DENVER, April 29, 2015 /PRNewswire/ -- Antero
Midstream Partners LP (NYSE: AM) ("Antero Midstream" or the
"Partnership") today released its first quarter 2015 financial and
operating results. The relevant consolidated financial statements
are included in Antero Midstream's Quarterly Report on
Form 10-Q for the quarter ended March
31, 2015, which has been filed with the Securities and
Exchange Commission.
First Quarter 2015 Highlights:
- Low pressure gathering volumes averaged 935 MMcf/d, a 182%
increase compared to the prior year quarter and a 27% increase
sequentially
- High pressure gathering and compression volumes averaged
1,134 MMcf/d and 358 MMcf/d, respectively, increases of 800% and
894% compared to the prior year quarter and a sequential increase
of 25% and 61%, respectively
- Adjusted EBITDA of $36
million, a 326% increase compared to the prior year and 26%
increase sequentially
- Distributable cash flow of $33
million resulting in DCF coverage of 1.20x
- Increased quarterly cash distribution to $0.18 per unit ($0.72/unit annualized), a 6% increase compared to
the minimum quarterly distribution
Recent Developments
Distribution for the First Quarter of 2015
On April 15, 2015, Antero
Midstream announced that the Board of Directors of Antero Resources
Midstream Management LLC, the general partner of the Partnership,
declared a cash distribution of $0.18
per unit ($0.72 per unit annualized)
for the first quarter of 2015. The distribution represents a 6%
increase compared to the Partnership's minimum quarterly
distribution of $0.17 per unit
($0.68 per unit annualized). The
distribution is payable on May 27,
2015 to unitholders of record as of May 13, 2015.
Antero Midstream Guidance
The Partnership's parent, Antero Resources Corporation ("Antero
Resources"), recently announced that it anticipates production will
average 1,375 to 1,425 MMcfe/d for the remaining nine month period
of 2015 as compared to 1,485 MMcfe/d for the first quarter,
resulting in 2015 average net daily production in excess of 1.4
Bcfe/d including average net daily liquids production of over
37,000 Bbl/d. Antero's 2015 production guidance assumes the
completion of 80 wells in the Marcellus, of which approximately 90%
are located on Antero Midstream dedicated acreage and 50 well
completions in the Utica, 100% of which are located on Antero
Midstream dedicated acreage. The Partnership reaffirms previous
2015 EBITDA guidance of $150 to $160
million, distributable cash flow ("DCF") of $135 to $145 million and associated fourth
quarter 2015 over fourth quarter 2014 per unit distribution growth
of 28% to 30%.
First Quarter 2015 Financial Results
Antero Midstream closed its initial public offering on
November 10, 2014. The following
reflects results from Antero Midstream for the first quarter of
2015, combined Antero Midstream and predecessor results for the
fourth quarter and full year 2014 and predecessor results for the
first quarter of 2014.
Low pressure gathering volumes for the first quarter of 2015
averaged 935 MMcf/d, a 182% increase from the first quarter of 2014
and a 27% increase from the fourth quarter of 2014. High
pressure gathering and compression volumes for the first quarter of
2015 averaged 1,134 MMcf/d and 358 MMcf/d, respectively,
representing an increase of 800% and 894% from the first quarter of
2014 and a 25% and 61% increase from the fourth quarter of 2014.
Condensate gathering volumes averaged 2 MBbl/d during the quarter.
Volumetric growth was driven by strong production growth from
Antero Resources. Average realized low pressure gathering,
high pressure gathering and compression fees were $0.31 per Mcf, $0.19 per Mcf and $0.19 per Mcf, respectively, while average
realized condensate gathering fees were $4.16 per Bbl.
|
|
Three Months Ended
March 31,
|
|
|
Average Daily
Throughput:
|
|
2014
|
|
2015
|
|
%
Change
|
Low Pressure Gathering
(MMcf/d)
|
|
331
|
|
935
|
|
182%
|
High Pressure
Gathering (MMcf/d)
|
|
126
|
|
1,134
|
|
800%
|
Compression
(MMcf/d)
|
|
36
|
|
358
|
|
894%
|
Condensate Gathering
(MBbl/d)
|
|
—
|
|
2
|
|
*
|
Revenue for the first quarter of 2015 was $52 million as compared to $12 million for the prior year quarter, primarily
driven by increased throughput volumes across Antero Midstream's
systems. Revenue in the first quarter was comprised entirely
of fixed fees from Antero Resources. Direct operating
expenses totaled $12 million and
allocated general and administrative expenses totaled $10 million, including $5
million of non-cash equity-based compensation. Total
operating expenses were $36 million
including $14 million of
depreciation.
Net income was $16 million
($0.10 per basic and diluted limited
partner unit), as compared to $1
million in the first quarter of 2014. Adjusted EBITDA
of $36 million for the first quarter
of 2015 was 326% higher than the prior year quarter due to
increased throughput and revenue. Cash interest expense was
$0.6 million and maintenance capital
expenditures totaled $2 million,
resulting in DCF of $33 million.
Reconciliation of
Net Income to Adjusted EBITDA and DCF
(In
thousands):
|
|
Three months
ended
|
|
March 31,
|
|
|
2014
|
|
2015
|
Net income
|
|
$
|
774
|
|
$
|
15,648
|
Add:
|
|
|
|
|
|
|
Interest
expense
|
|
|
174
|
|
|
823
|
Depreciation
expense
|
|
|
6,108
|
|
|
14,582
|
Equity-based
compensation expense
|
|
|
1,313
|
|
|
4,623
|
Adjusted
EBITDA
|
|
$
|
8,369
|
|
$
|
35,676
|
Less:
|
|
|
|
|
|
|
Cash interest
expense
|
|
|
|
|
|
(579)
|
Maintenance capital
expenditures
|
|
|
|
|
|
(2,408)
|
DCF
|
|
|
|
|
$
|
32,689
|
|
|
|
|
|
|
|
Total distributions
declared (1)
|
|
|
|
|
$
|
27,338
|
|
|
|
|
|
|
|
DCF coverage
ratio
|
|
|
|
|
|
1.20x
|
|
|
1)
|
Reflects
distribution of $0.18 per limited partner unit attributable to the
first quarter of 2015 declared on April 15, 2015.
|
Commenting on quarterly results and expectations, Paul Rady, Chairman of the Board and CEO said,
"Antero Midstream's strong first quarter is a direct result of
Antero Resources' record production and operational success in the
Marcellus and Utica. As we look ahead to the remainder of 2015, we
expect Antero Midstream throughput volumes and cash flows to be
stable for the second and third quarters and to increase in the
fourth quarter. The forecasted slight decline in Antero Resources'
companywide second and third quarter net production is offset by
growth in volumes specifically located on Antero Midstream's
footprint in the liquids rich core of both the Marcellus Shale and
the Utica Shale."
Commenting on distribution growth and guidance, Glen Warren, President and Chief Financial
Officer said, "Our first quarter distribution of $0.18 per unit, a 6% increase as compared to the
minimum quarterly distribution, and DCF coverage of 1.20x places us
on track to achieve our previously stated distribution growth
target of 28% to 30%. Additionally, the remaining aspects of our
guidance, including average DCF coverage of 1.10x to 1.20x over the
course of the year, are unchanged since our initial announcement
earlier this year."
Balance Sheet and Liquidity
As of March 31, 2015, Antero
Midstream had $162 million of cash on
its balance sheet and a fully undrawn $1.0
billion credit facility, resulting in $1.2 billion of available liquidity. Antero
Midstream expects to fund all 2015 expansion capital expenditures,
excluding potential third party transactions or the potential
acquisition of water assets from Antero Resources pursuant to the
exercise of its option, with the cash on its balance sheet and
drawings under its credit facility.
First Quarter 2015 Capital Spending
Capital expenditures were $126
million in the first quarter of 2015 as compared to
$104 million in the first quarter of
2014. The increase is primarily driven by the build-out of
midstream infrastructure to support Antero Resources' production
growth. Capital expenditures in the Marcellus were
$100 million, or 79% of total capital
invested, and capital expenditures in the Utica were $26 million, or 21% of total capital
invested.
Conference Call
Antero Midstream will hold a call on Thursday, April 30, 2015, at 10:00 am MT to discuss the results. A brief
Q&A session for security analysts will immediately follow the
discussion of the results. To participate in the call, dial
in at 888-347-8204 (U.S.), 866-605-3851 (Canada), or 412-902-4229 (International) and
reference passcode 10063079. A telephone replay of the call will be
available until Friday, May 8, 2015,
at 10:00 am MT at 877-870-5176 (U.S.)
or 858-384-5517 (International) using the same passcode.
A simultaneous webcast of the call may be accessed over the
internet at www.anteromidstream.com. The webcast will be
archived for replay on the Partnership's website until Friday, May 8, 2015, at 10:00 am MT.
Presentation
An updated presentation will be posted to the Partnership's
website before the April 30, 2015
conference call. The presentation can be found at
www.anteromidstream.com on the homepage. Information on
the Partnership's website does not constitute a portion of this
press release.
Non-GAAP Financial Measures
As used in this news release, adjusted EBITDA means net income
plus interest expense, depreciation and amortization expense,
income tax expense (if applicable), and non-cash equity-based
compensation expense. As used in this news release,
distributable cash flow means adjusted EBITDA less cash interest
expense and maintenance capital expenditures. Distributable
cash flow should not be viewed as indicative of the actual amount
of cash that the Partnership has available for distributions from
operating surplus or that the Partnership plans to distribute.
Adjusted EBITDA and distributable cash flow are non-GAAP
supplemental financial measures that management and external users
of the Partnership's consolidated financial statements, such as
industry analysts, investors, lenders and rating agencies, use to
assess:
- the Partnership's operating performance as compared to other
publicly traded partnerships in the midstream energy industry
without regard to historical cost basis or, in the case of adjusted
EBITDA, financing methods;
- the ability of the Partnership's assets to generate sufficient
cash flow to make distributions to the Partnership's
unitholders;
- the Partnership's ability to incur and service debt and fund
capital expenditures; and
- the viability of acquisitions and other capital expenditure
projects and the returns on investment of various investment
opportunities.
The Partnership believes that adjusted EBITDA and distributable
cash flow provide useful information to investors in assessing the
Partnership's financial condition and results of operations.
Adjusted EBITDA and distributable cash flow should not be
considered as alternatives to net income, operating income, net
cash provided by operating activities or any other measure of
financial performance or liquidity presented in accordance with
GAAP. Adjusted EBITDA and distributable cash flow have important
limitations as analytical tools because they exclude some items
that affect net income and net cash provided by operating
activities. Additionally, because adjusted EBITDA and distributable
cash flow may be defined differently by other partnerships in its
industry, the Partnership's definition of adjusted EBITDA and
distributable cash flow may not be comparable to similarly titled
measures of other partnerships, thereby diminishing their
utility.
For a reconciliation of adjusted EBITDA and distributable cash
flow to net income, please refer to the table on page two of this
press release.
The following table reconciles adjusted EBITDA to net cash
provided by operating activities:
Reconciliation of
Adjusted EBITDA to Net Cash Provided by Operating Activities (In
thousands):
|
|
Three months
ended
|
|
|
March 31,
|
|
|
2014
|
|
2015
|
Adjusted
EBITDA
|
|
$
|
8,369
|
|
$
|
35,676
|
Less:
|
|
|
|
|
|
|
Interest
expense
|
|
|
(174)
|
|
|
(823)
|
Changes in operating
assets and liabilities
|
|
|
(1,590)
|
|
|
4,638
|
Plus:
|
|
|
|
|
|
|
Amortization of
deferred financing costs
|
|
|
—
|
|
|
244
|
Net cash provided by
operating activities
|
|
$
|
6,605
|
|
$
|
39,735
|
The Partnership does not provide financial guidance for
projected net income or changes in working capital, and therefore
is unable to provide a reconciliation of its adjusted EBITDA and
distributable cash flow guidance to net income, operating income,
or net cash flow provided by operating activities, the most
comparable financial measures calculated in accordance with
GAAP.
Antero Midstream Partners LP is a limited partnership
that owns, operates and develops midstream gathering, compression
and pipeline assets that service Antero Resources' production
located in the Appalachian Basin in West Virginia,
Ohio and Pennsylvania.
This release includes "forward-looking statements" within the
meaning of federal securities laws. Such forward-looking statements
are subject to a number of risks and uncertainties, many of which
are beyond the Partnership's control. All statements, other
than historical facts included in this release, are forward-looking
statements. All forward-looking statements speak only as of the
date of this release. Although the Partnership believes that the
plans, intentions and expectations reflected in or suggested by the
forward-looking statements are reasonable, there is no assurance
that these plans, intentions or expectations will be achieved.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecasted in such
statements.
The Partnership cautions you that these forward-looking
statements are subject to all of the risks and uncertainties, most
of which are difficult to predict and many of which are beyond our
control, incident to the gathering and compression business. These
risks include, but are not limited to, commodity price volatility,
inflation, environmental risks, drilling and completion and other
operating risks, regulatory changes, the uncertainty inherent in
projecting future rates of production, cash flow and access to
capital, the timing of development expenditures, and the other
risks described under "Risk Factors" in Antero Midstream's Annual
Report on Form 10-K for the year ended December 31, 2014.
For more information, contact Michael
Kennedy – VP Finance, at (303) 357-6782 or
mkennedy@anteroresources.com.
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Balance Sheets
|
December 31, 2014,
and March 31, 2015
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2015
|
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
230,192
|
|
$
|
162,339
|
|
Accounts
receivable–affiliate
|
|
|
17,646
|
|
|
18,816
|
|
Prepaid
expenses
|
|
|
518
|
|
|
356
|
|
Total current
assets
|
|
|
248,356
|
|
|
181,511
|
|
Property and
equipment:
|
|
|
|
|
|
|
|
Gathering and
compression systems
|
|
|
1,180,707
|
|
|
1,254,077
|
|
Less accumulated
depreciation
|
|
|
(51,110)
|
|
|
(65,692)
|
|
Property and
equipment, net
|
|
|
1,129,597
|
|
|
1,188,385
|
|
Other assets,
net
|
|
|
17,168
|
|
|
24,453
|
|
Total
assets
|
|
$
|
1,395,121
|
|
$
|
1,394,349
|
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
8,728
|
|
$
|
10,103
|
|
Accounts
payable–affiliate
|
|
|
1,380
|
|
|
2,021
|
|
Accrued capital
expenditures
|
|
|
37,208
|
|
|
23,634
|
|
Accrued
liabilities
|
|
|
5,346
|
|
|
10,183
|
|
Total current
liabilities
|
|
|
52,662
|
|
|
45,941
|
|
|
|
|
|
|
|
|
|
Partners'
capital:
|
|
|
|
|
|
|
|
Common unitholders -
public (46,000,000 units issued and outstanding)
|
|
|
1,090,037
|
|
|
1,091,561
|
|
Common unitholder -
Antero (29,940,957 units issued and outstanding)
|
|
|
71,665
|
|
|
73,574
|
|
Subordinated unitholder
- Antero (75,940,957 units issued and outstanding)
|
|
|
180,757
|
|
|
183,273
|
|
Total partners'
capital
|
|
|
1,342,459
|
|
|
1,348,408
|
|
Total liabilities and
partners' capital
|
|
$
|
1,395,121
|
|
$
|
1,394,349
|
|
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
Three Months Ended
March 31, 2014, and 2015
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
|
Revenue–affiliate
|
|
$
|
11,773
|
|
$
|
52,243
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
941
|
|
|
11,689
|
|
General and
administrative (including $1,313 and $4,623 of equity-based
compensation in 2014 and 2015, respectively)
|
|
|
3,776
|
|
|
9,501
|
|
Depreciation
|
|
|
6,108
|
|
|
14,582
|
|
Total operating
expenses
|
|
|
10,825
|
|
|
35,772
|
|
Operating
income
|
|
|
948
|
|
|
16,471
|
|
Interest
expense
|
|
|
174
|
|
|
823
|
|
Net income and
comprehensive income
|
|
$
|
774
|
|
$
|
15,648
|
|
|
|
|
|
|
|
|
|
Less: General
partner's interest in net income
|
|
|
|
|
|
—
|
|
Limited partners'
interest in net income
|
|
|
|
|
$
|
15,648
|
|
Net income per limited
partner unit:
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
Common
units
|
|
|
|
|
$
|
0.10
|
|
Subordinated
units
|
|
|
|
|
$
|
0.10
|
|
Diluted:
|
|
|
|
|
|
|
|
Common
units
|
|
|
|
|
$
|
0.10
|
|
Subordinated
units
|
|
|
|
|
$
|
0.10
|
|
Weighted average
number of limited partner units outstanding:
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
Common
units
|
|
|
|
|
|
75,940,957
|
|
Subordinated
units
|
|
|
|
|
|
75,940,957
|
|
Diluted:
|
|
|
|
|
|
|
|
Common
units
|
|
|
|
|
|
75,941,670
|
|
Subordinated
units
|
|
|
|
|
|
75,940,957
|
|
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Statements of Cash Flows
|
Three Months Ended
March 31, 2014, and 2015
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2014
|
|
2015
|
|
Cash flows provided
by operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
774
|
|
$
|
15,648
|
|
Adjustment to reconcile
net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
6,108
|
|
|
14,582
|
|
Equity-based
compensation
|
|
|
1,313
|
|
|
4,623
|
|
Amortization of
deferred financing costs
|
|
|
—
|
|
|
244
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable–affiliate
|
|
|
(1,475)
|
|
|
(1,170)
|
|
Prepaid
expenses
|
|
|
(63)
|
|
|
162
|
|
Accounts
payable
|
|
|
16
|
|
|
168
|
|
Accounts
payable–affiliate
|
|
|
—
|
|
|
641
|
|
Accrued
liabilities
|
|
|
(68)
|
|
|
4,837
|
|
Net cash provided by
operating activities
|
|
|
6,605
|
|
|
39,735
|
|
Cash flows used in
investing activities:
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(104,333)
|
|
|
(126,014)
|
|
Change in working
capital of affiliate related to property and equipment
|
|
|
—
|
|
|
40,277
|
|
Change in other
assets
|
|
|
(2,792)
|
|
|
(7,515)
|
|
Net cash used in
investing activities
|
|
|
(107,125)
|
|
|
(93,252)
|
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
|
|
Deemed contribution
from parent, net
|
|
|
49,649
|
|
|
—
|
|
Distribution to
unitholders
|
|
|
—
|
|
|
(14,322)
|
|
Borrowings on credit
facility
|
|
|
51,461
|
|
|
—
|
|
Payments of deferred
financing costs
|
|
|
—
|
|
|
(14)
|
|
Payments on capital
lease obligations
|
|
|
(227)
|
|
|
—
|
|
Payments of IPO
related costs
|
|
|
(363)
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
|
|
100,520
|
|
|
(14,336)
|
|
Net decrease in cash
and cash equivalents
|
|
|
—
|
|
|
(67,853)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
—
|
|
|
230,192
|
|
Cash and cash
equivalents, end of period
|
|
$
|
—
|
|
$
|
162,339
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
Cash paid during the
period for interest and commitment fees
|
|
$
|
40
|
|
$
|
579
|
|
Supplemental
disclosure of noncash investing activities:
|
|
|
|
|
|
|
|
Increase (decrease) in
accrued capital expenditures and accounts payable for property and
equipment
|
|
$
|
22,781
|
|
$
|
(52,644)
|
|
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SOURCE Antero Midstream Partners LP