Energy Conference March 24, 2020 Legal Disclaimer This - - PowerPoint PPT Presentation

Scotia Howard Weil 48th Annual Energy Conference

March 24, 2020

Legal Disclaimer

This presentation includes "forward-looking statements." Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under AR’s control. All statements, except for statements of historical fact, made in this presentation regarding activities, events or developments Antero expects, believes or anticipates will or may occur in the future, such as those regarding expected results, future commodity prices, future production targets, completion of natural gas or natural gas liquids transportation projects, future earnings, Adjusted EBITDAX, leverage targets, future capital spending plans, improved and/or increasing capital efficiency, continued utilization of existing infrastructure, gas marketability, estimated realized natural gas, natural gas liquids and oil prices, acreage quality, access to multiple gas markets, expected drilling and development plans (including the number, type, lateral length and location of wells to be drilled, the number and type of drilling rigs and the number of wells per pad), projected well costs and cost savings initiatives, including with respect to potential incremental flowback and produced water services by AM, future financial position, future technical improvements, and future marketing opportunities, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All forward-looking statements speak only as of the date of this presentation. Although AR believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Except as required by law, AR expressly disclaims any obligation to and does not intend to publicly update or revise any forward-looking statements. AR cautions you that these forward-looking statements are subject to all of the risks and uncertainties incident to the exploration for and development, production, gathering and sale of natural gas, NGLs and oil, most of which are difficult to predict and many of which are beyond the AR’s control. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating natural gas and oil reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, world healthy events, and the other risks described under the heading "Item 1A. Risk Factors" in AR’s Annual Report on Form 10-K for the year ended December 31, 2019. This presentation includes certain AR and AM financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These AR measures include (i) Adjusted EBITDAX, (ii) Net Debt, (iii) leverage and (iv) free cash flow. For AM, these measures include (i) Adjusted EBITDA, (ii) Net Debt, (iii) leverage, (iv) Return on Invested Capital (“ROIC”) and (v) free cash flow. Please see “Antero Definitions” and “Antero Non-GAAP Measures” for the definition of each of these AR and AM measures as well as certain additional information regarding these measures, including the most comparable financial measures calculated in accordance with GAAP. All 2019 non-GAAP measures of AM included in this presentation represent pro forma financial results of Antero Midstream Corporation and its subsidiaries, including Antero Midstream Partners and its subsidiaries, that reflect the applicable results as if the simplification transaction closed on January 1, 2018 unless

• therwise noted. AM data presented for historical periods represent the results of legacy Antero Midstream Partners LP and its subsidiaries for comparison
• purposes. The information on such slides is included for reference, but AR does not take responsibility for the validity or completeness of such information. For

more information regarding AM and the assumptions and qualifications of the statements made by it, please refer to its website and its filings with the SEC.

Antero Resources Corporation is denoted as “AR” in the presentation and Antero Midstream Corporation is denoted as “AM”, which are their respective New York Stock Exchange ticker symbols.

2

Antero Resources at a Glance

5th Largest

U.S. GAS PRODUCER(1)

94% Hedged

ON NATURAL GAS THROUGH 2021 @ $2.83/MMBtu (3)

)

S&P 400

CONSTITUENT

Denver, CO

HEADQUARTERS

Antero Resources Acreage Map

Ba3/BB-/BB-

RATINGS (4)

Own 40%

OF CORE LIQUIDS-RICH DRILLING LOCATIONS IN APPALACHIA(2)

Moody’s S&P Fitch

2nd Largest

U.S. NGL PRODUCER(1)

Note: Hedge position as of 12/31/19. Rigs on map as of 3/13/20, per Rig data. 1) Based on 4Q19 reported production. 2) Based on Antero analysis of undeveloped acreage in the core of the Marcellus and Ohio Utica Shales. 3) Percentage hedged represents percent of expected natural gas production hedged based on natural gas production guidance of 2.375 Bcf/d and 9% midpoint of targeted growth in 2021. 4) Represents corporate rating for Moody’s and issuer ratings for S&P and Fitch.

Antero Acreage SW Marcellus Core Ohio Utica Core Antero Marcellus Rig Industry Marcellus Rig Industry Utica Rig AR ~40% Peers ~60%

Core Liquids-Rich Appalachian Undrilled Locations(2)

3

1% 0.28% 0.10% 0.05% OF Industry Target 2025 Upstream Sector Target 2018 OF Upstream Sector Avg. AR 2019

4

Leading Sustainability and ESG Metrics

GHG Emissions

• Antero has zero flaring of produced gas, one of the lowest GHG

intensity metrics in the industry (upstream independents and majors) and a very low methane leak loss rate:

Water Management

• Fresh water pipeline network

eliminated 570,000 water truck trips in 2019

• AR recycles and reuses over

90% of flowback and produced water (~50,000 Bbl/d currently)

For more information, please visit: https://www.anteroresources.com/community-sustainability; OF stands for ONE Future Source: Data retrieved from 2018 and 2019 sustainability reports or calculated from 2018 sustainability and public disclosures. Antero Resources’ intensity is based on the total GHG emissions reported to the EPA under Subpart W of the Greenhouse Gas Reporting Rule Program (GHGRP). Previous years have been updated as of 3/2020. *Company's GHG intensity includes their midstream and/or downstream operations. 1) Comparisons for independents and majors who report include: BP, CHK, CNX, COP, CVX, DVN, ENI, EOG, EQNR, FANG, HES, MPC, NBL, RRC, RDS, SWN and XEC.

Total Direct GHG Emissions and Intensity (CO2e)

• Lost Time Incident Rate in 2018
• utperformed the industry

benchmark by 75%

• Total Recordable Incident Rate

in 2018 outperformed the industry benchmark by 52%

Safety

Methane Leak Loss Rate

• Both AR and AM are C-corps and

have a majority of independent directors

• Management compensation is

tied to free cash flow (AR), ROIC (AM) and safety and environmental performance metrics

Governance

5 10 15 20 25 30 35 40 AR A B C AR + AM D E F G H I J K L M N O P Q R

*

*

2019 Antero vs 2018 Industry GHG Emission Intensity(1)

CO2e Tons/MBOE

* * * * * * * * *

506 428 432 3.9 2.7 2.4 2017 2018 2019 Thousand Metric Tons Tons/MBOE

AR Business Strategy

Build scale with Liquids Diversification Mitigate Commodity Price Risk With Hedges and Firm Transportation Maintain Strong Balance Sheet and Financial Flexibility

Antero Resources Principles Priorities

1

Liquidity and strengthen balance sheet with leverage target of mid 2- times

2

Develop liquids-rich locations with superior margins and returns vs dry gas locations Hedge commodities to protect cash flow and balance sheet Spend within cash flow, fill premium firm transportation capacity

3 4

Denotes management & employee compensation plan metrics

5

Note: Leverage is a non-GAAP financial measure. Please see the appendix for more information.

$330 MM

($970/ft - $750/ft) x 12,000’ = $2.6 MM $2.6 MM per well x 125 wells = $330 MM

Spend Within Cash Flow - Cost Structure Reset

6

Note: Cost reductions are based on 2020 guidance vs original 2019 guidance (1) Based on midpoint 2020 guidance.

Cost Savings Update 2020 Expected Impact (1)

• D&C target of $750/lateral foot by mid-2020, a 23% reduction from $970/ft in 2019
• $1.0 B D&C capital budget in 2020, a $150 MM reduction from the initial budget and

21% below 2019, with no change to production guidance

Well Cost Reduction Progress

$74 MM

~50% reduction from 2019

• 4Q19 represented a 24% reduction from 3Q19
• Expect to save $74 MM in 2020 as a result of increased blending operations

combined with reduced trucking

+ +

Water Savings Driving LOE Lower GP&T and Net Marketing Expense Reduction

• $90 MM of midstream fee reductions in 2020 with Antero Midstream and other third

party midstream providers

• Targeting $100 MM reduction in 2020 net marketing expense (1)

Drilling and completion efficiencies result in a reduction in 2020 CAPEX to $1.0 B, down $150 MM from prior guidance $190 MM

+

G&A Cost Reduction

• 18% reduction by mid-2020 due to headcount reductions in 1H2019, natural

employee attrition and a reduction across the board in expenses

$24 MM

=

~$620 MM

Grand Total Cost Reset 1

7

Marcellus Well Cost Reductions

$11.6 $11.1 $10.1 $0.50 $1.09 $0.72 $7.50 $8.00 $8.50 $9.00 $9.50 $10.00 $10.50 $11.00 $11.50 $12.00 2019 Budget (1/1/2019) Achieved Initiatives 2H 2019 AFE Recently Achieved Initiatives 4Q 2019 Exit AFE 2020 Initiatives Underway 2020 AFE Target ($MM) $970/ft

Cost Reductions Underway:

• Expanded produced water

services via AM pipeline system

• Further drilling & completion

efficiencies

• Further service cost deflation

Cost reductions already achieved:

• Service cost deflation
• Sand sourcing logistics
• Completion efficiencies
• Drier completions (100% of wells)
• Water blending by AM
• Trucking savings
• Enhanced drillout methodology

Targeted Marcellus Well Cost Reductions (January 2019 AFE to Mid-2020 Target)

$9.0

Assumes 12,000 foot lateral

$930/ft $840/ft $750/ft

• Significant Reduction in Well Costs already “in-hand”

‒ Targeting reduced well costs by ~23% ($2.6 million per well)

($800) ($600) ($400) ($200) $0 $200 $400 $600 $800 2017A 2018A 2019A 2020E

Spend Within Cash Flow – Lower Costs Drives Free Cash Flow Profile

Note: Free Cash Flow represents Cash Flow from Operations, less Drilling and Completion capital and leasehold capital. 2020 free cash flow includes $125 million water earnout payment received in January of 2020 from water drop-down transaction and projected AM cash dividends.

AR Free Cash Flow ($ MM)

8

Cost structure reset results in enhanced free cash flow profile. The 2020 capital plan will remain flexible, targeting cash flow neutrality.

Targeting Free Cash Flow Neutral Profile in 2020

1

Strengthen Balance Sheet - Significant Absolute Debt Reduction

9

Asset Monetization Opportunity Set Targeting $750 MM to $1.0 B AR has multiple assets that can be monetized in 2020 to reduce debt including producing properties, undeveloped leasehold, overriding royalty, minerals, hedges and midstream ownership

Hedge Portfolio

Minerals E&P Assets Land PDP Financial / Midstream Assets

AM Ownership

• ~5,000 net mineral

acres

• High NRI enables

carveout of

• verriding royalty

interest (ORRI)

• Highest realized

prices in Appalachia due to FT and liquids

• 541,000 net acres

in Appalachia

• 84% average net

revenue interest (NRI) in Marcellus leasehold

• 19 Tcfe of Proved

Reserves

• 3.2 MMcfe/d of net

production (4Q19)

• ~2.0 Tcfe of natural

gas hedges with a current hedge value

• f >$1.1 B (1)
• 10.6 MMBbls of

crude oil hedges with a current value

• f $245 MM (1)

1) Based on hedge position as of 2/12/2020 and strip pricing as of 3/20/2020 for natural gas and liquids hedges. 2) Based on AM share price of $2.30/share as of 3/20/2020.

• Current market

value of $320 MM (2)

• Divested $100 MM

in December 2019

• AM had $175MM

remaining under its share repurchase program as of 12/31/19

2

Strengthen Balance Sheet - Liquidity & Leverage

10

2020 Liquidity Outlook ($MM)

$960

Targeting Free Cash Flow Neutral Profile in 2020

$900 $1,465 $2,365 $0 $500 $1,000 $1,500 $2,000 $2,500 12/31/2019 Liquidity 2020 Free Cash Flow Expected Proceeds From 2020 Asset Sales YE 2020E Liquidity 2021 - 2022 Senior Notes @ 3/20/20 Trading Levels

Liquidity Liquidity

Note: Liquidity represents borrowing availability under AR’s credit facility based on $2.64 B of lender commitments, $623 million of letters of credit and $552 million of borrowings as of 12/31/19. Asset sales assume high end of the targeted range. Free Cash Flow is a Non-GAAP financial measures. For more information see the appendix. Free cash flow includes projected AM cash dividends payable to AR, plus the $125 million earnout payment received in January 2020 from AM associated with the water drop down transaction.

(1) 2021 – 2020 senior notes have par value of $1,875 B as of 12/31/19.

• Antero plans to have substantial capacity to address its November 2021 and December 2022

bond maturities due to:

― Capital and operating cost reductions ― GP&T fee and net marketing expense reductions ― Proceeds from asset sales

2

(1)

Develop Liquids-Rich Locations - Large Delineated Drilling Inventory

11

Sherwood Smithburg

Antero Drilling Rig Antero Producing Well Antero Undrilled Location Antero Completion Crew

Deep Drilling Inventory

• AR holds 40% of the core undrilled

liquids-rich locations in Appalachia

• 10+ years of premium inventory

Contiguous Acreage Position Delivers Efficient Development

• Long-laterals average 12,100’ in Marcellus

rich-gas drilling inventory

• Efficient gathering, compression and

processing utilization, and water re-use

• pportunities generates synergies and

capital savings

High Working and Net Revenue Interest

• 925 horizontal Marcellus producing wells

are 100% operated and have 99% average working interest

• AR has 84% average NRI in the Marcellus

AR Marcellus Asset Map AR Resource Overview

3

Develop Liquids-Rich Locations – Premium NGL Price Realizations

31

International Markets Domestic Markets

1) Based on Antero C3+ NGL component barrel consisting of 56% C3 (propane), 10% isobutane (Ic4), 17% normal butane (Nc4) and 17% natural gasoline (C5+).

12 2019

• f

Antero 2020 C3+ NGL Pricing Outlook (1)

Domestic International Combined Sales Point Hopedale Marcus Hook Blended % of AR C3+ Volume 50% 50% 100% Expected Premium / (Discount) to Mont Belvieu ($/Gal) $0.00 - $0.05

Diversified exposure to both international and domestic markets results in Antero realizing a premium to Mont Belvieu on its C3+ NGL pricing

3

2,228 2,400 $1.95 $2.38 $2.87 $2.80 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 500 1,000 1,500 2,000 2,500 3,000 2020 2021 Antero Swap Volume NYMEX Strip Price Antero NYMEX Swap Price

Hedge Commodities - Protected From Gas Pricing Weakness

13 Antero Natural Gas Hedge Profile

(BBtu/d) ($/MMBtu) Swap at $2.80/MMBtu Swap at $2.87/MMBtu

Note: Percentage hedged represents percent of expected natural gas production hedged based on natural gas production guidance of 2.375 Bcf/d in 2020 and 9% midpoint of targeted growth in 2021. 1) Includes total hedge gains through 2019. 2) Strip pricing as of 3/20/2020. 3) Based on hedge position as of 2/12/20 and strip pricing as of 3/20/2020, only for natural gas hedges (excludes liquids).

~$1.1 B Forecasted Hedge Value (3)

(2)

~94% Hedged ~93% Hedged

• AR has hedged 94% and 93% of expected natural gas production in 2020 and 2021 at $2.87/MMBtu

and $2.80/MMBtu, respectively

• Antero has realized $4.7 billion of net cash hedge gains since 2008 (1)

4

Hedge Commodities - Significant Oil Hedge Position

AR has hedged ~100% of expected oil and “oil-equivalent” pentane production in 2020 at $55.63/Bbl and 10% of oil and oil equivalent production in 2021 at $55.16/Bbl

10,000 10,900 16,000 17,440 26,000 26,000 28,340 3,000 $32.47 $32.74 $55.63 $55.16 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00

• 5,000

10,000 15,000 20,000 25,000 30,000 Production Guidance Hedges Production Guidance Hedges Oil Production Oil Equivalent Production WTI Strip Price AR WTI Swap Price

14 Antero Oil and Pentane (C5) Hedge Profile

(Bbl/d)

~100% Hedged

WTI Swap at $55.63/Bbl Oil Antero has hedged pentanes as a percent of WTI and then hedged the corresponding WTI price, effectively converting its pentane production into “oil-equivalent” production

Pentane Volumes x ~80% = Oil Equivalent Production

Oil

2020 2021

Pentane Volumes x ~80% = Oil Equivalent Production

~10% Hedged

WTI Swap at $55.16/Bbl

Note: Percentage hedged represents percent of expected oil production hedged based on 2020 guidance and 9% midpoint of targeted growth in 2021. 1) Based on hedge position as of 2/12/20 and strip pricing as of 3/20/2020.

Oil

(1)

~$245 MM Forecasted Hedge Value (1)

(1)

4

Premier Northeast Infrastructure Platform

Antero Midstream Snapshot

16

• 54% Adjusted EBITDA

CAGR and 12% average ROIC (2014-2019)

• Despite a 54% decline in

natural gas prices since 2014

• “Just-in-time” capital

investment philosophy

• Flexible capital budget
• Integrated planning and
• perations with AR
• 88% to 98% asset

utilization rates in 2019

Proven Returns and Capital Discipline Conservative Financial Policy Aligned with Shareholders

• Maintain conservative

leverage

• Mid-to-high 3-times

range

• Targeting free cash flow

after return of capital

• Accessing equity capital

markets is not required to deliver on organic project backlog

• Eliminated IDRs and

converted to a C-Corp

• Board consists of majority of

independent directors

• Significant insider ownership
• Management compensation

based on:

• ROIC
• Leverage
• Per share cash flow growth
• Safety

Note: Adjusted EBITDA, leverage, ROIC and free cash flow are non-GAAP financial measures. See appendix for more information.

Fixed Fee Business Model Insulates EBITDA Growth

17

Note: Adjusted EBITDA is a non-GAAP financial measure. See appendix for more information and reconciliation. 2020 reflects previously disclosed Antero Midstream guidance range, denoted in gray. 2020 natural gas price based on NYMEX strip pricing as of 2/21/20.

Antero Midstream generates all of its revenues through fixed-fee contracts, insulating Adjusted EBITDA growth from commodity price volatility

Antero Midstream Adjusted EBITDA ($MM) Details

• 100% of revenues derived from

fixed-fee contracts resulting in no direct commodity price risk ‒ AR’s industry leading hedge book further insulates AM from indirect commodity price risk

• Backed by acreage dedications

from Antero Resources in the core

• f the Marcellus and Utica Shales
• Remaining contract life of 15+

years with inflation protection

• Underpinned by minimum

volume commitments (“MVCs”) ‒ 70-75% on compression, HP gathering and processing

$840 $67 $215 $404 $529 $717 $830 $850 $900 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $0

$100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 2014 2015 2016 2017 2018 2019 2020E NYMEX Henry Hub Gas Price ($/MMBtu) AM Adjusted EBITDA ($MM) Adjusted EBITDA NYMEX Henry Hub Gas Price

IPO

2020 Capital Budget

18

Capital Expenditures ($MM) Marcellus Project Map Gathering & Compression Water Delivery & Treatment

AM’s just-in-time capital investment approach adjusts to AR’s plan and results in a budgeted 59% decrease in 2020 as compared to 2019 Actual

$250 $646 $275 $0 $100 $200 $300 $400 $500 $600 $700 $800 2019 Actual 2020 Updated Budget

Gathering Pipeline Stonewall Regional Pipeline Compressor Station Sherwood and Smithburg Processing Facilities

Note: Grey compressor stations and dashed gathering lines represent future build-out of infrastructure through 2024.

2019 fresh water withdrawal and buried trunkline 2019 gathering trunklines into Tyler County Defer expansion capex into Wetzel County Fresh Water Pipeline

Revised 2019 Guidance Midpoint: $675MM

Additional plant at new Smithburg Processing Complex

Original 2019 Guidance Midpoint: $775MM Actual Original 2020 Guidance Midpoint: $312MM

$450 ($800) ($600) ($400) ($200) $0 $200 $400 $600 2014A 2015A 2016A 2017A 2018A 2019A 2020 Guidance (Midpoint)

Capital Efficiency Drives Free Cash Flow Generation

19

AM Throughput Growth

AM Free Cash Flow ($MM Before Return of Capital)

AM Cash Flow Outspend (Before Return of Capital) AM Free Cash Flow (Before Return of Capital)

AM’s capital efficiency and flexibility drives attractive mid-teens ROIC and ability to generate significant free cash flow (before return of capital)

Note: Free Cash Flow and ROIC are non-GAAP terms. See appendix for reconciliation and definition.

ROIC: 12% 9% 12% 14% 13% 13% 15%

20

Antero Midstream Investment Summary

Leverage in the mid 3-times “flexing” to high 3-times for accretive transactions 100% fixed-fee business model eliminates direct commodity price risk Benefits from strong sponsor and visibility into development plan “Just-in-time” capital philosophy results in mid-teens ROIC Increasing DCF with declining capital budgets drives higher retained cash flow (before return of capital)

Note: Leverage, ROIC and Distributable Cash Flow (“DCF”) are non-GAAP financial measures. See the appendix for more information.

Appendix

22

LOE Reductions

($MM)

$194.0 $120.0 $42.0 $32.0

$0 $25 $50 $75 $100 $125 $150 $175 $200 $225 2020E LOE Pre-Water Savings Initiatives Existing Wells Produced Water (after 90 days, 70% of total) New 2020 Completions Produced Water (after 90 days, 30% of total) 2020E LOE Target

35% Reduction ($74 MM+)

$42 MM ($0.03/Mcfe) reduction driven by $6/Bbl savings related to wells already on sales $32 MM ($0.03/Mcfe) reduction driven by $6/Bbl savings related to new wells in 2020

$0.15/Mcfe $0.09/Mcfe

• Materially Reducing LOE

‒ Targeting reduced LOE by 35% in 2020 (~$74 MM+)

Antero Lease Operating Expense Reductions (2020 Target)

Growth Incentive Program Summary – AR/AM

23

4Q19A: 2,639

2,700 2,800 2,900

Tier 1: 2,900 Tier 2: 3,150 Tier 3: 3,400 2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400 3,600 3,800 4,000

Low Pressure Gathering Throughput and Thresholds (MMcf/d)

Growth incentive targets structured in a manner that aligns with AR’s plan to grow net production by 8% to 10% through 2021 in order to fill its premium FT portfolio

• Actual reduction in low pressure gathering fees from AM will be realized on a quarterly basis

$12 MM/Quarter $15.5 MM/Quarter $19 MM/Quarter No fee reduction

1) Assumes AM low pressure volumes approximate Antero Resources’ production target CAGR of 2.375 Bcf/d in 2020 and 9% midpoint of targeted growth in 2021.

MMcf/d

Antero Resources: Advantaged NGL Producer

Mariner East

Producer Advantaged & Unconstrained:

Antero Resources in Appalachia 24 Producer Disadvantaged & Constrained:

E&Ps in Permian, Rockies, Mid-Con & Bakken

Mont Belvieu Conway

FROM ROCKIES

Who Captures the Arb at the Gulf Coast?

Answer: Midstream & LPG off-takers (not E&P’s)

• No direct E&P access to international markets (i.e.

producers only receive Mont Belvieu linked pricing)

• Constrained export/storage capacity due to

infrastructure and fog

• Minimal local fractionation to sell marketable purity

products in-basin

Results in “Mont Belvieu Minus” pricing

Who Captures the Arb at Marcus Hook?

Answer: AR and other Appalachian E&P’s

• Direct sales to most attractive international

(ARA & FEI) & domestic markets

• Fixed terminal rates
• Locked in a portion of shipping rates
• Local fractionation & marketing to sell purity

products in-basin for local demand

Results in “Mont Belvieu plus” pricing netbacks captured by AR

AR is the largest C3+ producer with the most international exposure in Appalachia

Anchor shipper on ME2

25

Antero Non-GAAP Measures

Adjusted EBITDAX: Adjusted EBITDAX as defined by the Company represents income or loss, including noncontrolling interests, before interest expense, interest income, gains or losses from commodity derivatives and marketing derivatives, but including net cash receipts or payments on derivative instruments included in derivative gains or losses other than proceeds from derivative monetizations, income taxes, impairment, depletion, depreciation, amortization, and accretion, exploration expense, equity-based compensation, contract termination and rig stacking costs, simplification transaction fees, and gain or loss on sale of assets. Adjusted EBITDAX also includes distributions received with respect to limited partner interests in Antero Midstream Partners common units prior to the closing of the simplification transaction on March 12, 2019. The GAAP financial measure nearest to Adjusted EBITDAX is net income or loss including noncontrolling interest that will be reported in Antero’s condensed consolidated financial statements. While there are limitations associated with the use of Adjusted EBITDAX described below, management believes that this measure is useful to an investor in evaluating the Company’s financial performance because it:

• is widely used by investors in the oil and natural gas industry to measure operating performance without regard to items excluded from the

calculation of such term, which may vary substantially from company to company depending upon accounting methods and the book value of assets, capital structure, and the method by which assets were acquired, among other factors;

• helps investors to more meaningfully evaluate and compare the results of Antero’s operations from period to period by removing the effect of its

capital and legal structure from its consolidated operating structure; and

• is used by management for various purposes, including as a measure of Antero’s operating performance, in presentations to the Company’s

board of directors, and as a basis for strategic planning and forecasting. Adjusted EBITDAX is also used by the board of directors as a performance measure in determining executive compensation. There are significant limitations to using Adjusted EBITDAX as a measure of performance, including the inability to analyze the effects of certain recurring and non-recurring items that materially affect the Company’s net income or loss, the lack of comparability of results of operations of different companies, and the different methods of calculating Adjusted EBITDAX reported by different companies. In addition, Adjusted EBITDAX provides no information regarding a company’s capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax position. The Company has not provided projected net income or a reconciliation of projected Adjusted EBITDAX to projected net income, the most comparable financial measure calculated in accordance with GAAP, because the Company does not provide guidance with respect to income tax expense, depletion and depreciation expense or the revenue impact of changes in the projected fair value of derivative instruments prior to settlement. Therefore, projected net income and a reconciliation of projected adjusted EBITDA to projected net income, are not available without unreasonable effort. Net Debt: Net Debt is calculated as total debt less cash and cash equivalents. Management uses Net Debt to evaluate its financial position, including its ability to service its debt obligations. Leverage: Leverage is calculated as LTM Adjusted EBITDAX / net debt.

26

Antero Non-GAAP Measures (cont.)

Free Cash Flow: Free Cash Flow as presented in this release and defined by the Company represents Cash Flow from Operations, less Drilling and Completion capital and leasehold capital. Includes the earnout payment in 2020 received from AM associated with the water drop down transaction that

• ccurred in 2015.

Free Cash Flow is a useful indicator of the company’s ability to internally fund its activities and to service or incur additional debt. There are significant limitations to using Free Cash Flow as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect the company’s net income, the lack of comparability of results of operations of different companies and the different methods

• f calculating Free Cash Flow reported by different companies. Free Cash Flow does not represent funds available for discretionary use because those

funds may be required for debt service, land acquisitions and lease renewals, other capital expenditures, working capital, income taxes, exploration expenses, and other commitments and obligations. Free Cash Flow is a measure of financial performance not calculated under GAAP and should not be considered in isolation or as a substitute for cash flow from operating, investing, or financing activities, as an indicator of cash flows, or as a measure of liquidity. The Company has not provided projected Cash Flow from Operations or reconciliations of Free Cash Flow to projected Cash Flow from Operations, the most comparable financial measure calculated in accordance with GAAP. The Company is unable to project Cash Flow from Operations for any future period because this metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. The Company is unable to project these timing differences with any reasonable degree of accuracy without unreasonable efforts. However, Antero is able to forecast Drilling and Completion capital and leasehold capital, each of which is a reconciling item between Free Cash Flow and its most comparable GAAP financial measure.

Antero Resources Adjusted EBITDAX Reconciliation

LTM Adjusted EBITDAX Reconciliation 27

Twelve months ended (in thousands) December 31, 2019

Net loss and comprehensive loss attributable to Antero Resources Corporation $ (340,129) Net income and comprehensive income attributable to noncontrolling interests 46,993 Commodity derivative fair value gains (1) (463,972) Losses on settled commodity derivatives (1) 325,090 Loss on sale of assets 951 Gain on deconsolidation of Antero Midstream (1,406,042) Interest expense, net 228,111 Gain on early extinguishment of debt (36,419) Provision for income tax benefit (74,110) Depletion, depreciation, amortization, and accretion 918,629 Impairment of oil and gas properties 1,300,444 Impairment of midstream assets 14,782 Impairment of equity investments 467,590 Exploration expense 884 Equity-based compensation expense 23,559 Equity in loss of unconsolidated affiliate - AMC 143,216 Distributions from unconsolidated affiliates 157,956 Contract termination and rig stacking 14,026 Loss on sale of equity investment shares 108,745 Water earnout (125,000) Simplification transaction fees 15,482 Antero Midstream Related Adjustments (2) Net income and comprehensive income attributable to noncontrolling interests (46,993) Antero Midstream interest expense, net (2) (16,815) Antero Midstream loss on extinguishment of debt (21,770) Antero Midstream depreciation, accretion of ARO and accretion of contingent consideration (2) (6,982) Antero Midstream impairment (2,477) Antero Midstream equity-based compensation expense (2) 12,264 Antero Midstream gain on sale (2) (61,319) Antero Midstream equity in earnings of unconsolidated affiliates (2) (15,021) Antero Midstream distributions from unconsolidated affiliates (2) 95,183 Equity in earnings of Antero Midstream (2) — Distributions from Antero Midstream (2) — Antero Midstream simplification transaction fees (9,185) Adjusted EBITDAX $ 1,247,671

Antero Resources Net Debt Reconciliation

Net Debt Reconciliation 28

December 31, 2019

AR bank credit facility $ 552,000 5.375% AR senior notes due 2021 952,500 5.125% AR senior notes due 2022 923,041 5.625% AR senior notes due 2023 750,000 5.000% AR senior notes due 2025 600,000 Net unamortized premium 791 Net unamortized debt issuance costs (19,464) Total debt 3,758,868 Less: AR cash and cash equivalents — Net Debt $ 3,758,868

Antero Midstream Non-GAAP Measures

29

Non-GAAP Financial Measures and Definitions Antero Midstream uses certain non-GAAP financial measures. Antero Midstream defines Adjusted Net Income as net income plus amortization of customer contracts and impairment expenses. Antero Midstream uses Adjusted Net Income to assess the operating performance of its assets. Antero Midstream defines Adjusted EBITDA as net income before amortization of customer relationships, impairment expense, interest expense, provision for income taxes (benefit), depreciation expense, accretion, equity-based compensation expense, excluding equity in earnings of unconsolidated affiliates, and including cash distributions from unconsolidated affiliates. Antero Midstream uses Adjusted EBITDA to assess:

• the financial performance of Antero Midstream’s assets, without regard to financing methods, capital structure or historical cost basis;
• its operating performance and return on capital as compared to other publicly traded companies in the midstream energy sector, without regard

to financing or capital structure; and

• the viability of acquisitions and other capital expenditure projects.

Antero Midstream defines Free Cash Flow as Adjusted EBITDA less interest expense less capital expenditures before dividend payments or share

• repurchases. Antero Midstream uses Free Cash Flow as a performance metric to compare the cash generating performance of Antero Midstream

from period to period. Free Cash Flow does not reflect changes in working capital balances. Antero Midstream’s defines Distributable Cash Flow as Adjusted EBITDA less interest paid, decrease in cash reserved for bond interest, income tax withholding upon vesting of Antero Midstream Partners LP equity-based compensation awards, AMGP general and administrative expenses, and ongoing maintenance capital expenditures paid. Antero Midstream uses Distributable Cash Flow as a performance metric to compare the cash generating performance of Antero Midstream from period to period and to compare the cash generating performance for specific periods to the cash dividends (if any) that are expected to be paid to shareholders. Distributable Cash Flow does not reflect changes in working capital balances. Adjusted EBITDA, Adjusted Net Income, Free Cash Flow and Distributable Cash Flow are non-GAAP financial measures. The GAAP measure most directly comparable to such measures is Net Income. Such non-GAAP financial measures should not be considered as alternatives to the GAAP measure of Net Income. The presentations of such measures are not made in accordance with GAAP and have important limitations as analytical tools because they include some, but not all, items that affect Net Income and, as applicable, Adjusted EBITDA. You should not consider any or all such measures in isolation or as a substitute for analyses of results as reported under GAAP. Antero Midstream’s definitions of such measures may not be comparable to similarly titled measures of other companies. Antero Midstream defines Net Debt as consolidated total debt less cash and cash equivalents. Antero Midstream views Net Debt as an important indicator in evaluating Antero Midstream’s financial leverage. Leverage is defined as LTM Adjusted EBITDA divided by net debt.

Antero Midstream Non-GAAP Measures

30

The following table reconciles consolidated total debt to consolidated net debt (“Net Debt”) as used in this presentation (in thousands): The following table reconciles pro forma net income to pro forma Adjusted EBITDA for the twelve months ended December 30, 2019 as used in this presentation (in thousands):

December 31, 2019 Bank credit facility $959,500 5.375% senior notes due 2024 652,600 5.75% senior notes due 2027 653,250 5.75% senior notes due 2028 650,000 Net unamortized debt issuance costs (23,101) Consolidated total debt $2,892,249 Cash and cash equivalents (1,235) Consolidated net debt $2,891,014

12 months ended December 31, 2019 Net income $ (285,076) Amortization of customer relationships 70,874 Impairment expense 768,942 Adjusted Net Income 554,740 Interest expense 130,518 Provision for income tax expense (benefit) (79,120) Depreciation expense 120,363 Accretion and change in fair value of contingent acquisition consideration 10,254 Equity-based compensation 75,994 Equity in earnings of unconsolidated affiliates (62,394) Distributions from unconsolidated affiliates 76,925 Conflicts committee legal & advisory fees 2,278 Adjusted EBITDA $ 829,558

Antero Midstream Non-GAAP Reconciliation

31

The following reconciles net income to Adjusted EBITDA: $ in Thousands 2014 G&C Only 2014 2015 2016 2017

Net income $ 16,832 $ 127,875 159,105 236,703 307,315 Interest expense, net 4,620 6,183 8,158 21,893 37,557 Impairment of property and equipment — — — 23,431 Depreciation 36,789 53,029 86,670 99,861 119,562 Accretion and change in fair value of contingent acquisition consideration — 3,333 16,489 13,476 Accretion of asset retirement obligations — — — — Equity-based compensation 8,619 11,618 22,470 26,049 27,283 Equity in earnings of unconsolidated affiliates — —

• 485
• 20,194

Distributions from unconsolidated affiliates — — 7,702 20,195 Gain on sale of assets–Antero Resources — — — — Gain on sale of assets–third-party $ $ — —

• 3,859

— Adjusted EBITDA 66,860 198,705 279,736 404,353 528,625 Pre-IPO net income attributed to parent

• 98,219

— — — Pre-IPO depreciation attributed to parent

• 43,419

— — — Pre-IPO equity-based compensation attributed to parent

• 8,697

— — — Pre-IPO interest expense attributed to parent

• 5,358

— — — Pre-Water Acquisition net income attributed to parent

• 22,234
• 40,193

— — Pre-Water Acquisition depreciation attributed to parent

• 3,086
• 18,767

— — Pre-Water Acquisition equity-based compensation attributed to parent

• 654
• 3,445

— — Pre-Water Acquisition interest expense attributed to parent

• 359
• 2,326

— — Adjusted EBITDA Attributable to the Partnership $ 66,860 $ 16,679 215,005 404,353 528,625 Interest paid

• 2981
• 331
• 5,149
• 13,494
• 46,666

Increase (decrease) in cash reserved (paid) for bond interest — — —

• 10,481

291 Income tax withholding upon vesting of Antero Midstream Partners equity- based compensation awards — —

• 4,806
• 5,636
• 5,945

Maintenance capital expenditures

• 10,423
• 1,157
• 13,097
• 21,622
• 55,159

Distributable cash flow $ 53,456 $ 15,191 191,953 353,120 421,146

Antero Midstream Non-GAAP Measures

32

Antero Midstream has not included a reconciliation of Adjusted EBITDA, Adjusted Net Income, Free Cash Flow or Distributable Cash Flow to the nearest GAAP financial measure for 2020 because it cannot do so without unreasonable effort and any attempt to do so would be inherently imprecise. Antero Midstream is able to forecast the following 2020 reconciling items between such measures and Net Income (in thousands):

$ in Millions Low High Depreciation Expense $110 — $120 Equity based compensation expense 10 — 20 Interest expense 160 — 170 Amortization of customer relationships 65 — 75 Distributions from unconsolidated affiliates 95 — 105

ROIC is defined as earnings before interest and taxes excluding amortization of customer relationships divided by average total liabilities and partners capital, excluding goodwill and intangible assets in order to derive an operating asset driven ROIC calculation. The following reconciles Antero Midstream’s return on invested capital ($ in thousands):

Note: 2018 Pro Forma for Simplification Transaction.

2014A 2015A 2016A 2017A 2018 PF 2019A Adjusted Net Income $128 $159 $237 $311 $329 $555 + Interest Expense $6 $8 $22 $41 $62 $131 + Taxes and Provision for Income Taxes $0 $0 $0 $0 $110 ($79) = Adjusted Earnings Before Interest and Taxes $134 $167 $259 $352 $500 $606 Total Liabilities and Partners Capital $1,817 $1,980 $2,350 $2,829 $4,850 $4,617

• Current Liabilities

$80 $99 $82 $82 $117 $242 = Invested Capital $1,737 $1,881 $2,268 $2,747 $4,733 $4,375 Adjusted Earnings Before Interest and Taxes $134 $167 $259 $352 $500 $606 / Average Invested Capital $1,137 $1,809 $2,075 $2,508 $3,740 $4,554 = Return on Invested Capital 12% 9% 12% 14% 13% 13%