Antero Resources (AR) Q4 2025 Earnings Transcript

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Date

Feb. 12, 2026 at 11 a.m. ET

Call participants

• Chief Executive Officer — Michael N. Kennedy
• Chief Financial Officer — Brendan E. Krueger
• Senior Vice President, Liquids Marketing and Transportation — David A. Cannelongo
• Senior Vice President, Strategy — Dan Katzenberg
• Senior Vice President, Natural Gas Marketing — Justin B. Fowler

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Takeaways

• HG Energy Acquisition -- Closed ahead of schedule, adding 385,000 net acres and over 400 drilling locations, extending core inventory life by five years, and expanding exposure to dry gas markets.
• Ohio Utica Asset Sale -- Completed transaction that, combined with the HG acquisition, solidifies Antero Resources Corporation as the premier natural gas and NGL producer in West Virginia.
• Free Cash Flow -- Generated over $750,000,000 for the year, which funded over $300,000,000 in debt reduction, $136,000,000 in share repurchases, and over $250,000,000 in accretive acquisitions.
• Operational Performance -- Achieved a record 19 stages per day on a single completion crew in Q4; company-wide, averaged over 14 stages per day, up 8% from 2024.
• Drilling Efficiency -- Reduced average drilling days per 10,000 feet to below five, improving by 4% from 2024 levels.
• Cost Structure -- Transaction lowered cash costs by nearly 10%, improving margins and reducing breakeven prices.
• Production Guidance -- 2025 average production was 3.4 Bcfe/d; projected to rise to 4.1 Bcfe/d in 2026, with 2027 guidance at 4.3 Bcfe/d and a growth option to 4.5 Bcfe/d based on market conditions.
• Capital Budget -- 2026 drilling and completion budget set at $1,000,000,000, including $900,000,000 maintenance capital and $100,000,000 for higher working interest; up to $200,000,000 in growth capital for three incremental pads remains discretionary.
• Hedge Portfolio -- For 2026, 40% of natural gas volumes hedged via swaps at $3.92/MMBtu and 20% with collars between $3.24-$5.70/MMBtu; for 2027, about 30% hedged at high $3/MMBtu levels.
• Balance Sheet and Leverage -- Equity was not utilized for the HG acquisition; leverage expected to remain below one times by 2026, in line with pre-acquisition levels.
• NGL Market Developments -- 2026 global NGL demand growth is forecast at 563,000 barrels per day, the largest annual increase since 2021; U.S. C3 supply growth decelerates, with 2026 growth at 131,000 barrels per day and further slowing to 45,000 barrels per day in 2027.
• LPG Export Capacity -- Significant expansions in 2025 and beyond have removed export bottlenecks, keeping U.S. export capacity unconstrained at least through 2028.
• Natural Gas Storage -- Entered winter 2025 with storage ~200 Bcf above five-year average; as of call, storage is approximately 140 Bcf below the five-year level, with expectations to exit withdrawal season below average.
• Basis Differentials -- TGP 500L premium for 2026 is $0.66 above Henry Hub; local basin pricing is currently $0.74 below Henry Hub, tighter than the $0.88 average over the past five years.
• Optional Growth Capital -- No firm commitments required; second-half 2026 capital for incremental pads can be deferred or accelerated dependent on gas price outlook, with growth tied to $3 NYMEX pricing levels.
• Midstream Synergy -- Coordination with Antero Midstream (NYSE: AM) allows delivery of dry gas through new $20,000,000 infrastructure buildout supporting increased egress and local demand.
• Investment Grade Bonds Issued -- In January, inaugural investment grade bonds were issued, increasing financial flexibility.
• Hedge Sensitivity -- Management estimates every $5 move in C3 NGL pricing impacts annual free cash flow by $225,000,000.
• Field Execution During Winter Storm -- Despite severe conditions, no shut-in volumes were suffered and a seven-well pad was brought online, supporting regional supply.

Summary

Antero Resources Corporation (NYSE:AR) used its HG Energy acquisition and Ohio Utica divestiture to consolidate its position as West Virginia's largest gas and NGL producer while improving operational scale and drilling inventory. Management targets a highly flexible growth plan, supported by an enhanced hedge portfolio and capital allocation options that allow balance between debt reduction, share buybacks, and accretive investments. The company's ability to lower cash costs by nearly 10% and extend its Marcellus core inventory by five years fundamentally shifts its cost structure and long-term competitiveness. Expanding LPG export capacity and tightening natural gas basis differentials position Antero Resources Corporation to benefit from increasing local and export-driven demand. Management states leverage is expected to remain below one times by 2026, with no new equity issued for recent transactions.

• Michael N. Kennedy described the HG acreage as "adjacent" with flatter terrain, enabling wider spacing and longer laterals up to 15,000 feet, which raises average lateral length versus legacy assets.
• David A. Cannelongo identified that international winter propane prices continued to outpace naphtha and that recent Gulf Coast export expansions are only beginning to be felt in 2026.
• Free cash flow was deployed across debt reduction, buybacks, and acquisitions, supporting a "portfolio approach" to capital returns that can pivot as market opportunities or shareholder value considerations evolve.
• Management highlighted its ability to supply gas for new regional power projects and data centers, noting RFPs for additional supply and early sales to utilities off of Mountain Valley Pipeline (MVP).
• Dan Katzenberg said, "It is all second half capital," referencing that nearly all growth pad investments are back-end loaded and can be deferred based on real-time commodity pricing.
• Basis tightening in the East, with storage more than 13% below the five-year average, has led to the narrowest February differential to Henry Hub ($0.15) in a decade.
• C3 NGL prices are currently above $35 per barrel, with an annual average of $33.50 per barrel, and management is layering in further hedges at high $3/MMBtu levels if pricing allows.
• Company claims a competitive moat due to size, infrastructure, and capacity to optimize firm transport, enabling cost and margin advantages over smaller Appalachian producers.

Industry glossary

• Bcfe/d: Billion cubic feet equivalent per day; measures hydrocarbon production, combining gas and liquids volumes on an energy-equivalent basis.
• HG Energy: Recently acquired producer with 385,000 net acres and over 400 drilling locations in West Virginia, now integrated into Antero's core Marcellus development.
• PDH: Propane Dehydrogenation; industrial process converting propane to propylene, relevant to global LPG/NGL demand trends.
• Wide Collar: Option-based hedge instrument that establishes a price floor and ceiling, allowing partial upside price participation above the floor and below the cap.
• TGP 500L: Tennessee Gas Pipeline 500 Line; a pipeline corridor utilized by Antero Resources Corporation for transporting gas to Gulf Coast markets.
• MVP: Mountain Valley Pipeline; infrastructure enabling dry gas supply to local and regional markets in Appalachia and beyond.
• Accretive Acquisition: Purchase that increases per-share financial metrics such as cash flow or earnings, enhancing shareholder value.

Full Conference Call Transcript

Michael N. Kennedy: I would like to start my comments by recognizing the outstanding performance from both our upstream and midstream teams during the recent winter storm event. Despite subzero temperatures and significant snowfall, we did not experience any shut-in volumes during the period. In fact, our team was able to turn in line a seven-well pad during that time, a truly remarkable achievement by our people in the field, enabling Antero Resources Corporation to deliver critical natural gas to the various regions that desperately needed it. In addition to navigating through the winter, we had a very successful last few months on other fronts. Last week, we announced the closing of the HG Energy acquisition, ahead of our original expectations.

This acquisition, combined with the sale of our Ohio Utica asset, solidifies Antero Resources Corporation as the premier natural gas and NGL producer in West Virginia. We are also excited that in January, we issued our inaugural investment grade bonds. This offering provides substantial flexibility along with our free cash flow generation during this period that exceeded our initial expectations. Next, let us turn to Slide three titled “Antero’s Strategic Initiatives.”

Dan Katzenberg: Last quarter, we introduced our long-term vision and strategic initiatives. The HG acquisition marked significant progress towards

Michael N. Kennedy: all of the goals we highlighted. These include expanding our core Marcellus position in West Virginia. This transaction added 385,000 net acres and over 400 drilling locations, extending our core inventory life by five years. Increasing our dry gas exposure, our larger production and inventory base positions Antero Resources Corporation to capture the significant demand opportunities from LNG exports in the Gulf Coast and data centers and natural gas-fired power plants regionally.

Dan Katzenberg: Adding hedges to lock in attractive free cash flow yields

Michael N. Kennedy: providing high confidence in our free cash flow outlook over the next several years.

Dan Katzenberg: Reducing our cash costs and expanding margins.

Michael N. Kennedy: The transaction lowers our cost structure by nearly 10% assuming no changes to commodity prices and expands margins. This in turn lowers our peer-leading breakeven prices even further. Lastly, it highlights the benefits of Antero Resources Corporation’s integrated structure with Antero Midstream. Now, to touch on the current liquids and NGL fundamentals, I am going to turn it over to our Senior Vice President of Liquids Marketing and Transportation,

Dan Katzenberg: David A. Cannelongo, for his comments. Thanks, Mike. The NGL market faced various headwinds in 2025, but many of these issues were singular events or trends that are expected to improve over the coming

Operator: quarters.

Dan Katzenberg: When looking back on 2025, three main fundamental forces caused propane inventories to move higher than market expectations. Slide four titled “U.S. Propane Stocks and Propane Days of Supply” identifies these factors on the chart on the left. As we enter 2025, propane inventory levels were trending with the historic five-year average. However, U.S. trade tensions with China, the resulting reshuffling of U.S. propane exports to different destinations impacted U.S. export volumes. Additionally, this tariff shakeup came at a time when export expansions and existing terminals in the Gulf Coast were facing start-up delays or operational issues.

Importantly, the chart on the right-hand of the slide highlights the demand pull that persisted in the propane market last year despite these identified headwinds. Days of supply in 2025 consistently trended within the five-year range, due to strong export and domestic demand. Turning to the supply side, while NGL supply is expected to continue to increase over the coming years, the rate of growth will likely moderate due to weaker oil prices. As shown on Slide five titled “U.S. C3 Supply Growth Slows,” the chart on the left displays year-over-year U.S. supply growth decreased from 328,000 barrels a day in 2024 to 131,000 barrels a day in 2026 and further to 45,000 barrels a day year-over-year in 2027.

This deceleration is expected due to the lower oil price environment and the resulting reduction in oil-focused drilling activity, especially in the Permian Basin. This trend is likely to continue in the current WTI price environment. Turning to exports, significant LPG export capacity expansion was added in 2025 and there is more to come in 2026, entirely removing any potential market bottlenecks. Slide number six titled “Timely In-Service Dates for LPG Export Expansions” illustrates that LPG export capacity should be unconstrained through at least 2028, allowing U.S. barrels to continue to clear the market. Slide number seven illustrates the significant global NGL demand growth that is forecast for 2026.

Following several years of declining demand growth, 2026 demand is expected to grow 563,000 barrels a day, the largest annual increase since 2021, driven by LPG increases in the steam crackers, rising PDH demand, and annual rescom growth. On the bottom of the slide, you can see the C3 NGL price going back to 2021. Today, prices are above $35 per barrel, but with the backwardated strip, the annual average is $33.5 per barrel. To put pricing in the context, a $5 move in C3 NGL pricing equates to $225,000,000 in annual free cash flow.

All of these factors lead third-party analysts to forecast propane storage levels returning to within the normal five-year range by 2026, which should result in improving prices throughout the year. With that, I will now turn it over to our Senior Vice President of Natural Gas Marketing, Justin B. Fowler, to discuss the natural gas markets. Thanks, Dave. I will start on Slide number eight, which shows the winter-to-date residential and commercial demand. This winter, ResCom demand has been extremely strong, with November through February averaging nearly 42 Bcf per day. This results in an incremental 350 Bcf of natural gas demand compared to the five-year average, and is over 1 Bcf above last year.

Further, January demand averaged over 50 Bcf, ranking it as the third strongest January ResCom demand on record. January also saw the highest level of industrial natural gas demand on record dating back to 2005, which we believe to be in part related to the continued growth in behind-the-meter power demand for data centers. Turning to Slide number nine titled “Natural Gas Storage.” The result of this strong winter demand has been a dramatic flip in storage levels. At the start of the winter in November, storage was approximately 200 Bcf above the five-year level. Today, we are approximately 140 Bcf below the five-year level. This should result in exiting withdrawal season below the five-year average.

Last year, we experienced mild summer demand, which drove storage levels to the high end of the five-year range by the fall.

Operator: We

Dan Katzenberg: believe substantially higher LNG demand, which is up over 5 Bcf a day from a year ago, even before the imminent startup of Golden Pass, along with an increase in gas-fired power demand year-over-year, will likely moderate storage injections in 2026 relative to historical levels. Supporting strong LNG export demand this year are the European storage level deficits versus the five-year average that continue to widen, currently at approximately 600 Bcf below the average, and are now approaching the historic low levels of 2022. This should incentivize robust U.S. LNG exports to Europe throughout this coming summer. Next, on Slide number 10, let us look at the pricing improvements at some of the hubs that we sell significant gas to.

The chart on the left-hand side of the slide shows the TGP 500L basis strength. With the Plaquemines LNG facility consistently averaging feed gas of over 4 Bcf per day, we have seen increasing demand along our TGP 500L firm transport path, driving a higher premium at the delivery point relative to Henry Hub. For the full year 2026, the premium is now plus $0.66 to Henry Hub, the highest level we have seen on an annualized basis. Next, the chart on the right of the slide shows local basis pricing relative to Henry Hub. Local pricing for 2026 is currently $0.74 back of Henry Hub, compared to the $0.88 differential over the past five years on average.

We believe this local basis differential could tighten further, driven by East Region storage that is more than 13% below the five-year average. As an example, the recent winter weather event combined with this low storage in the East led to February PECO prices settling at just approximately a $0.15 differential to Henry Hub, the tightest February differential in ten years. Our acquisition of HG Energy substantially increases our exposure to strengthening local prices, driven by the significant regional demand growth. Historically low storage in the East, combined with this regional demand growth, could result in a need for increased supply, supporting a decision for our growth capital that Mike detailed earlier.

This significant regional demand growth is driven by new natural gas power generation and data center projects being announced throughout our region and along our firm transportation corridor. All of these projects will be competing for natural gas that could face supply challenges in that short timeframe. The HG acquisition increases Antero Resources Corporation’s dry gas production and drilling inventory, boosting our exposure to this regional demand. Our coordination with Antero Midstream’s ability to build out infrastructure and supply the substantial water needs at these facilities, combined with our extensive land team, puts Antero Resources Corporation at competitive advantage in participating in these projects. With that, I will turn over to Brendan E. Krueger, CFO of Antero Resources Corporation.

Thanks, Justin.

Michael N. Kennedy: I will start with Slide number 11, which highlights our 2025 financial and operating results. Our operational performance in 2025 was one of our best years yet.

Dan Katzenberg: As we set numerous company records. During the fourth quarter, we achieved a new stages per day company record for a single completion crew, hitting 19 stages in a day.

Michael N. Kennedy: For the full year, we averaged over 14 stages per day,

Dan Katzenberg: an 8% increase from the 2024 average. Our drilling team achieved its best annual rate

Michael N. Kennedy: averaging under five drilling days per 10,000 feet, 4% faster than the 2024 average. The chart on the right-hand side of the slide highlights our 2025 financial highlights.

Dan Katzenberg: During the year, we generated over $750,000,000 in free cash flow.

Michael N. Kennedy: We used this free cash flow to reduce debt by over $300,000,000, repurchase $136,000,000 of stock, and invest more than $250,000,000 accretive

Operator: acquisitions.

Michael N. Kennedy: The strength of our balance sheet and the consistency of our free cash flow generation supports an opportunistic return of capital strategy.

Dan Katzenberg: Where we can pivot between debt reduction, buybacks, and accretive transactions, or a portfolio approach to all of these, in order to drive shareholder value.

Michael N. Kennedy: Next, Slide 12 highlights our 2026 production and capital outlook.

Dan Katzenberg: Starting with the capital table at the top of the slide. Our drilling and completion capital budget is $1,000,000,000. This includes $900,000,000 for maintenance capital,

Michael N. Kennedy: and $100,000,000 from the higher working interest as a result of foregoing a drilling joint venture partner this year.

Dan Katzenberg: Additionally, we have an incremental three pads that we could develop in 2026, that would add up to $200,000,000 of growth capital during the year and drive further 2027 production growth. The bottom of the slide highlights our production outlook. 2025, we averaged 3.4 Bcfe a day. For 2026, we forecast 4.1 Bcfe a day of production. This maintenance production level reflects the early February close of the HG acquisition and the expectation that the Ohio Utica divestiture closes in February. Next, as we have discussed, we laid out growth

Michael N. Kennedy: to 4.3 Bcfe a day in 2027 due to not having a drilling JV this year

Dan Katzenberg: and a growth option that could increase our 2027 production up to 4.5 Bcfe a day.

Michael N. Kennedy: This discretionary growth option will be based on the outlook natural gas prices and in-basin demand during the year. Now let us turn to Slide 13 to discuss our updated hedge program.

Dan Katzenberg: To derisk the acquisition of HG,

Michael N. Kennedy: hedge those volumes

Dan Katzenberg: to provide a clear path to funding the transaction in just three years using the free cash flow from those hedges

Michael N. Kennedy: along with the divestiture of our Ohio Utica assets.

Dan Katzenberg: In 2026 and 2027, we are hedged with a combination of swaps and wide collars. We have approximately 40% of our 2026 natural gas volumes hedged with swaps at a price of $3.92 per MMBtu. We have another 20% hedged with wide collars between $3.24 and $5.70 per MMBtu. Our hedge book allows us to protect the downside by locking in a portion of our free cash flow

Michael N. Kennedy: while at the same time maintaining attractive exposure to higher natural gas prices.

Dan Katzenberg: I will close by commenting that while our equity value remains near levels from before the HG acquisition, our company is much stronger today. Through the transaction, we increased our production base by over 30%, extended our Marcellus core inventory by five years, reduced our cash cost by nearly 10%, and substantially increased our free cash flow.

Michael N. Kennedy: We achieved all of this without using any of our equity. And we expect leverage by 2026 to be similar to where we were prior to the

Operator: acquisition.

Dan Katzenberg: Which was just below one times. Looking forward, we are well positioned to capitalize on the significant natural gas demand growth

Operator: expected.

Dan Katzenberg: Both on the LNG front in the Gulf Coast and from the

Michael N. Kennedy: significant power demand that we see occurring regionally. With that, I will now turn the call over to the operator for questions. Thank you. We will now open for questions. First question comes from John Christopher Freeman with Raymond James. Please state your question.

Operator: Thank you. Good morning, guys. The first topic just on growth capital, just want to know if you all could kind of provide a little bit more color on sort of what kind of in-basin demand gas price assumptions you all would need to kind of support that growth plan kind of relative to the current strip and outlook?

Dan Katzenberg: Yes, John. Our goal is always have the most capital efficient development program and we do have that

Michael N. Kennedy: but what that leads us to is to try to have a steady state program. So we are running three rigs and two completion crews right now. So maintaining that would result in growth not only in 2027 at a couple hundred million a day, but also in the further out years. But an attraction of this, though, is that it is flexible. We have the ability just to do our maintenance capital program with leading and drilling two or three less pads and still maintaining production, and then deferring those pads in the future years. You saw us do that in 2024 when you had kind of a $2 gas environment or $2 plus.

Then when the natural gas returned to more kind of the $3 plus level, we completed those pads. So that is kind of the expectation here. All of that is has the ability to be deferred. It is all second half capital. So we can call an audible then. But if you saw a $3 plus gas, as Brendan mentioned in his comments, the local differentials being so tight, that continues. You would probably see us complete those pads and drill those pads. But if it was lower gas environment, we would defer those into future years.

Dan Katzenberg: The other nice thing on this capital, this growth, is it is not based on any commitments

Michael N. Kennedy: so it truly is flexible. It truly is an option value for us. No commitments with that. It is all local gas. And with discussions we are having and the prices we are seeing, and we have actually already entered into some

Dan Katzenberg: sales to utilities off of MVP. As those continue, we will complete those pads into those opportunities.

Operator: That is great. Very helpful. And then just follow-up. On Slide 11, you all showed kind of the breakdown of the uses of the free cash flow last year, roughly about 20% of the free cash flow went to buybacks and as Brendan, as you mentioned, you know, leverage will be back below one times before the end of the year. Is there any sort of like just sort of absolute debt target or something like that we should be looking at to where you would then potentially maybe more aggressively shift toward buybacks? I mean, I know you are going to be opportunistic, but if there is just some sort of metrics we should be following

Dan Katzenberg: No. Yeah. You know, there is there is no metrics

Michael N. Kennedy: I think we are better positioned now than ever to be countercyclical in buying back shares. With our hedge position, size and scale. Very comfortable buying back shares regardless of where our debt is right now. But with that said, paying down the debt is normally when we actually perform the best from an equity standpoint, derisking the business, getting it under one times, as a result of this year's activity. But if there is an ability to opportunistically buy back shares and be countercyclical, that is something that we would take advantage of.

Operator: Thanks. Appreciate it.

Michael N. Kennedy: Your next question comes from Arun Jayaram with JPMorgan. Please state your question.

Dan Katzenberg: Yes, good morning, Mike, you have had

Michael N. Kennedy: it has been just over sixty days since you announced the HG deal. And I was wondering if as you look a little bit more under the hood

Operator: thoughts on potential upside

Dan Katzenberg: potential to the synergy

Michael N. Kennedy: number. I think you identified $950,000,000 of PV-10 synergies. Just maybe thoughts on where you stand regarding synergies and how do you think about potential upside or better capital efficiency even as we look at 2026.

Operator: Yes, Arun. It is actually better than our expectations

Michael N. Kennedy: I was actually out there last week. What is really apparent when you go out there, it is part of our field. It is adjacent. It should have—we are the natural developer of it. It just extends our field south to that southern row

Dan Katzenberg: of dry gas and liquids opportunities, a little flatter down there. Bigger pads, ability to

Michael N. Kennedy: have wider spacing, do bigger completions, have terrific recoveries. Other thing that is come to our attention is just an improvement in our cost structure that is coinciding with all this local gas demand and better in-base pricing, which we did not underwrite and did not have. So there will be some upside on the pricing, I think. And then I think there will be further upside on the cost structure and recoveries and expanding our margins. Great. Mike, and just maybe a follow-up. I believe on the third quarter call, you highlighted how Antero was completing one of its kind of first dry gas pads in a number of years.

I was wondering if you could give us any sense, if you have enough data to maybe to give us some thoughts on how the results played out relative to your expectations and does this set up more of an opportunity for AR on the dry gas side? The completion crew right now is on that pad, the Flanagan pad. So it is just went on there this week, Arun.

Dan Katzenberg: Moving from the Shin pad over to that. So

Michael N. Kennedy: still early on that, but we have high expectations for it and very confident in its results. Great. I jumped again on my question. Thanks a lot, Mike. Appreciate it. Yep.

Dan Katzenberg: Next quarter.

Michael N. Kennedy: Your next question comes from Kevin Moreland MacCurdy with Pickering Energy Partners. Please state your question.

Dan Katzenberg: It is Kevin McCurdy. Thanks for taking my question. As we look at the production ramp this year, you end up at the same spot, but the ramp is maybe a touch lower than we were expecting. I wonder if you could maybe touch on the variables that impact that ramp and is that ramp mainly on the acquired assets? Yes. On the production, it is not a

Michael N. Kennedy: touch lower. It is as expected. We gave some quarterly performance. We closed it quicker than we thought.

Dan Katzenberg: When we mentioned the 4.2% on the initial

Michael N. Kennedy: call, that was from Q2 to Q4. It is still 4.2. It is 4.1 now in Q2 with a turn-in-line happening

Dan Katzenberg: the middle of the quarter that pushes that up to 4.2%. So it is as expected. So cadence is terrific.

Michael N. Kennedy: And then goes to 4.3 in 2027, then with the growth capital that we have, if we execute on that plan, we would be at 4.5% in 2027. Great. Thank you for the detail on that.

Dan Katzenberg: And maybe shifting to NGLs, as we track the C3 prices, Antero, it looks like domestic prices have not moved much this year, but international prices have been driving your forecast as C3 price for the year up a little bit. I wonder if you can touch on maybe what do you think is driving that arbitrage and how you think that progresses through the year? And maybe is Mont Belvieu fully debottlenecked now or are we waiting on further expansions this year? Yes, Kevin, this is Dave. I will take that one.

So on your first question on what is driving the international pricing, typically, we see this time of year of the winter propane prices really kind of rise relative to naphtha. So we are seeing levels that are kind of in line with what we have seen in prior winters. But certainly some of the issues that we had on the U.S. export infrastructure side, kind of a lower or a later start on some of the expansion capacity than maybe we had anticipated.

Some challenges that some folks have with refrigeration units, as I mentioned in my comments, kind of led us to see the inventories in the U.S. kind of go a little higher than what folks are modeling and expecting at that point in time. So I think here in the first quarter we are seeing those issues resolve. We typically have some fog challenges in the winter as we always do. But strong domestic demand is kind of keeping that from being too noticeable in the inventory levels. But just the usual international markets having a strong desire for U.S.

LPG and when they see any kind of hiccup at the dock and kind of peak demand season of the winter, you see that flip through in the pricing while we always see that appreciation versus naphtha. And then, yes, on the export side, would say really seeing even though we kind of talked about expansions in 2025, did not really see the effect of those until we get into calendar year 2026, and then further expansion is coming. So view us really at the front end of that debottlenecking in the Gulf Coast right now. Thank you. I appreciate the answer.

Michael N. Kennedy: Your next question comes from Greta Dreskoye with Goldman Sachs Asset Management. Please state your question.

Operator: Good morning, all, and thank you for taking my questions. My first is just

Greta Dreskoye: on the winter gas realizations. Given the volatility in both the Gulf Coast and Northeast pricing this winter we have seen so far, can you speak a little bit more about your outlook for gas realizations in this quarter in particular? And just key considerations to keep in mind in the context of your scale of your volumetric exposure at the Gulf Coast and the moving pieces of the two transactions.

Dan Katzenberg: Yes. Hi, Greta. Yes, I mentioned on my initial

Michael N. Kennedy: comments, we did not have any curtailment. So, obviously, we participated. The pricing that occurred in the region and on the Gulf Coast in the first quarter. So we typically have 80% first of the month and 20% on the day. So we were able to sell 20% daily pricing during the quarter.

Greta Dreskoye: Great. Thank you. And then a quick follow-up as well. Just on hedges, given the amount of volatility that we have seen at the start of the year. Can you just talk a little bit about your current view on potentially layering in incremental hedges in 2027 or beyond if the forward curve gives you that opportunity?

Michael N. Kennedy: Yes. I think you said that well. 2026 we are set. 60% hedged, and a high $3 level and some wide collars. 2027, we have some room to go. We are about 900,000,000 a day hedged. So about 30% hedged in that high $3 level. Think high $3 level is, you know, a good area to target. The other thing to note is the M2 basis has really come in. I think it is the tightest it has been on a forward-looking curve in, you know, ten years. Ability to hedge that at about $0.75, $0.76 back level. So if high $3 and hedge the local basis at $0.75, $0.76, lock in

Dan Katzenberg: $3 realizations at the wellhead locally.

Michael N. Kennedy: That is an attractive level for us. So I think we continue to layer some of those in.

Greta Dreskoye: Thank you.

Dan Katzenberg: Mhmm.

Michael N. Kennedy: Thank you. And your next question comes from Josh with UBS. Please state your question. Just going back to the cost structure, can you talk about how this may change throughout the course of the year? I believe you talked about $0.25 per Mcfe margin improvement due to GP and C. Costs start higher, then declines, so you also see a benefit into 2027 versus 1Q of this year. Sort of direction there would be helpful. Thanks. I think you touched on it. $0.25 is a good level.

Dan Katzenberg: Obviously, there is some variable component to our cost structure. You recall with every dollar up,

Michael N. Kennedy: in the natural gas price is about a $0.10 variable just on production taxes. And transport costs on our feet.

Dan Katzenberg: So you had a little bit of that up compared to that when we

Michael N. Kennedy: mentioned December because the gas curve is actually up $0.60, up $0.26, so you saw about a $0.06 increase from there. But conversely, our realizations as well are still in that $0.10 to $0.20 premium, whereas we thought would be more flat. So the ability to add 800,000,000 a day of local dry gas and still have a $0.00 to $0.20 premium to NYMEX for 2026 is terrific. So looking good there, but think you hit on it, about a 10% reduction in our cost structure, about $0.25. Got it.

And then just wanted to shift over towards any sort of potential power supply deals and see how those are progressing with the new HG volumes and some of the interconnects that you now have a little bit better in West Virginia, how would those maybe developing? You have talked about now improving kind of local basis as well. How you may look to structure these?

Dan Katzenberg: Thanks. Hey, Josh, this is Brendan. So overall, I think on power side,

Operator: as Mike mentioned, think in his

Dan Katzenberg: prepared remarks,

Michael N. Kennedy: we are selling some of that gas already to utilities

Operator: that are buying for a lot of this gas-fired power demand that we are seeing. I think on top of that, we continue to see RFPs come in quite frequently on additional gas supply

Dan Katzenberg: the next several years. I think as they get closer to being in service, they then turn

Michael N. Kennedy: to some of the larger gas producers, and particularly investment grade gas producers, in the region to look to lock in some of that supply. So we are seeing a lot of

Operator: interesting conversations there, and

Dan Katzenberg: we will look to continue to lock in some of that pricing over time here.

Greta Dreskoye: Thank you.

Michael N. Kennedy: And your next question comes from Phillip J. Jungwirth with BMO Capital Markets. Please state your question.

Dan Katzenberg: Thanks. Good morning. Your FT portfolio, it is always

Michael N. Kennedy: delivered leading realizations, smoothed out price volatility. Most of this was signed up a long time ago. So I was just hoping you could talk about how you see yourself managing this FT position through the decade, including that associated with ethane, C3 . Is there any you do not feel the need to keep? And is there just a long-term margin optimization story here through recontracting, or maybe even picking up different FTs from others who do not have inventory?

Dan Katzenberg: Yes, good question. Definitely an optimization. I mean we are so well positioned right now. We can pick and choose the best path going forward. Also, now with the flexibility in the local dry gas

Michael N. Kennedy: so we can do both.

Dan Katzenberg: And that is an opportunity for us over the next couple of years. If some of these long-term agreements come to the end of their original agreement, we will assess whether it makes sense. But

Michael N. Kennedy: that is that is a great story for us on a go forward and definitely upside, our ability to optimize those

Dan Katzenberg: transport paths and optimize our cost structure.

Michael N. Kennedy: Okay, great. And then as we think about the organic just leasing program, hoping you could kind of frame the competitive moat you have here in terms of existing footprint or infrastructure. There are still some smaller players in and around you and just what is the pathway for some of these smaller E&Ps to efficiently develop their position? Or have you made it pretty prohibitive for them to do that given your large footprint and surrounding footprint?

Dan Katzenberg: No, we are obviously the West Virginia natural gas and NGL producer, and our size and scale makes it a lot more efficient for us to develop the asset compared to others. So I think you will continue to see us build upon that, whether through organic leasing or small transactions. Continue to just consolidate our position in West Virginia. And that will continue to drive our capital efficiency and lower cost structure and margins.

Michael N. Kennedy: Great. Thanks, guys. Your next question comes from Leo Paul Mariani with Roth. Please state your question.

Dan Katzenberg: Yes. Hi, guys. Just wanted to follow-up a little bit on the growth CapEx question. Obviously, you guys kind of cited that this $3 plus world is sufficient for you guys to go ahead and spend some of that growth CapEx.

Leo Paul Mariani: Just wanted to kind of clarify, is that a $3 Henry Hub price? Or is that more of a $3 kind of in-basin price, which seems like you are fairly close to that given the tightening basis as we roll into next year. And then if you do decide to the capital, could you just provide a little bit of color in terms of what that looks like in the second half? Is most of that CapEx kind of fourth quarter and then production starts to ramp kind of early in 2027? Just any kind of moving pieces around that would be great.

Dan Katzenberg: Yeah. First part is more NYMEX based. You know, like you cited, we can right now, the market is at, say, $3 in-basin for 2027. Even if you had $3 NYMEX and that $0.70 back, you would be in the

Michael N. Kennedy: -2s in-basin and you are talking $1 cost structure on this gas, so you are $1.50 margin even in that level. It is $0.50 F&D. So you are still having terrific returns. These are all local dry gas pads. The optionality here is kind of one of the key points, flexible. There is no commitments around it. So we can judge it at the time and we can hedge it as we have been

Dan Katzenberg: as well. So $3 plus kind of NYMEX is more where our head was at with that type basis. The second part is it is all second half capital.

Michael N. Kennedy: You will not see any of the production ramp until 2027. Obviously, you have a six- to nine-month kind of cycle on drilling, completing, and turn-in-line date. So there will be second half capital. We looked at it, it is almost all second half capital. It is like 95% all second half on these two to three pads. And then the production comes on in the 2027.

Leo Paul Mariani: Okay. Appreciate that.

Dan Katzenberg: And just with respect to the buyback here, I was getting a sense, correct me if I am wrong, do not want put words in your mouth, that the debt paydown is maybe a little bit more of a priority just given the fact that kind of added some leverage, you obviously have some nice hedges to take care of that. And the buyback is going to be maybe a little bit secondary and fairly opportunistic as well.

Dan Katzenberg: Yeah. It is it is fair at this level. But if you do see any sort of opportunities on the equity, you should be

Michael N. Kennedy: pretty confident we would take advantage of that.

Leo Paul Mariani: Okay. Thank you.

Operator: Your next question

Michael N. Kennedy: comes from Kaleinoheaokealaula Akamine with Bank of America. Please state your question. Just played a

Dan Katzenberg: good morning, guys. Thanks for taking my question.

Leo Paul Mariani: My first question is on the growth option. I am wondering if that investment sets you up for 4.5 Bcfe/d early in 2027. And what the new maintenance capital number is associated with that volume level.

Dan Katzenberg: That would be early in 2027 and that is not a maintenance capital. Running three rigs and

Michael N. Kennedy: two completion crews would add a couple of hundred million a day of growth 2028 and 2029. So you continue to grow at that kind of $1,200,000,000 capital. Our maintenance capital would still continue to be $900,000,000-ish. That is kind of what we were looking at this morning. It is pretty remarkable. So maintenance capital stays relatively flat even at those levels. Just highly, highly capital efficient development program. Got it. I appreciate that. And for my second question, just kind of based on your comments, it sounds like the growth option will be on the

Leo Paul Mariani: dry gas acreage.

Michael N. Kennedy: Whether that is legacy Harrison County or the new HG that you picked up. Just kind of wondering if there is sufficient egress to move those growth volumes around the basin

Leo Paul Mariani: or if you will be spending additional midterm capital at AM.

Dan Katzenberg: No. AM does have some capital. It is

Michael N. Kennedy: around $20,000,000 this year to build out our dry gas Eastern connect, all the various pipes, and that will provide enough egress and there is

Dan Katzenberg: so much local demand that you will be able to sell the gas locally. Thank you, Mike. This year.

Michael N. Kennedy: Thank you. And your next question comes from Subhas Chandra with DolanX. Please state your question.

Subhas Chandra: Yes. Hi. So just curious, maybe the question is for Dave. What is the

Subhas Chandra: PDH outlook in China in 2026?

Dan Katzenberg: Yes. So right now, I mean, the current infrastructure is running in the 65% to 70% utilization range. We did have four plants that came on in 2025. So kind of continuing to see the absolute amount of volume that is capacity that is available to ramp into is in that 300,000 to 400,000 barrel a day

Operator: range.

Dan Katzenberg: And then two additional plants right now on the schedule to turn in line, or come online, sorry, in 2026. And those total about another 55,000 barrels a day of PDH demand.

Subhas Chandra: Perfect. Excellent. Thank you. And then on it seems like, you know, the completions in 2026 guidance is longer laterals than 2025. Just curious if is any of that HG related? Or is that going to be more influential in 2027?

Dan Katzenberg: It is pretty much all HG related actually. That is one of the attractions

Michael N. Kennedy: here. I mentioned it is a row, but they were able to design it as a very efficient row that basically goes north and south 20,000 feet both ways. It is kind of their average. So that takes us up to that

Dan Katzenberg: 15,000 feet level from our typical 13,000 feet. So definitely accretive on a lateral length, the HG development.

Subhas Chandra: Great. Thank you.

Michael N. Kennedy: Thanks. And your next question comes from John Abbott with Wolfe Research. Please state your

Subhas Chandra: Thank you for taking our questions. I want to go back to the question, go back to growth. And the HG transaction has added to your inventory. We have already sat here and discussed

John Abbott: you have the option to get to 4.5 Bcf per day in 2027, you could grow beyond that. I guess, when you sort of think about your inventory in hand, and when you think about NGLs and dry gas, how do you think about the extent that you are willing to grow? Just given your visibility on that for user and how you about that?

Michael N. Kennedy: Yes, quite a bit. I mean, we are the ones that should grow. We have the most capital

John Abbott: program. We have the FT that goes to the LNG exports. We have the local dry gas where it goes to where all the data centers and that gas-fired generation is coming. So all the demand centers that everyone projects that is coming over the next five years, we are the best positioned for it, and we have the best rock. So that is kind of where our head was at is why would we, you know, navigate through this by strictly enforcing ourselves at maintenance capital. We want to be the most capital efficient

Michael N. Kennedy: developer and that is always our goal. And so a steady state program is always the way to achieve that. So just running three rigs,

John Abbott: and two completion crews flat will result in the most capital efficient development, and to toggle away from that based on monthly swap prices is not something that we would probably do.

Michael N. Kennedy: And when you put that into our development plan, that results in this growth. So that is kind of where we came to on this. We are the ones that should be growing and meeting this upcoming demand and we are the best positioned for it.

John Abbott: I appreciate it. And then the follow-up question here, I guess, would be for Justin. So you were in the slide, you are highlighting the tightening of basin. Basis, I mean, I guess the growth option here from bringing on the gap dry gas wells, you are to hedge that. But I guess when you sort of look at basin and tightening, how do you think about basis and growing into that basis? How do you think about your impact to basis? And the decision to grow? Yeah. We are not—I mean, we are talking a couple hundred million a day of growth. I mean, what the demand numbers you are seeing are well in excess of that.

So on a percentage basis, it is probably—we are actually probably not adding to the or detracting from the supply and demand picture. So

Michael N. Kennedy: this is not strictly material. You know, you are talking 200,000,000 a day of

John Abbott: gas production growth versus Bcf a day of gas demand. All right. Appreciate it. Thank you for taking our questions.

Michael N. Kennedy: Your next question comes from Sam Margolin with Wells Fargo. Please state your question.

Subhas Chandra: Hi, thanks for taking the question.

John Abbott: Back to your

Dan Katzenberg: point on capital efficiency, it looks like just from your

John Abbott: production guidance and your activity guidance that HG was had a

Dan Katzenberg: positive impact on your corporate decline rate. Is that is that accurate? And if so, could you help quantify that a little bit? I am

John Abbott: looking at the

Michael N. Kennedy: production outcome from this spending. Yes. Our capital decline actually was

John Abbott: in the low 20s. Hers is a little bit above that, kind of mid-20s. But what we have, it is

Dan Katzenberg: have a flatter production file. You have some

John Abbott: and an HG flatter. The midstream system has more of kind of a flat production profile in the wells in the first couple of years, whereas ours was more well plumbed. So it is fairly similar, but a lot of their production has had a constraint just around midstream. And so it has got a flatter production profile in its first couple of years. Got it. Okay. Thank you. And then just on the commercial side, there is a lot of focus on power, but the industrial piece along some of your firm transport destinations also has some growth prospects. Are there commercial or fixed

Dan Katzenberg: gas supply opportunities in that category? Yes. Good morning. This is Justin. We have spoken about this in previous calls, but Antero’s firm transport book is set up with approximately 2 Bcf that heads down to the Gulf Coast, which Mike mentioned. That gets into the LNG corridor. And within that path, not to mention what the local growth will be, and we have different capacity that will pass by those end users. Just if you think geographically, Kentucky, Tennessee, Mississippi, all the way down to the LNG corridor, we have identified potentially 4 to 6 Bcf of different demand that would be a potential fit with the Antero firm transport delivery. So we continue to have those conversations.

As Brendan mentioned, we continue to get RFPs for different supply for these data centers and power projects.

John Abbott: And, you know, we have touched on this in the past as well, but

Dan Katzenberg: the competition for that ball volume southbound continue to increase over the next couple of years.

Subhas Chandra: Thanks so much.

Operator: Thank you.

Michael N. Kennedy: And we have reached the end of our question and answer session. So I will now hand the floor back to Dan Katzenberg for closing remarks.

Dan Katzenberg: Thank you for joining us on the conference call today. Please reach out with any further questions that you have. Have a good day.

Operator: This concludes today’s call. All parties may disconnect.

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