Antero Midstream Corporation

Greetings. Welcome to the Ontario Midstream second quarter 2024 earnings call. At this time all participants are in listen only mode. The question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time we'll now turn the conference over to Justin Agnew, Vice President of Finance. Justin, you may now begin your presentation.

Thanks, Operator, and good morning. Thank you for joining us for Antero Midstream's second 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 have 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 measures. 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. Good morning, everyone. In my comments, I will discuss our bolt-on acquisition and peer-leading break-evens at AR. I'm referring to Antero Resources. Brendan will then walk through our quarterly results and recent credit improvements. Let's start on slide number three, titled Marcellus bolt-on acquisition highlights. During the second quarter, we closed on a $70 million acquisition from Summit Midstream. The acquisition included two compressor stations with 100 million cubic feet a day of capacity and approximately 50 miles of high pressure pipelines in the Marcellus shale, highlighted in purple on the map. These highly strategic assets are already connected to Antero Midstream's infrastructure, and support the future development by Antero Resources, which is now an investment-grade counterparty. In line with our previous bolt-on acquisitions, all of the throughput volume on these assets is from Antero Resources production. Most importantly, this transaction was immediately accretive to free cash flow and keeps us on track to achieve our leverage target of 3.0 times in the back half of this year. Now let's move on to slide number four, titled AR Has the Lowest Free Cash Flow Breakevens. The left-hand side of the page illustrates AR's free cash flow breakeven gas price of $2.20 per MCF. This peer-leading breakeven is due to several factors, including strong well performance, low maintenance capital requirements, and high exposure to liquids prices. In particular, AR's exposure to international prices and widening ARBs have resulted in strong C3-plus NGL pricing, which provided a $1.10 per mcfe uplift to the equivalent price realizations in the first half of 2024. These low break-even prices led to a peer-leading unhedged free cash flow profile, which is shown on the right-hand side of the page. Despite NYMEX gas prices of only $2.07 in the first half of 2024, AR's unhedged outspend has only been $59 million, well below the rest of the natural gas peer group. These results, combined with AR's balance sheet strength, were the primary drivers of the upgrade to investment grade for AR. In summary, we continue to expand our asset base at AM to support the strongest producer with the lowest gas, natural gas break-even prices in the U.S. And with that, I will turn the call over to Brendan.