AM's Q4 results beat my forecast.
> Cash distributions increased by 29.4% to $1.715/unit in 2018
> Guidance is for distributions to increase another 28% to 30% in 2019 as DCF keeps increasing
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Antero Midstream Fourth Quarter 2018 Highlights Include:
•Net income increased to $249 million, or $1.10 per limited partner unit
•Adjusted net income increased by 63% to $143 million compared to the prior year quarter (non-GAAP measure) < Compares to my forecast of $121.5 million net income.
•Adjusted EBITDA increased by 36% to $194 million compared to the prior year quarter (non-GAAP measure)
•Distributable Cash Flow increased by 43% to $167 million resulting in DCF coverage of 1.3x (non-GAAP measure)
•Distributions increased by 29% to $0.47 per unit compared to the prior year quarter and represented the Partnership's sixteenth consecutive distribution increase since the November 2014 IPO
Antero Midstream Full Year 2018 Highlights Include:
•Announced midstream simplification transaction where AMGP will convert to a C-Corp and acquire all outstanding AM common units in a stock and cash transaction resulting in the elimination of the IDRs, expected to close in March of 2019
•Net income increased to $586 million, or $2.37 per limited partner unit
•Adjusted net income increased by 47% to $485 million compared to the prior year (non-GAAP measure)
•Adjusted EBITDA increased by 36% to $717 million compared to the prior year (non-GAAP measure)
•Distributable Cash Flow increased by 42% to $596 million resulting in DCF coverage of 1.3x (non-GAAP measure)
•Debt to trailing twelve months Adjusted EBITDA was 2.3x at year-end 2018, with $1.0 billion of liquidity
Antero Midstream GP LP Fourth Quarter 2018 Highlights Include:
•Distributions increased to $0.164 per common share, a 119% increase compared to the prior year quarter and the sixth consecutive distribution increase since the May 2017 IPO
Commenting on the 2018 results and outlook for Antero Midstream, Paul Rady, Chairman and CEO said, "Antero Midstream delivered another successful year in 2018, achieving record gathering, compression, processing, fractionation, and fresh water delivery volumes. These record volumes drove a 36% year over year increase in Adjusted EBITDA and a 42% year-over-year increase in Distributable Cash Flow, resulting in strong DCF coverage of 1.3x."
Mr. Rady further added, "We also had a successful year in terms of infrastructure buildout, adding 760 MMcf/d of compression capacity and 600 MMcf/d of processing capacity, respectively. The significant capacity and throughput growth during the fourth quarter provides tremendous momentum to deliver on our 2019 organic infrastructure plan, in turn supporting Antero Resources' development."
Antero Midstream (AM) Q4 Results Update - Feb 16
Antero Midstream (AM) Q4 Results Update - Feb 16
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Antero Midstream (AM) Q4 Results Update - Feb 16
Conversion to a C-Corp
Antero Midstream and AMGP previously announced that AMGP's Registration Statement on Form S-4 relating to the simplification transaction between the two companies and certain of their affiliates has become effective under the Securities Act of 1933 as of January 30, 2019. AMGP and Antero Midstream have each filed a definitive proxy statement with the U.S. Securities and Exchange Commission ("SEC") for the separate special meetings of the AMGP shareholders and Antero Midstream unitholders to vote on the transaction on March 8, 2019. The special meeting of AMGP shareholders will be held on March 8, 2019, at 9:00 a.m. local time, at 1615 Wynkoop Street, Denver, Colorado 80202. The special meeting of Antero Midstream unitholders will be held on March 8, 2019, at 10:00 a.m. local time, at 1615 Wynkoop Street, Denver, Colorado 80202. All AMGP shareholders and Antero Midstream unitholders of record as of the close of business on January 11, 2019, which is the record date for the special meetings, will be entitled to vote the AMGP common shares and Antero Midstream common units, respectively, owned by them on the record date.
Under the terms of the documents governing the simplification transaction, each Antero Midstream unitholder, other than Antero Resources, has the opportunity to receive as consideration for each Antero Midstream common unit owned, at its election and subject to proration, one of (i) $3.415 in cash without interest and 1.6350 shares of New AM common stock, (ii) 1.6350 shares of New AM common stock plus an additional number of shares of New AM common stock equal to the quotient of (A) $3.415 and (B) the average of the 20-day volume-weighted average price per AMGP share prior to the Election Deadline (the "AMGP VWAP") or (iii) $3.415 in cash without interest plus an additional amount of cash without interest equal to the product of (A) 1.6350 and (B) the AMGP VWAP. In order for an election to be properly made and effective, American Stock Transfer & Trust Company, LLC (the exchange agent in connection with the transaction) must receive a completed and signed election form and I.R.S. Form W-9 (or Form W-8, as applicable) no later than 5:00 p.m., New York City time, on March 4, 2019 (the "Election Deadline").
Antero Midstream and AMGP previously announced that AMGP's Registration Statement on Form S-4 relating to the simplification transaction between the two companies and certain of their affiliates has become effective under the Securities Act of 1933 as of January 30, 2019. AMGP and Antero Midstream have each filed a definitive proxy statement with the U.S. Securities and Exchange Commission ("SEC") for the separate special meetings of the AMGP shareholders and Antero Midstream unitholders to vote on the transaction on March 8, 2019. The special meeting of AMGP shareholders will be held on March 8, 2019, at 9:00 a.m. local time, at 1615 Wynkoop Street, Denver, Colorado 80202. The special meeting of Antero Midstream unitholders will be held on March 8, 2019, at 10:00 a.m. local time, at 1615 Wynkoop Street, Denver, Colorado 80202. All AMGP shareholders and Antero Midstream unitholders of record as of the close of business on January 11, 2019, which is the record date for the special meetings, will be entitled to vote the AMGP common shares and Antero Midstream common units, respectively, owned by them on the record date.
Under the terms of the documents governing the simplification transaction, each Antero Midstream unitholder, other than Antero Resources, has the opportunity to receive as consideration for each Antero Midstream common unit owned, at its election and subject to proration, one of (i) $3.415 in cash without interest and 1.6350 shares of New AM common stock, (ii) 1.6350 shares of New AM common stock plus an additional number of shares of New AM common stock equal to the quotient of (A) $3.415 and (B) the average of the 20-day volume-weighted average price per AMGP share prior to the Election Deadline (the "AMGP VWAP") or (iii) $3.415 in cash without interest plus an additional amount of cash without interest equal to the product of (A) 1.6350 and (B) the AMGP VWAP. In order for an election to be properly made and effective, American Stock Transfer & Trust Company, LLC (the exchange agent in connection with the transaction) must receive a completed and signed election form and I.R.S. Form W-9 (or Form W-8, as applicable) no later than 5:00 p.m., New York City time, on March 4, 2019 (the "Election Deadline").
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Antero Midstream (AM) Q4 Results Update - Feb 16
Balance Sheet and Liquidity
As of December 31, 2018, Antero Midstream had $990 million drawn on its $2.0 billion bank credit facility, resulting in approximately $1.0 billion of liquidity. Antero Midstream's total debt and net debt to trailing twelve months Adjusted EBITDA was 2.3x as of December 31, 2018. For a reconciliation of net debt to total debt, the most comparable GAAP measure, please read "Non-GAAP Financial Measures."
Commenting on the balance sheet and credit strength, Michael Kennedy, CFO of Antero Midstream said, "Antero Midstream's organic growth investments continued to generate peer leading Distributable Cash Flow growth and resulted in 1.3x DCF coverage for the fourth quarter and full year 2018. In addition, Antero Midstream's strong balance sheet with debt to trailing twelve months Adjusted EBITDA of 2.3x at year-end 2018 positions it to deliver on its organic growth investment opportunity set without the need for external equity financing."
This is very important: Antero Resources does not have to issue more equity to keep growing. This is why I consider it a GROWTH & Income investment.
> Based on my forecast/valuation model and AM's guidance, the distributions in 2019 s/b approximately $2.20/unit for annual yield of ~8.4% based on the Feb. 15th closing price.
> AM's growth is primarily driven by the aggressive drilling program of Antero Resources (AR), but it also gathers and processes 3rd party production.
> After the "Simplification Transaction" (see note above), AM will no longer be publicly traded. AM will be a wholly owned subsidiary of AMGP.
As of December 31, 2018, Antero Midstream had $990 million drawn on its $2.0 billion bank credit facility, resulting in approximately $1.0 billion of liquidity. Antero Midstream's total debt and net debt to trailing twelve months Adjusted EBITDA was 2.3x as of December 31, 2018. For a reconciliation of net debt to total debt, the most comparable GAAP measure, please read "Non-GAAP Financial Measures."
Commenting on the balance sheet and credit strength, Michael Kennedy, CFO of Antero Midstream said, "Antero Midstream's organic growth investments continued to generate peer leading Distributable Cash Flow growth and resulted in 1.3x DCF coverage for the fourth quarter and full year 2018. In addition, Antero Midstream's strong balance sheet with debt to trailing twelve months Adjusted EBITDA of 2.3x at year-end 2018 positions it to deliver on its organic growth investment opportunity set without the need for external equity financing."
This is very important: Antero Resources does not have to issue more equity to keep growing. This is why I consider it a GROWTH & Income investment.
> Based on my forecast/valuation model and AM's guidance, the distributions in 2019 s/b approximately $2.20/unit for annual yield of ~8.4% based on the Feb. 15th closing price.
> AM's growth is primarily driven by the aggressive drilling program of Antero Resources (AR), but it also gathers and processes 3rd party production.
> After the "Simplification Transaction" (see note above), AM will no longer be publicly traded. AM will be a wholly owned subsidiary of AMGP.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Antero Midstream (AM) Q4 Results Update - Feb 16
NONE of the forecasts submitted to Reuters for AM have been updated since mid-October (when the company announced the "Simplification Transaction").
So ... I will not be showing First Call's forecasts for revenue, EPS and CFPS on my forecast/valuation model for AM.
AMGP closed at $13.93/share on Feb. 15
Justin Jenkins at Raymond James is the only analyst that has submitted a recent report to Reuters. He rates AMGP a BUY with a price target of $19.00/share. A few days ago, Stifel sent me a note saying their valuation of AMGP is $16.00/share.
I have updated my forecast/valuation model for AM and posted it to the EPG website. My valuation is $38.00/unit, which compares to AM's closing price of $26.11/unit.
When the Simplification Transaction closes, AM unit holders will get $3.415 in cash + 1.635 shares of "New AM" (AMGP).
AMGP's share price of $13.93 X 1.635 = $22.775.
$3.415 + $22.775 = $26.19
So ... I will not be showing First Call's forecasts for revenue, EPS and CFPS on my forecast/valuation model for AM.
AMGP closed at $13.93/share on Feb. 15
Justin Jenkins at Raymond James is the only analyst that has submitted a recent report to Reuters. He rates AMGP a BUY with a price target of $19.00/share. A few days ago, Stifel sent me a note saying their valuation of AMGP is $16.00/share.
I have updated my forecast/valuation model for AM and posted it to the EPG website. My valuation is $38.00/unit, which compares to AM's closing price of $26.11/unit.
When the Simplification Transaction closes, AM unit holders will get $3.415 in cash + 1.635 shares of "New AM" (AMGP).
AMGP's share price of $13.93 X 1.635 = $22.775.
$3.415 + $22.775 = $26.19
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group