Antero Resources Corporation

Greetings, and welcome to the Ontario Resources Corporation first quarter 2026 earnings conference call and webcast. At this time, all participants are in listen-only mode. A question and answer session will follow up with a formal presentation. You may be placed in the question queue at any time by pressing star 1, and we ask that you please ask one question and one follow-up, then return to the queue. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0. It's now my pleasure to turn the call over to Dan Katzenberg, Vice President, Investor Relations. Please go ahead.

Thank you for joining us for Antero's first quarter 2026 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 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. Joining me on the call today are Michael Kennedy, CEO and President, Brendan Krueger, CFO, Dave Catalango, Senior Vice President of Liquids Marketing and Transportation, and Justin Fowler, Senior Vice President of Natural Gas Marketing. I will now turn the call over to Mike.

Thank you, Dan. Good morning, everyone. I'd like to start my comments by praising our operations team for their success during winter storm firm. Their ability to achieve 100% uptime on our operations throughout the storm is an impressive achievement. As highlighted on slide number three, our team's efforts and strong pricing helped us deliver one of the best quarterly results in company history. Also as highlighted on the slide, we closed on the HG acquisition in the Ohio Utica shale divestiture. The HG acquisition added substantial production, cash flow in nearly 400,000 net acres and 400 drilling locations to our core West Virginia Marcellus position. Importantly, the acquisition will drive corporate cash costs down 30 cents per MCFE, which lowers our break-even costs and drives margin enhancement. Turning to the integration of HG, we are significantly ahead of schedule. We recently turned in line our first HG pad. This six-well pad, located in the liquids-rich area, has 110,000 total lateral feet, or average lateral lengths over 18,000 feet per well. Notably, this pad has one of the highest net royalty interests at 89%, further enhancing its rate of return. We expect the pad to produce 150 million per day and remain flat at these levels for quite some time. On the acquired assets, we have already achieved operating synergies of 15 to $20 million and are now forecasting over $80 million for the full year, outpacing our initial target of $50 million. Once we closed on the acquisition and took control of operations, we found incremental cost saving opportunities, which include drilling and completion design changes, water handling optimization, and benefits from our economies of scale that are driving faster than forecasted synergies. Our first quarter production was a record 3.9 BCFE per day, 13% above the year-ago period. This production growth is expected to continue through 2026 with full-year production of 4.1 BCFE per day a nearly 20% increase from 2025. Turning to the right-hand side of the slide, our quarterly financial results were highlighted by our ability to capture substantial premiums to benchmark prices. These high premiums combined with our terrific operational performance generated free cash flow of $657 million, the second highest level in our company history. We used this free cash flow to accelerate debt reduction following the HG acquisition. At the time of the acquisition announcement, we had targeted free cash flow available to fund the acquisition from December through the end of the first quarter to be approximately $500 million. We exceeded this target by $250 million. Looking ahead, improved NGL fundamentals are expected to result in us hitting our leveraged target of one times by mid-2026, six months ahead of prior expectations. Next, let's turn to slide number four, which highlights our latest hedge position. For 2026, over 60 percent of our natural gas volumes are hedged, and we have one-third hedged in 2027. Our strategy continues to be targeting a natural gas hedge position of 25 to 50 percent of annual production, which reduces the volatility in our cash flow and provides an opportunity to be counter-cyclical in share buybacks or asset acquisition opportunities. On the liquid side, we remain unhedged. I'll close my comments today by touching on Intero's advantage position based global backdrop, which is highlighted on slide number five. The recent geopolitical events have highlighted the advantage of Intero's corporate strategy. We have the highest LNG exposure among Appalachian producers, selling 2.3 BCF per day of production to sales points along the LNG fairway. At the same time, we are the largest producer exporter of NGLs in the U.S., selling the majority of our LPG, which includes propane and butane, into international markets. We expect recent global supply outages and disruptions to lead to increasing risk premiums for U.S. NGL barrels, both in the near term and in the years ahead. These global events are leading to increased demand from international NGO and LNG buyers. They're looking to de-risk their energy portfolios by diversifying their exposure and increasing purchases of U.S. supply. This shift towards U.S. supply supports higher export utilization and more attractive price premiums at our sales points along the coast. This highlights Antero's unique export strategy and positions us well to benefit from today's rising global demand for U.S. energy. Now to touch on the current liquids and NGL fundamentals, I'm going to turn it over to our Senior Vice President of Liquids Marketing and Transportation, Dave Canalongo, for his comments.