Argonaut Gold Inc (AR)

[Timothy Smith]

Antero Midstream Partners (NYSE:AM) agrees to acquire Antero Resources' (NYSE:AR) integrated water business for $1.05B in a combination of cash, assumed debt and AM units.

In addition, AM could receive two potential $125M earn-out payments at year-end 2019 and 2020 if certain fresh water volumetric delivery targets are met.

AM also will enter into a 20-year water services agreement covering AR's 534K net acres in West Virginia and Ohio, with a right of first offer on all future areas of operation.

"Antero Midstream takes another step towards becoming a full value chain midstream services provider in the Appalachian Basin, and Antero Resources reduces debt by $794M," says AM CEO Paul Rady.

Driven by the drop-down acquisition, AM raises its 2015 EBITDA outlook to $170M-$180M from a prior $150M-$160M; also sees 2015 distributable cash flow of $150M-$160M vs. prior guidance of $135M-$145M, and maintains capex guidance of $425M-$450M.

The help fund the acquisition, AM will launch a $243M private placement.