Antero Midstream (AM) risk factors, FY2024 10-K

Other

1. 01Because substantially all of our revenue is currently derived from Antero Resources, any development that materially and adversely affects Antero Resources’ operations, financial condition or market reputation could have a material and adverse impact on us
2. 02Also, due to our relationship with Antero Resources, our ability to access the capital markets, or the pricing or other terms of any capital markets transactions, may be adversely affected by any impairment to Antero Resources’ financial condition or adverse changes in its credit ratings
3. 03See Item 1A, “Risk Factors” in Antero Resources’ Annual Report on Form 10-K for the year ended December 31, 2024 (which is not, and shall not be deemed to be, incorporated by reference herein) for a full disclosure of the risks associated with Antero Resources’ business
4. 04A material shut-in of production by Antero Resources or any of our other customers could adversely affect our business
5. 05Our gathering and compression agreements include minimum volume commitments only under certain circumstances
6. 06Recent action and the possibility of future action on trade by U.S. and foreign governments has increased the costs of certain equipment and materials used in the construction of our assets and has created uncertainty in global markets, which may adversely affect our income from operations and cash flows
7. 07If third-party pipelines or other midstream facilities interconnected to our gathering and compression systems become partially or fully unavailable, our operating margin and cash flows could be adversely affected
8. 08Our exposure to commodity price risk may change over time
9. 09The fees charged to our customers may not escalate sufficiently to cover increases in costs, or the agreements may be amended with less favorable terms, may not be renewed or may be suspended in some circumstances
10. 10Oil and natural gas producers’ operations, especially those using hydraulic fracturing, are substantially dependent on the availability of water
11. 11ESG matters and conservation measures may adversely impact our business
12. 12Our business involves many hazards and operational risks, some of which may not be fully covered by insurance. The occurrence of a significant accident or other event that is not fully insured could curtail our operations and have a material adverse effect on our business, financial condition and results of operations
13. 13We do not own all of the land on which our pipelines and facilities are located, which could result in disruptions to our operations
14. 14World health events may materially adversely affect our business
15. 15Terrorist attacks, cyberattacks and threats could have a material adverse effect on our business, financial condition and results of operations
16. 16We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness or to refinance, which may not be successful
17. 17We will be required to make capital expenditures to increase our asset base. If we cannot obtain needed capital or financing on satisfactory terms, we may be unable to expand our business operations and/or our financial leverage could increase
18. 18We may be unable to access the equity or debt capital markets to meet our obligations
19. 19Restrictions in our existing and future debt agreements could adversely affect our business, financial condition and results of operations
20. 20Debt we incur in the future may limit our flexibility to obtain financing and to pursue other business opportunities
21. 21Increases in interest rates could adversely affect our business
22. 22Our gathering and compression and water handling systems are concentrated in the Appalachian Basin, making us vulnerable to risks associated with operating in one major geographic area
23. 23A shortage of equipment and skilled labor in the Appalachian Basin could reduce equipment availability and labor productivity and increase labor costs, which could have a material adverse effect on our business and results of operations
24. 24We may be unable to make attractive acquisitions or successfully integrate acquired businesses, and any inability to do so may disrupt our business and hinder our ability to grow
25. 25Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock
26. 26We have elected not to be subject to the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), regulating corporate takeovers
27. 27We own a 50% interest in the Joint Venture, which is operated by MarkWest. While we have the ability to influence certain business decisions affecting the Joint Venture, the success of our investment in the Joint Venture will depend on MarkWest’s operation of the Joint Venture
28. 28If the Joint Venture is not successful or if the Joint Venture does not perform as expected, our future financial performance may be negatively impacted
29. 29Interruptions in operations at any of the Joint Venture’s facilities may adversely affect its operations and our gathering and processing and water handling operations
30. 30We are subject to complex federal, state and local laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities
31. 31If our assets become subject to FERC regulation or federal, state or local regulations or policies change, or if we fail to comply with market behavior rules, our financial condition, cash flows and results of operations could be materially and adversely affected
32. 32Increased regulation of hydraulic fracturing could result in reductions or delays in production by our customers, which could reduce the throughput on our gathering and processing systems and the number of wells for which we provide water handling services, which could adversely impact our revenues
33. 33We or any third-party customers may incur significant liability under, or costs and expenditures to comply with, environmental and occupational health and workplace safety regulations, which are complex and subject to frequent change
34. 34The Inflation Reduction Act could adversely impact demand for oil and gas and could impose new costs on our operations and those of our customers
35. 35Our operations are subject to a series of risks related to climate that could result in increased operating costs, limit the areas in which our customers may conduct oil and gas exploration and production activities, and reduce demand for the services we provide
36. 36We may incur significant costs and liabilities as a result of pipeline integrity management program testing and any related pipeline repair or preventative or remedial measures
37. 37Regulations related to the protection of wildlife could adversely affect our ability to conduct oil and gas operations in some of the areas where we operate
38. 38The loss of senior management or technical personnel could adversely affect operations
39. 39Our officers and employees provide services to both Antero Resources and us
40. 40We are a holding company whose sole material asset is our equity interest in Antero Midstream Partners, and we are accordingly dependent upon distributions from Antero Midstream Partners to pay taxes, return capital to stockholders and cover our corporate and other overhead expenses
41. 41Certain of our stockholders have investments in our affiliates that may conflict with the interests of other stockholders
42. 42Our future tax liabilities may be greater than expected if we do not generate deductions or net operating loss (“NOL”) carryforwards sufficient to offset taxable income or if tax authorities challenge our tax positions
43. 43Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could adversely affect our operating results and cash flows
44. 44Taxable gain or loss on the sale of our common stock could be more or less than expected

General Risks

1. 45We expect to use a significant portion of our cash flows to pay dividends to our stockholders and/or repurchase shares of our common stock, which could limit our ability to grow and make acquisitions
2. 46We may reduce or cease paying dividends on our common stock
3. 47The market price of our common stock could be volatile, and holders of common stock may not be able to resell their common stock at or above the price at which they acquired such securities due to fluctuations in the market price of our common stock
4. 48There may be future dilution of our common stock, which could adversely affect the market price of shares of our common stock
5. 49Sales of a substantial amount of shares of our common stock in the public market could adversely affect the market price of our shares
6. 50We may issue preferred stock, which may have terms that could adversely affect the voting power or value of our common stock