Antero Midstream (AM) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2024, Antero Midstream Corporation generated EBITDA of $1.05 billion, marking the tenth consecutive year of EBITDA growth [7] - The company achieved a record return on invested capital (ROIC) of 19$274 million, an 8% increase year over year, while free cash flow after dividends was $93 million, a 91$250 million [13] Business Line Data and Key Metrics Changes - The capital budget for 2025 is set between $170 million and$200 million, with approximately $100 million allocated for organic capital and$15 million for the Stonewall joint venture [8][10] - The water business segment will see an investment of approximately 85 million in 2025, aimed at expanding the water system across the Marcellus footprint [9][10] Market Data and Key Metrics Changes - Antero Midstream expects low single-digit throughput growth in 2025, driven by activity from its primary customer, Antero Resources [14][25] - The company anticipates mid-single-digit EBITDA growth in 2025, supported by annual CPI adjustments to fees [15][25] Company Strategy and Development Direction - The company is focused on maintaining capital efficiency and driving free cash flow growth, with plans to allocate remaining free cash flow after dividends to share repurchases and debt reduction [17][18] - Antero Midstream is exploring M&A opportunities while balancing these against share buybacks and debt repayment [43][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, highlighting a capital budget focused on the lowest-cost natural gas basin in North America [17] - The company is well-positioned to capitalize on potential data center opportunities in the Appalachia region, although discussions are still in early stages [22][23] Other Important Information - Antero Midstream reduced absolute debt by over 50 million in Q4 2024 and commenced a share repurchase program, buying back nearly 30 million of shares [13] - The company expects interest expenses to decrease in 2025 due to lower absolute debt levels [16] Q&A Session Summary Question: Can you talk about Antero Resources' plans regarding future data center deals? - Management indicated that Antero Resources is in discussions about data center opportunities, and Antero Midstream will be involved as the primary midstream service provider [22][23] Question: Can Antero Resources return to higher activity levels in 2025? - Management confirmed that Antero Resources has a drilling joint venture, which will lead to low single-digit volume increases at Antero Midstream [25] Question: Can you provide details on the Veolia lawsuit and the use of the 19 million received? - Management stated there are no additional disclosures beyond the 10-Ks and that cash flow from the lawsuit will likely be allocated to debt repayment and share buybacks [29][30] Question: What specifics can you provide about the $85 million investment in water infrastructure? - The investment will support an integrated water system across the Marcellus, allowing for more efficient development and reduced capital spending [33][34] Question: How should we think about capital allocation with solid free cash flow? - Management indicated a balanced approach of 50/50 between share repurchases and debt pay down moving forward [44]