View Annual Report

2014 ANNUAL REPORT H IG H LIG H TS Antero Midstream Antero Midstream Partners LP is a limited partnership that owns, operates and develops midstream gathering, compression and pipeline assets that service Antero Resources’ production located in the Appalachian Basin in West Virginia, Ohio and Pennsylvania. All of Antero Resources’ 543,000 net acre leasehold is dedicated to us for gathering and compression services except for 131,000 Marcellus Shale net leasehold acres characterized by dry gas and liquids-rich production that have been previously dedicated to third-party gatherers. We have approximately 136 miles of low pressure gathering pipelines, 97 miles of high pressure gathering pipelines, 16 miles of condensate gathering pipelines and 375 MMcf/d of compression capacity. Antero Resources formed Antero Midstream to support its growing Appalachian Basin production and to create a seamless and highly effective system of gathering pipelines and compressor stations. We successfully executed Antero Midstream’s $1.15 billion IPO during 2014 and generated significant throughput, cash flows and distributable cash flow. We are a 70% owned MLP subsidiary of Antero Resources. 2014 THROUGHPUT (MMcf/d) KEY 907 Low Pressure Gathering High Pressure Gathering Compression 738 531 531 386 331 266 222 116 126 41 36 Q4 Q3 Q2 Q1 2014 CAPITAL EXPENDITURES ($MM) 2014 EBITDA ($MM) $126 $28 Q4 Q4 $162 CAPEX ($MM) $19 Q3 Q3 $162 $12 Q2 Q2 $104 $8 Q1 Q1 % % 76 Marcellus 69 Marcellus % % 24 Utica 31 Utica PARTNERSHIP STRENGTHS 1 2 Driven by AR’s Strategically “Best in Class” Located Asset Base Upstream Growth in Low Cost Resource Plays 3 Financial Flexibility and Strong Capital Structure 4 5 High Growth Multi-Pay Cash Flows Basin with Underpinned by Additional Play Long-Term, Fixed- Development Fee Contracts Upside Utica Shale 148,000 net acres dedicated to AM 45 miles of low pressure gathering pipelines 35 miles of high pressure gathering pipelines 16 miles of condensate gathering pipelines Marcellus Shale 264,000 net acres dedicated to AM 91 miles of low pressure gathering pipelines 62 miles of high pressure gathering pipelines 375 MMcf/d of compression capacity Utica Shale DEAR FELLOW UNITHOLDERS, 2014 was a year of continued momentum and success for the Antero family. Just 13 months after Antero Resources (“Antero”) completed the largest E&P IPO in U.S. history, Antero Midstream Partners LP (“Antero Midstream”) completed the largest and lowest yielding Master Limited Partnership (“MLP”) IPO in U.S. history, raising $1.15 billion. Our role as the primary midstream provider to Antero, who continues to successfully develop its leading Appalachian liquids-rich acreage position, enabled us to generate volumetric, revenue, and cash flow records in 2014. Our low pressure gathering, high pressure gathering, and compression volumes grew over 200 percent; revenues and EBITDA grew 328 percent and 411 percent, respectively. The Company’s growth and the achievements of our employees to date have positioned Antero Midstream for continued momentum and success, with the best years yet to come. SUCCESS OF ANTERO RESOURCES BUILDS OUR FOUNDATION In 2008, Antero identified the Appalachian Basin as one of the lowest cost, unconventional resource plays in North America. The focus driving Antero’s strategy was to become the lowest cost producer in the lowest cost plays, thereby generating attractive rates of return and a sustainable development program that will weather any commodity price environment. This enterprising approach and foresight led to the development of the Marcellus and Utica Shales, and to the subsequent infrastructure capital investment opportunity that became Antero Midstream. Going forward, the resources of Antero and the successful development of the Company’s Appalachian acreage position will continue to contribute significantly to the success of Antero Midstream. LARGEST AND LOWEST YIELDING MLP IPO IN U.S. HISTORY Despite a declining and volatile commodity price environment in the second half of 2014, Antero Midstream successfully executed a 46 million common unit initial public offering at $25 per unit in November 2014. The IPO was priced $5.00 above the midpoint of the original pricing range and the offering size was upsized by 20 percent to accommodate the tremendous demand for Antero Midstream units. The transaction marked the largest MLP IPO in U.S. history to date, as well as the lowest-yielding MLP IPO on record at a 2.7 percent yield. Approximately 30 percent of the units outstanding were offered to the public, with the remaining 70 percent owned by Antero, thus aligning and incentivizing Antero to maximize the value for our unitholders. This highly successful offering, in spite of commodity headwinds, was a true testament to the underlying quality of the assets served by our operations in the world-class Marcellus and Utica Shales. WORLD-CLASS SPONSOR In 2014, Antero once again reached several milestones on multiple fronts. Net proved reserves grew 66 percent to 12.7 Tcfe; production grew 93 percent to 1,007 MMcfe/d; and EBITDAX grew 79 percent to $1.2 billion. In the Marcellus Shale, Antero added 50,000 net acres through acquisitions and basehold leasing, and dedicated the entire acreage to Antero Midstream. The Company further increased well recoveries by drilling longer laterals and utilizing shorter stage length (SSL) completions in 100 percent of the Marcellus wells drilled in 2014. The successful combination led to the growth of proved and 3P reserves to 11.9 Tcfe and 28.4 Tcfe, respectively. In addition to the full scale development of the Marcellus Shale, the Utica Shale made a significant contribution to total production in 2014 for the first time in Antero’s history. Targeting the highest Antero Midstream AM 2014- pg. 1/2 liquids-rich areas in the southern core part of the play, Antero turned 41 Utica wells to sales, achieving net production of 134 MMcfe/d, including 36 percent liquids. This represented a 433 percent increase over average 2013 production. Antero’s Utica Shale wells exhibit some of the highest production rates of any North American shale play. As Antero Midstream is the primary midstream service provider for Antero, the ongoing improvement and growth in Antero’s development program ultimately benefits our unitholders. SIGNIFICANT INVESTMENT IN CORE FOOTPRINT In 2014, we invested nearly $600 million in gathering and compression infrastructure. We successfully placed three compressor stations into service in the Marcellus Shale, adding incremental capacity of 275 MMcf/d, and built 97 miles of combined low pressure, high pressure, and condensate gathering lines. To date we have invested $1.2 billion in midstream infrastructure in the largest U.S. basin by natural gas production; approximately 80 percent of that investment is associated with rich gas production. Our mutually interdependent relationship with Antero is a key competitive asset and a factor in our success. The relationship allows us to prudently deploy capital in a responsible, timely, and cost-effective manner. By eliminating the need to use speculative capital, our relationship with Antero facilitates the investment of “just in time” capital, resulting in lower-risk projects. This is a tremendous, albeit underappreciated, benefit in the low commodity price cycle our industry faces as we head into 2015. FUTURE READY Antero enters 2015 as the most active operator in the Appalachian Basin. By targeting high rate of return, core, liquids-rich drilling, the Company expects to report peer-leading production growth of 40 percent. To accommodate the most active operator in Appalachia, Antero Midstream anticipates investing more than $425 million in associated gathering and compression infrastructure in 2015. At year-end 2014, Antero Midstream held in excess of $1.2 billion in liquidity and zero leverage, allowing us to pursue these attractive, organic growth opportunities. Our unique combination of fixed-fee contracts to mitigate direct commodity price exposure, financial flexibility, and an industry- leading E&P sponsor in Antero will enable us to achieve top-tier, consistent distribution growth in 2015 and beyond. THE PEOPLE OF ANTERO The hard work and dedication of our talented employees generated the value creation and momentum that this Company exhibited in 2014. The skills and expertise of our people in assembling and executing world-class projects represent Antero Midstream’s true strength and competitive advantage. We’re grateful for the guidance and support of our Board of Directors. We thank you for investing in our partnership and look forward to even greater value creation in 2015, and for years to come. Paul M. Rady Glen C. Warren, Jr. Chairman & CEO President & CFO Antero Midstream AM 2014- pg. 2/2 2014 FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 001-36719 ANTERO MIDSTREAM PARTNERS LP (Exact name of registrant as specified in its charter) Delaware 46-4109058 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1615 Wynkoop Street Denver Colorado 80202 (Address of principal executive offices) (Zip Code) (303) 357-7310 (Registrant’s telephone number, including area code) Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on which Registered Common Units Representing Limited Partner Interests New York Stock Exchange Securities Registered Pursuant to Section 12(g) of the Act: None. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Load more