ANTERO RESOURCES Corp (AR) stock intrinsic value fair value estimate & owner earnings analysis

Antero Resources is a natural gas producer. It drills in the Marcellus and Utica shales of West Virginia and Ohio. It sells gas, natural gas liquids (NGLs) and a little oil. Production has been steady at about 3.4 billion cubic feet equivalent per day (roughly 1.25 trillion cubic feet a year) for three years. That means the roughly $0.7 to $1.1 billion a year it spends on drilling and leasing is mostly the cost of keeping output flat. We treated all of it as maintenance spending. We did not use a revenue-based split into growth and maintenance capex. Reported revenue includes swings in the value of derivative contracts, which say nothing about volumes. What we measure. Owner earnings are operating cash flow, less swings in working capital, less stock compensation, less that maintenance spending. Antero deconsolidated its midstream affiliate in 2019, so we measure only from 2020. Per diluted share, owner earnings were about -$0.19 (2020), $2.63 (2021), $6.48 (2022), -$1.09 (2023), $0.29 (2024) and $2.38 (2025). We used a median across those six years. It spans the 2020 trough, the 2022 price spike and the weak 2023-24 stretch, so it represents a full gas-price cycle. The median is about $1.34 per share per year. We did not use the recent run-rate. First-half 2026 operating cash flow of about $1.30 billion, against about $0.95 billion a year earlier, is encouraging, but one strong stretch is not enough to lift the level. In 2025, owner earnings grew from $0.29 to $2.38. We assume no growth in year one; the base case starts at the $1.34 median, below that latest actual, because gas prices, not anything the company controls, drove that jump. How long it lasts. Proved reserves at year-end 2025 were 19.1 trillion cubic feet equivalent, up 7% on the year. That is about 15 years at the current pace. The company also reports about 1,279 identified drilling locations on roughly 537,000 net acres. We credit only the reserves and drilling record already in hand. We assume no production growth, no new markets and no price recovery. Base case, about $13 per share. Owner earnings of about $1.34 per share continue for 15 years, the life of the proved reserves. Nothing named and evidenced continues after that, so the value stops there. Bear case, about $2 per share. Gas stays at the weak levels of 2023-24. In 2024 Antero realized only $2.29 per Mcf of gas and earned about $0.29 per share. Owner earnings stay near that level for about 12 years. Two of the last six years were negative after drilling costs. The company also carries senior notes and a term loan, and an 8.375% note, a 4.25% convertible note and a 7.625% note are being retired or refinanced in 2026. A prolonged low-price period would leave little cushion. Bull case, about $27 per share. Antero's own strong-price years repeat: 2021 and 2025 each delivered roughly $2.4 to $2.6 per share. That level holds for about 18 years, the reach of its drilling inventory. This is broadly in line with the after-tax present value of proved reserves in the filing (about $8.1 billion, or roughly $26 per share, at year-end SEC prices). What would make this wrong. Owner earnings are very sensitive to gas prices, so any case can miss by a wide margin. Drilling costs could rise as the best locations are used up. Cash paid for the 2025 acquisition of $253 million of oil and gas properties is not counted as maintenance spending, so it is not in owner earnings. We did not reconcile the reported figures against net income independently; they were built from the cash flow statement. Because results swing so much with commodity prices and the company is levered, the margin of safety is large. The margin-of-safety price is about $4.50, well below the base value and above the bear value.