ANTERO RESOURCES Corp

Previous wording

We have assembled a portfolio of long-lived properties that are characterized by what we believe to be low geologic risk and repeatability. Our drilling opportunities are focused in the Appalachian Basin. As of March 31, 2024, we held approximately 517,000 net acres in the Appalachian Basin.

Current wording

We have assembled a portfolio of long-lived properties that are characterized by what we believe to be low geologic risk and repeatability. Our drilling opportunities are focused in the Appalachian Basin. As of June 30, 2024, we held approximately 519,000 net acres in the Appalachian Basin.

Previous wording

Prices for natural gas, NGLs and oil that we produce significantly impact our revenues and cash flows. Natural gas benchmark prices decreased significantly while NGLs and oil benchmark prices remained consistent during the three months ended March 31, 2024 as compared to the same period of 2023. As a result of the lower benchmark natural gas prices, we experienced a decrease in price realizations for natural gas and ethane products during the three months ended March 31, 2024. We monitor the economic factors that impact natural gas, NGLs and oil prices, including domestic and foreign supply and demand indicators, domestic and foreign commodity inventories, the actions of Organization of Petroleum Exporting Countries and other large producing nations and the current conflicts in Ukraine and in the Middle East, among others. In the current economic environment, we expect that commodity prices for some or all of the commodities we produce could remain volatile. This volatility is beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows.

Current wording

Prices for natural gas, NGLs and oil that we produce significantly impact our revenues and cash flows. Natural gas benchmark prices decreased significantly while NGLs and oil benchmark prices increased during the three and six months ended June 30, 2024 as compared to the same period of 2023. As a result of the lower benchmark natural gas prices, we experienced a decrease in price realizations for natural gas and ethane products during the three and six months ended June 30, 2024. We monitor the economic factors that impact natural gas, NGLs and oil prices, including domestic and foreign supply and demand indicators, domestic and foreign commodity inventories, the actions of Organization of Petroleum Exporting Countries and other large producing nations and the current conflicts in Ukraine and in the Middle East, among others. In the current economic environment, we expect that commodity prices for some or all of the commodities we produce could remain volatile. This volatility is beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows.

Previous wording

We are exposed to certain commodity price risks relating to our ongoing business operations, and we use derivative instruments when circumstances warrant to manage such risks. In addition, we periodically enter into contracts that contain embedded features that are required to be bifurcated and accounted for separately as derivatives. Due to our improved liquidity and leverage position as compared to historical levels, the percentage of our expected production that we hedge has decreased. For the three months ended March 31, 2023 and 2024, 2% and 1%, respectively, of our production was hedged through fixed price commodity swaps. The tables and narrative below exclude derivative instruments attributable to Martica, our consolidated VIE, since all gains or losses from such contracts are fully attributable to the noncontrolling interests in Martica.

Current wording

We are exposed to certain commodity price risks relating to our ongoing business operations, and we use derivative instruments when circumstances warrant to manage such risks. In addition, we periodically enter into contracts that contain embedded features that are required to be bifurcated and accounted for separately as derivatives. Due to our improved liquidity and leverage position as compared to historical levels, the percentage of our expected production that we hedge has decreased. For the three and six months ended June 30, 2023 and 2024, substantially all of our production was unhedged. The tables and narrative below exclude derivative instruments attributable to Martica, our consolidated VIE, since all gains or losses from such contracts are fully attributable to the noncontrolling interests in Martica.

Previous wording

As of March 31, 2024, the estimated fair value of our commodity derivative contracts, excluding Martica, was a net liability of $27 million. See Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for more information.

Current wording

As of June 30, 2024, the estimated fair value of our commodity derivative contracts, excluding Martica, was a net liability of $37 million. See Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for more information.

Previous wording

As of March 31, 2024, the estimated fair value of Martica’s commodity derivative contracts was a net liability of $2 million. See Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for more information.

Current wording

As of June 30, 2024, the estimated fair value of Martica’s commodity derivative contracts was a net liability of $4 million. See Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for more information.

Previous wording

The economy experienced elevated inflation levels as a result of global supply and demand imbalances, where global demand outpaced supplies beginning in 2021 and continuing through the first quarter of 2024. For example, the Consumer Price Index (“CPI”) for all urban consumers increased 5% from March 2022 to March 2023 and an additional 3% from March 2023 to March 2024 as compared to the Federal Reserve’s stated goal of 2%. In order to manage the inflation risk present in the United States’ economy, the Federal Reserve utilized monetary policy in the form of interest rate increases beginning in March 2022 in an effort to bring the inflation rate in line with its stated goal of 2% on a long-term basis. Between March 2022 and March 2024, the Federal Reserve increased the federal funds interest rate by 5.25%. While inflationary pressures in the United States’ economy have begun to subside, we continue to be impacted by the increased federal funds interest rate. See “—Results of Operations” for more information.

Current wording

The economy experienced elevated inflation levels as a result of global supply and demand imbalances, where global demand outpaced supplies beginning in 2021 and continuing through the second quarter of 2024. For example, the Consumer Price Index (“CPI”) for all urban consumers increased 3% from June 2022 to June 2023 and an additional 3% from June 2023 to June 2024 as compared to the Federal Reserve’s stated goal of 2%. In order to manage the inflation risk present in the United States’ economy, the Federal Reserve utilized monetary policy in the form of interest rate increases beginning in March 2022 in an effort to bring the inflation rate in line with its stated goal of 2% on a long-term basis. Between March 2022 and June 2024, the Federal Reserve increased the federal funds interest rate by 5.25%. While inflationary pressures in the United States’ economy have begun to subside, we continue to be impacted by the increased federal funds interest rate. See “— Results of Operations” for more information.

Previous wording

Natural gas sales. Revenues from sales of natural gas decreased from $668 million for the three months ended March 31, 2023 to $474 million for the three months ended March 31, 2024, a decrease of $194 million, or 29%. Lower commodity prices (excluding the effects of derivative settlements) during the three months ended March 31, 2024 accounted for an approximate $222 million decrease in year-over-year natural gas sales revenue (calculated as the change in the year-to-year average price times current year production volumes). Higher natural gas production volumes accounted for an approximate $28 million increase in year-over-year natural gas sales revenue (calculated as the change in year-to-year volumes times the prior year average price).

Current wording

Natural gas sales. Revenues from sales of natural gas decreased from $437 million for the three months ended June 30, 2023 to $375 million for the three months ended June 30, 2024, a decrease of $62 million, or 14%. Lower commodity prices (excluding the effects of derivative settlements) during the three months ended June 30, 2024 accounted for an approximate $43 million decrease in year-over-year natural gas sales revenue (calculated as the change in the year-to-year average price times current year production volumes). Lower natural gas production volumes accounted for an approximate $19 million decrease in year-over-year natural gas sales revenue (calculated as the change in year-to-year volumes times the prior year average price).

Previous wording

NGLs sales. Revenues from sales of NGLs increased from $495 million for the three months ended March 31, 2023 to $518 million for the three months ended March 31, 2024, an increase of $23 million, or 5%. Higher NGLs production volumes accounted for an approximate $38 million increase in year-over-year NGLs revenues (calculated as the change in year-to-year volumes times the prior year average price). Lower commodity prices (excluding the effects of derivative settlements) during the three months ended March 31, 2024 accounted for an approximate $15 million decrease in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes).

Current wording

NGLs sales. Revenues from sales of NGLs increased from $398 million for the three months ended June 30, 2023 to $489 million for the three months ended June 30, 2024, an increase of $91 million, or 23%. Higher commodity prices (excluding the effects of derivative settlements) during the three months ended June 30, 2024 accounted for an approximate $69 million increase in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes). Higher NGLs production volumes accounted for an approximate $22 million increase in year-over-year NGLs revenues (calculated as the change in year-to-year volumes times the prior year average price).

Previous wording

Oil sales. Revenues from sales of oil increased from $52 million for the three months ended March 31, 2023 to $65 million for the three months ended March 31, 2024, an increase of $13 million, or 25%. Higher oil production volumes during the three months ended March 31, 2024 accounted for an approximate $13 million increase in year-over-year oil revenues (calculated as the change in year-to-year volumes times the prior year average price).

Current wording

Oil sales. Revenues from sales of oil increased from $58 million for the three months ended June 30, 2023 to $63 million for the three months ended June 30, 2024, an increase of $5 million, or 9%. Higher commodity prices (excluding the effects of derivative settlements) during the three months ended June 30, 2024 accounted for an approximate $6 million increase in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes). Lower oil production volumes during the three months ended June 30, 2024 accounted for an approximate $1 million decrease in year-over-year oil revenues (calculated as the change in year-to-year volumes times the prior year average price).

Previous wording

Amortization of deferred revenue, VPP. Amortization of deferred revenues associated with the VPP decreased from $8 million for the three months ended March 31, 2023 to $7 million for the three months ended March 31, 2024, a decrease of $1 million, or 11%, primarily due to lower production volumes attributable to the VPP properties between periods. Amortization of the deferred revenues associated with the VPP are recognized as the production volumes are delivered at $1.61 per MMBtu over the contractual term.

Current wording

Amortization of deferred revenue, VPP. Amortization of deferred revenues associated with the VPP decreased from $8 million for the three months ended June 30, 2023 to $7 million for the three months ended June 30, 2024, a decrease of $1 million, or 12%, primarily due to lower production volumes attributable to the VPP properties between periods. Amortization of the deferred revenues associated with the VPP are recognized as the production volumes are delivered at $1.61 per MMBtu over the contractual term.

Previous wording

Lease operating expense. Lease operating expense remained consistent between periods at $29 million for both the three months ended March 31, 2023 and 2024. On a per unit basis, lease operating expense decreased from $0.10 per Mcfe for the three months ended March 31, 2023 to $0.09 per Mcfe for the three months ended March 31, 2024, primarily due to higher production volumes between periods.

Current wording

Lease operating expense. Lease operating expense remained relatively consistent for the three months ended June 30, 2023 and 2024 at $29 million and $30 million, respectively. On a per-unit basis, lease operating expense increased from $0.09 per Mcfe for the three months ended June 30, 2023 to $0.10 per Mcfe for the three months ended June 30, 2024 primarily due to increased oilfield services costs between periods.

Previous wording

Gathering, compression, processing and transportation expense. Gathering, compression, processing and transportation expense increased from $645 million for the three months ended March 31, 2023 to $672 million for the three months ended March 31, 2024, an increase of $27 million, or 4%. This fluctuation primarily resulted from higher production volumes between periods and the following:

Current wording

Gathering, compression, processing and transportation expense. Gathering, compression, processing and transportation expense remained relatively consistent at $664 million and $663 million for the three months ended June 30, 2023 and 2024, respectively. This was primarily a result of the following:

Previous wording

Production and ad valorem tax expense. Production and ad valorem taxes increased from $49 million for the three months ended March 31, 2023 to $58 million for the three months ended March 31, 2024, an increase of $9 million, or 18%, primarily due to higher ad valorem taxes and production volumes between periods, partially offset by lower natural gas prices during the three months ended March 31, 2024. Production and ad valorem taxes as a percentage of natural gas revenues increased from 7.4% for the three months ended March 31, 2023 to 12.3% for the three months ended March 31, 2024, primarily as a result of higher ad valorem taxes, which 2024 ad valorem taxes are based on commodity prices during 2022.

Current wording

Production and ad valorem tax expense. Production and ad valorem taxes increased from $36 million for the three months ended June 30, 2023 to $42 million for the three months ended June 30, 2024, an increase of $6 million, or 16%, primarily due to higher ad valorem taxes and production volumes between periods, partially offset by lower natural gas prices during the three months ended June 30, 2024. Production and ad valorem taxes as a percentage of natural gas revenues increased from 8% for the three months ended June 30, 2023 to 11% for the three months ended June 30, 2024, primarily as a result of higher ad valorem taxes, which 2024 ad valorem taxes are based on commodity prices during 2022.

Previous wording

General and administrative expense. General and administrative expense (excluding equity-based compensation expense) decreased from $44 million for the three months ended March 31, 2023 to $40 million for the three months ended March 31, 2024, a decrease of $4 million, or 10%, primarily due to lower professional service fees between periods. General and administrative expense on a per unit basis (excluding equity-based compensation) decreased from $0.15 per Mcfe for the

Current wording

General and administrative expense. General and administrative expense (excluding equity-based compensation expense) increased from $40 million for the three months ended June 30, 2023 to $42 million for the three months ended June 30, 2024, an increase of $2 million, or 5%, primarily due to higher professional service fees between periods. General and administrative expense on a per unit basis (excluding equity-based compensation) increased from $0.13 per Mcfe for the three months ended June 30, 2023 to $0.14 per Mcfe for the three months ended June 30, 2024 as a result of higher overall costs between periods.

Previous wording

Marketing revenue. Marketing revenue decreased from $59 million for the three months ended March 31, 2023 to $49 million for the three months ended March 31, 2024, a decrease of $10 million, or 17%. This fluctuation primarily resulted from the following:

Current wording

Marketing revenue. Marketing revenue increased from $44 million for the three months ended June 30, 2023 to $49 million for the three months ended June 30, 2024, an increase of $5 million, or 13%. This fluctuation primarily resulted from the following:

Previous wording

Marketing expense. Marketing expense decreased from $81 million for the three months ended March 31, 2023 to $60 million for the three months ended March 31, 2024, a decrease of $21 million, or 26%. Marketing expense includes the cost of third-party purchased natural gas, NGLs and oil as well as firm transportation costs, including costs related to current excess firm capacity. The cost of third-party natural gas, oil and NGLs purchases decreased $9 million between periods, primarily due to lower natural gas prices and marketing volumes between periods, partially offset by higher oil and NGLs marketing volumes and prices between periods. Firm transportation costs were $29 million for the three months ended March 31, 2023 and $17 million for the three months ended March 31, 2024, a decrease of $12 million due to the reduction in firm transportation commitments between periods.

Current wording

Marketing expense. Marketing expense increased from $66 million for the three months ended June 30, 2023 to $71 million for the three months ended June 30, 2024, an increase of $5 million, or 7%. Marketing expense includes the cost of third-party purchased natural gas, NGLs and oil as well as firm transportation costs, including costs related to current excess firm capacity. The cost of third-party natural gas, oil and NGLs purchases increased $5 million between periods, primarily due to higher oil marketing volumes and prices between periods, partially offset by lower natural gas marketing volumes and prices between periods. Firm transportation costs remained consistent at $27 million for the three months ended June 30, 2023 and 2024.

Previous wording

Antero Midstream revenue. Revenue from the Antero Midstream segment increased from $259 million for the three months ended March 31, 2023 to $279 million for the three months ended March 31, 2024, an increase of $20 million. This increase is primarily due to higher gathering and processing revenues of $28 million as a result of the expiration of the growth incentive fee rebate program on December 31, 2023 and increased throughput between periods, partially offset by lower water handling revenues of $8 million primarily due to decreased water trucking volumes and fewer wells serviced by fresh water deliveries between periods.

Current wording

Antero Midstream revenue. Revenue from the Antero Midstream segment increased from $258 million for the three months ended June 30, 2023 to $270 million for the three months ended June 30, 2024, an increase of $12 million. This increase is primarily due to higher gathering and processing revenues of $18 million, partially offset by lower water handling revenues of $6 million. The increased gathering and processing revenues between periods is primarily a result of the expiration of the growth incentive fee rebate program on December 31, 2023, annual CPI-based gathering and compression rate adjustments and increased high pressure gathering throughput between periods. The decreased water handling revenues between periods was primarily due to lower fresh water delivery volumes, partially offset by higher other fluid handing

Previous wording

Antero Midstream operating expense. Total operating expense related to the Antero Midstream segment remained relatively consistent at $111 million and $113 million for the three months ended March 31, 2023 and 2024, respectively.

Current wording

Antero Midstream operating expense. Total operating expense related to the Antero Midstream segment increased from $113 million for the three months ended June 30, 2023 to $117 million for the three months ended June 30, 2024, an increase of $4 million. This increase is primarily due to higher direct operating expenses, equity-based compensation expenses and depreciation expense between periods, partially offset by lower interest expense. Direct operating expenses increased by $3 million between periods primarily due to higher compression expense for the addition of two compressor stations that were acquired during the second quarter of 2024 and increased high pressure gathering volumes, partially offset by increased pipeline maintenance, repair and monitoring activities for the three months ended June 30, 2024.

Previous wording

Interest expense. Interest expense increased from $26 million for the three months ended March 31, 2023 to $30 million for the three months ended March 31, 2024, an increase of $4 million, or 17%, primarily due to higher average Credit Facility borrowings between periods and higher benchmark interest rates during the three months ended March 31, 2024, partially offset by the conversion or inducement of $39 million aggregate principal amount of our 2026 Convertible Notes between periods.

Current wording

Interest expense. Interest expense increased from $28 million for the three months ended June 30, 2023 to $33 million for the three months ended June 30, 2024, an increase of $5 million, or 17%, primarily due to higher average Prior Credit Facility borrowings between periods and higher benchmark interest rates during the three months ended June 30, 2024.

Previous wording

Commodity derivative fair value gains. Our commodity derivatives included fixed price swap contracts, basis swap contracts, call options and embedded put options. Because we do not designate these derivatives as accounting hedges, they do not receive hedge accounting treatment. Consequently, all mark-to-market gains or losses, as well as cash receipts or payments on settled derivative instruments, are recognized in our statements of operations and comprehensive income. For the three months ended March 31, 2023 and 2024, our commodity hedges resulted in derivative fair value gains of $126 million and $9 million, respectively. For the three months ended March 31, 2023, commodity derivative fair value gains included $14 million of net cash payments for settled commodity derivative losses and a $202 million cash payment for the early settlement of our swaption. For the three months ended March 31, 2024, commodity derivative fair value gains included $1 million of net cash proceeds on settled commodity derivatives gains.

Current wording

Commodity derivative fair value gains. Our commodity derivatives included variable price swap contracts, swaptions, basis swap contracts, call options and embedded put options. Because we do not designate these derivatives as accounting hedges, they do not receive hedge accounting treatment. Consequently, all mark-to-market gains or losses, as well as cash receipts or payments on settled derivative instruments, are recognized in our statements of operations. For the six months ended June 30, 2023 and 2024, our commodity hedges resulted in derivative fair value gains of $134 million and $4 million, respectively. For the six months ended June 30, 2023, commodity derivative fair value gains included $11 million of cash payments on settled commodity derivative losses and a $202 million cash payment for the early settlement of our swaption. For the six months ended June 30, 2024, commodity derivative fair value gains included $7 million of net cash proceeds for settled derivative gains.

Previous wording

Equity-based compensation expense. Noncash equity-based compensation expense increased from $13 million for the three months ended March 31, 2023 to $16 million for the three months ended March 31, 2024, an increase of $3 million, or 23%. This increase was primarily due to annual equity awards granted in March 2023 that were outstanding for the entire first quarter of 2024 and annual equity awards granted during March 2024, partially offset by prior year awards that were fully vested during the year ended December 31, 2023. See Note 9—Equity-Based Compensation to the unaudited condensed consolidated financial statements for more information.

Current wording

Equity-based compensation expense. Noncash equity-based compensation expense increased from $27 million for the six months ended June 30, 2023 to $33 million for the six months ended June 30, 2024, an increase of $6 million, or 25%. This increase was primarily due to annual equity-based awards granted in the first quarters of 2023 and 2024, partially offset by equity-based awards granted in prior years that were fully vested between periods. See Note 9—Equity-Based Compensation to the unaudited condensed consolidated financial statements for more information.

Previous wording

Depletion, depreciation, and amortization expense (“DD&A expense”). DD&A expense increased from $168 million for the three months ended March 31, 2023 to $173 million for the three months ended March 31, 2024, an increase of $5 million, or 3%, primarily due to higher production volumes between periods. On a per unit basis, DD&A expense remained relatively consistent at $0.57 and $0.56 per Mcfe for the three months ended March 31, 2023 and 2024, respectively.

Current wording

Depletion, depreciation and amortization expense. DD&A expense increased from $339 million for the six months ended June 30, 2023 to $344 million for the six months ended June 30, 2024, an increase of $5 million, or 1%, primarily due to higher production volumes between periods. On a per unit basis, DD&A expense remained relatively consistent at $0.56 and $0.55 per Mcfe for the six months ended June 30, 2023 and 2024, respectively.

Previous wording

Impairment of property and equipment. Impairment of oil and gas properties decreased from $16 million for the three months ended March 31, 2023 to $5 million for the three months ended March 31, 2024, a decrease of $11 million, or 67%, primarily due to lower impairments of expiring leases between periods. During both periods, we recognized impairments primarily related to expiring leases as well as design and initial costs related to pads we no longer plan to utilize.

Current wording

Impairment of property and equipment. Impairment of oil and gas properties decreased from $31 million for the six months ended June 30, 2023 to $6 million for the six months ended June 30, 2024, a decrease of $25 million, primarily due to lower impairments of expiring leases between periods. During both periods, we recognized impairments primarily related to expiring leases as well as design and initial costs related to pads we no longer plan to place into service.

Previous wording

Net marketing expense decreased from $23 million, or $0.08 per Mcfe, for the three months ended March 31, 2023 to $11 million, or $0.04 per Mcfe, for the three months ended March 31, 2024, primarily due to lower firm transportation commitments.

Current wording

Net marketing expense decreased from $45 million, or $0.07 per Mcfe, for the six months ended June 30, 2023 to $33 million, or $0.05 per Mcfe, for the six months ended June 30, 2024, primarily due to lower firm transportation commitments between periods.

Previous wording

Contract termination, loss contingency and other operating expenses. Contract termination, loss contingency and other operating expenses attributable to our marketing segment for the three months ended March 31, 2023 is due to a $24 million payment for the early termination of our firm transportation commitment of 200,000 MMBtu per day on the Equitrans pipeline. Our marketing segment did not incur any contract termination loss contingency and other operating expenses for the three months ended March 31, 2024.

Current wording

Contract termination, loss contingency and other operating expenses. Contract termination, loss contingency and other operating expenses attributable to our marketing segment for the six months ended June 30, 2023, relate to a $24 million payment for the early termination of our firm transportation commitment of 200,000 MMBtu per day on the Equitrans pipeline. Our marketing segment did not incur any contract termination, loss contingency and other operating expenses for the six months ended June 30, 2024.

Previous wording

Operating activities. Net cash provided by operating activities was $344 million and $262 million for the three months ended March 31, 2023 and 2024, respectively. Net cash provided by operating activities decreased between periods primarily due to lower natural gas prices, changes in working capital and higher gathering, compression, processing and transportation expenses, partially offset by a $202 million payment for early settlement of our swaption agreement in the three months ended March 31, 2023, higher production volumes and lower net marketing expense between periods.

Current wording

Operating activities. Net cash provided by operating activities was $499 million and $405 million for the six months ended June 30, 2023 and 2024, respectively. Net cash provided by operating activities decreased between periods primarily due to lower natural gas prices, changes in working capital and higher gathering, compression, processing and transportation expenses, partially offset by a $202 million payment for early settlement of our swaption agreement in the six months ended June 30, 2023.

Previous wording

Investing activities. Net cash used in investing activities decreased from $351 million for the three months ended March 31, 2023 to $227 million for the three months ended March 31, 2024, primarily due to a decrease in drilling activity, drilling rig count, completions stages and leasing activity between periods.

Current wording

Investing activities. Net cash used in investing activities decreased from $638 million for the six months ended June 30, 2023 to $414 million for the six months ended June 30, 2024, primarily due to a decrease in drilling and completions activity as a result of lower rig and completion crew counts between periods, and decreased leasing activity during the six months ended June 30, 2024.

Previous wording

*Financing activities.*Net cash provided by financing activities was $7 million for the three months ended March 31, 2023. Net cash used in financing activities was $35 million for the three months ended March 31, 2024. This change between periods is primarily due to lower net borrowings on our Credit Facility of $147 million between periods, partially offset by decreased share repurchases of $75 million and decreased distributions to the noncontrolling interests in Martica of $28 million between periods.

Current wording

*Financing activities.*Net cash provided by financing activities decreased from $139 million for the six months ended June 30, 2023 to $9 million for the six months ended June 30, 2024. The decrease between periods is primarily due to lower net borrowings on our Prior Credit Facility of $246 million, partially offset by decreased share repurchases of $75 million and decreased distributions to the noncontrolling interests in Martica of $40 million between periods.

Previous wording

For the three months ended March 31, 2023, our total consolidated capital expenditures were $342 million, including drilling and completion costs of $267 million, leasehold acquisitions of $72 million and other capital expenditures of $3 million. For the three months ended March 31, 2024, our total consolidated capital expenditures were $219 million, including drilling and completion costs of $187 million, leasehold acquisitions of $26 million and other capital expenditures of $6 million.

Current wording

For the three months ended June 30, 2024, our total consolidated capital expenditures were $188 million, including drilling and completion costs of $164 million, leasehold acquisitions of $21 million and other capital expenditures of $3 million. For the six months ended June 30, 2024, our total consolidated capital expenditures were $407 million, including drilling and completion costs of $351 million, leasehold acquisitions of $47 million and other capital expenditures of $9 million.

Previous wording

See Note 7—Long Term Debt to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Form 10-K for information on our senior notes.

Current wording

See Note 7—Long Term Debt to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Form 10-K for information on our debt agreements.

Previous wording

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in Note 2—Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. Accounting estimates and assumptions are considered to be critical if there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the reported amounts in our unaudited condensed consolidated financial statements that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our unaudited condensed consolidated financial statements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Form 10-K for information on our critical accounting estimates.

Current wording

affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. Accounting estimates and assumptions are considered to be critical if there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the reported amounts in our unaudited condensed consolidated financial statements that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our unaudited condensed consolidated financial statements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Form 10-K for information on our critical accounting estimates.

Previous wording

Based on future prices as of March 31, 2024, the estimated undiscounted future net cash flows exceeded the carrying amount and no further evaluation was required. We have not recorded any impairment expenses associated with our proved properties during the three months ended March 31, 2023 and 2024.

Current wording

Based on future prices as of June 30, 2024, the estimated undiscounted future net cash flows exceeded the carrying amount and no further evaluation was required. We have not recorded any impairment expenses associated with our proved properties during the three and six months ended June 30, 2023 and 2024.