Antero Midstream At A Glance AM Highlights Antero Midstream Marcellus Assets Market Cap....... 5.5B Enterprise Value.......... 6.9B LTM Adjusted EBITDA(1).. 619 MM % Gathering/Compression 65% New Smithburg JV % Water.......... 35%…
Antero Midstream Momentum/Value Chain Evolution Gathering and Compression Fresh Water Delivery Processing and Fractionation AM commences gathering AM acquires water AM/MPLX form 50/50 and compression services business from AR for 1.15…
Driven by Resilient Sponsor Model Anteros integrated strategy has positioned Antero as a leader in EBITDAX margin for over five years Long-term hedges and FT, liquids exposure and ownership in midstream buildout EBITDAX Margin vs WTI…
High Growth Midstream Throughput AM high growth throughput driven by AR development plan and resource base Low Pressure Gathering (MMcf/d) Compression (MMcf/d) 1,558 2,500 1,600 1,981 1,400 2,000 1,196 1,660 1,200 1,500 1,403…
Delivering on November 2014 AM IPO Promise AM Distribution Per Unit and DCF Coverage Delivered on 2.00 2.0x distribution growth 1.8x 1.80 1.72 through the downturn 1.8x 1.60 and exceeded 1.15x 1.4x 1.6x IPO DCF coverage 1.40…
Well Positioned Midstream Family Elite sponsor (AR) with scale, growth, declining leverage (Ba2/BB+/BBB-) and free cash flow Sustainable cash flow growth Longer lateral Self-funding development plan Generating 5-year free cash…
Strong, Growing & Supportive Sponsor
Anteros Integrated Strategy Antero Midstream is an integral part of Antero Resources long-term development plan Develop world class liquids-rich resource base Firm transportation to mitigate local basis Strategically expand…
Largest Core Liquids-Rich Inventory in Appalachia 13 NE Marcellus Rigs Core Liquids-Rich Appalachia 27 Utica Undrilled Locations(1) Rigs J B H F I 5% 3% 2% 3% D 7% 7% K AR 36 SW Marcellus Rigs 7% 40% 2,234 Locations…
Largest Undrilled Core Drilling Inventory Undrilled Core Marcellus & Utica Locations(1) Marcellus & Utica Liquids Rich Locations SW Marcellus & Utica Dry Locations NE Pennsylvania Dry Locations 4,000 3,500 Who Can Consistently…
Long Lateral Development Plan 59% of Inventory Now 5-Year Plan Averages 11,500 10,000 Lateral Length Average Lateral Length Core Inventory by Lateral Length per Completed Well 14,000 1,600 12,700 1,450 10,800 12,000…
AR is Currently The Top NGL Producer in the U.S. Top U.S. NGL Producers 2Q18 (MBbl/d)(1) 115 ARs significant 107 105 production and underlying liquids- 95 rich resource base 85 MBbl/d 75 .Brings AM a seat at the table 65…
Outstanding Corporate Level Well Economics Single Well Economics Excluding Hedges Well Economics Support Investment Full Cycle ROR Half Cycle ROR Full Cycle ROR at 70/Bbl Half Cycle ROR at 70/Bbl ROR Well in Excess of Cost of…
ARs Lower Capital & Higher Liquids Free Cash Flow Over 1.6B of Targeted Free Cash Flow from 2018 to 2022 at Strip Pricing Including Maintenance Land Capital Expenditures 5-Year Stand-Alone Free Cash Flow: Cumulative 1,500…
Cash Click Flow to editGrowth Deleveraging Master title style Profile 12/31/17 Strip Pricing (Base Case) 60 Oil / 2.85 Gas 5.0x 50 Oil / 2.85 Gas S&P Upgrade to BB+ 23% Debt-Adjusted 4.5x Moodys Ba2 Outlook Positive Production…
Premier Integrated Appalachian Midstream Assets
Antero Midstreams Organic Growth Strategy Organically invest in midstream infrastructure supporting AR Expand and diversify Non-speculative just- operations across in-time capital midstream value chain investment with high…
Antero Midstreams Premier Asset Footprint Antero Midstream provides a customized full value chain midstream solution in the lowest cost natural gas and liquids basins: the Marcellus and Utica Shale Integrated system in the core of the…
Driving Northeast Value Chain Buildout 5-year identified project inventory of 2.7B plus an additional 1.0B of potential downstream opportunities Upstream Downstream AM Assets AM/MPLX JV Assets Potential AM Opportunities 800MM JV…
Gathering and Compression Asset Overview Significant long-term volumetric visibility from AR supports efficient gathering and compression infrastructure buildout and attractive project returns Asset Strategy 2018 & 2019 Gathering &…
New Joint Venture Processing Site New Processing Site Northeast Processing & Fractionation AM and MPLX are beginning civil construction on a new JV processing site named Smithburg in Doddridge County, WV Strategically located 2.5…
Processing and Fractionation Asset Overview Joint Venture aligns the largest core liquids-rich resource base with largest processing and fractionation footprint in Appalachia Asset Strategy JV Processing Capacity (Bcf/d) Support…
Largest Natural Gas Processors in the U.S. Antero Midstream is a top 10 natural gas processor, with significant growth expected over the next 5 years supporting ARs liquids-rich development Top Natural Gas Processors in the U.S. 1Q18…
Freshwater Delivery Asset Overview Due to the reliability of AMs buried fresh water pipeline system, AM has a 100% track record of timely fresh water deliveries to ARs completions Asset Strategy 2018 & 2019 Fresh Water Projects…
Antero Clearwater Facility Asset Overview The Antero Clearwater Facility is the largest advanced wastewater treatment facility in the world for shale oil and gas operations Asset Strategy Midstream Services Provided Veolia will build…
Projected Marcellus Midstream Buildout In Service 2018 2019 2020 2021 2022 2023+ ORGANIC PROJECT BACKLOG WITH PEER-LEADING RETURNS 28
Projected Utica Midstream Buildout In Service 2018 2019 2020 2021 2022 2023+ ORGANIC PROJECT BACKLOG WITH PEER-LEADING RETURNS 29
5-year Organic Project Backlog: 2018 - 2022 High-graded organic Primary focus on rich project backlog of 2.7B gas Marcellus from 2018 - 2022 infrastructure 2.7B Project Backlog By Area 2.7B Project Backlog By Function Processing…
Organic Growth Drives Attractive Rates of Return AM Organic EBITDA Buildout Multiples 12.0x AM Organic Investment Drop Down 3.1B invested to EBITDA Multiple Median: 8.8x 10.0x through 9/30/17 on 8.8x midstream infrastructure…
Antero Midstream Return on Invested Capital AM Return on Invested Capital (ROIC) 2017 ROIC of 15% in 25% only fourth year of AM operations 20% Future organic growth 15% 15% capital leverages 13% existing trunklines and 12%…
Long-Term Distribution and Coverage Targets Unchanged capital investment philosophy with disciplined financial policies result in ability to target peer-leading distribution growth through 2022 Long-Term Distribution Targets and DCF…
Financial Policy Overview Maintain conservative leverage profile between 2.0x 2.5x Prudent net debt to LTM Adjusted EBITDA Leverage With ability to flex up to 3.0x on a short-term basis for accretive transactions Target…
AMGP Overview: Unmatched Yield Growth
AMGP Leads the Pack ARs visible and de-risked development plan 100% Pure Play IDR Vehicle AMs organic growth General Partner strategy results in with peer-leading LP unmatched distribution growth yield growth Debt-free…
Long-Term Distribution Targets As a result of AM targeting 20% distribution growth in 2021 and 2022, AMGP is targeting distribution growth of 29% and 27% in 2021 and 2022 AMGP Long-Term Distribution Targets (Midpoint) AMGP…
Most Integrated Natural Gas And NGL Story in the U.S. A Leading Northeast Infrastructure Provider 1 Organic just-in-time investment strategy with 1 Unmatched yield growth high visibility 2 Pure play IDR vehicle 2 Expanding…
Capital and EBITDA Contribution - 2018 2018 organic capital budget fully funded with retained cash flow and credit facility borrowings, no need for equity financing Capital Expenditures (MM) Adjusted EBITDA (MM) Processing &…
Pad Efficiency Results in Capital Efficiency Average Lateral Length Per Completed Well Pads Completed Per Year 2017 Plan 2018 Plan 2017 Plan 14,000 50 2018 Plan Cumulative Pads Removed 12,400 12,700 45 12,000 11,600 Average…
Liquidity & Debt Term Structure 6/30/2018 Debt Maturity Profile AM Credit Facility AM Senior Notes 900 800 700 New credit facilities for AM 600 have extended its average debt maturity out to 2023 650 500 400 770 300…
5-year Organic Project Backlog Reduction 500MM in Capital Efficiencies Reduce 5-Year Backlog to 2.7B with No Change in Throughput Targets Midstream Optimized Capital Higher EURs Longer Laterals Capex Savings 25MM from Lateral…
Capital Efficiency Drives Free Cash Flow Generation Significant Significant Investment in Investment in Leverage existing asset base Gathering, Processing, and realization of full build-out Compression, Fresh Fractionation, EBITDA…
Antero Midstream Project Economics Just-in-time capital investment philosophy drives attractive project IRRs AM Project Economics by Investment 45% 40% 40% 40% Weighted Internal Rate of Return 35% Avg: 25% IRR 30% 28% 30%…
AR Development Focused on AM Dedicated Acreage AR Net Production vs. AM Throughput Attractive E&P 38% 6.0 40% economics on liquids-rich acreage 34% 35% dedicated to AM 5.0 AM Throughput Growth 30% 4.0 24% 22% 25% 5-year…
Improving Midstream Capital Efficiencies More Efficient Increasing More Wells Per Longer Laterals Capital Recoveries Pad Investment Increasing Lateral Lengths (Feet) Increasing Wells Per Pad 17,400 12,000 16 14 11,000 14 10,134…
Antero Midstream Capex Reduction AM Capex (Excluding Earn-outs) 500MM cumulative 1,000 As of December 2017 As of December 2016 capital reduction vs. December 2016 budget 750 Infrastructure plan focused in the 500 Marcellus…
Advanced Completions Utilize More Water AR applies 2,000-2,500 Budget plan Vintage 1,000 1,500 lb/ft lb/ft completions in assumes proppant completions use 2017 utilizing 25% 2,000 lb/ft 33-34 Bbl/ft of water more water vs. vintage…
Fresh Water Delivery Volume Growth Wells Serviced by Fresh Water Delivery System and Lateral Length 250 Wells Serviced by Freshwater System (Low End) Average Lateral Length Wells Serviced by Freshwater System Wells Serviced by…
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…
Deleveraging is Driving Ratings Momentum AR Corporate Credit Ratings History Stable Credit Ratings with Consistent Investment Grade Rating from Upgrades from the Beginning of the Fitch (BBB-) & Recent Decade Through the Downturn…
Antero Midstream Non-GAAP Measures Non-GAAP Financial Measures and Definitions Antero Midstream views Adjusted EBITDA as an important indicator of the Partnerships performance. Antero Midstream defines Adjusted EBITDA as Net Income…
Antero Midstream Non-GAAP Measures The GAAP financial measure nearest to Adjusted Operating Cash Flow is cash flow from operating activities as reported in Antero Midstreams consolidated financial statements. Management believes that…
Antero Midstream Non-GAAP Measures Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures. The GAAP measure most directly comparable to Adjusted EBITDA and Distributable Cash Flow is Net Income. The non-GAAP…
Adjusted EBITDA and DCF Reconciliation Adjusted EBITDA and DCF Reconciliation ( in thousands) Three months ended June 30, 2017 2018 Net income 87,175 109,466 Interest expense 9,015 14,628 Impairment of property and equipment…
Antero Resources Cautionary Note Regarding Hydrocarbon Quantities The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserve estimates (collectively, 3P). Antero has…
Antero Resources Stand-Alone Adjusted EBITDAX Reconciliation AR Stand-Alone Adjusted EBITDAX Reconciliation ( in millions) Three Months Ended LTM Ended 6/30/2018 6/30/2018 Net income (loss) including noncontrolling interest…
Antero Resources Definitions Consolidated Adjusted EBITDAX: Represents net income or loss from continuing operations, including noncontrolling interests, before interest expense, interest income, derivative fair value gains or losses…
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