Kinetik Holdings Inc. · NYSE:KNTK
Kinetik — Altus Midstream Company — Investor Presentation (May 2019)
28 slides from Kinetik's investor presentation, May 2019
Slide 1: Altus Midstream Company
Altus Midstream Company May 2019
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 ► In November 2018, Kayne Anderson and Apache formed a Public Investors Apache Corporation publicly-traded midstream C-corp – Altus Midstream Company 21% 79% (“Altus” or “Altus Midstream”) 67,616,277 Shares 257,313,028 Shares 15,759,49
Slide 5: Investment Merits
Investment Merits ► Permian pure-play public midstream C-corp Unique Public Investment ► Exposure to full midstream value chain from Permian to the Gulf Coast Opportunity ► Strong sponsorship from premier independent E&P company in Apache Differentiated, ► Clear alignment of interests (C-corp govern
Slide 6: Gathering & Processing Overview
Gathering & Processing Overview Asset Map Current Asset Highlights ► Rich Gas Processing: 380 MMcf/d of capacity in service ► Lean Gas Treating / Compression: 400 MMcf/d of capacity in service ► Gas Gathering Pipelines: ~111 miles in service ► Residue Pipelines / Market Connections: ~52 miles in ser
Slide 7: Diamond Cryo Complex (May 2019)
Diamond Cryo Complex (May 2019) Cryo #1 Cryo #2 Cryo #3 Residue Compression 7
Slide 8: Diamond Cryo Complex (May 2019)
Diamond Cryo Complex (May 2019) 8
Slide 9: State of the Art Cryogenic Processing – SRX Technology
State of the Art Cryogenic Processing – SRX Technology ► Altus is building SRX cryogenic facilities to capitalize on better ethane recovery and rejection ► SRX further maximizes processing economics via much higher propane recoveries during ethane rejection ► Drives improved netbacks on third party
Slide 10: 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%(1) of KMI’s GCX (Exercised) Nat Gas 27% of KMI’s Permian Highway (Option) 33% of EPD’s Shin Oak (Option) NGLs Katy 50% of Salt Creek NGL (Option)
Slide 11: JV Pipeline Recent Developments
JV Pipeline Recent Developments Gulf Coast ► Expected in-service in October 2019 with project cost estimated at ~$1.75 billion Express Pipeline (Exercised) ► Midland lateral placed in-service in April 2019 ► Expected in-service in October 2020 with project cost estimated at ~$2 billion Permian Highw
Slide 12: Alpine High Overview
Alpine High Overview 12
Slide 13: Alpine High: A World-Class Resource Play
Alpine High: A World-Class Resource Play ► Unprecedented hydrocarbon column >5,000 feet ► Vertically stacked oil, rich gas, and lean gas fairways Scale ► ~300,000 net acres at year-end 2018 ► 5,000+ locations identified as of October 2017 ► 3 billion bbls / 75 Tcf of resource in place (Barnett and W
Slide 14: Stacked Pay From Landing Zones
Stacked Pay From 13 Landing Zones Parasequences Parasequences 3rd BONE SPRING High frequency, rapidly rising and falling sea level 13 environment landing WOLFCAMP zones so far; UNCONFORMITY PENNSYLVANIAN >5,000 vertical feet Source Rock Source Rock Tranquil marine BARNETT environment, gradually risi
Slide 15: Alpine High – Rich Gas Development Underway
Alpine High – Rich Gas Development Underway Formulation and Areal and Optimization and Focused near-term confirmation vertical transition to full development and setting of concept delineation field development up the long-term 2019 and 2014 - 2016 2016 - 2017 2018 Beyond • Seismic acquisition & • H
Slide 16: Financial Overview
Financial Overview 16
Slide 17: Financial Overview
Financial Overview ►Altus Midstream’s simple structure is a key point of differentiation No debt and undrawn revolver(1) provide strong liquidity No incentive distribution rights ►Financing is secured for planned growth projects, underpinned by $825 million of incremental capital availability fr
Slide 18: Preferred Equity Financing & Revolver Amendment
Preferred Equity Financing & Revolver Amendment Preferred Equity Altus Midstream LP has secured commitments for $625 million of preferred equity led by Magnetar Capital and The Carlyle Group Funding expected to occur by June 28, 2019, subject to customary closing conditions Cash distribution r
Slide 19: Near-Term Financing Plan
Near-Term Financing Plan ►Altus has diversified funding sources to support its current growth plans this year, including the exercise of Shin Oak and PHP options ►For 2020 and beyond, we are evaluating options for additional debt including exercise of the revolver accordion or accessing the term loa
Slide 20: Leverage & Cost of Capital
Leverage & Cost of Capital ►The preferred equity raise and revolver amendment provide access to attractive sources of capital from a leverage and cost of capital perspective Leverage ratio forecasted to be 2.4x in 2021 (3.8x assuming preferred equity is treated as 100% debt) Blended cost of incr
Slide 21: Financial Guidance Update
Financial Guidance Update Updated Gathered Volume Guidance ►In February 2019, Altus provided gathered volume guidance of 525-575 MMcf/d (~65% rich gas) for 2019 ►In April 2019, Apache announced that gas production from Alpine High would be temporarily deferred due to recent pricing at Waha Hub Apa
Slide 22: Financial Guidance
Financial Guidance Growth Capital Investments(1) Adjusted EBITDA(1) ($ in millions) ($ in millions) % Attributable to JV Pipelines % Attributable to JV Pipelines 75-85% 60-70% 0% 35-45% 55-65% 55-65% $1,575 - $1,675 $400 - $500 $260 - $340 $475 - $575 $75 - $95 $150 - $250 2019E 2020E 2021E 2019E 20
Slide 23: Altus Long-Term Growth Potential
Altus Long-Term Growth Potential ►Expect 10+% Adjusted EBITDA(1) growth in 2022 and beyond Depth of Alpine High inventory provides long runway for growth ►Significant free cash flow(1) generation potential in 2021 and beyond Enables attractive dividend while self-financing capital investments ►U
Slide 24: Appendix
Appendix 24
Slide 25: Details on Joint Venture Pipelines
Details on Joint Venture Pipelines Gulf Coast Permian Salt Creek EPIC Crude Shin Oak Express Highway NGL Line Product Natural Gas Crude Natural Gas NGL NGL Operator Kinder Morgan EPIC Kinder Morgan Enterprise Products ARM Project Cost $1.75 billion $2 billion $2 billion $1.5 billion $100 million Alt
Slide 26: Midstream Agreements with Apache
Midstream Agreements with Apache Commercial Agreements with Apache Area of Dedication ► The area of dedication encompasses a total of ~540,000 gross acres (as denoted by the red outline) Includes existing Apache acreage and future acreage acquired by Apache(1) ► Midstream services dedicated to Alt
Slide 27: Revolving Credit Facility Summary
Revolving Credit Facility Summary ►Altus has a five-year revolving credit facility Flexible terms Pro forma credit for JV pipelines before in-service Competitive “Investment Grade” pricing grid Two one-year extension options Revolving Credit Facility Summary Terms Key Term Threshold Capacity
Slide 28: Glossary of Terms
Glossary of Terms ► Adjusted EBITDA is defined as net income (loss) including noncontrolling interest before financing costs (net of capitalized interest), interest income, income taxes, depreciation, and accretion and adjusting for such items, as applicable, from income from equity method interests
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