Antero Resources Corporation

Greetings, and welcome to the Intero Resources First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Mr. Brendan Kruger, CFO of Antero Midstream and VP of Finances. Thank you, Mr. Kruger. You may begin.

Thank you. Good morning, and thank you for joining us for Antero's first quarter 2023 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, and Dave Cantalongo, Senior Vice President of Liquids Marketing and Transportation. I will now turn the call over to Paul.

Thank you, Brendan. I'd like to focus my comments today on our company's operational performance during the quarter. During the first quarter, we set a number of new company and industry drilling and completions records, which highlights our exceptional team and high-quality asset base. Let's begin on slide number three, titled Drilling and Completion Performance. The chart on the left-hand side of the slide highlights our lateral footage drilled per day. During the first quarter, we achieved three of the top 10 lateral feet drilled in a 24-hour period. This included a world record of 12,340 lateral feet drilled in a 24-hour period. The chart on the right hand side of the page illustrates our completion stages per day. We set a new quarterly record at almost 11 stages per day, including a single day record of 16 stages per day. These completion records are referring to a single completion crew. Across the two crews, we have averaged 22 completion stages per day. These are extraordinary achievements from both our drilling and completion teams who continuously look for ways to improve our operations. I will note that the increase in efficiency during the first quarter results in activity being pulled forward. During the quarter, we completed 31% of our 2023 budgeted completion stages. Now, Let's turn to slide number four, titled Antero Well Performance versus Pierce. In addition to the drilling and completion records, we continue to be very encouraged by the well productivity we are seeing. The chart on the left-hand side of this slide shows that Antero's liquids productivity continues to get better and better each year. average liquids productivity has increased 87% since 2018. The chart on the right-hand side of the page highlights well productivity trends versus our peers since 2020. As illustrated on the page, Nantero's average cumulative equivalent production per well is 20% greater than the peer average over this time. This is in a This is an important distinction for Antero. With many companies having already drilled their best acreage, our long core inventory life continues to deliver stronger results each year. Next, I'll discuss slide number five titled, Low Decline Rate Leads to Lower Maintenance Capital. As we enter the fourth year of a maintenance capital program, our base decline rate continues to move lower. This analysis from a third party highlights that Antero's one-year and three-year decline rates are the lowest of our natural gas peer group. Touching briefly on our cost outlook, we are beginning to see service costs roll over for rigs and completion crews. We're also seeing a decline in costs for raw materials such as tubulars, fuel, and sand. The combination of cost deflation, drilling and completion efficiency gains, and a lower decline rate is expected to result in lower overall maintenance capital requirements in 2024. Lastly, I would like to comment on our organic leasing efforts. During the quarter, the first quarter, we invested $72 million on land. As previously communicated, this represents just under half of our 2023 land budget of $150 million. Our leasing efforts are primarily focused near our current development plan, where we are achieving these excellent drilling completion and well-performance results. This land investment in the first quarter adds the equivalent of over 50 incremental drilling locations, mostly in the liquids-rich core of the Marcellus. We say equivalent locations as the organic leasing investment adds both absolute locations as well as lengthening our current locations. For example... Our 2023 wells drilled are expected to average 14,500 feet in the lateral, a 7% increase from the average in 2022. 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 Cantalongo, for his comments. Dave?