AM - Earnings call 3 2023 | Antero Midstream Corporation

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Operator

Greetings, and welcome to the Antero Midstream's Third Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. And it is now my pleasure to introduce to you, Justin Agnew, Director of Finance. Thank you, Justin.

You may begin.

Justin Agnew

you conference us call. thank third Antero and investor quarter morning, for for joining Midstream's Good non-GAAP it also would We'll that call the to www.anteromidstream.com, highlights, today's open where financial during a the will and for contain spend few our call financial a call. Today's operating be and minutes home page we've measures. then reviewed website direct provided like presentation to also going certain of through up may you Q&A. I at we'll earnings separate Please most release such refer for important measures, including our earnings to press financial disclosures reconciliations comparable regarding to measures. the GAAP

Kennedy, Joining President of Director and Antero today of call Brendan Antero are Midstream. With and and of turn the that, Resources Paul. Chairman, Michael Antero to Midstream; CEO Antero me call CFO on Antero of over Krueger, Resources Paul the CFO I'll Rady, and Midstream;

Paul Rady

XXXX. and third support outlook business to Brendan ESG In results, capital efficiency Justin. inventory multi-decade then at Thanks, dedicated in of cash free and comments, repeatable highlights. the financial model my the our XXXX derisked discuss long-term AR discuss will attractive and will Both these AM quarter AM. I flow achievements the attributes

Growth Going throughput a This $X.XX on #X to natural and at peers and NYMEX the to gas at Slide start drilling Dedicated breakeven Large price. AM slide titled my Inventory growth Consistent Low-cost the comments AM. highlights inventory gas for

XXXX. Similar million United to natural the the program capital the roughly has organic based leasing on in year-over-year XXXX. production dedicated on delivered and the page. result inventory XXXX XX growth. States, years right-hand strategy, executed to The as AM side the AM's pace a of depicted well again During gathering once investing growth operations over AR of is AM land the X development AM's organic growth of double-digit throughput since its $XXX day, X% the quarter, highlighting gas since scale gathers third AM total in Bcf over With now volumes of

more the within So leasing the over fill-in majority positions per while reserves inventory for already nearly AR, A and land drove is increased in as at has extend only capital that strategy than replenished volumes and efficient invested organic to production XXXX, AR the of frame. capital growth AM capital not incredibly is gathering Antero for position. multi-decade acreage contiguous cost-effective up This acreage AR's This throughput more consolidated position. infrastructure well laterals, Midstream's but have build-outs block acreage AM. that efficient time as more XX% since the results well

let's and drilling This Most Now the move illustrates Customer Appalachia. completion the the Capital-Efficient year-over-year on capital change production to year-over-year the X-axis. Slide titled change on #X, in in and Y-axis slide in

actually capital you year-over-year. with the program, program, quarter invested translated the the a year-over-year. combined grew and drilling been growth, year. contributions production far growth While This operator to production acquisitions AR's XX% third a the maintenance their last completion volumes from targeting XXXX in the increase maintenance a when attempted group volumes capital peer at drilling partnership, to gathering year-over-year AM. Conversely, bolt-on the AR's X% target this over capital Appalachia has to When and capital-efficient declined to AR in deliver growth, actually most compare away and

summary, to for natural or at balance AM high companies capital value underpins to that, midstream largest ROIC. repeatable teens at combined These combined visibility very Brendan. to development for inventory X sheet The with completion invested returns our program repeatable, X continues to X reference, AM dedicated X of most results the the of gas manageable generates unparalleled invested For peer-leading capital drive producers AR's capital the to in that strong multi-decade, This we peer-leading X and balanced the further by shareholders. With consistently which industry. consistent with AR supported over development capital-efficient program AR, running the and is peer-leading continue turn X rigs capital drives AM. In consistently I a call crews, U.S. efficiency to efficiency, be in return on low-cost on the is

Brendan Krueger

Thanks, my #X will begin I Slide Operational comments Success Earnings Growth. Paul. on Drives titled

During increase of annualized a the over $XXX year-over-year. a on company million was or billion an third quarter, XX% which record we generated basis, EBITDA $X

which $XX cash X.Xx, flow from financial to and leverage at also utilized This of in a flow Midstream's were direct reduction and cash dividends. operational a X.Xx We and to growth before year-end strategy million success. of generated free is after flow free Antero resulted declining $XXX free reduce million These achievements cash is dividends of debt result absolute XXXX.

quarter, as legacy and our the approximately by that the in XXXX, a the pressure closed growth quarter which X% year. third Both organic X% Paul was increased was of Antero on outperformance sales company result gathering and compression acceleration increase The turned throughout year. volumes, and was respectively, Of AM's completion low-pressure EBITDA to XX% last attributable as drove year outperformance to compared gathering fourth guidance, records wells Crestwood business, as acquisition XX%, on the the the in the compression assets in During to discussed, throughput set of in for the XX% low volumes in of well growth gathering quarter. and measures prior Midstream. our

Cash after on let's titled to Free Flow Slide to Dividends. Now move #X, Repeatable Transition

guidance dividends. benefited $XXX full quarter just cash generating our budget. midpoint from quarter our a our in base business, dividends has Midstream's was achieved XXXX which straight our totaled and flow Antero after free Year-to-date, of X in flow our realizing have combination This after flow quarters. free from has and million, cash acquisitions original million, synergies outperformance optimizing of cash of above $XXX free this fifth bolt-on we capital year is

given our To it balance leverage context, and the pay we off we the term. with essentially the the demonstrating well almost Looking a dividends. just time, both of X were business At to just visibility at EnLink leverage that excess we position acquisitions to This AM's X by expect expect cash sheet back flow how our acquisitions period. is is and how same highlights well as both into put these and acquisitions free put cash decline over after as strong to quarters of feat were. turn over accretive on base Crestwood acquisitions, to positioned near incredible an free flow those

delivered wanted on of our of data Before on annual to X.XXX%, rate published X methane just leak industry. loss #X. recently our in I ESG the prepared was we page report. lowest In finishing in on up our achievements touch ESG the just XXXX The Slide briefly remarks, this midstream a XXXX,

of in Our integrated our the reuse water largest million traffic wastewater system, allowed and XX of or over eliminated in our truck recycle us XX% miles to local Appalachia, communities.

the growth employee proud last safely. XXXX incident, Midstream. Importantly, year, we achievement delivered are and here Antero marked an at without while the an have have we significant straight lost of time very something over we it eighth year delivered which is incredible

Boxes. comments We and recordable focus also total on XX% Antero further Midstream all the had the finish a Checking operations. I'll XXXX titled reduction in safe highlighting Slide #X, on my in incident efficient the corporate rate

our our X financial integration in deliver us second which quarters an teens high this business complementary first operating in of standpoint, acquisitions, the to reflected on been is outperformance base again successful and increase and of the in year. The track incredibly successful peer-leading a XXXX keep in guidance from have The XXXX. ROIC

guidance at derisked million dividends, now which midpoint the significantly expect $XXX which almost $XXX transitioning of have free guidance, we We cash the business to generate XX% is total our to million. consistent initial by flow above after of

to Xx our increase meaningful free delivering record to return As continue leverage financial build targets. will target on to and of and we increase our our look of we after a capital our expect This XXXX, summary, track further guidance dividends. cash achieve well AM stated shareholders. In on position we in to flow

we and importantly, through efficient take communities. With are deliver ready More local our being to stewards operations questions. good while these operator, we in that, safe

Operator

of And the first question comes Instructions] from Tonet with the [Operator JPMorgan. line Jeremy

Unknown Analyst

your of on allocation Xx your after leverage target by Noah how is just I achieving about Jeremy. wanted achieving what this? XXXX. on to think I capital guess -- should we This for priorities touch

Brendan Krueger

Yes.

talked I makes whether share look closer to think are target, past evaluate get as further we'll where the we've and certainly some or this think we on dividend that we or I paydown we'll overall, I perspective to mean repurchases well. calls as from equity debt sense. about an increases

those of I through of return AM visibility terms visibility perspective repurchases we think And at sense as with continue today, But for we'll of look business AR, integration all certainly we past, make lot underlying think as I target. sit the to having that the of we've approach the of talked about gives equity lot a into a further share value. capital. long-term us -- in the of that here this in leverage significant as

Operator

from comes Brian question of next the the UBS. And Reynolds line with

Brian Reynolds

Maybe some look XXXX, ahead recent to 'XX to outperformance. the of given

relief could then should Should of some that next this growth? kind flow the the into if through just going could kind Just characterize go we of Or characterize year? kind will the as mid-single-digit wondering the and low of given growth inflator. some EBITDA of away that you into 'XX, get of the tailwinds we rate teens CPI

Brendan Krueger

question, Brian. Good Yes.

down components. you the There's I it of think really X nicely. broke kind

$XX So will be the million fee about rebates rolling off year. next

CPI, on the measured midpoint on our growth to it's this June. X% roughly The June that's -- of So year. our guidance

So XX% was already. then CPI It we take that -- it number, a of X% and that. you know number was

given then performance, what call and you're, has look overall X% of that growth. well improve EBITDA you So said, the if that it, X.X%, continued drilling to to benefit completions. X% at the partnership with AR is And acceleration AR so

year-end And 'XX is a number over so XXX million AR 'XX. up year-end production day at the to from

And of so capital of maintenance third will depending kind component that a they run plan growth drive at from AM. on what

plan well AM a call to it, can the to X% double-digit those the depending on in up that talked positioned just from able you you about, anywhere, just low number and standpoint capital development be at see So levels. that AR the that is to meet to level we X% be

Brian Reynolds

all I my the Great, AM further could look co end, color. sense. drill XXXX. is Maybe expected to little which volumes in at let's The impact appreciate to water follow-up, with as 'XX. even a ahead makes the AR

then the the from So balance gas, the gas given for was is sheet just call supply, call and natural ago it coming that that's given online, years and relative the for LNG a AR's basin. demand where few to gas where

Antero maybe curious of on how kind about to think volumes of we some up Just co-activity through that picking the Midstream of drill should flows ultimately AR side? water the

Brendan Krueger

Thanks.

perspective. at gross the place wellhead for is perspective overall, volume, to mean, it a think here got gross wellhead from from you an volume infrastructure us looking benefit I XXXX, you've I in look the AR AM the as

rolls very partnership infrastructure drilling the a off, that's once transport, you at into it's AR so grow perspective from very to processing, a a from from that already And have net from gathering -- perspective. efficient that firm a capacity

prices with entails, probably and level, the fair assumption what AM, be that at volume So the flow to if that hold AR that'd I strip of gross will wellhead through course. a that the you maintain think

Operator

comes Holt. the with the Zack Pickering line Everen question And next from Tudor of Van

Zackery Van Everen

are CapEx capacity? Just guys on at those. spend And you what you so, on into and expanding processing both X Have would of for above those? the the like that looked or frac nameplate I see look side. running if

Brendan Krueger

I benefit XX% the processing typically No, the about Yes. can side above run I is on you nameplate. mean think

day, JV to to that at of So look X.X the if a would the be million Bcf ability another you grow. net $XXX just

In the AM the gathering Utica, in in is the pads Utica turned got which that, of there be will already the obviously, out. Utica. an built that of perspective that on a be And benefit you've will is lot a couple AM's from to addition that infrastructure

to plus there's you run of also side, to in give think terms nameplate processing side. the from you've above the which the assets can occurs, where the development And over then move on ability there. on be that I got levers So pulled acquired dry Crestwood, of the ability plenty we

nameplate the Utica So the dry above to and you've and Crestwood and ability processing. capacity got assets run

Zackery Van Everen

makes That also can is the you And Got above pretty limited? that run side, Or sense. that then it. frac on capacity?

Brendan Krueger

the The side unutilized. essentially benefit is was that frac last the frac there on anyway is

our not we Hopedale just is participate elected pretty It's essentially capacity. in participate full elected empty. X one, fourth got you've fractionation unit. fifth We to the X. to and X, The frac that So

facility. the move So got AR from perspective an to and that ability fractionation you've grow into

Operator

with And from line Instructions] [Operator of the Brody the question comes Bank America. Gregg next of

Gregg Brody

is more Was very -- within specific this X trying to But I back M&A-related see the if the just last Midstream. of XX get the -- in but can to question, X call. minutes Antero

opportunities So if think landscape make year and you Antero you we next M&A Midstream obviously, sense? And capital for there about possibility. think the there's -- today? a do returning it is How does out

Brendan Krueger

you X, last there. Yes. and Those AR were the volumes drove I us kind side, the which fold-in. do acquisitions, call saw flow mean the cleanup on year. AM what Crestwood of were EnLink we assets asset cash nice

So There you with organic third you a the essentially how at AR a that smaller opportunities occasionally do relative perspective. we'll we opportunities we'll And side. out are enough to parties continue look can for third-party and need just how And other to derisk probably that's larger in the then comfortable it scale. with That's you going on you M&A have look to forward. opportunities few opportunities. where see some get there and

Operator

turn time. Justin back questions There at closing the to for are no Agnew floor comments. any like And I to would over further this

Justin Agnew

feel Thanks, us out with questions. everyone, joining to for today. any free reach Please

Operator

that gentlemen, and conclude does teleconference. Ladies today's

at may for your lines your you participation. You Thank this disconnect time.

Antero Midstream (AM) 26 Oct 232023 Q3 Earnings call transcript