Hot stock to watch: Antero Midstream Partners LP (NYSE: AM)

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Antero Midstream Partners LP (NYSE: AM) stock surged 15.25% on 9th October (Source: Google finance) and slightly corrected over 1.3% on October 10th. 2018 (as of  10:22 AM GMT-4; Source: Google finance). Antero Midstream GP LP (NYSE: AMGP) announced plans to acquire Antero Midstream Partners both those held by the public and those held by Antero Resources (AR) in a stock and cash transaction. In connection with the transaction, AMGP will convert into a corporation and the combined entity will be renamed Antero Midstream Corp. Under the deal terms, AM public unitholders will be entitled to receive a combination of $3.415 in cash and 1.635 shares of New AM stock per AM unit owned, resulting in aggregate consideration valued at $31.41 per AM unit. Antero Resources will be entitled to receive a combination of $3.00 in cash and 1.6023 shares of New AM stock for each AM unit owned, resulting in aggregate consideration valued at $30.43 per AM unit. AM public unitholders will be entitled to elect to receive their merger consideration in all cash, all stock, or a combination of cash and stock, and AR will have the ability to elect to take a larger portion of its merger consideration in cash if the AM public unitholders elect to receive more stock than the mixed election consideration. The aggregate amount of cash consideration paid to all AM unitholders equals approximately $598 million

AM for the second quarter, has reported 26% increase in the Net income to $109 million compared to the prior year quarter, or $0.41 per limited partner unit. Adjusted EBITDA increased by 26% to $176 million compared to the prior year quarter. Distributable Cash Flow increased by 30% to $142 million compared to the prior year quarter, resulting in DCF coverage of 1.3x. Increased distribution for the 14th consecutive quarter, achieving 30% growth on an annualized basis. Record gathering, compression, fresh water delivery, processing and fractionation volumes. Net Debt to trailing twelve months Adjusted EBITDA of 2.3x and $750 million of liquidity at quarter-end.

Low pressure gathering volumes for the second quarter of 2018 averaged 1,981 MMcf/d, an 18% increase as compared to the prior year quarter.  Compression volumes for the second quarter of 2018 averaged 1,558 MMcf/d, a 31% increase as compared to the second quarter of 2017.  High pressure gathering volumes for the second quarter of 2018 averaged 1,932 MMcf/d, an 11% increase over the second quarter of 2017.  The increase in gathering and compression volumes to Partnership record levels was driven by production growth from Antero Resources in Antero Midstream’s area of dedication.

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