Antero Midstream Partners LP (NYSE:AM) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 12:00 pm ET

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Antero Midstream Partners LP (NYSE:AM) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the Antero Midstream's Second Quarter 2020 Earnings Conference Call. [Operator Instructions]

I will now turn the conference over to our host, Michael Kennedy, Chief Financial Officer. Thank you, sir. You may begin.

Executive
Michael N. Kennedy

Thank you for joining us for Antero Midstream's Second Quarter 2020 Investor Conference call. We'll spend a few minutes going through the financial and operating highlights, and then we'll open it up for Q&A. I would also like to direct you to the homepage of our website at www.anteromidstream.com, where we have provided a separate earnings call presentation that will be reviewed during today's call. Before we start our comments, I would first like to remind you that during this call, Antero management will make forward-looking statements. Such statements are based on our current judgments regarding factors that will impact the future performance of Antero Resources and Antero Midstream and are subject to a number of risks and uncertainties, many of which are beyond Antero's control.

Actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Today's call may also contain certain non-GAAP financial measures. Please refer to our earnings press release for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measures. Joining me on the call today are Paul Rady, Chairman and CEO of Antero Resources and Antero Midstream; Glen Warren, President and CFO of Antero Resources and President of Antero Midstream; and Dave Cannelongo, Vice President of Liquids Marketing and Transportation.

With that, I'll turn the call over to Paul.

Executive
Paul M. Rady

Thanks, Mike. I'd like to start by discussing AR's asset sale program, which continues to improve AR's liquidity position and will allow it to repurchase debt at attractive discounts to par. Slide three, titled, AR Asset Sale Program Update, details the progress that AR has made to date on its $750 million to $1 billion asset sale program. During the fourth quarter of 2019, AR commenced its asset sale program with the sale of AM shares to AM for $100 million. Despite the ongoing COVID-19 pandemic, AR was able to execute a $402 million overriding royalty interest sale in the second quarter of 2020, including $300 million of upfront proceeds and $102 million of contingent payments. In July, AR monetized excess 2021 natural gas hedges for proceeds of $29 million.

This brings AR's total completed asset sales to $531 million. These asset sales have allowed AR to reduce total debt by approximately $365 million since commencing the asset sale program in the fourth quarter of 2019. In addition, AR is in active discussions for further asset sales, and we remain confident that we can achieve the $750 million to $1 billion asset sale target in 2020. We believe this positions AR to repay its 2021 and 2022 maturities and significantly derisks the Antero complex. Before moving on to AR's liquidity position, I want to briefly touch on AR's hedge position pro forma for the recent monetization on slide number four, titled,