertainties not currently known to us. Furthermore, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect us.
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Item 2. Unregistered Sales of Equity Securities AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
The following table sets forth our share purchase activity for each period presented:
Total Number | Approximate | ||||||||||
of Shares | Dollar Value | ||||||||||
Repurchased | of Shares | ||||||||||
as Part of | that May | ||||||||||
Total Number | Publicly | Yet be Purchased | |||||||||
of Shares | Average Price | Announced | Under the Plan | ||||||||
Period | | Purchased (1) | Paid Per Share | | Plans | | ($ in thousands) (2) | ||||
July 1, 2026 - July 31, 2026 | 1,631,144 | $ | 34.15 | 1,631,144 | $ | 820,908 | |||||
August 1, 2026 - August 31, 2026 | 2,882 | 34.33 | — | 820,908 | |||||||
September 1, 2026 - September 30, 2026 | — | — | — | 820,908 | |||||||
Total | 1,634,026 | $ | 34.15 | 1,631,144 | |||||||
| (1) | The total number of shares purchased includes shares of our common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of equity-based awards held by our employees. |
| (2) | On February 15, 2022, our Board of Directors authorized a share repurchase program to opportunistically repurchase up to $1.0 billion of shares of our outstanding common stock. On October 25, 2022, our Board of Directors authorized a $1.0 billion increase to our share repurchase program to allow us to repurchase up to an aggregate of $2.0 billion of our outstanding common stock. |
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. Other Information
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Item 6. Exhibits
Exhibit | Description of Exhibit | ||
3.1 | Amended and Restated Certificate of Incorporation of Antero Resources Corporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission File No. 001-36120) filed on October 17, 2013). | ||
3.2 | Certificate of Amendment to Second Amended and Restated Certificate of Incorporation of Antero Resources Corporation, dated June 8, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission File No. 001-36120) filed on June 8, 2023). | ||
3.3 | Third Amended and Restated Bylaws of Antero Resources Corporation, dated August 14, 2025 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission File No. 001-36120) filed on August 14, 2025). | ||
10.1 | First Amendment to Amended and Restated Credit Agreement, dated as of July 28, 2026, among Antero Resources Corporation, as Borrower, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (Commission File No. 001-36120) filed on July 29, 2026). | ||
31.1* | Certification of the Company’s Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. Section 7241). | ||
31.2* | Certification of the Company’s Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. Section 7241). | ||
32.1* | Certification of the Company’s Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). | ||
32.2* | Certification of the Company’s Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). | ||
101* | The following financial information from this Quarterly Report on Form 10-Q of Antero Resources Corporation for the quarter ended September 30, 2026 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Consolidated Statements of Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text. | ||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ANTERO RESOURCES CORPORATION | |
By: | /s/ Brendan E. Krueger |
Brendan E. Krueger | |
Chief Financial Officer, Senior Vice President – Finance and Treasurer | |
Date: | October 28, 2026 |
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