AM - Earnings call transcript Q2 2018 | Antero Midstream Corporation

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Operator

Good day, and welcome to the Antero Midstream Partners LP Second Quarter 2018 Earnings Conference Call and Webcast. [Operator Instructions] Please note this event is being recorded. And with that, I'd like to turn the conference over to Mr. Michael Kennedy, Senior Vice President and Chief Financial Officer. Please go ahead.

Michael Kennedy

us Midstream's joining Investor Quarter for Call. Conference you for Second Antero XXXX Thank few through for minutes operating a spend We'll going then open highlights, the we'll it up Q&A. and and financial to direct at call. separate during website www.anteromidstreamgp.com, earnings I would presentation or also you the will of www.anteromidstream.com provided home have we today's that to where call our page a reviewed like be

forward-looking Actual our will control. regarding Antero important regarding outcomes expressed, refer remind may measures. the most start we make Antero's Such you beyond AMGP management subject a to and comments, comparable call, what Antero during this could also factors future financial and earnings first based differ to Before are to statements. and are for including of which I number or contain press like of financial that, judgments will implied disclosures Antero Today's materially uncertainties, on reconciliations measures. impact is Please statements. statements GAAP to such our in current risks Midstream of measures, from forecast Resources, such are performance call would non-GAAP our results the that certain many release and

want it Paul, turn to measures over the Before I review potential a I to also to brief quickly provide of on valuation. update enhance Antero's

review entities, is to The stakeholders for Antero create remains this directors board, of complex full board exploring of in their AR's Antero conducting of which options the process of working conjunction a special the mentioned, advisers. independent and GP's and are value committees have is of we ongoing. legal financial committee and and Midstream As all advisers, X special special a with long-term range Midstream with committees and the

update the as future that third review. completed completion be as timetable be initiatives While and of special substantial stated in position hope this is announced there definitive to a of any has be a the the can in We no an made we assurances this the for no previously, result will committees, or before evaluation, you end by been of progress give quarter. to there

As you call. related further any can address this able questions it to be discuss will during to review or we understand, not today's

Joining turn are me call Resources the Rady, and CFO of Glen Midstream. today President Antero and Resources the on Midstream; to Chairman over and and CEO Paul call Paul. Antero will President Warren, now Antero I of of Antero and

Paul Rady

I and results Consistency today thank my updates operational quarter and begin AR Mike, will walk to today. with AR's listening my begin XXXX for comments call discussion you Thanks, on the comments AM. to Slide the Mike and remainder number will EBITDAX Leadership everyone of on the at margin. and the X, in project through in then at titled year. covering for the second highlights AR I'll outlook improvements

During a X.X the year second prior per XX% of over equivalent quarter. the quarter, a Antero production, reported day record increase Bcf Resources

transportation the price hedging, natural pre-hedged Mcf NYMEX importantly, which of AR AR but equivalent. a Including Additionally, per AR gas Henry our Appalachia, quarter a not in more price at production gas a $X.XX consecutive AR been the industry in leader margins. consistent of Hub. $X.XX during liquids natural Mcf to highest equivalent realizations that to leading per before and has generates has due a average premium marks a price premium portfolio. realizations the hedges, realized realized price delivered EBITDAX quarter gas This was XXth firm natural only to

consistency Mcf near is margin equivalent. group of the be year trending sixth was is markets, This was result hedge midstream and $X.XX highest the illustrated realizes first exposure, of transportation AR to industry-leading liquids AR's which again slide, integrated in a margin and business. and the XXXX to firm the half attractive This direct consecutive outperformance portfolio EBITDAX As AR's top on EBITDAX Appalachia. portfolio the per stand-alone peer in

increase stages achieved day April. per records Slide company day the per number In record during days X.X per compares slide, continued AR day left an Completion the on in completed at of Utica held day quarter, the most in I'll quarter the portion of to average X.X of and days stages which highlight the to days This trend stages recent AR X.X AR Drilling week. average per month XXXX. on XX on average, lengths. per in the first XXXX. drilling includes drilling operational quarter in with its This day flat this Completion X.X a during at per AR addition flat overall achievements, the X.X the averaged In on stages day stages completed Utica, significant of per Marcellus and from top the lateral X, average continues had and Starting financial trend days production titled stages on day Marcellus and XX of the second Efficiencies. increasing stages X.X despite average

initial plans crews during As second a plan release of result two of the half completion called are wells this pace for. than to completed improvement, quicker XXXX a development AR at the being as

base. at integrated system, AR's of fresh we well for water the benefit believe the the serviced midstream pace able the long-term which with to crucial achievements development are AR's resource and This of XX total was XXX% to multiple of of AM completions highlights serviced XX including with a pads, the Importantly, operations, wells world-class its quarter. operational keep

June, shown up the Clearwater We number placed fourth during quarter X, second Clearwater new We quarter commercial service AM. commission pretreatment wastewater on as of towards service operations. day to back In we pretreatment to improve now since in XX,XXX the Antero per and Clearwater been placed Antero has Antero on the day approximately facility is temporarily XXXX offline to commercial the XX,XXX Facility into install facilities of In the titled per equipment. expect XXXX, to while was The and Service. barrels of Moving for back Slide ramp at volumes full to treated. additional barrels XX,XXX maintenance Facility Facility into operations taken treating

the process Antero about remain treatment facility While longer shale and the took in wastewater the very expected, Facility, excited for largest gas Clearwater is oil commissioning than the which world. we

Importantly, footprint. the year, environmental XXX,XXX facility community per is to eliminate truck over and trips expected reducing Antero's

for directly into and sustainable completion Additionally, that one is long-term of allows in delivery back development. activities facility for reuse water consistent the outputs fresh clean of the our system water goes and

venture we the refer our during into In Site. Smithburg addition the to site, service commercial the civil new we quarter, processing Processing to which as joint Antero Facility commenced Clearwater second construction placing on

on Bcf to has in miles Smithburg footprint shown Joint major NGL X.X Facility. Northeast day. X.X interconnects pipelines also per be venture's processing fractionation Venture AR joint of largest X.X in The Slide of site invested MPLX' one is strategically Processing Smithburg and natural the will on is full that approximately day has As Sherwood site gas or initial X processing Site, which full Number of per footprint. Bcf with long-haul firm build-out the commitments. Bcf positioning the facilities AM gas businesses bringing Sherwood build-out, will The up dominant Site key soon-to-be important the the At located to capacity processing will facility west Processing transportation secured X, U.S. because infrastructure New connected have titled X Processing to plants, The accommodate day Smithburg can a new an be

I'll With over We that, next this be in turn the about Mike. to business excited continue several the to the years. prospects call over growth

Michael Kennedy

AMGP and AM increase recently I'll for per Per distribution you, beginning of an the Thank a titled quarter, first and Number Record We Growth. Paul. X, $X.XXX touch the unit, AM Slide Track for of Delivering on increase on a sequentially. AM X% announced XX% year-over-year second distributions Unit

to Additionally, XXX% per AMGP prior a full of a and sequentially. a quarter compared XX% $X.XXX share, increase year the announced distribution increase

well since excess the IPO May the averaged of since quarter distribution on of target an of IPO, has distribution XX% IPO which increase have XXXX. X.XXx XX% AM AMGP second the consecutive distribution of The incredible which times. basis since represented its the achievement. all DCF was coverage since in X.XX to annualized coverage The is DCF was IPO, an growth ratio AM's increase its XXth fourth consecutive distribution at XXXX, of in

Now Midstream Throughput. quarter Year-Over-Year High on operational second to X, number let's results, Growth move titled beginning with Slide

an during prior gathering gathering, the of second second delivery, quarter, the processing were quarter. barrels All quarter. compression, year volumes our processing a averaged volumes Joint venture of quarter per X were over the the in Low-pressure were per represented significant volumes year top the fresh day, quarter. XXX% of Joint year per day, Fresh the which day, second Bcf and in volumes AM a the High-pressure for of an fractionation volumes page. to water record the Bcf Starting the the XX% Bcf during left year portion per X.X day averaged XXXX. day, highs prior increase compared XX% Compression prior represents were increase year per XXX volumes water to XX,XXX X.X during achieved quarter, day ahead fractionation AR. increase gross the from increase prior quarter gathering volumes increase increase the completion due gross quarter. expectations by XXX,XXX XX% XXX% per over were delivery venture efficiencies a prior delivery water XX% barrels over Fresh the over year a prior quarter. volumes well million quarter.

from crews crews crews fresh AR which in second plans decline by the as result than six The XX the the gathering just four to year lower half the third wells in will second mentioned, growth delivery year. sales XX in the their delivery the will in volumes half quarter. expects the completion half volumes volumes more in in second reducing compression and to Paul of to turn quarter second of to XXXX, fresh in As on of AR in water be water offset

in in a AR takeaway listen mention had you if currently production the chance to are experiencing call, due curtailments that tightness did crude trucking However, we market. we the to local to

AR in We of be fourth has trucking by expect as We agreements additional XXXX. anticipate to these temporary quarter capacity. executed this be production alleviated for curtailments to the nature curtailed

was financial for quarter due throughput Clearwater the reduced compared operating on Adjusted in XX% the volumes. rates. water was adjusted increased increase halfway operations contribution delivery a a by fresh quarter to prior running commencing EBITDA the to the second Facility $XXX through material to EBITDA during at second driven and did primarily quarter to The quarter. Moving increase EBITDA results. not Antero year have in The million,

our from Equity driven quarter Stonewall currently by the guidance and at our in-service of are primarily look year range, we of the we Clearwater facility. EBITDA the bottom As distributions processing date half guidance, full trending to the second delay during towards in was $XXX totaled an the quarter. increase second million of the cash times. ratio and for venture $XX year quarter, to coverage XX% prior DCF fractionation X.X the resulting Distributable healthy million, joint a flow compared

and the Antero infrastructure. $XXX handling water in second Midstream quarter, During gathering invested $XX in infrastructure million million

invested In $XX and venture second addition water, during in gathering million the to fractionation quarter. and joint AM the processing

Moving on to sheet balance liquidity. and

the billion had operations my $X.X XX, Facility the in XX% from million and with integrated June the into acquisition Antero In operations EBITDA. with operations million business we momentum, water annual XXXX, $XXX water million we supporting of XXXX, growth small our of chain In through generated XX% of water titled drawn our in revolving created our XXXX, ratio into value that rate liquidity system XX% $XX IPO. As fresh capturing and AR and the and XXXX in cash, is of across X.Xx. from Midstream for processing The expanded number its net expansion gathering gas in a delivery credit chain. finish Slide XXXX, in through expanded regional in resulting business EBITDA annual $XXX and facility, AR million which EBITDA increase AM the In Clearwater debt-to-LTM After growth expanded in highlights and since treatment joint will and IPO our full-cycle with of wastewater comments venture the and was fractionation Antero compound the on we distribution Midstream X, operations oil completing XXXX, an our XXXX strategy in track record our of a I business U.S. $XX and gathering just in XXXX. in our to and MPLX. of midstream result value the only lines midstream Antero compression

strong see further AR. to at value unchanged. operations and of addition, we strategy our continue the remain sponsor, In growing excited our which summary, opportunities midstream In remains as AM, chain about from downstream we and capturing stem the opportunities

visibility our our With rates value take to corporate-level to and attractive and ready unitholders leverage operator, that, questions. AR's We return plan and will continue into to we're shareholders. project development to deliver generate of

Operator

[Operator comes JP Morgan. today Instructions] And with Tonet our from first question Jeremy

Rahul Krotthapalli

just quick This couple have on is Rahul of Jeremy. a I for questions.

guide this you guidance First bottom can the noted off, for thinking included there. in any half about of the XXXX -- range. curtailments the also AM's on at revision? provide Are any outlook And color if AR

Michael Kennedy

volumes, the Yes, in they are been a included. have have healthy and guidance. EBITDA We captured throughput that risking always of those

Rahul Krotthapalli

mean, Got still Or you. of if And they you could -- ramp on XX That's to for plants XX those immediately here. the the just thoughts helpful. in going play up are any for us share dynamic year? then Sherwood come? remainder I with the is fill and adjustment as curious,

Michael Kennedy

the of quarter, And that will fourth is third Sherwood completion will XX part well. in of that and the upon and be be as that plant. Yes. is filled XX part the latter the filled Sherwood quarter, of the latter

Rahul Krotthapalli

you. Got color there side focus schedule accelerate to then can the share there? shifting for you us Smithburg Marcellus, with of the potential with build any And AR's to liquids site? the Any the new is

Paul Rady

that Yes, question? could you repeat

Rahul Krotthapalli

site, the any potential shifting there curious newbuild liquids for accelerating the Marcellus, the Site. focus Antero's With for I'm to of just Yes. schedule Processing is Smithburg side if the

Glen Warren

Smithburg civil accelerate there quarter, is third started in-service No, is construction the Yes. -- in but no we've to from scheduled ability already the date. the under

Rahul Krotthapalli

one then And one. last

fresh strong quarter quite water came the side, well. in this as On

of well for the rate the serviced. Just guided curious for the on above given run range track half year to wells cadence seems the back the the

Michael Kennedy

the from We XX serviced, half of first a Yes. in waters XXXX. wells perspective,

Our XXX XXX to was guidance for the year wells serviced.

the at wells have you left second midpoint, So XX approximately in the half.

Operator

Barrett MUFG Blaschke go comes ahead. question Please with from Securities. Next

Barrett Blaschke

know us Can does like at sort is billion, what go much give this demand I how to X.X to falling, but there's guess, of I of this of any it point? committed point? capacity you color forward the of in on terms sort Smithburg at where's look is

Glen Warren

Well, have commit of resource but we those to out. running plenty time sort support plants. fill certainly to filling need so to the them plants plants all the six plants. to the But commit two, get resources out, And built you we there's certainly to those no up three there's to business, have that the of six of years

Barrett Blaschke

expected on completion that kind crew, is to reduction related the the then there, And curtailments? of

Paul Rady

fact stages our wells. have the many all to to complete that, related we it's across No, big picture, so

quite And then of so the if many accomplishing are crews. more a in crews shorter period time, we as don't need

on stages And schedule so our ahead that's getting we're because done. completions, why day we're per of more

of And so fourth exist those curtailments, to It's the we curtailments, beginning that's related the to which significance not the of not the by expect quarter. it.

per But So crews, efficiency it's really the day. situation. that's just stages on temporary increased a

Glen Warren

the to a load above those budget not would the really on, the basis. Which complete kept front-end to on but us budget, we're we enabled consolidated line, billion drill increase we budget and If have and at rigs $X.X kept the crews essentially bottom budget. running increasing the

Operator

is Please ahead. Bellamy The Baird. go Ethan next from with question

Ethan Bellamy

potential impact a your With respect you MEX, there still potential pipeline? how in further at interested plans, that would all? if And to stake delays in are

Glen Warren

capacity. Ethan. we don't MEX rail unloading next would winter. was point, even volumes, through any need see Yes, in if growth because, The the We impact at liquids with spring more impact that delayed the occur

MEX is I said of which Otherwise, hope workaround kind to And third work really the through about liquids need bit only ground that on in around. that's Energy thought right the strong of online something the watching. get X a that's which hand, they'd to of that would that quarter, to the that they do miles welded. So use Northeast on stop be pipeline. by the of repurpose MEX actually they've rest pricing. is quite we We local in that could working end they now, the we're that's already due MEX have But And we're the Transfer and that the this product here do can they time of other without winter believe. --

committed yes, much have of and continue rather right, had they certainly into target I Philadelphia to in they've can that to now quarter an actually and to interest an But facility But Marcus midstream of we there, center that Hook. the the given continue there. have the delays few interest later. a pretty to from Nothing interest that standpoint. we have And in move the on fourth an optimistic continue you're report we're strategic partner there. a think investment MEX kind we last year miles all on So than in our volumes is

Operator

Ned [Operator from Instructions] Fargo. Baramov comes Our next with Wells question

Ned Baramov

Blue you I is off their to guess, looking to on would thoughts a looking midstream know I acreage ownership Maybe company. dedicated or some here AR spin sell midstream to interest has stand-alone company. Racer. Dominion of midstream you EGT its business your Northeast? today? can assets in the a buyer that is provide consolidation -- in in seller a into be another is midstream

Glen Warren

Well, I for But at from is that everything price, a seller. we're not we course, do of moves. a we're watch standpoint. strategic And but a always don't everything think a sale seller

assets Our our significant those mantra assets way. we'd really where in be in touch a molecules is interested

all of that, you outside in things are basin the but mentioned developments of sort that sure. So are for the some of the following we

acquisitions We standpoint, what that a look from something to midstream haven't balance traditionally an all it's we and compare but could in the But and sheet side. it certainly that, big over We capital change at development way eye have cost of that grown we on through time. on. and a keep

Ned Baramov

spending just improve to its facility, provide total including operations? the Clearwater an update on you CapEx could investments the guess, And I recent the on

Michael Kennedy

Yes.

$XX it's $XXX think the I this total is past to during but -- quarter, I up about one the million. think million recent around

Ned Baramov

And that Would question to What the say is me then that plant. the back those? end is on it for possible timing constructed -- of Smithburg these last going by all the you of schedule XXXX? are

Paul Rady

the constructed you XX. But first months every X plants or be XX, so. tend plant them build will Cal Well, and be Cal order in would there in the site these to and

a so first XX, Cal will least the but in plus And site in itself one be one XX. ready whether say at the can't second I Cal

Operator

comes from The next Howard. question Stewart Scotia with Holly

Holly Stewart

you're utilized How It you target. the half ATM think Maybe Mike the about maybe or that? guess, in but place? so about, kind for certainly me, still are like leverage revolver, on financing? the either is within is of I first looks then Glen. thinking And do about the longer-term you how using or And remind

Michael Kennedy

the address in used but during first ATM. ATM I'll place, Yes. The have is XXXX. not we it

the that credit the look and facility, opportunistic senior reach utilized, term when about does and around XX% of note it out. On markets the if out actual terming it's at see generally, attractive we be

very does You grade. trajectory our scale, the that of did throughout mention years. a to And size actually X.X That are low the twos with we not -- stays attractive couple leverage investment next and and escalate. on the is times, at in

definitely want be opportunistic to but $XXX something monitor. out, it we So around that we million terming is

Holly Stewart

market Mike? now, How that right is

Michael Kennedy

It's fairly not somewhat it's but say. this it year, still right healthy, was now. It's where last I would attractive

Holly Stewart

that said just of yes. And kind eat one assuming maybe project? I'm then remains. would interest how returns one. into on then, And Glen, your great. Have timing there overall the been that pushback of on any I would MEX that guess, Okay, mean overruns it? cost final in you

Glen Warren

have think you in. costs don't you or higher time know going a runs But than project expected we any Holly. I a year generally X Well, late, specifically, that

have that. likely, but don't So it's specifics on we any

Transfer Energy ask to about have that. You

Operator

session. remarks. conference for At I'd conclude over to management time, like to will this the back closing turn any question-and-answer this today's

Michael Kennedy

today. joining Thank us you conference on for call our

If contact further questions, please again. you feel have us. to free Thanks any

Operator

much The today's very conference presentation. has now concluded. for Thank you attending

You may disconnect. now

Antero Midstream (AM) 5 Aug 182018 Q2 Earnings call transcript