Antero Midstream (AM) Update - Aug 5

[dan_s]

I just posted an updated forecast/valuation model for AM to the EPG website.

AM should be generating over $150 million free cash flow from operations this year and their increasing DCF should be enough to cover their increased quarterly results.

AM converted to a C-Corp and "de-consolidated" from AR in the first quarter. The GAAP accounting rules for the de-consolidation make their 10-Q look like it is a new company. On my forecast, Q1 is "proforma" for the stand alone company, so it doesn't tie to the year-to-date Income Statement and Cash Flow Statement in the 10-Q.

[k1f]

The numbers in your AM update look convincing and attractive. What do you suppose
the market's seeing that makes them keep crushing AM, even today?

[dan_s]

There is no love for any of the energy sector companies these days.

AM's future is almost entirely based on AR's growth, which s/b steady because so much of their production is hedged at good prices. We will be sending out updated profiles on AR and AM this week. They are sitting here waiting on my review. One of our top MBAs is assigned to AR and AM.