Altus Midstream Announces Third-Quarter 2021 Results

November 3, 2021
  • Strong third-quarter results with steady operational and financial performance;
  • Signed new agreement with Apache Corporation modifying gas processing fees to be more consistent with current market prices and incentivize new drilling at Alpine High; 
  • Announced combination with EagleClaw, which will form one of the largest integrated midstream companies in the Permian Basin; and
  • Declared fourth quarterly cash dividend on Class A common shares at a rate of $1.50 per share.


HOUSTON, Nov. 3, 2021 – Altus Midstream Company (Nasdaq: ALTM) today announced its financial and operational results for the three-month period ending Sept. 30, 2021.
 
The company reported third-quarter 2021 net income including noncontrolling interests of $50 million, which includes a $4 million non-cash unrealized gain related to an embedded derivative in the company’s preferred units. Excluding this and other items, adjusted EBITDA for the third quarter 2021 was $70 million. Growth capital expenditures were approximately $3 million. Gathering and processing (G&P) throughput volumes were up 1% from the preceding quarter and averaged 452 million cubic feet (MMcf) per day, approximately 75% of which was rich gas. 

CEO Comment

“Altus Midstream delivered strong third-quarter results, and we continue to make consistent progress on our key performance metrics,” said Clay Bretches, Altus Midstream CEO and president. “We remain on track to meet the annual guidance we’ve set for G&P volumes, capital expenditures and earnings. Execution in the field continues to impress, with excellent reliability and safety performance.”

Bretches also commented on the new gas processing agreement signed with Apache and the announced combination with EagleClaw, both of which occurred in October.

“The new gas processing agreement provides terms that are better aligned with today’s competitive landscape. The modifications are designed to incentivize new drilling by Apache in Alpine High and facilitate Altus’ efforts to bring in additional third-party gas from elsewhere in the Delaware Basin. 

“The combination with EagleClaw is a great next step for Altus. Our complementary systems and the underlying efficiencies will create a path for the new company to take advantage of improving commodity prices and achieve sustainable, long-term success with a focus on returning capital to shareholders.”

CFO Comment

“Altus generated free cash flow for the third consecutive quarter and is trending better than the midpoint on all annual guidance items,” said Ben Rodgers, Altus Midstream chief financial officer. “Our combination with EagleClaw will create one of the largest integrated midstream companies in the Permian. With the advantages of the new company, including a large, diversified customer base, we expect to maintain the existing dividend through 2023 with a target of 5% annual growth starting in 2024.”

Dividend

As announced yesterday, the Altus board of directors declared a fourth quarterly cash dividend on the company’s Class A common shares. The dividend on Class A common shares is payable Dec. 30, 2021, to stockholders of record on Nov. 30, 2021, at a rate of $1.50 per share.

For updated financial guidance, please refer to the investor presentation released today at www.altusmidstream.com/investors.

Conference Call

Altus will host its third-quarter 2021 results conference call Thursday, Nov. 4, 2021, at 1 p.m. Central time. The conference call will be webcast from Altus’ website at www.altusmidstream.com/investors, and the webcast replay will be archived there as well. The conference call will also be available for playback by telephone for one week beginning at approximately 6 p.m. Central time Nov. 4. To access the telephone playback, dial (855) 859-2056 or (404) 537-3406 for international calls. The conference access code is 4064034.

About Altus Midstream Company

Altus Midstream Company is a pure-play, Permian-to-Gulf Coast midstream C-corporation. Through its consolidated subsidiaries, Altus owns gas gathering, processing and transmission assets servicing production in the Delaware Basin and owns equity interests in four Permian-to-Gulf Coast pipelines. Altus posts announcements, operational updates, investor information and press releases on its website, www.altusmidstream.com.

Additional information

Additional information follows, including a reconciliation of Adjusted EBITDA, Capital Investments and Growth Capital Investments (non-GAAP financial measures) to the GAAP measures.

Non-GAAP financial measures

Altus’ financial information includes information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial information. It is management’s intent to provide non-GAAP financial information to enhance understanding of our consolidated financial information as prepared in accordance with GAAP. Adjusted EBITDA, Capital Investments and Growth Capital Investments are non-GAAP measures. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Wherever a non-GAAP financial measure is disclosed in this earnings release, the non-GAAP measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. 

Important Additional Information Will Be Filed with the SEC

In connection with the proposed transaction, Altus Midstream Company (the Company) intends to file a proxy statement with the Securities and Exchange Commission (SEC) and also plans to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the proxy statement (if and when it becomes available) and other relevant documents filed by the Company with the SEC at the SEC’s website at www.sec.gov. You may also obtain the Company’s documents on its website at www.altusmidstream.com.

Participants in the Solicitation

The Company and its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the Company’s directors and executive officers is available in the Company’s proxy statement filed with the SEC on April 23, 2021, for its 2021 annual meeting of stockholders. Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive proxy statement and other relevant materials to be filed with the SEC regarding the proposed transaction when they become available. Investors should read the definitive proxy statement carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents using the sources indicated above.

Forward-looking statements

This news release includes certain statements that may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “seeks,” “possible,” “potential,” “predict,” “project,” “prospects,” “guidance,” “outlook,” “should,” “would,” “will,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about the Company’s ability to effect the transactions discussed in this news release; the expected benefits of the transactions; future dividends; and future plans, expectations, and objectives for Altus Midstream’s and Apache Corporation’s operations, including after completion of the transactions, including statements about strategy, synergies, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, and objectives of management. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and in our Quarterly Reports on Form 10-Q, filed with the SEC for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.

Contacts 

Media:         (713) 296-7276 Alexandra Franceschi
Investors:    (281) 302-2286 Patrick Cassidy        


Click here for the full release with quarterly financial statements.

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