Antero Midstream’s Eastside Express Timeline, CapEx Claims Clash in Q2 2026 Earnings Call

Date of Call: Jul 30, 2026

Guidance:

• Expect high single-digit sequential EBITDA growth in Q3 driven by increased volumes.
• Full-year EBITDA guidance is expected to be achieved.
• Pro forma leverage was 2.8x as of June 30, below the 3x target, with no near-term maturities.

Business Commentary:

Volume Growth and Infrastructure Integration:

• Ontario Midstream Corporation gathered over 4.1 BCF per day of gas in Q2, marking a 20% increase year-over-year.
• The growth was driven by the successful integration of the HG Midstream assets, enhancing scale and regional connectivity.

Financial Performance and Free Cash Flow:

• The company reported adjusted EBITDA of $289 million for Q2, a 2% increase year-over-year.
• This increase was primarily due to higher gathering volumes, with the company also generating $80 million of free cash flow after dividends.

Strategic Infrastructure Development:

• Ontario Midstream is beginning construction on the Eastside Express pipeline with an investment of $200 million to $300 million over the next two to three years.
• The project aims to enhance regional connectivity and support the anticipated demand growth from new industrial and power generation projects in the area.

Balance Sheet and Leverage Management:

• The company received over $370 million from Veolium, resulting in a leverage ratio of 2.8 times as of June 30th, below their target of 3 times.
• This financial flexibility positions the company to pursue large infrastructure opportunities and execute its growth strategy effectively.

Production and Resource Validation:

• Early results from the revisit to the Dry Gas Marcellus showed EURs over 60% higher than offset wells completed a decade ago.
• This indicates significant productivity improvements from enhanced completion designs and validates the substantial resource base for future growth.

Sentiment Analysis:

Overall Tone: Positive

• Statements include: 'last year has been an exciting year for growth', 'successful integration of the HG Midstream assets', 'positions us well to continue delivering shareholder value', 'acceleration of new gas-fired power generation project announcements', 'production growth will have to come from high-quality, investment-grade producers', 'financial flexibility is critical... to execute the large opportunity set'.

Q&A:

• Question from John McKay (Goldman Sachs): Can you share more about Eastside Express CapEx expectations and contracting? Is it AR underwriting? Walk through spending and return profile.
  Response: Eastside Express is solely underwritten by Ontario Resources, with $200M-$300M in CapEx over 2-3 years, roughly $100M annually. It will have seven interconnects and capacity of 1.5-2 BCF/day, with optionality for third-party business.

• Question from John McKay (Goldman Sachs): Walk through the several billion dollars of opportunities. Could any dovetail with AR's top savings initiatives?
  Response: Opportunities include building regional pipelines and laterals for power plants and data centers in West Virginia, leveraging AR's dedicated acreage and demand projects.

• Question from Jeremy Tye (J.P. Morgan): Regarding the several billion dollars of CapEx opportunities, how much is for servicing third parties beyond AR?
  Response: Out of 15 projects evaluated, about half are likely associated with AR, with the rest potentially involving third parties.

• Question from Jeremy Tye (J.P. Morgan): What opportunities exist for water beneficial reuse given high disposal costs in the Northeast?
  Response: A closed-loop water system benefits both AR and AM, providing returns from water distribution and disposal/reuse. Connecting the HG system will contribute to high single-digit EBITDA growth in 2027.

• Question from Jeremy Tye (J.P. Morgan): What is Intero's appetite to embrace the governor's 50 by 50 goal for new power generation downstream?
  Response: The company fully embraces the initiative, positioning as the investment-grade producer and midstream builder in West Virginia to benefit.

• Question from Samil Sabal (Keyport Global): When contracting for gas to ultimate consumers, are you contracting with power producers or data center entities?
  Response: Contracting is with both power producers and data center entities; Eastside Express is built with AR's development in mind to position for future opportunities.

• Question from Ned Baramoff (Wells Fargo): Will construction of new projects overlap with Eastside Express?
  Response: Not in 2026, but construction may overlap in 2027 and beyond.

• Question from Ned Baramoff (Wells Fargo): Are AR contracts take-or-pay or volumetric for AM?
  Response: Contracts are based on acreage dedications from AR. No volumetric exposure is needed due to known drilling locations.

• Question from Ned Baramoff (Wells Fargo): What is the impact of potential curtailments on AM's results and seasonality?
  Response: Curtailments represent about 1% of daily volumes for one quarter, roughly 0.25% annually, which does not materially impact results.

Contradiction Point 1

Eastside Express Construction Timeline

The timing for the pipeline's construction phase is presented differently.

John McKay (Goldman Sachs) - John McKay (Goldman Sachs)

2026Q2: The Eastside Express is solely underwritten by Ontario Resources (AR), with a total CapEx of $200 million to $300 million over the next two to three years (roughly $100 million per year). It will be a large-diameter pipeline... This is the first project, with more announcements hoped for in the near term. - Mike (Ontario Midstream Corporation)

Can you provide details on the Eastside Express project's CapEx expectations, contracting, underwriting (including AR and third-party demand-side), and spending/return profile? - John Mackay (Goldman Sachs)

2026Q2: The project is solely underwritten by Antero Resources (AR)... Construction is expected to phase in over the 2028–2029 timeframe. - Michael Kennedy(CEO)

Contradiction Point 2

Timeline for Additional Projects

The expected timing for announcing and constructing new projects conflicts.

John McKay (Goldman Sachs) - John McKay (Goldman Sachs)

2026Q2: The Eastside Express is the first project, with more announcements hoped for in the near term. - Mike (Ontario Midstream Corporation)

Can you clarify the general buckets of the "several billion dollars of opportunities" and whether they align with AR's topside initiatives or should be considered separate? - Jeremy Tonet (J.P. Morgan)

2026Q2: The company hopes to announce more projects in the near term (2026). The East Side Express... construction over the next 2–3 years. - Michael Kennedy(CEO)

Contradiction Point 3

Highpoint (HG) System Integration Timeline and Capital

Timeline for completing the HG system integration moved from ~6 months to nearly a year.

Jeremy Tye (J.P. Morgan) - Jeremy Tye (J.P. Morgan)

2026Q2: Connecting the HG system will contribute to high single-digit EBITDA growth in 2027. - Mike (Ontario Midstream Corporation)

Given higher disposal costs in the Northeast versus Texas, what opportunities exist for water beneficial reuse and does this create a stronger economic incentive to recycle water? - Ivan Scotto (UBS)

20260430-2026 Q1: The water system integration... is on track to be completed by year-end 2026. - Michael Kennedy(CEO)

Contradiction Point 4

Growth Target Timeline

Timeline for exceeding the high single-digit EBITDA growth target shifted from 2027-2028 to being achievable in 2027.

John McKay (Goldman Sachs) - John McKay (Goldman Sachs)

2026Q2: The Eastside Express is the first project, with more announcements hoped for in the near term. - Mike (Ontario Midstream Corporation)

Can you walk us through the general buckets of the several billion dollars of opportunities and whether they align with AR's topside initiatives? - John Mackay (Goldman Sachs)

20260430-2026 Q1: AM's growth could exceed the high single-digit target in 2027 and 2028. - Michael Kennedy(CEO)

Contradiction Point 5

Capital Expenditure and Growth Trajectory

Contradiction in stated capital needs for future growth.

John McKay (Goldman Sachs) - John McKay (Goldman Sachs)

2026Q2: The Eastside Express project is solely underwritten by Ontario Resources (AR), with a total CapEx of $200 million to $300 million over the next two to three years (roughly $100 million per year). - Mike (Ontario Midstream Corporation)

Can you provide details on the Eastside Express project's CapEx expectations and contracting, including whether it's underwritten by AR, if third-party demand-side underwriting is being pursued, and the spending and return profile? - John Mackay (Goldman Sachs Group, Inc., Research Division)

2025Q4: For AM, there is really no additional capital required outside of the outlined budget; the assets are in the heart of the field with existing infrastructure. - Michael Kennedy(CEO)