Kinetik Holdings Inc. · NYSE:KNTK
Kinetik — Altus Midstream Company — Q4 2020 Earnings Presentation
25 slides from Kinetik's earnings presentation, Feb 25, 2021
Slide 1: Investor Presentation
ALT U S M ID ST R EAM C O M PANY Investor Presentation February 2021 Nasdaq: ALTM
Slide 2: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS The information in this presentation and the oral statements made in connection therewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities E
Slide 3: Financial Overview
Financial Overview 3
Slide 4: 2020 Financial Highlights
2020 Financial Highlights ► Strong performance and cost savings from G&P business partially offset impact of lower than anticipated cash flow from JV pipelines (driven by Shin Oak and EPIC) ► All JV pipelines now in-service, with three of four (natural gas and NGL pipelines) expected to provide sign
Slide 5: 2021 Financial Objectives
2021 Financial Objectives ► Ample liquidity and limited capital needs in 2021 and beyond ► Surety of cash flow to support a dividend given stable nature of underlying assets ► Manageable leverage – forecast to be well under 3x at YE 2021 (5x covenant) ► Focus on balance sheet strength and refinancin
Slide 6: 2021 Guidance
2021 Guidance ►Gathered volume outlook of 360 – 400 MMcf/d (~70% rich gas) ► Expect 2 DUCs to be completed at Alpine High in 1Q21 and an additional 5 DUCs later this year (current gathered volume outlook does not incorporate volumes from the 7 DUCs) ►Adjusted EBITDA range of $230 – 270 million ► 75%
Slide 7: 2020 – 2021 Guidance Overview
2020 – 2021 Guidance Overview ADJUSTED EBITDA DISTRIBUTABLE CASH FLOW GROWTH CAPITAL INVESTMENTS(1) ($ in millions) ($ in millions) ($ in millions) $300 $200 $400 $190 $270 $362mm Actual $175 $350 $250 ~30% increase ~45% increase $150 $160 $300 $230 $200 $191mm Actual $125 $122mm Actual $250 ~90% de
Slide 8: 2021 Financing Plan – Sources and Uses
2021 Financing Plan – Sources and Uses ►Altus has ample liquidity to execute on its 2021 dividend and capital program through a combination of reinvesting operating cash flow and revolver capacity ►Retained cash flow can be used to strengthen the balance sheet or reinvest into the business 2021 Sour
Slide 9: ALTM: An Attractive Yield Compared to Peers
ALTM: An Attractive Yield Compared to Peers ►Post-dividend announcement, ALTM stock still trades at a yield wider than the median of its peers, indicating further potential value uplift ►Upside potential in G&P business from incremental third-party opportunities ► A stable macro environment is const
Slide 10: Asset Overview
Asset Overview 10
Slide 11: Joint Venture Pipelines Overview
Joint Venture Pipelines Overview Pipeline Map Commentary ► Altus owns equity interests in four joint venture pipelines ► All four pipelines provide takeaway capacity from the Permian Basin to the U.S. Gulf Coast ► All pipelines now in-service (PHP commenced full Katy in-service January 1, 2021) Mark
Slide 12: JV Pipeline Recent Developments
JV Pipeline Recent Developments ► Capacity of 2.0 Bcf/d is fully subscribed under long-term, binding agreements with minimum volume commitments Gulf Coast Express Pipeline ► GCX continues strong performance, with cash flow in-line with expectations ► Total project cost of $1.75 billion ► Capacity of
Slide 13: Gulf Coast Express (GCX) Overview
Gulf Coast Express (GCX) Overview Pipeline Map Commentary ► Altus owns 16% of GCX, remaining ownership is 34% Kinder Morgan (Operator), 25% DCP and 25% Targa ► Project Statistics: Capacity: 2.0 Bcf/d Total Project Cost: $1.75 billion In-service: September 2019 Capacity is fully subscribed un
Slide 14: Permian Highway Pipeline (PHP) Overview
Permian Highway Pipeline (PHP) Overview Pipeline Map Commentary ► Altus owns ~27% of PHP, remaining ownership is ~27% Kinder Morgan (Operator), ~27% EagleClaw and 20% from an undisclosed anchor shipper ► Project Statistics: Capacity: 2.1 Bcf/d Total Project Cost: ~$2.2 billion Katy Market Access
Slide 15: Shin Oak Pipeline Overview
Shin Oak Pipeline Overview Pipeline Map Commentary ► Breviloba LLC owns the Shin Oak NGL Pipeline (Shin Oak) and is owned 67% by Enterprise Products Operating LLC and 33% by Altus ► Project overview: ~658 miles of 24-inch pipeline connecting Orla and Waha to Mont Belvieu NGL fractionation and stor
Slide 16: EPIC Crude Overview
EPIC Crude Overview Pipeline Map Commentary ► Altus owns 15% of EPIC Crude, remaining ownership is 45% Ares Capital(1), 30% Noble Midstream Partners and 10% Rattler Midstream ► The project consists of ~700 miles of pipeline connecting the Permian and Eagle Ford Basins to Corpus Christi ► Current cap
Slide 17: Gathering & Processing Overview
Gathering & Processing Overview Asset Map Asset Highlights ► Rich Gas Processing: 600 MMcf/d of capacity from three cryo trains online and in-service Cryos performing well, consistently able to run above nameplate capacity with 99%+ ethane recovery ► Lean Gas Treating / Compression: 400 MMcf/d o
Slide 18: State of the Art Cryogenic Processing – SRX Technology
State of the Art Cryogenic Processing – SRX Technology ► The cryogenic facilities utilize SRX technology to capitalize on better recoveries in ethane rejection mode ► Cleaner, more efficient operations from an ESG perspective ► Drives improved netbacks on third-party volumes ► Standardized units all
Slide 19: Notable ESG Initiatives for G&P Operations
Notable ESG Initiatives for G&P Operations ► New, highly efficient plants and compressor Cryogenic Facilities stations with vapor recovery on all tankage ► Use compressed air to operate hundreds of pneumatically controlled devices ► Implemented a proactive and intensive leak detection program at all
Slide 20: Appendix
Appendix 20
Slide 21: Altus Midstream Overview
Altus Midstream Overview Commentary Simplified Structure ► Altus Midstream is a pure-play, Permian to Gulf Coast Public Investors Apache Corporation midstream C-corp C-corp governance ~21%(1) ~79%(1) No IDRs ► Interests in premier JV pipelines provide diversity of Altus Midstream Company stable
Slide 22: Joint Venture Pipelines Detail
Joint Venture Pipelines Detail Gulf Coast Express Permian Highway Shin Oak EPIC Crude Product Natural Gas Natural Gas NGL Crude Operator Kinder Morgan Kinder Morgan Enterprise Products EPIC Project Cost $1.75 billion ~$2.2 billion $1.5 billion $2.4-$2.5 billion Altus Ownership % 16% ~27% 33% 15% Ori
Slide 23: Non-GAAP Reconciliation – Adjusted EBITDA & DCF
Non-GAAP Reconciliation – Adjusted EBITDA & DCF The Company believes Adjusted EBITDA and DCF are useful because they allow the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period and against its peers without regard to financ
Slide 24: Non-GAAP Reconciliation – Growth Capital
Non-GAAP Reconciliation – Growth Capital Management believes the presentation of capital investments and growth capital investments is useful for investors to assess Altus' expenditures related to our midstream capital activity. We define capital investments as costs incurred in midstream activities
Slide 25: Glossary of Terms
Glossary of Terms ► Adjusted EBITDA is defined as net income (loss) including noncontrolling interest before financing costs (net of capitalized interest), net interest expense, income taxes, depreciation, and accretion and adjusting for such items, as applicable, from income from equity method inte
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