Kinetik Holdings Inc. · NYSE:KNTK
Kinetik — Altus Midstream Company — Q4 2019 Earnings Presentation
21 slides from Kinetik's earnings presentation, Feb 27, 2020
Slide 1: Altus Midstream Company
Altus Midstream Company February 2020
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: Altus Midstream Overview
Altus Midstream Overview 3
Slide 4: Altus Midstream Summary Overview
Altus Midstream Summary Overview Commentary Simplified Structure ► Altus Midstream is a pure-play, Permian to Gulf Coast Public Investors Apache Corporation midstream C-corp ▪ C-corp governance / no ~21%(1) ~79%(1) IDRs ► Interests in premier JV pipelines provide diversity of Altus Midstream Company
Slide 5: Joint Venture Pipelines Overview
Joint Venture Pipelines Overview Pipeline Map Commentary ► Altus owns or has the option to participate in five joint venture pipeline projects ▪ 16% of KMI’s GCX (Exercised) Nat Gas ▪ 27% of KMI’s Permian Highway (Exercised) ▪ 33% of EPD’s Shin Oak (Exercised) NGLs Katy ▪ 50% of Salt Creek NGL (Opti
Slide 6: JV Pipeline Recent Developments
JV Pipeline Recent Developments Gulf Coast ► Altus started receiving cash distributions in 4Q19, in-line with expectations Express Pipeline (Exercised) ► Capacity of 2.0 Bcf/d is fully subscribed under long-term, binding agreements ► Expected in-service 1Q21 with project cost estimated at ~$2.1BN Pe
Slide 7: 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 ▪ In service since Sept 2019, Altus started receiving distributions in 4Q19 ▪ Capacity is fully su
Slide 8: 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 ► Designed to transport approximately 2.1 Bcf/d of natural gas Katy ▪ Pipeline capacity is fully s
Slide 9: 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% Altus ► Project overview: ▪ ~658 miles of 24-inch pipeline connecting Orla and Waha to Mont Belvieu NGL fractionation and storage
Slide 10: 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 ca
Slide 11: 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 12: 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 ► Drives improved netbacks on third-party volumes ► Standardized units allow for efficient operations at centralized cryo complex Desig
Slide 13: Financial Overview
Financial Overview 13
Slide 14: Financial Overview
Financial Overview ►Altus has ample liquidity to execute on its 2020 and 2021 capital plans through a combination of reinvesting operating cash flow and expanded revolver capacity ▪ Revolver capacity is $800 million ▪ No need to access any capital markets to finance growth plans ▪ Covenant leverage
Slide 15: Updated Guidance
Updated Guidance ►Gathered volume outlook reflects a zero rig program for 2020 at Alpine High compared to 1 rig at previous guidance ► Gathered volumes expected to be 480 – 520 MMcf/d (~70% rich gas) for 2020 ► If Waha basis differential continues to weaken, Apache may curtail gas at Alpine High. In
Slide 16: Updated Guidance, cont.
Updated Guidance, cont. ADJUSTED EBITDA DISTRIBUTABLE CASH FLOW (1) GROWTH CAPITAL INVESTMENTS (2) ($ in millions) ($ in millions) ($ in millions) $250 $150 $1,800 $220 $130 $1,621MM Actual(3) $1,500 $200 $120 $190 $1,200 ~135% increase Includes ~$65MM ~120% increase $100 for EPIC, likely not $150 $
Slide 17: Appendix
Appendix 17
Slide 18: Joint Venture Pipelines Detail
Joint Venture Pipelines Detail ► All equity options except regional Salt Creek NGL Line have been exercised ▪ Salt Creek option extended to March 2, 2020 Gulf Coast Permian Salt Creek EPIC Crude Shin Oak Express Highway NGL Line Product Natural Gas Crude Natural Gas NGL NGL Operator Kinder Morgan EP
Slide 19: Non-GAAP Reconciliation – Adjusted EBITDA & DCF
Non-GAAP Reconciliation – Adjusted EBITDA & DCF The Company believes Adjusted EBITDA and DCF are useful because it allows 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 financi
Slide 20: Non-GAAP Reconciliation – Growth Capital
Non-GAAP Reconciliation – Growth Capital Management believes the presentation of 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, adjusted to exclude asset ret
Slide 21: 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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