管理層發言
Greetings, and welcome to the Antero Midstream Corporation Second Quarter 2026 Earnings Conference Call. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Dan Katzenberg, Vice President, Investor Relations. Please go ahead.
Thank you for joining us for Antero Midstream's Second Quarter Investor Conference Call. We will spend a few minutes going through the financial and operating highlights, and then we will open it up for Q&A. I would also like to direct you to the homepage of our website at anteromidstream.com, where we have provided a separate earnings call presentation that will be reviewed during today's call. Today's call may contain certain non-GAAP financial measures. Please refer to the earnings press release for important disclosures regarding such measures. Joining me on the call today are Michael Kennedy, CEO and President of Antero Midstream; Justin Agnew, CFO of Antero Midstream; and Benny Krueger, CFO of Antero Resources. With that, I will turn the call over to Mike.
Thanks, Dan. Good morning, everyone. I'll start my comments on Slide 3. Last year has been an exciting year for growth in Appalachia and, more importantly, Antero Midstream. During the second quarter, we gathered over 4.1 Bcf per day of gas, which was almost a 20% increase year-over-year. This growth was driven by the successful integration of the HG Midstream assets. This increased scale, premier footprint and strong balance sheet positions Antero Midstream to capture the abundant opportunities that are beginning to materialize in the region. To this point, we've seen an acceleration of new gas-fired power generation project announcements and supply deals, including a 2-gigawatt combined cycle power plant in Doddridge County, West Virginia, accessed by AM's joint venture pipeline. We expect this trend to continue as final investment decisions and construction startups accelerate, providing increased visibility into the Appalachian demand growth story. Looking ahead, we are positioning our infrastructure to support the significant demand growth over the next several years. This starts with beginning construction on our first intrastate regional pipeline called East Side Express. This large-diameter east-west pipeline will enhance the regional connectivity of our dry gas gathering system with several downstream market outlets. We plan to phase in this project over the next several years as new market opportunities arise with the objective of increasing optionality and supporting low-cost dry gas growth. As the industrial builder in the state of West Virginia that gathers half of the gas produced in the state, we view this project as step one in positioning Antero Midstream to capture the incremental production needed to fulfill the visible demand growth. In our view, this production growth will have to come from high-quality investment-grade producers with multi-decade inventories like Antero Resources. In addition to this project, the opportunity set ahead of Antero Midstream is larger than ever. In aggregate, we are evaluating several billion dollars of infrastructure opportunities within the region and we'll be selective with projects that are near term, actionable and accretive to our free cash flow and generate attractive rates of return. Before turning the call over to Justin, I wanted to briefly touch on the early results we are seeing on our first return to the dry gas Marcellus in over a decade. As you can see on Slide 4, EURs on our revisit were over 60% higher than offset wells completed the last time we were actively developing the area. This highlights the productivity improvements from enhanced completion designs and validates the decades of underlying resource that underpins the growth outlook at Antero Midstream. With that, I'll turn the call over to Justin.
Thanks, Mike. I'll start with our second quarter highlights on Slide 5. The second quarter represents the first full quarter of contribution from the recently acquired HG assets, which have been successfully integrated. Adjusted EBITDA for the second quarter was a company record $289 million, which was a 2% increase year-over-year, driven by an increase in gathering volumes. Looking ahead to the third quarter, we expect high single-digit sequential EBITDA growth in Q3, driven by increased volumes, which keeps us on track to achieve our full year EBITDA guidance. Capital invested during the quarter was $47 million, which helped to generate $80 million of free cash flow after dividends. This quarter marks the 12th consecutive quarter of generating free cash flow after dividends, highlighting the consistency and durability of cash flows over the last three years. I'll conclude my prepared remarks on Slide 6, which highlights our pro forma balance sheet and maturity schedule. In July, we received over $370 million of damages and interest from Veolia. Pro forma for these proceeds, our leverage was 2.8x as of June 30, below our 3x target and well ahead of schedule. Excess cash on hand and availability under our undrawn credit facility positioned us to call our nearest term 2028 maturity at par. As a result, we have no near-term maturities, and we have converted that debt into lower-cost prepayable debt on our credit facility while maintaining significant liquidity. This financial flexibility is critical in today's environment as we position Antero Midstream to execute on the large opportunity that Mike referenced in his remarks. This flexibility and project opportunity set, in addition to our organic growth strategy, position us well to continue delivering shareholder value over the long term and enhance our return of capital to shareholders. With that, operator, we are ready to open up for Q&A.
分析師問答
Our first question today is coming from John Mackay from Goldman Sachs.
Let's start on East Side Express. Just wondering if there's a little more you can share with us in terms of CapEx expectations and the contracting side. Is this Antero Resources underwriting? Are you looking to get customers on the demand side to underwrite? Maybe just walk us through the spending and the return profile.
Yes, it's really Antero Resources underwriting, but it's $200 million to $300 million over the next two to three years. So I think about kind of $100 million each year. I think it has seven interconnects with long-haul pipelines. Big pipe, 1.5 to 2 Bcf a day. So there will be opportunities, but solely underwritten by Antero Resources and its development plans, but with optionality to get third-party business and connect with all those different pipes.
That's helpful. And then maybe just looking broadly, you mentioned the several billion dollars of opportunities. Maybe just walk us through some of the general buckets that could include. Is there anything in there that could kind of dovetail with some of the cost saving initiatives that Antero Resources has been talking about? Or should we kind of think about this as pretty separate?
Yes. No, I think you've heard about all the different power plant construction and data center construction in West Virginia. That's capturing that from a midstream perspective: building these types of regional pipelines or laterals off of existing pipelines to those types of projects. I referenced it on the Antero Resources call, but a decade ago, a good example is the Stonewall pipeline. We had to farm that out. We didn't have the ability to build that internally, whether from capital or expertise. Now that's not the case. We are the builder in this area of the world. We have one million acres dedicated to us from Antero Resources. We have all these demand projects and power plants within that acreage or close to it. So we will be building those pipelines and laterals to those types of projects within the state of West Virginia.
Appreciate that. And maybe just a clarification. Is there a kind of time frame on that that you can throw out there?
No, this is our first one, the East Side Express. So that's over the next two to three years in the '28–'29 time frame. We're hopeful to announce more in the near term.
Next question is coming from Jeremy Tonet from JPMorgan.
Just wanted to peel back that several billion of CapEx opportunities that you said there. And it sounds like some of this could be servicing third parties beyond Antero Resources here. Just wondering that part of the business, how much opportunity you see to grow as far as servicing other producers or just in general, moving beyond what Antero Resources provides?
Yes. I'm looking at a project backlog right now — there's 15 projects that generally make that up, all within the state of West Virginia. So that's what we're looking at. Antero Midstream could be involved solely or, more probably probability-wise, with Antero Resources' gas. So we're way more comfortable with Antero Resources as a supplier of that. Antero Resources, of course, we know exactly when they drill wells and where the gas goes and are very confident in that throughput. So most likely associated with Antero Resources, but there are 15 projects on this list I'm looking at right now, and Antero Resources is probably half of them.
Okay. Got it. And then just pivoting towards water here. Just wondering what opportunities on the produced water beneficial reuse side you might see there. Given disposal costs are much higher in the Northeast versus Texas, does that create more incentive and economic benefit to recycling here? Just wondering any updates there?
Yes. For Antero Resources, it's terrific to have a closed-loop water system that is kind of cost-plus 13% versus the disposal cost that you referenced. That's great for Antero Resources. Also great for Antero Midstream because that closed-loop system is the fresh water distribution where it gets nice returns both from a fresh water distribution and also from a produced water disposal and reuse case. So really a benefit to both parties. It also allows Antero Resources to complete in that 14–16 stages range and not have water be a logistics issue. So very beneficial to both. We're connecting the HG system as we speak. That will be what's responsible, and it could be more than this, but what we've talked about on the high single-digit EBITDA growth for '27, that's just connecting the water systems to get the water down to the HG area. So that will benefit us going forward into '27 with the EBITDA growth on top of what we had this year.
Got it. That's very helpful there. And apologies if I missed the details on the Antero Resources call. But with regards to power generation investment, the governor has a 50 by 50 goal. So clearly, a lot of appetite in the state to develop new generation there. Just wondering Antero's appetite to more fully embrace that build-out going further downstream, what have you? Any thoughts on that side?
Yes, we fully embrace that. We're the only investment-grade producer in West Virginia that's focused solely on West Virginia. We are the midstream builder. We've built everything up here over the last decade. So you combine those two, and we produce about half of the state's gas. So we would be the logical entity to benefit from that initiative the governor has.
Next question is coming from Sunil Sibal from Seaport Global.
Most of my questions have been hit, but I just had one clarification with regard to the opportunity to contract for the gas to ultimate consumers. So I was curious when you're talking for those contracts, are you contracting with the power producers in the region? Or are you more focused on contracting with the data center entities per se?
It's all of the above, both. We're building the East Side Express knowing Antero Resources' development plans and where the interconnects are and just the opportunity set in front of us. We want to get in front of that and be positioned well. So when these opportunities present themselves, we are positioned to deliver gas to them.
Next question today is coming from Ned Baramov from Wells Fargo.
Just wanted to go back to the timeline for additional infrastructure or intrastate projects you're currently working on. I think you noted you plan to announce potentially other projects soon. We're just wondering if construction of these projects would potentially overlap with that of the East Side Express project?
Yes, not in 2026, but 2027 and beyond, that's probably a good assumption.
Understood. And then I guess you mentioned that Antero Resources will underwrite the project. I was just wondering if the contracts would be in a take-or-pay type of format? Or will there be volumetric exposure from Antero Midstream's perspective?
It is just acreage dedication from Antero Resources, but because we know where Antero Resources drills and where the plants are drilling, there's no need for minimum volume commitments because we know the volumes will be there.
Understood. And then maybe one more, if I could. It seems that curtailments will be used a little bit more to better align the timing of production at Antero Resources with gas prices. Can you talk about the impact to Antero Midstream's results? And does this imply that volumes going forward will have a little bit more pronounced seasonality?
Yes. No, I mean we're talking 50 million a day. I think Antero Midstream gathered 4.1 Bcf. So that's about 1% for maybe one quarter of the year. So maybe you're looking at 0.25%. So that doesn't move the needle for Antero Midstream.
We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.
Thank you, everyone, for joining the second quarter conference call today. If you have any follow-up questions, please reach out. Have a good day.
Thank you. That does conclude today's teleconference. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.