# DEAR FELLOW
SHAREHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-e-p/NYSE_AR_2019/NYSE_AR_2019.mmd` · pages 2-8_

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DEAR FELLOW
SHAREHOLDERS,

Antero Resources (NYSE: AR) delivered many notable accomplishments during 2019, further strengthening the Company's position as a premier Appalachian Basin producer. Driven by the successful execution of our development plan, we averaged a record 3.2 Bcfe/d of net production during the year while growing average production by 19% over the previous year. Our liquids volumes averaged 161,000 Bbl/d in 2019, ranking Antero as the second largest natural gas liquids (NGL) producer in the United States. Antero Resources also exited 2019 as the fifth largest natural gas producer in the U.S., averaging 2.3 Bcf/d of dry gas production during the year. We grew our proved reserves by 5% to 18.9 Tcfe, including a 13% increase in proved developed reserves. All of these achievements were reached while executing on a cost reduction and efficiency initiative that resulted in well costs exiting the year at 795 per lateral foot, 18% below the initial 2019 budget. This operational momentum positions Antero Resources to generate significant value for our shareholders on a sustained basis over the coming years.

The Antero Family had a transformational year in 2019, closing the acquisition of Antero Midstream Partners by Antero Midstream GP and converting the partnership into a corporation. The tax-efficient transaction simplified the Antero Family structure, eliminated the incentive distribution rights, and significantly enhanced shareholder rights and corporate governance. Following the closing of the midstream simplification transaction, Antero Resources no longer consolidates Antero Midstream (NYSE: AM) in its financial statements, significantly improving our transparency and disclosure.

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## EFFICIENT AND VALUE-FOCUSED SHALE DEVELOPMENT

Antero Resources continued to be one of the most active operators in Appalachia in 2019, running an average of four drilling rigs and turning 131 horizontal wells to sales during the year. Our core contiguous acreage position allows for long lateral drilling and highly efficient operations, both upstream and midstream. These efficiencies led to new operational records in 2019. The 131 well completions had an average lateral length of 11,062 feet, a 10% increase from the prior year. We completed an average of 6.3 stages per day during the fourth quarter of 2019, a 21% increase from the average in 2018. Going forward, we have a core inventory of more than 2,700 drilling locations that includes an extensive mix of both liquids-rich and dry gas locations. This attractive mix allows us to focus our development plan on the highest return acreage.

## RELENTLESS FOCUS
ON COST REDUCTION

Throughout 2019 we maintained an intense focus on reducing our corporate cost structure. Through a combination of lower well costs, reduced lease operating expense, gathering, processing and transportation expense, and general and administrative costs, we are targeting a $620 million reduction in our capital and operating cost structure for 2020.

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Our liquids volumes averaged 161,000 Bbl/d in 2019, making Antero the second largest natural gas liquids (NGL) producer in the United States.

18.9 Tcf
Net Proved Reserves

541,000
Net Acres

2,700 +
Undeveloped Drilling Locations

S0.33 Mcfe
Marcellus F&D Cost

S6.1 Billion
SEC PV-10 Proved Reserve Value

29%
AM Ownership

39%
Liquids Revenue Contribution

151,000
Natural Gas Liquids Production

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In 2020 we will remain steadfast in continuing to reduce our overall cost structure, with a goal of being a peer leader in returns regardless of the commodity cycle. This persistent effort to reduce costs has already delivered benefits as highlighted by our latest 2020 well cost target of $715 per foot, 25% below the year-ago level.

## READY FOR THE FUTURE

Looking ahead, our development plan targets capital spending within cash flow while continuing to deliver modest growth. In 2020, we are expecting gas-equivalent production growth of just below 10% despite a drilling and completion capital budget that is 39% below 2019.

As one of the largest NGL producers in the United States, Antero is well positioned to capitalize on improving liquids pricing. In early 2019, we gained significant access to global NGL markets and pricing through our commitment on the Mariner East 2 Pipeline. This pipeline transports NGL products from our producing areas in West Virginia and Ohio to the Marcus Hook terminal and dock on the Delaware River near Philadelphia for international shipping. We expect to sell at least 50% of our NGLs into the global markets in 2020, diversifying our liquids pricing exposure and providing another link to premium price realizations.

We also continue to deliver pre-hedge natural gas realizations at a premium to benchmark pricing due to our firm transportation portfolio. Our 2.1Bcf/d of transportation capacity to the Gulf Coast enables Antero to be one of the largest suppliers to the growing LNG export business in the U.S., which allows us to receive premium natural gas price realizations.

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Antero is one of the largest suppliers to the growing LNG export business in the U.S., which directly contributes to our ability to receive premium natural gas price realizations.

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To ensure continued favorable price realizations, we have built an industry-leading natural gas hedge position at prices well above current futures market prices.

The combination of our large scale, diversified product pricing exposure and increasing capital efficiency provides Antero a differentiated strategy built to succeed throughout any commodity price cycle. Investors can remain confident in our coordinated development plan with Antero Midstream. This plan supports a low-risk, long-term outlook.

## ANTERO MIDSTREAM DEVELOPMENT

Following the simplification of the midstream structure, we own 29% of Antero Midstream Corporation's shares. Antero Midstream is an integrated midstream service provider whose primary role is to support the growth of Antero Resources in Appalachia. Through its gathering and compression business, Antero Midstream delivers low-pressure gathering, compression, and high-pressure gathering services to Antero Resources. Antero Midstream also uses its fluid handling assets to manage fresh water delivery for well completions and flowback and produced water services for Antero Resources. At year-end 2019, through the processing and fractionation joint venture with MPLX (NYSE: MPLX), the capacity at the Sherwood gas processing complex was increased to 2.8 Bcf/d, including 60,000 Bbl/d of de-ethanization. In 2020, we anticipate our first gas processing plant at the new and nearby Smithburg facility will be placed in service. The joint venture has been expanded to include all six of the planned processing plants for the Smithburg processing complex. Additionally, the joint venture has total fractionation capacity of 40,000 Bbl/d at the Hopedale fractionation complex. These assets will continue to contribute to growth and profitability in the coming years. Overall, 2019 was another year of continued growth and value chain buildout for Antero Midstream.

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CONSISTENTLY RECEIVING ABOVE
BENCHMARK NYMEX NATURAL GAS PRICING

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## HEALTH, SAFETY AND
THE ENVIRONMENT

Antero's commitment to health, safety and the environment is a core value of our organization. We have a culture dedicated to safety and environmental stewardship. This reduces risk, enhances productivity, and elevates our reputation in the communities in which we operate. We invest heavily in safety training and coaching of our employees and contractors. We promote risk assessment and encourage visible safety leadership, and we sponsor emergency preparedness programs. On the environmental front, Antero Resources is committed to methane leak reduction opportunities through our membership in the EPA Natural Gas Star Program. The program implements methane loss reduction projects and reports the reductions of methane emissions per unit of production to the EPA every year. We also report our yearly Greenhouse Gas emissions as a rate per production and our methane leak rate. We are proud to state that Antero's Greenhouse Gas emissions intensity dropped once again in 2019 from 2018 to just

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2.3 CO2E tons per Mboe despite an increase in production, placing Antero as a peer leader in the oil & gas industry. Further, Antero's methane leak loss rate was just 0.05% in 2019, which is well ahead of the gas production and gathering segment goal of 0.28% and the ONE Future target of below 1% by 2025. Finally, highlighting our commitment to Environmental, Safety and Governance leadership (ESG), both Antero Resources and Antero Midstream have established ESG committees on their respective Boards of Directors. Thanks to continuous improvement in our safety and environmental performance, Antero is viewed as a safe and environmentally responsible operator.

## THE PEOPLE OF ANTERO

We want to express appreciation for the hard work and dedication of our talented employees. The people of Antero Resources generate value creation and momentum year after year in what has been a challenging market environment. Their skills and expertise in assembling and executing world-class projects represent the true strength and competitive advantage of Antero Resources. We are also grateful for the guidance and support of our Board of Directors. We thank you, our shareholders, for investing in our Company and look forward to continued success in 2020, and for many years to come.

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GLEN C. WARREN, JR.
President and CFO