Antero Midstream (AM)2024-10-31 18:24Financial Data and Key Metrics Changes - Antero Midstream generated EBITDA of 40 million, a 32% increase from the previous year, with all free cash flow utilized to reduce absolute debt, resulting in leverage of 3.1 times as of September 30 [14][18] Business Line Data and Key Metrics Changes - Throughput volumes were approximately flat compared to Q2 2024, while freshwater delivery volumes declined sequentially due to AR operating one completion crew and deferring a duck pad [13] - The company expects a significant decline in capital expenditures in Q4 2024 due to the acceleration of capital investments in Q3 [14] Market Data and Key Metrics Changes - AR's unhedged free cash flow break-evens are approximately 150 million to 56 million in Q3 2024 [7][8] - The company is positioned to return incremental capital to shareholders as it expects further growth in EBITDA and free cash flow in 2025 [19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the three times leverage target in Q4 2024, driven by reduced capital expenditures and expected EBITDA growth [32] - The company anticipates mid-single-digit growth in gathering volumes, with potential upside depending on the deferral of completion pads [28] Other Important Information - The Torreys Peak Compressor Station is under construction and is expected to have a capacity of 160 million cubic feet per day, set to be operational in Q2 2025 [9] - The company has generated free cash flow after dividends in every quarter since Q3 2022, totaling over 350 million, which has been used to finance acquisitions [16] Q&A Session Summary Question: Impact of AR's deferral of completion on AM's results - Management indicated that the deferral would result in about 10 million of EBITDA impact overall, with no change expected for 2025 [22] Question: Expectations for servicing additional water wells - Management noted that servicing 7 to 12 additional wells in Q4 would depend on the completion of the deferred pad, with one completion crew delivering about 75,000 to 80,000 barrels a day [25] Question: Growth drivers for 2025 - Management expects low to mid-single-digit growth in gathering volumes, with consistent water volumes year-over-year [28] Question: Timing and use of proceeds from the Veolia payment - Management stated that the timing is uncertain and will analyze debt levels and leverage targets before making decisions on the use of proceeds [29] Question: Confidence in hitting the three times leverage target - Management expressed confidence in achieving the target due to reduced capital expenditures and expected EBITDA growth [32] Question: Implied CapEx budget for Q4 and future CapEx expectations - Management indicated that the 2025 CapEx budget is expected to be in the range of 200 million [34]