AM

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mkarpoff
Posts: 809
Joined: Fri May 30, 2014 4:27 pm

AM

Post by mkarpoff »

Big div drop. Why do you think that is given the improving energy situation?
dan_s
Posts: 34467
Joined: Fri Apr 23, 2010 8:22 am

Re: AM

Post by dan_s »

The Board of Directors of Antero Midstream declared a cash dividend of $0.225 per share for the first quarter of 2021, or $0.90 per share on an annualized basis. This was previously announced on 2/17/2021.
For 2020 their dividends were $0.3075/qtr or $1.58 for the year.

The dividend will be payable on May 12, 2021 to stockholders of record as of April 28, 2021. This represents the 26th consecutive quarterly dividend or distribution paid since Antero Midstream Partners LP's initial public offering in November 2014. Antero Midstream did not repurchase any common shares during the first quarter of 2021. Antero Midstream had approximately $150 million of remaining share repurchase capacity under its $300 million authorized share repurchase program as of March 31, 2021.

From their 2/17/2021 press release

Paul Rady, Chairman and CEO said, "In a separate release, Antero Resources (AR) announced the formation of a drilling partnership through 2024 that is expected to result in incremental throughput and fresh water volume growth on Antero Midstream dedicated acreage. As a result, Antero Midstream is forecasting a 2021 capital budget of $240 to $260 million, reflecting approximately $65 million of incremental capital that has been accelerated into 2021 above the previous maintenance capital program. To fund this acceleration, Antero Midstream expects to reallocate a portion of its dividend payments to fund the associated infrastructure projects supporting the increased volumes and water usage anticipated due to the drilling partnership. This reallocation is expected to allow Antero Midstream to internally fund these attractive rate of return projects without adding leverage or total debt.

Glen Warren, President said, "Antero Resources announced that it expects the drilling partnership to result in incremental gross gas production that is estimated to add $400 million of incremental free cash flow to Antero Resources through 2025 assuming current strip prices. In addition, Antero Resources announced that it expects a decreasing leverage profile from the 3.1x at year-end 2020 to below 2-times by year-end 2021 assuming current strip prices. Similarly, we expect the drilling partnership to result in an incremental $200 million of free cash flow after dividends through 2025 for Antero Midstream and result in a declining leverage profile to 3-times or less over that period."

MY TAKE: A significant increase in processed volumes generated by AR's new partnership will allow AM to increase their dividends in the future. Internally funding the AM infrastructure growth needed to handle higher volumes, should be looked at favorably by the Wall Street Gang. A stronger balance sheet should increase the share price.

Antero Resources Drilling Partnership Announcement

In a separate release, Antero Resources (AR) announced the formation of a drilling partnership with QL Capital Partners ("QL"), an affiliate of Quantum Energy Partners. Antero Resources noted that it is uniquely positioned to bring on a drilling partner due to its unutilized firm transportation portfolio and deep liquids-rich inventory. Under the terms of the agreement, QL is expected to fund 20% of total development capital spending in 2021 and between 15% and 20% of total development capital on an annual basis from 2022 through 2024 in exchange for a proportionate working interest percentage in each well spud. In addition, QL will pay a drilling carry to Antero Resources if certain return thresholds are achieved. Assuming QL's full participation through 2024, the partnership will enable the drilling and completion of approximately 60 incremental wells relative to Antero's prior base case of maintenance level capital. The drilling partnership is effective immediately and includes all wells spud since January 1, 2021.

Based on Antero Resources' current development plan and commodity pricing, this plan is expected to result in approximately 5 incremental completions in 2021 and 60 additional completions from 2021 through 2024. The increase in gross gas production is expected to drive annual low single digit throughput growth at Antero Midstream in 2022 through 2025. In addition, the approximate 20% increase in wells completed over this time frame is expected to drive a proportionate increase in fresh water delivery volumes for the Company. The tables and outlook below illustrate the impact of QL's full participation in the drilling partnership from 2021 through 2024.
Dan Steffens
Energy Prospectus Group
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