Kinetik Holdings Inc. · NYSE:KNTK
Kinetik — Altus Midstream Company — Q2 2020 Earnings Presentation
23 slides from Kinetik's earnings presentation, Jul 30, 2020
Slide 1: Altus Midstream Company
Altus Midstream Company July 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 equity method interests in four joint venture pipeline projects ► All pipelines in-service with the exception of Permian Highway (expected in early 2021) ► Long-haul pipe investments provide diversified Katy cash flow stream acros
Slide 6: JV Pipeline Recent Developments
JV Pipeline Recent Developments Gulf Coast ► Capacity of 2.0 Bcf/d is fully subscribed under long-term, binding agreements Express Pipeline ► GCX continues strong performance, with cash distributions in-line with expectations ► Capacity of 2.1 Bcf/d is fully subscribed under long-term, binding agree
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 continues to receive distributions Capacity is fully subscri
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 Pipeline capacity is fully subscr
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% by Altus ► Project overview: ~658 miles of 24-inch pipeline connecting Orla and Waha to Mont Belvieu NGL fractionation and stor
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, maturing in November 2023 No anticipated need to access any capital markets to fi
Slide 15: Near-Term Financing Plan
Near-Term Financing Plan ►Altus has ample funding sources to satisfy its remaining growth capital investments (primarily PHP capital calls) ►In 2021, retained cash flow will be directed towards debt reduction and fortifying the balance sheet ►Leverage ratio forecasted to be 2.2x at year-end 2021 (5.
Slide 16: Updates to 2020 Guidance
Updates to 2020 Guidance ►Gathered volume outlook remains 480 – 520 MMcf/d (~70% rich gas) ► Trending towards the low end of the range due to Alpine High production curtailments in 2Q20 ►2020 Adjusted EBITDA(1) range adjusted to $160 – 190 million ► 55-65% attributable to JV pipeline projects ►2020
Slide 17: Updates to 2021 Guidance
Updates to 2021 Guidance ►Gathered volumes projected to be 340 – 380 MMcf/d (~70% rich gas) ► Gathered volume outlook reflects a zero rig program for 2021 at Alpine High ►2021 Adjusted EBITDA(1) range of $220 – 260 million ► Over 80% attributable to JV pipeline projects ►2021 Distributable Cash Flow
Slide 18: 2020 – 2021 Guidance Overview
2020 – 2021 Guidance Overview ADJUSTED EBITDA DISTRIBUTABLE CASH FLOW GROWTH CAPITAL INVESTMENTS (1) ($ in millions) ($ in millions) ($ in millions) $300 $200 $400 $180 $360 $260 $175 $350 $250 ~50% increase ~40% increase $150 $300 $220 $150 $300 $200 $190 $125 $120 $250 ~90% decrease $150 $160 $100
Slide 19: Appendix
Appendix 19
Slide 20: 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 $2.1 billion $1.5 billion $2.4-$2.5 billion Altus Ownership % 16% 27% 33% 15% Origi
Slide 21: 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 22: 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 23: 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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