Antero Midstream Corporation

Greetings, and welcome to the Intero Midstream First Quarter 2023 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. It is now my pleasure to introduce your host, Justin Agnew, Director of Finance and Investor Relations. Thank you. You may begin.

Good morning, and thanks for joining us for Antero Midstream's first quarter 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've provided a separate earnings call presentation that will be reviewed during today's call. 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 measure. Joining me on the call today are Paul Rady, Chairman, CEO, and President of Antero Resources and Antero Midstream, Brendan Krueger, CFO of Antero Midstream, and Michael Kennedy, CFO of Antero Resources and Director of Antero Midstream. With that, I'll turn the call over to Paul.

Thanks, Justin. I will start my comments on slide number three, titled Increasing Lateral Lengths, Enhancing AM Economics. The left-hand side of the page illustrates the increase in lateral lengths of completed wells over the last several years. In 2023, the average lateral length for completed wells is expected to be approximately 13,500 feet. During the first quarter, longer laterals and higher completion stages per day drove a 41% increase in freshwater delivery volumes year over year. This was despite servicing only two additional wells year over year. As shown on the right-hand side of the page, longer laterals improved AM economics by approximately $1.7 million per well for every 1,000 feet of incremental lateral, given that there is no additional well-connect capital required. Since 2017, lateral lengths have increased by approximately 4,000 feet on average. This has resulted in nearly $7 million of incremental revenue per well, assuming an EUR of 2.0 BCF per 1,000 feet. The longer laterals, in addition to incremental locations, are a result of AR's consistent organic leasing program. During the first quarter, AR invested $72 million on organic leasehold, adding the equivalent of over 50 drilling locations. With AM servicing 23 well completions during the first quarter, These organic leasing efforts replenished the wells completed and added 27 more locations. Now, let's move to slide number four, titled Operational Performance at AR. This slide highlights the operational efforts at AR that resulted in record performance at AM. Supported by AM's water business, AR averaged 11 completion stages per day, which is approximately 40% higher than the 2022 average of eight stages per day. In addition, AR set a new daily company record of 16 stages per day from one completion crew, which is an incredible achievement. Importantly, we continue to be very encouraged by the well productivity we are seeing on AM dedicated acreage. This operational performance and well productivity help to drive record throughput and earnings at AM well ahead of expectations. These achievements are only possible with AM's integrated water system. which has not missed or caused a delay in completions since AM acquired the business in 2015. Lastly, I want to highlight AR's differentiated liquid strategy on slide number five. For the last decade, AR's strategy has been to develop low-cost, liquids-rich locations in Appalachia and avoid local bases. As depicted on the top half of the page, AR sells 100% of its gas outside of Appalachia and approximately 75% of its gas to the LNG fairway. This allows AR to avoid volatile local basis in Appalachia, particularly in the shoulder season. The bottom half of the slide illustrates the liquids contribution to overall revenues. As a result of its diversified product mix, almost half of AR's revenues are from NGLs and oil. Given the relative strength in liquids prices relative to gas, this provides further support for AR's development program. While we expect this downward cycle in gas prices to be shorter than prior cycles, these two characteristics insulate AM from any significant development risk. In summary, Our operational performance during the first quarter allowed us to generate record results and increase our guidance ranges for the year. With that, I will turn the call over to Brendan Kruger. Brendan?