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Antero Midstream (AM) to Acquire Water Business for $1.05B

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Antero Midstream Partners LPAM announced that it has entered into a definitive agreement to acquire Antero Resources Corporation's AR integrated water business. Per the transaction, the purchase consideration will be an aggregate $1.05 billion in a combination of cash, assumed debt and Antero Midstream common units. Also, Antero Resources is entitled to receive two potential $125 million earn-out payments at the end of 2019 and 2020, if certain fresh water volumetric delivery targets are met.

The acquisition includes Antero Resources' fresh water delivery business, together with an exclusive right to provide fresh water for the company's well completion operations in West Virginia and Ohio, and the to-be-constructed advanced wastewater treatment complex. It also includes the exclusive right to provide fluid handling and disposal services to Antero Resources.

The partnership has agreed to pay Antero Resources a cash distribution equal to $552 million, less any assumed debt, and issue 23.89 million common units representing limited partner interests in the partnership to Antero Resources. Antero Midstream Partners expects the acquisition to be accretive to its distributable cash flow per unit.

Antero Midstream Partners also raised its 2015 EBITDA guidance to a range of $170 million to $180 million from the previous range of $150 million to $160 million. Distributable cash flow is expected to be $150 million to $160 million in 2015 instead of the prior guidance of $135 million to $145 million.

In 2015, Antero plans to continue consolidating acreage in the core of the southwestern Marcellus rich gas play and the core of the Utica rich gas play in southern Ohio. However, given the current commodity price environment, Antero has reduced this year's land budget by $300 million, or 67%, to $150 million.

Antero Resources is an independent natural gas and oil player engaged in the acquisition, development and production of unconventional liquids-rich natural gas properties located in the Appalachian Basin in West Virginia, Ohio and Pennsylvania.

Currently, Antero Midstream Partners carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector include Alon USA Partners, LP ALDW and ReneSola Ltd SOL . Both these stocks sport a Zacks Rank #1 (Strong Buy).

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RENESOLA LT-ADR (SOL): Free Stock Analysis Report

ANTERO MIDSTRM (AM): Free Stock Analysis Report

ALON USA PTNRS (ALDW): Free Stock Analysis Report

ANTERO RESOURCE (AR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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