Antero Midstream Corporation · NYSE:AM
Antero Midstream — Antero Midstream Partners — NAPTP MLP Investor Conference May 2015
44 slides from Antero Midstream's conference presentation, May 20, 2015
Slide 1: NAPTP MLP Investor Conference May 2015
NAPTP MLP Investor Conference May 2015
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Antero Midstream Partners LP, and its subsidiaries (collectively, the “Partn
Slide 3: Sustainable Business Model: Leading Unconventional Midstream
Sustainable Business Model High Growth Sponsor Drives AM Throughput and Distribution Growth Largest Dedicated Core Liquids-Rich Acreage Position in Appalachia No Debt and $1.2 Billion of Liquidity 2 Premier E&P Operator in Appalachia 100% Fixed Fee and Largest Firm Transport and Hedge Portfolio Oppo
Slide 4: Sponsor Strength: AR Leader in Appalachian Basin
0 500 1,000 1,500 2,000 2,500 3,000 3,500 Appalachian Peers - 100 200 300 400 500 600 Core Net Acres - Dry Core Net Acres - Liquids-Rich 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 SPONSOR STRENGTH AR LEADER IN APPALACHIAN BASIN 3 Top Producers in Appalachia (Net MMcfe/d) 1Q 2015(1)(2) Top 12 U.S
Slide 5: Sponsor Strength: Most Active Operator in Appalachia
Note: 2014 SEC prices were $4.07/MMBtu for natural gas and $81.48/Bbl for oil on a weighted average Appalachian index basis. 1. All net acres allocated to the WV/PA Utica Shale Dry Gas and Upper Devonian Shale are included among the net acres allocated to the Marcellus Shale as they are stacked pay
Slide 6: Growth: Highest Growth Large Cap E&P
40.0% 25.6% 23.6% 20.0% 19.1% 17.7% 15.0% 9.3% 6.9% 3.0% 2.3% (1.8%) (1.8%) (2.3%) (2.3%) (8.6%) (8.7%) (13.6%) -25% -15% -5% 5% 15% 25% 35% 45% 40%+ 5 Appalachian Peers Source: Represents median of Wall Street research estimates for 2015E production growth vs. 2014 actual production. 1. Includes al
Slide 7: High Growth Midstream Throughput
$1 $5 $7 $8 $11 $19 $28 $36 $0 $10 $20 $30 $40 $50 2Q '13 3Q '13 4Q '13 1Q '14 2Q '14 3Q '14 4Q '14 1Q '15 2015E 10 38 80 126 266 531 908 1,134 0 200 400 600 800 1,000 1,200 2Q '13 3Q '13 4Q '13 1Q '14 2Q '14 3Q '14 4Q '14 1Q '15 Utica Marcellus 26 31 40 36 41 116 222 358 0 50 100 150 200 250 300 35
Slide 8: Liquids-Rich Largest Core Position
7 LIQUIDS-RICH LARGEST CORE POSITION Source: Core outlines and peer net acreage positions based on investor presentations, news releases and 10-K/10-Qs. Rig information per RigData as of 3/27/2015. 1. Based on company filings and presentations. Peer group includes AEP, CHK, CNX, COG, CVX, EQT, NBL,
Slide 9: Multi-Year Drilling Inventory Supports Low Risk, High Return Growth
0% 10% 20% 30% 40% 248 139 94 254 289 14% 39% 55% 40% 39% 0 100 200 300 0% 20% 40% 60% Condensate Highly-Rich Gas / Condensate Highly-Rich Gas Rich Gas Dry Gas Total 3P Locations ROR Locations ROR MARCELLUS WELL ECONOMICS(1) 664 1,010 628 889 45% 30% 15% 15% 0 300 600 900 1,200 0% 15% 30% 45% 60% Hi
Slide 10: Lowest Breakeven Prices Among U.S. Shale Plays
Marcellus and Utica undeveloped 3P rich-gas locations have the lowest breakeven prices for both oil and natural gas compared to other U.S. shale plays $39 $42 $44 $51 $53 $54 $60 $64 $65 $68 $69 $72 $83 $86 $0 $20 $40 $60 $80 $100 WTI Price ($/Bbl) Antero 2015 Drilling Plan 1. Source: Credit Suisse
Slide 11: High Visibility: Projected Marcellus Midstream Buildout
10 HIGH VISIBILITY – PROJECTED MARCELLUS MIDSTREAM BUILDOUT 2014 2015 2016 2017 2018+
Slide 12: High Visibility: Projected Utica Midstream Buildout
11 HIGH VISIBILITY – PROJECTED UTICA MIDSTREAM BUILDOUT 2014 2015 2016 2017 2018+
Slide 13: Mitigated Commodity Risk: 100% Fixed Fee
Fixed Fee 100% 12 MITIGATED COMMODITY RISK –100% FIXED FEE – RICH TO DRY Contract Mix Fixed Fee 97% Fixed Fee 100% Fixed Fee 100% Fixed Fee 94% (1) . Source: Core net acreage positions based on investor presentations, news releases and 10-K/10-Qs. 1. Represents assets held at MLP. 2. Average rig cou
Slide 14: Mitigated Commodity Risk: Firm Transportation & Sales Portfolio
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Gross Ga
Slide 15: Mitigated Commodity Risk: Hedging Integral to AR Business Model
$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $0 $50 $100 $150 $200 $250 $MM 14 MITIGATED COMMODITY RISK – HEDGING IS INTEGRAL TO AR BUSINESS MODEL 1. 2Q 2015 – 4Q 2020 hedge gains based on mark-to-market as of 3/31/2015. 2. Based on NYMEX strip as of 3/31/2015. AR has realized $1.1 billion of gains on
Slide 16: Value Chain Opportunity: Full Midstream Value Chain
Water Assets(1) Regional Gas Pipelines Miles Capacity In-Service Regional Gathering Pipeline(2) 50 1.4 Bcf/d 4Q 2015 15 1. Currently owned by AR; AM holds option to purchase 100% of assets at fair market value. 2. AM holds option to purchase 15% of regional gathering pipeline at cost plus cost of ca
Slide 17: Strong Financial Position: Significant Financial Flexibility
0.0x 1.2x 3.7x 3.8x 4.0x 4.5x 4.6x 5.0x 5.6x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x AM Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Total Debt / LTM EBITDA STRONG FINANCIAL POSITION SIGNIFICANT FINANCIAL FLEXIBILITY 16 Undrawn $1 billion revolver in place to fund future growth capital (5x Deb
Slide 18: Top Tier Distribution Growth & Healthy Coverage
3Year Expected Distribution Growth Rate and DCF Coverage(1) 17 1. Based on Bloomberg 2015-2017 consensus distribution and DCF coverage estimates. TOP TIER DISTRIBUTION GROWTH & HEALTHY COVERAGE 35% 28% 25% 25% 24% 24% 17% 16% 14% 14% 12% 8% 1.17x 1.20x 1.21x 1.46x 1.44x 1.63x 1.50x 1.25x 1.18x 1.25x
Slide 19: Attractive Value Proposition
ATTRACTIVE VALUE PROPOSITION Note: Based on Bloomberg consensus estimates and current market prices as of 05/15/15. 18 Attractive appreciation potential on a relative basis EQM DM SHLX CNNX MWE WES TEP MPLX PSXP VLP AM - Current Yield: 2.68% Price: $26.82/unit AM - Implied Yield: 1.86% Price: $38.72
Slide 20: Antero Midstream Asset Overview
Antero Midstream (NYSE: AM) Asset Overview 19
Slide 21: Antero Midstream Asset Overview
1. Represents inception to date actuals as of 12/31/2014 and 2015 midpoint guidance. 2. Includes $12.5 million of maintenance capex at 2015 midpoint guidance. 20 Utica Shale Marcellus Shale Projected Midstream Infrastructure(1) Marcellus Shale Utica Shale Total YE 2014 Cumulative Gathering/ Compress
Slide 22: Antero Midstream Assets: Rich Gas Marcellus
ANTERO MIDSTREAM ASSETS RICH GAS MARCELLUS 21 Provides Marcellus gathering and compression services Liquids-Rich gas is delivered to MWE’s 1 Bcf/d Sherwood processing complex Significant growth projected over the next twelve months as set out below: Antero plans to operate an average of nine drillin
Slide 23: Antero Midstream Assets: Rich & Dry Gas Utica
22 Provides Utica natural gas and condensate gathering services Liquids-Rich gas delivered into MWE’s 600 MMcf/d Seneca processing complex Condensate delivered to centralized stabilization and truck loading facilities Significant growth projected over the next twelve months as set out below: Antero
Slide 24: Organic growth strategy provides attractive returns
23 Organic growth strategy provides attractive returns and project economics, while avoiding the competitive acquisition market Industry leading organic growth story ~$1.06 billion in capital spent through 9/30/2014 $425 million in additional growth capital forecast for the twelve-month period endin
Slide 25: Project Economics by Asset Type
LP Gathering HP Gathering Compression Condensate Gathering Water Business Regional Pipeline Processing/ Fractionation Unlevered IRR Range: 25% - 35% 15% - 25% 10% - 20% 25% - 35% 30% - 40% 15% - 25% 15% - 20% Payout (Years): 2.5 - 4.0 3.5 - 4.5 4.0 - 6.5 2.0 - 3.5 2.0 3.0 3.5 - 7.0 5.0 - 6.0 Minimum
Slide 26: AM Upside Opportunity Set
AM UPSIDE OPPORTUNITY SET 25 ACTIVITY CURRENTLY DEDICATED TO AM Integrated Water Business Processing, Fractionation, Transportation and Marketing Regional Pipeline Project Option to participate up to 15% in regional gathering pipeline project in West Virginia Option to acquire at fair market value 1
Slide 27: AM Option: Integrated Water Business
AM OPTION INTEGRATED WATER BUSINESS 26 Marcellus Fresh Water System Provides fresh water to support ongoing Marcellus completion activity Year-round water supply sources: Ohio River and local rivers Source water treatment facility to be completed by 3Q 2015 Significant asset growth in 2015 as summar
Slide 28: Regional Pipeline Project
REGIONAL PIPELINE PROJECT Option to Acquire Up To 15% Non-Op Equity Interest Enables Antero Resources to move up to 1.1 Bcf/d of gas to more favorably priced markets including TCO, NYMEX and Gulf Coast markets Once the Regional Pipeline is placed into service, Antero Resources will complete the prev
Slide 29: Processing Value Chain Potential for Undedicated Acreage
PROCESSING VALUE CHAIN POTENTIAL FOR UNDEDICATED ACREAGE Sherwood Processing Complex AR acreage position on map reflects tax districts in which greater than 3,000 net acres are held. (1) Antero gross 3P C3+ NGL volumes and 3P Gross Wellhead Gas reserves as of 12/31/14. Processing Area Of Dedication
Slide 30: Deep Utica Dry Gas
DEEP UTICA DRY GAS 29 Antero has 217,000 net acres of exposure to Utica dry gas play 42,000 net acres in Ohio with net 3P reserves of 2.4 Tcf and 289 locations as of 12/31/2014 175,000 net acres in West Virginia and Pennsylvania with net resource of 11.1 Tcf as of 12/31/2014 (not included in 40.7 Tc
Slide 31: Catalysts
Low Cost Marcellus/Utica Focus -in- Distribution Growth 30 CATALYSTS 28% to 30% distribution growth targeted based on Sponsor budgeted development; additional third party business expansion opportunities AM Sponsor is the most active operator in Appalachia; 40%+ production growth targeted for 2015 s
Slide 32: Top Tier Distribution Growth
$0.17 $0.18 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 $0.50 4Q 14A 1Q 15A 2Q 15E 3Q 15E 4Q 15E 1Q 16E 2Q 16E 3Q 16E 4Q 16E 1Q 17E 2Q 17E 3Q 17E 4Q 17E TOP TIER DISTRIBUTION GROWTH 31 Distribution Per Unit(1) Antero Midstream is targeting 28% to 30% annual distribution growth throug
Slide 33: Appendix
APPENDIX éaAntero Midstreampertners i»
Slide 34: Largest Firm Transportation and Processing Portfolio in Appalachia
LARGEST FIRM TRANSPORTATION AND PROCESSING PORTFOLIO IN APPALACHIA Odebrecht / Braskem 30 MBbl/d Commitment Ascent Cracker (Pending Final Investment Decision) Antero Long Term Firm Processing & Takeaway Position (2018) Accessing Favorable Markets Mariner East II 62 MBbl/d Commitment Marcus Hook Expo
Slide 35: Current NGL Marketing Geographically Diverse
CURRENT NGL MARKETING GEOGRAPHICALLY DIVERSE 1. As an anchor shipper on Mariner East II, Antero has the right to expand its NGL commitment with notice to operator. 2. 2015 NGL production assumes ethane rejection. A-2 Mariner East II 61,500 Bbl/d AR Commitment(1) 4Q 2016 In-Service Export 15% Gulf Co
Slide 36: World Class Marcellus Shale Development Project
WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT 100% operated Operating 7 drilling rigs including 2 intermediate rigs 401,000 net acres in Southwestern Core (74% includes processable rich gas assuming an 1100 Btu cutoff) 50% HBP with additional 29% not expiring for 5+ years 400 horizontal wells comp
Slide 37: Marcellus ROR% and Gas Price Sensitivity
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 Pre-Tax ROR (%) Highly-Rich Gas/Condensate Highly-Rich Gas Rich Gas Dry Gas MARCELLUS ROR% AND GAS PRICE SENSITIVITY A-4 1. Large portfolio of Highly-Rich Gas/Condensate to Dry Gas locations Focused on drilling highly econ
Slide 38: Utica Shale Development Project
Note: Antero acreage position reflects townships in which greater than 3,000 net acres are held. Antero 30-day rates in ethane rejection. 1. 30-day rate reflects restricted choke regime. 100% operated Operating 4 drilling rigs 149,000 net acres in the core rich gas / condensate window (72% includes
Slide 39: Utica ROR% and Gas Price Sensitivity
0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 Pre-Tax ROR (%) Condensate Highly-Rich Gas/Condensate Highly-Rich Gas Rich Gas Dry Gas Antero Rigs Employed UTICA ROR% AND GAS PRICE SENSITIVITY A-6 NYMEX Flat Price Sensitivity(1) 94 Locations ROR% at Flat 20
Slide 40: Completion Deferrals Optimizing Pricing
$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 2015 2015 2016 2016 2017 Gas Price $/MMBtu Completion Deferral Impact on Realized Gas Price TETCO CGTLA TETCO Cal 2015: $1.88/MMBtu CGTLA Cal 2016: $3.27/MMBtu BTAX IRR: 57% A-7 Plan to defer 50 Marcellus well completions into 2016 to achieve hig
Slide 41: Antero Midstream – 2015 Guidance
ANTERO MIDSTREAM – 2015 GUIDANCE Key Variable 2015 Guidance Adjusted EBITDA ($MM) $150 - $160 Distributable Cash Flow ($MM) $135 - $145 Year-over-Year Distribution Growth(2) 28% - 30% Low Pressure Pipelines Added (Miles) 44 High Pressure Pipelines Added (Miles) 20 Compression Capacity Added (MMcf/d)
Slide 42: Antero Resources – 2015 Guidance
ANTERO RESOURCES – 2015 GUIDANCE Key Variable 2015 Guidance Net Daily Production (MMcfe/d) 1,400 Net Residue Natural Gas Production (MMcf/d) 1,175 Net Liquids Production (Bbl/d) 33,000 Net Oil Production (Bbl/d) 4,000 Natural Gas Realized Price Differential to NYMEX Henry Hub Before Hedging ($/Mcf)
Slide 43: Maintenance Capital Methodology
LTM Production NTM Production Forecast Average LTM Production MAINTENANCE CAPITAL METHODOLOGY Maintenance Capital Calculation Methodology Estimate the number of new well connections needed during the forecast period in order to offset the natural production decline and maintain the average throughpu
Slide 44: Cautionary Note
CAUTIONARY NOTE The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserve estimates (collectively, “3P”). Antero has provided internally generated estimates for proved, probable and possible reserves in this presentation in accordanc
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