PR Newswire
DENVER, July 31, 2019
DENVER, July 31, 2019 /PRNewswire/ -- Antero Midstream Corporation (NYSE: AM) ("Antero Midstream" or the "Company") today released its second quarter 2019 financial and operating results. The relevant condensed consolidated financial statements are included in Antero Midstream's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which has been filed with the Securities and Exchange Commission.
Second Quarter 2019 Highlights Include:
Commenting on Antero Midstream, Paul Rady, Chairman and CEO said, "Antero Midstream continued to deliver its organic growth strategy during the quarter generating 34% and 54% increases in low pressure gathering and compression volumes, respectively, compared to the second quarter of 2018. Looking forward, Antero Midstream will continue to organically build out the infrastructure needed to support Antero Resources' development plan which targets a 10% compound annual growth rate in net production at current strip pricing. Antero Resources has announced that is has already achieved material well cost savings this year and has initiatives underway to achieve a 10% to 14% reduction in well costs, as well as further reductions in lease operating expenses, by 2020. Antero Resources has announced that it believes these well cost and operating cost reductions will enable it to continue executing its development plan at current strip pricing."
Mr. Rady further added, "Importantly, the integrated development program results in capital efficient spending at both Antero Resources and Antero Midstream, allowing for a strong balance sheet at both entities assuming the current commodity price strip."
For a discussion of the non-GAAP financial measures including Adjusted EBITDA, Adjusted Net Income and Distributable Cash Flow presented on an actual and pro forma basis, as well as Net Debt, please see "Non-GAAP Financial Measures."
Incremental Flowback and Produced Water Services
In conjunction with Antero Resources' well cost initiatives, Antero Midstream plans to expand the scope of its water business to support the growing flowback and produced water volumes from Antero Resources. Antero Midstream plans to implement localized storage and fresh water blending operations, utilize mobile treatment for flowback and produced water volumes in Antero's northern fairway, repurpose portions of the existing fresh water system to transport flowback and produced water, and construct a limited amount of new pipelines to deliver flowback and produced water to localized blending and treatment operations and the Antero Clearwater Facility. The fresh water blending and mobile treatment options could be implemented as soon as the second half of 2019 in certain areas of development. The infrastructure buildout will be a flexible, fit-for-purpose system based on Antero Resources' development plan and Antero Midstream believes the system could be phased in beginning in 2020. These localized operations would replace a significant amount of the flowback and produced volumes trucked by third parties and generate attractive margins and rates of return for Antero Midstream, while also resulting in significant savings for Antero Resources.
Based on ongoing assessments of drilling and completion designs, Antero Resources announced that it expects to trend lower in water used in completion operations over time. Depending on the areas being developed, Antero Resources expects water use will be reduced by 5 to 7 barrels per foot from the current design of 40 to 45 barrels per foot to 35 to 38 barrels per foot in the Marcellus, beginning in January 2020. Based on Antero's expected completion schedule in 2020, this would result in a reduction in Adjusted EBITDA for Antero Midstream of approximately $25 to $35 million. Importantly, Antero Resources has announced that the savings from completion optimization, combined with other savings initiatives, is forecast to allow Antero Resources to continue targeting its 10% production CAGR, despite the decline in overall commodity prices. In combination with the expanded scope of produced water services, the continued development plan for Antero Resources is expected to offset a majority of the cash flow impact to Antero Midstream from reduced water use.
Antero Midstream Second Quarter Financial Results
The previously announced simplification transaction between Antero Midstream GP LP ("AMGP") and Antero Midstream Partners LP ("Antero Midstream Partners") closed on March 12, 2019. GAAP financial results for periods prior to the closing of the simplification transaction reflect the financial results of AMGP. The financial and operating results and comparisons for periods prior to the closing of the simplification transaction that are discussed in this release are based on the pro forma results of Antero Midstream Corporation as if the transaction had occurred on January 1, 2018. GAAP and pro forma financial statements can be found in the back of this release.
Low pressure gathering volumes for the second quarter of 2019 averaged 2,662 MMcf/d, a 34% increase as compared to the prior year quarter. Compression volumes for the second quarter of 2019 averaged 2,396 MMcf/d, a 54% increase as compared to the second quarter of 2018. High pressure gathering volumes for the second quarter of 2019 averaged 2,620 MMcf/d, a 36% increase over the second quarter of 2018. The year-over-year increase in gathering and compression volumes was driven by production growth from Antero Resources in Antero Midstream's area of dedication. Fresh water delivery volumes averaged 122 MBbl/d during the quarter, a 46% decrease compared to the second quarter of 2018, driven by a decrease in Antero Resources' completion activity. During the quarter, Antero Resources released one of its completion crews, which was subsequently recontracted early in the third quarter of 2019 and is expected to drive an increase in completion activity and fresh water delivery volumes in the second half of 2019. Antero Midstream treated an average of 29 MBbl/d of wastewater at the Antero Clearwater Facility during the second quarter of 2019.
Gross processing volumes from the 50/50 processing and fractionation joint venture with MarkWest (a wholly-owned subsidiary of MPLX) (the "Joint Venture") averaged 986 MMcf/d for the second quarter of 2019, an increase of 73% compared to the prior year quarter. The five Sherwood Joint Venture plants operated at 99% utilization for the quarter. Gross Joint Venture fractionation volumes averaged 27 MBbl/d, a 170% increase compared to the prior year quarter. The year-over-year increase in processing and fractionation volumes is primarily driven by the increase in Antero Resources' rich gas and C3+ NGL production volumes.
| | Three Months Ended June 30 | | |||
Average Daily Volumes: | | 2018(1) | | 2019 | | % |
Low Pressure Gathering (MMcf/d) | | 1,981 | | 2,662 | | 34% |
Compression (MMcf/d) | | 1,558 | | 2,396 | | 54% |
High Pressure Gathering (MMcf/d) | | 1,932 | | 2,620 | | 36% |
Fresh Water Delivery (MBbl/d) | | 228 | | 122 | | (46)% |
Clearwater Treatment Volumes (MBbl/d) | | 8 | | 29 | | 263% |
Gross Joint Venture Processing (MMcf/d) | | 571 | | 986 | | 73% |
Gross Joint Venture Fractionation (MBbl/d) | | 10 | | 27 | | 170% |
| |
1. | Three months ended June 30, 2018 presented on a pro forma basis |
For the three months ended June 30, 2019, revenues were $256 million, comprised of $167 million from the Gathering and Processing segment and $89 million from the Water Handling and Treatment segment, net of $(9) million of amortization of customer contracts. Revenues increased 5% compared to the prior year quarter, driven by growth in gathering, compression, and Clearwater treatment volumes. Water Handling and Treatment segment revenues include $12 million from wastewater treatment at the Antero Clearwater Facility and $40 million from wastewater handling and high rate water transfer services, which are billed at cost plus 3%.
Direct operating expenses for the Gathering and Processing and Water Handling and Treatment segments were $12 million and $52 million, respectively, for a total of $64 million, compared to $76 million in total direct operating expenses in the prior year quarter. Water Handling and Treatment direct operating expenses include $9 million from wastewater treatment at the Antero Clearwater Facility and $39 million from wastewater handling and high rate water transfer services, which are billed at cost plus 3%. General and administrative expenses excluding equity-based compensation were $13 million during the second quarter of 2019. Total operating expenses were $138 million, including $36 million of depreciation, $22 million of equity-based compensation, $1 million of impairment and $2 million of accretion of contingent acquisition consideration and asset retirement obligations.
Net income was $69 million, or $0.14 per share. Adjusted Net Income was $78 million, or $0.15 per share, representing a 19% increase compared to the prior year quarter. Adjusted EBITDA was $206 million, an 18% increase compared to the prior year quarter. Adjusted EBITDA for the quarter included $19 million in combined distributions from Stonewall Gathering LLC and the processing and fractionation Joint Venture. Cash interest paid was $12 million. The increase in cash reserved for bond interest during the quarter was $18 million. Maintenance capital expenditures during the quarter totaled $18 million and Distributable Cash Flow was $156 million, representing a 9% increase over the prior year quarter. Based on the previously declared dividend of $0.3075 per share, Antero Midstream's Distributable Cash Flow coverage ratio was 1.0x.
The following table reconciles net income to Adjusted Net Income, Adjusted EBITDA and Distributable Cash Flow as used in this release (in thousands):
| Three Months Ended | |||||||
| | 2018(1) | | | 2019 | |||
Net income | $ | 52,614 | | | 69,274 | |||
Amortization of customer relationships | | 8,533 | | | 8,534 | |||
Impairment expense | | 4,614 | | | 594 | |||
Adjusted Net Income | | 65,761 | | | 78,402 | |||
Interest expense | | 20,085 | | | 31,521 | |||
Provision for income tax expense | | 19,974 | | | 30,419 | |||
Depreciation expense | | 44,820 | | | 36,447 | |||
Accretion of contingent acquisition consideration | | 3,947 | | | 2,297 | |||
Accretion of asset retirement obligations | | 34 | | | 69 | |||
Equity-based compensation | | 14,978 | | | 21,543 | |||
Equity in earnings of unconsolidated affiliates | | (6,272) | | | (13,623) | |||
Distributions from unconsolidated affiliates | | 10,810 | | | 19,085 | |||
Adjusted EBITDA | | 174,137 | | | 206,160 | |||
Interest paid | | (6,270) Werbung Mehr Nachrichten zur American Greetings Aktie kostenlos abonnieren
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