Antero Cash Costs Fall Below Guidance as Production Hits Record

The Tip Desk · November 2, 2026 · 4 min read

Adjusted EBITDAX was $634 million, up 99% from a year earlier, as cash production expense reached $2.05 per Mcfe.

Antero Resources Corporation (AR) reported a company-record net production of more than 4.2 billion cubic feet of natural gas equivalent per day in the third quarter of 2026, up 23% from the year-ago period, after 4.1 Bcfe/d in the second quarter and 3.9 Bcfe/d in the first.

Adjusted EBITDAX rose to $634 million, an increase of 99% versus the year-ago period, after a 57% year-over-year increase in the second quarter. Net income attributable to Antero was $367 million and Adjusted Net Income was $256 million. Net cash provided by operating activities was $575 million. Adjusted Free Cash Flow was $215 million, up 137% from the year-ago period.

Cash production expense fell to $2.05 per Mcfe, a $0.39, or 16%, decline from $2.44 per Mcfe a year earlier, after $2.38 per Mcfe in the second quarter. The company said the result was below the low end of its guidance range and reflected continued momentum with the integration of HG Energy and the optimization of firm transportation agreements. Chief Financial Officer Brendan Krueger said the lower cash costs drove a 27% improvement in unhedged EBITDAX margin to $1.28 per Mcfe from $1.01 per Mcfe a year earlier, despite NYMEX natural gas prices declining 4%.

Average net production included 2,904 MMcf/d of natural gas, 6,924 barrels a day of oil, 124,109 barrels a day of C3+ NGLs and 90,576 barrels a day of ethane. Curtailments were approximately 10 Bcfe. The average realized natural gas price before hedges was $2.63 per Mcf. Combined natural gas equivalent realized price before settled derivatives was $3.41 per Mcfe and $3.76 per Mcfe after settled derivatives.

During the quarter Antero began executing a $300 million margin-enhancement target, expecting $140 million by mid-2027. That includes $50 million through optimization of its firm transportation portfolio, $60 million from the reversion of an overriding royalty interest and $30 million from the expiration of a volumetric production payment. The company entered firm-transportation optimization agreements for about 400 MMcf/d, which it said would increase annualized free cash flow by $20 million. It is commencing a formal process in the fourth quarter, targeting over 1 Bcf/d of optimization in 2027 for an expected $50 million annualized free cash flow increase. The 2020 ORRI hit its return hurdles in the second quarter; as of July 1, 2026, 85% of ORRI distributions had reverted, with an estimated $60 million annualized free cash flow impact. The VPP expires August 1, 2027 and would add about 35 MMcf/d of natural gas. Antero also signed 265 MMcf/d of premium-priced supply contracts tied to Clarington, Ohio demand.

Antero placed 22 Marcellus wells to sales with an average lateral of 17,600 feet; five wells online about 60 days averaged 30 MMcfe/d per well. It completed the longest lateral in company history at about 25,000 feet. Drilling and completion capital expenditures were $324 million. The company also spent $35 million on land, adding about 8,000 net acres and 35 locations. In July it acquired West Virginia properties for about $315 million, including about 125 MMcfe/d of net production and 3,500 net undeveloped acres supporting 15 locations.

Antero purchased 1.6 million shares for about $56 million at an average $34.15 per share, leaving about $821 million of remaining repurchase capacity. It added 147,000 MMBtu/d of 2027 swaps at a $3.54 weighted average and 133,000 MMBtu/d of 2028 swaps at $3.49.

For the fourth quarter, Antero expects production of about 4.3 Bcfe/d, reflecting an estimated 15 to 20 Bcfe of curtailments driven by low regional pricing. Natural gas realized price guidance is a $(0.15) to $(0.25) per Mcf discount to NYMEX. Cash production expense is expected at $2.10 to $2.20 per Mcfe. Drilling and completion capital is expected at $325 to $350 million, as the company targets a $1.2 billion 2026 drilling and completion budget and high-single-digit production growth in 2027.