Antero Resources Corporation

Greetings and welcome to the Ontario Resources fourth quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Brendan Krueger, Vice President of Finance for Ontario Resources. Thank you. You may begin.

Good morning. Thank you for joining us for Antero's fourth quarter 2022 investor conference call. We'll spend a few minutes going through the financial and operating highlights, and then we'll open it up for Q&A. I would also like to direct you to the homepage of our website at www.anteroresources.com, where we have provided a separate earnings call presentation that will be reviewed during today's call. Today's call may contain certain non-GAAP financial measures. Please refer to our earnings press release for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measures. Joining me on the call today are Paul Rady, Chairman, CEO, and President, Michael Kennedy, CFO, Dave Canalongo, Senior Vice President of Liquids Marketing and Transportation, and Justin Fowler, Senior Vice President of Natural Gas Marketing and Transportation. I will now turn the call over to Paul.

Thank you, Brendan. I'd like to start by highlighting the significant transformation that Antero underwent during 2022. Let's start with slide number three, which summarizes the consistent and repeatable results that we delivered throughout the year. The top of the slide illustrates our continued focus on debt reduction. During 2022, we reduced our total debt by approximately $1 billion. Since the beginning of our debt reduction program in the fourth quarter of 2019, we have now reduced debt by over $2.5 billion. Because of this conservative approach to debt reduction, we were able to shift our capital allocation towards increasing cash returns to our shareholders. As you can see on the bottom of the slide, we purchased over 25 million shares representing 1% of the total shares outstanding. To expand on Antero's consistent and repeatable business model, let's discuss our land acquisition strategy on slide number four, titled Organic Land Acquisitions. Over the last few years, we witnessed an increase in both public and private corporate M&A as commodity prices increased. Meanwhile, Antero remained focused on our core acreage footprint with a particular emphasis on organic lease acquisitions. As opposed to larger transactions that can dilute our equity and add absolute debt, Our strategy has been focused on organically acquiring acreage within our core position in Appalachia. This has allowed us to dollar-cost average across commodity cycles and acquire acreage near our proven well results. During 2022, Antero's organic leasing program added approximately 80 drilling locations at an average cost of less than $1 million per location. more than offsetting our maintenance capital plan that assumes an average of 60 to 65 wells per year. Now let's turn to slide number five to discuss Antero's differentiated strategy. The chart at the top highlights our absolute debt reduction since 2019 compared to our peers. Our disciplined corporate strategy of prioritizing debt reduction differentiates Antero versus peers that have increased their absolute debt levels primarily as a result of corporate M&A. With our debt initial target already achieved, we are well positioned to maintain a balanced debt reduction and return of capital program going forward. This is important, especially in light of the recent fallback in natural gas prices. The chart in the middle of the page illustrates the percentage of natural gas sold out of the basin. We sell 100% of our natural gas outside the Appalachian Basin, including 75% into the LNG fairway, where we capture premiums to NYMEX. The majority of our peers have significant exposure to local markets that trade at levels as low as $1.25 back of NYMEX. These markets are particularly at risk in times of increasing storage levels where price is the only mechanism to force shut-ins. The chart at the bottom of the page highlights our diversified product mix with nearly half of our revenue coming from liquids production. The uplift we receive from our liquid sales combined with our premium price natural gas provides better stability and predictability in financial and operating results through the different commodity cycles. Now, to touch on the current liquids and NGL fundamentals, I will turn it over to our Senior Vice President of Liquids Marketing and Transportation, Dave Canalongo, for his comments.