Antero Resources Reports First Quarter 2013 Results

             Antero Resources Reports First Quarter 2013 Results

PR Newswire

DENVER, May 13, 2013

DENVER, May13, 2013 /PRNewswire/ --

Highlights:

  oNet daily production averaged 383 MMcfe/d, up 114% over first quarter 2012
    production from continuing operations
  oNet daily production was up 21% sequentially from net daily production
    from continuing operations in the fourth quarter of 2012
  oNet daily liquids production was 2,392 Bbl/d, up 166% sequentially from
    net daily liquids production from continuing operations in the fourth
    quarter of 2012
  oReported GAAP loss was $48 million and adjusted net income was $42 million
  oEBITDAX was $119 million, up 76% over EBITDAX from continuing operations
    for the prior year quarter
  oCurrent estimated net production is 480 MMcfe/d including 4,400 Bbl/d of
    NGLs and condensate
  o16 Antero operated drilling rigs currently running in Marcellus and Utica
  oNatural gas hedge position increased by 4% to 977 Bcfe hedged through 2018
    at $4.87/MMBtu NYMEX-equivalent
  oCredit facility borrowing base increased by 43% to $1.75 billion in May
    2013 redetermination

Antero Resources today released its first quarter 2013 results. The relevant
financial statements are included in Antero Resources LLC's Quarterly Report
on Form10-Q for the quarterly period ended March31, 2013, which has been
filed with the Securities and Exchange Commission.

Recent Developments

Effective May 9, 2013 Antero's borrowing base under its bank credit facility
was increased by $530 million to a new total of $1.75 billion. In addition,
lender commitments under the facility were increased by $500 million to $1.2
billion. The $1.2 billion commitment can be expanded to the full $1.75
billion borrowing base upon bank approval. Antero's bank group is co-led by
JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A.

As of March 31, 2013, Antero had $404 million drawn under the credit facility
and $32 million in letters of credit outstanding, resulting in $764 million of
readily available liquidity and over $1.3 billion of unused borrowing base
capacity. The next borrowing base redetermination is expected to occur in
October 2013. Antero has $25 million of debt maturing prior to the May 2016
maturity of the credit facility.

Financial Results

Net production for the first quarter of 2013 increased to 34 Bcfe, a 114%
increase over net production from continuing operations in the first quarter
of 2012. First quarter 2013 net production increased 21% sequentially from
net production from continuing operations of 29 Bcfe in the fourth quarter
2012. The sequential net production increase was primarily driven by
production from 24 new wells brought on line in the first quarter of 2013 in
the Marcellus Shale. Net production of 34 Bcfe for the first quarter of 2013
was comprised of 33 Bcf of natural gas, 205,000 barrels of NGLs and 10,000
barrels of oil. Net daily production averaged 383 MMcfe/d for the first
quarter of 2013, and was comprised of 369 MMcf/d of natural gas (96%), 2,279
Bbl/d of NGLs (3%) and 113 Bbl/d of crude oil (1%). First quarter 2013 net
daily liquids production of 2,392 Bbl/d increased 166% sequentially from net
daily liquids production from continuing operations in the fourth quarter of
2012.

Revenues for the first quarter of 2013 were $61 million, a decrease of 89%
compared to the first quarter of 2012. Revenues for the first quarter of 2012
included a $291 million gain on sale of a portion of our Marcellus gathering
assets as well as a $170 million unrealized gain on commodity derivative
instruments while the first quarter of 2013 included a $120 million unrealized
loss on commodity derivatives. Liquids production (NGLs and oil) contributed
9% of oil, natural gas liquids and gas sales before commodity hedges compared
to less than 1% during the first quarter of 2012. Non-GAAP adjusted net
revenues increased 97% to $182 million (including cash-settled derivatives but
excluding the gain on sale of Marcellus gathering assets and rights and
unrealized derivative gains and losses). Average natural gas prices before
hedges increased 31% from the prior-year quarter to $3.67 per Mcf and average
natural gas-equivalent prices before hedges increased 38% to $3.87 per Mcfe.
Average realized gas prices including hedges decreased by 10% to $5.13 per Mcf
for the first quarter of 2013 as compared to the first quarter of 2012.
Average gas-equivalent prices including NGLs, oil and hedges, decreased by 8%
to $5.26 per Mcfe for the first quarter of 2013 as compared to the first
quarter of 2012. For the first quarter of 2013, Antero realized natural gas
hedging gains of $1.40 per Mcfe. For a reconciliation of adjusted net revenue
to operating revenues, the most comparable GAAP measure, please read "Non-GAAP
Financial Measures".

The Company had a net loss of $48 million on a GAAP basis for the first
quarter of 2013, including $120million of unrealized losses on commodity
derivatives as we realized previously unrealized gains and as prices increased
during the quarter and a $30 million income tax benefit driven by the
unrealized hedge losses. Excluding the unrealized loss on commodity
derivatives, the income tax benefit and the gain on asset sale in the prior
year, adjusted net income, a non-GAAP measure, was $42 million for the first
quarter of 2013 as compared to $24 million for the prior year quarter. For a
description of adjusted net income and reconciliation to net income, please
read "Non-GAAP Financial Measures".

For the first quarter of 2013, cash flow from continuing operations before
changes in working capital, a non-GAAP financial measure, increased 103% from
the prior-year quarter to $85million. EBITDAX from continuing operations of
$119million for the first quarter of 2013 was 76% higher than the prior-year
quarter due to increased production and revenues. For a description of
EBITDAX and cash flow from continuing 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 first quarter of 2013 was $1.47
per Mcfe compared to $0.99 per Mcfe in the prior year quarter. The increase
was primarily driven by the increase in gathering, compression and
transportation costs due to the inclusion of gathering fees in the first
quarter of 2013 in the Crestwood area of dedication. Those fees were not
included in the first quarter of 2012 and were instead treated as a purchase
price adjustment when the Marcellus midstream transaction closed.
Additionally, the rich gas portion of the Company's gas production stream was
processed for a fee during the first quarter of 2013 following the opening of
the MarkWest Sherwood I plant in October 2012, while gas was not processed in
2012. Per unit depreciation, depletion and amortization expense increased 18%
from the prior year quarter to $1.18 per Mcfe, primarily driven by higher
depreciation on gas gathering costs as the Company continued to build out its
gas gathering system in the rich gas areas of the Marcellus and Utica
projects. On a per unit basis, general and administrative expense for the
first quarter of 2013 was $0.37 per Mcfe, a 35% decline from the first quarter
of 2012, primarily driven by the increase in gas-equivalent production.

Antero Operations

All operational figures are as of the date of this release unless otherwise
noted.

During the month of April 2013, Antero estimates that net production averaged
over 435 MMcfe/d including 3,600 Bbl/d of liquids. Antero's current gross
operated production is 561 MMcf/d, and estimated net daily production is 480
MMcfe/d, including non-operated production, NGLs and oil. Antero has an
additional estimated 120 MMcfe/d of net production in the Marcellus and Utica
Shale associated with nine new horizontal wells that are shut-in waiting on
infrastructure and a number of producing wells that are constrained and
waiting on additional pipeline, compression or processing facilities. Several
large infrastructure projects in the Marcellus and Utica are expected to be
completed late in the second quarter and early in the third quarter of 2013.
The estimated current net daily production is comprised of 457 MMcf/d of
natural gas and 4,400 Bbl/d of NGLs and condensate. During the first three
months of 2013, Antero completed 25 gross (25 net) operated wells in the
Marcellus and currently has 45 gross (44 net) operated wells in various stages
of drilling, completion, or waiting on completion in the Marcellus and Utica
Shale projects.

Marcellus Shale — Antero is currently operating 14 drilling rigs in the
Marcellus Shale play, including three intermediate rigs that will drill the
vertical section of some horizontal wells to the kick-off point at
approximately 6,000 feet. All 14 of these rigs are drilling in northern West
Virginia. The Company plans to add a 15^th drilling rig late in the second
quarter of 2013. Currently, Antero has 560 MMcf/d of gross operated
production in the Marcellus Shale virtually all of which is from 160
horizontal wells, resulting in 479 MMcfe/d of estimated net production. The
479 MMcfe/d of estimated net production is comprised of approximately 456
MMcf/d of tailgate gas, 4,200 Bbl/d of NGLs and 100 Bbl/d of condensate.
Antero has 26 horizontal wells either in the process of completing or waiting
on completion and has two dedicated frac crews currently working in West
Virginia and several spot frac crews available as needed. The 160 horizontal
Marcellus wells that Antero has completed and placed online to date have an
average 24-hour peak rate of 13.7 MMcf/d, an average EUR of 10.5 Bcfe assuming
ethane rejection and an average lateral length of approximately 7,000 feet.
In the first quarter of 2013, Antero drilled and completed 25 horizontal
Marcellus Shale wells with an average 24-hour peak rate of 13.2 MMcf/d and an
average lateral length of approximately 7,700 feet.

MarkWest Energy Partners, L.P. (MarkWest) recently placed on line a second
cryogenic processing facility, Sherwood II, at the Sherwood processing
facility located in Doddridge County, West Virginia resulting in 400 MMcf/d of
total processing capacity. Sherwood I was running at full capacity of 200
MMcf/d when Sherwood II was brought on line. Antero has committed to a third
200 MMcf/d gas processing plant, Sherwood III, which is expected to go on line
in the fourth quarter of 2013, and a fourth 200 MMcf/d plant, Sherwood IV,
expected to go online in the second quarter of 2014. These commitments
provide Antero access to a total of 800 MMcf/d of Marcellus gas processing
capacity.

Antero recently completed compression facilities located in Ritchie County
that add 55 MMcf/d of compression capacity and will connect highly rich
Ritchie County wells to the Sherwood processing facilities. Additionally,
Antero has signed agreements with various third parties to provide compression
services in central and eastern Doddridge County that will add a combined
total of 240 MMcf/d of incremental capacity during the course of 2013. This
additional capacity is expected to relieve an estimated 70 MMcfe/d of
currently constrained Marcellus production by the third quarter 2013.

Antero is planning the construction of a 20" low pressure gathering line
connecting third party compression located in central Doddridge County to the
Sherwood processing facilities to allow for incremental rich gas gathering
capacity. This low pressure pipeline, expected to go into service in the
fourth quarter of 2013, is ultimately expected to be converted to a high
pressure gathering line serving central Doddridge County. Additionally,
Antero is constructing a 16" low pressure gathering line in eastern Ritchie
and southern Tyler Counties to further expand our gathering infrastructure
into higher-BTU areas to allow for delivery of highly rich gas to the Sherwood
processing facility. This line is expected to go in service by the third
quarter of 2013.

Antero has 312,000 net acres in the Marcellus Shale play of which only 19% was
associated with proved reserves at year-end 2012. Approximately 80% of
Antero's Marcellus leasehold is prospective for processable rich gas.

Utica Shale — Antero is currently operating two drilling rigs in the rich
gas/condensate window of the southern core of the Utica Shale play in Ohio.
In December 2012, Antero placed its first well on line which is currently
producing to sales. Additionally, Antero has an estimated 35 MMcfe/d of net
production including approximately 2,300 Bbl/d of NGLs and condensate that is
shut-in waiting on infrastructure associated with two wells completed during
2012 and three recently completed wells. In total, Antero has completed six
horizontal wells in the Utica play and has drilled an additional four wells,
two of which are in the process of completing. The three wells completed in
2013 were drilled on one pad and are the Company's first increased density
pilot in the Utica.

Antero has an agreement with MarkWest to provide processing, fractionation and
NGL marketing services in the liquids rich/condensate window of the Utica
Shale play. As a result, MarkWest is currently constructing the Seneca
processing complex in Noble County, Ohio to process Antero's rich gas
production. Seneca I, a 200 MMcf/d cryogenic gas processing facility, is
expected to begin operations by early fourth quarter 2013. The processing
agreement provides for the construction of an additional 200 MMcf/d facility,
Seneca II, which is expected to be installed in the fourth quarter 2013.

Additionally, MarkWest is building a high pressure lateral connecting the
Seneca complex to its existing Cadiz processing complex in Harrison County,
Ohio in order to provide Antero preferred access to 185 MMcf/d of combined
refrigeration and cryogenic natural gas processing capacity. This lateral is
expected to be on line by the end of the second quarter 2013. Antero is an
anchor producer and will have up to 50 MMcf/d of preferred processing capacity
at Cadiz and expects to have sufficient interruptible overflow capacity at
Cadiz until Seneca I becomes operational. Antero plans to place several
additional wells on line late in the second quarter of 2013 when the Cadiz
processing capacity becomes available. Antero is in the process of laying
both low and high pressure gathering pipeline to transport its initial Utica
production to connect with the MarkWest high pressure lateral to the Cadiz
processing complex and eventually to the Seneca processing complex.

Antero has signed a compression and condensate stabilization agreement with a
third party to provide and operate three compressor stations in Noble and
Monroe Counties with a combined capacity of 300 MMcf/d as well as three
condensate stabilization facilities with a combined capacity of 12,000 Bbl/d,
all of which are fully dedicated to Antero. The first two compressor stations
and condensate stabilization facilities are expected to start up by early
fourth quarter of 2013 while the third compressor station and condensate
stabilization facility is expected to start up late in the fourth quarter of
2013.

Antero has assembled over 92,000 net acres of leasehold in the southern core
of the Utica Shale play of eastern Ohio. Over 90% of the acreage is believed
to be located in the rich gas/condensate window.

Commodity Hedges

Antero has hedged 977 Bcfe of future production using fixed price swaps
covering the period from April 1, 2013 through December 2018 at an average
NYMEX‑equivalent price of $4.87 per MMBtu. Over 80% of Antero's estimated
2013 natural gas production is hedged at a NYMEX‑equivalent price of $4.71 per
MMBtu. Approximately 21% of Antero's financial hedges are NYMEX hedges and
79% are tied to the Appalachian Basin. For the NYMEX hedges, Antero
physically delivers its hedged gas through backhaul firm transportation to
Henry Hub, the index for NYMEX pricing, which eliminates basis risk on these
NYMEX hedges. For presentation purposes, basin prices are converted by Antero
to NYMEX‑equivalent prices using current basis differentials in the
over-the-counter futures market. Antero has 11 different counterparties to
its hedge contracts, all but one of which are lenders under Antero's bank
credit facility.

The following table summarizes Antero's hedge positions held as of the date of
this release:

               Natural gas  NYMEX-
               equivalent
                            Equivalent
Calendar Year  MMBtu/day    index price
2013           456,520      $4.71
2014           380,000      $5.22
2015           390,000      $5.39
2016           522,500      $4.99
2017           610,000      $4.38
2018           430,000      $4.78

Non-GAAP Financial Measures

Adjusted net revenue as set forth in this release represents 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 adjusted net revenues:

                                                Threemonthsended

                                                March 31,
                                                2012       2013
Total operating revenues                        $ 553,741  $ 61,454
Unrealized commodity derivative (gains) losses  (170,402)  120,072
Gain on sale of gathering system                (291,305)  —
Adjusted net revenues                           $ 92,034   $ 181,526

Adjusted net income as set forth in this release represents income from
operations before deferred income taxes, adjusted for certain non-cash items.
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 under 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

                                                March 31,
                                                2012       2013
Net income (loss) from continuing operations    $ 287,555  $ (47,997)
Unrealized commodity derivative (gains) losses  (170,402)  120,072
Gain on sale of gathering system                (291,305)  —
Provision (benefit) for income taxes            198,411    (30,400)
Adjusted net income                             $ 24,259   $ 41,675

Cash flow from continuing operations before changes in working capital as
presented in this release represents net cash provided by operations before
changes in working capital and exploration expense. Cash flow from continuing
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 continuing 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 continuing operations before
changes in working capital is not a measure of financial performance under
GAAP and should not be considered in isolation or as a substitute for cash
flows from continuing 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 continuing operations before changes in working capital as used
in this release:

                                                         Threemonthsended

                                                         March 31,
                                                         2012       2013
Net cash provided by operating activities                $ 100,491  $ 110,207
Net change in working capital                            (20,694)   (24,961)
Cash flow from operations before changes                   79,797     85,246
inworkingcapital
Cash flow from discontinued operations before changes      37,849     —
inworkingcapital
Cash flow from continuing operations before changes      $ 41,948   $ 85,246
inworkingcapital

EBITDAX is a non-GAAP financial measure that we define as net income (loss)
before interest expense or interest income, realized and unrealized gains or
losses on interest rate derivative instruments, taxes, impairments, depletion,
depreciation, amortization, exploration expense, unrealized commodity hedge
gains or losses, franchise taxes, stock compensation, business acquisition and
gain or loss on sale of assets. 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 may be required for debt service,
capital expenditures, working capital, income taxes, franchise taxes,
exploration expenses, and other commitments and obligations. However, our
management team believes EBITDAX is useful to an investor in evaluating our
financial performance because this measure:

  ois widely used by investors in the oil and gas 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;
  ohelps 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
  ois 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 covenants under our credit facility and the indentures
    governing our 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 months ended March 31, 2012 and 2013:

                                                     Threemonthsended

                                                     March 31,
                                                     2012       2013
Net income (loss) from continuing operations         $ 287,555  $ (47,997)
Unrealized loss (gain) on commodity derivative
                                                     (170,402)  120,072
contracts
Interest expense                                     24,370     29,928
Provision (benefit) for income taxes                 198,411    (30,400)
Depreciation, depletion, amortization and accretion  16,132     40,628
Impairment of unproved properties                    286        1,556
Exploration expense                                  1,804      4,362
Gain on sale of gathering assets                     (291,305)  --
Other                                                800        600
EBITDAX from continuing operations                     67,651     118,749
EBITAX from discontinued operations                    54,689     --
                                                     $ 122,340    118,749

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. 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, 2012.

ANTERO RESOURCES LLC
Condensed Consolidated Balance Sheets
December 31, 2012 and March 31, 2013
(Unaudited)
(In thousands)
                                                        2012         2013
Assets
Current assets:
Cash and cash equivalents                               $ 18,989     4,806
Accounts receivable — trade, net of allowance for
doubtful accounts of $174 and $10 in 2012 and 2013,     21,296       31,840
respectively
Notes receivable — short-term portion                   4,555        5,222
Accrued revenue                                         46,669       52,618
Derivative instruments                                  160,579      89,751
Other                                                   22,518       10,807
Total current assets                                    274,606      195,044
Property and equipment:
Natural gas properties, at cost (successful efforts
method):
Unproved properties                                     1,243,237    1,392,152
Producing properties                                    1,689,132    2,107,151
Gathering systems and facilities                        168,930      238,234
Other property and equipment                            9,517        10,238
                                                        3,110,816    3,747,775
Less accumulated depletion, depreciation, and           (173,343)    (213,707)
amortization
Property and equipment, net                             2,937,473    3,534,068
Derivative instruments                                  371,436      329,575
Notes receivable — long-term portion                    2,667        444
Other assets, net                                       32,611       33,748
Total assets                                            $ 3,618,793  4,092,879
Liabilities and Equity
Current liabilities:
Accounts payable                                        $ 181,478    267,238
Accrued liabilities                                     61,161       88,371
Derivative instruments                                  —            7,382
Revenue distributions payable                           46,037       53,074
Current portion of long-term debt                       25,000       25,000
Deferred income tax liability                           62,620       32,039
Total current liabilities                               376,296      473,104
Long-term liabilities:
Long-term debt                                          1,444,058    1,862,530
Deferred income tax liability                           91,692       91,873
Other long-term liabilities                             33,010       39,632
Total liabilities                                       1,945,056    2,467,139
Equity:
Members' equity                                         1,460,947    1,460,947
Accumulated earnings                                    212,790      164,793
Total equity                                            1,673,737    1,625,740
Total liabilities and equity                            $ 3,618,793  4,092,879

ANTERO RESOURCES LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Loss)
Three Months ended March 31, 2012 and 2013
(Unaudited)
(In thousands)
                                                           2012       2013
Revenue:
Natural gas sales                                          $ 45,134   121,946
Natural gas liquids sales                                  —          10,572
Oil sales                                                  48         877
Realized and unrealized gain (loss) on derivative
instruments (including unrealized gains (losses) of        217,254    (71,941)
$170,402 and $(120,072) in 2012 and 2013, respectively)
Gain on sale of assets                                     291,305    —
Total revenue                                              553,741    61,454
Operating expenses:
Lease operating expenses                                   693        1,071
Gathering, compression and transportation                  11,575     40,970
Production taxes                                           3,742      8,619
Exploration expenses                                       1,804      4,362
Impairment of unproved properties                          286        1,556
Depletion, depreciation and amortization                   16,110     40,364
Accretion of asset retirement obligations                  22         264
General and administrative                                 9,173      12,717
Total operating expenses                                   43,405     109,923
Operating income (loss)                                    510,336    (48,469)
Interest expense                                           (24,370)   (29,928)
Income (loss) from continuing operations before income     485,966    (78,397)
taxes and discontinued operations
Income tax (expense) benefit                               (198,411)  30,400
Income (loss) from continuing operations                   287,555    (47,997)
Discontinued operations:
Income from results of operations and sale of              40,176     —
discontinued operations
Net income (loss) and comprehensive income (loss)          $ 327,731  (47,997)
attributable to Antero equity owners

ANTERO RESOURCES LLC
Condensed Consolidated Statements of Cash Flows
Three Months ended March 31, 2012 and 2013
Unaudited
(In thousands)
                                                         2012        2013
Cash flows from operating activities:
Net income (loss)                                        $ 327,731   (47,997)
Adjustment to reconcile net income to net cash provided
by operating activities:
Depletion, depreciation, amortization, and accretion     16,110      40,628
Impairment of unproved properties                        286         1,556
Unrealized (gains) losses on derivative instruments,     (170,402)   120,072
net
Gain on sale of assets                                   (291,305)   —
Deferred income tax expense (benefit)                    181,911     (30,400)
Depletion, depreciation, amortization, accretion, and
impairment of unproved properties — discontinued         32,418      —
operations
Unrealized losses on derivative instruments, net —       (32,561)    —
discontinued operations
Deferred income tax expense (benefit) — discontinued     14,444      —
operations
Other                                                    1,165       1,387
Changes in current assets and liabilities:
Accounts receivable                                      (14,061)    (10,545)
Accrued revenue                                          10,116      (5,948)
Other current assets                                     313         11,711
Accounts payable                                         (2,864)     (1,584)
Accrued liabilities                                      7,692       24,290
Revenue distributions payable                            2,998       7,037
Other                                                    16,500      —
Net cash provided by operating activities                100,491     110,207
Cash flows from investing activities:
Additions to unproved properties                         (64,181)    (148,972)
Drilling costs                                           (164,288)   (343,985)
Additions to gathering systems and facilities            (23,807)    (55,975)
Additions to other property and equipment                (270)       (721)
Proceeds from asset sales                                376,805     —
Changes in other assets                                  440         1,768
Net cash from (used in) investing activities             124,699     (547,885)
Cash flows from financing activities:
Issuance of senior notes                                 —           231,750
Borrowings on bank credit facility, net                  (222,000)   187,000
Payments of deferred financing costs                     —           (3,014)
Other                                                    (40)        7,759
Net cash provided by (used in) financing activities      (222,040)   423,495
Net increase (decrease) in cash and cash equivalents     3,150       (14,183)
Cash and cash equivalents, beginning of period           3,343       18,989
Cash and cash equivalents, end of period                 $ 6,493     4,806
Supplemental disclosure of cash flow information:
Cash paid during the period for interest                 $ (17,288)  (16,160)
Supplemental disclosure of noncash investing
activities:
Increase in accounts payable for additions to            $ 7,146     88,843
properties, gathering systems and facilities

Operating Data
The following table sets forth selected operating data (as recast for
discontinued operations) for the three months ended March 31, 2012 compared to
the three months ended March 31, 2013:
                 ThreeMonthsEnded             Amountof

                 March31                       Increase
                 2012             2013          (Decrease)     PercentChange
                 (inthousands,exceptperunitandproductiondata)
Operating
revenues:
Natural gas      $   45,134       $  121,946    $   76,812     170%
sales
NGL sales        —                10,572        10,572         *
Oil sales        48               877           829            1,727%
Realized gains
on derivative    46,852           48,131        1,279          3%
instruments
Unrealized gains
(losses) on      170,402          (120,072)     (290,474)      *
derivative
instruments
Gain on sale of  291,305          —             (291,305)      *
assets
Total operating  553,741          61,454        (492,287)      *
revenues
Operating
expenses:
Lease operating  693              1,071         378            55%
expense
Gathering,
compression, and 11,575           40,970        29,395         254%
transportation
Production taxes 3,742            8,619         4,877          130%
Exploration      1,804            4,362         2,558          142%
expenses
Impairment of
unproved         286              1,556         1,270          444%
properties
Depletion,
depreciation,    16,110           40,364        24,254         151%
and amortization
Accretion of
asset retirement 22               264           242            1,100%
obligations
General and      9,173            12,717        3,544          39%
administrative
Total operating  43,405           109,923       66,518         151%
expenses
Operating income 510,336          (48,469)      (558,805)      *
(loss)
Interest expense (24,370)         (29,928)      (5,558)        23%
Income (loss)
before income    485,966          (78,397)      (564,363)      *
taxes
Income tax
benefit          (198,411)        30,400        228,811        *
(expense)
Income from
continuing       287,555          (47,997)      (335,552)      *
operations
Income from
discontinued     40,176           —             (40,176)       *
operations
Net income
(loss)           $   327,731      (47,997)      (375,728)      *
attributable to
Antero members
EBITDAX from
continuing       $   67,651       118,749       51,098         76%
operations
Total EBITDAX    $   122,340      118,749       (3,591)        (3)%
Production data:
Natural gas      16               33            17             106%
(Bcf)
NGLs (MBbl)      —                205           205            *
Oil (MBbl)       1                10            9              900%
Combined (Bcfe)  16               34            18             114%
Daily combined
production       177              383           206            114%
(MMcfe/d)
Average prices
before effects
of hedges :
Natural gas (per $   2.80         $  3.67       $   0.87       31%
Mcf)
NGLs (per Bbl)   $   —            $  51.55      $   *          *
Oil (per Bbl)    $   102.13       $  86.12      $   (16.01)    (16)%
Combined (per    $   2.80         $  3.87       $   1.07       38%
Mcfe)
Average realized
prices after
effects of
hedges :
Natural gas (per $   5.70         $  5.13       $   (0.57)     (10)%
Mcf)
NGLs (per Bbl)   $   —            $  51.55      $   *          *
Oil (per Bbl)    $   102.13       $  75.41      $   (26.72)    (26)%
Combined (per    $   5.70         $  5.26       $   (0.44)     (8)%
Mcfe)
Average costs
(per Mcfe):
Lease operating  $   0.04         $  0.03       $   (0.01)     (25)%
costs
Gathering,
compression, and $   0.72         $  1.19       $   0.47       65%
transportation
Production taxes $   0.23         $  0.25       $   0.02       9%
Depletion,
depreciation,    $   1.00         $  1.18       $   0.18       18%
amortization,
and accretion
General and      $   0.57         $  0.37       $   (0.20)     (35)%
administrative

SOURCE Antero Resources

Website: http://www.anteroresources.com
Contact: Chad Green, Finance Director, (303) 357-7339,
cgreen@anteroresources.com.