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February 2016 Partnership Overview – Antero Midstream Partners Lp

Antero Midstream Partners Lp · Feb 24, 2016 · 49 slides

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Slides

  1. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 1
    Partnership Overview February 2016
  2. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 2
    CHANGES SINCE FEBRUARY 2016 PRESENTATION Updated AM slides for 12/31/2015 balance sheet and Slides 16, 17 liquidity results Updated AR slide for 12/31/2015 balance sheet and Slide 16 liquidity results 2
  3. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 3
    LEADING UNCONVENTIONAL MIDSTREAM BUSINESS MODEL High Growth Sponsor Largest Dedicated Core Drives AM Throughput Liquids-Rich Acreage and Distribution Growth Position in Appalachia 2 3 Growth Liquids- Premier E&P Operator…
  4. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 4
    SPONSOR STRENGTH LEADERSHIP IN APPALACHIAN BASIN Antero has the largest proved reserve base, the largest core liquids-rich acreage position and is one of the largest producers in the Appalachian Basin Appalachian Producers by Proved…
  5. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 5
    SPONSOR STRENGTH MOST ACTIVE OPERATOR IN APPALACHIA COMBINED TOTAL 12/31/15 RESERVES Assumes Ethane Rejection Net Proved Reserves 13.2 Tcfe Net 3P Reserves 37.1 Tcfe Strip Pre-Tax 3P PV-10(1) 11.2 Bn Net 3P Reserves & Resource 50…
  6. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 6
    GROWTH HIGH GROWTH MIDSTREAM THROUGHPUT Low Pressure Gathering (MMcf/d) High Pressure Gathering (MMcf/d) 1,800 Utica Marcellus 1,800 Utica Marcellus 1,600 1,600 1,400 1,400 1,216 1,195 1,124 1,134 1,197 1,200 1,038 1,200 935 965 1,000…
  7. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 7
    GROWTH TOP TIER DISTRIBUTION GROWTH Antero Midstream is targeting 28% to 30% annual distribution growth through 2017 AM has delivered on those targets with DCF coverage of 1.4x in the third quarter 2015 Distribution Per Unit (Left…
  8. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 8
    LIQUIDS-RICH LARGEST CORE POSITION Antero has over 3,000 undeveloped rich gas locations with an average lateral length of 6,800 in its 3P reserves as of 12/31/2014 Antero controls an estimated 37% of the NGLs in the liquids-rich…
  9. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 9
    SUSTAINABLE BUSINESS MODEL AR MULTI-YEAR DRILLING INVENTORY SUPPORTS LOW RISK, HIGH RETURN GROWTH PROFILE Antero has reduced average well costs for a 9,000 lateral by 16% in the Marcellus and 18% in the Utica as compared to 2014 well…
  10. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 10
    HIGH VISIBILITY PROJECTED MARCELLUS MIDSTREAM BUILDOUT In-service 2016 Budget 10
  11. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 11
    HIGH VISIBILITY PROJECTED UTICA MIDSTREAM BUILDOUT In-service 2016 Budget 11
  12. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 12
    MITIGATED COMMODITY RISK 100% FIXED FEE RICH TO DRY (1) Contract Mix Commodity Commodity Based Based Fixed Fixed Fixed Fixed Fee Fee Fee Fee 100% 100% 100% 100% Fixed Fixed Fee Fee 90% 97% Appalachian Exposure…
  13. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 13
    MITIGATED COMMODITY RISK FIRM TRANSPORTATION & SALES PORTFOLIO Antero Resources Transportation Portfolio Antero Resources has built the largest firm transportation portfolio in Appalachian Basin with 4.85 BBtu/d by year end 2018 BBtu/d…
  14. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 14
    HEDGING INTEGRAL TO BUSINESS MODEL Hedging is a key component of Anteros business model which includes development of a large, repeatable drilling inventory Locks in higher returns in a low commodity price environment and reduces well…
  15. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 15
    VALUE CHAIN OPPORTUNITY FULL MIDSTREAM VALUE CHAIN Well Pad Condensate Gathering End Stabilization Users (Miles) YE 2015 YE 2016E Compression (Miles) YE 2015 YE 2016E Utica 19 19 Marcellus 76 98 Low Pressure Gathering Utica 36…
  16. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 16
    STRONG FINANCIAL POSITION STRONG BALANCE SHEET AND FLEXIBILITY Antero Resources (NYSE:AR) Antero Midstream (NYSE:AM) 12/31/2015 Debt Liquid Non-E&P Assets 12/31/2015 Debt Liquid Assets Debt Type MM Asset Type MM Debt Type MM Asset…
  17. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 17
    STRONG FINANCIAL POSITION SIGNIFICANT FINANCIAL FLEXIBILITY AM Liquidity (12/31/2015) Financial Flexibility 1.5 billion revolver in place to fund future growth capital ( in millions) (5x Debt/EBITDA Cap) Revolver Capacity 1,500…
  18. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 18
    TOP TIER DISTRIBUTION GROWTH & HEALTHY COVERAGE 3Year Street Consenus Distribution Growth Rate and DCF Coverage(1) 30% 2.00x 1.7x 1.80x 1.7x 25% 1.5x 1.60x 1.4x 1.4x 1.3x 1.40x 1.3x 1.3x 1.3x 20% 1.1x 1.20x 15% 1.00x…
  19. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 19
    ATTRACTIVE VALUE PROPOSITION Attractive appreciation potential on a relative basis 10.0% CNNX R-squared = .76 9.0% 8.0% 7.0% WES 6.0% TEP AM 12/31/15 Yield: 3.59% Yield (%) 5.0% Price: 22.82 MPLX 4.0% AM -…
  20. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 20
    Antero Midstream (NYSE: AM) Asset Overview 20
  21. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 21
    ANTERO MIDSTREAM GATHERING AND COMPRESSION ASSET OVERVIEW Gathering and Compression Assets Utica Gathering and compression assets in core of rapidly Shale growing Marcellus and Utica Shale plays Acreage dedication of 438,000 net…
  22. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 22
    ANTERO MIDSTREAM ASSETS RICH GAS MARCELLUS Marcellus Gathering & Compression Provides Marcellus gathering and compression services Liquids-rich gas is delivered to MWEs 1.2 Bcf/d Sherwood processing complex Significant growth…
  23. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 23
    ANTERO MIDSTREAM ASSETS RICH & DRY GAS UTICA Utica Gathering & Compression Provides Utica gathering and compression services Liquids-rich gas delivered into MWEs 800 MMcf/d Seneca processing complex Condensate delivered to…
  24. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 24
    ANTERO MIDSTREAM WATER BUSINESS OVERVIEW AM acquired ARs integrated water business for 1.05 billion plus earn out payments of 125 million at year-end in each of 2019 and 2020 The acquired business includes Anteros Marcellus and Utica…
  25. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 25
    ANTERO MIDSTREAM ADVANCED WASTEWATER TREATMENT ASSET OVERVIEW Antero has contracted with Veolia to integrate an advanced wastewater treatment complex into its water business Advanced Wastewater Treatment Illustrative Produced &…
  26. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 26
    ORGANIC GROWTH STRATEGY: BUILD VS. BUY Organic growth strategy provides attractive Organic EBITDA Multiple vs. Precedent Drop Down Multiples returns and project economics, while 11.9x avoiding the competitive acquisition market…
  27. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 27
    ESTIMATED PROJECT ECONOMICS BY SEGMENT Project Economics by Segment(1) AM Option Opportunities 40% 40% Internal Rate of Return 35% 35% 30% 30% 25% 25% 25% 25% 25% Wtd. Avg. 21% IRR 20% 20% 20% 15% 15% 15% 15% 10% 10% 0%…
  28. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 28
    AM UPSIDE OPPORTUNITY SET ACTIVITY CURRENTLY DEDICATED TO AM Option to participate for up to 15% in regional gathering pipeline project in West Virginia that went in-service Regional Pipeline Project 12/1/2015 Additive to full value…
  29. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 29
    REGIONAL PIPELINE PROJECT Regional Gathering Pipeline Option to Acquire Up To 15% Non-Op Equity Interest Throughput Capacity: 1.4 Bcf/d Pipeline 50 miles of 36 inch pipeline Specifications: Project Capital: 400 Million In-Service…
  30. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 30
    PROCESSING VALUE CHAIN POTENTIAL FOR UNDEDICATED ACREAGE Antero Resources has 14.8 Tcf of processable gross 3P gas reserves and 745 Million Bbls of gross 3P NGL reserves across 141,000 gross processable Marcellus acres that are…
  31. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 31
    LARGE UTICA SHALE DRY GAS POSITION Utica Shale Dry Gas Acreage in OH/WV/PA(1) Antero has completed its first dry gas Utica well a 6,620 Chesapeake Rice Hess lateral in Tyler County, WV Bigfoot 9H Porterfield 1H-17 Hubbard BRK 3H…
  32. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 32
    CATALYSTS 1 AM Sponsor is the most active operator in Appalachia; 15% production High Growth Sponsor growth targeted for 2016 supported by 1.4 billion capital budget, firm Production Profile processing and takeaway, long-term natural…
  33. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 33
    APPENDIX 33
  34. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 34
    ANTERO MIDSTREAM 2016 GUIDANCE Key Operating & Financial Assumptions Key Variable 2016 Guidance Financial: Adjusted EBITDA (MM) 300 - 325 Distributable Cash Flow (MM) 250 - 275 Year-over-Year Distribution Growth(1) 28% - 30% Operating:…
  35. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 35
    2016 CAPITAL BUDGET Antero Midstreams 2016 initial capital budget is 435 million, a 3% increase from 2015 capital expenditures of 423 million 423 Million 2015(1) 435 Million 2016 By Segment (MM) By Segment (MM) 13 25 55 6 3%…
  36. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 36
    ANTERO RESOURCES 2016 GUIDANCE Key Operating & Financial Assumptions Key Variable 2016 Guidance Net Daily Production (MMcfe/d) 1,715 Net Residue Natural Gas Production (MMcf/d) 1,355 Net C3+ NGL Production (Bbl/d) 46,500 Net…
  37. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 37
    LARGEST FIRM TRANSPORTATION AND PROCESSING PORTFOLIO IN APPALACHIA Anteros natural gas firm transportation (FT) portfolio builds to 4.85 Bcf/d by YE 2018 with 87% serving favorable markets, with an average demand fee of 0.40/MMBtu and…
  38. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 38
    NORTHEAST NGLS ARE TRANSPORTATION CHALLENGED Not so much a supply problem but more of a logistics problem for NGLs in the northeast today The majority of northeast NGL production is being transported by expensive rail and trucking NGLs…
  39. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 39
    NORTHEAST NGL GROWTH IS SUPPORTED BY INCREASING TAKEAWAY OPTIONS NGL transportation rates are expected to decline 0.12 to 0.15 per gallon by 2017 as pipeline options to domestic markets and export terminals go in-service (Mariner East…
  40. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 40
    U.S. EXPORTS ARE SUPPORTED BY EXCESS DOCK CAPACITY AND FLEET GROWTH LPG transportation rates from northeast fractionation to Europe and Asia should improve by 0.05 to 0.15 per gallon by YE 2016, driven both by pipelines replacing rail…
  41. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 41
    2015 GLOBAL LPG DEMAND Global LPG demand is 8.5 MMBbl/d and growing 41
  42. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 42
    POSITIVE OUTLOOK FOR LONG-TERM NGL MARKETS Forecast global LPG demand growth of 800 MBbl/d to 1 MMBbl/d by 2020 to be driven by petrochem projects in Asia and Middle East as well as residential/commercial, alkylate and power generation…
  43. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 43
    GLOBAL LPG DEMAND DRIVEN BY PETCHEM AND RES/COMM Largest end-use sectors for LPG are residential/commercial, which tends to grow with population and improvement in living standards in the emerging markets PIRA forecasting 1.0 MMBbl/d…
  44. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 44
    GLOBAL LPG TRADE DRIVEN BY U.S. SHALE The U.S. is the largest single driver of the rapid expansion in LPG trade accounting for over 90% in trade growth MMBbl/d 5.2 4.6 3.9 3.3 2.6 2.0 United States 1.3 0.7 1.…
  45. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 45
    U.S. SHALE NGL EURS SUPPORT LPG TRADE GROWTH U.S. shale play NGL reserves are 50.8 billion barrels (1) Eagle Ford, Marcellus, Utica, Bakken and Permian are the work horses of U.S. shale production growth Marcellus/Utica NGL resource…
  46. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 46
    POSITIVE OUTLOOK FOR LONG-TERM ETHANE MARKETS AS WELL U.S. ethane demand is projected to increase at an annual 3.5% CAGR through 2020, primarily based on an 8% CAGR for U.S. petrochem demand and a 30% growth in exports primarily to…
  47. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 47
    MAINTENANCE CAPITAL METHODOLOGY Maintenance Capital Calculation Methodology Low Pressure Gathering Estimate the number of new well connections needed during the forecast period in order to offset the natural production decline and…
  48. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 48
    ANTERO RESOURCES EBITDAX RECONCILIATION EBITDAX Reconciliation ( in millions) Quarter Ended LTM Ended 12/31/2015 12/31/2015 EBITDAX: Net income including noncontrolling interest 175.6 980.0 Commodity derivative fair value (gains)…
  49. February 2016 Partnership Overview – Antero Midstream Partners Lp – slide 49
    ANTERO MIDSTREAM EBITDA RECONCILIATION EBITDA and DCF Reconciliation Three months ended in thousands December 31, 2014 2015 Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow: Net income 55,898 49,008 Add:…

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