Antero prices upsized IPO above the range

Antero Resources Corp.

Antero Resources Corp. (NYSE: AR) has priced the Antero Midstream Partners LP initial public offering of 40,000,000 common units representing limited partner interests in the Partnership at $25 per common unit. The Partnership was initially offering 37,500,000 common units at an estimated price range of $19 to $21 per common unit. 

The Partnership has granted the underwriters a 30-day option to purchase up to an additional 6,000,000 common units. The common units are expected to begin trading on the New York Stock Exchange on Nov. 5 under the symbol "AM." The Partnership will initially own gathering and compression assets that service Antero's production. The offering is expected to close on Nov. 10.

Upon conclusion of the offering, the public will own 26.3% of the 151,881,914 outstanding common and subordinated units (or 30.3% if the underwriters exercise in full their option to purchase additional common units). Antero and its affiliates will own the remaining 73.7% limited partner interest in the Partnership (or 69.7% if the underwriters exercise in full their option to purchase additional common units). Antero Midstream Management LLC, a wholly owned subsidiary of Antero's controlling stockholder, will serve as the general partner of the Partnership and will own the Partnership's incentive distribution rights.

Total gross proceeds from the offering will be $1 billion and net proceeds will be $947 million (or $1.1 billion if the underwriters exercise in full their option to purchase additional common units), and the Partnership intends to use $1 million to pay finance structuring costs in connection with its new revolving credit facility, $458 million to repay outstanding indebtedness it will assume from Antero, and $238 million (or $380 million if the underwriters exercise in full their option to purchase additional common units) to make a distribution to Antero as reimbursement for certain capital expenditures incurred. The Partnership will retain $250 million of the net proceeds for general partnership purposes.

Barclays and Citigroup are acting as joint book-running managers and structuring agents for the offering. Wells Fargo Securities, Credit Suisse, JP Morgan, and Morgan Stanley are also acting as joint book-running managers.

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