DENVER, Colo., Jan. 20, 2015 /PRNewswire/ -- Antero Midstream
Partners LP (NYSE: AM) ("Antero Midstream" or the
"Partnership") today announced its 2015 guidance and status of
additional pending growth opportunities.
- Adjusted EBITDA for 2015 is estimated to
be $150 to $160 million
- Distributable Cash Flow is estimated to be
$135 to $145 million with a 1.1x to
1.2x DCF coverage ratio
- Distribution growth is expected to be 28%
to 30% year-over-year in the fourth quarter of 2015
- Capital budget for 2015 is $425 to $450 million, including $415 to $435 million in expansion capital and
$10 to $15 million in maintenance
capital
2015 Guidance
Antero Midstream is estimating adjusted EBITDA for 2015 of
$150 to $160 million and
Distributable Cash Flow ("DCF") for 2015 of $135 to $145 million. Additionally, Antero
Midstream expects to pay a distribution in the fourth quarter of
2015 that is 28% to 30% higher than the minimum quarterly
distribution ("MQD") of $0.17 per
unit ($0.68/unit annualized) while
maintaining an average DCF coverage ratio of 1.1x to 1.2x over the
course of the year. Antero Midstream's 2015 guidance excludes
any impact from potential third party volumes and transactions or
the potential acquisition of fresh water distribution assets from
Antero Resources Corporation ("Antero Resources") pursuant to the
exercise of Antero Midstream's option.
|
|
Full Year
2015
|
|
|
Low
|
|
High
|
Adjusted EBITDA
($MMs)
|
|
$150
|
-
|
$160
|
Distributable Cash
Flow ($MMs)
|
|
$135
|
-
|
$145
|
Year-Over-Year
Distribution Growth(1)
|
|
28%
|
-
|
30%
|
|
|
|
|
|
1) Year-over-year
distribution growth reflects the expected distribution in the
fourth quarter of 2015 vs. the minimum quarterly distribution
("MQD") of $0.17/unit (not full year 2015 distributions vs. the
annualized MQD) 2015 Guidance
|
2015 Capital Budget
During 2015, Antero Midstream plans to expand its existing
Marcellus and Utica Shale gathering and compression systems to
accommodate Antero Resources' development plans. Antero
Resources announced its 2015 drilling and completion capital budget
of $1.6 billion and guidance today in
a separate news release, which can be found at
www.anteroresources.com.
The Partnership expects to invest $415 to
$435 million and $10 to $15
million in expansion and maintenance capital, respectively,
resulting in a total Antero Midstream capital budget of
$425 to $450 million in 2015.
This capital budget includes $250 to $260
million on gathering infrastructure, which will result in 44
miles and 20 miles of additional low pressure and high pressure
gathering pipelines, respectively, in both the Marcellus and Utica
Shale plays combined. Additionally, the budget includes the
construction or expansion of five compressor stations, which will
add 545 MMcf/d of additional compression capacity in 2015. At
year-end 2015, Antero Midstream expects to have 180 miles of low
pressure gathering lines, 117 miles of high pressure gathering
lines, and 920 MMcf/d of compression capacity in service.
As of December 31, 2014, Antero
Midstream had $230 million of cash on
its balance sheet and a fully undrawn $1.0
billion credit facility. Antero Midstream expects to
fund all 2015 expansion capital expenditures, excluding potential
third party transactions or the potential acquisition of fresh
water distribution assets from Antero Resources, with the cash on
its balance sheet and drawings under its credit facility.
Below is a summary of the 2015 capital budget, by category, as
well as a comparison to the $650
million 2014 capital budget.
|
|
Year Ended
December 31,
|
Capital Budget
Comparison ($MMs)
|
|
2014
|
|
2015
|
%
Change
|
|
|
|
|
|
|
Low Pressure
Gathering
|
|
$290
|
|
$165 –
$170
|
(42)%
|
High Pressure
Gathering
|
|
$180
|
|
$85 – $90
|
(51)%
|
Compression
|
|
$160
|
|
$160 –
$165
|
2%
|
Condensate
Gathering
|
|
$15
|
|
$5 – $10
|
(50)%
|
Maintenance
Capital
|
|
$5
|
|
$10 – $15
|
150%
|
Total Antero
Midstream Capital Budget
|
|
$650
|
|
$425 –
$450
|
(32)%
|
Fresh Water Distribution Update
Upon completion of the Antero Midstream initial public offering,
Antero Resources granted Antero Midstream the option to purchase
its fresh water distribution assets at fair market value. If
Antero Midstream purchases Antero Resources' fresh water
distribution assets, it will enter into a 20-year fresh water
distribution agreement covering all of Antero Resources' areas of
operations in West Virginia,
Ohio, and Pennsylvania, and any future areas of
operation.
As of today, Antero Midstream has not received a Private Letter
Ruling ("PLR") from the Internal Revenue Service ("IRS") on whether
income from fresh water distribution services is qualifying income
for federal income tax purposes. Should Antero Midstream
receive a PLR from the IRS, Antero Midstream expects to exercise
its option to purchase the fresh water distribution assets at fair
market value, subject to required analysis and approvals. If
Antero Midstream exercises its option, 2015 guidance, including
distribution growth expectations, will be re-evaluated and
disclosed at a later date.
Regional Pipelines Update
Antero Midstream has elected not to exercise its option to
invest in the ET Rover Pipeline due to a large inventory of
expansion projects competing for capital.
Additionally, Antero Midstream has the right to participate for
up to a 15% non-operating equity interest in a 50-mile regional
gathering system in which Antero Resources is an anchor shipper.
The option expires six months following the date on which the
regional gathering system is placed into service, which is
currently scheduled to occur in the fourth quarter of 2015.
Antero Midstream has not yet elected to participate in this
project.
Non-GAAP Disclosures
As used in this news release, adjusted EBITDA means net income
plus interest expense, depreciation and amortization expense,
income tax expense (if applicable), non-cash long-term compensation
expense and other non-cash adjustments. As used in this news
release, distributable cash flow means adjusted EBITDA less
interest expense and ongoing 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, but not
all, 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
companies in its industry, the Partnership's definition of adjusted
EBITDA and distributable cash flow may not be comparable to
similarly titled measures of other companies, thereby diminishing
their utility.
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 projections 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.
Nothing in this press release is intended to constitute guidance
with regard to Antero Resources.
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 the
Partnership's control, related to the gathering and compression
business. These risks include, but are not limited to, changes to
business plans as circumstances warrant, general market conditions,
Antero Resources' drilling and development plan, commodity price
volatility, inflation, environmental risks, regulatory changes and
the uncertainty regarding future operating results.
For more information, contact Michael
Kennedy – VP Finance, at (303) 357-6782 or
mkennedy@anteroresources.com.
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SOURCE Antero Midstream Partners LP