Corporate Presentation 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 Water Delivery &…
Antero Midstream Corporation at a Glance Denver, CO Antero Midstream Asset Map HEADQUARTERS S&P 400 CONSTITUENT 6.4 Bn ENTERPRISE VALUE(1) 29% OWNED BY ANTERO RESOURCES(1) 3.1 Bcf/d COMPRESSION CAPACITY(2) 90%…
AR Asset Sale, Refinancing and Debt Repurchase Progress Antero has closed 751 MM in asset sales and 250 MM in refinancing to date to address debt maturities and deleverage Announced Asset Sale Program with Hedge Monetization (July…
AR Pro Forma Liquidity Post VPP, Convert and Debt Tenders Through a combination of asset sales, discounted senior note repurchases and the recent unsecured convertible note offering, Antero has plenty of liquidity to repay the…
Antero Midstream Momentum Significant momentum generated at both AM and AR in 2020 Capital Expenditures: 68% decrease in 2020 vs. 2019 Free Cash Flow: 642% increase in 2020 vs. 2019 Leverage: Unchanged at 3.7x in 2020 vs. 2019 AR…
Corporate Presentation Executive Summary Natural Gas & NGL Fundamentals Detailed Asset Overview Antero Resources Overview Appendix 10
Natural Gas and NGL Macro Momentum Natural gas and NGL prices expected to strengthen over the coming quarters as global demand remains resilient while supply declines materially (assuming current oil price strip) U.S. Natural Gas U.S.…
Significant Reduction in Drilling Rigs Since March 6th, the total U.S. rig count has declined by 528 rigs, or 69%, and oil focused rig count has declined by 74% NGL production associated with shale oil activity represents 65% of total…
Significant Reduction in Completion Crews Since March 6th, U.S. completion crew count has declined by 233 crews, or 74%, and oil focused completion crew count has declined by 78% U.S. Oil & Gas Drilling Completion Crew Count Since…
Material Impact to NGL Production in the U.S. The oil price decline is expected to have a pronounced impact on U.S. NGL supply, 65% of which comes from shale oil plays U.S. NGL Production Forecast (MBbl/d) LPG Export Capacity Gulf…
NGL Price Recovery Domestic and international LPG prices are improving on a relative basis to crude oil, driven by resilient global demand for LPG from petrochemicals and res/comm C3+ NGL Prices & % of WTI (1) Far East Index (FEI)…
NGL Pricing Outlook Limited liquidity in the futures market for C3+ NGL products often does not capture anticipated value further out in the curve A bottoms-up analysis of supply/demand fundamentals suggests NGL prices have…
Northeast LPG Supply & Demand Northeast LPG markets became oversupplied in 2015 and were forced to transport via rail, which was relieved by Mariner East 2 coming online in early 2019 The Northeast is now long LPG pipeline takeaway…
Corporate Presentation Executive Summary Natural Gas & NGL Fundamentals Detailed Asset Overview Antero Resources Overview Appendix 18
Antero Midstreams Differentiated Strategy Antero Midstream Principles Strategy 1 Maintain conservative leverage profile in mid-to-high 3-times range Balance Sheet Strength & Flexibility 2 Keep capital budgets flexible and invest…
Strategy Aligned with Industry Risks & Reality Energy Industry Realities Commodity Price Risk AR is focused on liquids-rich development and is 92- 93% hedged on natural gas production through 2021 AR firm transport substantially…
1 Maintain Conservative Leverage Antero Midstreams current leverage of 3.7x is below the midstream industry average of 4.4x and gathering and processing sector average of 4.4x Energy Industry Leverage (Net Debt / LTM EBITDA as of…
2 Flexible and Just-in-Time Capital Budgets AMs competitive advantage during periods of uncertainty is its integrated planning with AR and flexible just-in-time capital budgets AR D&C Capex (MM) AM Capex (MM) 1,400 700 1,270 646…
3 Continue Generating Mid-Teens ROIC AMs just-in-time capital investment philosophy drives high asset utilization rates and results in resilient mid-teens return on invested capital (ROIC) AM Asset Capacity Utilization AM Return on…
4 Inflection Point of Generating Free Cash Flow AMs legacy midstream infrastructure and flexible capital budget with no long lead-time projects allows it to generate significant free cash flow Free Cash Flow (Before Return of Capital…
5 Incentive Alignment With Shareholders 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 rights…
Antero Midstream Financial Policy Summary Maintain Target conservative leverage profile in the mid-to-high 3-times Prudent or below net debt to LTM Adjusted EBITDA Leverage Ability to flex balance sheet on a short-term basis for…
Corporate Presentation Executive Summary & Strategic Updates Natural Gas & NGL Fundamentals Detailed Asset Overview Antero Resources Overview Appendix 27
Antero Resources at a Glance Denver, CO Antero Resources Acreage Map HEADQUARTERS Antero Marcellus Rig Industry Marcellus Rig S&P 400 Industry Utica Rig Antero Acreage CONSTITUENT SW Marcellus Core Ohio Utica Core 3rd Largest…
Impressive Operational Momentum at AR Lowered 2020 Capital Budget to 750 MM Revised D&C capital budget to 750 MM in 2020, a 35% decrease from initial 2020 guidance and a 41% decrease from 2019 spending 2020 production growth guidance…
Significant Commodity Price Leverage at AR As one of the largest natural gas and NGL producers in the U.S., Antero has significant cash flow upside in a rising commodity price environment Top 5 U.S. Natural Gas Producers (MMcf/d) Top…
AR Business Strategy Antero Resources Principles Priorities 1 Build Scale with Balance capital spending Natural Gas & with cash flow Liquids Diversification 2 Maintain liquidity & strengthen balance sheet with medium term…
1 Balance Capex with Cash Flow - Cost Structure Reset Drilling and completion efficiencies and midstream cost savings are expected to result in approximately 616 million of savings in 2020 compared to ARs 2019 initial budget Cost…
1 Balance Capex with Cash Flow Drilling & Completion Efficiencies Average Lateral Length per Well Lateral Drilling Feet per Day 12,000 11,253 18,000 16,320 16,000 10,000 New 14,000 12,897 U.S. 8,000 Record 12,000 11,062 6,126…
1 Balance Capex with Cash Flow LOE Reductions Materially Reducing LOE Reducing LOE by 45% in 2020 (90 MM+) Antero Lease Operating Expense Reductions (2020 Target) (MM) 225 200 42.0 175 32.0 150 125 42 MM (0.03/Mcfe) 16.0…
2 Significant Steps Taken to Strengthen Balance Sheet The execution of 751 MM in asset sales, discounted senior note repurchases and the convertible notes offering has positioned AR to address upcoming bond maturities YE 2020…
3 Develop Highest ROR Locations AR Resource Overview AR Marcellus Asset Map Large Delineated Drilling Inventory Diverse set of locations AR holds 1,400 liquids-rich locations, or 40% of the core undrilled liquids-rich locations in…
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 - NGL Price Recovery NGL prices have risen on an absolute basis and relative to WTI since March/April lows AR Monthly Realized C3+ NGL Price /Bbl AR C3+ Realized Price (/Bbl) WTI Price % of WTI 70…
3 Develop Highest ROR Locations Attractive Well Economics Anteros average unhedged half cycle rate of return for its near-term development program areas is 52% Antero Half Cycle Well Economics by BTU Regime 70% Marcellus Utica…
4 Hedge Commodities - Natural Gas Price Exposure Mitigated Through 2021 AR monetized 100 BBtu/d of its 2021 hedges for proceeds of 29 million, attributable to the volumes included in the recently announced ORRI transaction In…
4 Firm Transport is a Competitive Advantage FT Destination Atlantic Seaboard 8% TCO Pool 9% Regional 13% Gulf Coast 51% Midwest 19% 41
4 Firm Transport Protects Basis Hedges + Firm Transportation + Liquids-Rich focus provides price stability and supports sustainable long-term development Strategy: Pair Hedges & FT Result: Low Natural Gas Pricing Volatility (2)…
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-…
APPENDIX
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 Measures The following reconciles net income to Adjusted Net Income, Adjusted EBITDA and Free Cash Flow (in thousands): in Thousands 2014 2015 2016 2017 2018 2019 Net income 127,875 159,105 236,703 307,315…
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, 2020 Bank credit facility 1,155,000 5.375% senior notes…
Antero Midstream Non-GAAP Measures Antero Midstream has not included a reconciliation of Adjusted EBITDA, Leverage or Free Cash Flow to the nearest GAAP financial measure for both 2020 and 2021 because it cannot do so without…
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…
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