May 8, 2019 - 7:54 PM EDT
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Altus Midstream Announces $825 Million of Committed Financing for Planned Growth Projects

Altus Midstream LP to Issue Preferred Equity; Expand Credit Facility Capacity During Initial Period

HOUSTON, May 08, 2019 (GLOBE NEWSWIRE) -- Altus Midstream Company (“Altus”) (NASDAQ: ALTM) today announced that Altus Midstream LP (“Altus Midstream”) has entered into definitive agreements to issue $625 million of preferred equity in a private placement and amend its credit facility, which will allow Altus Midstream’s revolver capacity to increase to $650 million during the Initial Period (as defined in Altus Midstream’s credit agreement), an increase of $200 million.

“Upon closing the preferred equity financing, the amended revolver and preferred equity will satisfy our needs for external capital for the foreseeable future,” said Clay Bretches, Altus CEO and president. “This incremental financing will facilitate our ability to efficiently finance the exercise of all three remaining JV pipeline equity options, two of which we plan to exercise in 2019 – the Permian Highway natural gas pipeline and the Shin Oak NGL pipeline, as well as our gathering and processing business.”

“Following an extensive and competitive process, we chose to issue private preferred equity at Altus Midstream, a deal in which we are pleased to partner with outstanding investors led by Magnetar Capital and The Carlyle Group’s Energy Mezzanine Opportunities team. This financing, along with our amended revolver, confirms that our gathering and processing assets and JV pipelines are highly valued for their ability to deliver long-term returns for our investors,” said Ben Rodgers, Altus chief financial officer. “Upon closing, these financings will provide us with significant incremental liquidity with pricing and terms that are competitive with recent comparable transactions in the midstream space. They also solidify our financing outlook by funding our planned growth projects without issuing additional common equity or warrants.”

Preferred Equity

The preferred equity will have a 7 percent per annum distribution rate, payable quarterly with a payment-in-kind option at Altus Midstream’s discretion for the first six quarters. The preferred equity will be redeemable at any time by Altus Midstream based on delivering the greater of an 11.5 percent internal rate of return (IRR) and 1.3x multiple of invested capital. The distribution rate and IRR thresholds increase to the extent the preferred equity is outstanding after five years. Closing and funding of the preferred equity financing is expected to occur by June 28, 2019, subject to customary closing conditions.

The lead preferred equity investors are Magnetar Capital and The Carlyle Group’s Energy Mezzanine Opportunities team. Other supporting investors include certain funds or accounts managed by affiliates of Apollo Capital Management, L.P., FS Energy and Power Fund, as advised by a joint venture of FS Investments and EIG Global Energy Partners, funds managed by Tortoise Capital Advisors, L.L.C., Salient Capital Advisors, LLC and Yaupon Capital Management. Credit Suisse and J.P. Morgan served as joint placement agents to Altus Midstream in connection with the private placement of preferred equity.

Amended Credit Facility

Altus Midstream’s bank group features 100 percent crossover with the bank group of Apache Corporation (NYSE, NASDAQ: APA), which, through direct and indirect interests, owns 79 percent of Altus Midstream. Under the amended revolver, at the time Altus Midstream receives funds for at least $500 million of preferred equity, commitments during the Initial Period will increase by $200 million to a total of $650 million. Altus Midstream expects to exit the Initial Period later this year, which, per the terms of the existing agreement, will allow for an increase in borrowing capacity to $800 million.

Investor Presentation

Additional information is available in an updated investor presentation posted to Altus’ website at www.altusmidstream.com.

About Altus Midstream Company

Altus Midstream Company is a pure-play, Permian-to-Gulf Coast midstream C-corporation. Through its consolidated subsidiaries, Altus owns substantially all of the gas gathering, processing and transportation assets servicing Apache Corporation’s production in the Alpine High play in the Delaware Basin and owns, or has the option to own, joint venture equity interests in five Permian Basin pipelines, four of which go to various points along the Texas Gulf Coast. Altus posts announcements, operational updates, investor information and press releases on its website, www.altusmidstream.com.

Forward-Looking Statements

This news release includes certain statements that may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “seeks,” “possible,” “potential,” “predict,” “project,” “guidance,” “outlook,” “should,” “would,” “will,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about future plans, expectations, and objectives for Altus’, Altus Midstream’s, and/or Apache’s operations, including statements about our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, and objectives of management. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. See "Risk Factors" in our Annual Report Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development or otherwise, except as may be required by law.

Contacts

Investors: (281) 302-2286  Gary Clark
Media: (713) 296-7276  Phil West

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Source: GlobeNewswire (May 8, 2019 - 7:54 PM EDT)

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