Antero Midstream (AM) 16 Feb 232022 Q4 Earnings call transcript

Hello, and welcome to the Antero Midstream Fourth Quarter 2022 Earnings Conference Call and Webcast. [Operator Instructions].

As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to your host, Justin Agnew. Please go ahead, Justin.

you conference us call. thank fourth Antero and investor quarter morning, for on joining Midstream's Good it We'll the highlights, open financial a and for spend few operating and minutes then going through up Q&A. we'll

website presentation to like call. provided to of we also would be at earnings reviewed direct where call I www.anteromidstream.com, separate will the you homepage our that a today's have during

including disclosures our contain to measures, Today's financial to release non-GAAP comparable also most financial reconciliations refer certain earnings call regarding for GAAP important may Please measures. press such the measures.

today Joining the Brendan Paul on Midstream; CEO Antero of me and of and of CFO Resources call and Midstream; are Antero Resources Rady, CFO Kennedy, of Antero and Chairman Michael Antero Antero Director Krueger, Midstream.

call the Paul. that, I'll over turn to With

was two Antero the Thanks, flow free environment, guidance an the inflationary expenditures for two over completed delivered at accretive, and underlying acquisitions EBITDA extended exceptional decades. We Despite bolt-on, year we guidance our Midstream. capital dedicated below that inventory cash to strategic of Justin. high-end XXXX

$XXX achievements, Antero to Midstream with below X financial and at approximately our IPO year-over-year. Delivering number its X-year on of on these very Returns million Capital. In million remarks $XXX capital the million Invested XXXX, expenditures, in Consistent we attractive formal since I'll a position, outlook. titled, strongest Slide our $XXX begin is my With were guidance flat range

that for highlight today. return and year midstream our midstream XXXX deliver like of over on -- strong invested in teams maintained and team This allowed asset environment also financial exemplary results performance our XX% This deliver to tremendous of contributed we the XXXX. in planning procurement uptime that XX% I'd capital return by is a to us to in achievement the a results availability to operations inflationary in to are these

and dividend strength. our our and returns invested our of consistency balance sheet operations The on capital, support

of XXXX. line pressure in XXXX. midstream reduction the the the will hand in in Capital to that high in our rich X left page liquids be much capital drives move depicted number approximately Slide The orange Now side XXXX our XX% trunk the chart of capital, invested titled Declining corridor. in the let's Marcellus budget, illustrates capital Shale in the on decline Of

We this while continue trend declining delivering growth. capital expect to still beyond EBITDA XXXX,

Customer the Lastly, the AR on stability to on my its program, comments strength development Premier I and want in finish of Slide X, of Appalachia. titled

years. debt the opposed side has to as page, past the shown three XXXX left resulted debt positions conservative in of absolute down leverage year at through over debt hand throughout leverage low maintain the adding of commodity This AR billion $X.X a dividend strategy paid policy acquisitions, X.Xx. or As reduction has of AR on over initiating cycles. This just to end

seen E&Ps decline commodity other and its leverage AR has reduction prices, due while initial have targets in achieved reduction Importantly, target. debt extend, debt their to the already

that growth AR expect is a a a number in advantages and strategic driven AR development drives of by AM. has. not does that plan This As result, its competitive at change

volumes could to of First, and NYMAX gas relative to importantly AR shut approximately and its that LNG certain AM, sells more the Appalachia out in XXX% for This result pricing to in at XX% basis its of the basin premium times. of volatile results production fairway. ability local in in gas avoid

peer AR's estimates for with the average versus the XX%. America, a XXXX, approximately uplift of is in one largest China as total reopening. liquids just Based revenue producers on tailwinds from percent NGL XX% is exposure consensus AR pricing liquids of North and Second, to the of revenue

rigs three on deliver two AM's assets. crews volume growth gross needs two one completion only to to AR Lastly, and to

roughly of basins impact In are these to advantaged that to you X completion with in summary, providers crews, other half operate Appalachia. like AM basins. and increased In a it's is see and environments rigs likely other Steeper in for to active the year outside supporting costs in lead decline a these midstream all in on competitive advantage to and reductions geologic are of rates, competition today, Appalachia, complexity what development contribute a This debt activity well-positioned low targets, basin. inflationary higher in gas costs premier deliver customer its areas. where development will competitively

Brendan. to With that, I call turn the will over

Slide of Thanks, X gas year-over-year pressure move acquired all Crestwood the gross on production briefly a day. from to volumes Paul. quarter growth the fourth growth. increase contribution X% Compression through were highlighting a volumes The I'll quarter assets. months X, Over XXXX. gathering year bcf comments our U.S. outlook on during results were and throughput day, fourth guidance Partners Capital titled midstream updated and in by the X growth by start volumes Partnership the a year-over-year. then of low X.X number volume natural XXXX the Starting X.X gathered the my was and approximately year-over-year AM's X% driven Drilling QL from Bcf

Fresh Moving the serviced. quarter in XX the XXX,XXX fourth delivery side on water averaged to barrels per with wells of water the business. day volumes

illustrates our guidance. Antero capital, year For a is and titled X, XXXX growth completions, year, serviced for which line AM XX Slide the in well our outlook, pivotal EBITDA Midstream. truly declining with

from Before to long-term I awarded to relating we outlook, that Midstream not the to impact would Clearwater any guidance Antero does like outlook note our XXXX the facility. into the damages include treatment and get

As January interest, million. judgment of claims our in pre fraud. totaled and Court in XX-K, this the Including damages prevailed approximately its breach $XXX these year, of AM the contract District noted found for that

unable process subject and is answer to specific we this be is damages matter. ongoing will to award appeal, questions that still that regarding any the Given

Now on to the guidance.

XX% annual and organic budgeting year a is at are a decline we QL both growth a contribution the midpoint Capital in of Drilling acquisitions. Partnership Partners EBITDA growth recent XXXX, For The guidance. full function capital the and X% of EBITDA growth of from our

and investment and capital Resources. this Antero plays. higher capital to risk higher growth, is risk superior non-speculative, supporting shale As higher project visible, lower by operated and investments production competition Paul projects economics These to have tend compared highly discussed,

addition, less ability free EBITDA space, end flow and is allows assets generate declining illustrates significant to plan dividends midstream over to over dividends our and leverage $XXX million before leverage unique capital have. In the This generate after with the of our cash us reduced growth X.Xx the in of year operational to free XXXX. million or flow $XXX cash truly

to as high Slide the growth number been shale out This model revolution, and to years. and a approximately free after has After flat cash business allowed that of dividends flow illustrates capital successfully during for debt, investments over company on leverage titled maintain internally and organic have significantly cash sustainable the cash integrating transitioned last flow era free a our of we both finance the more flow years. breakeven position bolt just X we us our far capital while lower come model a XX to expanding to how return X transition de-risked business shareholders spending acquisitions.

expect us target we year further debt organic driven absolute dividends down free by ahead, XXXX, decline three end XXXX. rebate of leverage more to and double fee achieve expiration and than less This in in a by to Looking after allows growth capital. our flow to of program, the continue times our pay cash or

XXXX, cash to three will after capital billion period are be Importantly we dividends X.X after now targeting is free amount to increased of five-year times dividends before X free annual The of dividends from through X.XX cash dividend expected used X.XX billion XX over cash our of substantial XXXX assuming on debt continued a shareholders. flow free basis. flow of once flat flow target the and to cent an an of reduction return achieved and leverage for

XXX, unique next XX all only dividends. S&P generate S&P S&P EBITDA with than an more that pays also only over remarks that company I XXX approximately Paul's cash capital after is generate greater and years. which both greater finish in dividends, illustrates growth slide generate and in highlights free Midstream, XXX X% the only with but AM attributes the subset two is. XXX free echo again, slide This year, in the industry, XX% was those than than operationally exceptional only times Antero model dividend on unique the that business In to my comments truly flow will an universe. in our the those how Of truly than midstream XXXX cash Of XXX flow would how of attractive X% companies less to declining after like The I financially. and is, summary, nine. not forecasted leverage number are broader four have XXX

the of this industry. deliver bolt-on de-risked most position cash the growth flow in story along highly investments to organic AM Our strategic making one acquisitions model, expanding free unique midstream with us

to we With that ready operator, are questions. take

first question coming is Our from JP from Tonet Morgan. Instructions] Jeremy [Operator

maintenance to about Midstream Just start capital inflection metrics when point? watch off a for reaching model. curious thinking post should around transitioning around return your with a we thoughts capital Antero positive return AR kind of of in

Yes.

to years, nice the $XXX And through to up and overall, move as cash 'XX, think over build-out million the infrastructure. a we with and the over the as before cash But $XXX come EBITDA dividends do tried free growth. last were capital we So of years remarks. to to I free in flow the get that for of generate into X we after expect we of at dividends flow prepared million forward further in decline continue expect do breakeven

expect flow after see double flow we what we'd -- after free dividends we in over free as nicely, cash XXXX on double should noted, cash So dividends. that expanding

AM drilling XXXX. nice to the trajectory continues for the growth the down, So we rebate nice plus in fee expiring with and as capital have partnership come

pivot And a NGLs you Northeast landscape wanted with it. then competitive region. guys cracker I Got the and thoughts sense. on on processing in within to the for Shell's Makes bit

Yes.

we've facility overall, processing with dedicated I largest complexes. got Smithburg think Sherwood America a North and in with

will got So through with flow AR for the that AM, capacity MPLX. with and to venture course, to of plenty we've joint of develop,

an in result from that AM fee of facility, you on and as cracker does not takeaway that and an positioned very that processing a that liquids, So also really AM's to the from facility. the as effect participant terms incremental it Shell relates then well not of have perspective, the perspective related a on is no AM side volume in both there's side, noted

So no there. impact

Our Instructions] Mackay next is from John [Operator Goldman Sachs. from coming question

just I kind Looks a small current of of wanted to start for decent bolt-on paid you what it. versus of capacity lot on throughput like and -- from the amount maybe a

kind So that maybe plan acquired? potential savings the frame what for eventual you you could on just any CapEx of is versus be up kind us and your assets upside there if could of initial maybe these

mold. the was to Crestwood This fit year. in servicing Utica had small. it over It No, is pads in AR compression the time. a a activity, We was another production Utica. to in feather of will the over the Yes. does that that asset over ARs have earlier couple deal continue really

investment standpoint, So years with just most payout, this from from the a from midstream take we planned. assets to an perspective X X typically X development years have the will payout be X to

asset as in we've shown top you certainly have over unutilized that, first stations. compressor that great of the to could on be thus capacity far do with there. areas So compression XXXX deployed reuse And of the other

So transaction of being and Crestwood it the was just top on well. we're excited Despite AM a as small, for that. about transaction it built great

so side. different sense. through compression far CapEx a that talked you’ve couple to on Maybe makes last save the on opportunities piece, you’ve had That

You Crestwood that talked a little about bit the on deal. of

one. You this have

your XX X‘years that of been, You plan maybe ‘XX or your of in what talk about of kind capital frame together up internally. overall either say, you of Wondering just opportunities magnitude own that original Maybe for would kind maybe found ago? what versus us? of for just that putting if of kind CapEx let's the terms savings. altogether some And could of all means have

savings reuse. we’ll we the be to as Yes. to Near opportunities. and And of call term, of over will that $XX for of it, additional already, what we’ll I about look million. gave, continue you like think would is continue identified of terms do evaluate, I million we’d X and $XX comments in we’ve But million say evaluate to about so have opportunities. of the But ‘XX $XX some that a ‘XX there – result capital again, years this and

that. buy to to us kind values these at with of piece able attractive unutilized the You’re comes and assets

manner looking always in invest we’re capital can. efficient So to and we redeploy most just the

the We I'd to or end our reach for the of any over question-and-answer closing like comments. floor turn further back

you. out reach questions. thank Please today. there's Thank Yes, for any further time you if the

today's conclude does That teleconference and you. webcast. Thank

You today. may disconnect have We your participation lines thank at for this wonderful a day. you time, and your