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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Altus Midstream Company | NASDAQ:ALTM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 62.35 | 61.89 | 63.07 | 0 | 01:00:00 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
81-4675947
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Class A common stock, $0.0001 par value
|
|
ALTM
|
|
Nasdaq Global Market
|
Large accelerated filer
|
|
☐
|
Accelerated filer
|
|
☒
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Non-accelerated filer
|
|
☐
|
Smaller reporting company
|
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☐
|
|
|
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Emerging growth company
|
|
☒
|
Number of shares of registrant’s Class A common stock, par value $0.0001 per share issued and outstanding as of July 29, 2020
|
3,746,460
|
|
|||
Number of shares of registrant’s Class C common stock, par value $0.0001 per share issued and outstanding as of July 29, 2020
|
12,500,000
|
|
Item
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Page
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PART I — FINANCIAL INFORMATION
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1.
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2.
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3.
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4.
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PART II — OTHER INFORMATION
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1.
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||
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1A.
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||
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5.
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||
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|
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6.
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•
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the scope, duration, and reoccurrence of any epidemics or pandemics (including specifically the coronavirus disease 2019 (COVID-19) pandemic) and the actions taken by third parties, including, but not limited to, governmental authorities, customers, contractors, and suppliers, in response to such epidemics or pandemics;
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•
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the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services;
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•
|
pipeline and gathering system capacity and availability;
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•
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production rates, throughput volumes, reserve levels and development success of dedicated oil and gas fields;
|
•
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economic and competitive conditions;
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•
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the availability of capital;
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•
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cash flow and the timing of expenditures;
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•
|
capital expenditures and other contractual obligations;
|
•
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weather conditions;
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•
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inflation rates;
|
•
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the availability of goods and services;
|
•
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legislative, regulatory, or policy changes;
|
•
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terrorism or cyberattacks;
|
•
|
occurrence of property acquisitions or divestitures;
|
•
|
the integration of acquisitions;
|
•
|
a decline in oil, natural gas, and NGL production, and the impact of general economic conditions on the demand for oil, natural gas, and NGLs;
|
•
|
the impact of environmental, health and safety, and other governmental regulations and of current or pending legislation;
|
•
|
environmental risks;
|
•
|
the effects of competition;
|
•
|
the retention of key members of senior management and key technical personnel;
|
•
|
increases in interest rates;
|
•
|
the effectiveness of the Company’s business strategy;
|
•
|
changes in technology;
|
•
|
market-related risks, such as general credit, liquidity and interest-rate risks;
|
•
|
the timing, amount and terms of the Company’s future issuances of equity and debt securities;
|
•
|
other factors disclosed under Item 1A—Risk Factors, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in the Company’s most recently filed Annual Report on Form 10-K;
|
•
|
other risks and uncertainties disclosed in the Company’s second-quarter 2020 earnings release;
|
•
|
other factors disclosed under Part II, Item 1A-Risk Factors in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020;
|
•
|
other factors disclosed under Part II, Item 1A—Risk Factors of this Quarterly Report on Form 10-Q; and
|
•
|
any other factors disclosed in the other filings that the Company makes with the Securities and Exchange Commission (SEC).
|
•
|
Bbl. One stock tank barrel of 42 United States (U.S.) gallons liquid volume used herein in reference to crude oil, condensate or NGLs.
|
•
|
Bbl/d. One Bbl per day.
|
•
|
Bcf. One billion cubic feet of natural gas.
|
•
|
Bcf/d. One Bcf per day.
|
•
|
Btu. One British thermal unit, which is the quantity of heat required to raise the temperature of a one-pound mass of water by one degree Fahrenheit.
|
•
|
Field. An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.
|
•
|
Formation. A layer of rock which has distinct characteristics that differs from nearby rock.
|
•
|
MBbl. One thousand barrels of crude oil, condensate or NGLs.
|
•
|
MBbl/d. One MBbl per day.
|
•
|
Mcf. One thousand cubic feet of natural gas.
|
•
|
Mcf/d. One Mcf per day.
|
•
|
MMBbl. One million barrels of crude oil, condensate or NGLs.
|
•
|
MMBtu. One million British thermal units.
|
•
|
MMcf. One million cubic feet of natural gas.
|
•
|
MMcf/d. One MMcf per day.
|
•
|
NGLs. Natural gas liquids. Hydrocarbons found in natural gas, which may be extracted as liquefied petroleum gas and natural gasoline.
|
(1)
|
Includes amounts of $1.3 million and $2.0 million associated with related parties for the three months ended June 30, 2020 and 2019, respectively, and $2.8 million and $4.9 million for the six months ended June 30, 2020 and 2019, respectively. Refer to Note 2—Transactions with Affiliates.
|
(2)
|
Includes amounts of $1.6 million and $1.0 million associated with related parties for the three months ended June 30, 2020 and 2019, respectively, and $3.6 million and $2.6 million for the six months ended June 30, 2020 and 2019, respectively. Refer to Note 2—Transactions with Affiliates.
|
(3)
|
Share and per share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(In thousands)
|
||||||||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS
|
|
$
|
17,662
|
|
|
$
|
(5,498
|
)
|
|
$
|
(9,130
|
)
|
|
$
|
230
|
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
|
|
|
|
|
|
|
|
|
||||||||
Share of equity method interests other comprehensive income (loss)
|
|
390
|
|
|
(1,043
|
)
|
|
(794
|
)
|
|
(1,043
|
)
|
||||
COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS
|
|
18,052
|
|
|
(6,541
|
)
|
|
(9,924
|
)
|
|
(813
|
)
|
||||
Comprehensive income attributable to Preferred Unit limited partners
|
|
18,764
|
|
|
4,143
|
|
|
37,026
|
|
|
4,143
|
|
||||
Comprehensive loss attributable to Apache limited partner
|
|
(547
|
)
|
|
(8,191
|
)
|
|
(36,659
|
)
|
|
(3,563
|
)
|
||||
COMPREHENSIVE LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS
|
|
$
|
(165
|
)
|
|
$
|
(2,493
|
)
|
|
$
|
(10,291
|
)
|
|
$
|
(1,393
|
)
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
|
|
(In thousands)
|
||||||
ASSETS
|
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,880
|
|
|
$
|
5,983
|
|
Accounts receivable from Apache Corporation (Note 1)
|
|
—
|
|
|
5,195
|
|
||
Revenue receivables (Note 3)
|
|
13,572
|
|
|
15,461
|
|
||
Inventories
|
|
3,771
|
|
|
4,027
|
|
||
Prepaid assets and other
|
|
1,713
|
|
|
1,071
|
|
||
|
|
20,936
|
|
|
31,737
|
|
||
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
|
||||
Property, plant and equipment
|
|
214,389
|
|
|
207,270
|
|
||
Less: Accumulated depreciation and amortization
|
|
(7,085
|
)
|
|
(1,468
|
)
|
||
|
|
207,304
|
|
|
205,802
|
|
||
OTHER ASSETS:
|
|
|
|
|
||||
Equity method interests
|
|
1,408,479
|
|
|
1,258,048
|
|
||
Deferred charges and other
|
|
5,524
|
|
|
5,267
|
|
||
|
|
1,414,003
|
|
|
1,263,315
|
|
||
Total assets
|
|
$
|
1,642,243
|
|
|
$
|
1,500,854
|
|
|
|
|
|
|
||||
LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY
|
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
|
||||
Accounts payable to Apache Corporation (Note 1)
|
|
$
|
165
|
|
|
$
|
—
|
|
Current debt (Note 5)
|
|
—
|
|
|
9,767
|
|
||
Other current liabilities (Note 6)
|
|
11,941
|
|
|
23,925
|
|
||
|
|
12,106
|
|
|
33,692
|
|
||
LONG-TERM DEBT
|
|
493,000
|
|
|
396,000
|
|
||
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
|
|
|
|
|
||||
Asset retirement obligation
|
|
62,041
|
|
|
60,095
|
|
||
Embedded derivative
|
|
175,498
|
|
|
102,929
|
|
||
Other non-current liabilities
|
|
5,998
|
|
|
4,614
|
|
||
|
|
243,537
|
|
|
167,638
|
|
||
Total liabilities
|
|
748,643
|
|
|
597,330
|
|
||
|
|
|
|
|
||||
COMMITMENTS AND CONTINGENCIES (Note 7)
|
|
|
|
|
||||
|
|
|
|
|
||||
Redeemable noncontrolling interest — Apache limited partner
|
|
230,631
|
|
|
701,000
|
|
||
Redeemable noncontrolling interest — Preferred Unit limited partners
|
|
592,625
|
|
|
555,599
|
|
||
|
|
|
|
|
||||
EQUITY:
|
|
|
|
|
||||
Class A Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 3,746,460 shares issued and outstanding at June 30, 2020 and December 31, 2019(1)
|
|
1
|
|
|
1
|
|
||
Class C Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 12,500,000 shares issued and outstanding at June 30, 2020 and December 31, 2019(1)
|
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
|
473,532
|
|
|
39,822
|
|
||
Accumulated deficit
|
|
(402,741
|
)
|
|
(392,633
|
)
|
||
Accumulated other comprehensive loss
|
|
(449
|
)
|
|
(266
|
)
|
||
|
|
70,344
|
|
|
(353,075
|
)
|
||
Total liabilities, noncontrolling interests, and equity
|
|
$
|
1,642,243
|
|
|
$
|
1,500,854
|
|
(1)
|
Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information.
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income (loss) including noncontrolling interests
|
|
$
|
(9,130
|
)
|
|
$
|
230
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Unrealized derivative instrument loss
|
|
72,569
|
|
|
—
|
|
||
Depreciation and accretion
|
|
7,976
|
|
|
16,758
|
|
||
Deferred income tax benefit
|
|
—
|
|
|
(5
|
)
|
||
Income (loss) from equity method interests, net
|
|
(33,221
|
)
|
|
1,028
|
|
||
Distributions from equity method interests
|
|
37,536
|
|
|
—
|
|
||
Other
|
|
489
|
|
|
(564
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
(Increase) decrease in inventories
|
|
256
|
|
|
(484
|
)
|
||
Increase in prepaid assets and other
|
|
(642
|
)
|
|
(311
|
)
|
||
Decrease in revenue receivables (Note 2)
|
|
1,889
|
|
|
1,930
|
|
||
(Increase) decrease in account receivables from/payable to affiliate
|
|
1,301
|
|
|
(3,347
|
)
|
||
Increase in accrued expenses
|
|
6,392
|
|
|
6,453
|
|
||
Increase deferred credits and noncurrent liabilities
|
|
1,382
|
|
|
—
|
|
||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
86,797
|
|
|
21,688
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Capital expenditures(1)
|
|
(26,520
|
)
|
|
(259,295
|
)
|
||
Proceeds from sale of assets
|
|
6,773
|
|
|
—
|
|
||
Contributions to equity method interests
|
|
(154,386
|
)
|
|
(210,238
|
)
|
||
Distributions from equity method interests
|
|
4,211
|
|
|
—
|
|
||
Acquisition of equity method interests
|
|
—
|
|
|
(228,165
|
)
|
||
Capitalized interest paid
|
|
(5,373
|
)
|
|
—
|
|
||
NET CASH USED IN INVESTING ACTIVITIES
|
|
(175,295
|
)
|
|
(697,698
|
)
|
||
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Redeemable noncontrolling interest — Preferred Unit limited partners, net
|
|
—
|
|
|
611,249
|
|
||
Proceeds from revolving credit facility
|
|
97,000
|
|
|
—
|
|
||
Finance lease
|
|
(11,789
|
)
|
|
(7,462
|
)
|
||
Deferred facility fees
|
|
(816
|
)
|
|
(792
|
)
|
||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
84,395
|
|
|
602,995
|
|
||
|
|
|
|
|
||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
|
(4,103
|
)
|
|
(73,015
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
|
5,983
|
|
|
449,935
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
1,880
|
|
|
$
|
376,920
|
|
SUPPLEMENTAL CASH FLOW DATA:
|
|
|
|
|
||||
Accrued capital expenditures(2)
|
|
$
|
1,409
|
|
|
$
|
30,330
|
|
Finance lease liability(3)
|
|
—
|
|
|
29,000
|
|
||
Interest paid, net of capitalized interest
|
|
—
|
|
|
1,493
|
|
||
Cash received for income tax refunds
|
|
696
|
|
|
—
|
|
(1)
|
Following the Business Combination (as defined herein), capital expenditure amounts represent the portion of the total settlements with Apache in the period that are capital in nature, pursuant to the terms of the Construction, Operations and Maintenance Agreement (COMA). Refer to Note 1—Summary of Significant Accounting Policies and Note 2—Transactions with Affiliates for more information.
|
(2)
|
Includes $0.7 million due to Apache and $3.6 million due from Apache for the six months ended June 30, 2020 and 2019, respectively, pursuant to the terms of the COMA. Refer to Note 2—Transactions with Affiliates for more information.
|
(3)
|
The Company entered into a finance lease in the first quarter of 2019 for power generators, which ended during the first quarter of 2020. The Company then exercised its option to purchase the generators.
|
(1)
|
Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 10—Series A Cumulative Redeemable Preferred Units.
|
(2)
|
Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information.
|
(1)
|
Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 10—Series A Cumulative Redeemable Preferred Units.
|
(2)
|
Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In thousands)
|
||||||||||||||
MIDSTREAM SERVICES REVENUE — AFFILIATE:
|
|
|
|
|
|
|
|
||||||||
Gas gathering and compression
|
$
|
4,394
|
|
|
$
|
2,697
|
|
|
$
|
10,114
|
|
|
$
|
6,310
|
|
Gas processing
|
23,184
|
|
|
18,395
|
|
|
53,080
|
|
|
43,679
|
|
||||
Transmission
|
3,226
|
|
|
2,977
|
|
|
7,401
|
|
|
7,831
|
|
||||
NGL transmission
|
587
|
|
|
70
|
|
|
1,413
|
|
|
165
|
|
||||
Other
|
225
|
|
|
—
|
|
|
375
|
|
|
—
|
|
||||
|
$
|
31,616
|
|
|
$
|
24,139
|
|
|
$
|
72,383
|
|
|
$
|
57,985
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
|
|
(In thousands)
|
||||||
Gathering, processing and transmission systems and facilities
|
|
$
|
210,738
|
|
|
$
|
198,133
|
|
Construction in progress(1)
|
|
328
|
|
|
5,443
|
|
||
Other property and equipment
|
|
3,323
|
|
|
3,694
|
|
||
Total property, plant and equipment
|
|
214,389
|
|
|
207,270
|
|
||
Less: accumulated depreciation and amortization
|
|
(7,085
|
)
|
|
(1,468
|
)
|
||
Total property, plant and equipment, net
|
|
$
|
207,304
|
|
|
$
|
205,802
|
|
(1)
|
Included in construction in progress was capitalized interest of $0.6 million at December 31, 2019. There was no capitalized interest included in construction in progress as of June 30, 2020.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In thousands)
|
||||||||||||||
Interest income
|
$
|
2
|
|
|
$
|
806
|
|
|
$
|
9
|
|
|
$
|
2,967
|
|
Interest income
|
$
|
2
|
|
|
$
|
806
|
|
|
$
|
9
|
|
|
$
|
2,967
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
2,007
|
|
|
$
|
1,030
|
|
|
$
|
5,365
|
|
|
$
|
1,739
|
|
Amortization of deferred facility fees
|
292
|
|
|
221
|
|
|
565
|
|
|
415
|
|
||||
Capitalized interest
|
(2,007
|
)
|
|
(773
|
)
|
|
(5,365
|
)
|
|
(1,168
|
)
|
||||
Financing costs, net of capitalized interest
|
$
|
292
|
|
|
$
|
478
|
|
|
$
|
565
|
|
|
$
|
986
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
|
|
(In thousands)
|
||||||
Accrued taxes other than income
|
|
$
|
6,974
|
|
|
$
|
689
|
|
Accrued operations and maintenance expense
|
|
1,339
|
|
|
1,520
|
|
||
Accrued incentive compensation
|
|
733
|
|
|
1,425
|
|
||
Accrued professional and consulting fees
|
|
692
|
|
|
158
|
|
||
Accrued capital costs
|
|
686
|
|
|
17,035
|
|
||
Accrued finance lease liability
|
|
—
|
|
|
1,989
|
|
||
Other
|
|
1,517
|
|
|
1,109
|
|
||
Total other current liabilities
|
|
$
|
11,941
|
|
|
$
|
23,925
|
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
|||||
|
Ownership
|
|
Amount
|
|
Amount
|
|||||
|
|
|
|
|
|
|||||
|
|
|
(In thousands)
|
|||||||
Gulf Coast Express Pipeline LLC
|
16.0%
|
|
$
|
286,833
|
|
|
$
|
291,628
|
|
|
EPIC Crude Holdings, LP
|
15.0%
|
|
175,051
|
|
|
163,199
|
|
|||
Permian Highway Pipeline LLC
|
26.7%
|
|
454,381
|
|
|
310,421
|
|
|||
Breviloba, LLC
|
33.0%
|
|
492,214
|
|
|
492,800
|
|
|||
|
|
|
$
|
1,408,479
|
|
|
$
|
1,258,048
|
|
|
Gulf Coast Express Pipeline LLC
|
|
EPIC Crude Holdings, LP
|
|
Permian Highway Pipeline LLC
|
|
Breviloba, LLC
|
|
|
|||||||||||
|
|
|
|
|
Total
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
(In thousands)
|
|||||||||||||||||||
Balance at December 31, 2019
|
$
|
291,628
|
|
|
$
|
163,199
|
|
|
$
|
310,421
|
|
|
$
|
492,800
|
|
|
$
|
1,258,048
|
|
|
Contributions
|
919
|
|
|
15,000
|
|
|
138,467
|
|
|
—
|
|
|
154,386
|
|
||||||
Distributions
|
(26,171
|
)
|
|
—
|
|
|
—
|
|
|
(15,576
|
)
|
|
(41,747
|
)
|
||||||
Capitalized interest(1)
|
—
|
|
|
—
|
|
|
5,365
|
|
|
—
|
|
|
5,365
|
|
||||||
Equity income (loss), net(2)
|
20,457
|
|
|
(2,354
|
)
|
|
128
|
|
|
14,990
|
|
|
33,221
|
|
||||||
Accumulated other comprehensive loss
|
—
|
|
|
(794
|
)
|
|
—
|
|
|
—
|
|
|
(794
|
)
|
||||||
Balance at June 30, 2020
|
$
|
286,833
|
|
|
$
|
175,051
|
|
|
$
|
454,381
|
|
|
$
|
492,214
|
|
|
$
|
1,408,479
|
|
(1)
|
Altus’ proportionate share of the Permian Highway Pipeline (PHP) construction costs is funded with the revolving credit facility. Accordingly, Altus capitalized $5.4 million of related interest expense during the six months ended June 30, 2020, which is included in the basis of the PHP equity interest.
|
(2)
|
As of June 30, 2020, the amount of consolidated retained earnings, net of amortized basis differences, which represents undistributed earnings, was $3.0 million from Breviloba, LLC.
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||
|
|
2020
|
|
2019(1)
|
||||||||||||||||||||||||||||
|
|
Gulf Coast Express Pipeline LLC
|
|
EPIC Crude Holdings, LP
|
|
Permian Highway Pipeline LLC
|
|
Breviloba, LLC
|
|
Gulf Coast Express Pipeline LLC
|
|
EPIC Crude Holdings, LP
|
|
Permian Highway Pipeline LLC
|
|
Breviloba, LLC
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||||||
Revenues
|
|
$
|
182,231
|
|
|
$
|
85,971
|
|
|
$
|
—
|
|
|
$
|
83,120
|
|
|
$
|
4,974
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,928
|
|
Operating expenses
|
|
53,359
|
|
|
83,508
|
|
|
46
|
|
|
31,831
|
|
|
512
|
|
|
7,728
|
|
|
35
|
|
|
14,744
|
|
||||||||
Operating income (loss)
|
|
128,872
|
|
|
2,463
|
|
|
(46
|
)
|
|
51,289
|
|
|
4,462
|
|
|
(7,728
|
)
|
|
(35
|
)
|
|
32,184
|
|
||||||||
Net income (loss)
|
|
128,470
|
|
|
(16,263
|
)
|
|
480
|
|
|
46,345
|
|
|
5,382
|
|
|
(16,653
|
)
|
|
422
|
|
|
32,184
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
(5,037
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,337
|
)
|
|
—
|
|
|
|
(1)
|
Although the Company’s interests in EPIC Crude Holdings, LP, Permian Highway Pipeline LLC, and Breviloba, LLC were acquired in March, May, and July of 2019, respectively, the financial results are presented for the six months ended June 30, 2019 for comparability.
|
|
|
June 12, 2019
|
||
|
|
(In thousands)
|
||
Transaction price, gross
|
|
$
|
625,000
|
|
Issue discount
|
|
(3,675
|
)
|
|
Transaction costs to other third parties
|
|
(10,076
|
)
|
|
Transaction price, net
|
|
$
|
611,249
|
|
|
|
June 12, 2019
|
||
|
|
(In thousands)
|
||
Redeemable noncontrolling interest - Preferred Units
|
|
$
|
516,790
|
|
Long-term liability: Embedded derivative(1)
|
|
94,459
|
|
|
|
|
$
|
611,249
|
|
(1)
|
See Note 13—Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative.
|
|
|
Six Months Ended June 30, 2020
|
|||||
|
|
Units Outstanding
|
|
Financial Position(2)
|
|||
|
|
(In thousands, except for unit data)
|
|||||
Redeemable noncontrolling interest — Preferred Units: at December 31, 2019
|
|
638,163
|
|
|
$
|
555,599
|
|
Distribution of in-kind additional Preferred Units
|
|
22,531
|
|
|
—
|
|
|
Allocation of Altus Midstream net income
|
|
N/A
|
|
|
37,026
|
|
|
Redeemable noncontrolling interest — Preferred Units: at June 30, 2020
|
|
660,694
|
|
|
$
|
592,625
|
|
Embedded derivative liability(1)
|
|
|
|
175,498
|
|
||
|
|
|
|
$
|
768,123
|
|
(1)
|
See Note 13—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period.
|
(2)
|
As of June 30, 2020, the aggregate Redemption Price was $700.8 million, based on an internal rate of return of 11.5 percent.
|
|
Three Months Ended June 30,
|
||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||
|
Loss
|
|
Shares(1)
|
|
Per Share(1)
|
|
Loss
|
|
Shares(1)
|
|
Per Share(1)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||
Basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss attributable to Class A common shareholders
|
$
|
(255
|
)
|
|
3,746
|
|
|
$
|
(0.07
|
)
|
|
$
|
(2,293
|
)
|
|
3,746
|
|
|
$
|
(0.61
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interest — Apache limited partner
|
$
|
—
|
|
|
—
|
|
|
|
|
$
|
—
|
|
|
—
|
|
|
|
||||
Diluted(2):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss attributable to Class A common shareholders
|
$
|
(255
|
)
|
|
3,746
|
|
|
$
|
(0.07
|
)
|
|
$
|
(2,293
|
)
|
|
3,746
|
|
|
$
|
(0.61
|
)
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||
|
Loss
|
|
Shares(1)
|
|
Per Share(1)
|
|
Loss
|
|
Shares(1)
|
|
Per Share(1)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss attributable to Class A common shareholders
|
$
|
(10,108
|
)
|
|
3,746
|
|
|
$
|
(2.70
|
)
|
|
$
|
(1,193
|
)
|
|
3,746
|
|
|
$
|
(0.32
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interest — Apache limited partner
|
$
|
(36,048
|
)
|
|
12,500
|
|
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
|||
Diluted(2):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss attributable to Class A common shareholders
|
$
|
(46,156
|
)
|
|
16,246
|
|
|
$
|
(2.84
|
)
|
|
$
|
(1,193
|
)
|
|
3,746
|
|
|
$
|
(0.32
|
)
|
(1)
|
Share and per share amounts have been retroactively restated to reflect the Company’s reverse stock split which was effected June 30, 2020. Refer to Note 9—Equity for further information.
|
(2)
|
The effect of the exchange of outstanding Common Units of Altus Midstream (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for the three month periods ended June 30, 2020 and 2019, and also for the six month period ended June 30, 2019.
|
•
|
an assumed exchange of the outstanding Preferred Units of Altus Midstream for shares of Class A Common Stock; and
|
•
|
outstanding warrants of the Company to purchase an aggregate 947,082 shares of Class A Common Stock.
|
|
|
Quantitative Information About Level 3 Fair Value Measurements
|
||||||||
|
|
Fair Value at June 30, 2020
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Range/Value
|
||
|
|
|
|
|
|
|
|
|
||
|
|
(In thousands)
|
|
|
|
|
|
|
||
Preferred Units Embedded Derivative
|
|
$
|
175,498
|
|
|
Option Model
|
|
Altus Midstream Company’s Imputed Interest Rate
|
|
14.16-15.57%
|
|
|
|
|
|
|
Interest Rate Volatility
|
|
35.56%
|
•
|
a 16 percent equity interest in the Gulf Coast Express Pipeline Project (GCX), which is owned and operated by Kinder Morgan Texas Pipeline, LLC (Kinder Morgan);
|
•
|
a 15 percent equity interest in the EPIC crude oil pipeline (EPIC), which is owned by EPIC Pipeline LP and operated by EPIC Consolidated Operations, LLC;
|
•
|
an approximate 26.7 percent equity interest in the Permian Highway Pipeline (PHP), which is also owned and operated by Kinder Morgan; and
|
•
|
a 33 percent equity interest in the Shin Oak NGL Pipeline (Shin Oak), which is owned by Breviloba, LLC, and operated by Enterprise Products Operating LLC.
|
•
|
Throughput volumes and associated revenues;
|
•
|
Costs and expenses; and
|
•
|
Adjusted EBITDA (as defined below).
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In thousands)
|
||||||||||||||
Reconciliation of net income (loss) including noncontrolling interests
|
|
|
|
|
|
|
|
||||||||
Net income (loss) including noncontrolling interests
|
$
|
17,662
|
|
|
$
|
(5,498
|
)
|
|
$
|
(9,130
|
)
|
|
$
|
230
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Financing costs, net of capitalized interest
|
292
|
|
|
478
|
|
|
565
|
|
|
986
|
|
||||
Depreciation and accretion
|
4,062
|
|
|
9,107
|
|
|
7,976
|
|
|
16,758
|
|
||||
Unrealized derivative instrument loss
|
10,585
|
|
|
—
|
|
|
72,569
|
|
|
—
|
|
||||
Equity method interests Adjusted EBITDA
|
28,231
|
|
|
(60
|
)
|
|
51,917
|
|
|
166
|
|
||||
Other
|
—
|
|
|
—
|
|
|
290
|
|
|
—
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Gain on sale of assets, net
|
264
|
|
|
—
|
|
|
76
|
|
|
—
|
|
||||
Interest income
|
2
|
|
|
806
|
|
|
9
|
|
|
2,967
|
|
||||
Income (loss) from equity method interests, net
|
16,923
|
|
|
(1,297
|
)
|
|
33,221
|
|
|
(1,028
|
)
|
||||
Income tax benefit
|
—
|
|
|
430
|
|
|
696
|
|
|
5
|
|
||||
Other
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
43,641
|
|
|
$
|
4,088
|
|
|
$
|
90,183
|
|
|
$
|
16,196
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In thousands)
|
||||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
||||||||
Midstream services revenue — affiliate
|
$
|
31,616
|
|
|
$
|
24,139
|
|
|
$
|
72,383
|
|
|
$
|
57,985
|
|
Total revenues
|
31,616
|
|
|
24,139
|
|
|
72,383
|
|
|
57,985
|
|
||||
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Operations and maintenance
|
9,508
|
|
|
14,005
|
|
|
20,099
|
|
|
30,403
|
|
||||
General and administrative
|
2,988
|
|
|
2,081
|
|
|
7,166
|
|
|
5,072
|
|
||||
Depreciation and accretion
|
4,062
|
|
|
9,107
|
|
|
7,976
|
|
|
16,758
|
|
||||
Taxes other than income
|
3,347
|
|
|
3,888
|
|
|
6,790
|
|
|
6,463
|
|
||||
Total costs and expenses
|
19,905
|
|
|
29,081
|
|
|
42,031
|
|
|
58,696
|
|
||||
OPERATING INCOME (LOSS)
|
11,711
|
|
|
(4,942
|
)
|
|
30,352
|
|
|
(711
|
)
|
||||
OTHER INCOME (LOSS):
|
|
|
|
|
|
|
|
||||||||
Unrealized derivative instrument loss
|
(10,585
|
)
|
|
—
|
|
|
(72,569
|
)
|
|
—
|
|
||||
Interest income
|
2
|
|
|
806
|
|
|
9
|
|
|
2,967
|
|
||||
Income (loss) from equity method interests, net
|
16,923
|
|
|
(1,297
|
)
|
|
33,221
|
|
|
(1,028
|
)
|
||||
Other
|
(97
|
)
|
|
(17
|
)
|
|
(274
|
)
|
|
(17
|
)
|
||||
Total other income (loss)
|
6,243
|
|
|
(508
|
)
|
|
(39,613
|
)
|
|
1,922
|
|
||||
Financing costs, net of capitalized interest
|
292
|
|
|
478
|
|
|
565
|
|
|
986
|
|
||||
NET INCOME (LOSS) BEFORE INCOME TAXES
|
17,662
|
|
|
(5,928
|
)
|
|
(9,826
|
)
|
|
225
|
|
||||
Current income tax benefit
|
—
|
|
|
—
|
|
|
(696
|
)
|
|
—
|
|
||||
Deferred income tax benefit
|
—
|
|
|
(430
|
)
|
|
—
|
|
|
(5
|
)
|
||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS
|
17,662
|
|
|
(5,498
|
)
|
|
(9,130
|
)
|
|
230
|
|
||||
Net income attributable to Preferred Unit limited partners
|
18,764
|
|
|
4,143
|
|
|
37,026
|
|
|
4,143
|
|
||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
(1,102
|
)
|
|
(9,641
|
)
|
|
(46,156
|
)
|
|
(3,913
|
)
|
||||
Net loss attributable to Apache limited partner
|
(847
|
)
|
|
(7,348
|
)
|
|
(36,048
|
)
|
|
(2,720
|
)
|
||||
NET LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS
|
$
|
(255
|
)
|
|
$
|
(2,293
|
)
|
|
$
|
(10,108
|
)
|
|
$
|
(1,193
|
)
|
KEY PERFORMANCE METRICS:
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA(1)
|
$
|
43,641
|
|
|
$
|
4,088
|
|
|
$
|
90,183
|
|
|
$
|
16,196
|
|
OPERATING DATA:
|
|
|
|
|
|
|
|
||||||||
Average throughput volumes of natural gas (MMcf/d)
|
434
|
|
|
363
|
|
|
505
|
|
|
463
|
|
||||
Average volumes of natural gas processed (MMcf/d)
|
429
|
|
|
363
|
|
|
500
|
|
|
463
|
|
(1)
|
Adjusted EBITDA is not defined by GAAP and should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities or any other measures prepared under GAAP. For the definition and reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see the section entitled Adjusted EBITDA above.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(In thousands)
|
||||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
||||||||
Midstream services revenue — affiliate
|
|
$
|
31,616
|
|
|
$
|
24,139
|
|
|
$
|
72,383
|
|
|
$
|
57,985
|
|
Total revenues
|
|
$
|
31,616
|
|
|
$
|
24,139
|
|
|
$
|
72,383
|
|
|
$
|
57,985
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In thousands)
|
||||||||||||||
Operations and maintenance
|
$
|
9,508
|
|
|
$
|
14,005
|
|
|
$
|
20,099
|
|
|
$
|
30,403
|
|
General and administrative
|
2,988
|
|
|
2,081
|
|
|
7,166
|
|
|
5,072
|
|
||||
Depreciation and accretion
|
4,062
|
|
|
9,107
|
|
|
7,976
|
|
|
16,758
|
|
||||
Taxes other than income
|
3,347
|
|
|
3,888
|
|
|
6,790
|
|
|
6,463
|
|
||||
Total costs and expenses
|
$
|
19,905
|
|
|
$
|
29,081
|
|
|
$
|
42,031
|
|
|
$
|
58,696
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In thousands)
|
||||||||||||||
Unrealized derivative instrument loss
|
$
|
(10,585
|
)
|
|
$
|
—
|
|
|
$
|
(72,569
|
)
|
|
$
|
—
|
|
Interest income
|
2
|
|
|
806
|
|
|
9
|
|
|
2,967
|
|
||||
Income (loss) from equity method interests, net
|
16,923
|
|
|
(1,297
|
)
|
|
33,221
|
|
|
(1,028
|
)
|
||||
Other
|
(97
|
)
|
|
(17
|
)
|
|
(274
|
)
|
|
(17
|
)
|
||||
Total other income (loss)
|
$
|
6,243
|
|
|
$
|
(508
|
)
|
|
$
|
(39,613
|
)
|
|
$
|
1,922
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
2,007
|
|
|
$
|
1,030
|
|
|
$
|
5,365
|
|
|
$
|
1,739
|
|
Amortization of deferred facility fees
|
292
|
|
|
221
|
|
|
565
|
|
|
415
|
|
||||
Capitalized interest
|
(2,007
|
)
|
|
(773
|
)
|
|
(5,365
|
)
|
|
(1,168
|
)
|
||||
Financing costs, net of capitalized interest
|
$
|
292
|
|
|
$
|
478
|
|
|
$
|
565
|
|
|
$
|
986
|
|
•
|
A 16.0 percent interest in GCX, which delivers natural gas from the Waha area in West Texas to Agua Dulce near the Texas Gulf Coast. Full commercial service began at the end of September 2019, and the total capacity of 2.0 Bcf/d is fully subscribed under long-term contracts.
|
•
|
A 15.0 percent interest in EPIC, which began full service during the second quarter of 2020. The pipeline has initial capacity of approximately 600 MBbl/d and transports crude oil from Orla, Texas to the Port of Corpus Christi, Texas.
|
•
|
An approximate 26.7 percent interest in PHP, a long-haul pipeline under construction that is expected to have approximately 2.1 Bcf/d of natural gas transportation capacity. The pipeline will transport natural gas from the Waha area in northern Pecos County, Texas, to the Katy, Texas area, with connections to Texas Gulf Coast and other markets. PHP is anticipated to be in service in early 2021.
|
•
|
A 33.0 percent interest in Shin Oak, which transports NGLs primarily from the Permian Basin to Mont Belvieu, Texas. Shin Oak, which was in-service when the Company acquired its equity interest in the pipeline during the third quarter of 2019, has capacity of approximately 550 MBbl/d.
|
|
|
For the Six Months Ended
June 30, |
||||||
|
|
2020
|
|
2019
|
||||
|
|
|
|
|
||||
|
|
(In thousands)
|
||||||
Sources of cash and cash equivalents:
|
|
|
|
|
||||
Redeemable noncontrolling interest — Preferred Unit limited partners, net
|
|
$
|
—
|
|
|
$
|
611,249
|
|
Proceeds from revolving credit facility
|
|
97,000
|
|
|
—
|
|
||
Proceeds from sale of assets
|
|
6,773
|
|
|
—
|
|
||
Capital distributions from equity method interests
|
|
4,211
|
|
|
—
|
|
||
Net cash provided by operating activities
|
|
86,797
|
|
|
21,688
|
|
||
|
|
$
|
194,781
|
|
|
$
|
632,937
|
|
Uses of cash and cash equivalents:
|
|
|
|
|
||||
Capital expenditures(1)
|
|
$
|
(26,520
|
)
|
|
$
|
(259,295
|
)
|
Contributions to and acquisition of equity method interests
|
|
(154,386
|
)
|
|
(438,403
|
)
|
||
Finance lease payments
|
|
(11,789
|
)
|
|
(7,462
|
)
|
||
Deferred facility fees
|
|
(816
|
)
|
|
(792
|
)
|
||
Capitalized interest paid
|
|
(5,373
|
)
|
|
—
|
|
||
|
|
(198,884
|
)
|
|
(705,952
|
)
|
||
Decrease in cash and cash equivalents
|
|
$
|
(4,103
|
)
|
|
$
|
(73,015
|
)
|
(1)
|
The table presents capital expenditures on a cash basis; therefore, the amounts may differ from those discussed elsewhere in this document, which include accruals.
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
|
|
|
|
|
||||
|
|
(In thousands)
|
||||||
Cash and cash equivalents
|
|
$
|
1,880
|
|
|
$
|
5,983
|
|
Total debt
|
|
493,000
|
|
|
405,767
|
|
||
Available committed borrowing capacity
|
|
307,000
|
|
|
404,000
|
|
EXHIBIT NO.
|
|
DESCRIPTION
|
2.1***
|
–
|
|
3.1
|
–
|
|
3.2
|
–
|
|
3.3
|
–
|
|
10.1*
|
–
|
|
10.2*
|
–
|
|
31.1*
|
–
|
|
31.2*
|
–
|
|
32.1**
|
–
|
|
101*
|
–
|
The following financial statements from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL: (i) Statement of Consolidated Operations, (ii) Statement of Consolidated Comprehensive Income (Loss), (iii) Consolidated Balance Sheet, (iv) Statement of Consolidated Cash Flows, (v) Statement of Consolidated Changes in Equity and Noncontrolling Interests and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
|
101.SCH*
|
–
|
Inline XBRL Taxonomy Schema Document.
|
101.CAL*
|
–
|
Inline XBRL Calculation Linkbase Document.
|
101.DEF*
|
–
|
Inline XBRL Definition Linkbase Document.
|
101.LAB*
|
–
|
Inline XBRL Label Linkbase Document.
|
101.PRE*
|
–
|
Inline XBRL Presentation Linkbase Document.
|
104*
|
–
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
* Filed herewith.
|
** Furnished herewith.
|
*** Schedules and exhibits to this Exhibit have been omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
|
|
|
|
ALTUS MIDSTREAM COMPANY
|
|
|
|
|
Dated:
|
July 30, 2020
|
|
/s/ Ben C. Rodgers
|
|
|
|
Ben C. Rodgers
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Dated:
|
July 30, 2020
|
|
/s/ Rebecca A. Hoyt
|
|
|
|
Rebecca A. Hoyt
|
|
|
|
Senior Vice President, Chief Accounting Officer, and Controller
|
|
|
|
(Principal Accounting Officer)
|
1 Year Altus Midstream Chart |
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