Antero Midstream Partners Mergers and Acquisitions Presentation Deck
AR Share Repurchase Considerations
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.
Key Considerations
While only three E&P firms had announced share repurchase programs from 2015-2017, four
more firms have already done so in Q1 '18
Market reaction has been mixed: 8.2% up for APC, 1.0% up for HES, and (8.9%) down for
GPOR
Larger programs (5-10% of market capitalization) with well-defined funding sources and
timelines have received strongest response
Analysis of 16 precedent Energy share buy-backs since 2010 indicates positive impact on
share price
- T+30 relative performance to E&P index averaged 4.5% outperformance when announced
buy-back was 10% of market cap or higher
• AR share buy-backs need to be sized to balance impact, credibility, and balance sheet
- Average FCF over 5 years is $320mm / year
Two year, $600mm program
- A $300mm debt issuance in 2018 and 2019 keeps debt / EBITDAX below 2.0x in
2019 and beyond
- Two year, $600mm program assuming approximately $207mm³ of earn out proceeds and the
balance with debt
Announcement
date
02/15/18
02/15/18
02/14/18
01/29/18
11/06/17
09/20/17
03/29/17
08/07/14
Company
Noble Energy
Encana Corporation
Laredo Petroleum
Gulfport Energy Corporation
Hess Corporation
Anadarko Petroleum Corporation
ConocoPhillips
Linn Energy, LLC
E&P Share Repurchase Precedents
%6
shares OFS
5.8%
Market reaction
5 days
30 days
3.7%
10.4%
4.5%
3.6%
10.0%
Buyback
value ($mm)
$750
$400
$200
$100
$500
$2.500
$3,000
$250
4.9%
24%
$1,092
$375
90-Day
ADTV Multple
5.8x
6.0%
4.7%
8.5x
2.7x
11.6x
7.9x
6.9x
1 days
(0.3%)
6.7x
7.4x
5.0%
(8.9%)
1.0%
8.2%
8.8%
(24.3%)
(0.5%)
9.5%
10.2%
11.9%
3.6%
0.8%
6.6%
% Relative Price Performance vs. S&P E&P Index T+30
Dec 13
MRO-
Precedent Performance
B
OXY-
Oct 14
101
MUR-
Aug 14
(2.0)
60 days
@
1,0%
7.7%
(2,2%)
(20.1%)
15.0
120
9.0
60
0
COP-
Mar 10
B
COP-
Nov 16
0
1 days
(0,0%)
(1.1%)
5.3%
(5.3%)
1.2%
8.1%
@HES
APA-
May 14
MUR-
May 14
20
APA-
Mly: 13.
·
Feb 14
40
(15.8%)
(1.1%)
4.2%
6.0%
0.1%
PXP
(0.2%)
(1.7%)
(3.4%)
(1.3%)
3.0%
Mean
Median
Source: Factset as of 02/16/18; Market reaction defined as one day post-announcement: Relative performance based on S&P 500 E&P index Based on PV-10 of earn-out proceeds discounted to mid-year 2018
(0.2%)
(0.6%)
3.2%
0.1%
APC
Relative performance
5 days
30 days
00
4.1%
7.7%
1.6%
3.8%
3.0%
COP.
Dec 11
Antero
% of Market Capitalization
60 days
(3.2%)
13.3%
1.8%
(0.3%)
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