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MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp

Antero Midstream Partners Lp · May 14, 2019 · 46 slides

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Slides

  1. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 1
    MLP & Energy Infrastructure Conference May 2019
  2. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 2
    The Most Integrated Natural Gas and NGL Platform in the U.S A World Class E&P Operator in Appalachia NYSE: AR 6 Billion Enterprise Value(1) Ba2 / BB+ / BBB- Corporate Debt Ratings 31% A Leading Northeast Infrastructure…
  3. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 3
    An Integrated Infrastructure Platform AM provides a customized, integrated full value chain midstream solution 50/50 JV Exploration & Gathering & Natural Gas C3+ NGL Production Compression Processing Fractionation Terminals &…
  4. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 4
    Strong Fundamentals Will Drive Midstream Growth Increasing Global Demand for U.S. Natural Gas and NGLs 3% CAGR in natural gas demand led by exports 5% CAGR in NGL demand led by global Increasing Global LPG demand growth for…
  5. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 5
    U.S. Natural Gas Demand Growth U.S. natural gas demand is expected to grow by 12.6 Bcf/d, or 15%, from 2018 2023 driven primarily by growth in exports to Mexico by pipeline and globally by ship (LNG) 2018-2023 Demand Growth % Share…
  6. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 6
    Led by LNG Export Growth 3.9 Bcf/d of LNG capacity growth AR is a top supplier to U.S. LNG with expected in 2019 current commitments expected to reach Multiple 2nd wave projects seeking FID 700 MMcf/d by YE 2019 U.S. LNG Export…
  7. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 7
    U.S. Natural Gas Supply Challenges Material demand growth and base decline replacement requires significant new supply YE 2023E: 99.1 Bcf/d 100 Marketed Dry Gas Production Forecast YE 2018(1): Base Decline 85.7 Bcf/d Rest of US(3)…
  8. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 8
    Appalachia Driven by Resilient Gas Development Appalachia liquids-rich gas breakeven prices are 25% below current strip prices The two lowest breakeven gas plays in North America are located in Appalachia Gas Play Breakeven Prices…
  9. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 9
    U.S. Natural Gas Supply Growth Forecast Almost all U.S. gas supply growth over the next 5 years is expected to come from the Appalachian and Permian Basins YE 2018(1) : YE 2023E: 100 Marketed Dry Gas Production Forecast 85.7…
  10. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 10
    Exports Also Driving NGL Demand NGL demand growth driven primarily by increased exports of LPG (propane/butane) internationally Demand Growth by Sector (MMBbl/d) U.S. C3+ NGL Demand Share - 2022 4.5 4.0 3.5 Petrochemical 3.0…
  11. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 11
    U.S. to Meet Global LPG Demand Growth Global LPG demand is forecast to grow 415 MBbl/d from 2018-2020, driven primarily by residential/commercial and petrochemical growth in Asia U.S. export growth expected to meet this demand, while…
  12. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 12
    Appalachia has Become NGL Infrastructure-Advantaged Permian, Rockies, Mid-Continent & Bakken Appalachia Transport Y-grade for out-of-basin fractionation at Mont In-basin fractionation Belvieu and Conway Transport marketable purity…
  13. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 13
    World Class E&P Sponsor
  14. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 14
    Best-In-Class Inventory in Appalachia 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 Locations(1)…
  15. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 15
    AR is a Strong Sponsor With Scale Since AMs IPO in 2014, AR has reduced its leverage by 54% and reduced total debt by 900MM while growing into one of the top gas and NGL producers in the U.S. AR Net Debt / LTM Adjusted EBITDAX Top…
  16. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 16
    AR at an Inflection Point in NGL Marketing and Pricing With the opening of the ME2 pipeline in the first Diversified exposure to both international and domestic quarter, Antero now has the takeaway necessary markets results in Antero…
  17. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 17
    Sustainable and De-risked Business Model AR has 1,300 future drilling locations that are liquids-rich and have breakeven gas prices 2.12/Mcf and 1,700 locations with breakevens gas prices below strip pricing Can tolerate much lower…
  18. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 18
    Sustainable and De-risked Business Model Hedge program and firm transportation portfolio provide price stability to support sustainable long-term development Hedge Portfolio Supports Antero Natural Gas Differentials vs. Appalachia…
  19. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 19
    Hedge Position Supports Firm Pipeline Commitments AR has consistently executed a comprehensive commodity hedging program with 4.4 billion of realized hedge gains since 2008 Antero Hedge Profile (MMcf/d) (/MMBtu) 2,500 NYMEX Collar…
  20. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 20
    AR Firm Transportation is Strategically Advantaged 2016A 2017A 2018A 2019E 2020E 2021E Realized Hedge Premium gas pricing plus realized hedge Gains (/Mcfe):(1) 1.48 0.26 0.25 0.20 0.11 0.06 - 0.07 profits more than offset the cost of…
  21. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 21
    Attractive Development Program Across Commodity Scenarios 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…
  22. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 22
    Resilient Growth Outlook with Disciplined Spending Antero is poised to grow production while living within cash flow Production Growth Scenarios (2020 2023) 6,000 2.5B - 3.0 B Estimated Free Cash Flow Generation 5,000 Production…
  23. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 23
    What Happens in the 2.50 Sustained Gas Scenario 1 What is your WTI crude oil price assumption 40% of ARs revenues are derived from liquids 2.85/MMBtu gas / 50/Bbl oil price scenario results in the same all-in realized pricing per…
  24. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 24
    Premier Northeast Infrastructure Platform Premier Integrated Appalachian Midstream Assets Antero Clearwater Facility 25
  25. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 25
    Antero Midstream Asset Overview Dominant midstream position in the liquids-rich core of Appalachia Asset Details Antero Midstream Asset Map 370 miles of gathering pipeline 2.7 Bcf/d of compression capacity 1 Sherwood is the largest…
  26. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 26
    Fixed Fee Business Model Insulates EBITDA Growth Antero Midstream generates all of its revenues through fixed-fee contracts, insulating EBITDA growth from commodity price volatility Details Antero Midstream Adjusted EBITDA (MM)…
  27. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 27
    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 &…
  28. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 28
    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…
  29. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 29
    Antero Midstream Financial Policy Maintain Target conservative leverage profile in the low 3-times or below Prudent net debt to LTM Adjusted EBITDA by 2021 Leverage Ability to flex balance sheet on a short-term basis for additional…
  30. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 30
    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.…
  31. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 31
    Highest DCF Growth Among Top 20 Midstream Antero Midstream has the highest DCF growth and one of the lowest leverage profiles among the top 20 midstream companies C-Corp MLP Leverage Current Yield * 3-Year Distributable Cash Flow…
  32. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 32
    APPENDIX
  33. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 33
    U.S. Gas Supply and Base Decline Significant U.S. base decline requires substantial new supply just to maintain flat production Bcf/d Maintenance Production Level YE 2018(1): Base Decline 85.7 Bcf/d 90 % Contribution to Current…
  34. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 34
    High Growth Year-Over-Year Midstream Throughput AM reported strong year-over-year throughput growth in 1Q19 Low Pressure Gathering (MMcf/d) Compression (MMcf/d) Fixed Fee: 0.32/Mcf 2,800 Fixed Fee: 0.19/Mcf 2,800 2,562 2,400 2,255…
  35. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 35
    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…
  36. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 36
    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…
  37. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 37
    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…
  38. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 38
    Capital and Adjusted EBITDA Contribution - 2019 2019 organic capital budget fully funded with retained cash flow and credit facility borrowings no expectation for equity financing Capital Expenditures (MM) Adjusted EBITDA (MM)…
  39. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 39
    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%…
  40. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 40
    Liquidity & Debt Term Structure 3/31/2019 Debt Maturity Profile AM Credit Facility AM Senior Notes 1,200 1,000 800 No maturities 600 until 2022 1,100 400 650 650 200 0 2018 2019 2020 2021 2022 2023 2024 2025 2026…
  41. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 41
    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…
  42. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 42
    Antero Midstream Non-GAAP Measures Non-GAAP Financial Measures and Definitions Antero Midstream (the Company) views Adjusted EBITDA as an important indicator of the Companys performance. Antero Midstream defines Adjusted EBITDA as Net…
  43. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 43
    Adjusted EBITDA and DCF Reconciliation Adjusted EBITDA and DCF Reconciliation ( in thousands) Three Months Ended March 31, 2018 2019 Pro forma net income 50,970 82,123 Amortization of customer relationships 8,440 8,440 Impairment…
  44. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 44
    Antero Midstream Non-GAAP Reconciliation The following reconciles net income to Adjusted EBITDA and Distributable Cash Flow on a Pro Forma basis: ( in thousands) 2018 Pro forma net income 585,944 Amortization of customer…
  45. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 45
    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…
  46. MLP and Energy Infrastructure Conference – Antero Midstream Partners Lp – slide 46
    Antero Non-GAAP Measures Continued Adjusted Net Cash Provided by Operating Activities and Free Cash Flow Adjusted Net Cash Provided by Operating Activities represents net cash provided by operating activities excluding net cash…

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