Greetings. Welcome to Antero Midstream Q3 2022 Earnings Conference Call. At this time, all participants are on a listen only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, Dan Katzenberg, finance director. You may begin. Thank you for joining us for Antero Midstream's Q3 investor conference call. 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 anteromidstream.com, where we have provided a separate earnings call presentation that will be reviewed during today's call. 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 reconciliation 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, Brendan E. Krueger, CFO of Antero Midstream, and Michael Kennedy, CFO of Antero Resources and Director of Antero Midstream. With that, I'll turn the call over to Paul. Thanks, Dan. First and foremost, the Q3 was one of the more momentous quarters for Antero Midstream since our IPO in 2014. During the quarter, we generated $30 million of free cash flow after dividends and began paying down debt. We've been talking about this critical inflection point for several quarters, and it has finally arrived. Second, we announced our first organic acquisition of gathering and compression assets in the Marcellus Shale, which are highly complementary to our current assets. This acquisition is not only a strategic fit for AM, but further enhances our free cash flow profile, as Brendan will discuss in his remarks. To take a closer look at the acquisition, I will direct you to slide number 3, titled Marcellus Bolt-on Acquisition. We closed this $205 million acquisition from Crestwood earlier this week, and we have started integrating the asset and a number of former Crestwood employees into the AM platform. As you can see on the map, the primarily dry gas gathering and compression system is highly complementary to AM's existing footprint in the core of the Marcellus Shale. The acquisition increases Antero Midstream's compression capacity by 20% and gathering pipeline mileage by 15%. Importantly, the assets have significant available capacity for growth without material capital investment. As we look at the asset today, we have identified over $50 million of discounted future capital avoidance through connecting the system to AM's assets and rerouting the volumes to fill underutilized compression capacity. We also plan to move and reuse underutilized compressor units into the liquids rich midstream corridor, similar to the reuse opportunity we discussed on last quarter's conference call. This results in both capital and operating expense synergies. Most importantly, the acquisition includes approximately 425 undeveloped drilling locations held by AR that will be dedicated to AM for gathering and compression. I think it's important to reiterate this significant undeveloped value and optionality, which extends AM's underlying inventory well into the 2040s. In addition to this acquisition, year to date, Antero Resources has added approximately 60 locations through its organic leasing program. This has effectively replenished the underlying inventory at AM for all the wells completed in 2022. When you combine these 60 locations with the 425 undeveloped locations on the acquired assets, this 485 additional locations represents an incremental 6-7 years of highly visible economic well connects for AM. Importantly, AR's organic leasing program is predictable, repeatable, and cost-effective. The ability to consolidate acreage in close proximity versus acquisitions that often add scattered locations dedicated to other midstream companies provides significant capital efficiencies and long-term visibility for AM. This characteristic is unique to AM and one of the reasons we continue to generate peer leading returns on invested capital in the mid- to high teens%. Now let's move on to slide 4, titled Milestone Capital Projects Completed. This slide illustrates the major compression and high pressure gathering projects that we've constructed over the last 18 months, highlighted in green. During the Q2, we completed phase one of the Castle Peak compressor station, which added 160 million cubic feet a day of compression capacity in the liquids-rich midstream corridor in Tyler and Wetzel counties. Phase two, which will reuse underutilized compressor units, will add another 80 million cubic feet a day of capacity in 2023. During the Q3 of 2022, we finished construction on our 20-mile high-pressure pipeline from Tyler and Wetzel counties that delivers liquids-rich gas to the Sherwood and Smithburg processing complexes. With these milestone projects now complete, the stage is set for highly visible throughput growth from the liquids-rich midstream corridor that drives EBITDA growth at AM for the next several years. In addition, AM's capital budgets will continue to decline, which will drive expanding free cash flow and declining leverage. In summary, we generated significant momentum at AM during the quarter, further de-risked the business model, and crystallized the outlook over the long term. Our capital budgets will continue to decline, driving an expanding free cash flow profile. Our unparalleled long-term visibility gives us tremendous confidence in delivering this plan and continuing to generate shareholder value. With that, I'll turn the call over to Brendan. Thanks, Paul. I'll start my comments by briefly highlighting our ESG achievements and then move on to the quarterly results and outlook at AM. Slide 5 illustrates our ESG achievements. First, Antero Midstream was recently named to the top 100 best ESG companies by Investor's Business Daily, highlighting the significant strides we have committed to on the ESG front. Moving to our high safety standards, last year represented the seventh straight year without an employee lost time incident. We're incredibly proud of our employees and their relentless dedication to the health, safety, and well-being of our workforce. This year, we also added Scope 1 and Scope 2 GHG emissions to our net zero goals. We anticipate achieving a 100% reduction in pipeline emissions by 2025, and net zero Scope 1 and Scope 2 emissions by 2050 through increasing operational efficiencies, carbon reduction initiatives, and the purchase of carbon offsets. I'll finish my ESG comments with some impressive statistics from AM's water system and operations, which is the largest in Appalachia. In 2021, we reused or recycled 87% of the water used in completion. This, along with our integrated freshwater delivery system, allowed us to eliminate 16 million truck miles and 34,000 tons of CO2 equivalent compared to trucking the water. This approach is not only environmentally friendly, but reduces the impact to our local communities and is incredibly cost efficient. Now let's move on to the quarterly results on slide 6, titled year-over-year. During the Q3, AM's low pressure gathering volumes were nearly 3 Bcf a day, a 3% increase year-over-year. Compression volumes were 2.8 Bcf a day, a 1% increase year-over-year. The year-over-year volume growth was driven by the gross production growth from the drilling partnership. Looking ahead, we expect mid-single digit sequential throughput growth in the Q4 compared to the Q3, driven by 2 months of contribution from the acquired assets. From there, we expect further acceleration of volumes in the Q1 of 2023 to drive mid-single digit throughput growth in 2023 as compared to 2022. Moving on to the water side of the business. Freshwater delivery volumes in the Q3 averaged 103,000 barrels per day with 18 wells serviced. In addition to servicing 18 wells for AR, we sold approximately 5,000 barrels per day to a third party that generated approximately $2 million in revenues. We continue to look for third-party business opportunities such as these to complement the steady and predictable cash flows from our primary customer, AR. I'll finish my comments on slide 7, titled Free Cash Flow Inflection Points. During the Q3, we generated $30 million of free cash flow after dividends. With AM trending towards the lower end of our capital budget guidance, we are now expecting to be at the top end of the free cash flow guidance range. Looking to the years ahead, we expect to generate increasingly positive free cash flow after dividends. This is driven primarily by declining capital as we recently completed some of the key growth projects Paul discussed in his remarks. This declining capital profile allowed us to pay down debt during the quarter and gave us the confidence to finance the Crestwood acquisition on our revolving credit facility. In addition, as a result of the acquisition, we are trending above the high end of the five-year free cash flow targets. We will look to provide more formal updates to the long-term targets when we roll out our 2023 budget. Importantly, and consistent with our prior expectations, pro forma for the acquisition, we still expect to achieve the 3x leverage target in 2024. Once we achieve this target, we will be in a position to evaluate further return of capital strategies. In summary, I'd like to echo Paul's earlier comments. It was a tremendous quarter from a strategic and financial standpoint at AM as we acquired strategic bolt-on assets that add several years to the underlying inventory dedicated to AM, and we de-risked the business model by transitioning to generating consistent, repeatable free cash flow after dividends. With that operator, we are ready to take questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Our first question comes from the line of Marc Solecitto with Barclays. Please proceed with your question. Hi, good morning. With this Shell ethane cracker starting up in August, curious your views around whether that potentially allows for modest acceleration in drilling activity in the Northeast with more ethane coming out of the residue gas stream, and how that potentially affects your outlook for next year, if at all? Yeah, I mean, I think if you break it down in terms of overall incremental capacity for gas in the Northeast, it's about 250 a day of incremental capacity. So not really material in our view to the just overall macro environment on gas supply. Got it. Recognizing it might be a bit early for this, but with the reference capital savings as part of the recent bolt-on acquisition, and then last quarter, you identified some capital savings associated with compressor relocations. Just wondering if there's any context you could provide around the CapEx outlook for next year. Yeah, I think, you know, we'll certainly provide more formal guidance. I don't think from what we provided earlier, I think, you know, $215-$225 was the earlier guidance. Hopefully some tailwinds behind that, but we'll certainly come out with more formal guidance, as we get further along in the year. Maybe if I could just squeeze one last one in here. Looks like third-party water revenues ticked up in 3Q. Just wondering if you could elaborate on that. Would you expect that to continue or are there more opportunities out there? You know, that was a great opportunity, I think, for AM. We certainly are looking for additional opportunities like that, where you have operators that have a pad in the vicinity, where we can deliver fresh water volume to them. We'll certainly look to continue. I think given AR's large contiguous acreage position out here, there's not a lot of third-party water opportunities. We'll certainly continue to look for some of those. Got it. Appreciate the time. Thanks. Our next question comes from the line of John Mackay with Goldman Sachs. Please proceed with your question. Hey, everyone. Thanks for the time. I want to start on 2022 guidance maybe. I know you guys don't typically update kind of annual numbers quarter to quarter. Just wondering, though, with the close of the deal, are you looking at any offsets for EBITDA this year, maybe on the OpEx side that would kind of leave you in the current range? Or is the kind of original range intact, and then we think of, you know, any deal contributions this year just on top of that? Yeah, I think, you know, we did not update the range, but we do expect to get those additional contributions. As we talked about, do expect the sequential growth as a result of that acquisition. No change to the guidance, but certainly would add the incremental contributions on top of the guidance we provided. Got it. Okay. Thanks for that. Maybe just looking forward. Actually, no. Maybe one in the weeds here. Sorry. Just on the Smithburg 2, sale or reimbursement, whatever we wanna call it, is that a broader change in how you guys are thinking about this JV, or is it really just a reflection of the fact that, you know, we're probably not gonna see much more from you guys in capital in that direction? Just trying to figure out if there's a bigger thing going on here. No, nothing bigger. I think that was the equipment related to Smithburg 2. We still have all the sites available should we elect to move forward with another plant down the road. This was one, as you look in the outlook with AR and a maintenance capital plan, you just don't need that plant. The other plants can run at about 110% of capacity, and so you've got incremental capacity should you need it without the need for Smithburg 2. It was non-productive capital on AM's balance sheet. It's good to get that reimbursement of that capital in the quarter. Cool. Okay, that makes sense. I'll leave it there. Thank you. Thanks, John Mackay. Our next question comes from the line of Jeremy Tonet with JP Morgan. Please proceed with your question. Hi, good morning. Hi, Jeremy. Morning. Just wanted to kind of figure some stuff out maybe at a high level for the basin. We're hearing about a number of, I guess, midstream issues in the quarter impacting a number of producers. Just wondering, is there any impact on your system that happened this quarter or might be happening in the future? Are there any mitigation plans, if so? Just any color, I guess, in general on the midstream outlook for the basin, if there's any downstream issues that might impact you. No, I think, you know, a lot of the issues that we've certainly heard about have been more related to the gathering and water side of the business in basin. I think the very unique and strong distinction with AM and its primary customer, AR, is having that integration between the two parties. We have not seen any of those issues. We, you know, at AR has never had to defer a well as a result of AM being late with infrastructure. You know, very unique that we can continue to predictably operate and deliver, I think, the development plans that we've laid out, where, you know, you are seeing a lot of issues with others that have more difficult, to put it nicely, I think, relationships between the upstream and midstream operator. Sorry. Just to clarify, as far as there's no like NGL pipelines downstream of your system, no issues on any of those assets that might impact your outlook? No, no. We haven't had issues during the Q4. Yeah, you know, we did have one day in early October that we referenced in the AR, but it was just a 20-hour downtime. That may be what you're It'd be less, yeah. Less than $10 million a day or so. Got it. That's helpful. Thanks. Pivoting, I guess to the balance sheet, to the conversations with the agencies here. Just wondering if you could update us a little bit on outlook there and, you know, AM's rating vis-a-vis where AR is, and if AR is getting to a net cash position, you know, how might that impact their road to IG and, you know, AM's credit outlook as well? Yeah. On the AR side, we did get a Fitch investment-grade rating recently in early September. We were on the S&P and Moody's front, continue to push there, for the IG rating as well. You know, depending on when you get an upgrade there, you should see some follow through at the AM level. It is certainly difficult to predict when you'll get those rating upgrades from S&P and Moody's. We do expect that to happen at some point. Just don't know when that timing will occur. Got it. Just a last one, if I could, with the lawsuit, the old lawsuit. Just wondering any color there and timeline going forward. Yeah, no update from what we've provided before. Just waiting on feedback from the courts at this point. Okay, I'll leave it there. Thank you. Thanks, Jeremy. Thanks, Jeremy. Our next question comes from the line of Michael Cusimano with Pickering Energy Partners. Please proceed with your question. Hey, team. Thank you for taking my questions. I just wanted to start if you can comment on how the AR completion schedule that I believe was accelerated some in the Q4 affects AM's run rate into 2023? Yeah. There was one pad that AR talked about accelerating into the Q4. Really it's about a month of you know a month move up in when that would be placed to sales. You'll see some sequential growth further sequential growth in the Q1 than what you would have had otherwise. Okay. Got it. One follow on the Smithburg 2. Can you comment on where the buyer intends to use that equipment? Is it staying in basin or is it somewhere else, or another basin? Yeah, we can't. I don't think we can comment on where that's going in particular. All right. That's all for me. Thank y'all. Thanks. Thanks, Michael. Our next question comes from the line of Michael Hensley with Tudor Pickering Holt. Please proceed with your question. Hey, good morning, guys. Just on the OpEx front, you know that you all spoke on the AR call around the expectation that unit costs should come down in Q4 and into 2023 as variable costs related to power and fuel normalize a bit. I just wanted to get your thoughts on how much of a pullback in these kind of costs you are expecting at the AM level over the next couple of quarters, and whether we should think kind of as Q1 as a good reference point as we look to Q4, or if we could see something kind of more in between the Q1 and what we've seen over Q2 and Q3. Yeah. I think overall at AM, the OpEx has been relatively consistent, so I would expect what you've seen in Q3 you'd maintain into Q4. AR is more driven just by commodity prices driving the fuel there. AM, I would just assume consistency from Q3 going forward. Okay, got it. Just following up on Michael's question. On the incremental AR pad that you're expecting, is there any possibility that those freshwater volumes could at least partially hit in Q4, or would you expect substantially all to materialize in Q1, just given the late December timeframe? Yeah. I mean, I think a lot of those volumes you already had coming in in Q4, so you may see a little bit of incremental in Q4, but not in a material manner. You were going to complete most of those wells during Q4 to begin with. It's just being accelerated slightly. Okay, got it. Thanks for all the time. Sure. Thanks, Michael. Our next question comes from the line of Ned Baramov with Wells Fargo. Please proceed with your question. Hi, and thanks for taking the questions. Maybe one on cash taxes. I believe in the past you've stated you do not expect to be a cash taxpayer until the 2030s. Can you provide your updated timeline in light of the 15% alternative minimum corporate tax provision in the Inflation Reduction Act of 2022? Yeah. I mean, we've, you know, we've given our targets out through 2026 and continue to not expect to be a material cash taxpayer over that time period. I think as we continue to roll forward targets, we'll provide more updates, but no expected material cash taxes as a result of that change. At AM, you will be below that $1 billion threshold anyway, so no expectation for that to be applicable to AM. For the AMT threshold. For the AMT. Got it. A quick question on maybe if you can talk about the expected synergies from the acquisition of Crestwood's Marcellus assets. How much of the $50 million of net present value is CapEx avoidance? I think Paul's comments noted that all of this is CapEx avoidance, but I thought there's maybe some operating synergies embedded in there. What is the timeline for the realization of the full suite of synergies? Thank you. Yeah. The $50 million, the vast majority of that is CapEx avoidance, not having to build a compressor station as a result of the compression capacity that we're acquiring here and being able to connect to AM's current system. And then there's a little bit in terms of just OpEx savings as a result of being able to shut down some of the capacity that was running and direct elsewhere. Of the $50 million, call it 10% OpEx, 90% capital avoidance. Got it. Thank you. Thanks. Thanks, Ned. We have reached the end of the question and answer session. I'll now turn the call back over to Dan Katzenberg for closing remarks. Thank you everyone for joining us in the call today. If you have any further questions, please reach out. Have a good afternoon. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.