Good day and welcome to the Antero Midstream Fourth Quarter and Full Year 2017 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] Please note that today's event is being recorded. At this time, I would now like to turn the conference over to Mr. Michael Kennedy, Chief Financial Officer. Please go ahead.

Thank you for joining us for Antero Midstream's Fourth Quarter 2017 Investor Conference Call. We'll spend a few minutes going through the financial and operational highlights, and then we'll open it up for Q&A. I would also like to direct you to the homepage of our website at www.anteromidstream.com or www.anteromidstreamgp.com, where we have provided a separate earnings call presentation that will be reviewed during today's call. Before we start our comments, I would first like to remind you that during this call, Antero management will make forward-looking statements. Such statements are based on our current judgments regarding factors that will impact the future performance of Antero Resources, Antero Midstream and AMGP and are subject to a number of risks and uncertainties, many of which are beyond Antero's control. Actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Today’s call may also contain certain non-GAAP financial measures. Please refer to our earnings press release for important disclosures regarding such measures including reconciliations to the most comparable GAAP financial measures. Before starting the call, we quickly want to address the recently published AR shareholder letter and a response press release. As stated in our press release, we are currently working with our Board to evaluate various potential measures. There is no definitive time table for completion of this evaluation and there can be no assurances that any initiatives will be announced or completed in the future. During today’s call we will not address any additional questions related to this matter. Joining me on the call today are Paul Rady, Chairman and CEO of Antero Resources and Antero Midstream; and Glen Warren, President and CFO of Antero Resources and President of Antero Midstream. I will now turn the call over to Paul.

Thanks, Mike, and thank you to everyone for listening in to the call today. I’ll begin my comments today with a discussion on the five-year outlook at AR and the benefits to AM. Mike will then walk through fourth quarter 2017 results and the five-year outlook at AM. First I’d like to thank everyone that attended Antero’s first ever Analyst Day in New York this last month. We had almost 200 attendees in person and almost 300 who dialed into the webcast. So thank you to all the analysts and investors that attended or listened in. The primary reason for hosting an Analyst Day is that we believe both AR and AM are as important inflection points joining in an elite group of E&Ps and MLPs. In addition to the inflection points, we wanted to publicly roll out our optimized five-year upstream development and midstream infrastructure plans. I'll begin my prepared remarks going through the five-year plan at AR on Slide 3 titled, AR's $3 billion capital reduction to our five-year plan. On the left hand side of the page, you can see AR's consolidated drilling and the completion capital plan from the year ago in green compared to the current plan in orange. Comparing the two plans, we have reduced the drilling and completion capital by almost $3 billion over the next five-years at the AR level. Importantly, on the right hand side of the page, AR's production targets are essentially unchanged despite the significant reduction in capital. This step change is driven by longer lateral drilling, higher recoveries, and capital in operating efficiencies. In addition, all of the development in the five-year plan is focused on high rate of return liquids-rich locations on Antero Midstream dedicated acreage. AR's liquids-rich focused development plan underpins the gathering, compression, water, and…

Thank you, Paul. I'll first touch on the distribution for AM and AMGP for the fourth quarter. We recently announced an AM distribution of $36.5 per unit a 30% increase year-over-year and a 7% increase sequentially. Additionally, AMGP announced the distribution of $7.5 per share or a 27% increase sequentially. The fourth quarter distribution at AM was the 12 consecutive distribution increase since its IPO and the AMGP distribution was the second consecutive distribution since its IPO. For the full year 2017, AM delivered distribution growth of 29% while maintaining a healthy coverage of 1.3 times and AMGP distributions totaled $0.16 per share to the midpoint of the guidance range. Now, let’s move on to the fourth quarter results beginning on Slide number 6 titled, high growth year-over-year midstream throughput. Starting on the top left portion of the page, low pressure gathering volumes were 1.7 Bcf per day in the fourth quarter which represents a 12% increase from the prior year quarter. Compression volumes during the quarter averaged 1.4 Bcf per day, a 47% increase compared to the prior year quarter. The growth in compression volumes was driven by AM adding almost 600 million per day of compression capacity during 2017 including expanding our Marcellus compressor station by 25 million per day during the fourth quarter. High pressure gathering volumes were 1.8 Bcf per day a 28% increase over the prior year. High pressure volumes were in excess of low pressure volumes due to Antero resources utilizing AM high pressure pipelines to avoid third-party downstream pipeline constraints on a temporary basis. Joint venture growth processing volumes were 425 million per day during the fourth quarter over a 100% of nameplate capacity of 400 million per day. Growth fractionation volumes were over 900,000 barrels per day. As Paul mentioned, the AM…

We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Jeremy Tonet with JP Morgan. Please go ahead.

Wondering for the guidance that you provide for AR as far as the production in the first quarter some of the issues there? If you could provide a bit more color on the read through impact to AM with sure Sherwood downtime as well in the cold weather in January and the outage. Can you just give us more color as how you think that impacts the AM operation?

Yes, the read through would be the throughput volumes for the first quarter will be similar to the fourth quarter of 2017.

I was wondering also as well when you're looking at growth here, if you could just kind of refresh us as part of the appetite and ability to capture third-party business at this point. What’s kind of the outlook in that front?

Well, related to our actual guidance and forecast, we do not include any third-party volumes or third-party opportunities in that guidance or outlook. We do see actually with the Clearwater facility coming on opportunities around that, the capacity when fully online will be 60,000 barrels and our initial amount is to be about 40,000 barrels per day. So, there will be opportunities for third-party with the Clearwater facility. So, we do see some of those, but we have not forecast or included in any of the outlook that we provided.

And on the gathering side as well, it seems like you have some density in the area there. Do you see opportunities for winning business here even if it’s not in the budget at this point?

From a gathering, if you seen our math we have highly contiguous acreage position without really any other operators around our systems. There may be opportunities here and there, but it would be smaller just because of our dominant nature and our areas of operation.

Our next question comes from Vikram Bagri with Citi. Please go ahead.

My first question is, you talked about our $1 billion in additional potential projects at AM. Is there any update on that backlog? And would you say, are you closer to deciding on the project today than you were three months ago whether its shales ethane pipe in five or marineries project or any other downstream project? Are you closer to making a decision today than in your last quarter?

Yes, thanks. I think it's hard to characterize them that way, right now. We’re still having discussions and only time will tell and I wouldn’t really characterize this as a backlog, it's just an earmark for potential investment there. And we still have some confidence that, that’s all going to work out but nothing to report today.

And the second question I had was about the processing disruptions you saw in fourth quarter. Would you look to build excess processing capacity given those disruptions? And also given your volume expectations this year, is there a chance that your processing capacity gets tied later this year and even more forward the timeline to bring those additional plans online?

Well, we of course have our production forecast and we are electing plans as we go and they generally come on right on time and are filled quite quickly. In terms of unfilled, we don’t see that much unfilled and shouldn’t be able to just continue on our pace where the plans are available just as we bring on the production. I think the some of the production or the processing downtime over the course of this winter was just early stage that Sherwood is relatively new and hadn’t been tested like this before for freeze-off. So, there was just not quite enough installation and heating tape, but lessons learned there and we don’t project seeing anymore there. The operator is working hard to make sure that, that doesn’t happen again.

And then just lastly on the water, I noticed AR reported average proppant intensity of about 2,000 pounds per square foot in fourth quarter. You’ve tested proppant intensity of as high as 2,500 pounds square foot and your type with higher proppant intensity was outperforming your based type curve. I don’t see that slide into the deck anymore. Could you provide an update on what you were seeing in terms of EURs, well EURs with high crop end loadings? And would you continue to load test high proppant loadings going forward?

Yes, we continue to test higher proppant loading and so the highest we’ve done on a broader scale is 2,500 pounds. Our base design is 2000 but we have number of pilots where we’ve done 2,500 pounds right in the very same area. So say off the north side of the bed, it's going 500 pounds in the south side its 2,000 pounds. And we do see better response with the 2,500 pounds but time will tell as to whether it hangs in there and holds up. We’ve gone as high as 2,750 pounds, 2,800 pounds and will continue to test that too. But it’s a smaller proportion of even the 2,500s relatives to the 2,000 until we see slightly longer term results there and see if it's merited.

Should we look for an update sometime during this year on higher end loadings, maybe middle of the year or third quarter conference call?

Yes, definitely. We usually wait at least 90 days to make a call on a well, but we’ll know more and more as these different types of pilots show us the results. We also are doing where we’re doing tighter cluster spacing and we’re doing 100 MASH only pilots as well. So we continue to learn to optimize.

Our next question comes from Ethan Bellamy with Baird. Please go ahead.

Is there any potential for acreage sales of any magnitude at AR?

Probably not, not in the near-term we like everything that we have. We’ve done some big and some small acreage sales whether it’s a million dollars or 170 million like the one we did I think it was last year the AQT. So we’re always looking at that, but don’t see anything on the horizon, right now. We’re really consolidated, don’t have much outlying acreage.

And then hypothetically speaking, I could see some strategic rationale for taking a stake in ME2 and potentially to investing with energy transfer further downstream at market Hook -- Marcus Hook. First, is that something that would appeal to you at the right price? And second, for now or for any other potential third-party activity or M&A, should we presume that any midstream investment you would make would be done at AM or as using AMGP or buying asset at AMGP an option?

Yes, Ethan, good morning. GP is always a possibility, but I think you should presume AM would be the lead on that. But that certainly possible as GP matures overtime and as ME2 were watching that project carefully like lot of folks, but we have quite stake in it in terms of an anchor shipper. And so, we’re anxious to get that online this year, continue to be interested from an investment standpoint just like a lot of other things that we’re looking at, but we’ll continue to watch that once plays out but nothing to report there today.

[Operator Instructions] Our next question comes from Tina Zeng with Tudor Pickering Hall & Company. Please go ahead.

So I just have a question on the Clearwater commissioning. So for the wastewater flowing through the facility, is that fairly flow back from the completion? Or is there an element of produced water in there as well? Just really trying to get a sense of how sensitive the contribution will be to the completion count versus aggregate?

Yes, well, it is, Tina, both flow back water and produced water. So there is a difference in salinity there. I would say that I don’t have the proportions of produced relative to flow back, but it’s probably 10% to 20% at most of total water going through would be produced water, the rest would be flow back. So that’s going to be the higher proportion going forward.

And will that change with any third-party contributions?

Well, it would and mostly what we would be getting from third parties would probably be flow back water as they complete their pads and so on. So, there can be quite serge there. So I do think yes, if it is third-party water it will be mostly flow back.

And then going back to that Q1 guide, so given that AR has kept there kind of the whole year guide flat. I was wondering if we would see an uptick in the next couple of quarters in throughput to make up for that Q1 flat growth?

That’s the guidance would imply.

Next question comes from J R. Weston with Raymond James. Please go ahead.

I was just wondering if you could discuss maybe in a little bit more detail, the impact of the first quarter constraints on the water business and AM’s well serviced I guess cadence throughout the first quarter and then the rest of the year, obviously assume that there is probably a step down in the first quarter. And then I kind of wondering if it’s a linear figure for the rest of the year or it will continue to progress. Just any more color on the issues in the first quarter and how that might impact the water segment?

No, the actual production volumes then impact the water segment. During the winter, we typically have a bit less activity because it is cold so it does slowdown of water a bit, but generally throughout the year it’s a pretty linear, wells being serviced by the water segment.

So, there were no I guess completions in the well service that were slowdown as a result of the constraint?

No, absolutely not.

Okay. And then I guess maybe just one other second quarter in a row of high pressure volumes above that the low pressure, I guess you guys kind of talked about that a little bit already, but just wondering if we expect that to return to normal I guess in probably the second quarter?

We actually expected the return to normal in the first quarter, but the fourth quarter we put about a 125 million a day on the Bobcat versus 230 in the third quarter. October was an active month, but when it became cold weather, you use that lateral much less.

At this time, this will conclude our question-and-answer session. I’d like to turn the conference back over to Michael Kennedy for any closing remarks.

I want to thank everyone for participating in our conference call today. If you have any further questions, please feel free to reach out to us. Thanks again.

The conference has now concluded. Thank you very much for attending today’s presentation. You may now disconnect.