Core Insights - Natural gas prices experienced a significant decline, closing down by 5.19% due to a larger-than-expected increase in inventories [1] - Cooler weather forecasts for late September are expected to reduce demand for natural gas from electricity providers [2] - Increased U.S. natural gas production has contributed to bearish market conditions, with production forecasts for 2025 being raised [3] Inventory and Production - The EIA reported a rise of 90 billion cubic feet (bcf) in natural gas inventories for the week ending September 12, exceeding market expectations of 81 bcf and the five-year average of 74 bcf [1][6] - U.S. dry gas production was recorded at 107.2 bcf/day, reflecting a year-over-year increase of 5.7% [4] - The EIA's updated forecast indicates a 0.2% increase in U.S. natural gas production for 2025, now estimated at 106.63 bcf/day [3] Demand and Market Conditions - Lower-48 state gas demand decreased to 74.0 bcf/day, a decline of 0.8% year-over-year [4] - Electricity output in the U.S. rose by 0.83% year-over-year to 81,346 GWh for the week ending September 13, indicating some support for gas prices [5] - As of September 16, European gas storage was 81% full, compared to the five-year seasonal average of 87% [6]

Core Insights - Natural gas prices experienced a slight decline, closing down by 0.10% due to expectations of a larger-than-average build in weekly inventories [1] - Forecasts for late summer heat in the US are expected to boost natural gas demand, which may limit inventory buildup ahead of the winter heating season [2] - Increased US natural gas production has been a bearish factor for prices, with the EIA raising its 2025 production forecast [3] Inventory and Production - The consensus anticipates a rise of 81 billion cubic feet (bcf) in natural gas inventories for the week ending September 12, surpassing the five-year average of 74 bcf [1] - US dry gas production reached 106.0 bcf/day, marking a 5.0% year-over-year increase, while demand was 73.3 bcf/day, up 0.6% year-over-year [4] - The EIA reported a 71 bcf increase in inventories for the week ending September 5, exceeding market expectations and indicating adequate supply levels [6] Demand Factors - Electricity output in the US rose by 0.83% year-over-year to 81,346 GWh for the week ending September 13, supporting natural gas prices [5] - Forecasts indicate warmer temperatures across the US, particularly in the north-central region, which is expected to increase natural gas demand for electricity generation [2]

Group 1 - October Nymex natural gas prices closed down by $0.088, a decrease of 2.82%, due to expectations of increased US gas inventories in the near term [1] - Seasonal pipeline maintenance along the Gulf Coast is expected to lead to a decline in natural gas exports, which will increase supplies in storage [1] - The EIA's weekly report anticipates a rise of 69 billion cubic feet (bcf) in natural gas inventories for the week ending September 5, surpassing the five-year average increase of 56 bcf [1] Group 2 - Warmer weather forecasts in the US are expected to limit the downside for natural gas prices, as increased demand from electricity providers is anticipated due to higher air conditioning usage [2] - Forecasts indicate above-normal temperatures in the Midwest and East for the period of September 15-24 [2] Group 3 - US natural gas production has recently been a bearish factor for prices, with the EIA raising its 2025 production forecast by 0.2% to 106.63 bcf/day [3] - Current US natural gas production is near record highs, with active rigs reaching a two-year high [3] Group 4 - US dry gas production was reported at 107.2 bcf/day, reflecting a year-over-year increase of 5.9% [4] - Lower-48 state gas demand was recorded at 70.6 bcf/day, showing a year-over-year decrease of 2.0% [4] - Estimated LNG net flows to US export terminals were 14.4 bcf/day, down 5.8% week-over-week [4] - US electricity output rose by 1.03% year-over-year to 83,003 GWh for the week ending September 6, and increased by 2.97% year-over-year to 4,264,559 GWh over the past 52 weeks [4] - Natural gas inventories increased by 55 bcf for the week ending August 29, aligning with market consensus and above the five-year weekly average of 36 bcf [4] - As of August 29, natural gas inventories were down 2.2% year-over-year but 5.6% above the five-year seasonal average, indicating sufficient supplies [4] - European gas storage was reported to be 79% full as of September 7, compared to the five-year seasonal average of 86% [4]

Financial Data and Key Metrics Changes - Antero Midstream generated $274 million of EBITDA in Q1 2025, representing a 3% year-over-year increase, driven by higher gathering and processing volumes, with processing volumes setting a company record at 1.65 Bcf per day [12] - Free cash flow after dividends was $79 million, a 7% increase year-over-year, marking the eleventh consecutive quarter of positive free cash flow after dividends [13] - Leverage declined to approximately 2.9 times as of March 31, 2025, indicating improved financial stability [13] Business Line Data and Key Metrics Changes - The company reported an increase in gathering and processing volumes, with expectations for low to mid single-digit year-over-year growth in gathering volumes for 2025 compared to 2024 [12] - Capital expenditures as a percentage of EBITDA stood at 17%, highlighting Antero Midstream's capital efficiency compared to peers in the midstream industry [14] Market Data and Key Metrics Changes - The Appalachian region is experiencing significant growth in natural gas demand, particularly for power generation and data centers, with expectations for natural gas demand to double for powering data centers by 2030 [10] - The percentage of data centers expected to be powered by natural gas has increased from 50% to 70%, indicating a strong market trend [10] Company Strategy and Development Direction - Antero Midstream is focused on capital efficiency and returning capital to shareholders, with plans to allocate approximately 65% of its EBITDA for dividends, debt reduction, and share repurchases [15] - The company is well-positioned for future growth due to its investment-grade upstream counterparty and extensive natural gas and water systems in the region [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for natural gas demand, particularly in the Appalachian region, and highlighted ongoing discussions regarding local power demand [21] - The medium to long-term outlook for the company is viewed as increasingly positive, with a flexible capital allocation strategy to capitalize on high-return opportunities [16] Other Important Information - Antero Midstream has achieved significant reuse savings of approximately $30 million at the Torrey's Peak compressor station and over $50 million across all three stations constructed with relocated underutilized units [6] - The company has secured materials and pricing for its capital projects through 2026, minimizing impacts from tariffs and macroeconomic factors [7] Q&A Session Summary Question: Potential for in-basin demand growth - Management noted ongoing discussions about local power demand, particularly for data centers, and expressed confidence in Antero Midstream's infrastructure to support future growth [21][22] Question: Outlook for propane and risk mitigation strategy - Management reiterated confidence in the long-term outlook for propane, emphasizing its unique position in the residential and commercial markets [23][26] Question: Joint venture production outlook - Management indicated that current production is running about 4% over nameplate capacity, with potential for reevaluation based on future prices and market conditions [28][29] Question: Capital allocation strategy - Management confirmed a continued focus on debt reduction and share buybacks, while remaining open to M&A opportunities as they arise [35][36] Question: Water service expectations - Management expects to service a similar number of wells in Q2 as in Q1, maintaining guidance of 70 to 75 wells serviced [46][47]