Antero Midstream Snapshot ARs Modest Growth Strategy Optimizes Value and Free Cash Flow Fills premium unutilized pipeline capacity by 2022, minimizing net marketing expense Results in 400 million more free cash flow in 2022 than going…
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 C-Corp Structure Ba2 / BB+ / BBB- Corporate Debt Ratings 31% A Leading Northeast…
Antero Midstream Core Business 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 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…
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.…
World Class E&P Operator: Antero Resources
Scale and Product Diversification AR is the 5th largest natural gas producer and 2nd largest NGL producer in the U.S. Top U.S. Natural Gas Producers 2Q2019 Top U.S. C2+ NGL Producers - 2019E 2 NGL Producer following 4.5 250 OXY /…
Prolific Underlying Resource Underpins Sustainable Growth AR holds 40% of the core undrilled liquids-rich locations in Appalachia and has lower breakeven natural gas price than dry gas producers Core Liquids-Rich Appalachian…
Large Well-Delineated Core Drilling Inventory 10+ Years of Premium Drilling Inventory Does not assume infill drilling Contiguous Acreage Position Delivers Efficient Development Long-laterals average 12,100 in Marcellus rich-gas…
Firm Transportation Portfolio Provides Visibility ARs FT portfolio has delivered Appalachia-leading realized natural gas pricing quarter after quarter Antero Resources Firm Transportation Portfolio vs. Gross Gas Production (MMcf/d)…
Modest Growth Strategy is Optimal A modest growth plan through 2022 provides AR with sustainable free cash flow by filling currently unutilized FT and eliminating 200 MM of unutilized pipeline expenses by 2022 Maintenance Mode vs…
Industry Leading Natural Gas Hedge Position AR has consistently executed a comprehensive commodity hedging program with 4.5 billion of realized hedge gains since 2008 (1) Antero Natural Gas Hedge Profile (BBtu/d) NYMEX Collar Volume…
Superior Well Economics to Dry Gas Producers Liquids producers with associated gas have superior well economics in the current commodity price environment Natural Gas Breakeven Price by Region 25% ROR Half Cycle Breakeven…
Cost Reduction Initiatives Breakdown AR has achieved approximately 500,000 per well in cost reductions since the January 2019 budget with the remaining 950,000 per well expected to begin in 2020 Targeted Marcellus Well Cost…
Strong Financial Position for Low Price Environment Antero has the liquidity, scale, deep inventory and capital efficiency to continue to develop in todays commodity price environment Strong Financial Position Credit Facility Summary…
AR in a Position of Strength AR has the capital efficiency, financial strength and scale to deliver a right-sized development plan in todays commodity price environment 2014 2019E Change D&C Capex Budget 2.6 Bn 1.3 Bn (1.3) Bn…
Premier Northeast Infrastructure Platform Premier Integrated Appalachian Midstream Assets Antero Clearwater Facility 19
Antero Midstream Asset Overview ARs core resource base, combined with AMs integrated midstream assets, positions AM as the leading Appalachian infrastructure growth platform Over 370 miles of pipeline Over 2.7 Bcf/d of compression…
High Growth Year-Over-Year Midstream Throughput AM reported strong year-over-year gathering and processing growth in 2Q19 Low Pressure Gathering (MMcf/d) Compression (MMcf/d) Fixed Fee: 0.32/Mcf 2,800 Fixed Fee: 0.19/Mcf 2,800 2,662…
Operating Expense Improvement AMs operating costs per unit have declined over the last 5 years, benefitting from the implementation of automation, operational efficiencies, and scale Low/High Pressure Gathering Opex (/Mcf) Compression…
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)…
Expanding Liquids-Rich Core Infrastructure Highly visible near-term projects expanding liquids-rich Marcellus infrastructure Gathering and Compression In Marcellus Project Map System Expansions Size Service Tyler/Wetzel Connector 30…
4-year Organic Project Backlog: 2019 - 2022 High-graded organic Primary focus on project backlog of 2.0B liquids-rich 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…
AM Water Operations and Future Opportunity Set Anteros Current Operations Antero Clearwater Benefits Facility Additional fresh water source for Producing AM Fresh water future completions and closed Well Pad 3rd Party pipeline loop…
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 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)…
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…
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 Mid-teens % DCF CAGR in highest return from 2020-2022 and…
APPENDIX
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%…
Liquidity & Debt Term Structure 6/30/2019 Debt Maturity Profile (1) AM Credit Facility AM Senior Notes 700 600 500 400 No maturities 300 until 2022 595 650 650 650 200 100 0 2018 2019 2020 2021 2022 2023…
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…
Antero Midstream Non-GAAP Measures The following table reconciles pro forma net income to pro forma Adjusted EBITDA for the twelve months ended June 30, 2019 as used in this presentation (in thousands): Twelve Months Ended June 30,…
Adjusted EBITDA and DCF Reconciliation Adjusted EBITDA and DCF Reconciliation ( in thousands) Three Months Ended June 30, 2018 (1) 2019 Net income 52,614 69,274 Amortization of customer relationships 8,533 8,534 Impairment expense…
Antero Midstream Non-GAAP Reconciliation The following reconciles net income to Adjusted EBITDA on a Pro Forma basis: ( in thousands) 2018 Pro forma net income 585,944 Amortization of customer relationships Impairment expense…
Antero Midstream Non-GAAP Reconciliation The following reconciles net income to Adjusted EBITDA: 2014 in Thousands G&C Only 2014 2015 2016 2017 Net income 16,832 127,875 159,105 236,703 307,315 Interest expense, net 4,620 6,183 8,158…
Antero Midstream Non-GAAP Measures Antero Midstream has not included a reconciliation of Adjusted EBITDA to their nearest GAAP financial measure for 2019 because it cannot do so without unreasonable effort and any attempt to do so…
Antero Definitions Adjusted EBITDAX: Represents income or loss, including noncontrolling interests, before interest expense, interest income, gains or losses from commodity derivatives and marketing derivatives, but including net cash…
Antero Resources Adjusted EBITDAX & Net Debt Reconciliation LTM Adjusted EBITDAX Reconciliation Twelve months ended (in thousands) June 30, 2019 Net income and comprehensive income attributable to Antero Resources Corporation 744,966…
Antero Resources Net Debt to EBITDAX Net Debt to Adjusted EBITDAX Reconciliation (Annual) 2014 2015 2016 2017 2018 2Q19 Millions Debt 4,248 4,082 3,890 3,635 3,855 3,602 Less: Cash (16) (17) (18) (20) -- -- Net Debt 4,232 4,065…
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