# DEAR FELLOW
SHAREHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-e-p/NYSE_AR_2020/NYSE_AR_2020.mmd` · pages 2-8_

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DEAR FELLOW
SHAREHOLDERS,

As we reflect back on 2020, we want to express our appreciation for the hard work and dedication of our talented employees through the significant challenges presented by the COVID-19 global pandemic. During these unprecedented times, Antero Resources' people delivered the low-emission hydrocarbons needed to produce and transport medical supplies and personal protective equipment and to heat and power our communities. Their skills and determination represent the true strength and competitive advantage of Antero Resources. As we look ahead, we are committed to the health and safety of our employees, to the West Virginia and Ohio communities where we operate, and to responsibly delivering the energy needed to drive a recovering global economy.

Antero's unique positioning, including our liquid-rich production mix, firm transportation portfolio, and hedge position, allowed us to continue developing our resource base through the commodity price downturn in 2020. Antero Resources averaged 3.6 Bcfe/d of net production in 2020, delivering 11% year-over-year net production growth. This production included 198 MBbl/d of NGLs and oil, or 33% of our total net production by volume. At year-end 2020, Antero Resources was the second largest NGL producer and the third largest natural gas producer in the U.S.

## A STRONG BALANCE SHEET

We made tremendous strides in improving Antero Resources' financial strength in 2020. Since embarking on our asset sale program in late 2019, we have successfully raised $1.3 billion through a series of transactions. These included a Volumetric Production Payment (VPP), an overriding royalty transaction, and a drilling partnership. This high level of counterparty investment in a volatile environment was a strong endorsement of Antero Resources' assets and operations. These successful transactions allowed us to access the senior unsecured debt markets several times in 2020 and 2021, raising over $1.5 billion in proceeds and eliminating $2.3 billion of near-term maturities. Given these proactive steps, we successfully right-sized the balance sheet and re-balanced the debt maturity schedule. These transactions, combined with free cash flow, are expected to drive leverage under 2.0x in 2021.

## COST REDUCTIONS

Operating momentum remained a core focus in 2020. We continued the cost reduction and efficiency initiative that began in 2019. These efforts are expected to lead to well-cost reductions of 35% in 2021, as compared to the beginning of the program. Reduced well costs are a primary component of the 20% reduction in capital expenditures in 2021, as compared to the prior year, while delivering flat production. This improved capital efficiency is expected to result in sustained free cash flow generation going forward, assuming current strip pricing. In 2021, we will remain steadfast in continuing to reduce our overall cost structure with a goal of continuing to be a peer leader in returns regardless of the commodity cycle.

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PRODUCTION AVERAGED
3.6 BCFE/D IN 2020, DELIVERING
11% YEAR-OVER-YEAR GROWTH.

17.6 Tcf
Net Proved Reserves

29% AM Ownership

41% Liquids Revenue Contribution

$0.27 Mcfe
Marcellus F&D Cost

515,000
Net Acres

2,100+
Premium Core Drilling Locations

3.6 Bcfe/d
Total Net Production

186,000 Bbl/d
Natural Gas Liquids Production

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## CORPORATE SUSTAINABILITY

We made significant progress in Antero's environmental, social and governance (ESG) initiatives during 2020. In April, we established an Environment, Sustainability, and Social Governance Committee of the Board of Directors. This Committee provides guidance to management and the Board on matters relating to the identification, evaluation, and monitoring of corporate citizenship, environmental sustainability, climate change, and social and political trends, issues, and concerns. The Committee was integral in the development of Antero's 2025 environmental goals. These include a 50% reduction in our 2019 methane leak loss rate to under 0.025%, a 10% reduction in GHG intensity, and net zero Scope 1 carbon emissions through operational improvements, technologies, and carbon offsets.
We also published our annual Corporate Sustainability Report. This report highlights Antero's commitment to managing greenhouse gas emissions, reducing our use of fresh water, and the health and safety of our employees and communities. Antero continues to deliver industry-leading environmental results by demonstrating significant reductions in our greenhouse gas intensity, methane intensity, and methane leak loss rate from already low 2019 levels. Our strategic relationship with Antero Midstream provides access to an extensive network of pipelines and impoundments. This network has dramatically increased our ability to reuse and recycle produced water while also reducing the number of water trucks traversing on local

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ANTERO IS ONE OF THE
LARGEST SUPPLIERS TO THE GROWING
LNG EXPORT BUSINESS IN THE U.S.,
WHICH DIRECTLY LEADS TO
OUR PREMIUM NATURAL
GAS PRICE REALIZATIONS.

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roads, benefiting the local communities. We have earned a reputation as an industry-leading safe and environmentally responsible operator through our relentless focus on HSSE management and performance, making Antero an employer of choice in Appalachia.

As we look to the future, we believe that natural gas will be key to the energy transition over the coming decades. Natural gas complements renewable energy growth and powers the improvement in living standards across the globe. As the third largest natural gas producer in the U.S., we are well positioned to maintain our peer-leading ESG position and be a natural gas provider of choice. For additional information on Antero Resources' peer-leading ESG metrics, we encourage our shareholders to view our corporate sustainability report, which can be found at https://www.anteroresources.com/community-sustainability.

## READY FOR THE FUTURE

Looking ahead, our development plan contemplates maintenance capital spending to maximize free cash flow generation and reduce absolute debt. In 2021, we are expecting gas-equivalent production to be held flat with a drilling and completion capital budget 20% below 2020. This is expected to result in substantial free cash flow during the year.

As one of the largest NGL producers in the United States, Antero is well positioned to capitalize on strong liquids pricing. Antero is also one of the largest NGL exporters. During 2021, we expect to sell at least 50% of our NGLs into the global markets, diversifying our liquids pricing exposure and providing another link to premium price realizations.

We also continue to deliver pre-hedge natural gas realizations at premium-to-benchmark pricing due to our firm transportation portfolio. Our 2.1 Bcf/d of transportation capacity to the Gulf Coast and 330 MMcf/d contracted to the Cove Point LNG terminal on the East Coast position Antero as one of the largest suppliers to the growing LNG export business in the U.S. This positioning allows us to receive premium natural gas realizations. To ensure stability in our gas revenues, we have built a substantial natural gas hedge position and will continue to hedge gas prices moving forward.

CONSISTENTLY DELIVERING ABOVE
BENCHMARK NYMEX NATURAL GAS PRICING (MMBtu)

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The combination of our large-scale diversified product pricing exposure, increased capital efficiency, and low leverage provides Antero with 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
DEVELOPMENTS

Antero Resources owns 29% of Antero Midstream Corporation's shares. Antero Midstream is an integrated midstream service provider whose primary role is to support the development plan 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 in addition to flowback and produced water for Antero Resources.

At year-end 2020, through the processing and fractionation joint venture with MPLX (NYSE: MPLX), the capacity at the Sherwood gas processing complex was increased to 3.2 Bcf/d, including 60,000 Bbl/d of de-ethanization capacity. Additionally, the joint venture has total fractionation capacity of 40,000 Bbl/d at the Hopedale fractionation complex.

In 2020, Antero Midstream continued to build out its water handling and blending infrastructure footprint in the Marcellus and Utica Shale plays in West Virginia and Ohio, respectively, and now has a total fresh water delivery network of over 337 miles. This fresh water delivery system, the largest in Appalachia, eliminated more than 471,000 water truck trips in 2020 alone, significantly reducing Antero's environmental footprint.

## OUR SHAREHOLDERS

We remain appreciative of 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 2021, and for many years to come.

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GLEN C. WARREN, JR.
President and CFO