Antero Midstream Partners Mergers and Acquisitions Presentation Deck
AR Capital Return - Funding Options Cont'd
Benefits
Considerations
Issue Alternative
AR Security
* Issuance of
convertible/
preferred security
to provide a source
of funding
Provides ability to
kick-start share
repurchase without
increasing debt or
selling AM units
+
• Adds additional
complexity
Likely higher cost
of capital
.
Potentially viewed
as debt by rating
agencies
+
AR Asset Sale
. AR sells non-core
acreage - likely in
Utica Shale - as a
near-term source
of cash proceeds
. Likely would not
materially impact
publicly disclosed
capital plan
• Reduces drilling
inventory and
optionality
• Bearish gas
markets won't
support premium
value
• Limited buyer
universe for Utica
assets
Hedge Book
Monetization
+ Monetize hedge
book (currently
100% hedged for
*18-'19) as a near-
term source of
cash proceeds
+
Previously
pursued, well
understood by the
market
• Mixed market
reaction to past
hedge book
monetization
. Most confirm
consistency with
strategy and
communicate with
market
AR Margin Loan
on AM Units
• AR collateralizes
AM units in a
margin loan to fund
ASR program to
demonstrate their
commitment to
return capital
• Debt is recourse
only to AM units
• Increases total
leverage
. Another form of
debt, on balance
sheet
* Higher cost of
capital than RBL
AMGP Bond
Issuance
+ AMGP uses
proceeds from
public bond
issuance to buy
AM units from AR
as a means to
structurally simplify
AR from midstream
+ Increases near-
term yield of AMGP
Near-term cash
proceeds
+ AR loss of upside
from AM units
• Sale of AM units
to repurchase AR
shares dilutive
Reduces future
flexibility at AMGP
•
AR Common
Dividend
Demonstrates
commitment to
returning capital to
shareholders
.
Immediate,
consistent
shareholder return
• Commits capital,
future reductions
difficult
. Unusual for
upstream
companies under
$10Bn
• "Token" dividend
unlikely to alter
trading multiple
Antero
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