Antero Midstream Corporation (AM) 2024 Q1 法說會逐字稿

Greetings, and welcome to Antero Midstream First Quarter 2024 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

各位好，歡迎參加 Antero Midstream 2024 年第一季財報電話會議。（接線員指示）提醒各位，本次會議將被錄音。

I would now like to turn the conference over to your host, Justin Agnew, Vice President of Finance and Investor Relations.

現在我想把會議交給今天的主持人——財務與投資人關係副總裁 Justin Agnew。

Good morning. and thank you 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 have provided a separate earnings call presentation that will be reviewed during today's call.

各位早安，感謝各位參加 Antero Midstream 第一季投資人電話會議。我們將花幾分鐘回顧財務與營運重點，接著開放問答。我也想請各位前往我們網站首頁 www.anteromidstream.com，我們已提供一份獨立的財報電話會議簡報，將在今天的會議中進行說明。

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.

今天的電話會議也可能包含某些非 GAAP 財務衡量指標。請參閱我們的財報新聞稿，以取得關於此類指標的重要揭露資訊，包括與最具可比性的 GAAP 財務衡量指標之調節表。

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.

今天與我一同參與電話會議的有：Antero Resources 與 Antero Midstream 董事長、執行長兼總裁 Paul Rady；Antero Midstream 財務長 Brendan Krueger；以及 Antero Resources 財務長、同時擔任 Antero Midstream 董事的 Michael Kennedy。

With that, I'll turn the call over to Paul.

接下來，我把電話交給 Paul。

Thanks, Justin. Good morning, everyone. In my comments, I will discuss our capital projects completed in the first quarter, operational efficiencies in our water business and AR's peer-leading free cash flow breakeven costs. Brendan will then go through our first quarter results, which set multiple company records.

謝謝你，Justin。各位早安。在我的發言中，我將討論我們在第一季完成的資本專案、我們水務業務的營運效率，以及 AR 在同業中領先的自由現金流損益兩平成本。接著 Brendan 將說明我們第一季的業績表現，該季度創下多項公司紀錄。

Let's start with Slide #3 titled Continued Asset Optimization. At the end of the first quarter, we placed our Grays Peak, compressor station in service as depicted in the light blue outline on the north part of our map. The station was the second compressor station that utilize relocated compressor units, which resulted in approximately $15 million in capital savings. Grays Peak has an initial capacity of 160 million cubic feet a day and will support the future throughput growth in the liquids-rich corridor of AR's acreage position. Importantly, Grays Peak was placed online slightly ahead of schedule and on budget. This exemplifies our just-in-time capital investment philosophy and integrated planning with Antero Resources.

我們先從第 3 張投影片「持續資產最佳化」開始。第一季末，我們已將 Grays Peak 壓縮機站投入營運，如地圖北側淺藍色外框所示。該站是第二座採用搬遷之壓縮機組的壓縮機站，因而帶來約 1,500 萬美元的資本支出節省。Grays Peak 初始產能為每日 1.6 億立方英尺，將支援 AR 在其富液走廊（liquids-rich corridor）之礦權區未來的輸送量成長。重要的是，Grays Peak 上線時間略早於原定進度，且符合預算。這體現了我們即時（just-in-time）的資本投資理念，以及與 Antero Resources 的整合式規劃。

Looking ahead, you can see in the yellow highlighted box, where the future expansion of the Grays Peak station will occur. Our visibility into the future development of our dedicated acreage allows us to phase in capacity over time as needed. This maximizes our project rates of return and drives our peer-leading return on invested capital.

展望未來，各位可在黃色標示框中看到 Grays Peak 站未來擴建的位置。我們對專屬礦權區未來開發的能見度，使我們能依需求隨時間分階段導入產能。這可使我們的專案報酬率最大化，並推動我們同業領先的投入資本報酬率。

In addition to our capital efficiencies, we had significant operational efficiencies on the freshwater side of the business highlighted on Slide #4 titled, 2024 Completion Efficiencies. During the first quarter, Antero Midstream delivered 113,000 barrels per day of freshwater to AR, who was running 1.3 completion crews on average. The last time AM delivered a similar amount of water during the quarter, AR was running 2 completion crews on average. So this is a 35% improvement. As depicted on the left-hand side of the page, AR averaged 11.3 completion stages per day, which is a quarterly company record and a 44% increase compared to 2022.

除了資本效率之外，我們在業務的淡水端也取得顯著的營運效率提升，重點列於第 4 張投影片「2024 完井效率」。第一季，Antero Midstream 向 AR 供應每日 113,000 桶淡水，而 AR 平均運行 1.3 支完井作業隊。上一次 AM 在單季供應類似水量時，AR 平均運行 2 支完井作業隊。因此，這代表效率提升 35%。如頁面左側所示，AR 平均每日完成 11.3 個完井階段（completion stages），創下公司單季紀錄，且較 2022 年增加 44%。

This performance is partially due to AM's integrated freshwater delivery system. This system provides industry-leading water deliverability rates and eliminates the need for water trucks which significantly reduces congestion on our pad sites. In addition, an underappreciated aspect of our operations is the integrated planning between AR and AM. This starts with efficient pad design incorporating gathering and water lines and there's consistent communication between upstream and midstream teams and the elimination of nonproductive time. To put our planning cess into perspective, since AM acquired the water business almost a decade ago, we have had 0 missed completions with our freshwater delivery system, which is an outstanding achievement.

此表現部分歸功於 AM 的整合式淡水輸送系統。該系統提供業界領先的供水能力，並免除使用水車的需求，從而大幅降低我們井場平台（pad sites）的壅塞。此外，我們營運中一個常被低估的面向，是 AR 與 AM 之間的整合式規劃。這從高效率的井場平台設計開始，將集輸（gathering）與水管線納入設計，並透過上游與中游團隊的持續溝通，消除非生產時間。為了讓各位理解我們規劃流程的成效，自 AM 近十年前收購水務業務以來，我們的淡水輸送系統在完井作業上從未發生過 0 次延誤（missed completions），這是一項傑出的成就。

Adding to the development stability at AR is its premium natural gas price realizations highlighted on Slide 5 titled Not All Transport to the Gulf Coast is Equal. This map illustrates AR's firm transportation portfolio directly into the heart of the LNG corridor. With several new LNG facilities starting up over the next several years, we expect to see a widening spread between sales points near Henry Hub and sales points outside of the Tier 1 markets.

進一步支撐 AR 開發穩定性的，是其優異的天然氣實現價格，重點列於第 5 張投影片「並非所有通往墨西哥灣沿岸的運輸都相同」。此地圖展示 AR 的固定運輸（firm transportation）組合，直接通往 LNG 走廊的核心地帶。隨著未來幾年多座新 LNG 設施陸續投產，我們預期亨利樞紐（Henry Hub）附近的銷售點與 Tier 1 市場以外的銷售點之間的價差將擴大。

The blue callout box highlights a recent quote from a research commodity team that emphasizes this view. They believe sales points within 100 miles of Henry Hub could see prices above $5 per MMBtu, while sales points outside of that range comprised at $3 to $4 per MMBtu. Importantly, 75% of AR's firm transportation delivers gas to these Tier 1 markets, providing direct exposure to these premium-priced markets. this solidifies AM's position as the critical first-mile infrastructure to supply LNG across the globe.

藍色重點框引用了某研究機構商品研究團隊近期的觀點，強調了上述看法。他們認為，距離 Henry Hub 100 英里內的銷售點，價格可能高於每 MMBtu 5 美元；而在該範圍之外的銷售點，價格則可能落在每 MMBtu 3 至 4 美元。重要的是，AR 有 75% 的固定運輸將天然氣輸送至這些 Tier 1 市場，使其能直接受惠於這些高溢價市場。這也鞏固了 AM 作為關鍵「第一哩」基礎設施的地位，為全球 LNG 供應提供支援。

I'll finish my comments on Slide #6 titled AR has the lowest free cash flow breakevens. We previously put this slide out highlighting that AR's breakeven natural gas price was $2.27 on an unhedged basis. As you can see on the left-hand side of the page, AR generated approximately $10 million of unhedged free cash flow in the first quarter of 2024 when NYMEX gas averaged $2.24 per MMBtu. In combination, AR's capital efficiency, liquids pricing uplift and premium natural gas price realizations result in development stability that underpins AM's consistency. As a midstream provider, we desire to service producers with the lowest overall breakeven costs, and AR certainly meets that test.

我將以第 6 張投影片「AR 擁有最低的自由現金流損益兩平點」作結。我們先前曾發布此投影片，指出 AR 在未避險（unhedged）基礎下的天然氣損益兩平價格為 2.27 美元。如頁面左側所示，當 2024 年第一季 NYMEX 天然氣均價為每 MMBtu 2.24 美元時，AR 仍產生約 1,000 萬美元的未避險自由現金流。綜合而言，AR 的資本效率、液體（liquids）價格帶來的上行，以及優異的天然氣實現價格，共同帶來開發穩定性，並支撐 AM 的一致性。作為中游服務商，我們希望服務整體損益兩平成本最低的生產商，而 AR 顯然符合此一標準。

With that, I will turn the call over to Brendan.

接下來，我把電話交給 Brendan。

Thanks, Paul. I will begin my comments on Slide #7 titled First Quarter 2024 Highlights. The first quarter of 2024 was a record-breaking quarter, both financially and operationally. Antero Midstream's organic growth strategy delivered a 4% and 6% increase in gathering and processing volumes, respectively, compared to last year. We delivered double-digit EBITDA growth, combined with double-digit declines in capital year-over-year. The growing EBITDA and declining capital resulted in $182 million of free cash flow before dividends and $74 million of free cash flow after dividends, both of which were company records.

謝謝你，Paul。我將從第 7 張投影片「2024 年第一季重點」開始。2024 年第一季在財務與營運兩方面皆為破紀錄的一季。Antero Midstream 的有機成長策略，使集輸量與處理量分別較去年增加 4% 與 6%。我們實現 EBITDA 兩位數成長，同時資本支出年減亦達兩位數。EBITDA 成長與資本支出下降，使股利發放前自由現金流達 1.82 億美元、股利發放後自由現金流達 7,400 萬美元，兩者皆創公司紀錄。

All of this record free cash flow was utilized to reduce absolute debt during the quarter. In combination, our EBITDA growth and declining debt resulted in leverage declining to 3.1x and from 3.3x at year-end 2023. The strong first quarter results place us on track to achieve our full year 2024 guidance. Looking ahead to the second quarter, we expect modest throughput growth compared to the first quarter offset by lower expected fresh water delivery volumes as a result of AR reducing its completion crews to 1 in February, consistent with our full year guidance.

本季所有創紀錄的自由現金流皆用於降低絕對負債。綜合而言，我們的 EBITDA 成長與負債下降，使槓桿比率降至 3.1 倍，低於 2023 年底的 3.3 倍。第一季的強勁表現使我們有望達成 2024 年全年指引。展望第二季，我們預期相較第一季輸送量將溫和成長，但由於 AR 於 2 月將完井作業隊減至 1 支，且符合我們全年指引，預期淡水輸送量將較低，因而抵銷部分成長。

I'll finish my comments on Slide #8 titled Executing on Debt and Leverage Reduction Plan. This page illustrates AM's free cash flow after dividends and leverage since we announced our 3x leverage target on our fourth quarter 2022 earnings release. As you can see, after the initial outspend to fund the drilling partnership growth in the first half of 2022, we transitioned to generate consistent free cash flow after dividends. The first quarter represented the seventh consecutive quarter of generating free cash flow after dividends, which totaled almost $270 million on a cumulative basis. This has been used to reduce absolute debt and internally financed 2 highly accretive bolt-on acquisitions.

我將以第 8 張投影片「執行降債與降低槓桿計畫」作結。本頁展示自我們在 2022 年第四季財報新聞稿中宣布 3 倍槓桿目標以來，AM 的股利發放後自由現金流與槓桿走勢。如各位所見，在 2022 年上半年為資助鑽井合作夥伴成長而出現初期超支（outspend）之後，我們轉為持續產生股利發放後自由現金流。第一季為連續第七季產生股利發放後自由現金流，累計總額接近 2.7 億美元。這些資金已用於降低絕對負債，並以內部資金完成 2 項高度增益（highly accretive）的補強型併購（bolt-on acquisitions）。

In summary, our business continues to operate as efficiently as any midstream company in the industry and delivers consistent returns through commodity cycles. We are on track to achieve our 3x leverage target in the back half of 2024, which is almost 1.5 years ahead of our initial target laid out at the end of 2020. This positions AM to pursue incremental return of capital to shareholders.

總結而言，我們的業務持續以不亞於業界任何一家中游公司的效率運作，並能在商品循環中提供一致的報酬。我們有望在 2024 年下半年達成 3 倍槓桿目標，較我們在 2020 年底提出的初始目標提前近 1.5 年。這使 AM 得以進一步追求對股東的額外資本回饋。

With that, operator, we are ready to take questions.

那麼，接線員，我們已準備好開始提問。

(Operator Instructions) Our first question comes from Naomi Marfatia with UBS.

（接線員指示）我們的第一個問題來自 UBS 的 Naomi Marfatia。

Maybe to start, if you could touch on the theme of increased demand for power related to AI and data centers. Just curious on the opportunity set that AM has and if you've taken any steps to commercialize on this AI trend.

或許先從與 AI 與資料中心相關、帶動電力需求增加的主題談起。想請教 AM 在這方面有哪些機會集合（opportunity set），以及你們是否已採取任何步驟來將這股 AI 趨勢商業化？

So on the data center, I don't know if you caught the AR call, but we went through how much demand is coming from that in our basin, but also went through our firm transport portfolio to the Gulf Coast, and that's where we're going to be directing all of our gas. All competition is good. Gulf Coast, we think we'll get the premium for that. So that's where AR is focused. And of course, that would underpin AM's investments and allow AM's visibility into decades worth of development of this asset.

關於資料中心，我不確定你是否有聽到 AR 的電話會議，但我們已說明在我們盆地中有多少需求來自這一塊，也談到我們通往墨西哥灣沿岸的堅定運輸（firm transport）組合，而那正是我們將把所有天然氣導向的地方。所有競爭都是好事。對於墨西哥灣沿岸，我們認為我們會因此取得溢價。所以 AR 的重點就在那裡。當然，這也會支撐 AM 的投資，並讓 AM 對該資產未來數十年的開發具備能見度。

Maybe to switch gears to some ROE opportunities. AM did announce buyback authorization last quarter and indicated that buybacks to start hitting -- to start post hitting the 3x leverage target. Since we're almost there, how should we think about the timing of buybacks and capital allocation priorities between M&A and buybacks?

或許換個話題談一些 ROE 的機會。AM 上季宣布了庫藏股回購授權，並表示回購將在達到 3 倍槓桿目標之後開始啟動。由於我們幾乎已達標，應該如何看待回購的時點，以及在併購（M&A）與回購之間的資本配置優先順序？

Yes. Thanks for the question. This is Brendan. I think as we've talked about on past calls as well, I mean, we look at everything in terms of return and on overall capital. So as we approach this 3x leverage target, as we mentioned, second half of this year, we'll look to -- it will be positioned us well to buy back shares or pay down further debt or execute for the bolt-on acquisitions. We've got the $500 million program out there, as you mentioned, and we do see attractiveness in our shares still today. So as we sit here today, share buybacks would continue to make a lot of sense, but we'll certainly evaluate that as we as we hit that 3x target, hopefully, in the second half of this year.

是的，謝謝你的問題。我是 Brendan。我想如同我們在過去幾次電話會議中提到的，我們會以報酬率與整體資本回報的角度來看所有事情。當我們接近 3 倍槓桿目標時，如我們所說在今年下半年，我們將會——我們將處於有利位置來回購股票、或進一步償還債務、或執行補強型收購（bolt-on acquisitions）。如你所提，我們有一項 5 億美元的計畫，而且我們仍認為目前我們的股價具吸引力。因此以我們現在的狀況來看，股票回購仍然非常合理，但當我們達到 3 倍目標（希望在今年下半年）時，我們當然會再評估。

Our next question comes from John Mackay with Goldman Sachs.

我們的下一個問題來自高盛（Goldman Sachs）的 John Mackay。

Maybe we'll pick up that last one a little bit, maybe not to put words in your mouth, but it does -- it had sounded like the buyback was kind of clearly front of the line for capital allocation decisions. I just maybe looking for a clarification on the last comment there. Are you guys seeing maybe more bolt-on opportunities than you'd expected before that look a little more attractive? I guess just curious if that kind of stack has changed at all? Or maybe I'm just reading a little too much into your last comment there?

或許延續上一題再追問一下，也許不是要替你們說話，但聽起來回購在資本配置決策上似乎很明顯是排在最前面。我只是想釐清你剛才最後那段話。你們是否看到比先前預期更多、且看起來更具吸引力的補強型收購機會？我想了解這個排序是否有任何改變？或者只是我對你剛才的話解讀過度？

Yes. No, I mean, I think it's the same messaging we've been giving over the last several quarters, which is share buybacks as we sit here today, continue to make a lot of sense for further return of capital. To the extent we come across opportunities similar to past opportunities on the bolt-on where you've got high visibility into the assets, and we'll certainly look at those type of opportunities, but share buybacks do continue to make a lot of sense as we look at return of capital today.

是的。不，我的意思是，我認為這與我們過去幾季一直傳達的訊息相同：以我們目前的狀況來看，股票回購仍然非常合理，作為進一步回饋資本的方式。若我們遇到類似過去那種補強型機會——也就是對資產有高度能見度——我們當然會評估那類機會；但就目前回饋資本而言，股票回購仍然非常合理。

Okay. No, that's absolutely clear. Maybe just shifting gears. On the AR call, there was a comment around there's the 1 pad. I guess, in the third quarter that could push to the right or be deferred a little bit given where dry gas pricing is right now. Maybe if you could just kind of frame up for us what that could mean for AM volumes back half of the year? I imagine it's a relatively small impact, but maybe just tie that together for us.

好的，這非常清楚。那再換個話題。在 AR 的電話會議上，有提到第三季有一個 1 pad（井場平台）可能會因目前乾氣價格而往後推遲或稍微延後。可否請你們幫我們框架一下，這對 AM 下半年輸送量可能意味著什麼？我想影響應該相對不大，但能否幫我們把這點串起來？

Yes. This is Mike. It would not come on this year. So it would have no impact on AM volumes.

是的，我是 Mike。它今年不會上線，所以對 AM 的輸送量沒有影響。

Maybe just coming on the water side then?

那麼只是發生在水務那一側嗎？

Just on the water side.

是的，只在水務那一側。

Our next question comes from Zach Van Everen with TPH & Company.

我們的下一個問題來自 TPH & Company 的 Zach Van Everen。

Just a follow-up from the AR call, it sounds like they revised up their guidance kind of on the liquids-rich area a little bit. Does that just provide more confidence around your volume forecast of flat to slight growth or are you guys leaning more towards that slight growth kind of higher end of the volume guidance?

延續 AR 電話會議的追問，聽起來他們把液體富集區（liquids-rich area）的指引稍微上修。這是否只是讓你們對「持平到小幅成長」的量能預測更有信心？還是你們更傾向於量能指引中「小幅成長」的較高端？

No. I think AR was solely really driven by the liquid side of things. So no change on the AM front, just overall, I think, solidifies the guidance we put out there already.

不，我認為 AR 的上修主要完全是由液體端所驅動。因此 AM 這邊沒有變化；整體而言，我想只是進一步鞏固我們已經提出的指引。

Got you. That makes sense. And then it does look like your guys' JV frac is full. I know in previous calls, you mentioned there's plenty of capacity in the area on non-G&P fracs. Do you guys have to pay any third-party frac fees? And if so, would those show up just in direct OpEx under the G&P segment?

了解，這很合理。接著看起來你們的 JV 壓裂（frac）已滿載。我知道在先前的電話會議中，你們提到在該區域非 G&P 的壓裂仍有充足產能。你們是否需要支付任何第三方壓裂費用？如果有，這些費用是否會在 G&P 部門下以直接營運費用（OpEx）呈現？

Yes, we don't have any fees we're paying on that front, so nothing to note there.

是的，我們在那方面沒有支付任何費用，所以沒有需要特別說明的。

Our next question comes from Ned Baramov with Wells Fargo.

我們的下一個問題來自富國銀行（Wells Fargo）的 Ned Baramov。

One more on capital allocation, if I may. I caught the approximately $2 million repurchase of your 2026 senior notes. So could you maybe elaborate a little bit more on the decision to buy back debt in the first quarter and whether your capital allocation framework assumes further debt paydown this year?

如果可以的話，我再問一題關於資本配置。我注意到你們大約回購了 200 萬美元的 2026 年期優先票據。能否請你們更詳細說明第一季回購債務的決策，以及你們的資本配置架構是否假設今年會進一步償還債務？

Yes. No, good question. I mean we did the -- just to remind a little bit, we did issue some senior notes in January, paid off our revolver. If you look at our senior notes outstanding, just to the extent that it makes sense to repurchase notes versus having cash on the balance sheet, I think we'd certainly look to buy in bonds like you saw us do at the end of the quarter. But again, as we approach that 3x leverage target, then we'll look at further return of capital on the debt pay down.

是的，這是個好問題。我們確實——稍微提醒一下，我們在 1 月發行了一些優先票據，並償還了循環信貸（revolver）。如果你看我們未償還的優先票據，只要在回購票據相較於把現金留在資產負債表上更合理的情況下，我想我們肯定會考慮回購債券，就像你看到我們在季末所做的那樣。但同樣地，當我們接近 3 倍槓桿目標時，我們會再看進一步回饋資本，包括償還債務。

That makes sense. And then it seems you guys completed a small acquisition of gathering systems and other facilities in the first quarter, not a material number relative to overall spending, but still it would be great to get some additional details on that purchase?

了解。接著看起來你們在第一季完成了一筆小型收購，買入集輸系統（gathering systems）及其他設施；相對於整體支出不是重大金額，但仍希望能取得一些關於該筆收購的更多細節？

Yes, we did purchase -- it was a relatively actually sizable line, but just not much volume flowing through it. So we paid $2 million for a nice asset that gives a lot of optionality to further capital savings. I think you've seen us over the years reuse compressor units. And then through some of the bolt-on acquisitions, we've been able to save on future capital use. I think that this is a good way to think about it. It's an asset that doesn't have much volume flowing through. We picked it up at a very attractive price, and we think it could be very helpful in terms of future capital savings down the road. So we'll provide probably further details down the road on that, but attractive piece of infrastructure to pick up at a very low price.

是的，我們確實買了——其實那是一條相對相當可觀的管線，但只是目前流經的量不多。所以我們以 200 萬美元買到一項很好的資產，能提供很多選擇性，帶來進一步的資本節省。我想你們多年來也看到我們重複利用壓縮機組（compressor units）。而透過一些補強型收購，我們也能在未來資本使用上節省成本。我認為可以用這樣的方式來理解：這是一項目前流量不大的資產，我們以非常具吸引力的價格取得，並認為它在未來道路上的資本節省方面可能非常有幫助。之後我們可能會提供更多細節，但這是一項以非常低價格取得、相當有吸引力的基礎設施。

(Operator Instructions) There are no further questions at this time. I'd like to turn the call back over to Justin Agnew for brief closing comments.

（接線員指示）目前沒有其他問題。我想把電話會議交回給 Justin Agnew 做簡短的結語。

Thank you, operator, and thank you to everybody who joined today's call. Please feel free to reach out with any follow-up questions.

謝謝你，接線員，也謝謝今天加入電話會議的各位。如有任何後續問題，歡迎隨時與我們聯繫。

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

今天的電話會議到此結束。您現在可以掛斷線路，感謝您的參與。