Market Overview - The US equity market experienced a rally in the third quarter of 2025, with the S&P 500 Index increasing by 8.12% [1] - Bonds also performed well, with the Bloomberg U.S. Aggregate Bond Index rising by 2.03% during the same period [1] Performance Analysis - The composite return for the quarter was 7.22% gross of fees and 7.10% net of fees, which underperformed the S&P 500 Index's gain of 8.12% [1] - The underperformance of the strategy was attributed to security selection [1] Company Focus: Antero Resources Corporation - Antero Resources Corporation (NYSE:AR) is an oil and natural gas development and exploration company based in Denver, Colorado [2] - As of November 13, 2025, Antero Resources' stock closed at $34.34 per share, with a one-month return of 11.57% and a 52-week gain of 12.63% [2] - The market capitalization of Antero Resources Corporation is $10.594 billion [2] Performance Challenges - Antero Resources Corporation detracted from performance in the third quarter due to lower natural gas prices, which caused earnings volatility due to the company's unhedged production profile [3] - Pipeline constraints and seasonal infrastructure limitations led to Antero's gas realizations trading at steep discounts to NYMEX benchmarks, despite strong operational execution [3] Long-term Outlook - The long-term outlook for natural gas demand remains positive, driven by increasing demand for natural gas for AI data center power generation and growing U.S. LNG export infrastructure [3] Hedge Fund Interest - Antero Resources Corporation is not among the 30 most popular stocks among hedge funds, with 72 hedge fund portfolios holding the stock at the end of the second quarter, up from 67 in the previous quarter [4] - While Antero Resources has investment potential, certain AI stocks are believed to offer greater upside potential and less downside risk [4]

Core Insights - Antero Resources Corporation (AR) experienced a 3.8% increase in stock price despite reporting lower-than-expected earnings, indicating strong natural gas demand driven by data centers and LNG exports [1][9] Financial Performance - Adjusted earnings for Q3 2025 were 15 cents per share, missing the Zacks Consensus Estimate of 22 cents, but improved from a loss of 12 cents in the same quarter last year [1] - Total quarterly revenues reached $1,213.99 million, surpassing the Zacks Consensus Estimate of $1,183.64 million and increasing from $1,055.9 million year-over-year [2] Production Metrics - Total production for Q3 was 315 billion cubic feet equivalent (Bcfe), slightly up from 313 Bcfe a year ago and exceeding the estimate of 314 Bcfe [4] - Natural gas production accounted for 64% of total production, totaling 202 Bcf, a 1% increase from 200 Bcf year-over-year [4] - Oil production decreased by 28% to 619 thousand barrels (MBbls) from 856 MBbls in the previous year [5] Price Realization - Weighted natural-gas-equivalent price realization was $3.59 per thousand cubic feet equivalent (Mcfe), up from $3.14 a year ago [6] - Realized prices for natural gas increased by 46% to $3.12 per Mcf from $2.13 year-over-year [6] - Oil price realization was $50.65 per barrel (Bbl), down from $61.59 a year ago [6] Operating Expenses - Total operating expenses rose to $1,095.9 million from $1,080.9 million in the previous year [8] - Average lease operating costs increased by 11% to 10 cents per Mcfe [10] Capital Expenditures and Financials - Antero Resources spent $172 million on drilling and completion operations in Q3 [11] - The company reported a long-term debt of $1.3 billion as of June 30, 2025 [11] Future Outlook - Production guidance for 2025 is projected between 3.4-3.45 Bcfe/d [12] - The full-year drilling and completion capital budget is estimated at $650 million to $675 million [12]

Core Insights - Antero Resources Corp. has shown strong performance, with a 7.21% increase in stock price, closing at $33.14, driven by rising natural gas prices and solid earnings in Q3 [1][4] - The benchmark Nymex index for natural gas rose by 3.56% to $4.27/MMBtu, indicating expectations of increased demand due to the upcoming winter season [2] - Seasonal forecasts suggest a heightened risk of cold weather, which is expected to support natural gas pricing [3] Financial Performance - Antero Resources reported a net income of $76.18 million in Q3, a significant turnaround from a net loss of $35.3 million in the same quarter last year [4] - Revenues increased by 15% year-over-year, reaching $1.2 billion compared to $1.05 billion in the previous year [4] Production Outlook - The company aims to achieve full-year production at the upper end of its forecast, targeting 3.4 to 3.45 billion cubic feet equivalent per day (Bcfe/d) [5] - Recent acquisitions in the Marcellus acreage site in West Virginia for $260 million have contributed to the anticipated increase in production [5]

Group 1 - Antero Resources Corporation (NYSE:AR) is highlighted as a strong stock to buy and hold for the next decade, with a price target of $39 set by Wells Fargo analyst Sam Margolin [1][2] - Margolin anticipates structural changes in the US gas markets over the next decade, which are expected to raise the price floor and reduce risk, positively impacting equities [1] - Morgan Stanley analyst Devin McDermott recently lowered the price target for Antero Resources from $47 to $44 while maintaining an Overweight rating [2] Group 2 - Antero Resources is an independent oil and natural gas company engaged in the development, production, exploration, and acquisition of natural gas, NGLs, and oil properties in the US [3]

Core Insights - Diamond Hill Capital's "Select Fund" underperformed the Russell 3000 Index in Q3 2025, returning 4.98% compared to the index's 8% gain [1] - Antero Resources Corporation (NYSE:AR) was highlighted as a significant stock in the fund's portfolio, with a market capitalization of $9.467 billion [2] - The stock of Antero Resources experienced a one-month decline of 9.87% but had a 52-week gain of 17.58% [2] Company Performance - Antero Resources faced challenges in Q3 2025 due to seasonally lower natural gas prices and the announcement of a new CEO, which contributed to uncertainty [3] - The company was not among the top 30 most popular stocks among hedge funds, although it saw an increase in hedge fund interest from 67 to 72 portfolios [4] - Diamond Hill Capital initiated a position in Antero Resources in the previous quarter, indicating a strategic investment decision [5]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Financial Data and Key Metrics Changes - The company generated over $90 million in free cash flow during the quarter, with nearly $600 million year-to-date [22] - The free cash flow yield is locked in at 6% to 9% at natural gas prices between $2 and $3, with a break-even at $1.75 per MCF for 2026 [25][26] - The company paid down approximately $180 million in debt and repurchased $163 million in stock year-to-date [22] Business Line Data and Key Metrics Changes - The company achieved a record completion performance, averaging 14.5 stages per day and nearly 5,000 feet on the completion side [8] - The Marcellus Core Fairway expansion is driven by strong well performance and ongoing organic leasing efforts [9] - The company has hedged 24% of expected natural gas volumes in 2026 at $3.82 per MMBtu [25] Market Data and Key Metrics Changes - NGL production growth in the U.S. is expected to slow due to low oil prices and reduced rig counts, particularly in the Permian Basin [11][12] - Propane exports have increased by over 120,000 barrels a day year-to-date, averaging 1.85 million barrels a day [13] - LNG export demand is projected to increase by 4.5 Bcf from the beginning of 2025 to the end of 2025, driven by the Plaquemines LNG facility [17] Company Strategy and Development Direction - The company is focused on expanding its core Marcellus position in West Virginia through bolt-on transactions and organic leasing [6] - The strategic initiatives aim to capitalize on structural demand changes in the natural gas market, particularly from LNG exports and power generation [5][6] - The company plans to maintain a disciplined approach to transactions, focusing on accretive opportunities that enhance free cash flow and net asset value per share [22][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the natural gas market, citing significant demand growth driven by LNG exports and new data centers [5] - The company is well-positioned to respond to regional demand increases and has a substantial inventory for future growth opportunities [26] - Management emphasized the importance of patience in capitalizing on market opportunities, particularly in the context of LNG and regional demand [58] Other Important Information - The company has a dominant position in West Virginia, producing over 40% of the state's natural gas [64] - The company is exploring opportunities for data center cooling and natural gas-fired power generation in the region [56][58] Q&A Session Summary Question: What was the catalyst for commencing drilling in Harrison County? - The catalyst was increased local demand related to data centers and power deals [30] Question: How does the higher production level impact maintenance CapEx? - A 3% increase in production is expected to lead to a similar increase in maintenance capital, approximately $20 million [37] Question: What are the expectations for average lateral length in 2026? - Average lateral length is expected to increase to 14,000 feet, up from the low 13,000 feet this year [44] Question: What is the strategy regarding hedging? - The strategy involves locking in above 5% free cash flow yields while maintaining exposure to upside [50] Question: What are the expectations for the proof-of-concept pad in Harrison County? - The expectation is for a 50% improvement in well performance compared to historical averages [55] Question: What is the company's approach to M&A and asset sales? - The company is evaluating opportunities for bolt-on transactions and is encouraged by the market for its Ohio assets [66][90]

Financial Data and Key Metrics Changes - The company reported attractive free cash flow of over $90 million for the quarter, with year-to-date free cash flow reaching almost $600 million [22][24] - The production level increased by 3%, which is expected to result in a proportional increase in maintenance capital by approximately $20 million from the previous $675 million level [37][38] Business Line Data and Key Metrics Changes - The company achieved a record average of 14.5 completion stages per day, with significant improvements in drilling and completion results [8][10] - The company is expanding its Marcellus Core position through both bolt-on transactions and organic leasing, with strong well performance driving this expansion [9][10] Market Data and Key Metrics Changes - NGL production growth in the U.S. is forecasted to slow down due to low oil prices and reduced rig counts, particularly in the Permian Basin [11][12] - Propane exports have increased by over 120,000 barrels per day year-to-date, averaging 1.85 million barrels per day compared to 1.72 million barrels per day for the same period last year [13][14] Company Strategy and Development Direction - The company is focused on capitalizing on structural demand changes in the natural gas market, driven by increasing U.S. LNG exports and natural gas power generation [5][6] - The strategic initiatives include returning to West Virginia dry gas development and using hedging to lock in attractive free cash flow yields [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming demand surge for natural gas, particularly from new LNG capacity additions and power demand increases [19][20] - The company is well-positioned to respond to regional demand increases and has significant dry gas inventory for future growth opportunities [26][27] Other Important Information - The company has hedged 24% of its expected natural gas volumes in 2026 at a price of $3.82 per MMBtu, with additional hedges in place to protect free cash flow [24][25] - The company is actively evaluating accretive opportunities for transactions and share repurchases, maintaining a disciplined approach to capital allocation [22][26] Q&A Session Summary Question: What was the catalyst for resuming drilling in Harrison County? - Management indicated that discussions related to local demand and opportunities in the eastern portion of their acreage were the catalysts for this decision [29][30] Question: How does the increase in production impact maintenance CapEx? - Management stated that a 3% increase in production logically leads to a similar increase in maintenance capital, approximately $20 million more than the previous level [37][38] Question: What are the expectations for average lateral lengths in 2026? - Management expects average lateral lengths to increase to approximately 14,000 feet in 2026, up from the low 13,000 feet range this year [44] Question: What is the strategy regarding hedging? - Management indicated a dual approach, aiming to replicate a model with wide collars and a portion unhedged to maximize free cash flow yield while protecting against downside risks [49][50] Question: What are the expectations for the dry gas acreage in Harrison County? - Management anticipates a 50% improvement in well performance compared to historical averages, expecting deliverability of around 2 Bcf per thousand feet [55] Question: What is the company's approach to potential asset sales in Ohio? - Management confirmed they are in the middle of the marketing process for Ohio assets, which are considered highly desirable due to their contiguous acreage and midstream access [66][67]

Financial Data and Key Metrics Changes - The company reported a free cash flow of over $90 million for the quarter, with nearly $600 million generated year-to-date [15][16] - The company paid down approximately $180 million in debt and repurchased $163 million in stock year-to-date [15][16] - The average natural gas price hedged for 2026 is $3.82 per MMBtu, with 24% of expected volumes hedged [17] Business Line Data and Key Metrics Changes - The company achieved a record completion stage average of 14.5 stages per day, with significant improvements in drilling and completion results [4][5] - The Marcellus Core Fairway expansion has been driven by strong well performance and organic leasing efforts, leading to increased acreage acquisitions [5][6] Market Data and Key Metrics Changes - U.S. propane exports increased by over 120,000 barrels a day year-to-date, averaging 1.85 million barrels a day compared to 1.72 million barrels a day for the same period last year [9] - The projected NGL supply growth in the Permian is expected to slow dramatically in 2026, with total U.S. C3+ production growth nearly flat [8][9] Company Strategy and Development Direction - The company is focused on enhancing its position in the Marcellus region through strategic initiatives, including organic leasing and bolt-on acquisitions [3][4] - The company aims to capitalize on structural demand changes in the natural gas market driven by increasing U.S. LNG exports and natural gas power generation [2][3] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the natural gas market, anticipating a significant demand surge due to new LNG capacity additions and power demand increases [12][13] - The company is positioned to respond to regional demand increases and is evaluating opportunities for growth while maintaining a disciplined approach to capital expenditures [18][36] Other Important Information - The company has hedged 28% of its expected natural gas volumes in 2026 with wide collars between $3.22 and $5.83 per MMBtu [17] - Management highlighted the importance of being countercyclical in share repurchases and transactions, especially in a low commodity price environment [45] Q&A Session Summary Question: What was the catalyst for resuming drilling in Harrison County? - The catalyst was the increasing local demand related to data centers and power deals, prompting the company to return to gas drilling in the area [19][20] Question: How does the recent production increase impact maintenance CapEx? - The production increase is expected to lead to a proportional increase in maintenance capital, estimated at an incremental $20 million [23] Question: What is the outlook for the 2026 program? - The company is maintaining a production level around 3.5 to 3.525 Bcf per day, with decisions on drilling partnerships still to be determined [22] Question: How does the company view its acquisitions? - The company sees acquisitions as opportunities that arise based on its dominant position in the West Virginia Marcellus, evaluating them as they come [24] Question: What are the expectations for the uplift in dry gas production? - The company expects about a 50% improvement in production from historical type curves, anticipating 2 Bcf per thousand feet [30] Question: What is the strategy regarding hedging? - The company has adopted a more aggressive hedging strategy, locking in above 5% free cash flow yields while maintaining exposure to rising prices [27][28] Question: What is the status of the Ohio asset sales process? - The company is in the middle of the process and is encouraged by the desirability of the assets due to their contiguous acreage and midstream infrastructure [36][38]

Operational Highlights - Antero Resources achieved a 17% quarter-over-quarter increase in drillout feet per day[8] - The company also saw a 22% quarter-over-quarter increase in completion stages per day[8] - Antero set a company record for the longest lateral drilled, exceeding 22,000 feet[8] - Drillout feet per day reached 4,980[8] - Completion stages per day reached 14.5 per day, or 2,900 feet per day[8] Financial Performance & Strategy - Antero Resources generated nearly $600 million in Free Cash Flow year-to-date[19] - $242 million was allocated to acquisitions[20] - $184 million was used for debt repayment[20] - $163 million was spent on stock purchases[20] - The company has reduced its debt by approximately $2.5 billion since 2019[31] Hedging - For 4Q25, Antero has swaps at 100 BBtu/d at $3.12[24] - For 2026, Antero has collars at 500 BBtu/d with a floor of $3.14 and a ceiling of $6.31, and swaps at 600 BBtu/d at $3.82[24]