Corporate Presentation Antero Midstream Executive Summary Natural Gas & NGL Fundamentals Detailed Asset Overview Antero Resources Overview Appendix 3
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 Long Haul Pipelines…
Antero Midstream Investment Thesis Increasing Global Demand for U.S. Natural Gas and NGLs Natural gas and NGLs are the fuels of the future; renewables alone cannot satisfy demand 3% CAGR in natural gas demand and 5% CAGR in NGL demand…
Antero Midstream Corporation at a Glance Denver, CO Antero Midstream Asset Map HEADQUARTERS S&P 400 CONSTITUENT 5.1 Bn ENTERPRISE VALUE(1) 29% OWNED BY ANTERO RESOURCES(1) 2.8 Bcf/d COMPRESSION CAPACITY(2) 88%…
Antero Midstream Strategy Antero Midstream Principles Priorities 1 Continue generating mid-teens return on invested capital (ROIC) Balance Sheet Strength & Flexibility 2 Maintain conservative leverage profile in mid-to-high…
Strategy Aligned with Industry Risks & Reality Energy Industry Realities Commodity Price Risk AR is focused on liquids-rich development and is 94- 100% hedged on natural gas production through 2021 AR firm transport substantially…
Corporate Presentation Antero Midstream Executive Summary Natural Gas & NGL Fundamentals Detailed Asset Overview Antero Resources Overview Appendix 9
Natural Gas and NGL Macro Momentum Natural gas and NGL prices should strengthen over the coming quarters as global demand remains resilient while supply declines materially (assuming current oil price strip) For oil and the resulting…
Significant Reduction in Drilling Rigs Since March 6th, the total U.S. rig count has declined by 502 rigs, or 66% NGL production associated with shale oil activity represents 66% of total U.S. NGL production and is expected to decline…
Significant Reduction in Completion Crews Since March 6th, U.S. completion crew count has declined by 244 crews, or 77% U.S. Oil & Gas Drilling Completion Crew Count Since 3/6/2020 Change Since 3/6/20 Current Dry Current Completion…
Material Impact to NGL Production in the U.S. The oil price decline is expected to have an even more pronounced impact on NGL supply where two-thirds of the supply comes from shale oil plays U.S. NGL Production Forecast (MBbl/d) LPG…
NGL Price Recovery Expected Domestic and international LPG prices are improving on a relative basis to crude oil, driven by inelastic global demand from petrochemicals and res/comm Mont Belvieu C3+ NGL Prices & % of WTI (1) FEI…
The Impact of the U.S. Shale Revolution The Shale Revolution dramatically changed the NGL landscape, turning the U.S. into a net exporter after decades of importing NGL products U.S. NGL Production (MBbl/d) (1) U.S. NGL Exports /…
LPG Exports US exports surpassed the entire Middle East region combined in 2019 LPG Exports: US versus Middle East US is the incremental 1400 supplier for growing world demand. 1200 1000 800 MBbl/d Supply from Middle…
Future U.S. NGL Supply Challenged by Oil Price Decline U.S. shale plays were previously forecast (December 2019) to grow C3+ NGL supply through 2022 by almost 500,000 Bbl/d Now, with a 35 to 45/Bbl oil strip, U.S. C3+ NGL supply is…
Corporate Presentation Antero Midstream Executive Summary Natural Gas & NGL Fundamentals Detailed Asset Overview Antero Resources Overview Appendix 18
Flexible and Just-in-Time Capital Budgets AMs competitive advantage during periods of uncertainty is its integrated planning, visibility into ARs development plan, and pure-play Appalachian focus AR D&C Capex (MM) AM Infrastructure…
Consistency of Returns and Capital Resiliency AM Capacity Utilization Capital Investment Overview: 120% JV Processing G&P capital returns are much more 98% 96% 96% 95% consistent than E&P single well economics; 100% volumetric…
Fixed Fee Business Model Insulates EBITDA Growth Antero Midstream generates all of its revenues through fixed-fee contracts, insulating Adjusted EBITDA growth from commodity price volatility Details Antero Midstream Adjusted EBITDA…
Inflection Point of Generating Free Cash Flow Through its just-in-time capital investment philosophy and capital discipline, AM has achieved scale and is at an inflection point of free cash flow generation in 2020 Free Cash Flow…
Comparative Free Cash Flow Yield Profiles G&P Cash Flow Yield Overview: In general, midstream companies generate consistent free cash flow and have higher free cash flow yields as compared to E&Ps and Utilities (before return of…
Attractive Term Debt Structure & Liquidity Profile Antero Midstream has 1 billion of liquidity, leverage of 3.7x (0.8x below midstream industry leverage of 4.5x) and no senior note maturities until 2024 03/31/2020 Debt Term Structure…
Comparative Leverage Profiles Antero Midstreams leverage profile is below the midstream average and is expected to remain in the mid to high 3-times range Leverage (Net Debt / LTM EBITDA as of 3/31/20) 6.0x 5.1x 5.0x 4.7x 4.6x…
A Leader In Midstream Governance & Structure Traditional MLP Antero Midstream Outdated Model New Infrastructure Model Limited partnership Eliminated GP & IDRs structure with incentive Converted to a C-Corp with proxy distribution…
Antero Midstream Snapshot Proven Returns and Conservative Aligned with Capital Discipline Financial Policy Shareholders 54% Adjusted EBITDA Maintain conservative Eliminated IDRs and GP CAGR and 12% average leverage in the mid-to-…
Corporate Presentation Antero Midstream Executive Summary Natural Gas & NGL Fundamentals Detailed Asset Overview Antero Resources Overview Appendix 29
1 Balance Cash Flow & Capital - Cost Structure Reset Drilling and completion efficiencies and midstream cost savings result in approximately 602 million of savings in 2020 compared to ARs 2019 initial budget Cost Savings Update 2020…
1 Balance Cash Flow & Capital - Marcellus Well Cost Reductions Significant Reduction in Well Costs already in-hand Reduced well costs by 26% (3.05 million per well) Marcellus Well Cost per Lateral Foot (January 2019 AFE to Current…
1 Balance Cash Flow & Capital Drilling & Completion Efficiencies Antero continues to achieve material improvements to drilling and completion efficiencies which reduce well costs Average Drilled Lateral Feet per Well Lateral Feet…
1 Balance Cash Flow & Capital Lower Costs Drive Free Cash Flow Profile Cost structure reset results in enhanced Free Cash Flow profile. The 2020 capital plan will remain flexible, targeting 190 MM in Free Cash Flow. AR Free Cash Flow…
2 Strengthen Balance Sheet 2020 Asset Sale Program AR has additional assets that can be monetized in 2020 to further reduce debt Asset Monetization Opportunity Set Targeting 750 MM to 1 B E&P Assets Financial / Midstream Assets…
2 Strengthen Balance Sheet - Liquidity & Leverage Affirmation of the bank borrowing base above 2.64 B in lender commitments plus the execution of the 402 MM asset sale positions Antero to address upcoming bond maturities AR 2020…
3 Develop Highest ROR Locations - Large Delineated Drilling Inventory AR Resource Overview AR Marcellus Asset Map Large Drilling Inventory Diverse set of locations AR holds 1,400 liquids-rich locations, or 40% of the core undrilled…
3 Develop Highest ROR Locations - Premium NGL Price Realizations Diversified exposure to both international and domestic markets results in Antero realizing a premium to Mont Belvieu on its C3+ NGL pricing Domestic Markets…
3 Develop Highest ROR Locations - Premium NGL Price Realizations Producer Disadvantaged: Producer Advantaged & Unconstrained: E&Ps in Permian, Rockies, Mid-Con & Bakken Antero Resources in Appalachia AR is the largest C3+ producer…
4 Hedge Commodities - Natural Gas Price Exposure Mitigated Through 2021 AR continued its consistent hedging program during 1Q20, adding 688 MMBtu/d to its 2022 hedge position (previously unhedged) at a price of 2.48/MMBtu Antero…
4 Hedge Commodities - Significant Oil Hedge Position AR has hedged 100% of expected oil and oil-equivalent pentane production in 2020 at 55.63/Bbl and 10% of oil and oil equivalent production in 2021 at 55.16/Bbl Antero Oil and…
2020 Credit Enhancement Momentum Reduced capital budget and operating cost structure improves Free Cash Flow profile while asset sales, hedge position and scale support debt profile Potential Credit 2019A 2020E Enhancement D&C…
Antero Long-Term Strategy Producer resiliency is a key attribute for a sustainable development plan: Cost AR has budgeted 602 MM in reductions to Reduction 2020 capital and operating expenses Initiatives Asset Sale 502 MM (1) of…
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…
Antero Midstream Non-GAAP Measures Non-GAAP Financial Measures and Definitions Antero Midstream uses certain non-GAAP financial measures. Antero Midstream defines Adjusted Net Income as net income plus amortization of customer contracts…
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 The following table reconciles consolidated total debt to consolidated net debt (Net Debt) as used in this presentation (in thousands): Decem ber 31, 2019 Bank credit facility 959,500 5.375% senior…
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): March 31, 2020 Bank credit facility 1,170,500 5.375% senior…
Antero Midstream Non-GAAP Measures Antero Midstream defines Free Cash Flow as Adjusted EBITDA less interest paid, decrease in cash reserved for bond interest and capital expenditures. Free Cash Flow is before dividend payments, share…
Antero Midstream Non-GAAP Measures Antero Midstream has not included a reconciliation of Adjusted EBITDA to the nearest GAAP financial measure for 2020 because it cannot do so without unreasonable effort and any attempt to do so would be…
Antero Non-GAAP Measures Adjusted EBITDAX: Adjusted EBITDAX as defined by the Company represents income or loss, including noncontrolling interests, before interest expense, interest income, gains or losses from commodity derivatives and…
Antero Non-GAAP Measures Free Cash Flow: Free Cash Flow is a measure of financial performance not calculated under GAAP and should not be considered in isolation or as a substitute for cash flow from operating, investing, or financing…
Antero Resources Net Debt & LTM EBITDAX Reconciliation Decem ber 31, March 31, (in thousands) 2019 2020 AR bank credit facility 552,000 882,000 5.375% AR senior notes due 2021 952,500 730,283 5.125% AR senior notes due 2022…
Antero Resources 2019 LTM EBITDAX Reconciliation Tw elve m onths ended (in thousands) Decem ber 31, 2019 Net loss and comprehensive loss attributable to Antero Resources Corporation (340,129) Net income and comprehensive income…
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