Why Were Here Midstream Simplification has been approved by the AM and AMGP Conflicts Committees and by the AR Special Committee Transaction Timeline October 9, 2018 Simplification transaction announced January 31, 2019 Proxy…
Antero Midstream Presenters Paul Rady Antero Co-Founder Chairman & CEO of Antero Resources and Antero Midstream Glen Warren Antero Co-Founder President of Antero Midstream President and CFO of Antero Resources Michael Kennedy…
Long Track Record Of Success Antero Midstream has delivered a 27% dividend CAGR through the downturn and exceeded DCF coverage targets by 22% on average since the IPO New AM Dividend Per Share and DCF Coverage Since IPO (2) 1.40…
Antero Family at a Glance The Most Integrated Natural Gas and NGL Platform in the U.S. A World Class E&P Operator in Appalachia NYSE: AR 7 Billion Enterprise Value(1) Ba2 / BB+ / BBB- Corporate Debt Ratings 31%(1) A…
What Does Antero Midstream Do Provides a customized, integrated full value chain midstream solution 50/50 JV Exploration & Gathering & Natural Gas C3+ NGL Production Compression Processing Fractionation Terminals & Storage Long…
Antero Midstreams Strategy AR + AM ownership captures the integrated natural gas and NGL value chain with C-Corp governance and ongoing return of capital Dominant position in highest return natural gas and 18% to 25% DCF CAGR…
AMGP/AM Simplification Transaction Summary Announced on 10/09/2018 and expected to close in March 2019 1 Simplifies midstream structure and aligns all Antero equity holders Converts MLP to C-Corp structure without IDRs Expected to…
Antero Family Simplified Pro Forma Structure Midstream simplification transaction results in one publicly traded midstream infrastructure corporation with no IDRs and AR as its largest shareholder Status Quo Structure Simplified Pro…
DCF Profile Supports Growing Return of Capital Antero Midstreams distributable cash flow growth, self-funding business model, and leverage profile supports an increase in return of capital to shareholders Distributable Cash Flow vs.…
Highest DCF Growth Among Top 20 Midstream New AM will be a unique midstream vehicle with scale, low leverage and high distributable cash flow growth all in a C-Corp structure C-Corp MLP Leverage * Eliminated IDRs (Simplified)…
World Class E&P Operator: Antero Resources
Prolific Underlying Resource Underpins Growth Antero Resources holds 40% of the core undrilled liquids-rich locations in Appalachia with attractive economics and low breakeven prices Core Liquids-Rich Appalachian Undrilled…
Anteros Disciplined Strategy The Exploration and Production Industry is: PRICE CAPITAL COMPETITIVE CYCLICAL INTENSIVE & DYNAMIC Anteros Strategy Anteros Strategy Anteros Strategy Focus on liquids-rich Own the lowest cost…
Strong Sponsor with Scale to Capitalize on Resource AMs sponsor and primary customer (AR), is the largest NGL producer in the U.S. with a strong balance sheet and leverage in the low 2x range Top U.S. C2+ NGL Producers - 2019E(1) 2019…
Resilient and Flexible Development Plan Anteros flexible development program through 2023 will be responsive to commodity prices to grow production and maximize free cash flow Lower Prices: 50 Oil / 2.85 Gas Higher Prices: 65 Oil / 3.15…
Long-Term Outlook Antero is poised to prudently grow production to maximize free cash flow, ultimately resulting in an appropriate mix of return of capital and further deleveraging Production Growth Scenarios (2020 2023) 6,000 2.5 -…
Sustainable and De-risked Development Plan Antero Resources is 100% hedged on natural gas through 2019; Hedges and FT provide price stability to support sustainable long-term development Hedge Portfolio Supports Antero Natural Gas…
Antero Hedge Position Antero has 100% of its gas production hedged in 2019 and 55% to 60% hedged in 2020 at 3.00/MMbtu Antero Hedge Profile(1) (MMcf/d) (/MMBtu) 2,500 2,330 NYMEX Collar Volume NYMEX Swap Volume 4.00 3.48 3.44 NYMEX…
Firm Transportation Portfolio Provides Visibility All of Antero Resources contracted firm capacity is now in service, providing visible production growth and sales to diversified markets Antero Resources Firm Transportation Portfolio…
Integration is Critical in Shale Development Anteros integrated strategy has resulted in peer-leading realized prices and margins for 6 straight years and consistent results through commodity cycles Stand-alone E&P Adjusted All-in…
Premier Northeast Infrastructure Platform Premier Integrated Appalachian Midstream Assets Antero Clearwater Facility February 2018 24
Antero Midstream Asset Overview ARs core resource base, combined with AMs integrated midstream assets, positions AM as the leading Appalachian infrastructure growth platform Over 300 miles of pipeline Over 2.2 Bcf/d of compression…
High Growth Midstream Throughput Antero Midstream has delivered consistent, peer-leading, and sustainable growth through its organic investments Low Pressure Gathering (MMcf/d) Compression (MMcf/d) 1,756 2,500 1,800 2,165 1,600…
Capital and Adjusted EBITDA Contribution - 2019 2019 organic capital budget fully funded with retained cash flow and credit facility borrowings no need for equity financing Capital Expenditures (MM) Adjusted EBITDA (MM)…
4-year Organic Project Backlog: 2019 - 2022 High-graded organic Primary focus on rich project backlog of 2.0B gas Marcellus through 2022 infrastructure 2.0B Project Backlog By Area 2.0B Project Backlog By Function Processing &…
Gathering and Compression Assets & Strategy Significant long-term volumetric visibility from AR supports efficient gathering and compression infrastructure buildout and attractive project returns Asset Strategy Historical Compression…
Processing and Fractionation Assets & Strategy Joint Venture with MPLX (subsidiary of Marathon) aligns the largest core liquids-rich resource base with largest processing and fractionation footprint in Appalachia Asset Strategy…
Water Handling and Treatment Assets & Strategy 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 Water Services Provided…
Fixed Fee Business Model Supports Stable Cash Flows Antero Midstream generates all of its revenues through fixed-fee contracts, insulating EBITDA growth from commodity price volatility Details Antero Midstream Adjusted EBITDA (MM)…
Organic Strategy Drives Attractive Return on Capital Fixed-fee tolling business combined with Just-in-Time capital investment drives attractive returns on capital across commodity environments Investment Philosophy AM Return on…
Long-Term Outlook New AM Based on ARs flexible long-term outlook, AM is targeting an 18% - 25% distributable cash flow (DCF) CAGR from 2020 to 2022 New AM Distributable Cash Flow Growth Scenarios (2020 2022) 1,600 1,400 1,200…
The New Energy Infrastructure Model New AM checks all the boxes Old MLP Model New Infrastructure Perception Model Corporate K-1 tax form and 1099 tax form and Plus C-Corp Structure IDRs No IDRs governance Niche and retail Broad…
Investment Thesis Prolific Underlying Resource & De-risked Development Plan Multi-decade underlying NGL and natural gas resource base in Appalachia Dominant liquids-rich position with significant barriers to entry Run by Co-Founders…
APPENDIX
Merger Consideration AM Public Unitholder At the effective time of the Merger: in exchange for each AM Common Unit held, each AM Public Unitholder will be entitled to receive, at its election and subject to proration, one of: Public…
Simplification Transaction Overview On October 9th, Antero Midstream GP LP (AMGP) announced that it had agreed to acquire Antero Midstream Partners LP (AM) to be renamed Antero Midstream Corporation (NYSE: AM) or New AM AMGP to…
Attractive Valuation on Traditional Metrics The energy sector and AM provide attractive combination of earnings growth and yield investment opportunity vs. other S&P 500 companies Price / 2019E Net Income (EPS) Enterprise Value /…
Antero Capitalization Pro forma as of 9/30/18 Antero Midstream Antero Resources Antero Resources As of September 30, 2018 (MM) (Standalone) (Consolidated) Cash 0 0 0 Debt Revolving Credit Facility 875 547 1,422 5.375% Senior Notes…
Antero Resources D&C Capital Through negotiating contracts and self sourcing sand, Antero was able to mitigate a majority of inflationary pressures on D&C capital for 2019 Antero Resources Stand-alone Marcellus Well Cost (MM/1,000…
Liquidity & Debt Term Structure 9/30/2018 Debt Maturity Profile AM Credit Facility AM Senior Notes 1,000 900 800 Credit facility for AM 700 extended its average debt 600 maturity out to 2023 650 500 875 400 300 No…
Antero Midstream Project Economics Just-in-Time capital investment philosophy drives attractive project IRRs AM Project Economics by Investment (Ranges) 45% 40% 40% 40% Weighted Internal Rate of Return 35% Avg: 25% IRR 30%…
Antero Midstream Fee Structure Gathering & Compression Agreement Water Services Agreement Fixed-fee agreement to provide gathering and compression services to AR with 20-year term beginning Fixed-fee agreement to provide water…
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…
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 Reconciliation The following reconciles net income to Adjusted EBITDA and Distributable Cash Flow: 2014 in Thousands G&C Only 2014 2015 2016 2017 Net income 16,832 127,875 159,105 236,703 307,315 Interest…
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…
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): September 30, 2018 Bank credit facility 875,000 5.375% AM…
Antero Resources Definitions Stand-alone Adjusted Operating Cash Flow and Free Cash Flow Free Cash Flow as presented in this release and defined by the Company represents Stand-alone Adjusted Operating Cash Flow, less Stand-alone Drilling…
Antero Resources Definitions Adjusted EBITDAX and Stand-alone Adjusted EBITDAX Adjusted EBITDAX as defined by the Company represents net income or loss, including noncontrolling interests, before interest expense, interest income,…
Antero Resources Standalone Adjusted EBITDAX Reconciliation Stand-alone LTM Adjusted EBITDAX Reconciliation Stand-alone Twelve months ended September 30, (in thousands) 2018 Net income attributable to Antero Resources Corporation…
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