Antero Resources Strategic Announcements OCTOBER 9, 2018
Special Committee Process Objectives While evaluating potential alternatives to increase shareholder value, there were a number of key objectives: 1 Return Capital to AR Shareholders - Capitalize on opportunity to repurchase shares at…
AR Strategic Announcements Antero has completed its special committee process and is pleased to announce the following: 1 AMGP to acquire AM in a simplification transaction creating New AM AR to receive 300 million of cash and 158 MM…
Midstream Simplification Transaction Overview Antero Midstream GP LP (AMGP) to acquire Antero Midstream Partners LP (AM) creating a premier Appalachian infrastructure organic growth corporation: Antero Midstream Corporation (NYSE: AM)…
Antero Simplified Pro Forma Structure Midstream simplification transaction results in one publicly traded midstream entity and better aligns the interests of PE sponsors and management with AR shareholders Eliminates IDRs and the…
New AM Same Cash Distribution Targets From an AR perspective New AM will target the same dividends & year-over-year growth rates as legacy AM distributions with stronger DCF coverage (as a result of tax savings through 2022 and beyond)…
Share Repurchase Program Details The Board of AR has approved an initial 600MM share repurchase program, representing over 10% of ARs shares outstanding assuming todays share price 1 Share repurchase program authorized over the next…
Share Repurchase Program Funding Antero expects to fund its share repurchase program through the following sources: 1 Midstream Simplification Transaction (300 million) 2 Free Cash Flow Generation (300 million) Share Repurchase…
Compounding Leverage to Improving NGL Prices From 2015 - 2018 C3+ NGL prices Production growth combined with have increased 94% while ARs pricing improvement drives compounding production has increased by 84% exposure to improving NGL…
Leader in Leverage to NGL Prices Top NGL Producers in the U.S. (C3+ and ethane) 2018 Consensus C2+ NGL Production Pre-hedged Realized NGL Price (/Bbl) 140 45% Pre-Hedge NGL % of Total Product Revenues (1) NGLs Generate 33% 40% 120…
Powerful C3+ NGL Pricing Upside Exposure Compounded pricing leverage from For every 5.00/Bbl increase in NGL increasing volumes, prices, and Mariner prices, Antero generates an East 2 uplift drives cash flow growth incremental 170MM…
Anteros Ethane Exposure: All Upside Anteros ethane has a natural gas pricing Anteros balanced approach to ethane floor and purity ethane ceiling; increases sales results in 50% of contracts tied in ethane purity prices are all upside…
Anteros Liquids Scale at Attractive Value Anteros liquids scale and leverage to liquids Attractive value proposition for prices compares favorably to Permian similar liquids scale operators Liquids Production vs. Revenue Liquids…
Near Term Free Cash Flow Inflection Point Production growth and strong liquids Capital discipline to reduce completion prices drives free cash flow crews and D&C capex in 2H18 in 4Q18 and beyond Free Cash Flow(1) Free Cash Flow…
Capital Discipline Leads to Free Cash Flow 48% reduction in D&C capital budget Future D&C capital budgets that are and 15-rig reduction since 2014 measured and within cash flow Stand-Alone Adjusted Cash Flow Alongside D&C Capital…
Financially Disciplined Repurchase Program Disciplined share repurchase plan maintains financial flexibility and balance sheet strength with leverage 2.25x in 4Q 2018 and 2.0x in 2019 AR Standalone Net Debt / LTM EBITDAX(1) 4.5x…
Antero Profile Should Drive Multiple Expansion At current prices, share repurchase program allows AR to buy back shares at an attractive 4.1x 2019 standalone unhedged EBITDAX multiple Median Debt/ Median EV/ of Adjusted 2019 Adj. AR…
Summary Simplification Transaction Benefits Midstream simplification transaction attributes: 1 AR receives cash and a premium for its AM ownership - Receives a minimum of 300 million of cash which serves as a catalyst to fund a portion…
Appendix
Clickin to Best editMidstream Class Master title style Vehicle Simplification checks all the boxes for midstream investors Attribute Antero Midstream Corporation 1099 Tax Form C-corp for tax and governance purposes with 1099 tax…
Series B Profits Elimination Prior to Simplification: The Series B profits interests were created in December 2016 through an agreement between Anteros co-founders and private equity sponsors, who jointly owned 100% of IDR LLC prior to…
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…
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 Midstream Non-GAAP Measures The following table reconciles consolidated total debt to consolidated net debt (Net Debt) as used in this presentation (in thousands): June 30, 2018 Bank credit facility 770,000 5.375% AM senior…
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