Antero Midstream Corporation

Second-quarter adjusted EBITDA was a record $289 million, up 2% year over year. Gathering volumes were over 4.1 Bcf per day, almost 20% higher year over year, and capital invested was $47 million. Free cash flow after dividends was $80 million, marking the 12th consecutive quarter of positive free cash flow after dividends. Management said third-quarter adjusted EBITDA is expected to grow by high single digits sequentially, which should keep the company on track to meet full-year EBITDA guidance. They also said the $370 million-plus Veolia proceeds lowered pro forma leverage to 2.8x as of June 30, below the 3x target.

Michael Kennedy focused on the scale-up in Appalachia and the growing opportunity from new power generation and data center demand in West Virginia. He said Antero Midstream is positioning itself as the regional infrastructure builder, with East Side Express as the first step in a larger set of several billion dollars of opportunities. He sounded constructive on long-term demand visibility, saying the company is evaluating projects selectively and will prioritize those that are near-term, actionable, accretive to free cash flow, and attractive on returns.

Justin Agnew emphasized that the second quarter was the first full quarter of HG asset contribution and that the assets were successfully integrated. He highlighted record adjusted EBITDA of $289 million, $47 million of capital invested, and $80 million of free cash flow after dividends, noting the company has produced free cash flow after dividends for 12 straight quarters. On the balance sheet, he said the company received over $370 million of damages and interest from Veolia, bringing pro forma leverage to 2.8x at June 30 and allowing AM to call its nearest-term 2028 maturity at par, leaving no near-term maturities and significant liquidity.

Analysts focused on the size, timing, and underwriting of East Side Express and the broader several-billion-dollar project backlog. Management said East Side Express is expected to cost $200 million to $300 million over 2 to 3 years, is being underwritten by Antero Resources via acreage dedication, and could still allow some third-party connectivity through seven interconnects and 1.5 to 2 Bcf per day of capacity. Questions also centered on whether the company would expand beyond AR and how power-generation and data-center demand might be contracted; management said opportunities are mostly tied to AR but that it is prepared to contract with power producers and data centers as well. On curtailments, management said the impact to AM is minimal, estimating roughly 0.25% of annualized volume impact from about 50 MMcf/d curtailments for one quarter.