Upload
anteromidstream
View
220
Download
0
Tags:
Embed Size (px)
Citation preview
Partnership OverviewNovember 2014
FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Antero Midstream Partners LP, and its subsidiaries (collectively, the “Partnership”) expect, believe or anticipate will or may occur in the future are forward-looking statements. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “project,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include expectations of plans, strategies, objectives, and anticipated financial and operating results of the Partnership and Antero Resources Corporation (“Antero”). These statements are based on certain assumptions made by the Partnership and Antero based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements.
The Partnership cautions you that these forward-looking statements are subject to risks and uncertainties that may cause these statements to be inaccurate, and readers are cautioned not to place undue reliance on such statements. These risks include, but are not limited to, Antero’s ability to meet its drilling and development plan, commodity price volatility, inflation, environmental risks, drilling and completion and other operating risks, regulatory changes, the uncertainty inherent in projecting future rates ofproduction, cash flow and access to capital, the timing of development expenditures, and the other risks discussed in the registration statement on Form S-1 (No. 333-193798) filed by the Partnership under the heading “Risk Factors.”
Any forward-looking statement speaks only as of the date on which such statement is made, and the Partnership undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
1
ANTERO MIDSTREAM – A GROWTH FOCUSED MLP
2
• AM sponsor is the most active operator in Appalachia• Highest recycle ratio and low F&D cost supports sponsor production growth expectations• Sponsor maintains strong liquidity and significant hedging position• Highly incentivized to maximize value of AM to support AR growth
• Midstream assets located in lowest cost per Mcfe rich gas plays in North America• ~80% of midstream “footprint” is associated with rich gas production• Substantial AR and third-party future infrastructure required• Gathering and compression provide core asset portfolio with additional option to
expand into freshwater distribution and regional pipelines
• Pure play, fee-based midstream MLP with top tier growth rate• Cash flows are supported by 20-year, fee-based agreements with AR• “Best in class” anchor tenant with 90% expected net production growth in 2014 and
45-50% growth in both 2015 and 2016• Growth not dependent on drop-downs, 3rd party business or acquisitions for growth
• Consolidated Marcellus and Utica rich gas acreage dedications• Multiple gathering and compression, processing, pipeline and other expansion
opportunities• Option to acquire AR Fresh Water Distribution system
• Antero Midstream MLP had no leverage at IPO closing plus $250 million cash • $1 billion of undrawn borrowing capacity commitments at IPO• Good high yield access with “Ba3/BB” rated parent (corporate ratings)• Structured to pursue organic growth opportunities
PremierE&P Sponsorship1
“Pure Play” Marcellus/UticaMidstream MLP
2
Top Tier MLP Organic Growth3
Appalachian Midstream Value Chain Opportunity
4
Stacked-Pay Basin Potential Upside5
Financial Flexibility & Strong Capital Structure
6
• Stacked-pay opportunities – Utica, Marcellus, Upper Devonian• Opportunity to develop Utica Shale dry gas pipeline and compression systems in
West Virginia• Future Upper Devonian development will require existing water resource for
completions and gathering and compression systems
AnteroMidstream Management
ANTERO MIDSTREAM OWNERSHIP STRUCTURE
3
Antero ResourcesCorporation (NYSE: AR)$14 Billion Market Cap.(1)
Ba3/BB Corporate Rating
Antero MidstreamPartners LP (NYSE: AM)
$4.3 Billion Market Cap.(1)
Public
$1 BillionCredit Facility
Midstream Entity
PartnershipCorporation
MarcellusGathering
& Compression
UticaGathering &
Compression
Option(4)
Antero Fresh WaterDistribution System
Option
69.7% Limited Partner Interest
Option(2)
ET Rover PipelineProject
1. As of 11/10/2014. 2. Option to acquire up to a 20% non-operating equity interest in Energy Transfer’s (NYSE: ETP) Rover Pipeline new build project. 3. Option to acquire up to a 15% non-operating equity interest in a new build Regional Gathering Pipeline.4. Option to acquire 100% interest at fair market value.
100% 100% 20% 100%
Option(3)
Regional GatheringPipeline
15%
Midstream Option
1. Represents inception to date actuals as of 6/30/2014 and 2H 2014 and next twelve months (NTM) guidance.2. Includes $14.7 million of maintenance capex.
4
• Gathering and compression assets in core of rapidly growing Marcellus and Utica Shale plays
– Acreage dedication of ~390,000 net leasehold acres for gathering and compression services
– 100% fixed fee long term contracts
UticaShale
MarcellusShale
Projected Midstream Infrastructure(1)
Marcellus Shale
Utica Shale Total
YE 2014E Cumulative Gathering/ Compression Capex ($MM) $850 $350 $1,200
Gathering Pipelines(Miles) 180 85 265
Compression Capacity(MMcf/d) 370 - 370
Condensate Gathering Pipelines (Miles) - 20 20
NTM (9/30/2015) Gathering/ Compression Capex ($MM)(2) $473 $129 $602
Gathering Pipelines (Miles) 219 108 327
Compression Capacity(MMcf/d) 835 - 835
Condensate Gathering Pipelines (Miles) - 27 27
Midstream Assets
ANTERO MIDSTREAM PARTNERS OVERVIEW
ANTERO MIDSTREAM ASSETS – RICH GAS MARCELLUS
5
• Provides Marcellus gathering and compression services − Liquids-rich gas is delivered to MWE’s Sherwood
Complex for processing• Significant growth projected over the next twelve
months as set out below:
• Antero sold the Harrison County portion of its gathering system to a 3rd party midstream company in 2012, which is now recognized as the 3rd Party Gathering and Compression Dedication area
• Development upside as AR continues to drill, step-out and add acreage
Marcellus Gathering & Compression
Note: Antero acreage position reflects tax districts in which greater than 3,000 net acres are owned.
YE 2014 9/30/2015
Gathering Pipelines (Miles) 180 219
Compression Capacity (MMcf/d) 370 835
WV/PA Utica Dry Gas Gathering & Compression
• Further development upside in 154,000 net acres of Utica deep rights beneath the Marcellus Shale− Will require a separate dry gas gathering system
6
• Provides Utica natural gas and condensate gathering services− Liquids-rich gas delivered into MWE’s Seneca
Complex for processing− Condensate delivered to centralized stabilization
and truck loading facilities• Significant growth projected over the next twelve
months as set out below:
• Development upside as AR continues to drill, step-out and add acreage
Utica Gathering
Note: Antero acreage position reflects tax districts in which greater than 3,000 net acres are owned.
ANTERO MIDSTREAM ASSETS – RICH & DRY GAS UTICA
YE 2014 9/30/2015
Gathering Pipelines (Miles) 85 108
Condensate Pipelines (Miles) 20 27
Utica Compression• Opportunity to build up to ten new compressor stations
that are planned to support AR development over the next several years− Compressor stations are not included in AM NTM
forecast
ORGANIC GROWTH STRATEGY: “BUILD VS. BUY”
7
• Organic growth strategy provides attractive returns and project economics, while avoiding the competitive acquisition market
• Industry leading organic growth story
– ~$875 million in estimated capital spent through 6/30/2014
– $587 million in additional growth capital forecast for the twelve-month period ending 9/30/15 (excludes $15 million of maintenance capital)
Note: Precedent data per IHS Herold’s research and public filings.1. Antero organic multiple calculated as estimated gathering and compression capital expended through Q2 2014 divided by NTM 9/30/15 projected gathering and compression EBITDA.2. Selected gathering and compression drop down acquisitions since 1/1/2011. Drop down multiples are based on NTM EBITDA. Source: Barclays.
6.4x
11.9x
10.7x
10.0x
9.3x9.0x 9.0x 9.0x 8.9x 8.9x 8.8x 8.6x
8.0x 7.9x
7.0x 6.9x
5.5x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
11.0x
12.0x
Drop Down Multiple(2)
Organic EBITDA Multiple vs. Precedent Drop Down Multiples
Median: 8.9x
Value creation for the AM unit holder =Build at 4-6x EBITDA
vs.Drop-Down / Buy at 8-12x EBITDA
Fresh Water
Distribution(1)
Regional Gas Pipelines
Miles Capacity In-Service
Rover Pipeline 800 3.25 Bcf/d 1Q 2017
Unnamed Regional Pipeline
50 1.4 Bcf/d 4Q 2015
81. Currently owned by AR; AM holds option to purchase 100% of assets at fair market value.
EndUsers
EndUsers
Gas Processing
Y-Grade Pipeline
Long-Haul Interstate
Pipeline
InterConnect
NGL Product Pipelines
Fractionation
Compression
Low Pressure Gathering
Well Pad
Terminalsand
Storage
(Miles) YE 2014 9/30/2015
Marcellus 110 130
Utica 51 72
Total 161 202
AM has option to participate in processing, fractionation,
terminaling and storage projects offered to AR
FULL MIDSTREAM VALUE CHAIN POTENTIAL
(Miles) YE 2014 9/30/2015
Marcellus 70 89
Utica 34 36
Total 104 125
(MMcf/d) YE 2014 9/30/2015
Marcellus 370 835
Utica 0 0
Total 370 835
AM Owned Assets
Condensate GatheringStabilization
(Miles) YE 2014 9/30/2015
Utica 20 27
EndUsers
AM Option Assets
(Ethane, Propane, Butane, etc.)
(De-ethanization)
AM OPTION – FRESH WATER DISTRIBUTION SYSTEMS
9
Marcellus Fresh Water Distribution System• Provides fresh water to support ongoing Marcellus completion
activity • Year-round water supply sources: Ohio River and local rivers• Significant growth projected over the next twelve months as
summarized below:
Note: Antero acreage position reflects tax districts in which greater than 3,000 net acres are owned.1. Estimated fee of $3.50 per barrel at an average of 200,000 Bbls of water per well.
Utica Fresh Water Distribution System• Provides fresh water to support ongoing Utica completion activity • Year-round water supply sources: local reservoirs and rivers• Significant growth projected over the next twelve months as
summarized below:
• Currently owned by AR – AM holds option to purchase 100% of assets at fair market value
Marcellus Water System YE 2014 9/30/2015
Buried Water Pipeline (Miles) 107 127
Fresh Water Storage Impoundments 26 32
NTM 9/30/2015 Projected Wells 162
Water Fees per Well ($)(1) $600K -$800K
Utica Water System YE 2014 9/30/2015
Buried Water Pipeline (Miles) 48 63
Fresh Water Storage Impoundments
8 13
NTM 9/30/2015 Projected Wells 56
Water Fees per Well ($)(1) $600K -$800K
OHIO
Rover PipelineOperator – Energy TransferAntero Midstream Option
Up to 20% Ownership2017 in-service
3.25 Bcf/d Pipeline
Antero Marcellus & Utica Acreage
Sherwood
Seneca
• Option to Acquire Up to 20% Non-Op Equity Interest
• Connects Antero’s Marcellus and Utica projects to existing Chicago, MichCon, and Gulf Coast pipeline capacity
• Provides first interconnect of Antero’s Marcellus and Utica projects
• Fully subscribed Energy Transfer (NYSE: ETP) project
AM OPTION – REGIONAL PIPELINE INVESTMENTS
ET Rover Pipeline
• Option to Acquire Up To 15% Non-Op Equity Interest
● Connects Antero’s Marcellus production to Gulf Coast and Atlantic Seaboard capacity
Regional Gathering PipelineRegional Gathering Pipeline
Operator – TBAAntero Midstream Option
Up to 15% Ownership4Q 2015 in-service1.4 Bcf/d Pipeline
Throughput Capacity: 3.25 Bcf/d
Pipeline Specifications: 800 miles of 36” and 42”
Project Capital: $4.3 Billion
In-Service Date: 1Q 2017
AR FT Commitment: 800 MMcf/d
Throughput Capacity: 1.4 Bcf/d
Pipeline Specifications: TBD
Project Capital: ≈ $400 Million
In-Service Date: 4Q 2015
AR FT Commitment: 1,100 MMcf/d
10
25%
15%
10%
25%
30%
10% 15%
35%
25%
20%
35%
25%
20%
40%
0%
10%
20%
30%
40%
Inte
rnal
Rat
e of
Ret
urn
11
DRY GAS LOCATIONS RICH GAS LOCATIONS
HIGHLY RICH GAS
LOCATIONS
Project Economics by Segment(1)
ESTIMATED PROJECT ECONOMICS BY SEGMENT
LPGathering
HPGathering Compression
CondensateGathering
Water Distribution
RegionalPipelines
Processing/Fractionation
Unlevered IRR Range: 25% - 35% 15% - 25% 10% - 20% 25% - 35% 30% - 40% 10% - 25% 15% - 20% Payout (Years): 2.5 - 4.0 3.5 - 4.5 4.0 - 6.5 2.0 - 3.5 2.0 – 3.0 3.5 - 7.0 5.0 - 6.0 Minimum Volume Commitments: N/A 75% 70% N/A N/A 100% 60%
9/30/15 NTM Capex(2) TotalMarcellus $473.3 $155.9 $131.8 $185.6 -Utica 114.0 89.8 15.9 - 8.3
Expansion Capex $587.3 $245.7 $147.7 $185.6 $8.3 % of Capex 100% 42% 25% 32% 1%
Included in NTM Period: Marcellus & Utica
Marcellus & Utica
Marcellus Utica Not Included Not Included Not Included
Additional Opportunities: Dry Utica Dry Utica Rich & Dry Utica
Utica Stabilization
Drop-Downof Water
Distribution System
ET Rover & Regional
Gathering Pipelines
Marcellus Processing/
Fractionation
1. Based on management capex, operating cost and throughput assumptions by project.2. Excludes $14.7 million of maintenance capex.
Wtd. Avg. 23% IRR
AM Option Opportunities
SIGNIFICANT FINANCIAL FLEXIBILITY
12
• Unfunded $1 billion revolver in place at time of IPO to fund future growth capital (5x Debt/EBITDA Cap)
• No leverage and $250 million of cash “post-IPO” provides significant financial flexibility
• Sponsor (NYSE: AR) has Ba3/BB corporate ratings
AM Liquidity
AM Peer Leverage Comparison(1)
($ in millions) At IPO
Revolver Capacity $1,000
Less: Borrowings -
Plus: Cash 250
Liquidity $1,250
0.0x 0.0x 0.1x
1.1x 1.3x 1.5x2.2x 2.4x
3.1x 3.1x 3.3x 3.3x4.0x 4.1x
0.0x
2.0x
4.0x
6.0x
Deb
t / L
TM E
BIT
DA
1. Peers include ACMP, EQM, MPLX, MWE, OILT, PSXP, QEPM, RRMS, SXL, TEP, TLLP, VLP and WES.
Sources ($ in millions)
Primary IPO Proceeds $1,150
Total Sources $1,150
Uses
Proceeds to AR $843
Proceeds retained by AM 250
Fees & Expenses 57
Total Uses $1,150
Sources & Uses
Financial Flexibility
13
ANTERO MIDSTREAM MLP INVESTMENT HIGHLIGHTS
Premier E&P Sponsorship
“Pure Play” Marcellus/UticaMidstream MLP
Top Tier MLP Organic Growth
Full Midstream Value Chain Potential
Financial Flexibility & Strong Capital Structure “Best in Class”
Distribution Growth Expected
14
Antero ResourcesOverview
PREMIER UNCONVENTIONAL RESOURCE PLATFORM
1. All net acres allocated to the WV/PA Utica Shale Dry Gas and Upper Devonian Shale are included among the net acres allocated to the Marcellus Shale as they are stacked pay formations attributable to the same leasehold. Antero and industry rig locations as of 10/31/2014 per RigData.
2. Locations as at 9/30/2014 adjusted for additional 130 locations acquired through 11/3/2014.
15
COMBINED TOTAL – 6/30/14 RESERVESAssumes Ethane RejectionNet Proved Reserves 9.1 TcfeNet 3P Reserves 37.5 TcfePre-Tax 3P PV-10 $25.9 BnNet 3P Reserves & Resource 47.0 TcfeNet 3P Liquids 966 MMBbls% Liquids – Net 3P 15%3Q 2014 Net Production 1,080 MMcfe/d- 3Q 2014 Net Liquids 25,000 Bbl/dNet Acres(1) 520,000Undrilled 3P Locations(2) 5,244
UTICA SHALE CORE
Net Proved Reserves 537 BcfeNet 3P Reserves 6.4 TcfePre-Tax 3P PV-10 $6.5 BnNet Acres 134,000Undrilled 3P Locations(2) 997
MARCELLUS SHALE CORE
Net Proved Reserves 8.5 TcfeNet 3P Reserves 26.4 TcfePre-Tax 3P PV-10 $19.4 BnNet Acres 386,000Undrilled 3P Locations 3,131
UPPER DEVONIAN SHALE
Net Proved Reserves 40 BcfeNet 3P Reserves 4.6 TcfePre-Tax 3P PV-10 NMUndrilled 3P Locations 1,116
WV/PA UTICA SHALE DRY GASNet Resource 9.5 TcfNet Acres 154,000Undrilled Locations 1,390
LARGEST PORTFOLIO OF FIRM PROCESSINGAND GAS & NGL TAKEAWAY IN APPALACHIA
Odebrecht / Braskem30 MBbl/d Commitment
Ascent Cracker(Pending Final
Investment Decision)
Antero Long Term Firm Processing & Takeaway Position (2018) – Accessing Favorable Markets
Mariner East II62 MBbl/d Commitment
Marcus Hook Export
Shell25 MBbl/d CommitmentBeaver County Cracker
(Pending FinalInvestment Decision)
Sabine Pass (Trains 1-4)50 MMcf/d per Train
1. November 2014 and 2016 futures basis, respectively, provided by Wells Fargo dated 11/3/2014. Favorable gas markets shaded in green.
Chicago(1)
+$0.32 / $(0.08)
CGTLA(1)
$(0.09) / $(0.09)
Dom South(1)
$(1.38) / $(1.21)
TCO(1)
$(0.18) / $(0.43)
16
738 1,160 943 780 1,073 818
$4.99$4.34 $4.46 $4.34 $4.50 $4.41
$4.03 $3.87 $3.95 $4.05 $4.18 $4.27
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
0
200
400
600
800
1,000
1,200
4Q 2014 2015 2016 2017 2018 2019
BBtu/d $/MMBtu
TCO5%
Dom South11%
CGTLA13%
NYMEX70%
Chicago1%
SIGNIFICANT LONG-TERM COMMODITY HEDGE POSITION
17
% HEDGE VOLUMES BY INDEX THROUGH 2019
Average Index Hedge Price(1)Hedged Volume Current NYMEX Strip(2)
NATURAL GAS HEDGE POSITION
1. Reflects weighted average index price per annum based on volumes hedged and 6:1 gas to oil ratio. Antero has hedged ~3,000 Bbl/d for 2014, WTI hedges comprise ~1% of overall hedge book.2. As of 11/3/2014.
~$976 million mark-to-market unrealized gain based on current prices; additional hedge capacity remaining through 2019 1.8 Tcfe hedged from October 1, 2014 through year-end 2019 and 254 Bcf of TCO basis hedges from 2015 to 2017
$71 MM $328 MM $313 MM $99 MM $126 MM $41 MM
Mark-to-Market Value(2)
($/Mcf) 4Q 2014E 2015E 2016ENYMEX Strip Price(1) $3.91 $3.86 $3.95Basis Differential to NYMEX(1) $(0.56) $(0.49) $(0.32)BTU Upgrade(5) $0.34 $0.34 $0.36 Estimated Realized Hedge Gains $0.68 $0.59 $0.38Realized Gas Price with Hedges $4.36 $4.30 $4.37 Premium to NYMEX +$0.45 +$0.44 +$0.42Liquids Impact(6) +$0.59 +$0.62 +$0.67Premium to NYMEX w/ Liquids +$1.04 +$1.06 +$1.09Realized Gas-Equivalent Price $4.95 $4.92 $5.04
4. Represents 60,000 MMBtu/d of TCO index hedges and 202,500 MMBtu/d of TCO basis hedges that are matched with NYMEX hedges for presentation purposes.
5. Assumes ethane rejection resulting in 1100 BTU residue sales gas.6. Represents equivalent price upgrade associated with NGL (C3+) and oil production.
ANTERO REALIZED PRICE “ROAD MAP”
1. Based on 11/3/2014 strip pricing.2. Differential represents contractual deduct to NYMEX-based firm sales contract.3. Represents 120,000 MMBtu/d of TCO index hedges and 390,000 MMBtu/d of TCO basis hedges that are
matched with NYMEX hedges for presentation purposes.
DOM S 29% DOM S
23%DOM S
8%
TETCO M26% TETCO M2
9%
TETCO M28%
TCO 41%
TCO 22%
TCO 14%
NYMEX8%
NYMEX7%
NYMEX10%
Gulf Coast17% Gulf Coast
50%
Chicago16% Chicago
22%
Chicago10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
4Q 2014Basis(1)
2015 Basis(1)
2016 Basis(1)
4Q 2014Hedges
2015Hedges
2016Hedges
Mar
kete
d %
of T
arge
t Re
sidu
e G
as P
rodu
ctio
n
+$0.25/MMBtu
$(0.25)/MMBtu(2)
$(1.52)/MMBtu
$(0.11)/MMBtu
+$0.09/MMBtu
$(0.25)/MMBtu(2)
$(1.32)/MMBtu
$(0.28)/MMBtu
$(0.08)/MMBtu
$(0.25)/MMBtu(2)
$(1.21)/MMBtu
$(0.43)/MMBtu
$(0.10)/MMBtu
$(0.09)/MMBtu
340,000 MMBtu/d
@ $4.18/MMBtu
160,000 MMBtu/d
@ $5.27/MMBtu
210,000 MMBtu/d
@ $5.24/MMBtu
40,000 MMBtu/d
@ $4.00/MMBtu
230,000 MMBtu/d
@ $5.60/MMBtu
510,000 MMBtu/d
@ $4. 06/MMBtu(3)
170,000 MMBtu/d
@ $4.09/MMBtu
272,500 MMBtu/d
@ $5.35/MMBtu
262,500 MMBtu/d
@ $4.01/MMBtu(4)
$0.68/Mcf in estimated hedge gains(1)
68% exposure to favorable price indices
$0.78/Mcf in estimated hedge gains(1)
65% exposure to favorable price indices
$0.40/Mcf in estimated hedge gains(1)
84% exposure to favorable price indices
Antero is forecasting realized gas prices including hedges at a premium to NYMEX strip prices for Q4 2014 through 2016, assuming current strip prices and basis, existing firm transportation and hedges, and targeted 2015 and 2016 production figures
$(1.55)/MMBtu
$(1.29)/MMBtu
$(1.10)/MMBtu
Wtd. Avg.Basis ($0.56)
720,000 MMBtu/d@ $4.73/MMBtu
Wtd. Avg.Basis $(0.49)
1,000,000 MMBtu/d@ $4.42/MMBtu
Wtd. Avg.Basis $(0.32)
812,500 MMBtu/d@ $4.55/MMBtu
10,000 MMBtu/d
@ $3.98/MMBtu
4Q 2014E 2015E 2016E
18
220,000 MMBtu/d
@ $4.12/MMBtu
107,500 MMBtu/d
@ $4.16/MMBtu
0%
20%
40%
60%
80%
248
143 87
265 254
23%
70%
103%
65%50%
050100150200250300
0%
25%
50%
75%
100%
125%
Condensate Highly-RichGas/
Condensate
Highly-RichGas
Rich Gas Dry Gas
Tota
l 3P
Loca
tions
RO
R
Locations ROR
MARCELLUS SSL WELL ECONOMICS(1)
727896
633
875
82% 52%
23% 18%
0
200
400
600
800
1000
0%
25%
50%
75%
100%
125%
Highly-RichGas/
Condensate
Highly-RichGas
Rich Gas Dry Gas
Tota
l 3PL
loca
tions
RO
R
Locations ROR
MULTI-YEAR DRILLING INVENTORY SUPPORTS LOW RISK, HIGH RETURN GROWTH PROFILE
Large 3P Drilling Inventory of High Return Projects(3)
1. Pre-tax well economics based on 9/30/2014 strip pricing for natural gas, 9/30/2014 strip pricing for 2014-2016 and $85 flat thereafter for WTI oil, NGLs at 55% of oil price and applicable firm transportation costs.
2. Adjusted for additional 130 gross locations acquired as of 11/3/2014.3. Source: Credit Suisse report dated October 2014 – After-tax internal rate of return based on 10/27/2014 strip pricing.
59%57%
71%
21%
Inte
rnal
Rat
e of
Ret
urn
(%)
37%
19
UTICA WELL ECONOMICS(1)(2)
1,000
72% of Marcellus locations are processable (1100-plus Btu) 75% of Utica locations are processable (1100-plus Btu)
3,000 Antero Liquids-Rich Locations
37%
2H 2014 / 2015Drilling Plan
1,129 Antero Dry Gas Locations
1. 2012, 2013 and 6/30/2014 proved reserves assuming ethane rejection.2. Midpoint of increased production guidance of 990-1,010 MMcfe/d for 2014.3. Based on 45-50% production growth targets for 2015 and 2016. 4. Per current First Call median estimate from Bloomberg.
0
600
1,200
1,800
2,400
2010 2011 2012 2013 1H 2014 3Q2014
4Q 2014
2015E 2016E
Marcellus Utica Guidance
30 124 239522
(2)
1,237
838
1,500
2,200
(3) (3)
1,080
0
2,000
4,000
6,000
8,000
10,000
2010 2011 2012 2013 6/30/2014
Marcellus Utica
677
2,844
4,283
7,632
(1) (1) (1)
9,107
20
AVERAGE NET DAILY PRODUCTION (MMcfe/d)NET PROVED SEC RESERVES (Bcfe)
0255075
100125150175200225
2010 2011 2012 2013 2014E
Marcellus Utica
29 36
86
162
215
STRONG TRACK RECORD OF GROWTH
OPERATED GROSS WELLS SPUD EBITDAX ($MM)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2010 2011 2012 2013 2014E
$28$160
$285
$649
$1,179
(4)
45-50% Annual Growth Target
92% Growth –Guidance of
1,000 MMcfe/dfor 2014E
WORLD CLASS MARCELLUS SHALE DEVELOPMENT PROJECT
100% operatedOperating 15 drilling rigs
including 5 intermediate rigs386,000 net acres in
Southwestern Core (73% includes processable rich gas assuming an 1100 Btu cutoff)– 50% HBP with additional 27%
not expiring for 5+ years325 horizontal wells completed
and online– Laterals average 7,300’– 100% drilling success rate5 plants at Sherwood Processing
Complex capable of processing 1,000 MMcf/d of rich gas−Over 800 MMcf/d being
processed currentlyNet production of 937 MMcfe/d in
3Q 2014, including 17,300 Bbl/d of liquids 3,131 future drilling locations in
the Marcellus (2,256 or 72% are processable rich gas)26.4 Tcfe of net 3P (18% liquids),
includes 8.5 Tcfe of proved reserves (assuming ethane rejection) Highly-Rich Gas
118,000 Net Acres896 Gross Locations
Rich Gas90,000 Net Acres
633 Gross Locations
Dry Gas104,000 Net Acres
875 Gross Locations
Highly-Rich/Condensate74,000 Net Acres
727 Gross Locations
HEFLIN UNIT30-Day Rate
2H: 21.4 MMcfe/d (21% liquids)
EQT PENN 15 UNIT30-Day Rate
5-well average9.3 MMcfe/d (26% liquids)
CONSTABLE UNIT30-Day Rate
1H: 14.3 MMcfe/d (26% liquids)
142 Horizontals Completed30-Day Rate8.1 MMcf/d
6,915’ average lateral length
PRUNTY UNIT30-Day Rate
1H: 11.1 MMcfe/d(27% liquids)
HINTERER UNIT30-Day Rate
1H: 12.9 MMcfe/d (20% liquids)
RUTH UNIT30-Day Rate
1H: 19.2 MMcfe/d (14% liquids)
SherwoodProcessing
Complex
EQT30-Day Rate
12 Recent Wells9.2 MMcfe/d (20% Liquids)
Source: Company presentations and press releases. Antero acreage position reflects tax districts in which greater than 3,000 net acres are held. Note: Rates in ethane rejection.
DOTSON UNIT30-Day Rate
1H: 12.4 MMcfe/d2H: 11.8 MMcfe/d
(26% liquids)
MASH UNIT30-Day Rate
1H: 14.9 MMcfe/d2H: 16.5 MMcfe/d
(28% liquids)
NERO UNIT30-Day Rate
1H: 18.2 MMcfe/d(27% liquids)
BLANCHE UNIT30-Day Rate
1H: 9.7 MMcfe/d(30% liquids)
BEE LEWIS PAD30-Day Rate
4-well combined 30-Day Rate of
67 MMcfe/d (26% liquids)
RJ SMITH PAD30-Day Rate
4-well combined 30-Day Rate of
56 MMcfe/d (21% liquids)
21
Source: Company presentations and press releases. Note: Antero acreage position reflects townships in which greater than 3,000 net acres are held. Note: Third party peak rates assume ethane recovery; Antero 30-day rates in ethane rejection.1. For non-Antero wells, Antero has converted rich gas rates where BTU has been disclosed to NGLs, assuming ethane recovery. Where BTU has not been disclosed, Antero has estimated BTU and gas
composition.2. 30-day rate reflects restricted choke regime.
• 100% operated• Operating 7 rigs including 2 intermediate rigs• 134,000 net acres in the core rich gas/
condensate window (76% includes processablerich gas assuming an 1100 Btu cutoff)
– 20% HBP with additional 79% not expiring for 5+ years
• 41 operated horizontal wells completed and online in Antero core areas
− 100% drilling success rate• 3 plants at Seneca Processing Complex capable
of processing 600 MMcf/d of rich gas
− Over 500 MMcf/d being processed currently• Net production of 143 MMcfe/d in 3Q 2014
including 7,700 Bbl/d of liquids− Seneca 3 processing plant online in July
2014− The first 120 MMcf/d compressor station
went into service in late January, the second 120 MMcf/d station in late March and a third 100 MMcf/d station in early July
• 997 future gross drilling locations (743 or 75% are processable gas)
• 6.4 Tcfe of net 3P (13% liquids), includes 537 Bcfe of proved reserves (assuming ethane rejection)
LEADING UTICA SHALE CORE POSITION DELIVERS CONDENSATE AND NGLS
22
Utica Shale Industry Activity(1)
CadizProcessing
Plant
NORMAN UNIT30-Day Rate
2 wells average17.2 MMcfe/d (17% liquids)
YONTZ UNIT 1H30-Day Rate 17.0 MMcfe/d(14% liquids)
RUBEL UNIT30-Day Rate
3 wells average17.3 MMcfe/d(22% liquids)
GULFPORT24-Hour IP
McCort1-28H, 2-28H, Stutzman 1-14H
Average 13.1 MMcf/d + 922 Bbl/d NGL
+ 21 Bbl/d Oil
GULFPORT24-Hour IP
Wagner 1-28H, Shugert 1-1H, 1-12H
Average 21.0 MMcf/d + 2,270 Bbl/d NGL
+ 292 Bbl/d Oil
Utica Core Area
GARY UNIT30-Day Rate
3 wells average24.3 MMcfe/d(22% liquids)
Highly-Rich/Cond19,000 Net Acres
143 Gross Locations
Highly-Rich Gas19,000 Net Acres
87 Gross Locations
Rich Gas31,000 Net Acres
265 Gross Locations
Dry Gas32,000 Net Acres
254 Gross Locations
COAL UNIT30-Day Rate
2 wells average16.3 MMcfe/d (50% liquids)
SCHEETZ UNIT30-Day Rate
2 wells average16.5 MMcfe/d(53% liquids)
NEUHART UNIT 3H30-Day Rate16.4 MMcfe/d(56% liquids)
Condensate33,000 Net Acres
248 Gross Locations
DOLLISON UNIT 1H30-Day Rate19.0 MMcfe/d(36% liquids)
MYRON UNIT 1H30-Day Rate26.0 MMcfe/d(50% liquids)
SenecaProcessingComplex
LAW UNIT30-Day Rate
2 wells average15.7 MMcfe/d(48% liquids)
VORHIES UNIT30-Day Rate(2)
3 wells average12.0 MMcfe/d (46% liquids)
SCHAFER UNIT30-Day Rate(2)
2 wells average13.7 MMcfe/d(46% liquids)
-
5.0
10.0
15.0
20.0
25.0
30.0
30-D
ay R
ate
(MM
cfe/
d)
Liquids Gas
51% Avg. Liquids7,201’ Avg. Lateral
Condensate Highly-Rich Gas / Condensate Highly-Rich Gas Rich Gas
ANTERO UTICA SHALE WELLS – 30-DAY RATES
• Outstanding 30-day average rates with high liquids content– Antero’s wells produced against 1,100 psi line pressure until late January 2014 due to lack of compression facilities
– First 120 MMcf/d compressor station started up in late January 2014, a second 120 MMcf/d station was placed online in late March 2014 and a third 100 MMcf/d station was placed online in early July 2014
37% Avg. Liquids5,993’ Avg. Lateral
22% Avg. Liquids7,481’ Avg. Lateral
15% Avg. Liquids5,504’ Avg.
Lateral
Type Curve Regimes (1)
1. Excludes wells under choke management program. 2. Normalized for 7,000’ lateral.3. In ethane rejection.
14.3 MMcfe/dor
2,383 Boe/d 14.6 MMcfe/d
20.9 MMcfe/d
16.9 MMcfe/d
13.9 MMcfe/dNormalized(2)
17.0 MMcfe/dNormalized(2)
19.5 MMcfe/dNormalized(2)
21.5 MMcfe/dNormalized(2)
Average 30-Day Production Rate(3)
23
APPENDIX
24
MAINTENANCE CAPITAL METHODOLOGY
• Maintenance Capital Calculation Methodology– Estimate the number of new well connections needed during the forecast period in order to offset the natural
production decline and maintain the average throughput volume on our system over the LTM period
– (1) Compare this number of well connections to the total number of well connections estimated to be made during such period and
– (2) Designate an equal percentage of our estimated gathering capital expenditures as maintenance capital expenditures
25Source: Antero Midstream S-1; maintenance capital calculation per management estimates.
Maintenance capital expenditures are cash expenditures (including expenditures for the construction or development of new capital assets or the replacement, improvement or expansion of existing capital assets) made to maintain, over the long term, our operating capacity or revenue
• Illustrative Example
LTM Forecast Period
Decline of LTM average throughput to be replaced with production volume
from new well connections
• NTM Maintenance Capital ($ in millions)
NTM Wells to be placed online 183Wells required to maintain LTM throughput 10.3
% of total wells to be placed online 5.6%
NTM Low-Pressure Gathering Capital $260.4
Forecasted NTM Maintenance Capital $14.7
LTM ProductionNTM Production ForecastAverage LTM Production
CONTRACTUAL ARRANGEMENTS WITH ANTERO PROVIDE SIGNIFICANT GROWTH OPPORTUNITIES
26
• Gathering and Compression – 20-year agreement
– Dedication of all current and future AR acreage in West Virginia, Ohio, and Pennsylvania, outside of current
third-party commitments
– Option to gather and compress natural gas produced by Antero on any future acquired acreage outside of the
aforementioned areas
– Low-pressure gathering fee of $0.30/Mcf(1)
– High-pressure gathering fee of $0.18/Mcf(1)
– Compression fee of $0.18/Mcf(1)
– Minimum volume commitments on newly constructed high-pressure lines and compressor stations, respectively
– Compression minimum volume commitments of 70% of design capacity
– High-pressure gathering minimum volume commitments of 75% of design capacity
• Processing (“ROFO”)– Right of first offer on future processing services
– Agreement stipulates that AR has agreed not to procure any gas processing or NGLs fractionation,
transportation or marketing services (other than production subject to a pre-existing dedication) without first
offering AM the right to provide such services
1. All subject to CPI-based adjustments.
FORECASTED CASH FLOW AVAILABLEFOR DISTRIBUTIONS
27
Next 12 Months Ending($ in millions) September 30, 2015
Antero Midstream Adjusted EBITDA(1) $136.2
Less:
Cash interest, net ($2.7)
Expansion capital expenditures ($587.3)
Ongoing maintenance capital expenditures ($14.7)
Add:
Borrowings and cash to fund expansion capital expenditures $587.3
Minimum estimated cash available for distribution $118.8
Assumed Coverage 1.15x
Distributed Cash Flow $103.3
Distribution per Unit(2) $0.68
1. Includes incremental public company expenses.2. Based on 151.9 million units outstanding.
AM OPPORTUNITY SET
28
ACTIVITY CURRENTLY DEDICATED TO AM
Gas Gathering and Compression (High-Pressure and Low-Pressure)
Condensate and Liquids Gathering
Fresh Water Distribution System
Processing, Fractionation, Transportation, Marketing
and Other Services
• Existing dedication of 370,000 acres• Option to expand outside dedicated area, including ROFR• Minimum Volume Commitments on newly constructed
compression (70%) and high pressure gathering (75%)
Regional Pipeline Projects• Option to participate up to 20% in the Rover Pipeline
project• Option to participate up to 15% in another regional pipeline
project
• Relevant liquids production can be added to the existing dedication; AR must request AM to provide a fee proposal
• Option to acquire at fair market value 100% of AR’s fresh water distribution assets covering 505,000 net acres, including ROFO on future services
• AR must request a bid from AM and can only reject if third party service fees are lower. AM has right to match lower fee offer.
0.0%
50.0%
100.0%
150.0%
200.0%
$3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00
Pre-
Tax
RO
R (%
)
NYMEX Gas PriceHighly-Rich Gas/Condensate Highly-Rich Gas Rich Gas Dry Gas
MARCELLUS ROR% AND GAS PRICE SENSITIVITY
1. Assumes 9/30/2014 strip pricing, market differentials and relevant transportation cost.
• Large portfolio of Highly-Rich Gas/Condensate to Dry Gas locations• Focused on drilling highly economic rich gas locations – rig symbols represent current rig location by regime• Assumes 9/30/2014 strip pricing for 2014-2016 and $85/Bbl WTI thereafter and NGL price of 55% of WTI
NYMEX Price Sensitivity(1)
ROR% at 3-Year NYMEX Gas Strip
Highly-Rich Gas/Condensate: 82%
Highly-Rich Gas: 52%
Rich Gas: 23%
Dry Gas: 18% 727 Locations
896 Locations
633 Locations
875 Locations
Antero Rigs Employed
2H 2014 / 2015Drilling Plan
29
0%
50%
100%
150%
200%
250%
$3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00
Pre-
Tax
RO
R (%
)
NYMEX Gas Price
Condensate Highly-Rich Gas/Condensate Highly-Rich Gas Rich Gas Dry Gas Antero Rigs Employed
UTICA ROR% AND GAS PRICE SENSITIVITY
30
NYMEX Price Sensitivity(1)
87 Locations
ROR% at 3-Year NYMEX Gas Strip
Condensate: 23%
Highly-Rich Gas/Condensate: 70%
Highly-Rich Gas: 103%
Rich Gas: 65%
Dry Gas: 50%
• Large portfolio of Condensate to Dry Gas locations• Focused on drilling highly economic rich gas locations – rig symbols represent current rig location by regime• Assumes 9/30/2014 strip pricing for 2014-2016 and $85/Bbl WTI thereafter and NGL price of 55% of WTI
1. Assumes 9/30/2014 strip pricing, market differentials and relevant transportation cost.
265 Locations
143 Locations
254 Locations
248 Locations
2H 2014 / 2015Drilling Plan
LARGE UTICA SHALE DRY GAS POSITION
31
Antero has 183,000 net acres of exposure to Utica dry gas play− 29,000 net acres in Ohio with net 3P reserves of 1.9 Tcf as of
6/30/2014− 154,000 net acres in West Virginia and Pennsylvania with net
resource of 9.5 Tcf as of 6/30/2014 (not included in 37.5 Tcfe of net 3P reserves)
− 1,390 locations underlying current Marcellus Shale leasehold in West Virginia and Pennsylvania as of 9/30/2014
Expect to drill and complete a Utica Shale dry gas well in West Virginia in 2015
Other operators have reported strong Utica Shale dry gas results including the following wells:
ChesapeakeHubbard BRK #3H
3,550’ LateralIP 11.1 MMcf/d
HessPorterfield 1H-17
5,000’ LateralIP 17.2 MMcf/d
GulfportIrons #1-4H
5,714’ LateralIP 30.3 MMcf/d
EclipseTippens #6H5,858’ Lateral
IP 23.2 MMcf/d
Magnum HunterStalder #3UH5,050’ Lateral
IP 32.5 MMcf/d
AnteroPlanned
Utica Well2015Well Operator
IP(MMcf/d)
Lateral Length (Ft)
Stewart Winland 1300U Magnum Hunter 46.5 5,289
Bigfoot 9H Rice Energy 41.7 6,957
Stalder #3UH Magnum Hunter 32.5 5,050
Irons #1-4H Gulfport 30.3 5,714
Simms U-5H Gastar 29.4 4,447
Conner 6H Chevron 25.0 6,451
Tippens #6H Eclipse 23.2 5,858
Porterfield 1H-17 Hess 17.2 5,000
Hubbard BRK #3H Chesapeake 11.1 3,550
1. Antero acreage position reflects tax districts in which greater than 3,000 net acres are held in OH, WV and PA.
Magnum HunterStewart Winland 1300U
5,289’ LateralIP 46.5 MMcf/d
RangeUtica Well
Drilling
ChevronConner 6H
6,451’ LateralIP 25.0 MMcf/d
GastarSimms U-5H4,447’ Lateral
IP 29.4 MMcf/d
Utica Shale Dry Gas Acreage in OH/WV/PA(1)
RiceBigfoot 9H
6,957’ LateralIP 41.7 MMcf/d
Utica Shale Dry GasWV/PA
Net Resource9.5 Tcf
1,390 Gross Locations154,000 Net Acres
Utica Shale Dry GasOhio
3P Reserves1.9 Tcf
226 Gross Locations29,000 Net Acres
Utica Shale Dry GasTotal OH/WV/PA
Net Resource11.4 Tcf
1,616 Gross Locations183,000 Net Acres
Stone EnergyUtica Well
Drilling
ChesapeakeUtica Well
Drilling
Needed to make up for base declines in conventional and GOM production
? ??
3,000 Antero Drilling Locations
Perm
ian
Nio
brar
a
Gra
nite
Was
h
Bar
nett
Hay
nesv
ille
U.S. INCREMENTAL GAS SUPPLY BREAK-EVEN PRICE CURVE(1)
32
Low cost, liquids-rich Utica and Marcellus Shales will remain attractive in most commodity price environments
Utica Shale
SW (Rich) Marcellus
Shale
1. Source: Credit Suisse report dated January 2014 – Break even price for 15% after tax rate-of-return; assumes $90.00/Bbl WTI
NE (Dry) Marcellus
ShaleEagle Ford
Shale
MARCELLUS & UTICA – ADVANTAGED ECONOMICS
CAUTIONARY NOTE
The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserve estimates (collectively, “3P”). Antero has provided internally generated estimates for proved, probable and possible reserves in this presentation in accordance with SEC guidelines and definitions, which have been audited by Antero’s third-party engineers. Unless otherwise noted, reserve estimates as of June 30, 2014 assume ethane rejection and strip pricing.
Actual quantities that may be ultimately recovered from Antero’s interests may differ substantially from the estimates in this presentation. Factors affecting ultimate recovery include the scope of Antero’s ongoing drilling program, which will be directly affected by commodity prices, the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors, and actual drilling results, including geological and mechanical factors affecting recovery rates.
In this presentation:
• “3P reserves” refer to Antero’s estimated aggregate proved, probable and possible reserves as of June 30, 2014. The SEC prohibits companies from aggregating proved, probable and possible reserves in filings with the SEC due to the different levels of certainty associated with each reserve category.
• “EUR,” or “Estimated Ultimate Recovery,” refers to Antero’s internal estimates of per well hydrocarbon quantities that may bepotentially recovered from a hypothetical future well completed as a producer in the area. These quantities do not necessarily constitute or represent reserves within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or the SEC’s oil and natural gas disclosure rules.
• “Condensate” refers to gas having a heat content between 1250 BTU and 1300 BTU in the Utica Shale.
• “Highly-rich gas/condensate” refers to gas having a heat content between 1275 BTU and 1350 BTU in the Marcellus Shale and 1225 BTU and 1250 BTU in the Utica Shale.
• “Highly-rich gas” refers to gas having a heat content between 1200 BTU and 1275 BTU in the Marcellus Shale and 1200 BTU and 1225 BTU in the Utica Shale.
• “Rich gas” refers to gas having a heat content of between 1100 BTU and 1200 BTU.
• “Dry gas” refers to gas containing insufficient quantities of hydrocarbons heavier than methane to allow their commercial extraction or to require their removal in order to render the gas suitable for fuel use.
33
Regarding Hydrocarbon Quantities