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 6.7 Bn ENTERPRISE VALUE (1) 29% OWNED BY ANTERO RESOURCES (1) Sherwood and Smithburg 3.1 Bcf/d…
Industry Leader in ESG Environmental Social Governance YTD 2020 Source: ONE Future for industry methane leak loss rates 6
Significant Liquidity & Attractive Term Structure 1.5 B in liquidity and attractive term structure pro forma for AMs upsized 550 million senior note offering on November 5, 2020 As reported Senior Note Offering Pro Forma As of (1)…
Antero Midstreams Differentiated Strategy Antero Midstream Principles Strategy 1 Maintain conservative leverage profile in the mid 3-times range Balance Sheet Strength & Flexibility 2 Keep capital budgets flexible and invest…
1 Maintain Conservative Leverage Antero Midstreams leverage of 3.7x is below the midstream industry and gathering and processing sector average of 4.4x Energy Industry Leverage (Net Debt / LTM EBITDA as of 9/30/20) AM Peers 6.0x…
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 Generating Significant 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5 Incentive Alignment With Shareholders Traditional MLP Antero Midstream Outdated Model New Infrastructure Model Limited partnership Eliminated GP & IDRs structure with incentive Converted to a C-Corp with proxy distribution rights…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 3-times net debt Prudent to LTM Adjusted EBITDA Leverage Ability to flex balance sheet to high 3-times on a short-term basis for…
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 over the past 5 years Asset Strategy Water…
Antero Resources Snapshot 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 U.S.…
Addressing Senior Note Maturities Antero has closed 751 MM in asset sales and 288 MM in refinancing to date to reduce 2021-2023 debt maturities and deleverage Announced Asset Sale Program with Hedge Monetization (July 2020) AM share…
Much Improved Senior Note Term Structure at AR Unsecured Debt Maturity Summary: Repurchased 1.6 B of senior notes since 4Q 2019, pro forma for the redemption of the remaining 313 MM of 2021s, resulting in 661 MM of senior notes due…
Impressive Operational Momentum 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 of 8%…
Significant Commodity Price Leverage 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 5 U.S.…
Positive Natural Gas and NGL Price Momentum Natural gas and NGL prices expected to strengthen over the coming quarters as global demand increases while supply flattens (assuming current oil price strip) U.S. Natural Gas U.S. NGLs…
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 18,000 16,320 12,000 11,253 16,000 14,000 10,000 New 12,595 Achieved March 2020 U.S.…
2 Strong Liquidity Outlook Through a combination of Free Cash Flow, the recent unsecured convertible note offering and ORRI contingent payments, Antero has sufficient liquidity to repay the December 2022 maturity AR Year-End 2020E…
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 Focus on Liquids Antero currently recovers only 30% of the ethane in its rich gas stream while rejecting 70% of the ethane, sending it to pipeline sales in the natural gas stream Antero NGL Barrel…
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…
Anteros C3+ NGL Composite Barrels Weekly Benchmark Index Pricing as of 12/07/20 Net of Shipping (1) This data reflects benchmark pricing estimates and does not directly reflect Anteros realized prices or hedges Assumes 2020 AR C3+…
3 Develop Highest ROR Locations Attractive Economics Antero has some of the lowest natural gas breakeven prices in Appalachia as highlighted in a recent JP Morgan research report 2021-2022 Natural Gas Unhedged Breakevens - 15% ROR…
4 Hedge Commodities - Natural Gas Price Exposure Mitigated Through 2021 Antero is very well hedged on its forecast natural gas production through 2021 Antero Natural Gas Hedge Profile (1) (1) (BBtu/d) Antero Swap Volumes NYMEX…
4 Firm Transport a Competitive Advantage FT Destination Atlantic Seaboard 8% TCO Pool 9% Regional 13% Gulf Coast 51% Midwest 19% 37
4 FT Protects Basis and Provides Flow Assurance ARs firm transportation portfolio provides price stability, production flow assurance, and premium pricing vs. Appalachia-dependent producers Antero Basis vs. Appalachia Basis (/Mcf)…
Antero Midstream Summary 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 3- and…
APPENDIX
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): September 30, 2020 Bank credit facility 1,187,500 5.375% senior…
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 because it cannot do so without unreasonable…
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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