ANTERO RESOURCES Corp

Previous wording

We are an independent oil and natural gas company engaged in the development, production, exploration and acquisition of natural gas, NGLs and oil properties located in the Appalachian Basin. We focus on unconventional reservoirs, which can generally be characterized as fractured shale formations. Our management team has worked together for many years and has a successful track record of reserve and production growth as well as significant expertise in unconventional resource plays. Our strategy is to leverage our team’s experience delineating and developing natural gas resource plays to develop our reserves and production, primarily on our existing multi-year inventory of drilling locations.

Current wording

We have assembled a portfolio of long-lived properties that are characterized by what we believe to be high repeatability and low geologic risk. We focus on unconventional reservoirs, which can generally be characterized as fractured shale formations. Our management team has worked together for many years and has a successful track record of reserve and production growth as well as significant expertise in unconventional resource plays. Our strategy is to leverage our team’s experience delineating and developing natural gas resource plays to develop our reserves and production, primarily on our existing multi-year inventory of drilling locations.

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 September 30, 2024, we held approximately 519,000 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 March 31, 2025, we held approximately 526,000 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. Benchmark prices for natural gas decreased significantly, while benchmark prices for oil remained consistent and benchmark prices for NGLs increased during the nine months ended September 30, 2024 as compared to the same period of 2023. As a result of the lower benchmark natural gas prices and higher benchmark NGLs prices in 2024, we experienced a decrease in price realizations for natural gas and ethane products and an increase in price realization for NGLs products during the three and nine months ended September 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.

Current wording

Prices for natural gas, NGLs and oil that we produce significantly impact our revenues and cash flows. Benchmark prices for natural gas and NGLs increased, while benchmark prices for oil decreased during the three months ended March 31, 2025 as compared to the same period of 2024. As a result of the higher benchmark natural gas and NGLs prices during the three months ended March 31, 2025, we experienced increased price realizations for these products between periods, partially offset by the effects of decreased benchmark oil prices on our oil price realizations as compared to 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.

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 and nine months ended September 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.

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 months ended March 31, 2024 and 2025, substantially all of our production was unhedged. Assuming our 2025 production is the same as our production in 2024, approximately 2% of our total production for 2025 is hedged through fixed price commodity swaps. As of March 31, 2025, the estimated fair value of our commodity derivative contracts was a net liability of $107 million. See Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for additional information.

Previous wording

Our consolidated VIE, Martica, also maintains a portfolio of fixed swap natural gas, NGLs and oil derivatives for the benefit of the noncontrolling interests in Martica. As such, all gains and losses attributable to Martica’s derivative portfolio are fully attributable to the noncontrolling interests in Martica. As of September 30, 2024, Martica’s fixed price natural gas and oil swap positions were as follows:

Current wording

Our consolidated VIE, Martica, also maintained a portfolio of fixed swap natural gas, NGLs and oil derivatives for the benefit of the noncontrolling interests in Martica. As such, all gains and losses attributable to Martica’s derivative portfolio were fully attributable to the noncontrolling interests in Martica. During the three months ended March 31, 2025, all of Martica’s derivative contracts expired, and as of March 31, 2025, Martica’s had no derivative instruments. See Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for additional 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 third quarter of 2024. For example, the Consumer Price Index (“CPI”) for all urban consumers increased 3.7% from September 2022 to September 2023 and an additional 2.4% from September 2023 to September 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 July 2023, the Federal Reserve increased the federal funds interest rate by 5.25%. During the three months ended September 30, 2024, inflation rates began to approach the Federal Reserve’s stated goal of 2%, and the Federal Reserve decreased the federal funds rate by 0.5% in September 2024. 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 2024. 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 July 2023, the Federal Reserve increased the federal funds interest rate by 5.25%. During the second half of 2024, inflation rates began to approach the Federal Reserve’s stated goal of 2%, and the Federal Reserve decreased the federal funds rate by 1.0% between September and December 2024. While inflationary pressures in the United States’ economy have begun to subside, it is uncertain what impact recent tariff activity by the United States and foreign governments will have on inflation.

Previous wording

The economy also continues to be impacted by the effects of global events. These events have often caused global supply chain disruptions with additional pressure due to trade sanctions on Russia and other global trade restrictions, among others. However, our supply chain has not experienced any significant interruptions as a result of such events.

Current wording

The economy also continues to be impacted by the effects of global events. These events have often caused global supply chain disruptions with additional pressure due to trade sanctions, tariffs and other global trade restrictions, among others. While our supply chain has not experienced any significant interruptions as a result of such events, there can be no assurance that we will not experience interruptions in the future.

Previous wording

We have three operating segments: (i) the exploration, development and production of natural gas, NGLs and oil; (ii)marketing and utilization of excess firm transportation capacity; and (iii) midstream services through our equity method investment in Antero Midstream. Revenues from Antero Midstream’s operations were primarily derived from intersegment transactions for services provided to our exploration and production operations by Antero Midstream. All intersegment transactions were eliminated upon consolidation, including revenues from water handling services provided by Antero Midstream, which we capitalized as proved property development costs. Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market and utilize excess firm transportation capacity. See Note 16—Reportable Segments to the unaudited condensed consolidated financial statements for more information.

Current wording

We have three reportable segments: (i) the exploration, development and production of natural gas, NGLs and oil; (ii)marketing and utilization of excess firm transportation capacity; and (iii) midstream services through our equity method investment in Antero Midstream. Revenues from Antero Midstream’s operations were primarily derived from intersegment transactions for services provided to our exploration and production operations by Antero Midstream. All intersegment transactions were eliminated upon consolidation, including revenues from water handling services provided by Antero Midstream, which we capitalized as proved property development costs. Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market and utilize excess firm transportation capacity. See Note 16—Reportable Segments to our unaudited condensed consolidated financial statements for additional information.

Previous wording

Natural gas sales. Revenues from sales of natural gas decreased from $516 million for the three months ended September 30, 2023 to $426 million for the three months ended September 30, 2024, a decrease of $90 million, or 18%. Lower commodity prices (excluding the effects of derivative settlements) during the three months ended September 30, 2024 accounted for an approximate $69 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 $21 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).

Current wording

Natural gas sales. Revenues from sales of natural gas increased from $474 million for the three months ended March 31, 2024 to $780 million for the three months ended March 31, 2025, an increase of $306 million, or 65%. Higher commodity prices (excluding the effects of derivative settlements) during the three months ended March 31, 2025 accounted for an approximate $322 million increase 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 $16 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 $1.4 billion for the nine months ended September 30, 2023 to $1.5 billion for the nine months ended September 30, 2024, an increase of $0.1 billion, or 10%. Higher commodity prices (excluding the effects of derivative settlements) during the nine months ended September 30, 2024 accounted for an approximate $76 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 $60 million increase in year-over-year NGLs revenues (calculated as the change in year-to-year volumes times the prior year average price).

Current wording

NGLs sales. Revenues from sales of NGLs increased from $518 million for the three months ended March 31, 2024 to $561 million for the three months ended March 31, 2025, an increase of $43 million, or 8%. Higher commodity prices (excluding the effects of derivative settlements) during the three months ended March 31, 2025 accounted for an approximate $51 million increase in year-over-year revenues (calculated as the change in the year-to-year average price times current year production volumes). Lower C3+ NGLs production volumes accounted for an approximate $14 million decrease in year-over-year NGLs revenues (calculated as the change in year-to-year volumes times the prior year average price), partially offset by

Previous wording

Oil sales. Revenues from sales of oil decreased from $63 million for the three months ended September 30, 2023 to $53 million for the three months ended September 30, 2024, a decrease of $10 million, or 16%. Lower commodity prices (excluding the effects of derivative settlements) during the three months ended September 30, 2024 accounted for an approximate $6 million decrease 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 September 30, 2024 accounted for an approximate $4 million decrease 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 decreased from $65 million for the three months ended March 31, 2024 to $50 million for the three months ended March 31, 2025, a decrease of $15 million, or 22%. Lower oil production volumes during the three months ended March 31, 2025 accounted for an approximate $12 million decrease in year-over-year oil revenues (calculated as the change in year-to-year volumes times the prior year average price). Lower oil prices, excluding the effects of derivative settlements, accounted for an approximate $3 million decrease in year-over-year oil revenues (calculated as the change in the year-to-year average price times current year production volumes).

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 September 30, 2023 and 2024, our commodity hedges resulted in derivative fair value gains of $3 million and $18 million, respectively. For the three months ended September 30, 2023, commodity derivative fair value gains included $6 million of cash payments on settled commodity derivative losses. For the three months ended September 30, 2024, commodity derivative fair value gains included $4 million of net cash proceeds on settled commodity derivatives gains.

Current wording

Commodity derivative fair value gains (losses). 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 three months ended March 31, 2024 and 2025, our commodity hedges resulted in derivative fair value gains of $9 million and fair value losses of $72 million, respectively. 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. For the three months ended March 31, 2025, commodity derivative fair value losses included $11 million of net cash payments for settled derivative losses.

Previous wording

Amortization of deferred revenue, VPP. Amortization of deferred revenues associated with the VPP decreased from $8 million for the three months ended September 30, 2023 to $7 million for the three months ended September 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.

Current wording

Amortization of deferred revenue, VPP. Amortization of deferred revenues associated with the VPP decreased from $7 million for the three months ended March 31, 2024 to $6 million for the three months ended March 31, 2025, a decrease of $1 million or 8%, 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 decreased from $92 million, or $0.10 per Mcfe, for the nine months ended September 30, 2023 to $88 million, or $0.09 per Mcfe, for the nine months ended September 30, 2024, primarily due to lower water disposal costs and workover expense during the nine months ended September 30, 2024, partially offset by higher oilfield service costs between periods.

Current wording

Lease operating expense. Lease operating expense increased from $29 million, or $0.09 per Mcfe, for the three months ended March 31, 2024 to $34 million, or $0.11 per Mcfe, for the three months ended March 31, 2025, primarily due to higher oilfield service costs and workover expense during the three months ended March 31, 2025, partially offset by lower water disposal costs between periods.

Previous wording

Gathering, compression, processing and transportation expense. Gathering, compression, processing and transportation expense increased from $672 million for the three months ended September 30, 2023 to $685 million for the three months ended September 30, 2024, an increase of $13 million, or 2%. This was primarily a result of the following:

Current wording

Gathering, compression, processing and transportation expense. Gathering, compression, processing and transportation expense increased from $672 million for the three months ended March 31, 2024 to $695 million for the three months ended March 31, 2025, an increase of $23 million, or 3%. This fluctuation was primarily a result of the following:

Previous wording

Production and ad valorem tax expense. Production and ad valorem taxes increased from $118 million for the nine months ended September 30, 2023 to $148 million for the nine months ended September 30, 2024, an increase of $30 million, or 25%, primarily due to higher ad valorem taxes and production volumes between periods, partially offset by lower natural gas prices during the nine months ended September 30, 2024. Production and ad valorem taxes as a percentage of natural gas revenues increased from 7% for the nine months ended September 30, 2023 to 12% for the nine months ended September 30,

Current wording

Production and ad valorem tax expense. Production and ad valorem taxes decreased from $58 million for the three months ended March 31, 2024 to $55 million for the three months ended March 31, 2025, a decrease of $3 million, or 5%, primarily due to lower production volumes between periods, partially offset by higher natural gas prices during the three months ended March 31, 2025. Production and ad valorem taxes as a percentage of natural gas revenues decreased from 12% for the three months ended March 31, 2024 to 7% for the three months ended March 31, 2025, primarily as a result of lower ad

Previous wording

2024, primarily as a result of higher ad valorem taxes, which 2024 West Virginia ad valorem taxes are based on commodity prices during 2022.

Current wording

valorem taxes, which 2024 West Virginia ad valorem taxes were based on commodity prices during 2022 and 2025 West Virginia ad valorem taxes are based on commodity prices during 2023.

Previous wording

General and administrative expense. General and administrative expense (excluding equity-based compensation expense) decreased from $125 million for the nine months ended September 30, 2023 to $121 million for nine months ended September 30, 2024, a decrease of $4 million, or 3%, primarily due to lower professional service fees between periods. General and administrative expense on a per unit basis (excluding equity-based compensation) remained consistent at$0.13 per Mcfe for the nine months ended September 30, 2023 and 2024.

Current wording

General and administrative expense. General and administrative expense (excluding equity-based compensation expense) increased from $40 million for the three months ended March 31, 2024 to $47 million for three months ended March 31, 2025, an increase of $7 million, or 19%, 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 March 31, 2024 to $0.15 per Mcfe for the three months ended March 31, 2025 primarily as a result of higher overall costs and lower production volumes between periods.

Previous wording

Equity-based compensation expense. Non-cash equity-based compensation expense decreased from $18 million for the three months ended September 30, 2023 to $16 million for the three months ended September 30, 2024, a decrease of $2 million, or 13%. This decrease was primarily due to lower PSU award expense between periods, partially offset by increased RSU award expense attributable to awards granted in the first quarter of 2024. See Note 9—Equity-Based Compensation to the unaudited condensed consolidated financial statements for more information.

Current wording

Equity-based compensation expense. Non-cash equity-based compensation expense remained relatively consistent at $16 million and $15 million for the three months ended March 31, 2024 and 2025, respectively. See Note 9—Equity-Based Compensation to the unaudited condensed consolidated financial statements for additional information.

Previous wording

Depletion, depreciation and amortization expense. DD&A expense remained relatively consistent at $515 million, or $0.56 per Mcfe, and $514 million, or $0.55 per Mcfe, for the nine months ended September 30, 2023 and 2024, respectively.

Current wording

Depletion, depreciation and amortization expense. DD&A expense remained relatively consistent at $190 million, or $0.61 per Mcfe, and $186 million, or $0.61 per Mcfe, for the three months ended March 31, 2024 and 2025, respectively.

Previous wording

Impairment of property and equipment. Impairment of oil and gas properties remained consistent at $13 million for the three months ended September 30, 2023 and 2024. 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.

Current wording

Impairment of property and equipment. Impairment of oil and gas properties remained relatively consistent at $5 million for the three months ended March 31, 2024 and $6 million for the three months ended March 31, 2025. 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

Marketing revenue. Marketing revenue decreased from $53 million for the three months ended September 30, 2023 to $47 million for the three months ended September 30, 2024, a decrease of $6 million, or 11%. This fluctuation primarily resulted from the following:

Current wording

M**arketing revenue. Marketing revenue decreased from $49 million for the three months ended March 31, 2024 to $26 million for the three months ended March 31, 2025, a decrease of $23 million, or 47%. This fluctuation primarily resulted from the following:

Previous wording

*Marketing expense.*Marketing expense decreased from $217 million for the nine months ended September 30, 2023 to $193 million for the nine months ended September 30, 2024, a decrease of $24 million, or 11%. 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 purchases decreased $47 million between periods, partially offset by increased oil and NGLs purchases of $38 million and $4 million, respectively. The total cost of third-party commodity purchases decreased primarily due to lower natural gas marketing volumes and prices between periods, partially offset by higher oil prices and marketing volumes during the nine months ended September 30, 2024. Firm transportation costs decreased $19 million from $82 million for the nine months ended September 30, 2023 to $63 million for the nine months ended September 30, 2024, primarily due to the reduction in firm transportation commitments between periods.

Current wording

*Marketing expense.*Marketing expense decreased from $60 million for the three months ended March 31, 2024 to $43 million for the three months ended March 31, 2025, a decrease of $17 million, or 28%. 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, NGLs and oil purchases decreased $7 million, $1 million and $13 million between periods, respectively. The total cost of third-party commodity purchases decreased primarily due to lower marketing volumes between periods, partially offset by higher natural gas, NGLs and oil prices during the three months ended March 31, 2025. Firm transportation costs increased from $17 million for the three months ended March 31, 2024 to $21 million, an increase of $4 million or 23%, for the three months ended March 31, 2025, primarily due to the increase in firm transportation tariffs and pipeline maintenance between periods.

Previous wording

Antero Midstream revenue. Revenue from the Antero Midstream segment increased from $264 million for the three months ended September 30, 2023 to $270 million for the three months ended September 30, 2024, an increase of $6 million. This increase is primarily due to higher gathering and processing revenues of $20 million, partially offset by lower water handling revenues of $14 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 and other fluid handling volumes, partially offset by an increased fresh water delivery rate due to an annual CPI-based adjustment during the first quarter of 2024.

Current wording

Antero Midstream revenue. Revenue from the Antero Midstream segment increased from $279 million for the three months ended March 31, 2024 to $291 million for the three months ended March 31, 2025, an increase of $12 million. This increase is primarily due to higher gathering and processing revenues of $11 million and higher water handling revenues of $1 million. The increased gathering and processing revenues between periods is primarily a result of increased throughput and annual CPI-based gathering and compression rate adjustments between periods. The increased water handling revenues between periods is primarily due to higher other fluid handling volumes, cost of service fees for blending and high-rate transfer services and wastewater handling costs, partially offset by decreased fresh water delivery volumes during the three months ended March 31, 2025.

Previous wording

Antero Midstream operating expense. Total operating expense related to the Antero Midstream segment increased from $102 million for the three months ended September 30, 2023 to $107 million for the three months ended September 30, 2024, an increase of $5 million. This increase is primarily due to higher general and administrative expense, including equity-based compensation expense, and depreciation expense between periods.

Current wording

Antero Midstream operating expense. Total operating expense related to the Antero Midstream segment remained relatively consistent at $113 million for the three months ended March 31, 2024 and $114 million for the three months ended March 31, 2025.

Previous wording

Interest expense. Interest expense decreased from $32 million for the three months ended September 30, 2023 to $28 million for the three months ended September 30, 2024, a decrease of $4 million, or 11%, primarily due to the conversion of $26 million aggregate principal amount of our 2026 Convertible Notes during the first quarter of 2024 and lower benchmark interest rates during the three months ended September 30, 2024, partially offset by higher average Credit Facility borrowings between periods.

Current wording

Interest expense. Interest expense decreased from $30 million for the three months ended March 31, 2024 to $23 million for the three months ended March 31, 2025, a decrease of $7 million or 23%, primarily due to the redemption or repurchase of $116 million aggregate principal amount of our Senior Notes and the conversion of $26 million aggregate principal amount of our 2026 Convertible Notes between periods and lower average Credit Facility borrowings and interest rates during the three months ended March 31, 2025.

Previous wording

Income tax expense (benefit). For the nine months ended September 30, 2023, we had income tax expense of $46 million, with an effective tax rate of 17%, related to our income before income taxes of $272 million. For the nine months ended September 30, 2024, we had an income tax benefit of $2 million, with an effective tax rate of 9%, related to our loss before income taxes of $25 million. The decrease in the effective tax rate between periods was primarily due to the effects of noncontrolling interests and our loss before income taxes during the nine months ended September 30, 2024.

Current wording

Income tax expense. For the three months ended March 31, 2024, we had income tax expense of $6 million, with an effective tax rate of 15%, related to our income before income taxes of $41 million. For the three months ended March 31, 2025, we had an income tax expense of $54 million, with an effective tax rate of 20%, related to our income before income taxes of $274 million. The increase in the effective tax rate between periods was primarily due to the effects of noncontrolling interests and stock compensation expense.

Previous wording

Our primary sources of liquidity have been through net cash provided by operating activities, borrowings under our Credit Facility, issuances of debt and equity securities and additional contributions from our asset sales, including our drilling partnership. Our primary use of cash has been for the exploration, development and acquisition of oil and natural gas properties. As we develop our reserves, we continually monitor what capital resources, including equity and debt financings, are available to meet our future financial obligations, planned capital expenditure activities and liquidity requirements. Our future success in developing our proved reserves and production will be highly dependent on net cash provided by operating activities and the capital resources available to us.

Current wording

Our primary sources of liquidity have been through net cash provided by operating activities, borrowings under our Credit Facility, issuances of debt and equity securities and additional contributions from our asset sales, including our drilling partnerships. Our primary use of cash has been for the exploration, development and acquisition of oil and natural gas properties. As we develop our reserves, we continually monitor what capital resources, including equity and debt financings, are available to meet our future financial obligations, planned capital expenditure activities and liquidity requirements. Our future success in developing our proved reserves and production will be highly dependent on net cash provided by operating activities and the capital resources available to us.

Previous wording

Operating activities. Net cash provided by operating activities was $682 million and $571 million for the nine months ended September 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 interest expense, partially offset by lower net marketing expense and higher NGLs and oil revenues between periods and a $202 million payment for early settlement of our swaption agreement in the nine months ended September 30, 2023.

Current wording

Operating activities. Net cash provided by operating activities was $262 million and $458 million for the three months ended March 31, 2024 and 2025, respectively. Net cash provided by operating activities increased between periods primarily due to higher natural gas and NGLs prices and lower interest expense, partially offset by changes in working capital, higher net marketing expense and lower oil revenues between periods.

Previous wording

Investing activities. Net cash used in investing activities decreased from $914 million for the nine months ended September 30, 2023 to $588 million for the nine months ended September 30, 2024, primarily due to lower well completions between periods, decreased drilling activity as a result of a lower rig count during the nine months ended September 30, 2024 and decreased leasing activity during the nine months ended September 30, 2024.

Current wording

Investing activities. Net cash used in investing activities decreased from $227 million for the three months ended March 31, 2024 to $208 million for the three months ended March 31, 2025, primarily due to lower well completions between periods and decreased drilling activity during the three months ended March 31, 2025.

Previous wording

*Financing activities.*Net cash provided by financing activities decreased from $232 million for the nine months ended September 30, 2023 to $17 million for the nine months ended September 30, 2024. The decrease between periods is primarily due to lower net borrowings on our Credit Facility of $330 million and payment of debt issuance costs for our Unsecured Credit Facility of $6 million, partially offset by decreased share repurchases of $75 million and decreased distributions to the noncontrolling interests in Martica of $46 million between periods.

Current wording

*Financing activities.*Net cash used in financing activities increased from $35 million for the three months ended March 31, 2024 to $250 million for the three months ended March 31, 2025. The increase in net cash used in financing activities between periods is primarily due to Senior Note redemptions and repurchases of $118 million during the three months ended March 31, 2025, higher net repayments on our Credit Facility of $87 million, share repurchases of $10 million during the three months ended March 31, 2025 and increased payments of employee tax withholdings for the settlement of equity-based compensation awards of $7 million, partially offset by decreased distributions to the noncontrolling interests in Martica of $7 million between periods.

Previous wording

On February 14, 2024, we announced a net capital budget for 2024 of $725 million to $800 million. Our budget includes: a range of $650 million to $700 million for drilling and completion and $75 million to $100 million for leasehold expenditures. We do not budget for acquisitions. During 2024, we plan to complete 45 to 50 net horizontal wells in the Appalachian Basin. We periodically review our capital expenditures and adjust our budget and its allocation based on liquidity, drilling results, leasehold acquisition opportunities and commodity prices. On October 30, 2024, we announced a decrease in our net capital budget for drilling and completion to a range of $640 million to $660 million to reflect operational efficiencies and the deferral of a drilled but uncompleted pad due to low natural gas prices. Our revised net capital budget for 2024 is $715 million to $760 million.

Current wording

On February 12, 2025, we announced a net capital budget for 2025 of $725 million to $800 million. Our budget includes: a range of $650 million to $700 million for drilling and completion and $75 million to $100 million for leasehold expenditures. We do not budget for acquisitions. During 2025, we plan to complete 60 to 65 net horizontal wells in the Appalachian Basin. We periodically review our capital expenditures and adjust our budget and its allocation based on liquidity, drilling results, leasehold acquisition opportunities and commodity prices.

Previous wording

For the three months ended September 30, 2024, our total consolidated capital expenditures were $172 million, including drilling and completion costs of $148 million, leasehold acquisitions of $23 million and other capital expenditures of $1 million. For the nine months ended September 30, 2024, our total consolidated capital expenditures were $578 million, including drilling and completion costs of $499 million, leasehold acquisitions of $69 million and other capital expenditures of $10 million.

Current wording

For the three months ended March 31, 2025, our total consolidated capital expenditures were $188 million, including drilling and completion costs of $157 million, leasehold acquisitions of $30 million and other capital expenditures of $1 million.

Previous wording

We evaluate the carrying amount of our proved natural gas, NGLs and oil properties for impairment on a geological reservoir basis whenever events or changes in circumstances indicate that a property’s carrying amount may not be recoverable. If the carrying amount of our proved properties exceeds the estimated undiscounted future net cash flows (measured using futures prices at the balance sheet date), we further evaluate our proved properties and record an impairment charge if the carrying amount of our proved properties exceeds the estimated fair value of the properties.

Current wording

recoverable. If the carrying amount of our proved properties exceeds the estimated undiscounted future net cash flows (measured using futures prices at the balance sheet date), we further evaluate our proved properties and record an impairment charge if the carrying amount of our proved properties exceeds the estimated fair value of the properties.

Previous wording

Based on future prices as of September 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 nine months ended September 30, 2023 and 2024.

Current wording

Based on future prices as of March 31, 2025, 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, 2024 and 2025.

Previous wording

See Note 13—Commitments to the unaudited condensed consolidated financial statements for further information on off balance sheet arrangements.

Current wording

See Note 13—Commitments to the unaudited condensed consolidated financial statements for information on off balance sheet arrangements.