AM - Earnings call transcript Q2 2024 | Antero Midstream Corporation

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Operator

Greetings. Welcome to the Antero Midstream Second Quarter 2024 Earnings Call. [Operator Instructions]. Please note this conference is being recorded. At this time, I'll now turn the conference over to Justin Agnew, Vice President of Finance.

begin now may you your presentation. Justin,

Justin Agnew

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

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

Paul Rady

to Justin. Resources. walk morning, results Thanks, recent comments, acquisition referring and will In I Brendan peer-leading credit Good breakevens my through I'm AR. our our discuss then at will everyone. quarterly improvements. Bolt-on and Antero

Bolt-on on highlights. Let's #X Marcellus start acquisition titled Slide

of already capacity on Midstream's a the are strategic of acquisition highlighted in Midstream. the shale compressor During day These million pipelines the connected $XX approximately stations support infrastructure cubic to second and in map. highly quarter, of we included high-pressure two The feet Marcellus XXX Antero a from Summit XX Bolt-on achieve closed purple the now Antero assets acquisition the on with miles us million Resources, our and Resources on to Antero accretive production. counterparty. In our this all track half was target cash importantly, from these in immediately which and to of throughput the this of by X.Xx back acquisitions, investment-grade transaction flow assets with an leverage is year. free keeps on development Most future is line volume previous

Now Free $X.XX The let's free side illustrates #X, Mcf. breakeven to of price AR titled, Breakevens. page of Flow AR's the the Lowest on gas left-hand per Slide cash move Has flow Cash

peer-leading is performance, price well to XXXX. of low including pricing This In capital per international exposure widening realizations prices. factors, Mcfe to and ARPS several NGL AR's high have strong in liquids due in breakeven exposure half to strong resulted prices the which requirements maintenance particular, and equivalent first CX+ a provided uplift $X.XX the to

been to only AR's shown first page. a flow gas in peer-leading These with free right-hand only natural low balance NYMEX the for investment prices rest side which unhedged $X.XX strength prices combined led AR. profile, grade $XX These were drivers is primary well half of of sheet million, the the peer results, has cash breakeven on outspend the below of the unhedged Despite group. of the gas the of AR's to XXXX, upgrade

breakeven asset In support producer call prices turn the I -- will Brendan. in at with gas to we expand gas strongest U.S. the to that, lowest our natural to continue summary, with the And base over AM the

Brendan Krueger

last $XXX on flow after Thanks, highlights. cash the during Free are titled today. XX% was will XXXX running X Adjusted metrics X of a increase year. #X to quarter quite year-over-year. these is my the crew million, compared quarter Paul. was increase of rigs EBITDA quarter Quarter completion Both given Slide only X% begin Second AR notable the second second and I for a was dividends comments $XX million, which

acquisition. This acquisition to highlights the immediate purchase AM's cash bolt-on from despite $XX quarter. the remained during cash-funded our accretion flow flat free price the leverage X.Xx Importantly, attractive quarter-over-quarter the at million and

This from flexibility. providing the Next, capital highest Proceeds of balance program revolving refinancing successful highlights in provides sheet which was In used of organic XXXX in execute offering the let's and we move attractive the due sheet oversubscribed $X.XX $XXX due was us our our flexibility. our with senior lowers of and positive million we were slide improved upsized balance opportunities. go-forward to financial coupon to refinancings expense our XXXX, which notes on flow. on In NPV and July, maintained expands to the facility to credit additional an extended demand. Slide to call flexibility near-term XXXX acquisition our X, that billion This notes in January, May. titled commitments, our cash issued interest maturity free

flow borrowed an end we by June of transitioned XX, of received from on and illustrates and debt leverage our annual in of validates In comments over almost the Consistent titled Credit our free liquidity. this towards we have This XXXX after credit As from increase I'll made Flow Antero Momentum. resulting of significant X, slide upgrade cash time BB+ since consistent frame, has Slide XX%. May XXXX. S&P to the year, facility, the and my we in ratings to corporate under we EBITDA finish this targets. million is increased Cash million rating. Over dividends same S&P fourth credit had This since on generates our leverage Free that business and credit $XXX model ratings Midstream's $XXX a progress

to generated and have million cumulative have cash leverage our free we dividends, after $XXX over X.Xx. We reduced of flow

acquisition ability equity our continue by integrate $XXX of a any to opportunities, return we plan organic delivering on is on execute organic All acquiring strict of of while without assets accomplished summary, quickly was to In attractive our growth million model. our assets execution growth our our and on patients acquisitions. asset to and almost bolt-on supplemented business testament business synergies base bolt-on issuance. This this drive threshold and our

approach us a debt extending with and have tremendous which and reduction towards taken strength sheet We debt flexibility. maturities, balance proactive provides

With we are we take target, ready positioned Xx the shareholders well to are that, return near operator, to our to capital approach questions. leverage we additional As term. in

Operator

[Operator Instructions].

Our first the with from Ned question Baramov Wells line of is Fargo.

Ned Baramov

AM with volumes recent Was at reflected May? update to Starting in and pad from guidance from most delay begins wells gather when these potential your in X deferred compress the AR. this

Brendan Krueger

currently guidance guidance within the in would also that update fall we provided. extent range our that gets To overall. further, that the That's deferred Yes.

So result no change to to what provided we've there of year. end deferral the as that out of a the

Ned Baramov

number results Understood. And about from But the declined wells quarter. then overall water XXX,XXX my XX,XXX XX the some at day shed from barrels to the the second XX. serviced quarter. wells increased same the barrels seems light in to a your second in volumes a question, you quarter maybe first can on It in of first day time,

So this second implies much I less per guess, taken water the together, quarter. in well

presume I to servicing, any related of So color this -- is but the you can provide and well guess, timing helpful. would I be

Brendan Krueger

service. really question, define related It how well Yes. No, good just it's to is a we Ned.

So in most particular, was will the that come pad end in the wells volume serviced there June, quarter. be that but third a began really to the of X-well of at

completion really the from X-well decline if crews the in So going XX AR from completion two XX And quarter wells, going first like of you take volumes wells. a one to result crew. just was really pad, the out the it's

back. were actually today. quite looking We it's impressive So

one was a when Historically, completion it crew, about barrels XX,XXX day. you're

AM, to. So day on pushed the that at be with really quarter And back it packages a delivering just efficiency is X-well and timing, quite today, goes impressive. going with to by one wells, that's just XX barrels overall. third completion crew your XX,XXX it's driven the But going gains essentially question to the

Operator

The question of next Arsa is the UBI. from with line Naomi

Unknown Analyst

could time like be once rather What's question. buyback thought to Maybe some capital process some achieving AM BP than potentially compete you'll its with M&A leverage stock start for seems the on level BP within on some of has quite Xx there is a buyback. achieved. It target And allocation maintained is rate that later. now. sooner that

Brendan Krueger

Yes.

again, talked our start once to very today. about buyback that Xx buyback, So think us look we've target, attractive we'll we still I hit

think second out and to got year, expect the the buyback $XXX start we'd half program the authorization of there. So million I we've

up a to where want at leverage on whether we X.Xx. X.Xx, standpoint, And so or flat that's end based Xx from

of attractive. again, expectations versus think just have where internal be our very and to I cognizant we today, equity is

So time we a leverage fairly over would $XXX over use to given short here. where be frame trending million time that would expect

Unknown Analyst

post follow-up as a base acquisition the understand on of guidance Maybe us can 'XX? how help drivers 'XX growth the steps [indiscernible], of you base EBITDA in that the business increase up in business, and of 'XX AM drivers

Brendan Krueger

Yes.

we that by $XX annualized on million about over 'XX, That the acquisition basis, X.Xx about, do on increased million. the multiple $XX So math if again, an a $XX million on acquisition. little increase you talked a about it still for we

us allowed that a to with despite our great asset from acquisition it cash. standpoint was economic leverage an again which flat acquiring keep So

target our Xx which still the So original that able in second hit half, plan. to was

think the depend goes at it just AR. As on we will look out, where development I plan

AR is capital. about still talking maintenance

So And AM, obviously year-over-year, growth from flat digit gets which you have of volumes, the on low CPI I that fees. an think in volumes then on standpoint. single you'll at should have the EBITDA kind

Operator

Our next with questions Tonet Jeremy are from JPMorgan. the line of

Noah Katz

This Jeremy. for Katz is on Noah

touch similar the step you XQ brought brings the service XX year, a then in XX% connected wells you system to we be for expect freshwater wells in to in to to on the XQ? for which First, the should I quarter, wanted down for in delivery and

Brendan Krueger

Yes.

of then first crews. the guidance then overall, we with pushed step the of talked in out level of quarter, have service. those we should less with well deferred, XX level see well, quarter. the But be two assuming you're report wells about to activity third those about, most in gets from the not third quarter quarter. To in in getting at So the extent should quarter, that fourth in third a terms XX, well the you'd completion really in what -- the quarter if pushed fourth getting you look slight pad down look a terms in we second volume And similar of X a you to you wells from quarter service, run pushed. talked have you But similar we'd what that

Noah Katz

have helpful. it. the And AR volumes? the they'll then have the I as size crews will a Got the of year? on That's guess, of impact less are that you can And expectations deliveries completion for your one number what remainder crew that the completion follow-up, for for having

Brendan Krueger

Yes.

So one crew We second at day. looking barrels completion third again. XX,XXX crew a talked about about quarter the at quarter, one completion had

will completion level same be of amount a a that to volume completion of crews, it's third in quarter, fourth the expect quarter. similar I'd two the then quarter. number the assumption completion run running those the first one crews extent running So you a fair flat in to And crew in

crew completion the pretty So on count. math think, just simple, on that I based

Operator

question next from Our John Sachs. with of line Goldman is the Mackay

John Mackay

quick start trying are you the just being looking the second there the of quarter. the just relatively Maybe for if range at think year, timing I that guidance for, deferral small guess, dollars the a to sensitive we're to to able start a say, know would to you let's but I follow-up a for figure of half this here, be back sometime quarter driver half out AR. fourth buyback later let's in more the timing do talking how at of than, that say, and

Brendan Krueger

No. $X I talking debt. of you're mean billion

the the EBITDA moving a and Xx change you're leverage needle not in much So impact. by overall

not into there. factoring really that's the timing So

John Mackay

how Maybe just frame, been that? opportunities. broadly, up we more anything conversations an guys are looking like those More talking going, for be have you time enough. maybe Fair on what third-party update could some

Brendan Krueger

Yes, John, side. conversations gathering the We're always continue. on looking third-party opportunities the I think at

there. going about sense There in I primarily the excess think Ohio. is activity on Ohio capacity we that more talked we in have

tough that done. we've that deals there, fruition, but always third-party it's whether conversations to had get So to comes

I comes the is So whether in that think still to works. fruition,

add at to nothing So this point.

Operator

from question Everen line TPH. with the Zack Our of is next

Zackery Van Everen

got you I looks like up one both ticked QX. just and I rates know in gas for quarter-over-quarter. today. the water across escalators CPI

little on be a bit those what might driving So maybe rates any just higher. color

Brendan Krueger

Yes.

accounting a on again, volume. that, just annual the function accounting rate. it $XX really high-pressure accounted just so of how change for think fact, in that we're due mark gathering terms It's million was But that for a when the for acquisitions of treatment. was you versus a about that fee of are the gathering, And Summit bolt-on how I there. matter to in from it Still, the small think EBITDA, was in again, EBITDA. just it's

Zackery Van Everen

Got water, looks went you. like one that well. And quarter-over-quarter it up then maybe as on

Brendan Krueger

there want no to should Yes, get you I on back to that, real be on water. impact

on that you back to one. come we'll So

Operator

call the back I'll That will Justin question-and-answer now to conclude Agnew remarks. session. closing our turn for

Justin Agnew

Please Thank reach today. with you, questions. everybody, any joining for free to feel out

Operator

today's conclude will conference. This

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

Antero Midstream (AM) 1 Aug 242024 Q2 Earnings call transcript