Antero Resources Corp. (AR) Friday said it has entered into a definitive agreement for Antero Midstream Partners LP (AM) to acquire Antero Resources' integrated water business for an aggregate $1.05 billion in a combination of cash, assumed debt and Antero Midstream common units.
In addition, 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 Antero Resources' well completion operations in West Virginia and Ohio, the to-be-constructed advanced wastewater treatment complex, and the exclusive right to provide fluid handling and disposal services for 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. The acquisition is expected to close on September 23.
Separately, Antero Midstream Partners said the acquisition is expected to be accretive to its distributable cash flow per unit.
Driven by the drop down acquisition, the partnership 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 compared to prior guidance of $135 million to $145 million.
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