Antero Midstream Corporation is a growth oriented midstream energy company that owns operates and develops midstream energy assets to primarily service Antero Resources production and completion activity. The company’s asset base includes a network of gathering pipelines compressor stations and equity interests in processing and fractionation plants. These assets collect and process natural gas and ethane from Antero Resources wells in the Appalachian Basin spanning West Virginia and Ohio. The gathering pipelines traverse the Marcellus and Utica shale formations which are the primary sources of Antero Resources’ production. Antero Midstream also operates two independent water handling systems that draw fresh water from the Ohio River and several regional waterways and that transport flowback and produced water. The company’s strategic location and its close relationship with Antero Resources provide a foundation for continued growth and for expanding services to other operators in the region.

Antero Midstream Corporation generates revenue principally through fixed fee contracts with Antero Resources for gathering compression and water handling services. The fees are calculated based on the volume of natural gas gathered the volume of gas compressed and the volume of fresh water delivered or other fluids handled. The contracts include periodic CPI based rate adjustments that help offset inflationary pressures on operating costs. In addition the company earns modest third party fees for water handling services provided to operators other than Antero Resources. The substantial majority of the company’s revenue is derived from Antero Resources with third party contributions representing a small portion of the total. Revenues are also supported by the company’s ability to adjust fees annually based on changes in the consumer price index.

The company operates through the following segments: gathering and processing and water handling.

• The gathering and processing segment comprises low pressure gathering pipelines high pressure gathering pipelines and compressor stations that move natural gas from wellheads to processing facilities. The segment also includes Antero Midstream’s equity interests in the Joint Venture which provides processing and fractionation services and in Stonewall which offers high pressure gas gathering services. These assets enable the company to separate natural gas into ethane propane butane and heavier natural gas liquids and to deliver high pressure gas to downstream markets. The gathering and processing operations benefit from the company’s extensive pipeline network and from long term agreements with Antero Resources that specify volume commitments and fee structures.

• The water handling segment consists of two independent systems that supply fresh water for hydraulic fracturing and other operational needs. These systems draw water from the Ohio River and from regional waterways and include buried pipelines surface pipelines storage facilities pumping stations blending facilities and impoundments. In addition the water handling segment provides other fluid handling services such as high rate transfer wastewater transportation disposal and blending and manages the transport of flowback and produced water. The water handling operations are supported by contractual arrangements that include volume based fees and periodic CPI based rate adjustments.

Antero Midstream Corporation holds a leading position among midstream providers in the Appalachian Basin due to its strategically located asset base and its contractual ties to Antero Resources. The company’s competitive advantages include a predominantly fixed fee revenue model that insulates earnings from short term commodity price fluctuations and CPI based escalators that preserve real returns over time. Its extensive gathering pipeline network and compression infrastructure allow it to handle growing volumes from Antero Resources’ ongoing drilling programs. The high fixed cost nature of gathering pipelines and compression stations means that incremental volumes can be added at relatively low marginal cost providing a scale advantage. While the company primarily serves Antero Resources it has repeatedly noted opportunities to extend its gathering compression and water handling services to other producers operating in the same geographic area. These factors together create a barrier to entry for new midstream entrants and support Antero Midstream’s ability to maintain stable cash flows.

Antero Midstream Corporation’s primary customer is Antero Resources for whom it provides substantially all of its gathering compression and water handling services. The company also serves a limited number of third party customers who purchase water handling services such as fresh water delivery wastewater disposal and fluid blending. Although the specific names of these third party customers are not disclosed in the filing the company indicates that they include other oil and gas operators active in the Appalachian Basin. The concentration of revenue from a single major customer is mitigated by the long term nature of the contracts and by the potential to expand the third party business over time. Antero Midstream continues to pursue opportunities to increase its third party water handling business as part of its growth strategy.