Antero Midstream Corporation

Greetings and welcome to the Ontario Midstream Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Brendan Kruger, Chief Financial Officer at Ontario Midstream. Please proceed.

Thank you, Operator. Thank you for joining us for Antero Midstream's third quarter 2021 investor conference call. We'll spend a few minutes going through the financial and operating highlights, and then we'll open it up for Q&A. I would also like to direct you to the homepage of our website at www.anteromidstream.com, where we have provided a separate earnings call presentation that will be reviewed during today's call. Before we start our comments, I would first like to remind you that during this call, Antero Management will make forward-looking statements. regarding factors that will impact the future performance of Antero Resources and Antero Midstream and are subject to a number of risks and uncertainties, many of which are beyond Antero's control. Actual outcomes and results could materially differ from what is expressed, implied, or forecast in such statements. Today's call may also contain certain non-GAAP financial measures. Please refer to our earnings press release for important disclosures regarding such measures. including reconciliations to the most comparable GAAP financial measures. Joining me on the call today are Paul Rady, Chairman and CEO of Antero Resources and Antero Midstream, and Michael Kennedy, CFO of Antero Resources and Director at Antero Midstream. With that, I'll turn the call over to Paul. Thanks, Brendan.

I'll start on slide number three entitled Expansion Projects, Supporting the Drilling Partnership. which illustrates the progress on our midstream build-out supporting the AR and QL Partners drilling partnership. First, as shown on the bottom left portion of the page, we placed the SmithBerg 1 processing plant online in early July, adding 200 million cubic feet a day of incremental joint venture processing capacity. This brings the joint venture's total processing capacity to 1.6 BCF per day. Consistent with our just-in-time capital investment philosophy, the joint venture processing capacity was 96% utilized during the third quarter. As you can see on the right-hand side of the page, we continue to build out our compression infrastructure in Tyler and Wetzel counties in West Virginia. These stations, which will be placed online in early 2022, will support the incremental throughput growth from the drilling partnership over the next several years. Looking ahead to 2022, we will continue the Marcellus midstream build-out, constructing a high-pressure pipeline from Tyler and Wetzel counties down to the Sherwood and Smithburg processing complex. In addition, we will continue building out our low-pressure gathering infrastructure in this area, where AR's development is focused over the next several years. Importantly, we are encouraged by the well-performance in the core Marcellus, where our build-out is focused, which drives stronger economics for Antero Midstream. Slide number four, entitled AR's Peer-Leading Premium Core Drilling Inventory, provides a summary of AR's premium inventory that underpins the AM capital investment and throughput growth over the next several years. At AR, we regularly perform a technical review of peer acreage positions, undrilled acreage, and location potential based on BTU regimes and EURs. Based on these results, we subdivided the core of the Southwest Marcellus and Ohio Utica into premium and Tier 2 subareas. We have identified approximately 5,200 premium undeveloped locations for industry in the Southwest Marcellus, which are located within the red outlines on the map. Of that, we estimate AR holds 1,865 of these premium locations, or 36% of the total, which includes more than 1,000 liquids-rich locations. In the Ohio Utica, we estimate roughly 1,100 premium undeveloped locations for industry, of which AR holds 210 locations, or 19% of the total, You can see that much of the acreage is covered up with existing Marcellus and Utica horizontal wellbores, which are the red lines on the map. Ultimately, we believe the concept of inventory fatigue and the limited number of premium drilling locations will be a critical distinction between E&P operators in Appalachia. Importantly for AM, its primary producer, AR has over 15 years of liquids-rich drilling inventory and a highly contiguous acreage position, which results in efficient midstream build-outs and peer-leading return on invested capital for AM. With that, I'll turn the call over to Brendan.