Antero Resources Reports Third Quarter 2012 Results and Delivers Operating Update

  Antero Resources Reports Third Quarter 2012 Results and Delivers Operating
                                    Update

PR Newswire

DENVER, Nov. 8, 2012

DENVER, Nov. 8, 2012 /PRNewswire/ --

  oNet production averaged 308 MMcfed, up 57% over the prior-year quarter,
    pro forma for Arkoma sale
  oConsolidated EBITDAX was $95million, up 47% over the prior-year quarter,
    pro forma for Arkoma sale
  oCurrent net production of 371 MMcfed — 314 MMcfd net from the Marcellus
    alone
  o13 Antero-operated drilling rigs currently running in Marcellus and Utica
    Shale core areas
  oAnnounced start-up of Sherwood I processing plant in Marcellus – currently
    producing 1,300 Bbl/d of NGLs
  oAnnounced gas processing agreement with MarkWest in the Utica Shale play
  oAnnounced Piceance upstream and pipeline asset sale for $325 million plus
    $100 million hedge monetization
  oIncreased borrowing base to $1.65 billion and lender commitments to $950
    million

Antero Resources today released its third quarter 2012 results. Those
financial statements are included in Antero Resources LLC's Quarterly Report
on Form10-Q for the quarter ended September30, 2012, which has been filed
with the Securities and Exchange Commission.

Recent Developments

On October 26, 2012, Antero announced that the borrowing base under its bank
credit facility had been increased by $300 million to the $1.65 billion
level. Lender commitments under the facility were raised to $950 million, a
$200 million increase. The $950 million commitment can be expanded to the
full $1.65 billion borrowing base upon bank approval.

On October 31, 2012, Antero and MarkWest Energy Partners, L.P. (MarkWest)
jointly announced the completion of certain gas processing and pipeline
infrastructure in Doddridge County, West Virginia. The first phase of this
infrastructure was completed and includes Sherwood I, which is a 200 MMcfd
cryogenic gas processing plant, as well as plant inlet compression. Antero is
currently delivering 110 MMcfd of liquids rich gas to the Sherwood I plant
inlet. Antero will not recover ethane from the rich gas stream but will
extract the heavier products ("C3+") until ethane takeaway is available.
Antero is an anchor shipper on Enterprise Products Partners L.P.'s Appalachia
to Texas ATEX pipeline (ATEX Express) enabling Antero to ship up to 20,000
Bbl/d of ethane, with the option to expand to 40,000 Bbl/d. The ATEX Express
is expected to begin service in the first quarter of 2014. MarkWest will
initially truck Sherwood NGL products until completion of a 6-inch NGL
pipeline from Sherwood to MarkWest NGL fractionation facilities in Houston,
Pennsylvania. The NGL pipeline is expected to be in service by the second
quarter of 2013. Current NGL yield from the 110 MMcfd of throughput at
Sherwood I is approximately 1,300 Bbld of C3+ y-grade product.

On November 5, 2012, Antero announced that it had entered into an agreement to
sell all of its natural gas properties and pipeline assets in the Piceance
Basin to a private company for $325 million in cash plus the assumption of all
of its Rocky Mountain firm transportation obligations.The transaction is
expected to close in December 2012, subject to the satisfaction of customary
closing conditions, with an effective date of October 1, 2012. Antero has
also monetized approximately 80% of its 78 Bcf of Rockies hedges for $80
million and plans to monetize the remaining 20% in the fourth quarter of 2012
resulting in $100 million of hedge proceeds.

On November 6, 2012, Antero and MarkWest Utica EMG, L.L.C. (MarkWest Utica)
jointly announced the completion of definitive agreements for MarkWest to
provide processing, fractionation and marketing services in the liquids-rich
corridor of the Utica Shale play. Under the terms of the agreements, MarkWest
Utica will develop natural gas processing infrastructure in Noble County, Ohio
to process Antero's rich gas Utica Shale production. MarkWest Utica will
initially bring online an interim 45 MMcfd refrigeration natural gas
processing plant with an expected second quarter 2013 completion date. This
interim facility will be followed by Seneca I, a 200 MMcfd cryogenic gas
processing facility, which is expected to begin operations in the third
quarter of 2013. The definitive agreements also provide for the construction
of an additional facility, Seneca II, a 200 MMcfd cryogenic processing
facility, which may be installed as soon as the end of 2013.

On November 7, 2012, Antero announced a 33% increase in the company's 2012
capital budget to $1.6 billion, which includes $838 million for drilling and
completion, $639 million for leasehold acquisitions and $123 million for the
construction of gathering pipelines and facilities. The budget was revised
primarily to fund the acquisition of additional leasehold in Appalachia and
the construction of gathering infrastructure which will gather rich gas in
Doddridge County, West Virginia and deliver gas to MarkWest's Sherwood I gas
processing plant.

In this release, Antero's results are presented two ways: (1) in accordance
with GAAP, where the results of operations of the Arkoma Basin assets and the
loss on the sale are presented in one line as discontinued operations and (2)
in a non-GAAP manner, where the results of operations of the Arkoma Basin
assets (prior to the June 29, 2012 closing) and the loss on the sale are
aggregated with the Company's results from continuing operations. Investors
should be cautioned that this non-GAAP presentation is not representative of
Antero's future operations, which will no longer include Arkoma Basin assets
and earnings. See "Non-GAAP Financial Measures" for reconciliation between
these two presentations.

Financial Results for the Third Quarter

Production for the third quarter of 2012 increased by 17% to 28 Bcfe relative
to the third quarter of 2011, including third quarter 2011 production from the
Arkoma Basin assets sold in June 2012. Excluding the Arkoma Basin assets that
were sold in June 2012, net production increased 57% from the third quarter of
2011. The net production increase was primarily driven by new wells brought
online in the Marcellus Shale. Net production of 28 Bcfe for the quarter was
comprised of 27 Bcf of natural gas, 203,000 barrels of NGLs and 78,000 barrels
of oil. Net daily production averaged 308 MMcfed for the third quarter, and
was comprised of 289 MMcfd of natural gas (94%), 2,209 Bbl/d of NGLs (4%) and
850 Bbl/d of crude oil (2%). 

GAAP revenues for the third quarter of 2012 decreased by 139% compared to the
third quarter of 2011 to a negative $88 million, primarily due to a $237
million unrealized loss on commodity derivatives in third quarter of 2012
compared to a $125 million unrealized gain on commodity derivatives in the
prior year quarter. Reported GAAP earnings resulted in a net loss of
$128million for the three months ended September 30, 2012, including a
$237million unrealized loss on commodity derivatives as natural gas prices
increased from the prior quarter, and an $84 million deferred income tax
benefit. EBITDAX from continuing operations of $95million for the third
quarter of 2012 was 47% higher than the prior-year quarter, primarily due to
increased production. For a description of EBITDAX, and reconciliation to the
nearest comparable GAAP measures, please read "Non-GAAP Financial Measures".

(The non-GAAP amounts presented below combine the Arkoma Basin operations with
the Company's other operations. See "Non-GAAP Financial Measures" for a
definition of each of these non-GAAP financial measures and tables that
reconcile each of these non-GAAP measures to their most directly comparable
GAAP financial measure.)

Following the sale of the Arkoma in the second quarter of 2012, Non-GAAP
adjusted net revenues for the third quarter 2012 increased 10% to $148 million
compared to the third quarter of 2011 (including cash-settled derivatives but
excluding unrealized derivative gains and losses). For a reconciliation of
adjusted net revenues to revenues from operations (GAAP), please read
"Non-GAAP Financial Measures". Liquids production (NGLs and oil) contributed
14% of adjusted net revenues before commodity hedges during the third quarter
of 2012 compared to 12% in the prior year quarter. Average natural gas prices
before hedges decreased 31% from the prior-year quarter to $2.90 per Mcf and
average natural gas-equivalent prices before hedges decreased 30% to $3.17 per
Mcfe. Additionally, average realized gas prices including hedges decreased by
4% to $5.10 per Mcf. Average realized NGL prices decreased by 32% to $31.28
per barrel, while average realized oil prices including hedges increased by 2%
to $78.60 per barrel. Gas-equivalent prices, after adjusting for all realized
gains on commodity derivatives, declined by 5% to $5.24 per Mcfe for the third
quarter of 2012.

For the third quarter of 2012, Antero realized natural gas hedging gains of
$59 million, or $2.07 per Mcfe. However, due to the fact that expiring
financial hedges are settled and realized on a monthly basis while long-term
non-expiring hedges are marked to market at the end of the quarter, we
realized gains on hedges that settled during the quarter while we recognized
an unrealized loss on long-term hedges as natural gas prices rose during the
third quarter of 2012.

Excluding the unrealized loss on commodity derivatives and deferred income tax
benefit, adjusted net income, a non-GAAP measure, was $25 million for the
quarter. Cash flow from operations before changes in working capital, a
non-GAAP measure, decreased 8% from the prior-year quarter to $65million,
excluding cash tax installment payments made during the quarter for
alternative minimum taxes due on the gain on sale of Antero's Appalachian
midstream assets divested in March 2012. EBITDAX of $95million for the third
quarter of 2012 was 4% higher than the prior-year quarter, primarily due to
increased production. For a description of EBITDAX, adjusted net income and
cash flow from operations before changes in working capital and reconciliation
to the nearest comparable GAAP measures, please read "Non-GAAP Financial
Measures".

Per unit cash production costs (lease operating, gathering, compression and
transportation, and production tax) for the third quarter of 2012 were $1.49
per Mcfe, a 2% increase from the prior year quarter. This increase was
primarily driven by increased costs on firm transportation commitments
executed to facilitate future production growth. Per unit lease operating
expenses decreased by 55% to $0.14 per Mcfe driven by a decrease in workover
expense in the Piceance, the elimination of higher operating cost Arkoma
production and the addition of high rate new Marcellus wells brought online
during the third quarter of 2012. Per unit depreciation, depletion and
amortization expense decreased 21% from the prior year quarter to $1.45 per
Mcfe, driven by low cost reserve increases. On a per unit basis, general and
administrative expense for the third quarter 2012 was $0.42 per Mcfe, a 40%
increase from the third quarter of 2011, primarily driven by an increase in
staffing levels commensurate with our growth in production levels and
development activities and the elimination of Arkoma production due to the
second quarter 2012 divestiture.

Antero Operations

Antero's current gross operated production is 461 MMcfd and estimated net
production is 371 MMcfed, including 3,600 Bbl/d of NGLs and 1,000 Bbl/d of
oil. Antero has an additional estimated 40 MMcfed of net production in the
Marcellus and Utica Shales that is either shut-in or constrained waiting on
pipeline, compression or processing facilities.During the third quarter of
2012, Antero completed 28 gross operated wells (27 net wells) and currently
has 37 gross operated wells (36 net wells) in various stages of drilling,
completion or waiting on completion.

Marcellus Shale  — Antero is operating 12 drilling rigs in the Marcellus Shale
play, all of which are drilling in northern West Virginia. The Company plans
to add a 13th drilling rig in December 2012 and a 14th drilling rig in January
2013. Antero has 405 MMcfd of gross operated production in the play of which
99% is coming from 105 horizontal Marcellus Shale wells, resulting in 314
MMcfd of net production. The 314 MMcfed net is comprised of approximately 307
MMcfd of tailgate gas, 1,100 Bbls/d of NGLs and 100 Bbls/d of light oil.
Antero has 24 horizontal wells either completing or waiting on completion and
has two fully-dedicated frac crews currently working in West Virginia along
with several spot crews as needed. The 105 horizontal Marcellus wells that
Antero has completed and placed online to date have an average lateral length
of 6,699 feet. In the third quarter of 2012, Antero completed 14 horizontal
Marcellus Shale wells with an average 24-hour peak rate of 15.1 MMcfd and an
average lateral length of approximately 7,631 feet.

In addition to the Sherwood I plant, Antero has committed to a second 200
MMcfd gas processing plant, Sherwood II, to be located on the same site as
Sherwood I. Sherwood II is expected to go in service in the second quarter of
2013. Antero has also committed to the fabrication of a third 200 MMcfd gas
processing plant, Sherwood III, which is expected to go online in the fourth
quarter of 2013, giving Antero access to a total of 600 MMcfd of Marcellus gas
processing capacity by the end of 2013.

MarkWest is building the Pike Fork high pressure lateral and has completed the
Zinnia high pressure pipeline lateral, both of which will transport rich gas
production from western Harrison and eastern Doddridge Counties to the
Sherwood processing complex. The Pike Fork lateral is expected to be
completed in December 2012 and will bring approximately 40 MMcfd of rich gas
to the Sherwood processing complex. These high pressure laterals will also
move rich gas gathered by Crestwood Midstream Partners, in the area of
dedication, in order to be processed.

Antero is continuing to build out the 17-mile Canton low pressure pipeline
lateral which will gather rich gas in northern Doddridge County and deliver
the gas to the Sherwood I plant. The southern section of the Canton low
pressure lateral is in service and currently delivering rich gas to Sherwood
I, with the remainder of the pipeline expected to go in service in December
2012. MarkWest has also constructed inlet compression facilities located at
the Sherwood I plant to serve the Canton low pressure lateral. The first
inlet compressor unit is online while the remaining units are awaiting hookup
to the electric grid. Antero is building the 20 mile White Oak high pressure
lateral which will transport rich gas production from western Doddridge and
eastern Ritchie Counties to the Sherwood processing facilities. The White Oak
lateral is expected to be in service in the fourth quarter of 2012. White Oak
compression facilities are expected to be in-service in the first quarter of
2013.

Antero has 277,000 net acres in the Marcellus Shale play of which only 15% was
associated with proved reserves at mid-year 2012. Approximately 78% of
Antero's Marcellus leasehold contains processable rich gas. The Company has
increased its Marcellus Shale leasehold position by 67,000 net acres in 2012
to date.

Utica Shale —  Antero has assembled over 60,000 net acres of leasehold in the
Utica Shale play of eastern Ohio and is currently operating one drilling rig.
Antero plans to add a second drilling rig in the second quarter of 2013.
Almost all of the acreage is located in the rich gas/condensate window of the
Utica Shale play. Antero has completed three horizontal wells in the Utica
play with strong results. All three completed wells are shut-in, waiting on
pipeline and processing infrastructure.

Antero plans to put its first Utica Shale well online in December 2012 without
access to processing followed by several additional wells by the second
quarter of 2013 when the initial firm processing capacity becomes available.
Antero is in the process of laying both low and high pressure gathering
pipeline to transport its initial Utica production.

Piceance Basin  — Antero is no longer operating a drilling rig in the Piceance
Basin as of late July 2012 when its drilling contract expired. The Company's
gross operated production in the Piceance is currently 56 MMcfd and 57 MMcfed
net including 2 MMcfed of non-operated production from 284 wells online. The
57 MMcfed net is comprised of approximately 37 MMcfd of tailgate gas, 2,400
Bbls/d of NGLs and 900 Bbls/d of light oil.

Antero has 61,000 net acres in the Piceance.

Non-GAAP Financial Measures

The table below reconciles the Company's GAAP results from continuing
operations to Non-GAAP results including operations of the Arkoma Basin assets
(prior to the sale) and the loss on the sale. Antero is including this
presentation in order to more clearly illustrate its results of operations
during the period:

ANTERO RESOURCES LLC
Statements of Operations and Additional Data
Based on GAAP reported earnings with additional
Details of items included in each line in Form 10-Q
                Three Months Ended September 30,      Three Months Ended September 30, 2012
                2011
                           Arkoma         Including               Arkoma         Including
                As         Discontinued   Arkoma      As          Discontinued   Arkoma
                Reported   Operations     Operations  Reported    Operations     Operations
(in thousands, except per unit and production data)
Operating
revenues:
Natural gas     $ 71,836   24,133         95,969      77,212      —              77,212
sales
NGL sales       5,886      2,618          8,504       6,357       —              6,357
Oil sales       4,775      100            4,875       6,202       —              6,202
Realized
commodity       16,547     8,682          25,229      58,652      —              58,652
derivative
gains
Unrealized
commodity       124,567    15,628         140,195     (236,536)   —              (236,536)
derivative
gains (losses)
Gain (loss) on  —          —              —           (115)       —              (115)
sale of assets
Total
operating       223,611    51,161         274,772     (88,228)    —              (88,228)
revenues
Operating
expenses:
Lease
operating       6,087      1,485          7,572       3,943       —              3,943
expenses
Gathering,
compression     15,439     7,076          22,515      32,976      —              32,976
and
transportation
Production      5,473      (123)          5,350       5,397       —              5,397
taxes
Exploration     968        137            1,105       3,251       —              3,251
expenses
Impairment of
unproved        4,652      182            4,834       2,407       —              2,407
properties
Depletion,
depreciation    29,117     15,500         44,617      41,055      —              41,055
and
amortization
Accretion of
asset           86         25             111         116         —              116
retirement
obligations
General and     7,404                     7,404       11,938      —              11,938
administrative
Total
operating       69,226     24,282         93,508      101,083     —              101,083
expenses
Operating       154,385    26,879         181,264     (189,311)   —              (189,311)
income
Interest
expense and
loss on         (20,608)   —              (20,608)    (22,453)    —              (22,453)
interest rate
derivatives
Income (loss)
before income   133,777    26,879         160,656     (211,764)   —              (211,764)
taxes
Income tax
benefit         (49,578)   —              (49,578)    84,086      —              84,086
(expense)
Income from
continuing      84,199     26,879         111,078     (127,678)   —              (127,678)
operations
Income (loss)
from
discontinued
operations      26,879     (26,879)       —           —           —              —
andsale of
discontinued
operations
Net income
(loss)
attributable    $ 111,078  —              111,078     (127,678)   —              (127,678)
to Antero
members
Production
data:
Natural gas     17         6              23          27          —              27
(Bcf)
NGLs (MBbl)     138        47             185         203         —              203
Oil (MBbl)      62         1              63          78          —              78
Combined        18         6              24          28          —              28
(Bcfe)
Daily combined
production      196        68             264         308         —              308
(MMcfe/d)
Average prices
before effects
of hedges:
Natural gas     $ 4.26     $   4.04       $    4.20   $   2.90    $       —      $    2.90
(per Mcf)
NGLs (per Bbl)  $ 42.78    $   55.75      $    45.97  $   31.28   $       —      $    31.28
Oil (per Bbl)   $ 77.63    $   85.47      $    77.38  $   79.30   $       —      $    79.30
Combined (per   $ 4.57     $   4.28       $    4.50   $   3.17    $       —      $    3.17
Mcfe)
Average
realized
prices after
effects
of hedges:
Natural gas     $ 5.24     $   5.49       $    5.31   $   5.10    $       —      $    5.10
(per Mcf)
NGLs (per Bbl)  $ 42.78    $   55.75      $    45.97  $   31.28   $       —      $    31.28
Oil (per Bbl)   $ 77.16    $   85.47      $    76.92  $   78.60   $       —      $    78.60
Combined (per   $ 5.49     $   5.67       $    5.53   $   5.24    $       —      $    5.24
Mcfe)
Average Costs
(per Mcfe):
Lease
operating       $ 0.34     $   0.24       $    0.31   $   0.14    $       —      $    0.14
costs
Gathering,
compression,    $ 0.86     $   1.13       $    0.93   $   1.16    $       —      $    1.16
and
transportation
Production      $ 0.30     $   (0.02)     $    0.22   $   0.19    $       —      $    0.19
taxes
Depletion,
depreciation,   $ 1.58     $   2.47       $    1.83   $   1.45    $       —      $    1.45
amortization
and accretion
General and     $ 0.41     $   0          $    0.30   $   0.42    $       —      $    0.42
administrative

ANTERO RESOURCES LLC
Statements of Operations and Additional Data
Based on GAAP reported earnings with additional
Details of items included in each line in Form 10-Q
                NineMonthsEndedSeptember30,2011     NineMonthsEndedSeptember30,2012
                              Arkoma        Including                Arkoma        Including
                As            Discontinued  Arkoma       As          Discontinued  Arkoma
                Reported      Operations    Operations   Reported    Operations    Operations
                (inthousands,exceptperunitandproductiondata)
Operating
revenues:
Natural gas     $ 168,797   74,725       243,522       184,493     31,432       215,925
sales
NGL sales       14,224      7,841        22,065        21,602      4,913        26,515
Oil sales       9,224       1,067        10,291        19,527      357          19,884
Realized
commodity       48,282      25,505       73,787        187,561     33,681       221,242
derivative
gains
Unrealized
commodity       151,520     9,224        160,744       (111,649)   (11,025)     (122,674)
derivative
gains (losses)
Gain on sale    —           —            —             291,190     —            291,190
of assets
Total
operating       392,047     118,362      510,409       592,724     59,358       652,082
revenues
Operating
expenses:
Lease
operating       17,487      5,069        22,556        16,123      4,344        20,467
expenses
Gathering,
compression     37,331      22,141       59,472        78,888      16,267       95,155
and
transportation
Production      12,141      446          12,587        15,191      417          15,608
taxes
Exploration     5,902       636          6,538         8,150       269          8,419
expenses
Impairment of
unproved        6,828       1,106        7,934         4,572       409          4,981
properties
Depletion,
depreciation    67,865      49,400       117,265       106,733     35,900       142,633
and
amortization
Accretion of
asset           242         74           316           325         56           381
retirement
obligations
General and     21,972      —            21,972        31,584      —            31,584
administrative
Loss on sale
of compressor   8,700       —            8,700         —           —            —
station
Total
operating       178,468     78,872       257,340       261,566     57,662       319,228
expenses
Operating       213,579     39,490       253,069       331,158     1,696        332,854
income
Interest
expense and
loss on         (51,362)    —            (51,362)      (71,046)    —            (71,046)
interest rate
derivatives
Income (loss)
before income   162,217     39,490       201,707       260,112     1,696        261,808
taxes
Income tax
benefit         (74,941)    —            (74,941)      (112,610)   —            (112,610)
(expense)
Income from
continuing      87,276      39,490       126,766       147,502     1,696        149,198
operations
Income (loss)
from
discontinued
operations
and            39,490      (39,490)     —             (425,536)   (1,696)      (427,232)

sale of
discontinued
operations
Net income
(loss)
attributable    $ 126,766   —            126,766       (278,034)   —            (278,034)
to Antero

members
Production
data:
Natural gas     38          18           56            69          14           83
(Bcf)
NGLs (MBbl)     315         146          461           618         123          741
Oil (MBbl)      115         13           128           235         4            239
Combined        41          19           60            74          14           88
(Bcfe)
Daily combined
production      150         70           220           272         79           351
(MMcfe/d)
Average prices
before effects
of hedges:
Natural gas     $ 4.40      $   4.15     $  4.31       $   2.66    $   2.31     $      2.61
(per Mcf)
NGLs (per Bbl)  $ 45.21     $   53.71    $  47.86      $   34.95   $   39.93    $      35.78
Oil (per Bbl)   $ 80.17     $   82.18    $  80.40      $   82.93   $   93.95    $      83.20
Combined (per   $ 4.70      $   4.40     $  4.60       $   3.03    $   2.56     $      2.96
Mcfe)
Average
realized
prices after
effects of
hedges:
Natural gas     $ 5.67      $   5.57     $  5.63       $   5.38    $   4.79     $      5.28
(per Mcf)
NGLs (per Bbl)  $ 45.21     $   53.71    $  47.86      $   34.95   $   39.93    $      35.78
Oil (per Bbl)   $ 75.36     $   82.18    $  76.07      $   80.83   $   93.95    $      81.14
Combined (per   $ 5.88      $   5.74     $  5.85       $   5.55    $   4.90     $      5.45
Mcfe)
Average Costs
(per Mcfe):
Lease
operating       $ 0.43      $   0.27     $  0.38       $   0.22    $   0.30     $      0.23
costs
Gathering,
compression,    $ 0.91      $   1.17     $  0.99       $   1.06    $   1.13     $      1.07
and
transportation
Production      $ 0.30      $   0.02     $  0.21       $   0.20    $   0.03     $      0.18
taxes
Depletion,
depreciation,
amortization    $ 1.64      $   2.60     $  1.97       $   1.43    $   2.51     $      1.61

and accretion
General and     $ 0.54      $   —        $  0.37       $   0.42    $   —        $      0.36
administrative

Adjusted net revenue as set forth in this release represents total operating
revenues adjusted for certain non-cash items including unrealized derivative
gains and losses and gains and losses on asset sales. We believe that
adjusted net revenue is useful to investors in evaluating operational trends
of the Company and its performance relative to other oil and gas producing
companies. Adjusted net revenue is not a measure of financial performance
under GAAP and should not be considered in isolation or as a substitute for
total operating revenues as an indicator of financial performance. The
following table reconciles total operating revenues to total adjusted net
revenues:

                                   Threemonthsended     Ninemonthsended

                                   September30,          September 30,
                                   2012        2011       2012       2011
Total revenues from continuing     $ (88,228)  $ 223,611  $ 592,724  $ 392,047
operations
Total revenues from discontinued     –           51,161     59,358     118,362
operations
Total revenues                     $ (88,228)  $ 274,772  $ 652,082  $ 510,409
(Gain) loss on sale of assets      115         –          (291,190)  –
Unrealized commodity derivative    236,536     (140,195)  122,674    (160,744)
(gains) losses
Adjusted net revenues              $ 148,423   $ 134,577  $ 483,566  $ 349,665

Adjusted net income as set forth in this release represents income from
operations before deferred income taxes, adjusted for certain non-cash items
from operations and discontinued operations. We believe that adjusted net
income is useful to investors in evaluating operational trends of the Company
and its performance relative to other oil and gas producing companies.
Adjusted net income is not a measure of financial performance in accordance
with GAAP and should not be considered in isolation or as a substitute for net
income (loss) as an indicator of financial performance. The following table
reconciles income from operations to adjusted net income:

                                Threemonthsended      Ninemonthsended

                                September30,           September30,
                                2012         2011       2012         2011
Net income (loss)               $ (127,678)  $ 111,078  $ (278,034)  $ 126,766
Unrealized commodity            236,536      (140,195)  122,674      (160,744)
derivative (gains) losses
Loss on sale of Arkoma Basin    –            –          427,232      –
assets
(Gain) loss on sale of          115          –          (291,190)    –
Marcellus gathering assets
(Gain) loss on sale of          –            –          –            8,700
compressor station
Income tax expense (benefit)    (84,086)     49,578     112,610      74,941
Adjusted net income             $ 24,887     $ 20,461   $ 93,292     $ 49,663

Cash flow from operations before changes in working capital as presented in
this release represents net cash provided by operations before changes in
working capital. Cash flow from operations before changes in working capital
is widely accepted by the investment community as a financial indicator of an
oil and gas company's ability to generate cash to internally fund exploration
and development activities and to service debt. Cash flow from operations
before changes in working capital is also useful because it is widely used by
professional research analysts in valuing, comparing, rating and providing
investment recommendations of companies in the oil and gas exploration and
production industry. In turn, many investors use this published research in
making investment decisions. Cash flow from operations before changes in
working capital is not a measure of financial performance under GAAP and
should not be considered as an alternative to cash flows from operations,
investing, or financing activities, as an indicator of cash flows, or as a
measure of liquidity. The following table reconciles net cash provided by
operating activities to cash flow from operations before changes in working
capital as used in this release:

                                      Threemonthsended  Ninemonthsended

                                      September30,       September30,
                                      2012      2011      2012       2011
Net cash provided by operating        $ 64,416  $ 86,543  $ 225,400  $ 198,446
activities
Net change in working capital         (5,470)   (15,256)  (9,510)    (21,707)
Cash flow from operations before      $ 58,946  $ 71,287  $ 215,890  $ 176,739
changes inworking capital

EBITDAX is a non-GAAP financial measure that we define as net income before
interest expense and other income or expense, taxes, impairments, depletion,
depreciation, amortization, exploration expense, unrealized hedge gains or
losses, gain or loss on sale of assets, franchise taxes and expenses related
to business acquisitions. EBITDAX, as used and defined by us, may not be
comparable to similarly titled measures employed by other companies and is not
a measure of performance calculated in accordance with GAAP. EBITDAX should
not be considered in isolation or as a substitute for operating income, net
income or loss, cash flows provided by operating, investing and financing
activities, or other income or cash flow statement data prepared in accordance
with GAAP. EBITDAX provides no information regarding a company's capital
structure, borrowings, interest costs, capital expenditures, and working
capital movement or tax position. EBITDAX does not represent funds available
for discretionary use because those funds are required for debt service,
capital expenditures, working capital, and other commitments and obligations.
However, our management team believes EBITDAX is useful to an investor in
evaluating our operating performance because this measure is widely used by
investors in the natural gas and oil industry to measure a company's operating
performance without regard to items excluded from the calculation of such
term, which can vary substantially from company to company depending upon
accounting methods and book value of assets, capital structure and the method
by which assets were acquired, among other factors; helps investors to more
meaningfully evaluate and compare the results of our operations from period to
period by removing the effect of our capital structure from our operating
structure; and is used by our management team for various purposes, including
as a measure of operating performance, in presentations to our board of
directors, as a basis for strategic planning and forecasting and by our
lenders pursuant to a covenant under our senior secured revolving credit
facility. EBITDAX is also used as a measure of operating performance pursuant
to a covenant under the indenture governing our 9.375% and 7.25% senior notes.

There are significant limitations to using EBITDAX as a measure of
performance, including the inability to analyze the effect of certain
recurring and non-recurring items that materially affect our net income or
loss, the lack of comparability of results of operations of different
companies and the different methods of calculating EBITDAX reported by
different companies. The following table represents a reconciliation of our
net income to EBITDAX for the three and nine months ended September30, 2011
and 2012:

                                  Threemonthsended      Ninemonthsended

                                  September30,           September30,
                                  2012         2011       2012       2011
Net income (loss)                 $ (127,678)  $  84,199  $ 147,502  $ 87,276
Unrealized loss (gain) on         236,536      (124,567)  111,649    (151,520)
commodity derivativecontracts
Interest expense and other        22,453       20,608     71,046     51,362
Provision (benefit) for income    (84,086)     49,578     112,610    74,941
taxes
Depreciation, depletion,          41,171       29,203     107,058    68,107
amortization and accretion
Impairment of unproved            2,407        4,652      4,572      6,828
properties
Exploration expense               3,251        968        8,150      5,902
(Gain) loss on sale of gathering  115          —          (291,190)  —
systems
(Gain) loss on sale of            —            —          —          8,700
compressor station
Other                             996          185        2,992      708
EBITDAX from continuing           $ 95,165     $  64,826  $ 274,389  $ 152,304
operations
EBITDAX from discontinued           —             27,095    49,355     81,482
operations
EBITDAX                           $ 95,165     $  91,921  $ 323,744  $ 233,786

The cash prices realized for oil, NGLs and natural gas production including
the amounts realized on cash settled derivatives are a critical component in
the Company's performance tracked by investors and professional research
analysts in valuing, comparing, rating and providing investment
recommendations and forecasts of companies in the oil and gas exploration and
production industry.In turn, many investors use this published research in
making investment decisions.Due to the GAAP disclosures of various hedging
and derivative transactions, such information is now reported in various lines
of the income statement.

Antero Resources is an independent oil and natural gas company engaged in the
acquisition, development and production of unconventional oil and liquids-rich
natural gas properties primarily located in the Appalachian Basin in West
Virginia, Ohio and Pennsylvania, and in the Piceance Basin in Colorado. Our
website is located at www.anteroresources.com.

This release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements are subject to a number
of risks and uncertainties, many of which are beyond Antero's control. All
statements, other than historical facts included in this release, are
forward-looking statements. All forward-looking statements speak only as of
the date of this release. Although Antero believes that the plans, intentions
and expectations reflected in or suggested by the forward-looking statements
are reasonable, there is no assurance that these plans, intentions or
expectations will be achieved. Therefore, actual outcomes and results could
materially differ from what is expressed, implied or forecast in such
statements.

We caution you that these forward-looking statements are subject to all of the
risks and uncertainties, most of which are difficult to predict and many of
which are beyond our control, incident to the exploration for and development,
production, gathering and sale of natural gas and oil. These risks include,
but are not limited to, commodity price volatility, inflation, lack of
availability of drilling and production equipment and services, environmental
risks, drilling and other operating risks, regulatory changes, the uncertainty
inherent in estimating natural gas and oil reserves and in projecting future
rates of production, cash flow and access to capital, the timing of
development expenditures, and the other risks described under the heading
"Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2011.

ANTERO RESOURCES LLC
Condensed Consolidated Balance Sheets
December 31, 2011 and September 30, 2012
(Unaudited)
(In thousands)
                                                       2011         2012
Assets
Current assets:
Cash and cash equivalents                              $ 3,343      16,555
Accounts receivable — net of allowance for doubtful
accounts of $182 and $174 in2011 and 2012,            25,117       39,487
respectively
Notes receivable - short-term portion                  7,000        6,222
Accrued revenue                                        35,986       18,609
Derivative instruments                                 248,550      172,123
Other                                                  13,646       13,860
Total current assets                                   333,642      266,856
Property and equipment:
Natural gas properties, at cost (successful efforts
method):
Unproved properties                                    834,255      1,134,725
Producing properties                                   2,497,306    2,196,746
Gathering systems and facilities                       142,241      133,411
Other property and equipment                           8,314        11,100
                                                       3,482,116    3,475,982
Less accumulated depletion, depreciation, and          (601,702)    (391,227)
amortization
Property and equipment, net                            2,880,414    3,084,755
Derivative instruments                                 541,423      386,957
Notes receivable - long-term portion                   5,111        2,667
Other assets, net                                      28,210       25,034
Total assets                                           $ 3,788,800  3,766,269
Liabilities and Equity
Current liabilities:
Accounts payable                                       $ 107,027    176,888
Accrued liabilities                                    35,011       42,867
Revenue distributions payable                          34,768       34,748
Advances from joint interest owners                    2,944        113
Current income tax liability                           —            15,000
Deferred income tax liability                          75,308       62,739
Total current liabilities                              255,058      332,355
Long-term liabilities:
Long-term debt                                         1,317,330    1,399,091
Deferred income tax liability                          245,327      341,506
Other long-term liabilities                            12,279       12,545
Total liabilities                                      1,829,994    2,085,497
Equity:
Members' equity                                        1,460,947    1,460,947
Accumulated earnings                                   497,859      219,825
Total equity                                           1,958,806    1,680,772
Total liabilities and equity                           $ 3,788,800  3,766,269

ANTERO RESOURCES LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Loss)
Nine Months Ended September 30, 2011 and 2012
(Unaudited)
(In thousands)
                                                         2011       2012
Revenue:
Natural gas sales                                        $ 168,797  184,493
Natural gas liquids sales                                14,224     21,602
Oil sales                                                9,224      19,527
Realized and unrealized gain on commodity derivative
instruments (including unrealized gains(losses) of      199,802    75,912
$151,520 and $(111,649) in 2011 and 2012, respectively)
Gain on sale of gathering system                         —          291,190
Total revenue                                            392,047    592,724
Operating expenses:
Lease operating expenses                                 17,487     16,123
Gathering, compression and transportation                37,331     78,888
Production taxes                                         12,141     15,191
Exploration expenses                                     5,902      8,150
Impairment of unproved properties                        6,828      4,572
Depletion, depreciation and amortization                 67,865     106,733
Accretion of asset retirement obligations                242        325
General and administrative                               21,972     31,584
Loss on sale of assets                                   8,700      —
Total operating expenses                                 178,468    261,566
Operating income                                         213,579    331,158
Other expense:
Interest expense                                         (51,268)   (71,046)
Realized and unrealized losses on interest derivative
instruments, net (including unrealizedgains of $4,212   (94)       —
in 2011)
Total other expense                                      (51,362)   (71,046)
Income from continuing operations before income taxes    162,217    260,112
and discontinued operations
Income tax expense                                       (74,941)   (112,610)
Income from continuing operations                        87,276     147,502
Discontinued operations:
Income (loss) from results of operations and sale of     39,490     (425,536)
discontinued operations
Net income (loss) and comprehensive income (loss)        $ 126,766  (278,034)
attributable to Antero equity owners

ANTERO RESOURCES LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Loss)
Three Months Ended September 30, 2011 and 2012
(Unaudited)
(In thousands)
                                                         2011       2012
Revenue:
Natural gas sales                                        $ 71,836   77,212
Natural gas liquids sales                                5,886      6,357
Oil sales                                                4,775      6,202
Realized and unrealized gain (loss) on commodity
derivative instruments (including unrealizedgains       141,114    (177,884)
(losses) of $124,567 and $(236,536) in 2011 and 2012,
respectively)
Loss on sale of gathering system                         —          (115)
Total revenue                                            223,611    (88,228)
Operating expenses:
Lease operating expenses                                 6,087      3,943
Gathering, compression and transportation                15,439     32,976
Production taxes                                         5,473      5,397
Exploration expenses                                     968        3,251
Impairment of unproved properties                        4,652      2,407
Depletion, depreciation and amortization                 29,117     41,055
Accretion of asset retirement obligations                86         116
General and administrative                               7,404      11,938
Total operating expenses                                 69,226     101,083
Operating income (loss)                                  154,385    (189,311)
Interest expense                                         (20,608)   (22,453)
Income (loss) from continuing operations before income   133,777    (211,764)
taxes and discontinued operations
Income tax (expense) benefit                             (49,578)   84,086
Income (loss) from continuing operations                 84,199     (127,678)
Discontinued operations:
Income from results of operations and sale of            26,879     —
discontinued operations
Net income (loss) and comprehensive income (loss)        $ 111,078  (127,678)
attributable to Antero equity owners

ANTERO RESOURCES LLC
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2011 and 2012
Unaudited
(In thousands)
                                                        2011        2012
Cash flows from operating activities:
Net income (loss)                                       $ 126,766   (278,034)
Adjustment to reconcile net income to net cash
provided by operating activities:
Depletion, depreciation, amortization, and accretion    68,107      107,058
Impairment of unproved properties                       6,828       4,572
Unrealized gains (losses) on derivative instruments,    (151,520)   111,649
net
Loss on sale of discontinued operations                 —           427,232
Loss (gain) on sale of assets                           8,700       (291,190)
Depletion, depreciation, accretion, amortization and
impairment of unproved properties - discontinued        50,580      36,365
operations
Unrealized losses on derivative instruments, net -      (9,224)     11,025
discontinued operations
Deferred taxes                                          74,941      83,610
Other                                                   1,561       3,603
Changes in current assets and liabilities:
Accounts receivable                                     3,736       (16,811)
Accrued revenue                                         (11,840)    17,378
Other current assets                                    957         (3,112)
Accounts payable                                        (4,505)     (9,812)
Accrued liabilities                                     21,292      7,281
Revenue distributions payable                           10,420      2,369
Advances from joint interest owners                     1,647       (2,783)
Current income taxes payable                            —           15,000
Net cash provided by operating activities               198,446     225,400
Cash flows from investing activities:
Additions to proved properties                          (105,405)   (4,451)
Additions to unproved properties                        (145,200)   (428,574)
Drilling costs                                          (383,958)   (619,344)
Additions to gathering systems and facilities           (63,110)    (58,748)
Additions to other property and equipment               (2,083)     (2,786)
Proceeds from asset sales                               15,379      816,167
Changes in other assets                                 (3,105)     2,556
Net cash used in investing activities                   (687,482)   (295,180)
Cash flows from financing activities:
Issuance of senior notes                                400,000     —
Borrowings on bank credit facility, net                 120,000     82,000
Payments of deferred financing costs                    (6,800)     —
Distribution to members                                 (28,858)    —
Other                                                   (114)       992
Net cash provided by financing activities               484,228     82,992
Net increase (decrease) in cash and cash equivalents    (4,808)     13,212
Cash and cash equivalents, beginning of period          8,988       3,343
Cash and cash equivalents, end of period                $ 4,180     16,555
Supplemental disclosure of cash flow information:
Cash paid during the period for interest                $ (39,930)  (61,930)
Supplemental disclosure of noncash investing
activities:
Increase in accounts payable for additions to           $ 6,235     73,430
properties, gathering systems and facilities

OPERATING DATA
The following table sets forth selected operating data for the three months
ended September 30, 2011 compared to the three months ended September 30,
2012:
                          ThreeMonthsEnded          Amountof
                                                                     Percent
                          September30,               Increase
                          2011          2012          (Decrease)     Change
                          (inthousands,exceptperunitandproductiondata)
Operating revenues:
Natural gas sales         $  71,836     77,212        5,376          7%
NGL sales                 5,886         6,357         471            8%
Oil sales                 4,775         6,202         1,427          30%
Realized commodity        16,547        58,652        42,105         254%
derivative gains
Unrealized commodity
derivative gains          124,567       (236,536)     (361,103)      *
(losses)
Loss on sale of assets                  (115)         (115)          *
Total operating revenues  223,611       (88,228)      (311,839)      *
Operating expenses:
Lease operating expense   6,087         3,943         (2,144)        (35)%
Gathering, compression    15,439        32,976        17,537         114%
and transportation
Production taxes          5,473         5,397         (76)           (1)%
Exploration expenses      968           3,251         2,283          236%
Impairment of unproved    4,652         2,407         (2,245)        (48)%
properties
Depletion, depreciation   29,117        41,055        11,938         41%
and amortization
Accretion of asset        86            116           30             35%
retirement obligations
General and               7,404         11,938        4,534          61%
administrative
Total operating expenses  69,226        101,083       31,857         44%
Operating income (loss)   154,385       (189,311)     (343,696)      *
Interest expense          (20,608)      (22,453)      (1,845)        9%
Income (loss) before      133,777       (211,764)     (345,541)      *
income taxes
Income tax benefit        (49,578)      84,086        133,664        *
(expense)
Income (loss) from        84,199        (127,678)     (211,877)      *
continuing operations
Income from discontinued
operations and sale of    26,879        —             (26,879)       (100)%
discontinuedoperations
Net income (loss)
attributable to Antero    $  111,078    (127,678)     (238,756)      *
members
EBITDAX                   $  91,921     95,165        3,244          4%
Production data:
Natural gas (Bcf)         17            27            10             57%
NGLs (MBbl)               138           203           65             48%
Oil (MBbl)                62            78            16             28%
Combined (Bcfe)           18            28            10             57%
Daily combined            196           308           112            57%
production (MMcfe/d)
Average prices before
effects of hedges:
Natural gas (per Mcf)     $  4.26       $   2.90      $   (1.36)     (32)%
NGLs (per Bbl)            $  42.78      $   31.28     $   (11.50)    (27)%
Oil (per Bbl)             $  77.63      $   79.30     $   1.67       2%
Combined (per Mcfe)       $  4.57       $   3.17      $   (1.40)     (31)%
Average realized prices
after effects of hedges:
Natural gas (per Mcf)     $  5.24       $   5.10      $   (0.14)     (3)%
NGLs (per Bbl)            $  42.78      $   31.28     $   (11.50)    (27)%
Oil (per Bbl)             $  77.16      $   78.60     $   1.40       2%
Combined (per Mcfe)       $  5.49       $   5.24      $   (0.25)     (5)%
Average Costs (per
Mcfe):
Lease operating costs     $  0.34       $   0.14      $   (0.20)     (59)%
Gathering, compression    $  0.86       $   1.16      $   0.30       35%
and transportation
Production taxes          $  0.30       $   0.19      $   (0.11)     (37)%
Depletion, depreciation,
amortization and          $  1.61       $   1.45      $   (0.16)     (10)%
accretion
General and               $  0.41       $   0.42      $   0.01       2%
administrative

OPERATING DATA
The following table sets forth selected operating data for the nine months
ended September 30, 2011 compared to the nine months ended September 30, 2012:
                   NinemonthsEnded                 Amountof
                                                                     Percent
                   September30,                     Increase
                   2011             2012             (Decrease)      Change
                   (inthousands,exceptperunitandproductiondata)
Operating
revenues:
Natural gas        $   168,797      184,493          15,696          9%
sales
NGL sales          14,224           21,602           7,378           52%
Oil sales          9,224            19,527           10,303          112%
Realized
commodity          48,282           187,561          139,279         288%
derivative gains
Unrealized
commodity          151,520          (111,649)        (263,169)       (174)%
derivative gains
(losses)
Gain on sale of    —                291,190          291,190         *
assets
Total operating    392,047          592,724          200,677         51%
revenues
Operating
expenses:
Lease operating    17,487           16,123           (1,364)         (8)%
expense
Gathering,
compression and    37,331           78,888           41,557          111%
transportation
Production taxes   12,141           15,191           3,050           25%
Exploration        5,902            8,150            2,248           38%
expenses
Impairment of
unproved           6,828            4,572            (2,256)         (33)%
properties
Depletion,
depreciation and   67,865           106,733          38,868          57%
amortization
Accretion of
asset retirement   242              325              83              34%
obligations
General and        21,972           31,584           9,612           44%
administrative
Loss on sale of
compressor         8,700            —                (8,700)         (100)%
station
Total operating    178,468          261,566          83,098          47%
expenses
Operating income   213,579          331,158          117,579         55%
Interest expense
and loss on        (51,362)         (71,046)         (19,684)        38%
interest rate
derivatives
Income before      162,217          260,112          97,895          60%
income taxes
Income tax         (74,941)         (112,610)        (37,669)        50%
expense
Income from
continuing         87,226           147,502          60,226          69%
operations
Income (loss)
from
discontinued
operations and     39,940           (425,536)        (464,422)       *
sale of
discontinued
operations
Net income
(loss)             $   126,766      (278,034)        (404,800)       *
attributable to
Antero members
EBITDAX            $   233,786      323,744          89,958          38%
Production data:
Natural gas        38               69               31              81%
(Bcf)
NGLs (MBbl)        315              618              303             96%
Oil (MBbl)         115              235              120             104%
Combined (Bcfe)    41               74               33              82%
Daily combined
production         150              272              122             82%
(MMcfe/d)
Average prices
before effects
of hedges:
Natural gas (per   $   4.40         $    2.66        $    (1.74)     (40)%
Mcf)
NGLs (per Bbl)     $   45.21        $    34.95       $    (10.26)    (23)%
Oil (per Bbl)      $   80.17        $    82.93       $    2.76       3%
Combined (per      $   4.70         $    3.03        $    (1.67)     (36)%
Mcfe)
Average realized
prices after
effects of
hedges:
Natural gas (per   $   5.67         $    5.38        $    (0.29)     (5)%
Mcf)
NGls (per Bbl)     $   45.21        $    34.95       $    (10.26)    (23)%
Oil (per Bbl)      $   75.36        $    80.83       $    5.47       7%
Combined (per      $   5.88         $    5.55        $    (0.33)     (6)%
Mcfe)
Average Costs
(per Mcfe):
Lease operating    $   0.43         $    0.22        $    (0.21)     (49)%
costs
Gathering,
compression and    $   0.91         $    1.06        $    0.15       16%
transportation
Production taxes   $   0.30         $    0.20        $    (0.10)     (33)%
Depletion,
depreciation,      $   1.66         $    1.43        $    (0.23)     (14)%
amortization and
accretion
General and        $   0.54         $    0.42        $    (0.12)     (22)%
administrative



SOURCE Antero Resources

Website: http://www.anteroresources.com
Contact: Chad Green, Finance Director, +1-303-357-7339,
cgreen@anteroresources.com
 
Press spacebar to pause and continue. Press esc to stop.