Antero Midstream's Business Outlook Remains Positive Despite Veolia Lawsuit Uncertainty

Antero Midstream's general business outlook is positive, with a strong longer-term outlook for continued volume growth. However, there is negative news regarding the Veolia lawsuit, with Veolia's petition for certiorari being granted by the Colorado Supreme Court. This could impact the company's operations and financials.

Antero Midstream (NYSE: AM) has recently faced a setback in its ongoing legal dispute with Veolia, as the Colorado Supreme Court granted the latter's petition for certiorari. This development could have significant implications for the company's operations and financials.

The Colorado Supreme Court's decision to review the lower court's ruling on the economic loss rule and a fraud claim between the parties has introduced uncertainty into Antero Midstream's financial outlook. The court granted only 6% of petitions for certiorari in its last fiscal year, making this a notable event Antero Midstream: Colorado Supreme Court Takes Up The Veolia Lawsuit Case^[1]. If the court overturns the lower court's decision, Antero Midstream may not receive the $300 million in lawsuit proceeds that were previously anticipated.

The company's valuation has been revised downward to $19.70 per share, reflecting this increased uncertainty. Previously, the estimated value was $20 per share, with the expectation that the lawsuit proceeds would be received soon Antero Midstream: Colorado Supreme Court Takes Up The Veolia Lawsuit Case^[1]. However, with the potential delay in the case resolution and the possibility of a reduced damages award, Antero Midstream's near-term financial prospects have been adjusted.

Despite this setback, Antero Midstream's longer-term outlook for continued volume growth remains solid. The company's strong financial position can withstand the potential loss of lawsuit proceeds, but the additional funds could have accelerated debt reduction and share repurchases.

Antero Midstream recently completed a debt refinancing effort, issuing $650 million in 5.75% unsecured notes due 2033 at par. The company expects to receive $642 million in net proceeds after expenses, which will be used to redeem existing debt Antero Midstream: Colorado Supreme Court Takes Up The Veolia Lawsuit Case^[1]. This move indicates the company's commitment to managing its debt profile, which could benefit its financial health in the long run.

In conclusion, while the Veolia lawsuit presents a challenge for Antero Midstream, the company's overall outlook remains positive. The uncertainty introduced by the Colorado Supreme Court's decision may delay the receipt of lawsuit proceeds and potentially reduce the damages award, but Antero Midstream's strong financial position and long-term growth prospects remain intact.