Antero Midstream Agrees to Acquire Bolt-On Marcellus Gathering and Compression Syste | AM Message Board Posts

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Msg  479 of 490  at  9/13/2022 4:50:34 AM  by


Antero Midstream Agrees to Acquire Bolt-On Marcellus Gathering and Compression Syste

DENVER, Sept. 12, 2022 /PRNewswire/ -- Antero Midstream Corporation (NYSE: AM)  
("Antero Midstream" or the "Company") today announced that it has entered into
a definitive agreement to acquire Marcellus Shale gas gathering and compression
assets from Crestwood Equity Partners LP (NYSE: CEQP) for $205 million in cash,
subject to customary adjustments. The transaction is expected to close in the
fourth quarter of 2022 and is subject to customary regulatory approvals.

Paul Rady, Chairman and CEO said, "Today's bolt-on acquisition provides
significant synergies that drive attractive economics and immediate Free Cash
Flow accretion to Antero Midstream. The acquisition is consistent with Antero
Midstream's strategy of investing in infrastructure in the Marcellus, the
lowest cost shale play, for high visibility customers, particularly Antero
Resources. Importantly, the assets include underutilized gathering and
compression capacity for capital efficient development from both Antero
Resources and other third parties."

Mr. Rady further added, "I would like to personally thank Bob Phillips and
Crestwood for their investment in the midstream infrastructure in the Marcellus
during Antero's infancy. Their high quality assets, safety and environmental
record, and loyalty over the last 10 years demonstrate Crestwood's dedication
to providing quality midstream services."

Transaction Highlights and Rationale:

* Estimated to be more than 10% accretive to Free Cash Flow after
Dividends through 2026
* Adds approximately 425 undeveloped drilling locations and 120,000 gross
dedicated acres from Antero Resources primarily in Harrison County, West
* Increases Antero Midstream's compression capacity by 20% and gathering
pipeline mileage by 15%
* Transaction multiple of approximately 6x next twelve months estimated
Adjusted EBITDA, excluding synergies
* Identified over $50 million of discounted future capital avoidance,
integration and operational synergies, resulting in an adjusted transaction
multiple of 4.5x next twelve months estimated Adjusted EBITDA

Under the terms of agreement, Antero Midstream will acquire the gas
gathering and compression system and associated agreements for $205 million in
cash. The transaction will be financed with borrowings under Antero Midstream's
revolving credit facility. The assets to be acquired include 72 miles of dry
gas gathering pipelines and nine compressor stations with approximately 700
MMcf/d of compression capacity. Current throughput on the system is
approximately 200 MMcf/d, resulting in significant available capacity for
growth without significant capital investment. Throughput will be gathered and
compressed under the existing agreement, which is substantially similar to
Antero Midstream's gathering and compression agreement with Antero Resources,
but not considered in the low pressure gathering rebate volumes with Antero

Brendan Krueger, CFO of Antero Midstream, said, "We expect greater than 10%
accretion to Free Cash Flow after dividends through 2026. This results in our
ability to fund the transaction on a leverage neutral basis and continue to
target 3.0x or lower leverage in 2024 and beyond."

Non-GAAP Financial Measures and Definitions Antero Midstream uses certain
non-GAAP financial measures. Antero Midstream defines Adjusted EBITDA as Net
Income plus interest expense, income tax expense, amortization of customer
relationships, depreciation expense, impairment expense, loss (gain) on asset
sale, loss on settlement of asset retirement obligation, accretion of asset
retirement obligations, and equity-based compensation expense, and loss on
early extinguishment of debt, excluding equity in earnings of unconsolidated
affiliates, plus distributions from unconsolidated affiliates.

Antero Midstream uses Adjusted EBITDA to assess:

* the financial performance of Antero Midstream's assets, without regard
to financing methods, capital structure or historical cost basis;
* its operating performance and return on capital as compared to other
publicly traded companies in the midstream energy sector, without regard to
financing or capital structure; and
* the viability of acquisitions and other capital expenditure projects.

Antero Midstream defines Free Cash Flow before dividends as Adjusted EBITDA
less interest expense and accrual-based capital expenditures. Free Cash Flow
after dividends is defined as Free Cash Flow before dividends less
accrual-based dividends declared for the quarter. Antero Midstream uses Free
Cash Flow before and after dividends as a performance metric to compare the
cash generating performance of Antero Midstream from period to period.

Adjusted EBITDA and Free Cash Flow before and after dividends are non-GAAP
financial measures. The GAAP measure most directly comparable to these measures
is Net Income. Such non-GAAP financial measures should not be considered as
alternatives to the GAAP measures of Net Income and cash flows provided by
(used in) operating activities. The presentations of such measures are not made
in accordance with GAAP and have important limitations as analytical tools
because they include some, but not all, items that affect Net Income and cash
flows provided by (used in) operating activities. You should not consider any
or all such measures in isolation or as a substitute for analyses of results as
reported under GAAP. Antero Midstream's definitions of such measures may not be
comparable to similarly titled measures of other companies.

Antero Midstream defines leverage as Net Debt divided by Adjusted EBITDA for
the last twelve months. The GAAP measure most directly comparable to Net Debt
is total debt, excluding unamortized debt premiums and debt issuance costs.
Antero Midstream defines Net Debt as consolidated total debt, excluding
unamortized debt premiums and debt issuance costs, less cash and cash

Antero Midstream Corporation is a Delaware corporation that owns, operates
and develops midstream gathering, compression, processing and fractionation
assets located in the Appalachian Basin, as well as integrated water assets
that primarily service Antero Resources Corporation's properties.

This release includes "forward-looking statements." Such forward-looking
statements are subject to a number of risks and uncertainties, many of which
are not under Antero Midstream's control. All statements, except for statements
of historical

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