Antero Midstream Corp: Form 10-Q for the period ended Sep 30, 2026

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this report. The information provided below supplements, but does not form part of, our unaudited condensed consolidated financial statements. This discussion contains forward-looking statements that are based on the views and beliefs of our management, as well as assumptions and estimates made by our management. Actual results could differ materially from such forward-looking statements as a result of various risk factors, including those that may not be in the control of management. For further information on items that could impact our future operating performance or financial condition, see “Item 1A. Risk Factors” and the section entitled “Cautionary Statement Regarding Forward-Looking Statements.” We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. In this section, references to “Antero Midstream,” “AM,” the “Company,” “we,” “us,” and “our” refer to Antero Midstream Corporation and its consolidated subsidiaries, unless otherwise indicated or the context otherwise requires.

Overview

We are a growth-oriented midstream energy company formed to own, operate and develop midstream energy assets. We believe that our strategically located assets and our relationship with Antero Resources have allowed us to become a leading midstream energy company serving the Appalachian Basin and present opportunities to expand our midstream services to other operators in the Appalachian Basin. Our assets consist of gathering pipelines, centralized compressor stations and interests in processing and fractionation plants that collect and process production from the Appalachian Basin in West Virginia and Ohio. Our assets also include an independent water handling system that delivers water from the Ohio River and several regional waterways. These water handling systems consist of permanent buried pipelines, surface pipelines and water storage facilities, as well as pumping stations, blending facilities and impoundments. Portions of these water handling systems are also utilized to transport flowback and produced water. These services are provided by us directly or through third-parties with which we contract.

Acquisition and Divestiture

HG Acquisition

On December 5, 2025, we entered into a definitive agreement to acquire 100% of the issued and outstanding equity interests of HG Midstream for cash consideration of $1.1 billion, subject to the terms and conditions thereof. The HG Acquisition included gathering pipelines and integrated water handling assets in the core of the Marcellus Shale in West Virginia. This acquisition closed on the Closing Date. The Company’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2026 included results of operations from the assets and operations acquired in the HG Acquisition from the Closing Date through September 30, 2026.

The HG Acquisition was funded with net proceeds of the 2034 Notes, borrowing under the Credit Facility and restricted cash. See Note 3—Transactions to our unaudited condensed consolidated financial statements for additional information. In light of the nature and location of the assets and operations acquired in the HG Acquisition, we and Antero Resources agreed in principle to certain updates to, and intend to modify, our existing commercial arrangements with Antero Resources to provide for well pad compression with respect to certain wells and to provide certain water services. See Note 6—Revenue to our unaudited condensed consolidated financial statements for additional information.

Utica Shale Divestiture

On December 5, 2025, we entered into a purchase and sale agreement with the Buyer Parties to sell substantially all of our Utica Shale Property and Equipment in Ohio, for aggregate cash consideration of $400 million, subject to the terms and conditions thereof. The Utica Shale Property and Equipment included 118 miles of gathering pipelines, 0.7 Bcfe/d of compression capacity, 85 miles of water pipelines and 12 water impoundments with storage capacity of approximately 2 million barrels. The Utica Shale Divestiture closed on February 23, 2026. The net proceeds from the Utica Shale Divestiture were used for the repayment of long-term debt. See Note 3—Transactions to our unaudited condensed consolidated financial statements for additional information.

Financing Highlights

Share Repurchase Program

Through our share repurchase program, during the three and nine months ended September 30, 2026, we repurchased and retired approximately 1.3 million shares of our common stock for a total cost of $27 million and approximately 2.7 million shares of our common stock for a total cost of $54 million, respectively. As of September 30, 2026, we have approximately $283 million of remaining capacity under our share repurchase program. The shares may be repurchased from time to time in open market transactions, through privately negotiated transactions or by other means in accordance with federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by us at our discretion and will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and applicable legal requirements. The exact number of shares to be repurchased by us is not guaranteed and the program may be suspended, modified or discontinued at any time without prior notice.

Redemption of 2028 Notes

On August 8, 2026, we redeemed all $650 million aggregate principal amount of the 2028 Notes at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the redemption date, which was funded by cash on hand and borrowings under our Credit Facility. See Note 9—Long-Term Debt to the unaudited condensed consolidated financial statements for more information.

Market Conditions and Business Trends

Commodity Markets

Benchmark prices for oil, ethane and C3+ NGLs increased, while benchmark prices for natural gas decreased during the three months ended September 30, 2026 as compared to the same period of 2025. Benchmark prices for oil, natural gas and C3+ NGLs increased, while benchmark prices for ethane decreased during the nine months ended September 30, 2026 as compared to the same period of 2025. While substantially all of our revenues are based on fixed-fee contracts that are not directly impacted by changes in commodity prices, commodity price changes do impact the revenues and cash flows of Antero Resources, and Antero Resources’ drilling and development plan does have a direct impact on our gathering, compression and water handling services, revenues and cash flows. In the current economic environment, we expect that commodity prices for some or all of the commodities produced by Antero Resources could remain volatile. However, due to Antero Resources’ increased scale, liquidity and leverage position as compared to historical levels, together with Antero Resources’ increased commodity derivative portfolio, we do not expect to experience significant variability in our throughput volumes resulting from volatile commodity prices.

Economic Indicators

The economy experienced elevated inflation levels as a result of global supply and demand imbalances, where global demand outpaced supplies beginning in 2021 and continuing through 2026. During the second half of 2024, inflation rates began to approach the Federal Reserve’s stated goal of 2%, and the Federal Reserve decreased the federal funds rate by 1.75% in 2024 and 2025. Annual inflation rates have remained generally consistent at approximately 3% over that time. As a result, in September 2026, the Federal Reserve increased the federal funds rate by 0.25% in an effort to reach its stated goal for inflation of 2%.

The economy also continues to be impacted by global events. These events have often caused global supply chain disruptions with additional pressure due to trade sanctions, tariffs, other global trade restrictions and conflicts, including those in the Middle East and Venezuela, among others. While neither our nor Antero Resources’ supply chain has experienced any significant interruptions due to such events, there can be no assurance that we will not experience interruptions in the future.

Inflationary pressures and supply chain disruptions could result in further increases to our operating and capital costs that are not fixed. However, our gathering and compression and water agreements provide for annual CPI-based adjustments that mitigate a portion of such inflationary pressures.

These economic variables are beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows.

Results of Operations

We have two reportable segments: (i) gathering and processing and (ii) water handling. The gathering and processing segment includes a network of gathering pipelines, centralized compressor stations and well pad compressors that collect and process production from Antero Resources’ wells in the Appalachian Basin, as well as equity in earnings from our investments in the Joint Venture and Stonewall. The Joint Venture and Stonewall provide processing and fractionation services and high-pressure gas gathering services, respectively, in the Appalachian Basin. The water handling segment includes (i) an independent system that delivers water from sources including the Ohio River, local reservoirs and several regional waterways, and (ii) other fluid handling services, which include high rate transfer, wastewater transportation, disposal and blending. See Note 17—Reportable Segments to our unaudited condensed consolidated financial statements for additional information.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2026

The operating results of our reportable segments were as follows:

(in thousands)

(1) Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments.

(in thousands)

(1) Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments.

The operating data for Antero Midstream is as follows:

* Not meaningful or applicable.

(1) Fresh water delivery includes fresh water charged at a fixed fee under our water services agreement with Antero Resources.

(2) Other water handling includes fresh water charged at cost plus 3% for services provided to Antero Resources on its acreage acquired from HG Production and our other fluid handling services charged at cost plus 3% or cost of service.

(3) The average realized fees for the three months ended September 30, 2026 include annual CPI-based adjustments of approximately 1.5%.

Revenues. Total revenues increased by 11%, from $295 million for the three months ended September 30, 2025 to $327 million for the three months ended September 30, 2026. Total revenues included amortization of customer relationships of $18 million and $23 million for the three months ended September 30, 2025 and 2026, respectively. Gathering and processing revenues increased by 7%, from $241 million for the three months ended September 30, 2025 to $257 million for the three months ended September 30, 2026. Water handling revenues increased by 30%, from $54 million for the three months ended September 30, 2025 to $70 million for the three months ended September 30, 2026. These increases primarily resulted from the following:

Gathering and Processing

• Gathering revenue increased $23 million period over period primarily due to increased throughput volumes of 58 Bcf, or 635 MMcf/d, from the HG Acquisition and 86 wells that were connected to our system between periods and increased gathering rates as a result of annual CPI-based adjustments, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods.
• Compression revenue increased $4 million period over period primarily due to increased compression volumes of 53 Bcf, or 571 MMcf/d, from the HG Acquisition and 86 wells that were connected to our system between periods and increased centralized compression rates as a result of annual CPI-based adjustments, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods.
• High pressure gathering revenue decreased $7 million period over period primarily due to decreased throughput volumes of 23 Bcf, or 254 MMcf/d, primarily due to the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods, partially offset by increased high pressure gathering rates as a result of annual CPI-based adjustments.
• Amortization of customer relationships increased $4 million period over period due to a customer relationship intangible asset of $549 million acquired in the HG Acquisition completed during the first quarter of 2026.

Water Handling

• Fresh water delivery revenue remained relatively consistent at $37 million and $36 million for the three months ended September 30, 2025 and 2026, respectively.
• Other water handling revenue increased $17 million period over period primarily due to higher other water handling volumes of 6 MMBbl, or 69 MBbl/d, as well as higher blending cost of service fees and increased costs for wastewater trucking and disposal volumes. Other water handling volumes increased between periods primarily due to 5 MMBbl of fresh water delivery volumes provided to Antero Resources on its acreage acquired from HG Production that are charged at cost plus 3% and increased blending activity during the three months ended September 30, 2026.

Direct operating expenses. Direct operating expenses increased by 44%, from $58 million for the three months ended September 30, 2025 to $83 million for the three months ended September 30, 2026. Gathering and processing direct operating expenses increased by 33% from $29 million for the three months ended September 30, 2025 to $38 million for the three months ended September 30, 2026 primarily due to increased gathering and well pad compression costs between periods related to assets acquired with the HG Acquisition, partially offset by the Utica Shale Divestiture. Water handling direct operating expenses increased by 55%, from $29 million for the three months ended September 30, 2025 to $45 million for the three months ended September 30, 2026 primarily due to fresh water delivery volumes provided to Antero Resources on acreage acquired from HG Production, increased wastewater trucking and disposal volumes between periods and increased blending volumes and costs between periods.

General and administrative (excluding equity-based compensation) expenses. General and administrative expenses (excluding equity-based compensation expense) remained relatively consistent at $10 million for each of the three months ended September 30, 2025 and 2026.

Depreciation expense. Depreciation expense increased by 10%, from $34 million for the three months ended September 30, 2025 to $38 million for the three months ended September 30, 2026 primarily due to incremental depreciation expense of $4 million related to gathering and water pipelines acquired in the HG Acquisition and $3 million for assets placed in service between periods, partially offset by lower depreciation as a result of the Utica Shale Divestiture of $3 million between periods.

Gain on litigation. There was no gain on litigation during the three months ended September 30, 2025. During the three months ended September 30, 2026, we recognized a gain on litigation of $377 million related to the Veolia matter. See Note 16—Contingencies to the unaudited condensed consolidated financial statements for additional information.

Interest expense, net. Interest expense, net increased by 8%, from $47 million for the three months ended September 30, 2025 to $51 million for the three months ended September 30, 2026 primarily due to issuance of the 2033 Notes and 2034 Notes during the second half of 2025 and higher average daily Credit Facility borrowings between periods, partially offset by the redemption of the 2027 Notes during the three months ended September 30, 2025 and 2028 Notes during the three months ended September 30, 2026 and lower Credit Facility interest rates between periods. See Note 9—Long-Term Debt to our unaudited condensed consolidated financial statements for additional information.

Equity in earnings of unconsolidated affiliates. Equity in earnings of unconsolidated affiliates remained relatively consistent at $30 million and $28 million for the three months ended September 30, 2025 and 2026, respectively.

Income tax expense. Income tax expense increased by 207%, from $46 million for three months ended September 30, 2025 to $140 million for the three months ended September 30, 2026, which reflects effective tax rates of approximately 28% and 26%, respectively. This income tax expense increase was primarily due to higher net income before taxes during the three months ended September 30, 2026 as a result of the gain on litigation of $377 million.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2026

The operating results of our reportable segments were as follows:

(in thousands)

(1) Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments.

(in thousands)

(1) Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments.

The operating data for Antero Midstream is as follows:

* Not meaningful or applicable.

(1) Fresh water delivery includes fresh water charged at a fixed fee under our water services agreement with Antero Resources.

(2) Other water handling includes fresh water charged at cost plus 3% for services provided to Antero Resources on its acreage acquired from HG Production and our other fluid handling services charged at cost plus 3% or cost of service.

(3) The average realized fees for the nine months ended September 30, 2026 include annual CPI-based adjustments of approximately 1.5%.

Revenues. Total revenues increased by 9%, from $891 million for the nine months ended September 30, 2025 to $968 million for the nine months ended September 30, 2026. Total revenues included amortization of customer relationships of $53 million and $67 million for the nine months ended September 30, 2025 and 2026, respectively. Gathering and processing revenues increased by 8%, from $709 million for the nine months ended September 30, 2025 to $764 million for the nine months ended September 30, 2026. Water handling revenues increased by 12%, from $182 million for the nine months ended September 30, 2025 to $204 million for the nine months ended September 30, 2026. These increases primarily resulted from the following:

Gathering and Processing

• Gathering revenue increased $64 million period over period primarily due to increased throughput volumes of 160 Bcf, or 587 MMcf/d, from the HG Acquisition and 86 wells that were connected to our system between periods and increased gathering rates as a result of annual CPI-based adjustments, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods.
• Compression revenue increased $14 million period over period primarily due to increased throughput volumes of 150 Bcf, or 551 MMcf/d, from the HG Acquisition and 86 wells that were connected to our system between periods and increased centralized compression rates as a result of annual CPI-based adjustments, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods.
• High pressure gathering revenue decreased $11 million period over period primarily due to decreased throughput volumes of 42 Bcf, or 155 MMcf/d, due to the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods, partially offset by increased high pressure gathering rates as a result of annual CPI-based adjustments.
• Amortization of customer relationships increased $12 million period over period due to a customer relationship intangible asset of $549 million acquired in the HG Acquisition during the nine months ended September 30, 2026.

Water Handling

• Fresh water delivery revenue decreased $14 million period over period primarily due to decreased fresh water delivery volumes of 4 MMBbl, or 13 MBbl/d, partially offset by an increase to the fresh water delivery rate as a result of the annual CPI-based adjustment. Water delivery volumes decreased between periods due to the timing and location of well completions by Antero Resources.
• Other water handling revenue increased $38 million period over period primarily due to higher other water handling volumes of 17 MMBbl, or 60 MBbl/d, as well as higher blending cost of service fees and increased wastewater trucking and disposal costs. Other water handling volumes increased between periods primarily due to 13 MMBbl of fresh water delivery volumes provided to Antero Resources on its acreage acquired from HG Production that are charged at cost plus 3% and increased blending activity during the nine months ended September 30, 2026.
• Amortization of customer relationships increased $2 million period over period due to a customer relationship intangible asset of $73 million acquired in the HG Acquisition during the nine months ended September 30, 2026.

Direct operating expenses. Direct operating expenses increased by 34%, from $178 million for the nine months ended September 30, 2025 to $238 million for the nine months ended September 30, 2026. Gathering and processing direct operating expenses increased by 30% from $81 million for the nine months ended September 30, 2025 to $105 million for the nine months ended September 30, 2026 primarily due to increased gathering and well pad compression costs between periods related to assets acquired with the HG Acquisition, partially offset by the Utica Shale Divestiture. Water handling direct operating expenses increased by 38%, from $97 million for the nine months ended September 30, 2025 to $133 million for the nine months ended September 30, 2026 primarily due to fresh water delivery volumes provided to Antero Resources on acreage it acquired from HG Production during the nine months ended September 30, 2026, increased wastewater trucking and disposal volumes between periods and increased blending volumes and costs between periods.

General and administrative (excluding equity-based compensation) expenses. General and administrative expenses (excluding equity-based compensation expense) remained relatively consistent at $32 million and $34 million for the nine months ended September 30, 2025 and 2026, respectively.

Depreciation expense. Depreciation expense increased by 9%, from $101 million for the nine months ended September 30, 2025 to $110 million for the nine months ended September 30, 2026 primarily due to incremental depreciation expense of $12 million related to gathering and water pipelines acquired in the HG Acquisition and $8 million for assets placed in service between periods, partially offset by lower depreciation as a result of the Utica Shale Divestiture of $11 million between periods.

Gain on litigation. There was no gain on litigation during the nine months ended September 30, 2025. During the nine months ended September 30, 2026, we recognized a gain on litigation of $377 million related to the Veolia matter. See Note 16—Contingencies to our unaudited condensed consolidated financial statements for additional information.

Interest expense, net. Interest expense, net increased by 12%, from $144 million for the nine months ended September 30, 2025 to $160 million for the nine months ended September 30, 2026 primarily due to issuance of the 2033 Notes and 2034 Notes during the second half of 2025, partially offset by the redemption of the 2027 Notes during the nine months ended September 30, 2025 and 2028 Notes during the nine months ended September 30, 2026, lower average daily Credit Facility borrowings and interest rates between periods and higher interest income on cash equivalents and restricted cash between periods. See Note 9—Long-Term Debt to our unaudited condensed consolidated financial statements for additional information.

Equity in earnings of unconsolidated affiliates. Equity in earnings of unconsolidated affiliates remained relatively consistent at $88 million and $86 million for the nine months ended September 30, 2025 and 2026, respectively.

Transaction expense. There were no transaction expenses during the nine months ended September 30, 2025. During the nine months ended September 30, 2026, we incurred $9 million of transaction expense related to the HG Acquisition. See Note 3—Transactions to our unaudited condensed consolidated financial statements for additional information.

Income tax expense. Income tax expense increased by 74%, from $126 million for the nine months ended September 30, 2025 to $219 million for the nine months ended September 30, 2026, which reflects an effective tax rate of approximately 26% for each respective period. This income tax expense increase was primarily due to higher net income before taxes during the nine months ended September 30, 2026 as a result of the gain on litigation of $377 million.

Capital Resources and Liquidity

Sources and Uses of Cash

Capital resources and liquidity are provided by operating cash flows, available borrowings under our Credit Facility and capital market transactions. See Note 9—Long-Term Debt to the unaudited condensed consolidated financial statements. We expect that the combination of these capital resources will be adequate to meet our working capital requirements, capital expenditures program and expected quarterly cash dividends for at least the next 12 months.

Our Board declared a cash dividend on the shares of our common stock of $0.225 per share for the quarter ended September 30, 2026. The dividend is payable on November 11, 2026 to stockholders of record as of October 28, 2026. Our Board also declared a cash dividend of $137,500 on the shares of Series A Preferred Stock that is payable on November 16, 2026 in accordance with their terms as discussed in Note 13—Equity and Net Income Per Common Share. As of September 30, 2026, there were dividends in the amount of $68,750 accumulated in arrears on our Series A Preferred Stock.

We expect our future cash requirements relating to working capital, capital expenditures, acquisitions and quarterly cash dividends to our stockholders will be funded from cash flows internally generated from our operations or borrowings under the Credit Facility.

As of September 30, 2026, we did not have any off-balance sheet arrangements.

Cash Flows

The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2026:

(in thousands)

Operating activities. Net cash provided by operating activities was $677 million and $1,093 million for the nine months ended September 30, 2025 and 2026, respectively. This increase in cash flows provided by operating activities between periods was primarily the result of the gain on litigation of $377 million related to the Veolia matter, lower cash used for working capital and increased gathering and processing and water handling revenues during the nine months ended September 30, 2026 attributable to the HG Acquisition and decreased direct operating expenses for the Utica Shale Divestiture, partially offset by increased gathering and processing and water handling direct operating expenses attributable to the HG Acquisition and lower gathering and processing revenues for the Utica Shale Divestiture between periods.

Investing activities. Net cash flows used in investing activities was $119 million and $867 million for the nine months ended September 30, 2025 and 2026, respectively. The increase in cash flows used in investing activities between periods was primarily due to cash paid for the HG Acquisition of $1.1 billion during the nine months ended September 30, 2026, as well as increased capital spending for gathering systems and facilities of $19 million and water handling systems of $3 million, partially offset by proceeds from the Utica Shale Divestiture of $377 million and lower additional investments in unconsolidated affiliates of $6 million during the nine months ended September 30, 2026.

Financing activities. Net cash used in financing activities was $558 million and $489 million for the nine months ended September 30, 2025 and 2026, respectively. The decrease in cash flows used in financing activities between periods was primarily due to the increase in net borrowings on our Credit Facility of $682 million, lower share repurchases of $33 million between periods and lower payments of deferred financing costs of $5 million, partially offset by the redemption of the 2028 Notes of $650 million and higher payments for employee tax withholding for settlement of equity-based compensation awards of $6 million.

2026 Capital Investment

On February 11, 2026, we announced our 2026 capital budget with a range of $190 million to $220 million. This capital budget supports Antero Resources’ capital program for 2026. Our capital budget may be adjusted as business conditions warrant. Additionally, we monitor our existing assets and look for opportunities to reuse or otherwise repurpose assets in an effort to optimize our capital efficiency.

Our capital expenditures were as follows:

(in thousands)

Debt Agreements

See Note 9—Long-Term Debt to the unaudited condensed consolidated financial statements and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K for additional information.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. Any new accounting policies or updates to existing accounting policies as a result of recently adopted accounting standards have been included in Note 2—Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent liabilities. Accounting estimates and assumptions are considered to be critical if there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the reported amounts in our unaudited condensed consolidated financial statements that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our unaudited condensed consolidated financial statements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2025 Form 10-K for additional information.

Business Combinations

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, with any remaining difference recorded as goodwill. For acquisitions, management engages an independent valuation specialist to assist with the determination of fair value of the assets acquired, liabilities assumed, and goodwill, based on recognized valuation methodologies, including but not limited to cost and income approaches as circumstances warrant. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the acquisition date. An adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment.

The valuation of the assets acquired and liabilities assumed in a business combination requires significant judgment about future events, economic and functional obsolescence, capacity and useful lives, among others, and such fair value approaches may rely on significant inputs that are not observable in the market. These assumptions affect the fair value of assets acquired and liabilities assumed and, if changed, could have a material effect on the Company’s financial position or results of operations. See Note 3—Transactions and Note 14—Fair Value Measurement to our unaudited condensed consolidated financial statements for additional information.

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risk. The term “market risk” refers to the risk of loss arising from adverse changes in commodity prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.

Commodity Price Risk

Our gathering and compression and water services agreements with Antero Resources provide for fixed-fee and cost of service fee structures, and we intend to continue to pursue additional fixed-fee or cost of service fee opportunities with Antero Resources and third parties in order to avoid direct commodity price exposure. However, to the extent that our future contractual arrangements with Antero Resources or third parties do not provide for fixed-fee or cost of service fee structures, we may become subject to commodity price risk. We are subject to commodity price risks to the extent that they impact Antero Resources’ development program and production and therefore our gathering, compression, and water handling volumes. We cannot predict to what extent our business would be impacted by lower commodity prices and any resulting impact on Antero Resources’ operations.

Interest Rate Risk

Our primary exposure to interest rate risk results from outstanding borrowings under the Credit Facility, which has a floating interest rate. We do not currently, but may in the future, hedge the interest on portions of our borrowings under the Credit Facility from time-to-time in order to manage risks associated with floating interest rates. As of September 30, 2026, we had $577 million of borrowings and no letters of credit outstanding under the Credit Facility. A 1.0% increase in the Credit Facility interest rate would have resulted in an estimated $3 million increase in interest expense for the nine months ended September 30, 2026.

Credit Risk

We are dependent on Antero Resources as our primary customer, and we expect to derive substantially all of our revenues from Antero Resources for the foreseeable future. As a result, any event, whether in our area of operations or otherwise, that adversely affects Antero Resources’ production, drilling schedule, financial condition, leverage, market reputation, liquidity, results of operations or cash flows may adversely affect our revenues and operating results.

Further, we are subject to the risk of non-payment or non-performance by Antero Resources, including with respect to our gathering and compression and water handling services agreements. We cannot predict the extent to which Antero Resources’ business would be impacted if conditions in the energy industry were to deteriorate, nor can we estimate the impact such conditions would have on Antero Resources’ ability to execute its drilling and development program or to perform under our agreements. Any material non-payment or non-performance by Antero Resources could adversely affect our revenues and operating results and our ability to return capital to stockholders.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2026 at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are subject to certain risks and hazards due to the nature of the business activities we conduct. For a discussion of these risks, see “Item 1A. Risk Factors” in the 2025 Form 10-K. There have been no material changes to the risks described in such report. We may experience additional risks and uncertainties not currently known to us. Furthermore, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect us.