Energy Prospectus

I have updated my forecast/valuation model for AR and it will be posted to the EPG website this afternoon.

At the time of this post, AR was trading at $19.75.

My valuation increases by $5.00 to $32.00, primarily because I am now giving 2022 operating cash flow equal weight in my valuation.
> Less than 50% of AR's natural gas is hedged for 2022.
> None of their NGLs are hedged for 2022.

Raymond James and Mizuho Securities also raised their price targets to $32.00.

Vincent Lovaglio, at Mizuho Securities

"We continue to believe that AR is among the better-positioned gas operators to announce an attractive
cash return framework early next year, with the balance sheet significantly improved compared to
a year ago. AR confirmed that it expects to reach its $2.0Bn debt target early next year (would get
the company to ~2.0x "mid-cycle" leverage) at which point it should be able to start returning cash
to shareholders. We forecast $1.1Bn free cash flow next year at strip NGL prices, with torque to
a potentially higher NGL prices through the year (propane ~$15/bbl backwardated). We maintain
our Buy rating."