Business Context and Reporting Period
This Form 8-K was filed by Altus Midstream Company (not Kinetik Holdings Inc.) on October 14, 2021, reporting events occurring on October 8, 2021. The filing details a material definitive agreement entered into by Altus Midstream Processing LP, a subsidiary of the Company, with Apache Corporation, the Company's indirect controlling stockholder.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the terms of a new contractual agreement rather than financial performance results.
Material Changes and Agreement Terms
On October 8, 2021, the Company entered into a new Gas Processing Agreement (New GPA) effective September 1, 2021, superseding the prior agreement dated July 1, 2018. The New GPA was approved by the Conflicts Committee. Material differences include:
- Natural Gas Liquids (NGL) Recoveries: Changed from actuals to a fixed recovery percentage.
- Fuel and Lost Gas: Changed from allocated and capped amounts to negotiated fixed percentages.
- Treating Fees: Added for blended streams falling outside defined specifications.
- Capacity Entitlement: Producer's reserved capacity reduced and based on historical performance, granting the Processor greater flexibility to serve third parties with equal priority.
- Most Favored Nations: Provision removed.
- Processing Fees: Reduced for gas from new wells drilled and completed after September 1, 2021.
Guidance, Outlook, and Risks
The filing does not contain updated financial guidance, management outlook, or specific risk factors beyond the standard disclosure that the agreement description is qualified by reference to the full text of the New GPA (Exhibit 10.1). The agreement is a related-party transaction subject to the Company's policy.
Key Facts for Investor Verification
- Verify the full text of the New GPA (Exhibit 10.1) to understand the specific fixed percentages and fee structures.
- Confirm the impact of the reduced reserved capacity entitlement on future third-party revenue opportunities.
- Assess the financial impact of the reduced processing fees for new wells drilled post-September 1, 2021.
- Note that portions of the exhibit were omitted for confidential treatment.