Kinetik Holdings Inc. · NYSE:KNTK
Kinetik — Investor Presentation (February 2022)
28 slides from Kinetik's investor presentation, Feb 24, 2022
Slide 1: Investor Update & 2022 Guidance
Investor Update & 2022 Guidance February 2022
Slide 2: Forward looking statements
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 Exchange Act
Slide 3: Embracing change and moving towards a new future
Embracing change and moving towards a new future Financial strength Long-term Attractive organic Sustainability focus and stability shareholder value growth Stable cash flows supported by Commitment to redeem Series A Producers eager to accelerate Prioritization of sustainability long-term contracts
Slide 4: Company highlights
Company highlights Leading, pure-play Permian midstream company • Only large-scale, publicly-traded, pure-play Permian midstream business • Focused on gathering & processing and long-haul transportation • No federal land exposure Super-system in the Delaware Basin with integrated • ~2 Bcfpd of proce
Slide 5: Ten years in the Permian Basin
Ten years in the Permian Basin Continuously grown through multiple commodity cycles Announced FID EagleClaw Acquired on Permian Acquired Acquired stake in Acquired stake in Partnership with Midstream Ventures PennTex Highway Pipeline Caprock Acquired stake in Permian Highway Shin Oak Kinder on Permi
Slide 6: Pure-play Permian midstream company positioned for growth
Pure-play Permian midstream company positioned for growth Extensive Delaware in-basin gathering system feeds downstream pipeline assets Combined business opportunistically primed for future growth • Fourth largest processor in the Permian Basin ▪ ~2 Bcfpd processing capacity ▪ ~850k gas gathering de
Slide 7: Unique system with unmatched reliability and flow assurance
Unique system with unmatched reliability and flow assurance Significant operating leverage maximizes free cash flow generation potential Four, large-scale integrated processing complexes • ~2 Bcfpd processing capacity at Diamond, Pecos Bend, East Toyah, Pecos • Enhances operational reliability and f
Slide 8: Kinetik's operating leverage drives financial alchemy
Kinetik’s operating leverage drives financial alchemy Latent processing capacity is increasingly valuable in this accelerating production environment Kinetik Processing Volumes and Capacity Illustrative Incremental Processing EBITDA Spare Capacity ~800 Mmcfpd ~1.9 Bcfpd nameplate processing capacity
Slide 9: Poised to capitalize on accelerating activity within our footprint
Poised to capitalize on accelerating activity within our footprint Reeves County continues to lead the Delaware Basin in rig activity growth Southern Delaware Basin M&A in Last ~21 Months(1) Delaware Basin Indexed Rig Count(1) Conoco Reeves Loving Culberson Ward Lea Eddy 450 Reeves County leads the
Slide 10: De-risked cash flows supported by long-term contract portfolio
De-risked cash flows supported by long-term contract portfolio Balance sheet improvement and return of capital core to our strategy Diversified and well-capitalized customer base 2022E Gross Profit by Customer Credit Rating • Greater than 30 customers between the two segments ▪ Over ten customers re
Slide 11: Strategic priority to increase exposure to long-haul, take-or-pay cashflow
Strategic priority to increase exposure to long-haul, take-or-pay cashflow Continued Permian supply and U.S. Gulf Coast demand growth will require both new and expanded infrastructure Natural gas takeaway expansions are critical for Permian producers Permian Residue Gas Production(1) • Environmental
Slide 12: A full-service, integrated midstream model
A full-service, integrated midstream model Fee-based business with mission critical infrastructure Produced Water Water Pipelines Water Disposal Well Permian Highway and Gulf Coast Express Residue Gas Takeaway Natural Pipelines Gas Natural Gas Pipelines Gas Processing Shin Oak Mixed NGLs Takeaway Pi
Slide 13: Organizational structure (pro forma refinancing)
Organizational structure (pro forma refinancing) Management Public Investors Fully unsecured capital structure • No asset level or structurally senior debt • New Revolving Credit Facility ensures adequate liquidity • Target investment grade ratings by year end 2023 (NASDAQ: KNTK) • Accelerated redem
Slide 14: Strong governance profile with the right management team
Strong governance profile with the right management team Management and Board are committed to serving all shareholders’ best interests Board Governance Management Experienced Board of 11 Directors Kinetik incorporates listing exchange BCP management assumes current and public company requirements r
Slide 15: Management team brings wealth of experience
Management team brings wealth of experience Significant equity ownership creates true alignment with all stakeholders Jamie Welch • CEO and President • Group Chief Financial Officer and Head of Corp Development at Energy Transfer Todd Carpenter Matt Wall Steve Stellato Annie Psencik • General Counse
Slide 16: Board of Directors comprised of diverse and knowledgeable executives
Board of Directors comprised of diverse and knowledgeable executives Independents, CEO and Apache Board appointees represent more than 50% of the Board David Foley Jamie Welch Laura Sugg Diversity • Chairman of Board • Kinetik CEO and President • Lead Independent Director • Senior Managing Director
Slide 17: 2021 sustainability highlights
2021 sustainability highlights Advancing a safer, cleaner and more reliable energy future Prioritizing environmental sustainability Positively impacting our communities • Migration to electric vehicle fleet • Expanded use of electric compression • Investment in emissions monitoring, control and redu
Slide 18: ESG is fundamental to our identity
ESG is fundamental to our identity Positioned to drive significant change and progress Environmental Social Governance Adopt and implement best-in-class Cultivate work environment that Leadership aligned with long-term sustainability practices values diversity interests of all Legacy EagleClaw facil
Slide 19: Financial Update
Financial Update 19
Slide 20: Capital allocation unlocking value for all stakeholders
Capital allocation unlocking value for all stakeholders Focus on balance sheet improvement and return of capital to shareholders Near-term financial priorities How Kinetik gets there Core shareholders committed to reinvest dividends through 2023 Accelerated redemption • 100% Dividend Reinvestment
Slide 21: 2021 pro forma financial performance
2021 pro forma financial performance Strong performance in 2021 sets Kinetik up for robust growth in 2022 2021 Pro Forma Adjusted EBITDA Bridge ($mm) EBITDA more than doubles $6 $737 $44 $11 pro forma the transaction $83 $50 $102 $83 $355 BCP G&P(1) PHP Alpine High (2) GCX PHP Shin Oak EPIC Adj. Adj
Slide 22: 2022 financial guidance
2022 financial guidance Looking to the future 2022E Adjusted EBITDA Capital Expenditures EBITDA Segment Contribution Key Highlights $770mm to $810mm $125mm to $150mm • Modest volume growth YoY on EagleClaw • New Alpine High production expected to $810 $150 Natural Gas 61% commence in early 2023 • Gr
Slide 23: Confident in ability to achieve 2022 Guidance
Confident in ability to achieve 2022 Guidance De-risked and contracted growth in 2022 with first-half weighted capital spend 2022E Adjusted EBITDA Bridge ($mm) 2022E Capital Expenditures ($mm) ~$10 $810 ~$20 $150 ~$40 $770 $737 $125 ~$40 – 65 Growth(3) ~$15 Maintenance ~$55 Integration ~$15 One-time
Slide 24: Strong resiliency to commodity price fluctuations
Strong resiliency to commodity price fluctuations Limited commodity exposure to 2022 EBITDA due to ~85% gross profit from fee-based sources Commodity Price Exposure Breakdown • ~15% of 2022E gross profit exposed to commodity prices • Capital structure and balance sheet are resilient to swings in com
Slide 25: Expect $50mm+ of annual run-rate EBITDA synergies
Expect $50mm+ of annual run-rate EBITDA synergies Synergy capture and system integration well underway Management has a proven track record Annual EBITDA Synergies • Expect to be substantially complete with integration by mid-year 2022 ▪ Integration offers $175mm of capital savings over next five ye
Slide 26: Kinetik at a glance
Kinetik at a glance MIDSTREAM LOGISTICS FOR THE LARGEST INTEGRATED MIDSTREAM COMPANY IN THE DELAWARE BASIN OVER 30 Offices in Midland and Houston, TX CUSTOMERS INTERESTS IN OPERATES 4 MAJOR COMPLEXES EQUITY INTERESTS IN & OVER 1,700 MILES OF PIPELINE LONG-HAUL PIPELINES: 4.1 Bcfpd ACROSS FIVE COUNTI
Slide 27: Everything we do is
Everything we do is IKWINIE TIIK
Slide 28: Glossary of terms
Glossary of terms • Adjusted EBITDA (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 me
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