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The documents show that **Q1 2022** had an operating cash flow of **$565,673 thousand** compared to **$261,610 thousand** in **Q1 2024**.  **[0001558370-22-006110_ar-20220331x10q.htm:6]** **[0001558370-24-005602_ar-20240331x10q.htm:6]**  Although the detailed explanation in the documents focuses on the decline from Q1 2023 to Q1 2024, many of the same factors likely contributed to the lower cash flow in Q1 2024 relative to Q1 2022. Specifically, **lower natural gas prices**, **unfavorable working capital changes** (including increases in current assets and liabilities), and **higher operational costs**—such as increased gathering, compression, processing, and transportation expenses—have all negatively impacted the cash flows.  **[0001558370-24-005602_ar-20240331x10q.htm:44]** **[0001104659-24-051278_tm2412583d1_ex99-1.htm:2]** **[20240424LA96719:7]** **[20240424LA96719:10]**  Additionally, Q1 2024 did not include a significant one-time positive factor (a derivative monetization payment) that had boosted previous periods. These factors collectively help explain why operating cash flow in Q1 2024 was much lower than in Q1 2022.

Why was Operating Cash Flow in Q1 2024 much lower than in Q1 2022?

The dramatic swing to positive free cash flow in FY 2024 can be attributed to a significant reduction in capital expenditures. In FY 2024, the company notably completed fewer wells (declining from **70 to 41 wells**), reduced its drilling activity due to a lower rig count, and scaled back leasing activities. These factors contributed to a lower net cash outflow in investing activities, which in turn helped drive the improvement in free cash flow.  **[0001558370-25-000864_ar-20241231x10k.htm:100]** 

What factors contributed to the dramatic swing to positive Free Cash Flow in FY 2024?

The documents do not provide a definitive explanation for the significant increase in **Free Cash Flow** in Q4 2024 compared to Q4 2023. However, they do explain that the **net cash used in investing activities** decreased significantly—primarily driven by **lower well completions, decreased drilling activity due to a lower rig count, decreased leasing activity, and lower drilling and completion costs**. If these factors contributed to reducing capital expenditures, they might have indirectly supported a higher free cash flow, though the documents do not explicitly connect these changes to free cash flow.  **[0001558370-25-000864_ar-20241231x10k.htm:100]** **[0001104659-25-012276_tm256297d1_ex99-1.htm:13]** 

Why did Free Cash Flow in Q4 2024 increase significantly compared to Q4 2023?

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The noticeable drop in total assets in Q4 2024 was driven by several key factors. **Property and equipment, net** saw a decline due to increased depletion, depreciation, and amortization. Additionally, there was a reduction in the value of **operating leases right-of-use assets**, a significant decrease in **derivative instruments**, and a drop in **other current assets**. These reductions combined to lower the overall total assets significantly during the period.  **[20250212LA18150:8]** 

Why did Total assets drop so noticeably in Q4 2024?

The **increase in Long-term debt** in Q3 2024 was primarily driven by a **rise in borrowings under the Credit Facility**, which increased from **$417,200 thousand** at the end of 2023 to **$526,700 thousand** in Q3 2024, contributing to a net increase of **$84,720 thousand**. This change in borrowings indicates the company’s need for additional liquidity during that period.  **[0001558370-24-013956_ar-20240930x10q.htm:15]** **[0001104659-24-112650_tm2427082d2_ex99-1.htm:6]** 

What drove the increase in Long-term debt in Q3 2024?

The spike in **Derivative instruments - current liabilities** in Q4 2024 is primarily due to the **mark-to-market adjustments** of the derivative instruments. These adjustments reflect changes in market prices and are recorded in the statements of operations and comprehensive income, resulting in increased reported liabilities despite not affecting cash flows until settlement. Additionally, an increased **net derivatives liability** (rising from **$37 million** in 2023 to **$47 million** in 2024) contributed to this spike.  **[20250212LA18150:8]** **[0001104659-25-012276_tm256297d1_ex99-1.htm:11]** **[0001558370-25-000864_ar-20241231x10k.htm:128]** **[0001558370-25-000864_ar-20241231x10k.htm:106]** 

Why did Derivative instruments - current liabilities spike in Q4 2024?

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Antero Resources Corp (AR)

Financials