Natural Gas Liquids Fundamentals

May 2023
Summary
The U.S. NGL market continues to recover, with record propane exports
year to date 2023, as China drastically increases its PDH capacity and
utilization rates, while relying increasingly on the U.S. for LPG imports.

• US propane exports have increased by 16% YoY due to post-COVID recoveries from
Chinese demand
‒ Propane inventories could correct to 5-year averages by mid-2023 assuming strong
exports continue

• 2023 is expected to be a pivotal year for the liquids market due to the large number of
VLGC deliveries and significant Chinese PDH capacity additions

• The U.S. is the incremental global supplier of NGLs to meet this increasing international
demand

Antero is well-positioned to benefit from increasing global

NGL demand as a top U.S. NGL producer and with over
50% of NGL volumes being exported

Antero Resources (NYSE: AR) 2

US Exports of Propane Hit Record Highs in 2023
US Exports of Propane/Propylene, Quarterly Average (MMBbl/d)
MMBbl/d Weekly Record High Set on April 14, 2023 of 1.85 MMBbl/d
1.8

2020 2021 2022 2023

1.7

Western Economies
1.6
Reopening
Initial COVID Onset
1.5
COVID ‘Normal’ and 2023 Avg YTD:
China Lockdowns 1.57 MMBbl/d
1.4

1.3 China
Reopening

1.2

2021 Avg: 1.18 MMBbl/d 2022 Avg: 1.35 MMBbl/d

1.1

1.0
2020 Avg: 1.15 MMBbl/d

0.9
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Antero Resources (NYSE: AR) Source: EIA. 3
 China PDH Propane Demand and PDH Utilization
Although China PDH Utilization is Trending Down, Outright China PDH Propane
Demand is Expected to Increase 50% from 2022 to 2024
MBbls/d PDH Utilization Rate
600 100%

Forecast 90%
500
80%

70%
400
60%
PDH Utilization Rate [Right Axis]
300 50%

40%
200
30%

20%
100
China PDH Propane Demand [Left Axis]
10%

0 0%
Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25
Antero Resources (NYSE: AR) Source: S&P Global Commodity Insights.
4
China PDH Buildout Continues
China is Adding Over 400 MBbl/d of New PDH Capacity in 2023-2024, a 70%
Increase to the Existing Operational Capacity of 570 MBbl/d
MBbl/d Globally Planned PDH Units China’s Planned 2023/2024 PDH Units
China North America Middle East Rest of Asia Europe
400
300
200
100
0
2023 2024

Globally planned PDH units will

require over 570 MBbl/d of
incremental propane feedstock
from 2023-2024

Antero Resources (NYSE: AR) Source: Argus, Energy Aspects. 5

 U.S. is the Likely Incremental LPG Supplier
The U.S. is the incremental supplier and exporter of NGLs for growing global demand
World C2+ NGL Production U.S. Gulf Coast LPG Export Capacity
U.S. AND WORLD C2+ NGL PRODUCTION MBbl/d
MBbl/d
GROWTH FORECAST FOR 2024 vs. 2022 Export Capacity Unconstrained
16,000
+7% Global Growth
2,500 Through End of 2026 with
Announced Expansions
14,000
Existing Expansions
2,000
12,000 Capacity
LPG
10,000 Exports
U.S. 2024E vs. 2022: 1,500
U.S. 13% growth
8,000

6,000 1,000

Rest of World U.S. has the Supply Growth and

4,000 Infrastructure Needed to Supply
Rest of World 2024E vs. 2022:
1% growth 500 Increasing Global Demand
2,000
**Recent OPEC+ additional oil output cuts to decline
OPEC+ LPG supply by 8% from May 2023 to Dec 2023**

0 -
2019 2020 2021 2022 2023 2024 2025 2026

Source: Energy Aspects, S&P Global Commodity Insights as of April 2023.

Antero Resources (NYSE: AR)
Source: S&P Global Commodity Insights data as of April 2023
*Note: Includes recovered ethane only. 6
 “VLGC” Shipping Buildout Will Reduce Freight Rates
-Very Large Gas Carriers (“VLGC”) transport LPG (propane and butane)

Propane VLGC Additions of +0.3 MMBbl/d in 2023 will Lower Shipping Costs
$/Metric Ton
Global VLGC Fleet Baltic VLGC Futures
50 405 105
46 New Ships in 2023
(11 delivered through April) 390 Ship Additions Support Robust
95 Exports and Mont Belvieu Pricing
40 Total Ship Fleet
(Right Axis) 340

290 85
VLCG Delivery & Scrapping

30 Current Levels at $75/Metric Ton

VLGC Ships vs. $94/Metric Ton in February
240
75

VLGC Fleet
Delivered
20
190 Baltic Futures as of 4/25
65
Baltic Futures as of 2/24
10 140

55
90
0
40 45
The Baltic Rate is the USD Per Metric Ton Rate for
VLGC Ships Scrapped the LPG Freight Route from Ras Tanura, Saudi Arabia
-10 -10
to Chiba, Japan for Cargoes of 44,000 Metric Tons.
35
2017

2021
2015
2016

2018
2019
2020

2022
2023
2024
2025

2023 2024 2025

Antero Resources (NYSE: AR) Source: Poten Source: CME

7
 U.S. Propane Stocks Forecast Within 5-Year Range
Bearish U.S. Propane forecasts are fading due to strong exports
MMBbl
High Inventories Due To:
120
• Lack of Winter
Weather
110 • PDH Outages
3rd Party A
100 Forecast

90
5-Year Range (2018-2022)

80
3rd Party B Forecast
70
2023
60
Offset by:
• Strong US Exports Driven by
5-Year Average
50 Demand from China
Reopening
2022
40

30
Current US propane inventories are below 3rd
2023:+14 MMBbls (+31%) party forecasts made at the start of the year due
Above 5-Year Average to stronger than expected exports
20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Antero Resources (NYSE: AR) Source: US EIA.

8
 US Propane Stocks – Modeled Strong Exports
Maintaining current propane export levels would drive storage
below the 5-Year range in the 2H’23
MMBbl

110

100

5-Year Range (2018-2022)

90

80

70

60 2023
Forecast with 2023 Exports
50 5-Year Average Maintained at 1.6 MMBbl/d
(the Current YTD Export
40 2022 Average)

30

20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Antero Resources (NYSE: AR) Source: US EIA, Antero Modeled Calculations.

9
The Impact of the U.S. Shale Revolution
The Shale Revolution dramatically changed the NGL landscape, turning the U.S. into
a net exporter after decades of importing NGL products
U.S. NGL Production U.S. NGL Exports / (Imports)
7,000 2,500

6,000 2,000
Driven primarily by shale oil
development with high oil prices
5,000
1,500

4,000

MBbl/d
MBbl/d

1,000
3,000
Pentanes
500 Net importer of NGLs
2,000 Isobutane

Butane -
1,000
Propane

0
Ethane(1) (500)
1984 1990 1996 2002 2008 2014 2020 1984 1990 1996 2002 2008 2014 2020

Antero Resources (NYSE: AR) Includes recovered ethane volumes and natural gasoline (C5).
Source: U.S. Energy Information Administration 1984-2022. NGL exports/imports includes ethane, propane, normal butane, isobutane and natural gasoline. 1)
10
 LPG Exports: U.S. versus Middle East
Recently announced OPEC+ cuts could limit OPEC LPG production and exports even further

2,000 The U.S. is the incremental supplier for

growing world demand.
1,800

1,600

1,400

1,200
MBbl/d

1,000

800
Supply from Middle East nations flat,
OPEC policies limit growth potential
600

400

200

0
US Qatar UAE Saudi Arabia Kuwait Iran
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Antero Resources (NYSE: AR)

Source: S&P Global Commodity Insights
Notes: Propane and Butane exports only. U.S. Exports do not include exports via land to Canada and Mexico. As of 03/31/2023. 11
US NGL Demand
US NGL demand growth driven primarily by exports of LPG (propane/butane); China’s
dependence on US LPG imports is increasing and hit 50% of total imports in March
U.S. C3+ Demand by Sector Estimated U.S. C3+ Demand – 2024
5.0

4.5

4.0 Petrochemical
3.5 11%
MMBbl/d

3.0
Exports Refining/
2.5 Exports 2022-2024 Change: +14% 56% Blending
19%
2.0

1.5
Refining/Blending 2022-2024 Change: +1% Residential/
Commercial
1.0
Residential/Commercial 2022-202 Change: -12%
14%
0.5
Petrochemicals 2022-2024 Change: +10%
0.0
2016 2017 2018 2019 2020 2021 2022 2023 2024

Antero Resources (NYSE: AR) Source: S&P Global Commodity Insights as of 4/6/2023. 12
China LPG Demand
China’s LPG demand growth driven by the petrochemical industry,
fueled by PDH and steam cracker buildout
China LPG Demand by Sector (MMBbl/d) Forecast China LPG Demand – 2024
Own Use (Refinery) Transport
3.0

2%
6% Petrochemica
2.5 l
Transport 2022-2024 Change: +5%

Industrial
2.0
11% Res/Comm
MMBbl/d

Own Use (Refinery) 2022-2024 Change: +6% Exports Refining/

Blending
36%
1.5
Industrial 2022-2024 Change: +4%

Petrochemical 2022-2024 Change: +90%

1.0 Residential/
Petrochemical
Commercial
45%
Res/Comm 2022-2024 Change: -4%
0.5

0.0
2016 2017 2018 2019 2020 2021 2022 2023 2024
Antero Resources (NYSE: AR) Source: S&P Global Commodity Insights as of 4/6/2023. 13
 U.S. NGL Supply Growth Expected to Peak by 2030
U.S. NGL supply growth is expected to decline by 2030 despite the continued
growth in demand well into the 2040’s

US Shale Crude and Condensate Production Forecast to 2040

(MMBbl/d) Energy Aspects call for S&P Global Commodity
12 Peak Shale (2024) Insights call for Peak Shale

10 Other

8 Eagle Ford

Bakken
6

4
“Peak Shale” Permian

0
2010 2015 2020 2025 2030 2035 2040

Year on Year Growth by Basin

(MMBbl/d)
2.0 “Peak Shale”
1.0

0.0

-1.0 No More Growth

2011 2016 2021 2026 2031 2036 2041

Antero Resources (NYSE: AR) Source: S&P Global Commodity Insights, Energy Aspects. 14
NGL Demand Growth Expected Through 2050
Demand for NGLs will continue to grow to meet the needs of the energy transition
and growth in global petrochemical demand

Change in Demand by Liquids Product Change in Market Share

LPG demand up 1.44 MMBbl/d by 2030
MBbl/d MBbl/d 5% 5% 6%
14,000 Oil Demand 94,000 16% 18%
12,429 11% 11% 12%
Peaking

12,000 92,000 NGL share increases

LPG
10,000 90,000
10,796
Oil 6,708 85%
8,000 88,000
84%

6,000 86,000
82%
Ethane Crude and Condensate
4,000 84,000 share decreases
4,427
2,000 82,000
Gaining Petrochemical and Res/Comm
Demand Increases NGL Demand
0 80,000 2022-2029 2030-2039 2040-2050
2024

2034

2040
2042

2046
2048
2022

2026
2028
2030
2032

2036
2038

2050
2044

All Other Oil Products LPG Ethane

Antero Resources (NYSE: AR) Source: S&P Global Commodity Insights, Nov 2022 Ref. Case. 15
ESG Benefits of Growing Global NGL Demand
Increasing res/comm needs of the world to be met with the benefits of
cleaner burning LPG fuel sources to 3 billion people

• Around 3 billion people, over

one-third of the world’s population,
are required to cook using solid fuels
(wood, crop wastes, charcoal, coal and
dung) and kerosene in open fires and
inefficient stoves.

• These cooking practices produce high

levels of household air pollution with a
wide range of damaging health
impacts.

Antero Resources (NYSE: AR) Source: Antero ESG. 16

C3+ NGLs: Northeast Market Dynamics and Supply
Antero’s C3+ blended differential to Mont Belvieu has improved with Mariner
East 2 export takeaway and ability to access international markets
Northeast C3+ NGL Supply Northeast C3+ NGL Takeaway
600
Midwest/
500 Pentanes
Conway
400
IsoButane Cornerstone
MBbl/d

TEPPCO
300
Normal Butane
Export
200 Markets
Propane Mariner East 2
100 ~275+ MBbl/d

U.S. Gulf Mariner East 2, placed in

~200 MBbl/d of Northeast C3+ demand vs. Coast
service at YE 2018 and fully
~450 MBbl/d of Northeast supply in 2021 completed in 2022, provides
- Resulted in 44% of production consumed locally baseload demand and access
- Remainder moved primarily by rail and exported to international LPG markets

Differentials to Mont Belvieu tightened in 2019 with Mariner

East 2 coming online

Antero Resources (NYSE: AR) Source: S&P Global Commodity Insights as of 4/6/2023.
17
 Ethane: Northeast Market Dynamics & Supply
Antero’s ethane has a natural gas value pricing floor; pricing improvements from
additional petrochemical and takeaway demand is all “Upside”
Northeast Ethane Takeaway and Capacities
~140 MBbl/d of ethane current rejected in
Northeast (~25% of potentially recoverable ethane)
Shell Cracker
Antero is an anchor supplier to Shell’s Utopia
Mariner West
50 MBbl/d
105 MBbl/d (2022)

cracker which began operations in 2022 50 MBbl/d

Antero ethane firm sales contracts ~50%

Mariner East 2X:
gas-linked and ~50% Mont Belvieu-linked ~70-200 MBbl/d

Northeast Ethane Supply (MBbl/d)

800 Full Ethane Recovery
ME2X
700
Actual Ethane Recovery
600
500 Shell Cracker
MBbl/d

400
300 Mariner East
Utopia
200
100 Mariner West
ATEX
0

Antero Resources (NYSE: AR) Source: S&P Global Commodity Insights as of 4/6/2023.
18
APPENDIX
Natural Gas Liquids Primer
Natural Gas Liquids “NGLs” are contained in the rich natural gas stream, but after
processing, condense into liquid form for storage, shipping and consumption
Purity Products
Y-Grade De- Ethane
Ethane*
ethanization
Wellhead
Gas Propane*
Processing C3+ Raw
NGLs Butane*
Rich Gas
(>1100 Btu) Fractionation Isobutane

Pentane
Dry Gas

LNG and Pipeline

Export Markets
Natural Gas Domestic Export
Dry Gas Pipeline
Dry Gas Consumption Markets
(<1100 Btu)

Antero Resources (NYSE: AR) *Primary NGL export products are propane, butane, and ethane 20
Natural Gas Liquids Primer
NGLs play an essential role in the domestic and international industrial, residential,
commercial and transportation industries
Gas Linked Pricing Crude Linked Pricing

Iso-
Methane Ethane Propane Butane Butane Pentane

Natural Gas C2 C3 C4 IC4 C5

Industrial
Primary Chemical Residential Industrial
All Industrial Transportation
Sectors Industrial Commercial, Transportation
Chemical
Heating,
Ethylene Alkylate feed to
Primary Crop drying, Winter Gasoline Gasoline blend
Power Production produce
Uses Commercial, Blending and diluent
(For plastics) gasoline
Propylene

Higher Heating Value

1000 Btu 4000 Btu

Antero Resources (NYSE: AR) 21

Appendix and Supporting Information
This material is intended for benchmark pricing estimates only and does not reflect Antero actual contracted prices

Key Terms and Definitions:

•ARA – “Amsterdam-Rotterdam-Antwerp.” ARA is a port and refining area in the Belgian-Dutch region of Europe.
•CIF - “Cost, Insurance, Freight.” CIF means that the seller delivers the goods on board the vessel or procures the goods already so delivered. Note that
the CIF ARA LPG prices represent a delivered cargo into Europe.
•FEI – “Far East Index.” The Argus Far East Index is the average of the Argus Japan CFR propane quotation and the Argus South China CFR propane
quotation. Note that the FEI LPG prices represent a delivered cargo into Asia
•CFR - “Cost and Freight.” CFR means that the seller delivers the goods on board the vessel or procures the goods already so delivered.
•Baltic Index - The Baltic LPG Index is a shipping cost estimate based on a voyage from Ras Tanura, Saudi Arabia to Chiba, Japan round trip, laden (full)
on the outbound journey and ballast (empty) on the return trip, carrying a fully refrigerated cargo of 44,000 MT (+/- 5%) propane, butane, or a
mixture. The index is published by the Baltic Exchange.

Intercontinental Exchange (ICE) provides the benchmark pricing Information used in this presentation. For more information, visit
https://www.theice.com/energy/natural-gas-liquids

ICE Definition

ANTERO LABEL HUB PRODUCT

ARA C3 CIF ARA Propane Argus Futures
ARA C4 CIF ARA Butane Argus Futures
FEI C3 Far East Propane Argus Futures
FEI C4 Far East Butane Argus Futures
MB C3 MT.B-ENT Propane OPIS Futures
Relevant Conversions: MB C4 MT.B-ENT Normal Butane OPIS Futures
•Propane = 521 gallons per metric ton
•Butane = 453 gallons per metric ton

Antero Internal Shipping Estimates are derived by Antero using several sources, including Baltic LPG Index Futures and broker estimates.
•Rates are adjusted based on travel time from Marcus Hook, PA to Northwest Europe (Amsterdam-Rotterdam-Antwerp Region) and Marcus Hook, PA
to Asia (Chiba, Japan).
•Antero’s actual shipping rates may differ from these estimates.

Antero Resources (NYSE: AR) 22