10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-38048

KINETIK HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	81-4675947
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2700 Post Oak Blvd, Suite 300

Houston, Texas, 77056

(Address of principal executive offices)

(Zip Code)

(713) 621-7330

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.0001 par value	KNTK	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of registrant’s Class A Common Stock, par value $0.0001 per share issued and outstanding as of July 31, 2022	40,550,555
Number of shares of registrant’s Class C Common Stock, par value $0.0001 per share issued and outstanding as of July 31, 2022	94,450,000

TABLE OF CONTENTS

Item		Page
	PART I — FINANCIAL INFORMATION (UNAUDITED)
1.	FINANCIAL STATEMENTS	1
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	1
	CONDENSED CONSOLIDATED BALANCE SHEETS	2
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	3
	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS	4
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46
4.	CONTROLS AND PROCEDURES	47
	PART II — OTHER INFORMATION
1.	LEGAL PROCEEDINGS	48
1A.	RISK FACTORS	48
6.	EXHIBITS	49
	SIGNATURES	50

i

GLOSSARY OF TERMS

The following are abbreviations and definitions of certain terms used in this Quarterly Report on Form 10-Q and certain terms which are commonly used in the exploration, production and midstream sectors of the oil and natural gas industry:

•ASC. Accounting Standards Codification.

•ASU. Accounting Standards Update.

•Bbl. One stock tank barrel of 42 United States (“U.S.”) gallons liquid volume used herein in reference to crude oil, condensate or NGLs.

•Bcf. One billion cubic feet

•Bcf/d. One billion cubic feet per day.

•Btu. One British thermal unit, which is the quantity of heat required to raise the temperature of a one-pound mass of water by one degree Fahrenheit.

•CODM. Chief Operating Decision Maker.

•Delaware basin. Located on the western section of the Permian Basin. The Delaware Basin covers a 6.4M acre area.

•FASB. Financial Accounting Standards Board.

•Field. An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

•Formation. A layer of rock which has distinct characteristics that differs from nearby rock.

•GAAP. United States Generally Accepted Accounting Principles.

•GHG. Greenhouse gas.

•LIBOR. London Interbank Offered Rate.

•MBbl. One thousand barrels of crude oil, condensate or NGLs.

•MBbl/d. One MBbl per day.

•Mcf. One thousand cubic feet of natural gas.

•Mcf/d. One Mcf per day.

•MMBbl. One million barrels of crude oil, condensate or NGLs.

•MMBtu. One million British thermal units.

•MMcf. One million cubic feet of natural gas.

•MMcf/d. One MMcf per day.

•MVC. Minimum volume commitments.

•NGLs. Natural gas liquids. Hydrocarbons found in natural gas, which may be extracted as liquefied petroleum gas and natural gasoline.

•Throughput. The volume of crude oil, natural gas, NGLs, water and refined petroleum products transported or passing through a pipeline, plant, terminal or other facility during a particular period.

•SEC. U.S. Securities and Exchange Commission.

•SOFR. Secured Overnight Financing Rate.

•WTI. West Texas Intermediate crude oil.

All references to the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”), and Class C common stock, par value $0.0001 per share (“Class C Common Stock”), reflect such share amounts as retrospectively restated to reflect the Company’s two-for-one stock split, which was effected via stock dividend on June 8, 2022.

ii

FORWARD-LOOKING STATEMENTS AND RISK

This Quarterly Report on Form10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts included or incorporated by reference in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs and plans, and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “continue,” “seek,” “guidance,” “might,” “outlook,” “possibly,” “potential,” “prospect,” “should,” “would,” or similar terminology, but the absence of these words does not mean that a statement is not forward looking. Although we believe that the expectations reflected in such forward-looking statements are reasonable under the circumstances, we can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, assumptions about:

•our ability to integrate operations or realize any anticipated benefits, savings or growth of the Transaction (as defined herein). See Note 2 — Business Combination in the Notes to our Condensed Consolidated Financial Statements set forth in this Form 10-Q;

•the scope, duration, and reoccurrence of any epidemics or pandemics (including, specifically, the coronavirus disease 2019 (“COVID-19”) pandemic or any related variants) and the actions taken by third parties in response to such epidemics or pandemics;

•the market prices of oil, natural gas, NGLs, and other products or services;

•pipeline and gathering system capacity and availability;

•production rates, throughput volumes, reserve levels, and development success of dedicated oil and gas fields;

•our future financial condition, results of operations, liquidity, compliance with debt covenants and competitive position;

•our future revenues, cash flows and expenses;

•our access to capital and its anticipated liquidity;

•our future business strategy and other plans and objectives for future operations;

•the amount, nature and timing of our future capital expenditures, including future development costs;

•the risks associated with potential acquisitions, divestitures, new joint ventures or other strategic opportunities;

•the recruitment and retention of our officers and personnel;

•the likelihood of success of and impact of litigation and other proceedings, including regulatory proceedings;

•our assessment of our counterparty risk and the ability of our counterparties to perform their future obligations;

•the impact of federal, state, and local political, regulatory and environmental developments where we conduct our business operations;

•the occurrence of an extreme weather event such as Winter Storm Uri, terrorist attack or other event that materially impacts project construction and our operations, including cyber or other attached on electronic systems;

•our ability to successfully implement and execute our environmental, social and governance goals and initiatives and achieve the anticipated results of such initiatives;

•general economic and political conditions, including the armed conflict in Ukraine and the impact of continued inflation and associated changes in monetary policy; and

iii

•other factors disclosed in Part II, Item 1A — Risk Factors of the Company’s Quarterly Report on Form 10-Q for the first quarter of 2022, filed on May 10, 2022.

Other factors or events that could cause the Company’s actual results to differ materially from the Company’s expectations may emerge from time to time, and it is not possible for the Company to predict all such factors or events. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements. All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, the Company disclaims any obligation to update or revise its forward-looking statements, whether based on changes in internal estimates or expectations, new information, future developments or otherwise.

iv

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,*				Six Months Ended June 30,*
	2022		2021		2022		2021
	(In thousands, except per share data)
Operating revenues:
Service revenue	$	102,080	$	62,242	$	182,525	$	129,904
Product revenue	229,651		71,099		404,579		151,092
Other revenue	3,841		2,425		5,717		2,873
Total operating revenues	335,572		135,766		592,821		283,869
Operating costs and expenses:
Costs of sales (exclusive of depreciation and amortization shown separately below)	152,714		43,503		272,989		80,508
Operating expenses	35,280		25,280		65,151		40,844
Ad valorem taxes	5,880		3,414		10,033		5,765
General and administrative expenses	25,960		5,337		48,712		10,963
Depreciation and amortization	66,581		57,166		127,604		113,137
Loss on disposal of assets	8,546		422		8,656		454
Total operating costs and expenses	294,961		135,122		533,145		251,671
Operating income	40,611		644		59,676		32,198
Other income (expense):
Interest and other income	—		26		250		563
Gain on redemption of mandatorily redeemable Preferred Units	5,087		—		9,580		—
Gain (loss) on debt extinguishment	(27,975)		60		(27,975)		60
Unrealized gain on embedded derivative	91,448		—		88,562		—
Interest expense	(25,347)		(32,607)		(52,121)		(57,917)
Equity in earnings of unconsolidated affiliates	47,786		16,511		75,703		27,866
Total other income (expense), net	90,999		(16,010)		93,999		(29,428)
Income (loss) before income taxes	131,610		(15,366)		153,675		2,770
Income tax expense	162		—		838		—
Net income (loss) including noncontrolling interest	131,448		(15,366)		152,837		2,770
Net income attributable to Preferred Unit limited partners	109,502		—		114,495		—
Net Income (loss) attributable to common shareholders	21,946		(15,366)		38,342		2,770
Net income (loss) attributable to Common Unit limited partners	15,508		(15,366)		28,039		2,770
Net income attributable to Class A Common Shareholders	$	6,438	$	—	$	10,303	$	—
Net income attributable to Class A Common Shareholders per share
Basic	$	0.06	$	—	$	0.16	$	—
Diluted	$	0.06	$	—	$	0.16	$	—
Weighted-average shares **
Basic	39,297		—		38,766		—
Diluted	39,329		—		38,796		—

* The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

** Share amounts have been retroactively restated to reflect the Company’s Stock Split (as defined in Note 10—Equity and Warrants), which was effected on June 8, 2022. Refer to Note 10 – Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements

1

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,		December 31,
	2022		2021
	(In thousands, except share amounts)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,319	$	18,729
Accounts receivable, net of allowance for credit losses of $1,000 in 2022 and 2021	296,218		178,107
Prepaid and other current assets	40,226		20,683
	341,763		217,519
NONCURRENT ASSETS:
Property, plant and equipment, net	2,481,072		1,839,279
Intangible assets, net	747,721		786,049
Operating lease right-of-use assets	53,016		61,562
Deferred charges and other assets	26,384		22,320
Investment in unconsolidated affiliates	2,342,311		626,477
Goodwill	4,081		—
	5,654,585		3,335,687
Total assets	$	5,996,348	$	3,553,206
LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	10,907	$	12,220
Accrued expenses	245,951		135,643
Distribution payable to Preferred Unit limited partners	6,937		—
Derivative liabilities	—		2,667
Current portion of operating lease liabilities	35,327		31,776
Current portion of long-term debt, net	—		54,280
Other current liabilities	6,835		4,339
	305,957		240,925
NONCURRENT LIABILITIES:
Long-term debt, net	2,971,270		2,253,422
Contract liabilities	22,899		11,674
Operating lease liabilities	17,447		29,889
Embedded derivative liabilities	488		—
Derivative liabilities	—		200
Other liabilities	2,459		2,219
Contingent liabilities	—		839
Deferred tax liabilities	11,813		7,190
Mandatorily redeemable Preferred Units	30,717		—
	3,057,093		2,305,433
Total liabilities	3,363,050		2,546,358
COMMITMENTS AND CONTINGENCIES (Note 8)
Redeemable noncontrolling interest — Common Unit limited partners	3,251,290		1,006,838
Redeemable noncontrolling interest — Preferred Unit limited partners	563,338		—
EQUITY:
Class A Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 40,550,555 and nil shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively*	4		—
Class C Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 94,450,000 and 100,000,000 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively*	9		10
Accumulated deficit	(1,181,343)		—
	(1,181,330)		10
Total liabilities, noncontrolling interests, and equity	$	5,996,348	$	3,553,206

* Share amounts have been retroactively restated to reflect the Company’s Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements

2

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2022		2021
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income including noncontrolling interests	$	152,837	$	2,770
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	127,604		113,137
Amortization of deferred financing costs	6,538		6,637
Amortization of contract costs	896		896
Contingent liabilities remeasurement	(839)		—
Distributions from unconsolidated affiliates	117,544		27,882
Derivatives settlement	11,115		(16,297)
Derivatives fair value adjustment	(102,544)		13,409
Gain on redemption of mandatorily redeemable Preferred Units	(9,580)		—
Loss on disposal of assets	8,656		454
Equity in earnings from unconsolidated affiliates	(75,703)		(27,866)
(Gain) loss on debt extinguishment	27,975		(60)
Share-based compensation	18,304		—
Deferred income taxes	613		—
Change in operating assets and liabilities:
Accounts receivable	(100,511)		(62,213)
Other assets	(11,892)		(14,675)
Accounts payable	(3,844)		(777)
Accrued liabilities	102,094		49,570
Operating lease liabilities	(345)		1,343
Net cash provided by operating activities	268,918		94,210
CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment expenditures	(71,429)		(39,371)
Intangible assets expenditures	(8,516)		(2,682)
Investment in unconsolidated affiliates	(2,675)		(20,522)
Cash proceeds from disposals	160		58
Net cash acquired in acquisition	13,401		—
Net cash used in investing activities	(69,059)		(62,517)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	3,000,000		30,189
Principal payments on long-term debt	(2,294,130)		(50,980)
Payment on debt issuance costs	(37,042)		(3,152)
Proceeds from revolver	7,000		21,500
Payment on revolver	(716,000)		(14,500)
Redemption of mandatorily redeemable Preferred Units	(152,580)		—
Distributions paid to mandatorily redeemable Preferred Units holders	(1,850)		—
Distributions paid to redeemable noncontrolling interests Preferred Units limited partners	(6,937)		—
Cash dividends paid to Class A Common Stock shareholders	(11,239)		—
Distributions paid to Class C Common Units limited partners	(491)		(30,189)
Equity contributions	—		14,890
Net cash (used in) provided by financing activities	(213,269)		(32,242)
Net change in cash	$	(13,410)	$	(549)
CASH, BEGINNING OF PERIOD	$	18,729	$	19,591
CASH, END OF PERIOD	$	5,319	$	19,042
SUPPLEMENTAL SCHEDULE OF INVESTING AND FINANCING ACTIVITIES
Cash paid for interest, net of amounts capitalized	$	52,982	$	54,308
Property and equipment and intangible accruals in accounts payable and accrued liabilities	$	20,344	$	9,322
Class A Common Stock issued through dividend and distribution reinvestment plan	$	87,697	$	—
Fair value of ALTM assets acquired	$	2,446,430	$	—
Class A Common Stock issued in exchange	1,013,745		—
ALTM liabilities and mezzanine equity assumed	$	1,432,685	$	—

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements

3

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS

(Unaudited)

	Redeemable Noncontrolling Interest — Preferred Unit Limited Partners*		Redeemable Noncontrolling Interest — Common Unit Limited Partners		Class A Common Stock			Class C Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Equity
					Shares**	Amount		Shares**	Amount
	(In thousands)				(In thousands)
For the Quarter Ended June 30, 2021
Balance at March 31, 2021	$	—	$	1,044,492	—	$	—	100,694	$	10	$	—	$	—	$	10
Net loss	—		(15,366)		—	—		—	—		—		—		—
Balance at June 30, 2021	$	—	$	1,029,126	—	$	—	100,694	$	10	$	—	$	—	$	10
For the Quarter Ended June 30, 2022
Balance at March 31, 2022	$	460,773	$	3,185,431	37,973	$	4	94,520	$	9	$	—	$	(1,137,873)	$	(1,137,860)
Distributions payable to Preferred Unit limited partners	(6,937)		—		—	—		—	—		—		—		—
Redemption of Common Units	—		(2,499)		70	—		(70)	—		2,499		—		2,499
Issuance of Class A Common Stock through dividend and distribution reinvestment plan	—		—		2,504	—		—	—		87,697		—		87,697
Share-based compensation	—		—		4	—		—	—		12,173		—		12,173
Net income	109,502		15,508		—	—		—	—		—		6,438		6,438
Change in redemption value of noncontrolling interests	—		123,741		—	—		—	—		(102,369)		(21,372)		(123,741)
Distributions paid to Common Unit limited partners	—		(70,891)		—	—		—	—		—		—		—
Cash dividends on Class A Common Stock ($0.75 per share)	—		—		—	—		—	—		—		(28,536)		(28,536)
Balance at June 30, 2022	$	563,338	$	3,251,290	40,551	$	4	94,450	$	9	$	—	$	(1,181,343)	$	(1,181,330)

* Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

** Share amounts have been retroactively restated to reflect the Company’s Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

4

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS - (Continued)

(Unaudited)

	Redeemable Noncontrolling Interest — Preferred Unit Limited Partners*		Redeemable Noncontrolling Interest — Common Unit Limited Partners		Class A Common Stock			Class C Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Equity
					Shares**	Amount		Shares**	Amount
	(In thousands)				(In thousands)
For the Six Months Ended June 30, 2021
Balance at December 31, 2020	$	—	$	1,041,655	—	$	—	101,198	$	10	$	—	$	—	$	10
Contribution	—		14,890		—	—		492	—		—		—		—
Distribution paid to Common Unit limited partners	—		(30,189)		—	—		(996)	—		—		—		—
Net income	—		2,770		—	—		—	—		—		—		—
Balance at June 30, 2021	$	—	$	1,029,126	—	$	—	100,694	$	10	$	—	$	—	$	10
For the Six Months Ended June 30, 2022
Balance at December 31, 2021	$	—	$	1,006,838	—	$	—	100,000	$	10	$	—	$	—	$	10
ALTM acquisition	462,717		—		32,493	3		—	—		1,013,742		—		1,013,745
Distributions paid to Preferred Unit limited partners	(6,937)		—		—	—		—	—		—		—		—
Distributions payable to Preferred Unit limited partners	(6,937)		—		—	—		—	—		—		—		—
Redemption of Common Units	—		(172,559)		5,550	1		(5,550)	(1)		172,559		—		172,559
Issuance of common stock through dividend and distribution reinvestment plan	—		—		2,504	—		—	—		87,697		—		87,697
Share-based compensation	—		—		4	—		—	—		18,304		—		18,304
Remeasurement of contingent consideration	—		—		—	—		—	—		4,451		—		4,451
Net income	114,495		28,039		—	—		—	—		—		10,303		10,303
Change in redemption value of noncontrolling interests	—		2,459,863		—	—		—	—		(1,296,753)		(1,163,110)		(2,459,863)
Distributions paid to Common Units limited partners	—		(70,891)		—	—		—	—		—		—		—
Cash dividends on Class A Common Stock ($0.75 per share)	—		—		—	—		—	—		—		(28,536)		(28,536)
Balance at June 30, 2022	$	563,338	$	3,251,290	40,551	$	4	94,450	$	9	$	—	$	(1,181,343)	$	(1,181,330)

* Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to the Condensed Consolidated Financial Statements.

** Share amounts have been retroactively restated to reflect the Company’s Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

5

KINETIK HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

These condensed consolidated financial statements have been prepared by Kinetik Holdings Inc. (formerly known as Altus Midstream Company) (the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for interim periods, on a basis consistent with the annual audited financial statements, with the exception of recently adopted accounting pronouncements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with Kinetik Holdings Inc.’s audited financial statements and related notes thereto for the year ended December 31, 2021 filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on July 5, 2022 and the Company’s Quarterly Report on Form 10-Q for the first quarter of 2022 filed on May 10, 2022. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the audited financial statements for the year ended December 31, 2021 filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on July 5, 2022 and the Company’s Quarterly Report on Form 10-Q filed on May 10, 2022.

1. DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Transaction

On February 22, 2022 (the “Closing Date”), Kinetik Holdings Inc., a Delaware corporation (formerly known as Altus Midstream Company), consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021 (the “Contribution Agreement”), by and among the Company, Altus Midstream LP (now known as Kinetik Holdings LP), a Delaware limited partnership and subsidiary of Altus Midstream Company (the “Partnership”), New BCP Raptor Holdco, LLC, a Delaware limited liability company (“Contributor”), and BCP Raptor Holdco, LP, a Delaware limited partnership (“BCP”). The transactions are referred to herein as the “Transaction.”

Pursuant to the Contribution Agreement, in connection with the closing of the Transaction (the “Closing”), (i) Contributor contributed all of the equity interests of BCP and BCP Raptor Holdco GP, LLC, a Delaware limited liability company and the general partner of BCP (“BCP GP” and, together with BCP, the “Contributed Entities”), to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership (“Common Units”) and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share (“Class C Common Stock”), to Contributor.

The Company’s stockholders immediately prior to the Closing continued to hold their shares of the Company’s Class A Common Stock, par value $0.0001 per share (“Class A Common Stock,” and together with the Company’s Class C Common Stock, “Common Stock”). As a result of the Transaction, immediately following the Closing (i) Contributor held approximately 75% of the issued and outstanding Common Stock, (ii) Apache Midstream LLC, a Delaware limited liability company (“Apache Midstream”), held approximately 20% of the issued and outstanding Common Stock, and (iii) the Company’s remaining stockholders held approximately 5% of the issued and outstanding Common Stock.

The Company completed a two-for-one Stock Split in the form of a stock dividend on June 8, 2022. All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated elsewhere in this Form 10-Q to reflect the two-for-one Stock Split. However, the number of Common Units and shares of Class C Common Stock described in this Form 10-Q in relation to the Transaction are presented at pre-Stock-Split amounts to be consistent with our previous public filings and the terms of the Contribution Agreement.

In connection with the Closing, the Company changed its name from “Altus Midstream Company” (“ALTM”) to “Kinetik Holdings Inc.” Unless the context otherwise requires, “ALTM” refers to the registrant prior to the Closing and “we,” “us,” “our,” and the “Company” refer to Kinetik Holdings Inc., the registrant and its subsidiaries following the Closing.

Organization

BCP was formed on April 25, 2017 as a Delaware limited partnership to acquire and develop midstream oil and gas assets. BCP’s primary operating subsidiaries are EagleClaw Midstream Ventures, LLC (“EagleClaw”) and CR Permian Holdings, LLC (“CR Permian”). Both subsidiaries were formed to design, engineer, install, own and operate facilities and

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provide services for produced natural gas gathering, compression, processing, treating and dehydration, and condensate separation, stabilization, and storage, crude oil gathering and storage, water gathering and disposal assets.

ALTM was originally incorporated on December 12, 2016 in Delaware under the name Kayne Anderson Acquisition Corp. (“KAAC”) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. KAAC completed its initial public offering in the second quarter of 2017. On August 3, 2018, Altus Midstream LP was formed in Delaware as a limited partnership and wholly-owned subsidiary of KAAC and entered into a contribution agreement with certain affiliates of Apache Corporation (“Apache” and such affiliates the “Altus Midstream Entities”), formed by Apache between May 2016 and January 2017, for the purpose of acquiring, developing, and operating midstream oil and gas assets in the Alpine High resource play and surrounding areas (“Alpine High”). On November 9, 2018, KAAC acquired all equity interests of the Altus Midstream Entities and changed its name to Altus Midstream Company.

On February 22, 2022, upon the Closing, BCP and its subsidiaries became wholly owned subsidiaries of the Partnership. The Transaction was accounted for as a reverse merger pursuant to ASC 805 Business Combination (“ASC 805”). Refer to Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements for additional details.

Nature of Operations

Through its consolidated subsidiaries, the Company provides comprehensive gathering, water disposal, transportation, compression, processing and treating services necessary to bring natural gas, NGLs and crude oil to market. Additionally, the Company owns equity interests in four separate Permian Basin pipeline entities that have access to various markets along the Texas Gulf Coast.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. Certain reclassifications of prior year balances have been made to conform such amounts to current year presentation. These reclassifications have no impact on net income. All adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. All intercompany balances and transactions have been eliminated in consolidation.

Prior to the Closing, the Company’s financial statements that were filed with the SEC were derived from ALTM’s accounting records. As the Transaction was determined to be a reverse merger, BCP was considered as the accounting acquirer and ALTM was the legal acquirer. The accompanying Condensed Consolidated Financial Statements herein include (1) BCP’s net assets carried at historical value, (2) BCP’s historical results of operations prior to the Transaction, (3) the ALTM’s net assets carried at fair value as of the Closing Date and (4) the combined results of operations with the Company’s results presented within the Condensed Consolidated Financial Statements from February 22, 2022 going forward. Refer to Note 2—Business Combination to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion.

The Company completed a two-for-one Stock Split on June 8, 2022. All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the two-for-one Stock Split, except for the number of Common Units and shares of Class C Common Stock described above in relation to the Transaction, which are presented at pre-Stock-Split amounts. This presentation election is consistent with our previous public filings and the terms of the Contribution Agreement.

Use of Estimates

Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its condensed consolidated financial statements, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the valuation of derivatives, tangible and intangible assets, share-based compensation, contingent liabilities, mandatorily redeemable Preferred Units (as defined below) and noncontrolling interests.

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Variable Interest Entity

The Company uses a qualitative approach in assessing the consolidation requirement for variable interest entities. The approach focuses on identifying which enterprise has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. In the event that the Company is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity would be consolidated in our financial statements. The Company has determined that it has significant influence over the operating and financial policies of the four pipeline entities in which it is invested, but does not exercise control over them; and hence, it accounts for these investments using the equity method. Refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Redeemable Noncontrolling Interest — Common Units Limited Partners

Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share, to Contributor. Please refer to “The Transaction” above.

The Common Units are redeemable at the option of unit holders and accounted for in the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity. The Company records the redeemable noncontrolling interest at the higher of (i) its initial value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date. The redemption value was determined based on a 5-day volume weighted-average closing price of the Class A Common Stock. See discussion and additional details in Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

The Partnership issued Series A Cumulative Redeemable Preferred Units (“Preferred Units”) on June 12, 2019. As the Transaction was accounted for as a reverse merger, the Company assumed certain Preferred Units that were issued and outstanding were assumed at Closing for accounting purposes. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. In July 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

The Preferred Units are accounted for on the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units. Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s Condensed Consolidated Balance Sheet as a long-term liability embedded derivative. See discussion and additional detail in Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Equity Method Investments

The Company follows the equity method of accounting when it does not exercise control over its equity interests, but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity investments are carried originally at acquisition cost, increased by the Company’s proportionate share of the equity interest’s net income and contributions made, and decreased by the Company’s proportionate share of the equity interest’s net losses and distributions received. Please refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further details of the Company’s equity method investments. Equity method investments acquired in the Transaction were recorded at fair value upon Closing. See discussion and additional detail in Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for purchase price allocation of the Transaction.

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Inventory

Other current assets include condensate, residue gas and NGLs inventories that are valued at the lower of cost or market. At the end of each reporting period, the Partnership assesses the carrying value of inventory and makes any adjustments necessary to reduce the carrying value to the applicable net realizable value. Inventory was valued at $13.0 million and $2.1 million as of June 30, 2022 and December 31, 2021, respectively.

Impairment of Long-Lived Assets

In accordance with Financial Accounting Standards Board (“FASB”) ASC 360, Property, Plant and Equipment, long-lived assets, excluding goodwill, to be held and used by the Company are reviewed for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the assets have decreased below their carrying value. For long-lived assets to be held and used, the Company bases their evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present.

The Company’s management assesses whether there has been an impairment trigger, and if a trigger is identified, then the Company would perform an undiscounted cash flow test at the lowest level for which identifiable cash flows are independent of cash flows from other assets. If the sum of the undiscounted future net cash flows is less than the net book value of the property, an impairment loss is recognized for any excess of the property’s net book value over its estimated fair value. The Company did not recognize impairment losses for long-lived assets during the three and six months ended June 30, 2022 and 2021.

Transactions with Affiliates

The accounts receivable from or payable to affiliates represent the net result of the Company’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache and its subsidiaries, who controlled the Company prior to the Transaction. Accounts receivable from affiliates was $20.2 million as of June 30, 2022. Revenue from affiliates was $30.5 million and $46.2 million for the three and six months ended June 30, 2022, respectively. Accrued expense due to affiliates was $0.2 million as of June 30, 2022, and operating expenses for the three and six months ended June 30, 2022 were immaterial.

Net Income Per Share

Basic net income per share is calculated by dividing net income attributable to Class A common shareholders by the weighted-average number of shares of Class A Common Stock outstanding during the period. Class C Common Stock is excluded from the weighted-average shares outstanding for the calculation of basic net income per share, as holders of Class C Common Stock are not entitled to any dividends or liquidating distributions. No net income per share was computed for the three and six months ended June 30, 2021, as no Class A Common Stock was outstanding with respect to BCP as the accounting acquirer as of June 30, 2021.

The Company uses the “if-converted method” to determine the potential dilutive effect of (i) an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) for shares of Class A Common Stock, (ii) an assumed exercise of the outstanding public and private warrants for shares of Class A Common Stock and (iii) an assumed exchange of the outstanding Preferred Units for shares of Class A Common Stock. The dilutive effect of any earn-out consideration payable in shares is only included in periods for which the underlying conditions for the issuance are met.

Recently Adopted Accounting Pronouncement

Effective January 1, 2022, the Company adopted ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value. With adoption of ASU 2021-08, the Company assumed contract liabilities at carrying value of $9.1 million upon Closing.

Effective January 1, 2022, the Company adopted ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 was issued to ease the potential accounting burden expected when global capital markets move away from LIBOR, the benchmark interest rate banks use to make short-term loans to each other. The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationship, and other transactions affected by

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reference rate reform if certain criteria are met. Interest rate applied to the Company’s new debt resulting from the comprehensive refinance is based on Secured Overnight Financing Rate (“SOFR”), which is a broad measure of the cost of borrowing cash overnight collateralized by treasury securities. Refer to Note 6—Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements of this Form 10-Q for discussion of SOFR applicable to the Company’s debt structures.

Recent Accounting Pronouncement Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). The amendments in ASU 2022-03 clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments also require the following disclosures for equity securities subject to contractual sale restrictions: (1) The fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; (2) The nature and remaining duration of the restriction(s); (3) The circumstances that could cause a lapse in the restriction(s). This guidance is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the effect that ASU 2022-03 will have on its Consolidated Financial Statements.

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”). Current GAAP permits only prepayable financial assets and one or more beneficial interests secured by a portfolio of prepayable financial instruments to be included in a last-of-layer closed portfolio. The amendments in ASU 2022-01 allow nonprepayable financial assets also to be included in a closed portfolio hedged using the portfolio layer method. That expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. The amendments in ASU 2022-01 also clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers as follows: (1) an entity is required to maintain basis adjustments in an existing hedge on a closed portfolio basis (that is, not allocated to individual assets), (2) an entity is required to immediately recognize and present the basis adjustment associated with the amount of the designated layer that was breached in interest income. In addition, an entity is required to disclose that amount and the circumstances that led to the breach, (3) an entity is required to disclose the total amount of the basis adjustments in existing hedges as a reconciling amount if other areas of GAAP require the disaggregated disclosure of the amortized cost basis of assets included in the closed portfolio, and (4) an entity is prohibited from considering basis adjustments in an existing hedge when determining credit losses. The guidance is effective for public business entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in ASU 2017-02 for the corresponding period. The Company is currently evaluating the effect that ASU 2022-01 will have on its Consolidated Financial Statements.

2.    BUSINESS COMBINATION

On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share, to Contributor. Please refer to ““—The Transaction” discussed above.

The Transaction was accounted for as a business combination in accordance with ASC 805, which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. The Company also adopted ASU 2021-08, effective as of January 1, 2022, to record contract liabilities at their carrying value as of the acquisition date. Although the Company was the legal acquirer, BCP was determined to be the accounting acquirer and legal acquiree. As a result, BCP and its subsidiaries’ net assets were carried at historical value, acquired net assets were measured at fair value except contract liabilities being recorded at carrying value at the acquisition date, and results of operations of ALTM and its subsidiaries were included in the Company’s Condensed Consolidated Financial Statements from the Closing Date going forward.

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The preliminary purchase price allocation is based on an assessment of the fair value of the assets acquired and liabilities assumed in the acquisition using inputs that are not observable in the market and thus level 3 inputs. The fair value of the processing plant, gathering system and related facilities and equipment are based on market and cost approaches. The goodwill of $4.1 million relates to operational synergies. The value of the Preferred Units and assumed contingent liability was determined through a probability-weighted analysis of the expected future cash flows and other applicable valuation techniques. See additional details for Preferred Units in Note 11—Series A Cumulative Redeemable Preferred Units and contingent liabilities in Note 8—Commitments and Contingencies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, valuation of the underlying assets of the equity method investments and liabilities assumed. However, the Company is continuing its review of these matters during the measurement period, and if new information obtained about facts and circumstances that existed at the acquisition date identifies adjustments to the liabilities initially recognized, as well as any additional liabilities that existed at the acquisition date, the acquisition accounting will be revised to reflect the resulting adjustments to the provisional amounts initially recognized. The Company will finalize the purchase price allocation during the 12-month period following the acquisition date.

The following table summarizes the preliminary estimated fair value of assets acquired and liabilities assumed in the Transaction in accordance with ASC 805:

(In thousands)	Amount
Cash and cash equivalent	$	13,401
Accounts receivable	1,919
Accounts receivable - affiliates	15,681
Property, plant, and equipment, net	634,923
Intangible assets, net	13,200
Investments in unconsolidated affiliates	1,755,000
Prepaid expense and other assets	8,225
Goodwill	4,081
Total assets acquired	2,446,430
Accrued expenses and other accrued liabilities	5,688
Long-term debt	657,000
Embedded derivative liabilities	89,050
Contract liabilities	9,102
Mandatory redeemable Preferred Units	200,667
Deferred tax liabilities	4,010
Contingent liabilities	4,451
Total liabilities assumed	969,968
Redeemable noncontrolling interest - Preferred Unit limited partners	462,717
Total consideration transferred	$	1,013,745

The Company incurred acquisition-related costs of $0.7 million and $6.4 million for the three and six months ended June 30, 2022, respectively.

Supplemental Pro Forma Information

The unaudited supplemental pro forma financials are for informational purposes only and are not indicative of future results. The results below for the three and six months ended June 30, 2022 and 2021 combine the results of the Company and the Partnership, giving effect to the Transaction as if it had been completed on January 1, 2021.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
(In thousands)	Pro forma		Pro forma		Pro forma		Pro forma
Revenues	$	335,572	$	171,359	$	619,674	$	353,608
Net income including noncontrolling interest	$	132,159	$	18,845	$	145,627	$	35,647

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Given the assumed pro forma transaction date of January 1, 2021, we removed $0.7 million and $19.5 million of acquisition-related expenses for the three and six months ended June 30, 2022, respectively, and recognized $2.2 million and $31.1 million of total acquisition-related expenses for the three and six months ended June 30, 2021, respectively.

3.    REVENUE RECOGNITION

Disaggregation of Revenue

The following table presents a disaggregation of the Company’s revenue.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Gathering and processing services	$	102,080	$	62,242	$	182,525	$	129,904
Natural gas, NGLs and condensate sales	229,651		71,099		404,579		151,092
Other revenue	3,841		2,425		5,717		2,873
Total revenues and other	$	335,572	$	135,766	$	592,821	$	283,869

There have been no significant changes to the Company’s contracts with customers during the three and six months ended June 30, 2022. Contracts with customers acquired through the Transaction had similar structures as the Company’s existing contracts with customers. The Company recognized revenues from MVC deficiency payments of $0.3 million and nil for the three months ended June 30, 2022 and 2021, respectively, and $0.3 million and $2.5 million for the six months ended June 30, 2022 and 2021, respectively.

Remaining Performance Obligations

The following table presents our estimated revenue from contracts with customers for remaining performance obligations that has not yet been recognized, representing our contractually committed revenues as of June 30, 2022:

	Amount
Fiscal Year	(In thousands)
Remaining of 2022	$	10,633
2023	43,177
2024	40,247
2025	49,182
2026	34,631
Thereafter	191,293
	$	369,163

Our contractually committed revenue, for purposes of the tabular presentation above, is generally limited to customer contracts that have fixed pricing and fixed volume terms and conditions, generally including contracts with payment obligations associated with MVCs.

Contract Liabilities

The following table provides information about contract liabilities from contracts with customers as of June 30, 2022:

	Amount
	(In thousands)
Balance at December 31, 2021	$	14,756
Reclassification of beginning contract liabilities to revenue as a result of performance obligation being satisfied	(3,224)
Cash received and not recognized as revenue	17,517
Balance at June 30, 2022	29,049
Less: Current portion	6,150
Non-current portion	$	22,899

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Contract liabilities relate to payments received in advance of satisfying performance obligations under a contract, which result from contribution in aid of construction payments. Current and noncurrent contract liabilities are included in “Other Current Liabilities” and “Contract Liabilities,” respectively, of the Condensed Consolidated Balance Sheets.

Contract Cost Assets

The Company has capitalized certain costs incurred to obtain a contract that would not have been incurred if the contract had not been obtained. These costs are recovered through the net cash flows of the associated contract. As of June 30, 2022 and December 31, 2021, the Company had contract acquisition cost assets of $17.5 million and $18.4 million, respectively. Current and noncurrent contract cost assets are included in “Prepaid and Other Current Assets” and “Deferred Charges and Other Assets,” respectively, of the Condensed Consolidated Balance Sheets. The Company amortizes these assets as cost of sales on a straight-line basis over the life of the associated long-term customer contract. The Company recognized cost of sales associated with these assets of $0.4 million and $0.4 million for the three months ended June 30, 2022 and 2021, respectively, and $0.9 million and $0.9 million for the six months ended June 30, 2022 and 2021, respectively.

4.    PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are carried at cost or fair market value at the date of acquisition less accumulated depreciation. The cost basis of constructed assets includes materials, labor, and other direct costs. Major improvements or betterment are capitalized, while repairs that do not improve the life of the respective assets are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets.

Property, plant and equipment, at carrying value, is as follows:

	June 30, 2022		December 31, 2021
	(In thousands)
Gathering, processing and transmission systems and facilities	$	2,788,565	$	2,121,434
Vehicles	7,194		6,090
Computers and equipment	3,796		4,271
Less: accumulated depreciation	(402,994)		(337,030)
Total depreciable assets, net	2,396,561		1,794,765
Construction in progress	64,332		24,888
Land	20,179		19,626
Total property, plant and equipment, net	$	2,481,072	$	1,839,279

The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. These amounts represent property that is not yet available to be placed into productive service as of the respective reporting date. The Company recorded $36.6 million and $26.6 million of depreciation expense for the three months ended June 30, 2022 and 2021, respectively, and $67.5 million and $52.2 million of depreciation expense for the six months ended June 30, 2022 and 2021, respectively.

5.    GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The Company closed a business combination transaction on February 22, 2022, refer to the Transaction in Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. The Transaction was accounted for as a business combination pursuant to ASC 805. In connection with the Transaction, the Company recorded excess of the purchase price over net assets acquired as goodwill. The Company recorded goodwill of $4.1 million as of June 30, 2022.

Goodwill is tested at least annually as of December 31 of each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce fair value of a reporting unit below its carrying value. Company’s management assesses whether there have been events or circumstances that trigger the fair value of the reporting unit to be lower than its net carrying value since consummation of the Transaction, and concluded that goodwill was not impaired as of June 30, 2022.

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Intangible Assets

Intangible assets, net are comprised of the following:

	June 30, 2022		December 31, 2021
	(In thousands)
Customer contracts	$	1,136,728	$	1,135,963
Right of way assets	120,401		99,345
Less accumulated amortization	(509,408)		(449,259)
Total amortizable intangible assets, net	$	747,721	$	786,049

The fair value of acquired customer contracts was capitalized as a result of acquiring favorable customer contracts as of the closing dates of certain past acquisitions and is being amortized using a straight-line method over the remaining term of the customer contracts, which range from one to twenty years. Right of way assets relate primarily to underground pipeline easements and have a useful life of ten years and are amortized using the straight-line method. The right of way agreements are generally for an initial term of ten years with an option to renew for an additional ten years at agreed upon renewal rates based on certain indices or up to 130% of the original consideration paid.

The Company recorded $30.0 million and $30.5 million of amortization expense for the three months ended June 30, 2022 and 2021, respectively, and $60.1 million and $60.9 million of amortization expense for the six months ended June 30, 2022 and 2021, respectively. There was no impairment recognized on intangible assets for the three and six months ended June 30, 2022 and 2021.

6.    DEBT AND FINANCING COSTS

June 2030 Senior Notes

On June 8, 2022, the Partnership completed a private placement of $1.00 billion aggregate principal amount of its 5.875% Sustainability-Linked Senior Notes due 2030 (the “Notes”), which are fully and unconditionally guaranteed by the Company.

The Notes were issued at 99.588% of their face amount and will mature on June 15, 2030. Interest accrues from June 8, 2022 and is payable semi-annually on June 15 and December 15 of each year, commencing December 15, 2022. The aggregate fees, expenses, and original issue discount paid to obtain the notes totaled $21.6 million and were capitalized as debt issuance cost and included in the Condensed Consolidated Balance Sheets as a direct deduction to the Notes as the Notes were transferred to third-party investors that pay the stated principal amount without deduction for the initial purchasers’ discount.

On or after June 15, 2027, the interest rate accruing on the Notes will be increased by an additional 0.250% per annum unless the Partnership satisfies, and an independent external verifier confirms satisfaction of the Sustainability Performance Targets (“SPT”) for the three key performance indicators outlined in the Sustainability-Linked Financing Framework published by the Company on May 16, 2022: 1) Scope 1 and Scope 2 greenhouse gas emissions intensity, 2) Scope 1 and Scope 2 methane gas emissions intensity and 3) female representation in corporate officer positions. The interest rate accruing on the Notes will be increased by an additional 0.083% per annum for each SPT which has not been satisfied and externally verified.

The Partnership may redeem some or all of the notes at any time or from time to time prior to maturity based on terms prescribed in the Notes. As of June 30, 2022, unamortized debt issuance costs associated with the Notes were $19.3 million.

Revolving Credit Facility

On June 8, 2022, the Partnership entered into a revolving credit agreement (the “Revolving Credit Agreement”) among Bank of America, N.A., as administrative agent (“Bank of America”), and the banks and other financial institutions party thereto, as lenders. The Revolving Credit Agreement provides for a $1.25 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”).

The Partnership may prepay borrowings under the Revolving Credit Facility at any time without premium or penalty (other than customary SOFR breakage costs), subject to certain notice requirements. All borrowings under the Revolving Credit Facility mature on June 8, 2027. The obligations under the Revolving Credit Agreement are fully and unconditionally guaranteed by the Company.

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The Revolving Credit Agreement provides for borrowings of either, at the Partnership’s option, base rate loans or term SOFR loans. Base rate loans bear interest at a rate per annum equal to the greatest of (a) the prime rate as announced from time to time by Bank of America, (b) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, plus 1/2 of 1.00% and (c) the adjusted term SOFR rate for an interest period of one month plus 1.00%, plus a margin that ranges between 0.25% and 1.00%, depending on the credit rating of the Partnership. SOFR loans bear interest at a rate per annum equal to the term SOFR rate for such interest periods plus 0.10%, plus a margin that ranges between 1.25% and 2.00%, depending on the credit rating of the Partnership. In obtaining the Revolving Credit Agreement, the Partnership incurred fees and expenses totaling $7.8 million, which was capitalized and included in the Condensed Consolidated Balance Sheets as “Prepaid and other current assets” and “Deferred charges and other assets.”

In addition, the Partnership is required to pay to each lender a commitment fee on the daily unfunded amount of such lender’s revolving commitment, which accrues at a rate that ranges between 0.15% and 0.35% depending on the credit rating of the Partnership.

There were no outstanding borrowings under the Revolving Credit Facility as of June 30, 2022.

Term Loan Credit Facility

On June 8, 2022, concurrently with the closing of the Revolving Credit Facility , the Partnership entered into a term loan credit agreement (the “TLA”) among PNC Bank, National Association, as administrative agent (“PNC Bank”), and the banks and other financial institutions party thereto, as lenders. The TLA provides for a $2.00 billion senior unsecured term loan credit facility (the “Term Loan Credit Facility”). The TLA matures on June 8, 2025. The obligations under the TLA are fully and unconditionally guaranteed by the Company.

The TLA provides for borrowings of either, at the Partnership’s option, base rate loans or term SOFR loans. Base rate loans bear interest at a rate per annum equal to the greatest of (a) the prime rate as announced from time to time by PNC Bank, (b) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, plus 1/2 of 1.00% and (c) the adjusted term SOFR rate for an interest period of one month plus 1.00%, plus a margin that ranges between 0.25% and 1.0%, depending on the credit rating of the Partnership. SOFR loans bear interest at a rate per annum equal to the term SOFR rate for such interest periods plus 0.10%, that if the plus a margin that ranges between 1.25% and 2.0%, depending on the credit rating of the Partnership. In obtaining the TLA, the Partnership incurred fee and expenses totaled $7.6 million, which was capitalized as debt issuance cost and included in the Condensed Consolidated Balance Sheets as direct deduction to the Term Loan Credit Facility.

Both the Revolving Credit Agreement and the TLA contain a “Sustainability Adjustments” feature that could result in a 0.05% increase or reduction to the effective interest rate if the Company fails to meet certain sustainability targets after 2022. “Sustainability Rate Adjustment” means, with respect to any KPI Metrics Report, for any period between Sustainability Pricing Adjustment Dates, (a) positive 0.05%, if neither of the Sustainability Performance Targets as set forth in the KPI Metrics Report have been satisfied for the relevant calendar year, (b) 0.00% if only one of the Sustainability Performance Targets as set forth in the KPI Metrics Report has been satisfied for the relevant calendar year and (c) negative 0.05% if both of the Sustainability Performance Targets as set forth in the KPI Metrics Report have been satisfied for the relevant calendar year.

“Sustainability Performance Targets” in the Revolving Credit Agreement and TLA mean, for any calendar year, with respect to (a) the Female Representation KPI, the target percentage of female representation in corporate officer positions for such calendar year and (b) the Methane Emissions KPI, the percentage reduction in methane gas emissions intensity relative to the baseline year for such calendar year; provided that, in each case, if the Partnership subsequently issues a sustainability-linked debt instrument linked to the same KPI Metric and with an observation date for such calendar year, but with a higher percentage of representation or reduction, as the case may be, the relevant Sustainability Performance Target shall be automatically adjusted upward to equal the percentage of representation or reduction, as applicable, required by such subsequent sustainability-linked debt instrument.

Both the Revolving Credit Agreement and the TLA contain customary covenants and restrictive provisions which may, among other things, limit Partnership’s ability to create liens, incur additional indebtedness, make restricted payments, or liquidate, dissolve, consolidate with, or merge into or with any other person. As of June 30, 2022, the Partnership is in compliance with all customary and financial covenants.

Repayment of Existing Credit Facilities

In June 2022, the Company used the net proceeds from the Notes, together with cash on hand and proceeds from the term loan credit facility, to repay all outstanding borrowings under its existing credit facilities and to pay certain related fees and

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expenses. In conjunction with the extinguishment of existing outstanding borrowings, the Company recognized a loss on extinguishment of debt of approximately $28.0 million. In addition, the unamortized debt issuance costs related to the existing outstanding borrowings were fully amortized and included in the loss on debt extinguishment calculation for the three and six months ended June 30, 2022.

The fair value of the term loan credit facility approximates fair value and is not publicly traded. The fair value of the Company and its subsidiaries’ consolidated debt as of June 30, 2022 and December 31, 2021 was $2.95 billion and $2.34 billion, respectively.

The following table summarizes the Company’s debt obligations as of June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
$2.0 billion unsecured term loan	$	2,000,000	$	—
$1.0 billion 2030 senior unsecured notes	1,000,000		—
$1.25 billion term loan	—		1,175,417
$690 million term loan	—		639,393
$513 million term loan	—		479,377
$125 million revolving line of credit	—		52,000
Total Long-term debt	3,000,000		2,346,187
Less: Debt issuance costs, net(1)	(28,730)		(38,485)
	2,971,270		2,307,702
Less: Current portion, net	—		(54,280)
Long-term portion of debt and finance lease obligations, net	$	2,971,270	$	2,253,422

(1) Excluded unamortized debt issuance cost related to the Revolving Credit Facility. Unamortized debt issuance cost associated with the Revolving Credit Facility was $7.7 million and $2.2 million as of June 30, 2022 and December 31, 2021, respectively, and were included in the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets.

The table below presents the components of the Company’s financing costs, net of capitalized interest:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Capitalized interest	$	197	$	275	$	301	$	486
Debt issuance costs	3,149		3,332		6,538		6,637
Interest expense	22,001		29,000		45,282		50,794
Total financing costs, net of capitalized interest	$	25,347	$	32,607	$	52,121	$	57,917

As of June 30, 2022 and December 31, 2021, unamortized debt issuance costs associated with the Notes and the Term Loan Credit Facility were $28.7 million and $38.5 million, respectively.

Debt issuance costs associated with the new and existing revolving credit facilities were $7.7 million and $2.2 million as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, the unamortized debt issuance costs associated with the new and existing revolving credit facilities were included in the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets as there were no borrowings on the new or existing revolving credit facilities. As of December 31, 2021, the current and non-current portion of the unamortized debt issuance costs were included in the “Other non-current assets” and “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets.

The amortization of the debt issuance costs was charged to interest expense for the periods presented. The amount of debt issuance costs included in interest expense was $3.1 million and $3.3 million for the three months ended June 30, 2022 and 2021, respectively, and $6.5 million and $6.6 million for the six months ended June 30, 2022 and 2021, respectively.

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7.    ACCRUED EXPENSES

The following table provides detail of the Company’s accrued expenses at June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
Accrued product purchases	$	199,292	$	118,364
Accrued taxes	13,077		4,299
Accrued salaries, vacation, and related benefits	4,799		2,113
Accrued capital expenditures	11,255		2,995
Accrued interest expenses	3,787		—
Accrued other expenses	13,741		7,872
Total accrued expenses	$	245,951	$	135,643

8.    COMMITMENTS AND CONTINGENCIES

Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of June 30, 2022 and December 31, 2021, there were no accruals for loss contingencies.

Litigation

The Company is a party to various legal actions arising in the ordinary course of its businesses. In accordance with ASC 450, Contingencies, the Company accrues reserves for outstanding lawsuits, claims, and proceedings when a loss contingency is probable and can be reasonably estimated. The Company estimates the amount of loss contingencies using current available information from legal proceedings, advice from legal counsel and available insurance coverage. Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of the legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company from the legal proceedings in question. Thus, the Company’s exposure and ultimate losses may be higher, and possibly significantly more, than the amounts accrued.

The Company has entered into litigation with two third parties to collect outstanding receivables totaling $19.6 million that remain outstanding from the Winter Storm Uri during February of 2021. Given the counterparties’ sufficient creditworthiness and the valid claims that we hold, no allowance has currently been established for these items as we have legally enforceable agreements with these parties.

Environmental Matters

As an owner of infrastructure assets with rights to surface lands, the Company is subject to various local and federal laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the Company for the cost of pollution clean-up resulting from operations and subject the Company to liability for pollution damages. The Company is not aware of any environmental claims existing as of June 30, 2022, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity.

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Contingent Liabilities

Permian Gas Acquisition

As part of the acquisition of Permian Gas on June 11, 2019, consideration included a contingent liability arrangement with PDC Permian, Inc. (“PDC”) The arrangement requires additional monies to be paid by the Company to PDC on a per Mcf basis if the actual annual Mcf volume amounts exceed forecasted annual Mcf volume amounts starting in 2020 and continuing through 2029. The arrangement defines the incentive rate per Mcf for each qualifying year and the total monies paid under this arrangement are capped at $60.5 million. Amounts are payable on an annual basis over the earn-out period. The fair value of the contingent liability recognized on the acquisition date of $3.9 million was estimated utilizing the following key assumptions: (1) present value factors based on the Company’s weighted-average cost of capital, 2) a probability weighted payout based on an estimate of future volumes and (3) a discount period consistent with the arrangement’s life and the respective due dates of the potential future payments. Based on current forecasts and discussions with PDC, management revalued this contingent liability with updated assumptions at each reporting period. The Company did not expect PDC’s actual annual Mcf volume amounts to exceed forecasted amounts as of June 30, 2022; therefore, the estimated fair value of the contingent consideration liability was nil as of June 30, 2022. The estimated fair value of the contingent consideration liability related to this acquisition was $0.8 million as of December 31, 2021.

The Transaction

As part of the Transaction, the Company assumed contingent liabilities of $4.5 million related to earn-out a consideration of up to 2,500,000 shares of Class A Common Stock as follows:

• 1,250,000 shares if the per share closing price of the Class A Common Stock as reported by Nasdaq during any 30-trading-day period ending prior to November 9, 2023 is equal to or greater than $140.00 for any 20 trading days within such 30-trading-day period.

• 1,250,000 shares if the per share closing price of the Class A Common Stock as reported by Nasdaq during any 30-trading-day period ending prior to November 9, 2023 is equal to or greater than $160.00 for any 20 trading days within such 30-trading-day period.

Pursuant to ASC 805, this earn-out consideration was a pre-existing contingency and accounted for as an assumed liability to the acquirer on acquisition date. Immediately subsequent to the Closing, the Company evaluated the earn-out consideration classification in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The Company determined the earn-out consideration to be classified as equity based on the settlement provision.

9.    EQUITY METHOD INVESTMENTS

As of June 30, 2022, the Company owned investments in the following long-haul pipeline entities in the Permian Basin. These investments were accounted for using the equity method of accounting. For each equity method investment (“EMI”) pipeline entity, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the EMI pipeline. The table below presents the ownership percentages and investment balances held by the Company for each entity:

	Ownership	June 30, 2022		December 31, 2021
		(In thousands)
Permian Highway Pipeline LLC(1)	53.3%	$	1,416,318	$	626,477
Breviloba, LLC (Shin Oak)	33.0%	465,444		—
Gulf Coast Express Pipeline LLC	16.0%	460,549		—
		$	2,342,311	$	626,477

(1) Ownership for Permian Highway Pipeline LLC (“PHP”) was 53.3% and 26.7% as of June 30, 2022 and December 31, 2021, respectively.

Additionally, as of June 30, 2022, the Company owned 15.0% of Epic Crude Holdings, LP (“EPIC”). However, no dollar value was assigned through the purchase price allocation as adjustment was made to eliminate equity in losses of EPIC. No additional contribution was made to EPIC and no distribution or equity income was received from EPIC during the three and six months ended June 30, 2022.

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As of June 30, 2022, the unamortized basis differences included in the EMI pipelines balances were $414.3 million. There was no unamortized basis difference as of December 31, 2021. These amounts represent differences in the Company’s contributions to date and the Company’s underlying equity in the separate net assets within the financial statements of the respective entities. Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets. There was capitalized interest of $12.2 million and $12.8 million as of June 30, 2022 and December 31, 2021, respectively. Capitalized interest is amortized on a straight-line basis into equity income.

The following table presents the activity in the Company’s EMIs for the six months ended June 30, 2022:

		Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Total(2)
	(In thousands)
Balance at December 31, 2021		$	626,477	$	—	$	—	$	626,477
Acquisitions		815,000		470,000		470,000		1,755,000
Contributions		2,675		—		—		2,675
Distributions		(79,508)		(16,868)		(21,168)		(117,544)
Equity income, net(1)		51,674		12,312		11,717		75,703
Balance at June 30, 2022		$	1,416,318	$	465,444	$	460,549	$	2,342,311

(1)For the six months ended June 30, 2022, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $3.3 million from Permian Highway Pipeline LLC, $0.3 million from Breviloba, LLC and $2.7 million from Gulf Coast Express Pipeline, LLC.

(2)The EMIs acquired in the Transaction are included in the results from February 22, 2022 to June 30, 2022, and this is also the case for the additional 26.67% of PHP that was acquired in the Transaction. The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements of this Form 10-Q, for further information on the Company’s basis of presentation.

Summarized Financial Information

The following tables represent selected statement of operations data for the Company’s EMI pipelines (on a 100 percent basis) for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30,
	2022						2021
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Permian Highway Pipeline LLC(1)		Breviloba, LLC(1)		Gulf Coast Express Pipeline LLC(1)
	(In thousands)
Revenues	$	98,808	$	50,091	$	90,769	$	99,366	$	47,447	$	90,703
Operating income	61,294		25,359		64,816		62,444		28,002		60,766
Net income	61,307		25,284		64,461		62,329		27,645		60,551

	Six Months Ended June 30,
	2022					2021
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC	Permian Highway Pipeline LLC(1)		Breviloba, LLC(1)		Gulf Coast Express Pipeline LLC(1)
	(In thousands)
Revenues	$	196,664	$	98,612	180,742	$	197,214	$	81,976	$	179,072
Operating income	120,770		51,672		128,259	105,024		45,302		120,874
Net income	120,520		51,651		127,990	104,909		45,004		120,319

(1) For the three and six months ended June 30, 2021, the Company only had equity interest in Permian Highway Pipeline LLC.

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10. EQUITY AND WARRANTS

Redeemable Noncontrolling Interest — Common Unit Limited Partners

On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share, to Contributor. Please refer to “The Transaction” above.

The redemption option of the Common Unit is not legally detachable or separately exercisable from the instrument and is non-transferable, and the Common Unit is redeemable at the option of the holder. Therefore, the Common Unit is accounted for as redeemable noncontrolling interest and classified as temporary equity on the Company’s Condensed Consolidated Balance Sheet. During the first half of 2022, 5,550,000 common units were redeemed on a one-for-one basis for shares of Class A Common Stock and a corresponding number of shares of Class C Common Stock were cancelled. There were 94,450,000 Common Units and an equal number of Class C Common Stock issued and outstanding as of June 30, 2022. The Common Units fair value was approximately $3.25 billion as of June 30, 2022.

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

Upon Closing, the Company assumed certain Preferred Units that were issued and outstanding on acquisition date. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. Refer to Note 11—Series A Cumulative Redeemable Preferred Units for further discussion. In July 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

Public Warrants

As of June 30, 2022, there were 12,577,350 Public Warrants (as defined below) outstanding. Each whole public warrant entitles the holder to purchase one tenth of a share of Class A Common Stock at a price of $115.00 per share (the “Public Warrants”). The Public Warrants will expire on November 9, 2023 or upon redemption or liquidation. The Company may call the Public Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant with not less than 30 days’ notice provided to the Public Warrant holders. However, this redemption right can only be exercised if the reported last sale price of the Class A Common Stock equals or exceeds $180.00 per share for any 20-trading days within a 30-trading day period ending three business days prior to sending the notice of redemption to the Public Warrant holders.

Private Placement Warrants

As of June 30, 2022, there were 6,364,281 Private Placement Warrants (as defined below) outstanding, of which Apache holds 3,182,140. The private placement warrants will expire on November 9, 2023 and are identical to the Public Warrants discussed above, except (i) they will not be redeemable by the Company so long as they are held by the initial holders or their respective permitted transferees and (ii) they may be exercised by the holders on a cashless basis (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”).

The Company recorded a fair value of $0.1 million for the Public Warrants and a fair value of $0.1 million for the Private Warrants as of June 30, 2022 on the Condensed Consolidated Balance Sheet in other non-current liabilities. Refer to Note 15—Fair Value Measurement in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding valuation of the Warrants.

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Dividend

On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with certain stockholders including BCP Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, APA Corporation Apache Midstream LLC, and certain individuals (each, a “Reinvestment Holder”). Under the Reinvestment Agreement, each Reinvestment Holder is obligated to reinvest at least 20% of all distributions on Common Units or dividends on shares of Class A Common Stock in the Company’s Class A Common Stock. Additionally, the Audit Committee and subsequently the Company’s Board of Directors (the “Board”) resolved that for the calendar year 2022, 100% of all distributions or dividends received by each Reinvestment Holder would be reinvested in newly issued shares of Class A Common Stock. As described in these Condensed Consolidated Financial Statements, as the context requires, dividends paid to holders of Class A Common Stock and distributions paid to holders of Common Units may be referred to collectively as “dividends.”

On May 17, 2022, the Company made cash dividend payments of $11.7 million to holders of Class A Common Stock and Common Units and $87.7 million was reinvested in shares of Class A Common Stock by each Reinvestment Holder.

On July 20, 2022, the Board declared a cash dividend of $0.75 per share on the Company’s Class A Common Stock and a distribution of $0.75 per Common Unit from the Partnership to the holders of Common Units. Dividends are payable on August 17, 2022. Certain holders of Class A Common Stock and Class C Common Stock will receive a cash dividend with the balance receiving additional shares of Class A Common Stock under the Reinvestment Agreement.

Stock Split

On May 19, 2022, the Company announced that its Board approved and declared a two-for-one stock split with respect to its Class A Common Stock and Class C Common Stock, in the form of a stock dividend (the “Stock Split”). The Stock Split was accomplished by distributing one additional share of Class A Common Stock for each share of Class A Common Stock outstanding and one additional share of Class C Common Stock for each share of Class C Common Stock outstanding. The additional shares of Common Stock were issued on June 8, 2022 to holders of record at the close of business on May 31, 2022.

All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the Stock Split.

11.    SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS

Prior to the Closing Date of the Transaction, the Partnership had 625,000 Preferred Units issued and outstanding. Immediately prior to the Closing, on February 22, 2022, the Partnership redeemed for cash, 100,000 Preferred Units in an amount equal to approximately $120.1 million. The Company assumed the remaining 525,000 Preferred Units as well as 29,983 paid-in-kind (“PIK”) Preferred Units that were issued and outstanding at the close of the acquisition. 150,000 of these Preferred Units and a pro rata amount of the PIK units contain a mandatory redemption feature as further discussed below.

Mandatorily Redeemable Preferred Units

At the close of the Transaction, the Company effectuated the Third Amended and Restated Agreement of Limited Partnership of the Partnership (“Partnership LPA”), which among other things, provides for mandatory pro-rata redemptions by the Partnership of 50,000 Preferred Units at or prior to each of the six-, twelve- and eighteen-month anniversaries of the effectiveness of the Partnership LPA, for an aggregate of 150,000 Preferred Units over the eighteen-month period. Given this mandatory redemption feature and pursuant to ASC 480, liability classification is required for these 150,000 Preferred Units and the pro rata PIK units. The Company values the liability as of each reporting date and records the change in valuation in the “Other income (expenses)” in the Condensed Consolidated Statements of Operations.

During the first half of 2022, the Partnership declared and paid mandatorily redeemable Preferred Units holders distribution of $1.9 million and the Partnership redeemed 125,000 units along with 7,138 PIK units for an aggregate amount totaling $152.6 million. Gains of $5.1 million and $9.6 million were recorded for the redemption for the three and six months ended June 30, 2022, respectively. For the remaining 25,000 Preferred Units that contain the mandatory redemption feature, the Company recorded $30.7 million as liability in “Other Liabilities” of the Condensed Consolidated Balance Sheet as of June 30, 2022. These remaining units were subsequently redeemed in July 2022. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

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Redeemable Noncontrolling Interest Preferred Units

The remaining 375,000 Preferred Units assumed on the Closing Date do not contain a mandatory redemption feature, and are accounted for on the Company’s Condensed Consolidated Balance Sheets as a redeemable noncontrolling interest classified as temporary equity in accordance with the terms of the Preferred Units, including the redemption rights with respect thereto. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company.

The Company applies a two-step approach to measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the Company’s net income in accordance with the terms of the Partnership LPA.

After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Series A Redemption Price (as defined in the Partnership LPA) calculated at the seventh anniversary of the closing of the Preferred Unit Offering. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price.

Activities related to Preferred Units for the six months ended June 30, 2022 are as follows:

	Units Outstanding	Amount (3)
	(In thousands, except for unit data)
Redeemable noncontrolling interest — Preferred Units, immediately upon Closing Date of Transaction(1)	396,417	$	462,717
Cash distribution paid to Preferred Unit limited partners	—	(6,937)
Distribution payable to Preferred Unit limited partners		(6,937)
Allocation of net income	—	17,420
Accreted redemption value adjustment	—	97,075
Redeemable noncontrolling interest — Preferred Units, as of June 30, 2022	396,417	563,338
Embedded derivative liability(2)		488
		$	563,826

(1)Included 21,417 PIK units on a pro rata basis.

(2)Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. Refer to Note 15—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period.

(3)As of June 30, 2022, the Redemption Price would have been based on an 11.08% internal rate of return, which would equate to a redemption value of $700.0 million.

On July 8, 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

12. SHARE-BASED COMPENSATION

The Company previously issued incentive units, which included performance and service conditions, to certain employees and board members. The units consisted of Class A-1, Class A-2, and Class A-3 units. These units derived value from the Company’s certain wholly owned subsidiaries. Class A-1 and A-2 units would have vested upon either (i) the date of consummation of a change in control or (ii) the date that is 1-year following the consummation of the initial public offering (“IPO”) of the Company (or its successor) (collectively “Exit Events”). Class A-3 units would have vested upon a change in control, if the participants were employed at the time of the event, or upon termination of the participant by the Company.

22

Immediately upon Closing, all outstanding Class A-1 and Class A-2 units were cancelled and exchanged for 5,300,000 shares (the “Class A Shares”), post two-for-one stock split, of the Company’s Class A Common Stock. These Class A Shares are issued and outstanding as they were distributed pro rata to all holders of Class A-1 and Class A-2 units by the Common Unit limited partners from the 50,000,000 common units, pre-stock-split, they received upon the Closing. The Common Unit limited partners redeemed Common Units needed for the Class A shares distribution upon the Closing. The Class A Shares are held in escrow and will vest over three to four years. Similarly, the Class A-3 units were exchanged for approximately 326,000, post two-for-one stock split, Class C Common Stock and Common Units (the “Class C Shares”) and will vest over four years. The Company also issued approximately 76,000, post two-for-one stock split, replacement restricted share awards (“Replacement Awards”) to new employees that transitioned from ALTM as part of the merger. These changes for all three share types established a new measurement date. The Class A Shares, Class C Shares and Replacement Awards were valued based on the Company’s publicly quoted stock price on the measurement date, which was the Closing Date of the Transaction. With respect to these shares, the Company recorded compensation expenses of $12.2 million and $18.3 million for the three and six months ended June 30, 2022, respectively, based on a straight line amortization of the associated awards’ fair value over the respective vesting life of the shares. With respect to the incentive units, no compensation expenses were recorded for the three and six months ended June 30, 2021, as the incentive units were considered non-vested prior to their cancellation and exchange for Class A or Class C Common Stock.

13. INCOME TAXES

The Company is subject to U.S. federal income tax and the Texas margin tax. Income tax expense included in the Condensed Consolidated Financial Statements in this Form 10-Q is as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
	2022			2022
	(In thousands)
Income before income taxes	$	131,610		$	153,675
Income tax expense	$	162		$	838
Effective tax rate (1)	0.12		%	0.55		%

(1) Prior to the Closing on February 22, 2022, BCP, the accounting acquirer, was organized as limited partnership and was not subject to the U.S. federal income tax for the three and six months ended June 30, 2021.

The effective tax rate for the three and six months ended June 30, 2022 was lower than the statutory rate mainly due to the impact of tax attributable to noncontrolling interests related to the Common Units and Preferred Units limited partners and valuation allowance.

Upon Closing, the Company assumed certain uncertain tax positions from ALTM. The Company accounts for income taxes in accordance with ASC 740—Income Taxes, which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements. Tax positions generally refer to a position taken in a previously filed income tax return or expected to be included in a tax return to be filed in the future that is reflected in the measurement of current and deferred income tax assets and liabilities. Reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:

(In thousands)	Amount
Balance at December 31, 2021	$	—
Increase related to ALTM acquisition	5,238
Reduction related to current year activities	(2,455)
Balance at June 30, 2022	$	2,783

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14.    NET INCOME PER SHARE

The computation of basic and diluted net income per share for the periods presented in the Condensed Consolidated Financial Statements is shown in the tables below.

	Three Months Ended June 30,
	2022					2021
	Income		Weighted-average shares(3)	Per Share		Income		Weighted-average shares(3)	Per Share
	(In thousands, except per share data)
Basic:
Net income attributable to Class A common shareholders	$	6,438	39,297	$	0.16	$	—	—	$	—
Less: Net income available to participating unvested restricted Class A common shareholders(4)	(4,184)		—	$	—	—		—	$	—
Total net income attributable to Class A common shareholders	$	2,254	39,297	$	0.06	$	—	—	$	—
Effect of dilutive securities:
Unvested Class A common shares	—		32	$	—	—		—	$	—
Diluted(1)(2):
Net income attributable to Class A common shareholders	$	2,254	39,329	$	0.06	$	—	—	$	—

	Six Months Ended June 30,
	2022					2021
	Income		Weighted-average shares(3)	Per Share		Income		Weighted-average share (3)	Per Share
	(In thousands, except per share data)
Basic:
Net income attributable to Class A common shareholders	$	10,303	38,766	$	0.27	$	—	—	$	—
Less: Net income available to participating unvested restricted Class A common shareholders(4)	(4,184)		—	$	—	—		—	$	—
Total net income attributable to Class A common shareholders	$	6,119	38,766	$	0.16	$	—	—	$	—
Effect of dilutive securities:
Unvested Class A common shares	—		30	$	—	—		—	$	—
Diluted(1)(2):
Net income attributable to Class A common shareholders	$	6,119	38,796	$	0.16	$	—	—	$	—

(1)The effect of an assumed exchange of the outstanding Preferred Units and outstanding public and private warrants for shares of Class A Common Stock would have been anti-dilutive for all periods presented in which the Preferred Units and public and private warrants were outstanding.

(2)The effect of an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for all periods presented in which the Common Units were outstanding.

(3)Share amounts have been retroactively restated to reflect the Company’s two-for-one Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

(4)Represents dividends paid to unvested restricted Class A common shareholders.

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15. FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities measured at fair value on a recurring basis include cash and cash equivalents, accrued receivables, accounts receivable, accounts receivable from affiliates, dividends and distributions payable, interest rate and commodity swap derivatives, and Company’s private and public warrants and an embedded derivative liability related to the issuance of Preferred Units.

Topic 820 establishes a framework for measuring fair value in U.S. GAAP, clarifies the definition of fair value within that framework, and requires disclosures about the use of fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Topic 820 provides a framework for measuring fair value, establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of the counterparty’s creditworthiness when valuing certain assets.

Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1 inputs). The three levels of the fair value hierarchy under Topic 820 are described below:

Level 1 inputs: Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs: Inputs, other than quoted prices in active markets, that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 inputs: Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable. Valuation under Level 3 generally involves a significant degree of judgment from management.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or inventory parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity.

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021:

	June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Mandatorily redeemable Preferred Units	$	—	$	—	$	30,717	$	30,717
Embedded derivative	—		—		488		488
Public warrants	126		—		—		126
Private warrants	—		—		95		95
Total liabilities	$	126	$	—	$	31,300	$	31,426

	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swaps	$	—	$	205	$	—	$	205
Interest rate derivatives	—		2,662		—		2,662
Total liabilities	$	—	$	2,867	$	—	$	2,867

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The Company is exposed to certain risks arising from both its business operations and economic conditions, and the Company enters into certain derivative contracts to manage the exposures. Refer to Note 16—Derivatives and Hedging Activities in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further discussion related to commodity swaps and interest rate derivatives.

The Company bifurcated and recognized the embedded derivative associated with the Preferred Units related to the exchange option provided to the Preferred Unit holders under the terms of the Partnership LPA. The valuation of the embedded derivative, (using an income approach), was based on expected future interest rates using the Black-Karasinski model, the Company’s imputed interest rate of 5.88%, interest rate volatility of 39.51%, the expected timing of periodic cash distributions, the estimated timing for the potential exercise of the exchange option of 4.0 years and anticipated dividend yields of the Preferred Units. The Company recorded unrealized gains of $91.4 million and $88.6 million for the three and six months ended June 30, 2022, which was recorded as an “Unrealized gain on embedded derivative” in the Condensed Consolidated Statement of Operations. The Company has classified these recurring fair value measurements as Level 3 in the fair value hierarchy.

The carrying value of the Company’s Public Warrants are recorded at fair value based on quoted market prices, a Level 1 fair value measurement. The carrying value of the Company’s Private Placement Warrants are recorded at fair value determined using an option pricing model, a Level 3 fair value measurement, which is calculated based on key assumptions related to expected volatility of the Company’s common stock, an expected dividend yield, the remaining term of the warrants outstanding and the risk-free rate based on the U.S. Treasury yield curve in effect at the time of the valuation. These assumptions are estimated utilizing historical trends of the Company’s common stock, Public Warrants and other factors. The Company has recorded a liability of $0.2 million as of June 30, 2022. There was no change in fair value of the warrants since closing of the Transaction through reporting date.

The carrying amounts reported on the Condensed Consolidated Balance Sheets for the Company’s remaining financial assets and liabilities approximate fair value due to their short-term nature. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three and six months ended June 30, 2022 and 2021.

16.    DERIVATIVES AND HEDGING ACTIVITIES

The Company is exposed to certain risks arising from both its business operations and economic conditions, and it enters into certain derivative contracts to manage exposure to these risks. The Company did not elect to apply hedge accounting to these derivative contracts and recorded fair value of the derivatives on the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021.

Interest Rate Risk

The Company manages market risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and by using derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high credit-rating counterparties.

The Company’s objectives in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract.

In June 2022, all of BCP PHP, LLC’s (“BCP PHP”) outstanding interest rate swaps were terminated as BCP PHP’s outstanding term loan credit facility was extinguished on June 8, 2022. Refer to Note 6—Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements for additional information about the refinancing transactions.

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The fair value or settlement value of the consolidated interest rate swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets. Interest rate swap derivative liabilities were nil and $2.7 million as of June 30, 2022 and December 31, 2021, respectively. The Company recorded cash settlements on interest rate swap derivatives of $12.0 million and $0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $11.3 and $1.5 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations. In addition, the Company recorded fair value adjustments of $2.4 million and $1.9 million for the change in fair value of the interest rate swap derivatives for the three months ended June 30, 2022 and 2021, respectively, and $14.0 million and $3.1 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations.

Commodity Price Risk

Similarly, in 2020 and 2021 BCP Raptor, LLC (“BCP I”) and BCP Raptor II, LLC (“BCP II”) had WTI crude hedges at a specific notional that provides for a fixed price for crude in the Permian Basin and Waha basis hub hedges on various notional quantities of gas that either provided for a fixed price differential of natural gas in the Permian Basin relative to the NYMEX natural gas contract or provided for a fixed price for natural gas in the Permian Basin.

All of the Company’s commodity swaps had reached maturity as of December 31, 2021. The fair value or settlement value of the swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheet. Commodity swap derivative liability was nil and $0.2 million as of June 30, 2022 and December 31, 2021, respectively. The Company recorded cash settlements on commodity swap derivatives of nil and $14.1 million for the three months ended June 30, 2022 and 2021, respectively, and $0.2 million and $14.8 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations. In addition, the Company recorded fair value adjustments of $1.0 million and $16.5 million for the change in fair value of commodity swap derivatives for the three and six months ended June 30, 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations. No fair value adjustment recognized for the three and six months ended June 30, 2022.

17.    SEGMENTS

Our two operating segments represent the Company’s segments for which discrete financial information is available and is utilized on a regular basis by our chief operating decision maker (“CODM”) to make key operating decisions, assess performance and allocate resources. Our Chief Executive Officer is the CODM. These segments are strategic business units with differing products and services. No operating segments have been aggregated to form the reportable segments. Therefore, our two operating segments represent our reportable segments. The activities of each of our reportable segments from which the Company earns revenues and incurs expenses are described below:

•Midstream Logistics: The Midstream Logistics segment operates under three streams, 1) gas gathering and processing, 2) crude oil gathering, stabilization and storage services and 3) water gathering and disposal.

•Pipeline Transportation: The Pipeline Transportation segment consists of equity investment interests in four Permian Basin pipelines that access various points along the Texas Gulf Coast, and our Delaware Link Pipeline that is under development. The current operating pipelines transport crude oil, natural gas and NGLs to the Texas Gulf Coast.

Upon Closing, our CODM reviewed the Company and ALTM’s reporting segment activities. The Company then renamed its Gathering and Processing segment to Midstream Logistics and its Transmission segment to Pipeline Transportation. These name changes were made to better align segment activities with the name of the respective segment. There was no change in segment composition or structure for the three and six months ended June 30, 2022.

27

The following tables present the reconciliation of the segment profit measure as of and for the three and six months ended June 30, 2022 and 2021:

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the three months ended June 30, 2022	(In thousands)
Segment net income including noncontrolling interests	$	14,563	$	46,277	$	70,608	$	131,448
Add back:
Interest expense	20,641		942		3,764		25,347
Income tax expense	162		—		—		162
Depreciation and amortization	66,459		122		—		66,581
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		71,340		—		71,340
Share-based compensation	—		—		12,174		12,174
Loss (gain) on disposal of assets	8,580		—		(34)		8,546
(Gain) loss on debt extinguishment	27,983		(8)		—		27,975
Integration costs	579		—		4,707		5,286
Acquisition transaction costs	—		—		674		674
Other one-time costs or amortization	1,239		—		1,020		2,259
Deduct:
Gain on redemption of mandatorily redeemable Preferred units	—		—		5,087		5,087
Unrealized gain on embedded derivatives	—		—		91,448		91,448
Equity income from unconsolidated affiliates	—		47,786		—		47,786
Segment adjusted EBITDA	$	140,654	$	70,887	$	(3,622)	$	207,919

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the three months ended June 30, 2021	(In thousands)
Segment net income (loss) including noncontrolling interests	$	(24,222)	$	11,310	$	(2,454)	$	(15,366)
Add back:
Interest expense	27,829		4,778		—		32,607
Depreciation and amortization	57,038		128		—		57,166
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		21,717		—		21,717
Loss on disposal of assets	422		—		—		422
Gain on debt extinguishment	(60)		—		—		(60)
Other one-time costs or amortization	485		13		17		515
Producer settlement	6,827		—		—		6,827
Deduct:
Interest and other income	24		—		—		24
Equity income from unconsolidated affiliates	—		16,511		—		16,511
Segment adjusted EBITDA	$	68,743	$	21,435	$	(2,437)	$	87,741

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	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the six months ended June 30, 2022	(In thousands)
Segment net income including noncontrolling interests	$	23,749	$	75,412	$	53,676	$	152,837
Add back:
Interest expense	47,412		(672)		5,381		52,121
Income tax expense (benefit)	457		(39)		420		838
Depreciation and amortization	127,352		252		—		127,604
Contract assets amortization	896		—		—		896
Proportionate EMI EBITDA	—		112,081		—		112,081
Share-based compensation	—		—		18,304		18,304
Loss (gain) on disposal of assets	8,690		—		(34)		8,656
Loss on debt extinguishment	27,983		(8)		—		27,975
Integration costs	4,683		—		6,755		11,438
Acquisition transaction costs	4		—		6,346		6,350
Other one-time costs or amortization	2,157		—		1,297		3,454
Deduct:
Interest and other income	—		—		—		—
Gain on redemption of mandatorily redeemable Preferred units	—		—		9,580		9,580
Unrealized gain on embedded derivatives	—		—		88,562		88,562
Equity income from unconsolidated affiliates	—		75,703		—		75,703
Segment adjusted EBITDA	$	243,383	$	111,323	$	(5,997)	$	348,709

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the six months ended June 30, 2021	(In thousands)
Segment net income (loss) including noncontrolling interests	$	(16,027)	$	23,739	$	(4,942)	$	2,770
Add back:
Interest expense	55,285		2,632		—		57,917
Depreciation and amortization	112,880		257		—		113,137
Contract assets amortization	896		—		—		896
Proportionate EMI EBITDA	—		37,973		—		37,973
Loss on disposal of assets	454		—		—		454
Gain on debt extinguishment	(60)		—		—		(60)
Derivatives loss due to Winter Storm Uri	13,456		—		—		13,456
Other one-time costs or amortization	874		21		(52)		843
Producer settlement	6,827		—		—		6,827
Deduct:
Interest and other income	41		—		—		41
Equity income from unconsolidated affiliates	—		27,866		—		27,866
Segment adjusted EBITDA	$	174,544	$	36,756	$	(4,994)	$	206,306

(1) Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

(2) Results do not include legacy ALTM prior to February 22, 2022. Refer to Note 1 —Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further information on the Company’s basis of presentation. Adjusted EBITDA is a non-GAAP measure; please see Key Performance Metrics in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q, for a definition and reconciliation to the GAAP measure.

29

The following tables present the revenue for individual operating segment for the three and six months ended June 30, 2022 and 2021:

	Midstream Logistics		Pipeline Transportation		Consolidated
For the three months ended June 30, 2022	(In thousands)
Revenue	$	331,731	$	—	$	331,731
Other revenue	3,839		2		3,841
Total segment operating revenue	$	335,570	$	2	$	335,572

	Midstream Logistics		Pipeline Transportation		Consolidated
For the three months ended June 30, 2021	(In thousands)
Revenue	$	133,341	$	—	$	133,341
Other revenue	2,423		2		2,425
Total segment operating revenue	$	135,764	$	2	$	135,766

	Midstream Logistics		Pipeline Transportation		Consolidated
For the six months ended June 30, 2022	(In thousands)
Revenue	$	587,104	$	—	$	587,104
Other revenue	5,713		4		5,717
Total segment operating revenue	$	592,817	$	4	$	592,821

	Midstream Logistics		Pipeline Transportation		Consolidated
For the six months ended June 30, 2021	(In thousands)
Revenue	$	280,996	$	—	$	280,996
Other revenue	2,869		4		2,873
Total segment operating revenue	$	283,865	$	4	$	283,869

The following table presents total assets for each operating segment as of June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
Midstream Logistics	$	3,619,400	$	2,916,774
Pipeline Transportation	2,362,248		635,784
Segment total assets	5,981,648		3,552,558
Corporate and other	14,700		648
Total assets	$	5,996,348	$	3,553,206

18.    SUBSEQUENT EVENTS

In July 2022, the Company redeemed the remaining 400,000 Preferred Units along with 22,845 PIK units for an aggregate redemption price of $492.2 million. Following the July redemptions, there were no outstanding Preferred Units or PIK units.

On July 12, 2022, the Company filed a registration statement on Form S-3 with the SEC to register up to a maximum offering price of $400,000,000 of shares of Class A Common Stock, shares of preferred stock, depositary shares and warrants of the Company and debt securities of the Partnership and to register 107,580,912 shares of Class A Common Stock that may be offered and sold by the selling stockholders named in the registration statement Form S-3 filed from time to time on any exchange on which the shares of Class A Common Stock are listed.

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On July 20, 2022, the Board declared a cash dividend of $0.75 per share on the Company’s Class A Common Stock which will be payable to stockholders on August 17, 2022. The Company, through its ownership of the general partner of the Partnership, declared a distribution of $0.75 per Common Unit from the Partnership to the holders of Common Units. Please refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional information.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis addresses the results of our operations for the three and six month periods ended June 30, 2022, as compared to our results of operations for the same periods in 2021. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods. The previously announced merger of ALTM and BCP and their respective consolidated subsidiaries closed on February 22, 2022. As the Transaction was determined to be a reverse merger, BCP was considered the accounting acquirer and ALTM was considered the legal acquirer. Therefore, BCP’s net assets, carried at historical value, were presented as the predecessor to the Company’s historical financial statements and the comparable period presented herein reflects the results of operations of BCP for the three and six months ended June 30, 2022. The results of operations of ALTM is reflected within the Company’s Condensed Consolidated Financial Statements from the Closing Date through June 30, 2022.

Unless otherwise noted or the context requires otherwise, references herein to Kinetik Holdings Inc. “the Company”, “us”, “our”, “we” or similar terms, with respect to time periods prior to February 22, 2022, include BCP and its consolidated subsidiaries and do not include ALTM and its consolidated subsidiaries, while references herein to Kinetik Holdings Inc. with respect to time periods from and after February 22, 2022, include ALTM and its consolidated subsidiaries.

The Transaction

On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021, by and among the Company, the Partnership, Contributor and BCP. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests in BCP and its consolidated subsidiaries, to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 Common Units and the Company issued 50,000,000 shares of the Company’s Class C Common Stock to Contributor.

The Company’s stockholders immediately prior to the Closing continued to hold their shares of the Company’s Class A Common Stock. As a result of the Transaction, immediately following the Closing (i) Contributor owns approximately 75% of the issued and outstanding Common Stock, (ii) Apache Midstream owns approximately 20% of the issued and outstanding Common Stock, and (iii) the Company’s remaining stockholders own approximately 5% of the issued and outstanding Common Stock. Upon close of the Transaction, the Company’s Pipeline Transportation segment expanded to include three additional EMI pipelines and to increase its ownership interest in PHP. Further note that a secondary offering of 4 million Apache shares was closed during March of 2022 further reducing Apache’s ownership to approximately 13%.

The Transaction also brought in additional volume capacity from ALTM for the Midstream Logistics segment, including 182 miles of in-service natural gas gathering pipelines, approximately 46 miles of residue gas pipelines with four market connections, and approximately 38 miles of NGLs pipelines. The increased volume capacity has contributed to the increase in operating revenue for the three and six months ended June 30, 2022 compared to the same periods in 2021.

Overview

We are an integrated midstream energy company in the Permian Basin providing comprehensive gathering, transportation, compression, processing, and treating services. Our core capabilities include a variety of service offerings across multiple streams, including natural gas gathering, transportation, compression, treating and processing; NGLs stabilization and transportation; produced water gathering and disposal; and crude oil gathering, stabilization, storage and transportation. We have approximately 2.0 billion cubic feet per day (“Bcf/d”) cryogenic natural gas processing capacity strategically located near the Waha Hub in West Texas. As measured by processing capacity, we are the largest natural gas processor in the Delaware Basin and fourth largest across the entire Permian Basin. In addition, we have interests in four long-term contracted pipelines transporting natural gas, NGLs, and crude oil from the Permian Basin to the Gulf Coast.

Our Operations

Upon Closing, the Company renamed its Gathering and Processing segment to Midstream Logistics and renamed its Transmission segment to Pipeline Transportation. These name changes were made to better align segment activities with the name of each respective segment. The Midstream Logistics segment operates under three service offerings, 1) gas gathering and processing, 2) crude oil gathering, stabilization, and storage services, and 3) water gathering and disposal. The Pipeline Transportation segment consists of four EMI pipelines in the Permian Basin with various access points to the Texas Gulf Coast and our Delaware Link Pipeline, which is now expected in commercial service in 2023. The EMI pipelines transport crude oil, natural gas, and NGLs to the Texas Gulf Coast.

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Midstream Logistics

Gas Gathering and Processing

The Midstream Logistics segment provides gas gathering and processing services with approximately 1,200 miles of low and high-pressure steel pipeline located throughout the Southern Delaware Basin. Gas processing assets are centralized at five processing complexes with total cryogenic processing capacity of approximately 2.0 Bcf/d: the East Toyah complex (460 MMcf/d), the Pecos Bend complex (540 MMcf/d), the Pecos complex (260 MMcf/d), the Sierra Grande complex (60 MMcf/d), and Diamond Cryogenic complex (600 MMcf/d). The Company plans to expand the Diamond Cryogenic complex to 720 MMcf/d by the end of the first quarter of 2023. Current and under construction residue gas outlets include the El Paso Natural Gas Pipeline, Energy Transfer Comanche Trail Pipeline, ONEOK Roadrunner Pipeline, Energy Transfer Oasis Pipeline, and Whitewater Aqua Blanca Pipeline. NGLs outlets include Energy Transfer’s Lone Star NGL Pipeline, Targa’s Grand Prix NGL Pipeline, and Enterprise’s Shin Oak NGL Pipeline.

Crude Oil Gathering, Stabilization, and Storage Services

The Midstream Logistics segment also includes crude oil gathering, stabilization, and storage services throughout the Texas Delaware Basin. Crude gathering assets are centralized at the Caprock Stampede Terminal and the Pinnacle Sierra Grande Terminal. The system includes approximately 200 miles of gathering pipeline and 90,000 barrels of crude storage. The crude facilities have connections for takeaway transportation into Plains’ 285 Central Station and State Line and Oryx’s Orla & Central Mentone facilities.

Water Gathering and Disposal

In addition, this segment includes water gathering and disposal assets located in northern Reeves County, Texas which are included in the Midstream Logistics segment. The system includes approximately 70 miles of gathering pipeline and approximately 500,000 barrels per day of permitted disposal capacity.

Pipeline Transportation

The Pipeline Transportation segment consists of four EMI pipelines in the Permian Basin with access to various points along the Texas Gulf Coast and the Delaware Link Pipeline, which is currently under development. EMI pipelines include the following:

•An approximate 53.3% equity interest in PHP, which is also owned and operated by Kinder Morgan Texas Pipeline, LLC (“Kinder Morgan”). PHP transports natural gas from the Waha area in northern Pecos County, Texas to the Katy, Texas area with connections to Texas Gulf Coast and Mexico markets. PHP was placed in service January 2021, with the total capacity of 2.1 Bcf/d fully subscribed under long-term contracts. In June 2022, PHP announced a final investment decision to proceed with its expansion project to increase total capacity to 2.65 Bcf/d fully subscribed under 10 year take or pay contracts. The project will increase PHP’s capacity by nearly 550 MMcf/d with target in-service date in November 2023. The funding for the expansion is 67% by the Company and the reminder by Kinder Morgan. As a result, post the in service of the expansion, Kinetik’s ownership interest in PHP will increase to almost 56%.

•A 16% equity interest in the Gulf Coast Express Pipeline (“GCX”), which is owned and operated by Kinder Morgan. GCX transports natural gas from the Permian Basin in West Texas to Agua Dulce near the Texas Gulf Coast. GCX was placed in service during 2019, with the total capacity of 2.0 Bcf/d fully subscribed under long-term contracts.

•A 33% equity interest in the Shin Oak NGL Pipeline (“Shin Oak”), which is owned by Breviloba, LLC, and operated by Enterprise Products Operating LLC. Shin Oak transports NGLs from the Permian Basin to Mont Belvieu, Texas. Shin Oak was placed in service during 2019, with total capacity of up to 550 MBbl/d.

•A 15% equity interest in the EPIC Crude oil pipeline (“EPIC”), which is operated by EPIC Consolidated Operations, LLC. EPIC transports crude oil from Orla, Texas in Northern Reeves County to the Port of Corpus Christi, Texas. EPIC was placed in service early 2020, with initial throughput capacity of approximately 600 MBbl/d.

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Factors Affecting Our Business

The Significance of Crude Oil and Producer Volumes on Our Revenues, Cost of Sales and Gross Margin

The Company’s assets include approximately 1,700 miles of NGLs, natural gas, condensate, produced water, and crude oil pipelines as well as approximately 2 Bcf/d of natural gas processing capacity as of June 30, 2022. Most of the gas gathered and processed by the Company is associated gas included in the oil stream, making producers’ oil break-even prices the primary driver of activity. The average price of WTI crude oil was $101.77/Bbl during the first half of 2022. If crude prices were to fall below producers’ break-even prices for a prolonged period of time, drilling activity and volumes might decline and might have a negative impact on our business. In addition, because the Company’s Pipeline Transportation segment provides NGLs transmission service through its EMI pipelines, a decrease in natural gas and NGL price will have an adverse impact on the Company’s results of operations as it may lead to lower natural gas production and thus lower volumes of NGLs transported. The average natural gas price was $6.06/MMBtu during the first half of 2022. For additional risk factors that affect the Company’s business, please refer to Part II, Item 1A — Risk Factors of the Company’s Quarterly Report Form 10-Q for the first quarter of 2022 filed on May 10, 2022.

Recent Developments

Comprehensive Refinancing

On June 8, 2022, the Partnership, completed a private placement of $1.00 billion aggregate principal amount of its 5.875% Sustainability-Linked Senior Notes due 2030 (the “Notes”), which are fully and unconditionally guaranteed by the Company. In addition, the Partnership entered into a new revolving credit agreement (the “Revolving Credit Agreement”), which provides for a $1.25 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”) maturing on June 8, 2027, and a new term loan agreement (the “TLA”), which provides for a $2.00 billion senior unsecured term loan credit facility (the “Term Loan Credit Facility”) maturing on June 8, 2025. Proceeds from the Notes and the Term Loan Credit Facility were used to repay all outstanding borrowings under our existing credit facilities and to pay fees and expenses related to the offering. Refer to Note 6 — Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

Sustainability-linked Financing Framework

On May 16, 2022, we published our Sustainability Framework, which we developed in alignment with the five components outlined in the International Capital Markets Association Sustainability-Linked Bond Principles as of June 2020 and the Loan Syndications and Trading Association Sustainability-Linked Loan Principles as of July 2021 (each as referred to in our Sustainability-Linked Financing Framework), and corresponding Second Party Opinion provided by ISS ESG.

This framework establishes key-performance indicators (“KPIs”) that will be used to measure our progress against sustainability performance targets (“SPTs”). Under this framework, our KPIs are Scope 1 and Scope 2 greenhouse gas emissions intensity, Scope 1 and Scope 2 methane gas emissions intensity and female representation in corporate officer positions and our SPTs are (1) reducing the intensity of all Scope 1 and Scope 2 greenhouse gas emissions from our operations by 35% by 2030 from a 2021 Baseline Year (as defined in the Sustainability Framework), (2) reducing the intensity of Scope 1 and Scope 2 methane gas emissions from our operations by 30% by 2030 from a 2021 Baseline Year, and (3) increasing female representation in corporate officer positions of Vice President and above to 20% by year-end 2026. Additionally, satisfaction of our SPTs is now linked to our new debt agreements. Refer to Note 6 — Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

Stock Split

On May 19, 2022, the Company announced a two-for-one stock split with respect to its Class A Common Stock and Class C Common Stock in the form of a stock dividend (the “Stock Split”). The Stock Split was accomplished by distributing one additional share of Class A Common Stock for each share of Class A Common Stock outstanding and one additional share of Class C Common Stock for each share of Class C Common Stock outstanding. The additional shares of Common Stock were issued on June 8, 2022 to holders of record at the close of business on May 31, 2022.

Commodity Price Volatility

There has been, and we believe there will continue to be, volatility in commodity prices and in the relationships among NGLs, crude oil and natural gas prices. As a result of uncertainty around global commodity supply and demand, uncertainty in global economic recovery from COVID-19 pandemics and the armed conflict in Ukraine, global oil and natural gas commodity prices continue to remain volatile. The volatility and uncertainty of natural gas, crude oil and NGL prices impact drilling,

34

completion and other investment decisions by producers and ultimately supply to our systems. Although the armed conflict in Ukraine generated commodity price upward pressure, and our operation could benefit in an environment of higher natural gas, NGLs and condensate prices, the instability of international political environment and human and economic hardship result from the conflict would have a highly uncertain impact on the U.S. economy, which in turn, might affect our business and operations adversely. The Company continues to monitor commodity prices closely and may enter into commodity price hedges from time to time as necessary to mitigate the volatility risk.

Inflation and Interest Rates

The annual rate of inflation in the United States hit 9.1% in June 2022, as measured by the Consumer Price Index. We expect that inflation in 2022 will continue to increase our operating costs and the overall cost of capital projects we undertake. In addition, the Federal Reserve has continued to tighten its monetary policy by raising interest rates by three-quarters of a percentage point in June 2022 and July 2022 to maintain the federal funds rate in a target range of 2.25% - 2.50%. Furthermore, the Chairman of the Federal Reserve signaled that the Federal Reserve would continue to take necessary action to bring inflation down and to ensure price stability, including continued rate increases. Increased interest rates will have a negative impact on the Company’s ability to meet its contractual debt obligations and to fund its operating expenses, capital expenditures, dividends and distributions. While a significant portion of our debt is floating rate, even with expected further near term rate increases by the Federal Reserve, the possibility of an economic slowdown in 2023 and the uncertainty with the transition from LIBOR to SOFR, the all in cost of floating rate debt under the TLA is expected to remain lower than the current yield on the recent $1 billion Senior Notes issuance. The Company will continue to actively evaluate and analyze whether any form of interest rate hedging should be implemented to mitigate interest rate exposure.

Supply Chain Considerations

During 2021 and the first half of 2022, challenging supply chain issues have emerged that will continue at least through the remainder of 2022. Geopolitical events have further disrupted global supply chains and caused volatile commodity prices for natural gas, NGLs and crude oil. The United States has banned the import of Russian oil, NGLs and other energy commodities and European Union has taken steps to reduce imports of Russian oil and natural gas. The principal supply issues facing our industry for the next twelve months include: raw materials availability, finished good inventory, rising freight costs, delays due to port congestion and overall labor shortages.

All bidding will require the risk of shipping costs and delays to be factored into proposals. Trucking availability and pricing will impact North American opportunities while sea-freight costs will impact sales of North American manufactured goods being delivered internationally for the foreseeable future. The import of raw materials from China will also incur price increases. To that end, accelerating tensions between China and the U.S. could also result in further supply disruption.

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Results of Operations

The following table presents the Company’s results of operations for the periods presented:

	Three Months Ended June 30,*						Six Months Ended June 30,*
	2022		2021		% Change		2022		2021		% Change
	(In thousands, except percentages)
Revenues:
Service revenue	$	102,080	$	62,242	64	%	$	182,525	$	129,904	41	%
Product revenue	229,651		71,099		223	%	404,579		151,092		168	%
Other revenue	3,841		2,425		58	%	5,717		2,873		99	%
Total revenues	335,572		135,766		147	%	592,821		283,869		109	%
Operating costs and expenses:
Cost of sales (exclusive of depreciation and amortization)	152,714		43,503		251	%	272,989		80,508		239	%
Operating expense	35,280		25,280		40	%	65,151		40,844		60	%
Ad valorem taxes	5,880		3,414		72	%	10,033		5,765		74	%
General and administrative	25,960		5,337		386	%	48,712		10,963		344	%
Depreciation and amortization	66,581		57,166		16	%	127,604		113,137		13	%
Loss on disposal of assets	8,546		422		1925	%	8,656		454		1807	%
Total operating costs and expenses	294,961		135,122		118	%	533,145		251,671		112	%
Operating income	40,611		644		6206	%	59,676		32,198		85	%
Other income (expense):
Interest and other income	—		26		(100)	%	250		563		(56)	%
Gain on Preferred Units redemption	5,087		—		NM		9,580		—		NM
Gain (loss) on debt extinguishment	(27,975)		60		(46725)	%	(27,975)		60		(46725)	%
Unrealized gain on embedded derivatives	91,448		—		NM		88,562		—		NM
Interest expense	(25,347)		(32,607)		(22)	%	(52,121)		(57,917)		(10)	%
Equity in earnings of unconsolidated affiliates	47,786		16,511		189	%	75,703		27,866		172	%
Total other income (expense), net	90,999		(16,010)		(668)	%	93,999		(29,428)		(419)	%
Income (loss) before income tax	131,610		(15,366)		(957)	%	153,675		2,770		5448	%
Current income tax expense	162		—		NM		838		—		NM
Net income (loss) including noncontrolling interests	$	131,448	$	(15,366)	(955)	%	$	152,837	$	2,770	5418	%

*The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further information.

NM - Not meaningful

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

Revenues

For the three months ended June 30, 2022, revenue increased $199.8 million, or 147%, to $335.6 million, compared to $135.8 million for the same period in 2021. The increase was primarily driven by period to period higher commodity prices, increases in gathered and processed volumes, as well as similar increases in condensate and NGL volumes sold.

Service revenue

Service revenue consists of service fees paid to us by our customers for providing comprehensive gathering, treating, processing and water disposal services necessary to bring natural gas, NGLs and crude oil to market. Service revenue for the three months ended June 30, 2022, increased by $39.8 million, or 64%, to $102.1 million, compared to $62.2 million for the same period in 2021. This increase was primarily due to a period over period increase in gathered gas volumes of 596.2 Mcf per day, of which 370.3 Mcf per day are a result of new operations acquired through the Transaction. Service revenues are included entirely in the Midstream Logistics segment.

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Product revenue

Product revenue consists of commodity sales (including condensate, natural gas residue, and NGLs). Product revenue for the three months ended June 30, 2022, increased by $158.6 million, or 223%, to $229.7 million, compared to $71.1 million for the same period in 2021, primarily due to period over period increases in NGL and condensate prices combined with increased sales volumes of these liquids. NGL prices increased $10.36 per barrel, or 34%, and condensate prices increased $44.35 per barrel or 73%. NGL and condensate sales volumes increased 3.4 million barrels, or 297%. This substantial increase was due to our plants being run in recovery for most of the three months ended June 30, 2022 versus rejection during the same period in 2021. For the same reason, natural gas residue sales volumes decreased by 2.4 million MMBtu, or 42%. Offsetting this decrease in volumes, natural gas prices increased period over period $4.27 per MMBtu, or over 150%. Product revenues are included entirely in the Midstream Logistics segment.

Operating Costs and Expenses

Costs of sales (exclusive of depreciation and amortization)

Cost of sales (exclusive of depreciation and amortization) primarily consists of purchases of NGLs and natural gas from our producers at contracted market prices to support product sales to other third parties. For the three months ended June 30, 2022, cost of sales increased $109.2 million, or 251%, to $152.7 million, compared to $43.5 million for the same period in 2021. The increase was primarily driven by the period to period increase in commodity prices and condensate and NGL volumes discussed above. Cost of sales (exclusive of depreciation and amortization) are included entirely in the Midstream Logistics segment.

Operating expenses

Operating expenses increased by $10.0 million, or 40%, to $35.3 million for the three months ended June 30, 2022, compared to $25.3 million for the same period in 2021. Of the total increase, $6.0 million was driven by the new operations acquired through the Transaction. The remaining increase was primarily driven by higher period over period electricity costs of $1.6 million and higher period over period internal labor costs of $1.5 million, $0.5 million of which are integration related.

General and administrative

General and administrative (“G&A”) expense increased by $20.6 million, or 386%, to $26.0 million for the three months ended June 30, 2022, compared to $5.3 million for the same period in 2021. The increase was primarily driven by share-based compensation recognized of $12.2 million, acquisition and integration costs of $4.3 million incurred in relation to the Transaction closed in February 2022, and an increase of $1.3 million in costs associated with ongoing litigation.

Other Income (Expense)

Gain (loss) on debt extinguishment

For the three months ended June 30, 2022, the Company recognized a loss on debt extinguishment of $28.0 million, compared with a gain of $0.1 million for the same period in 2021. The change reflected the loss on debt extinguishment recognized in relation to the comprehensive refinancing completed in June 2022.

Unrealized gain on embedded derivatives

For the three months ended June 30, 2022, the Company recognized an unrealized gain on derivatives of $91.4 million. The unrealized gain is a result of the decrease in fair value of the embedded derivative related to the redeemable noncontrolling interest Preferred Units. The substantial decrease in fair value of this derivative relates to the comprehensive debt refinancing that achieved more favorable interest terms for the Company and the partial redemption of these Preferred Units on July 1, 2022, which was known as of the end of the second quarter.

Equity in earnings of unconsolidated affiliates

Income from EMI pipelines increased by $31.3 million, or 189%, to $47.8 million for the three months ended June 30, 2022, compared to $16.5 million for the same period in 2021. The increase was primarily due to the acquisition of new EMI pipelines and additional equity interests in the Company’s existing EMI pipeline, PHP, through the Transaction closed in February 2022 and due to higher earnings. Equity in earnings of unconsolidated affiliates is included entirely in the Pipeline Transportation segment.

37

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

Revenues

For the six months ended June 30, 2022, revenue increased $309.0 million, or 109%, to $592.8 million, compared to $283.9 million for the same period in 2021. The increase was primarily driven by period to period higher commodity prices, increases in gas gathered and processed volumes, as well as similar increases in condensate and NGL volumes sold.

Service revenue

Service revenue consists of service fees paid to us by our customers for providing comprehensive gathering, treating, processing and water disposal services necessary to bring natural gas, NGLs and crude oil to market. Service revenue for the six months ended June 30, 2022, increased by $52.6 million, or 41%, to $182.5 million, compared to $129.9 million for the same period in 2021. This increase is primarily due to a period over period increase in gathered gas volumes of 547.8 Mcf per day, of which 309.2 Mcf per day are a result of new operations acquired through the Transaction. Service revenues are included entirely in the Midstream Logistics segment.

Product revenue

Product revenue consists of commodity sales (including condensate, natural gas residue, and NGLs). Product revenue for the six months ended June 30, 2022, increased by $253.5 million, or 168%, to $404.6 million, compared to $151.1 million for the same period in 2021, primarily due to period over period increases in NGL and condensate prices combined with increased sales volumes of these liquids. NGL prices increased $13.49 per barrel, or 46%, and condensate prices increased $41.05 per barrel, or 72%. NGL and condensate sales volumes increased 4.6 million barrels, or 203%. This substantial increase was due to our plants being run in recovery for part of the six months ended June 30, 2022 versus rejection during the same period in 2021. For the same reason, natural gas residue sales volumes decreased by 1.3 million MMBtu, or 11%. Offsetting this decrease in volumes, natural gas prices increased period over period by $2.22 per MMBtu, or 65%. Product revenues are included entirely in the Midstream Logistics segment.

Operating Costs and Expenses

Costs of sales (exclusive of depreciation and amortization)

Cost of sales (exclusive of depreciation and amortization) primarily consists of purchases of NGLs and natural gas from our producers at contracted market prices to support product sales to other third parties. For the six months ended June 30, 2022, cost of sales increased $192.5 million, or 239%, to $273.0 million, compared to $80.5 million for the same period in 2021. The increase was primarily driven by the period to period increases in commodity prices and NGL and condensate volumes discussed above. Cost of sales (exclusive of depreciation and amortization) are included entirely in the Midstream Logistics segment.

Operating expenses

Operating expenses increased by $24.3 million, or 60%, to $65.2 million for the six months ended June 30, 2022, compared to $40.8 million for the same period in 2021. Of the total increase, $8.6 million was driven by the new operations acquired through the Transaction. The remaining increase was primarily driven by higher period over period electricity costs of $10.3 million, and higher internal labor costs of $3.2 million, $1.9 million of which are integration related. The higher electricity costs were due to electricity credits received from one of our primary electricity providers during the month of February 2021 related to the extreme weather caused by Winter Storm Uri.

General and administrative

General and administrative (“G&A”) expense increased by $37.7 million, or 344%, to $48.7 million for the six months ended June 30, 2022, compared to $11.0 million for the same period in 2021. The increase was primarily driven by $18.3 million of recognized share-based compensation, acquisition and integration costs of $15.7 million incurred in relation to the Transaction closed in February 2022, and an increase of $1.3 million in costs associated with an ongoing litigation.

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Other Income (Expense)

Gain (loss) on debt extinguishment

For the six months ended June 30, 2022, the Company recognized a loss on debt extinguishment of $28.0 million, compared with a gain of $0.1 million for the same period in 2021. The change reflected the loss on debt extinguishment recognized in relation to the comprehensive refinancing completed in June 2022.

Unrealized gain on embedded derivatives

For the six months ended June 30, 2022, the Company recognized an unrealized gain on derivatives of $88.6 million. The unrealized gain is a result of the decrease in fair value of the embedded derivative related to the redeemable noncontrolling interest Preferred Units. The substantial decrease in fair value of this derivative relates to the comprehensive debt refinancing that achieved more favorable interest terms for the Company and the partial redemption of these Preferred Units on July 1, 2022, which was known as of the end of the second quarter.

Equity in earnings of unconsolidated affiliates

Income from EMI pipelines increased by $47.8 million, or 172% to $75.7 million for the six months ended June 30, 2022, compared to $27.9 million for the same period in 2021. The increase was primarily due to the acquisition of new EMI pipelines and additional equity interests in the Company’s existing EMI pipeline, PHP, through the Transaction closed in February 2022 and due to higher earnings. Equity in earnings of unconsolidated affiliates is included entirely in the Pipeline Transportation segment.

Key Performance Metrics

Adjusted EBITDA

Adjusted EBITDA is defined as net income including noncontrolling interests adjusted for interest, taxes, depreciation and amortization, impairment charges, asset write-offs, the proportionate EBITDA from our equity method investments, equity in earnings from investments recorded using the equity method, share-based compensation expense, extraordinary losses and unusual or non-recurring charges. Adjusted EBITDA provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance.

We believe that Adjusted EBITDA provides a meaningful understanding of certain aspects of earnings before the impact of investing and financing charges and income taxes. Adjusted EBITDA is useful to an investor in evaluating our performance because this measure:

•Is widely used by analysts, investors and competitors to measure a company’s operating performance;

•Is a financial measurement that is used by rating agencies, lenders, and other parties to evaluate our credit worthiness; and;

•Is used by our management for various purposes, including as a measure of performance and as a basis for strategic planning and forecasting.

Adjusted EBITDA is not defined in GAAP

The GAAP measure used by the Company that is most directly comparable to Adjusted EBITDA is net income including noncontrolling interests. Adjusted EBITDA should not be considered as an alternative to the GAAP measure of net income including noncontrolling interests or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income including noncontrolling interests. Adjusted EBITDA should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company’s definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies in the industry, thereby diminishing its utility.

Reconciliation of non-GAAP financial measure

Company management compensates for the limitations of Adjusted EBITDA as an analytical tool by reviewing the comparable GAAP measure, understanding the differences between Adjusted EBITDA as compared to net income including noncontrolling interests, and incorporating this knowledge into its decision-making processes. Management believes that investors benefit from having access to the same financial measure that the Company uses in evaluating operating results.

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The following table presents a reconciliation of the GAAP financial measure of net income including noncontrolling interests to the non-GAAP financial measure of Adjusted EBITDA.

	Three Months Ended June 30,*						Six Months Ended June 30,*
	2022		2021		% Change		2022		2021		% Change
Reconciliation of net income including noncontrolling interests to Adjusted EBITDA	(In thousands, except percentages)
Net income including noncontrolling interests	$	131,448	$	(15,366)	(955)	%	$	152,837	$	2,770	5418	%
Add back:
Interest expense	25,347		32,607		(22)	%	52,121		57,917		(10)	%
Income tax expense	162		—		NM		838		—		NM
Depreciation and amortization	66,581		57,166		16	%	127,604		113,137		13	%
Amortization of contract costs	448		448		—	%	896		896		—	%
Proportionate EMI EBITDA	71,340		21,717		228	%	112,081		37,973		195	%
Share-based compensation	12,174		—		NM		18,304		—		NM
Loss on sale of assets	8,546		422		1925	%	8,656		454		1807	%
Loss (gain) on debt extinguishment	27,975		(60)		(46725)	%	27,975		(60)		(46725)	%
Derivative loss due to Winter Storm Uri	—		—		NM		—		13,456		(100)	%
Integration Costs	5,286		—		NM		11,438		—		NM
Transaction Costs	674		—		NM		6,350		—		NM
Other one-time cost or amortization	2,259		515		339	%	3,454		843		310	%
Producer Settlement	—		6,827		(100)	%	—		6,827		(100)	%
Deduct:
Interest and other income	—		24		(100)	%	—		41		(100)	%
Gain on redemption of mandatorily redeemable Preferred Units	5,087		—		NM		9,580		—		NM
Unrealized gain on embedded derivatives	91,448		—		NM		88,562		—		NM
Equity income from unconsolidated affiliates	47,786		16,511		189	%	75,703		27,866		172	%
Adjusted EBITDA	$	207,919	$	87,741	137	%	$	348,709	$	206,306	69	%

* The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to Note 1—Description of the Organization and Summary of Significant Accounting Policies for further information on the Company’s basis of presentation.

NM - not meaningful

Adjusted EBITDA increased by $120.2 million, or 137%, to $207.9 million for the three months ended June 30, 2022, compared to $87.7 million for the same period in 2021. The increase was primarily driven by an increase in net income including noncontrolling interest of $146.8 million, or 955%, and increases in add back related to the Company’s proportionate share of its EMI pipelines’ EBITDA of $49.6 million, or 228%, share-based compensation of $12.2 million and depreciation and amortization expense of $9.4 million, which are results of new operations acquired through the Transaction. The increase in add back was also due to increase in loss on debt extinguishment of $28.0 million as the Company completed its comprehensive refinancing in June 2022. The increase in adjusted EBITDA was partially offset by increases in unrealized gain on embedded derivatives of $91.4 million and EMI pipelines equity income of $31.3 million.

Adjusted EBITDA increased by $142.4 million, or 69% to $348.7 million for the six months ended June 30, 2022, compared to $206.3 million for the same period in 2021. The increase was primarily driven by an increase in net income including noncontrolling interest of $150.1 million, or 5418%, and increases in add back related to the Company’s proportionate share of its EMI pipelines’ EBITDA of $74.1 million, or 195%, share-based compensation of $18.3 million, depreciation and amortization expense of $14.5 million and integration costs of $11.4 million, which are results of new operations acquired through the Transaction. The increase in add back was also due to increase in loss on debt extinguishment of $28.0 million as the Company completed its comprehensive refinance in June 2022. The increase in adjusted EBITDA was partially offset by increases in unrealized gain on embedded derivatives of $88.6 million, EMI pipelines equity income of $47.8 million and a decrease in derivative loss add back due to the Winter Storm Uri of $13.5 million as no similar credit was taken during 2022.

The 2022 Adjusted EBITDA presented in the above table does not include any expected synergies including ad valorem taxes, operating expenses and corporate G&A, which will be recognized over the course of 2022.

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Segment Adjusted EBITDA

Segment Adjusted EBITDA is defined as segment net earnings adjusted to exclude interest expense, income tax expense, depreciation and amortization, the proportionate effect of these same items for our equity method investments and other non-recurring items. The following table presents segment adjustment EBITDA for the three and six months ended June 30, 2022 and 2021. Also refer to Note 17—Segments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for reconciliation of segment adjusted EBITDA to net income including noncontrolling interests.

	Three Months Ended June 30,*						Six Months Ended June 30,*
	2022		2021		% Change		2022		2021		% Change
	(In thousands, except percentages)
Midstream Logistics	$	140,654	$	68,743	105	%	$	243,383	$	174,544	39	%
Pipeline Transportation	70,887		21,435		231	%	111,323		36,756		203	%
Corporate and Other**	(3,622)		(2,437)		49	%	(5,997)		(4,994)		20	%
Total segment adjusted EBITDA	$	207,919	$	87,741	137	%	$	348,709	$	206,306	69	%

* The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements of this Form 10-Q for further information on the Company’s financial statement consolidation.

** Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

Midstream Logistics segment adjusted EBITDA increased by $71.9 million, or 105%, to $140.7 million for the three months ended June 30, 2022, compared to $68.7 million for the same period in 2021. The increase was primarily driven by an increase in segment net income including noncontrolling interests of $38.8 million and increases in the add back related to loss on debt extinguishment of $28.0 million as the Company completed its comprehensive refinancing in June 2022, loss on sale of assets of $8.2 million for assets retired during the second quarter of 2022 and depreciation and amortization expense of $9.4 million due to new operations acquired through the Transaction. The increase was offset by a decrease in interest expense add back of $7.2 million.

Midstream Logistics segment adjusted EBITDA increased by $68.8 million, or 39%, to $243.4 million for the six months ended June 30, 2022, compared to $174.5 million for the same period in 2021. The increase was primarily driven by an increase in segment net income including noncontrolling interests of $39.8 million and increases in the add back related to loss on debt extinguishment of $28.0 million as the Company completed its comprehensive refinancing in June 2022, depreciation and amortization expense of $14.5 million and integration costs of $4.7 million due to new operations acquired through the Transaction, and loss on sale of assets of $8.2 million for assets retired during the second quarter of 2022. The increase was offset by a decrease in derivative loss due to the Winter Storm Uri of $13.5 million as no similar credit was taken in 2022 and a decrease in interest expense add back of $7.9 million.

Pipeline Transportation segment adjusted EBITDA increased by $49.5 million, or 231%, to $70.9 million for the three months ended June 30, 2022, compared to $21.4 million for the same period in 2021. The increase was driven by investments in GCX, EPIC and Shin Oak and a 100% increase in the Company’s investment in PHP, which were all acquired through the Transaction in February 2022. During the three months ended June 30, 2021, the Company only held a 26.67% interest in PHP.

Pipeline Transportation segment adjusted EBITDA increased by $74.6 million, or 203%, to $111.3 million for the six months ended June 30, 2022, compared to $36.8 million for the same period in 2021. The increase was driven by investments in GCX and Shin Oak and a 100% increase in the Company’s investment in PHP, which were all acquired through the Transaction in February 2022. During the six months ended June 30, 2021, the Company only held a 26.67% interest in PHP.

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Capital Resources and Liquidity

The Company’s primary use of capital since inception has been for the initial construction of gathering and processing assets, as well as the acquisition of the EMI pipelines and associated subsequent construction costs. For 2022, the Company’s primary capital spending requirements are anticipated to be related to integration of the Alpine High gathering system with the legacy BCP system, certain integration related synergies including the relocation of compression units and treating assets to the legacy BCP processing plants, the Company’s contractual debt obligation, the Company’s payment of quarterly cash dividend on its Class A Common Stock and Common Units as may be declared by its Board of Directors (the “Board”) and cash payment upon redemption of remaining mandatorily redeemable Preferred Units.

During the six months ended June 30, 2022, the Company’s primary sources of cash were distributions from the EMI pipelines, borrowings under the Term Loan Credit Facility, proceeds from the offering of the Notes, and cash generated from operations. Based on the Company’s current financial plan and related assumptions including the Reinvestment Agreement, the Company believes that cash from operations, a reduced capital program for its midstream infrastructure, and distributions from the EMI pipelines will generate cash flows in excess of capital expenditures and the amount required to fund the Company’s planned quarterly dividend.

Given recent crude oil price volatility and economic uncertainty resulting from inflation, increased interest rates, the armed conflict in Ukraine and related governmental actions, the Company continues to monitor expected natural gas throughput volumes and capacity utilization of the EMI pipelines.

Comprehensive Refinancing

On June 8, 2022, the Partnership completed the private placement of $1.00 billion aggregate principal amount of 5.875% Sustainability-Linked Senior Notes due 2030, which are fully and unconditionally guaranteed by the Company. In addition, the Partnership entered into a new Revolving Credit Agreement, which provides for a $1.25 billion senior unsecured Revolving Credit Facility maturing on June 8, 2027, and a new TLA, which provides for a $2.00 billion senior unsecured Term Loan Credit Facility maturing on June 8, 2025. Proceeds from the Notes and the Term Loan Credit Facility were used to repay all outstanding borrowings under our existing credit facilities and to pay fees and expenses related to the offering. Refer to Note 6 — Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

Capital Requirements and Expenditures

Our operations can be capital intensive, requiring investments to expand, upgrade, maintain or enhance existing operations and to meet environmental and operational regulations. During the six months ended June 30, 2022 and 2021, capital spending for midstream infrastructure assets totaled $71.4 million and $39.4 million, respectively. Management believes its existing gathering, processing, and transmission infrastructure capacity is capable of fulfilling its midstream contracts to service its customers. During the six months ended June 30, 2022, the Company contributed $2.7 million to one of its EMI pipelines compared to $20.5 million contributed in the same period of 2021.

The Company anticipates its existing capital resources will be sufficient to fund the future capital expenditures for EMI pipelines and the Company’s existing infrastructure assets. For further information on EMIs, refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Cash Flows

The following tables present cash flows from operating, investing, and financing activities during the periods presented:

	For the Six Months Ended June 30,
	2022		2021
	(In thousands)
Cash provided by operating activities	$	268,918	$	94,210
Cash used in investing activities	$	(69,059)	$	(62,517)
Cash used in financing activities	$	(213,269)	$	(32,242)

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Operating Activities. Net cash provided by operating activities increased by $174.7 million for the six months ended June 30, 2022 compared with the same period in 2021. The change in the operating cash flows reflected increases in net income including noncontrolling interests of $150.1 million, adjustments related to non-cash items of $12.4 million and cash provided by changes in working capital of $12.3 million. Period over period increase in cash provided by operating activities was primarily driven by the new operations acquired through the Transaction, including three EMI pipelines and additional equity interests of the Company’s existing EMI pipeline acquired through the Transaction. The increase was also due to the increase in loss on debt extinguishment, which was a result of the comprehensive refinancing completed in June 2022. The increase was offset by derivative fair value adjustment recognized during the first half of 2022.

Investing Activities. Net cash used in investing activities increased by $6.5 million for the six months ended June 30, 2022 compared with the same period in 2021. The increase was primarily driven by increase in property, plant and equipment expenditure of $32.1 million and intangible assets expenditure of $5.8 million. The increase in cash outflow was offset by an increase in cash inflow of $13.4 million acquired through the acquisition closed in February 2022 and reduction of investments made to unconsolidated affiliates of $17.8 million.

Financing Activities. Net cash used in financing activities increased by $181.0 million for the six months ended June 30, 2022 compared with the same period in 2021. The increase was primarily due to increases in cash outflow for redemption of mandatorily redeemable Preferred Units of $152.6 million, net payments to the Company’s outstanding debts of $23.2 million, cash dividends paid to holders of Class A Common Stock of $11.2 million, cash distributions paid to holders of Preferred Units of $8.8 million and reduction of equity contribution receipt of $14.9 million. The increase in cash outflow was offset by a reduction of cash distributions paid to holders of Class C Common Units of $29.7 million.

Dividend and Distribution Reinvestment Agreement

On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with certain stockholders including BCP Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, APA Corporation Apache Midstream LLC, and certain individuals (each, a “Reinvestment Holder”). Under the Reinvestment Agreement, each Reinvestment Holder is obligated to reinvest at least 20% of all distributions on Common Units or dividends on shares of Class A Common Stock in the Company’s Class A Common Stock. Additionally, the Audit Committee and subsequently the Board resolved that for the calendar year 2022, 100% of all distributions or dividends received by each Reinvestment Holder would be reinvested in newly issued shares of Class A Common Stock.

On May 17, 2022, the Company made cash dividend payments of $11.7 million to holders of Class A Common Stock and Common Units and $87.7 million was reinvested in shares of Class A Common Stock by each Reinvestment Holder.

Stock Split

On May 19, 2022, the Company announced a two-for-one Stock Split with respect to its Class A Common Stock and Class C Common Stock in the form of a stock dividend. The Stock Split was accomplished by distributing one additional share of Class A Common Stock for each share of Class A Common Stock outstanding and one additional share of Class C Common Stock for each share of Class C Common Stock outstanding. The additional shares of Common Stock were issued on June 8, 2022 to holders of record at the close of business on May 31, 2022.

Dividend

On July 20, 2022, the Board declared a cash dividend of $0.75 per share on the Company’s Class A Common Stock, which will be payable on August 17, 2022. On July 20, 2022, the Company, through its ownership of the general partner of the Partnership, also declared a distribution of $0.75 per Common Unit from the Partnership to the holders of Common Units, which will be payable on August 17, 2022. As context requires, dividends paid to holders of Class A Common Stock and distributions paid to holders of Common Units may be referred to collectively as “dividends.”

Series A Cumulative Redeemable Preferred Units

The Partnership issued Preferred Units on June 12, 2019. Because the Transaction was accounted for as a reverse merger, certain Preferred Units that were issued and outstanding were assumed at Closing for accounting purposes. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company.

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The Preferred Units entitle the holders to receive quarterly distributions at a rate of 7% per annum, commencing with the quarter ended June 30, 2019. The rate increases to 10% per annum upon the occurrence of specified events. There were 396,417 redeemable noncontrolling interest Preferred Units outstanding as of June 30, 2022.

On the Closing Date of the Transaction, the Company effectuated the Third Amended and Restated Agreement of Limited Partnership of the Partnership (“Partnership LPA”), which, among other things, provides for mandatory redemptions by the Partnership of 50,000 Preferred Units at or prior to each of the six-, twelve- and eighteen-month anniversaries of the effectiveness from the Partnership LPA, for an aggregate of 150,000 Preferred Units over such eighteen-month period. There were 26,428 mandatory redeemable Preferred Units outstanding as of June 30, 2022.

In July 2022, the Company redeemed the remaining 400,000 Preferred Units along with 22,845 PIK units for an aggregate redemption price of $492.2 million. For further information on the Preferred Units, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Liquidity

The following table presents a summary of the Company’s key liquidity indicators at the dates presented:

	June 30, 2022		December 31, 2021
	(In thousands)
Cash and cash equivalents	$	5,319	$	18,729
Total debt	$	2,971,270	$	2,307,702
Available committed borrowing capacity	$	1,250,000	$	133,000

Cash and cash equivalents

As of June 30, 2022 and December 31, 2021, the Company had $5.3 million and $18.7 million, respectively, in cash and cash equivalents. The majority of the cash is invested in highly liquid, investment-grade instruments with maturities of three months or less at the time of purchase.

Total Debt and Available credit facilities

There is no assurance that the financial condition of banks with lending commitments to Company will not deteriorate. The Company closely monitors the ratings of the banks in the Company’s bank group. Having a large bank group allows the Company to mitigate the potential impact of any bank’s failure to honor its lending commitment.

Guarantor Information

In June 2022, the Company completed the comprehensive refinancing, which included the issuance of the Notes and entry into the TLA and the Revolving Credit Agreement by the Partnership. These debt obligations are fully and unconditionally guaranteed by the Company. The guarantee of the Notes is subject to certain customary release, including the exercise of legal defeasance or covenant defeasance options, the satisfaction and discharge of the indentures governing the Notes, and the release of the guarantor from its guarantee of the Notes in accordance to the indentures governing the Notes.

Contractual Obligations

We have contractual obligations for principal and interest payments on our term loan credit facility. See Note 6—Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Under certain of our transportation services agreements with third party pipelines to transport natural gas and NGLs, if we fail to ship a minimum throughput volume during any year, then we will pay a deficiency payment for transportation based on the volume shortfall up to the MVC amount. The Company has made no historical shortfall payments through June 30, 2022.

Off-Balance Sheet Arrangements

As of June 30, 2022, there were no off-balance sheet arrangements.

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Critical Accounting Policies

The Company’s significant accounting policies, described in the Summary of Significant Accounting Policies in Exhibit 99.1 to Current Report on Form 8-K filed on July 5, 2022 and the Company’s Quarterly Report on Form 10-Q filed on May 10, 2022 are fundamental to understanding our results of operations and financial condition. There has been no significant change to the Company’s significant accounting policies subsequent to the Form 8-K filed on July 5, 2022. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosure About Market Risk

The Company is exposed to various market risks, including the effects of adverse changes in commodity prices and credit risk as described below. The Company continually monitors its market risk exposure, including the impact and developments related to the armed conflict in Ukraine, increase in interest rate and inflation trend, which introduced significant volatility and uncertainties in the financial markets during 2022.

Commodity Price Risk

The results of the Company’s operations may be affected by the market prices of oil and natural gas. A portion of the Company’s revenue is directly tied to local natural gas, NGLs and condensate prices in the Permian Basin. Fluctuations in commodity prices also impact operating cost elements both directly and indirectly. For example, commodity prices directly impact costs such as power and fuel, which are expenses that increase or decrease in line with changes in commodity prices. Commodity prices also affect industry activity and demand, thus indirectly impacting the cost of items such as labor and equipment rentals. Management regularly reviews the Company’s potential exposure to commodity price risk, and may periodically enter into financial or physical arrangements intended to mitigate potential volatility. Refer to Note 16—Derivative and Hedging Activities in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding our hedging strategies and objectives.

Interest Rate Risk

The market risk inherent in our financial instruments and our financial position represents the potential loss arising from adverse changes in interest rates. As of June 30, 2022, the Company had interest bearing debt, net of deferred financing costs, with principal amount of $2.97 billion. The interest rate for the revolving and term loan credit facilities are variable, which exposes the Company to the risk of increased interest expense in the event of increases to short-term interest rates. Accordingly, results of operations, cash flows, financial condition, and the ability to make cash distributions could be adversely affected by significant increases in interest rates. If interest rates increase by 1.0%, the Company’s consolidated interest expense would have increased by approximately $5.1 million for the quarter ended June 30, 2022 on a pro forma basis giving effect of the Company’s comprehensive refinance completed at the beginning of the second quarter 2022. The Company may periodically enter into interest rate derivatives to add stability to interest expense and to manage its exposure to interest rate movements. Refer to Note 16—Derivative and Hedging Activities in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding our hedging strategies and objectives.

Credit Risk

The Company is subject to credit risk resulting from nonpayment or nonperformance by, or the insolvency or liquidation of third-party customers. Any increase in the nonpayment and nonperformance by, or the insolvency or liquidation of, the Company’s customers could adversely affect the Company’s results of operations.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of June 30, 2022, pursuant to Rule 13a-15(b) of the Exchange Act, the Company conducted an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Accounting and Administrative Operating Officer, who serves as the principal accounting officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Accounting and Administrative Operating Officer, concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2022.

The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. The Company’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that the Company files under the Exchange Act is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Accounting and Administrative Operating Officer, as appropriate, to allow timely decisions regarding required disclosure.

Change in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended June 30, 2022, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For further information regarding legal proceedings, refer to Note 8—Commitments and Contingencies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

ITEM 1A. RISK FACTORS

Please refer to Part II, Item 1A — Risk Factors of the Company’s Quarterly Report Form 10-Q for the first quarter of 2022 filed on May 10, 2022.

48

ITEM 6. EXHIBITS

EXHIBIT NO.		DESCRIPTION
2.1***	–	Contribution Agreement, dated October 21, 2021, by and among Altus Midstream Company, Altus Midstream LP, New BCP Raptor Holdco, LLC, and BCP Raptor Holdco, LP (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on October 21, 2021).
3.1	–	Third Amended and Restated Certificate of Incorporation of Kinetik Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 22, 2022).
3.2	–	Amended and Restated Bylaws of Kinetik Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 22, 2022).
4.1	–	Amended and Restated Stockholders Agreement, dated October 21, 2021, by and among APA Corporation, Apache Midstream LLC, Altus Midstream Company, New BCP Raptor Holdco, LLC, Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, and BCP Raptor Holdco, LP. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 22, 2022).
4.2	–	Second Amended and Restated Registration Rights Agreement, dated February 22, 2022, by and among Altus Midstream Company, Apache Midstream LLC, Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC and the other holders party thereto. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 22, 2022).
4.3	–	Indenture, dated June 8, 2022, by and among Kinetik Holdings Inc., Kinetik Holdings LP and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on June 14, 2022).
4.4	–	Form of 5.875% Sustainability-Linked Senior Notes (included in Exhibit 4.3) (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on June 14, 2022).
10.1	–	Third Amended and Restated Agreement of Limited Partnership of Altus Midstream LP, dated as of October 22, 2021. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 22, 2022).
10.2*	–	Form of Restricted Stock Unit Agreement (Directors).
10.3*	–	Form of Deferred Stock Unit Agreement (Directors).
10.4	–	Purchase Agreement dated June 1, 2022 by and among Kinetik Holdings Inc., Kinetik Holdings LP and J.P. Morgan Securities LLC, as representative of the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 3, 2022).
10.5***	–	Revolving Credit Agreement, dated June 8, 2022, by and among Kinetik Holdings LP and Bank of America, N.A., as administrative agent, and the banks and other financial institutions party thereto, as lenders (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 14, 2022).
10.6***	–	Loan Credit Agreement, dated June 8, 2022, by and among Kinetik Holdings LP and PNC Bank, National Association, as administrative agent, and the banks and other financial institutions party thereto, as lenders (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on June 14, 2022).
31.1*	–	Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2*	–	Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1**	–	Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(b) and 18 U.S.C. 1350.
32.2**	–	Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(b) and 18 U.S.C. 1350.
101*	–	The following financial statements from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows, (iv) Condensed Consolidated Statements of Changes in Equity and Noncontrolling Interests and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
101.SCH*	–	Inline XBRL Taxonomy Schema Document.
101.CAL*	–	Inline XBRL Calculation Linkbase Document.
101.DEF*	–	Inline XBRL Definition Linkbase Document.
101.LAB*	–	Inline XBRL Label Linkbase Document.
101.PRE*	–	Inline XBRL Presentation Linkbase Document.
104*	–	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Furnished herewith.

*** Schedules and exhibits to this Exhibit have been omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		KINETIK HOLDINGS INC.
Dated:	August 9, 2022	/s/ Jamie Welch
		Jamie Welch
		Chief Executive Officer, President, Chief Financial Officer and Director
		(Principal Executive Officer)
Dated:	August 9, 2022	/s/ Steven Stellato
		Steven Stellato
		Executive Vice President, Chief Accounting and Chief Administrative Operating Officer
		(Principal Financial Officer)

50

EX-10.2

Exhibit 10.2

KINETIK HOLDINGS INC.

2019 OMNIBUS COMPENSATION PLAN

RESTRICTED STOCK UNIT GRANT NOTICE

Under the terms of the Kinetik Holdings Inc. 2019 Omnibus Compensation Plan, as amended from time to time (the “Plan”), Kinetik Holdings Inc., a Delaware corporation (the “Company”), grants to the individual listed below (“you” or the “Participant”) the number of Restricted Stock Units (the “RSUs”) set forth below. This award of RSUs (this ”Award”) is subject to the terms set forth herein, in the Restricted Stock Unit Agreement attached as Exhibit A (the “Agreement”), the Plan and the Director Compensation Deferral Form for the applicable calendar year, if any, entered into by and between the Company and you prior to the Date of Grant (as applicable, the “Deferral Form”), each of which is incorporated herein by reference. Capitalized terms used but not defined herein have the meanings in the Plan.

Participant:	________________
Date of Grant:	________________ (the “Date of Grant”)
Total Number of Restricted Stock Units:	________________
Vesting Schedule:	Subject to the Agreement, the Plan and the other terms and conditions set forth herein, the RSUs shall vest according to the following schedule, so long as you continuously provide services to the Company from the Date of Grant through each vesting date set forth below: Vesting Date Portion of RSUs that Vest

By your signature below, you agree to be bound by the terms of the Plan, the Agreement and this Restricted Stock Unit Grant Notice (this “Grant Notice”). You acknowledge that you have reviewed the Agreement, the Plan and this Grant Notice in their entirety and understand all provisions of the Agreement, the Plan and this Grant Notice. You agree to accept as binding, conclusive and final all decisions or interpretations of the Committee regarding questions or determinations that arise under the Agreement, the Plan or this Grant Notice. This Grant Notice may be executed in one or more counterparts (including portable document format (.pdf) and facsimile counterparts), each of which will be deemed to be an original, but all of which together will constitute the same agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Grant Notice to be executed by an officer thereunto duly authorized, and the Participant has executed this Grant Notice, effective for all purposes.

KINETIK HOLDINGS INC.

    By:

    Name:

    Title:

PARTICIPANT

    Name:

Signature Page to

Restricted Stock Unit Grant Notice

EXHIBIT A

RESTRICTED STOCK UNIT AGREEMENT

This Restricted Stock Unit Agreement (with the Grant Notice to which this Agreement is attached, this “Agreement”) is made as of the Date of Grant in the Grant Notice to which this Agreement is attached between Kinetik Holdings Inc., a Delaware corporation (the “Company”), and _________ (the “Participant”). Capitalized terms used but not specifically defined have the meanings specified in the Plan or the Grant Notice.

1.Award.  In consideration of the Participant’s past and/or continued service to the Company or an Affiliate and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, effective as of the Date of Grant, the Company hereby grants to the Participant the number of RSUs set forth in the Grant Notice on the terms and conditions set forth in the Grant Notice, this Agreement and the Plan, which is incorporated herein by reference as a part of this Agreement. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control. Vesting and settlement of the RSUs shall occur at the times and subject to the terms and conditions set forth in the Grant Notice, this Agreement, the Plan and, if applicable, the Deferral Form. Unless and until the RSUs have vested and been settled in the manner described herein, the Participant will have no right to receive any cash in respect of the RSUs. Prior to settlement of this Award, the RSUs and this Award represent an unsecured obligation of the Company, payable only from the general assets of the Company.

2.Vesting of RSUs.  The RSUs shall vest in accordance with the vesting schedule set forth in the Grant Notice.  Unless and until the RSUs have been settled for shares of Stock, the Participant will have no right to receive any dividends or other distribution (or other rights of ownership) with respect to the shares of Stock underlying the RSUs; provided, however, nothing in this Section 2 is intended to alter the Participant’s right to receive dividend equivalents pursuant and subject to Section 3. In the event of the termination of the Participant’s service relationship with the Company, the following treatment shall apply: _____________________________. 

3.Dividend Equivalents. In the event that the Company declares and pays a dividend in respect of its outstanding shares of Stock and, on the record date for such dividend, the Participant holds RSUs granted pursuant to this Agreement that have not been settled, the Participant shall be entitled to receive an amount equal to the cash dividends the Participant would have received if the Participant was the holder of record, as of such record date, of a number of shares of Stock equal to the number of RSUs held by the Participant that have not been settled as of such record date, which amount shall be credited to the Participant and deemed to be reinvested in additional RSUs (rounded to the nearest whole RSU) as of the date of payment of any such cash dividends based on the same amount at which dividends are reinvested pursuant to the Company’s Dividend Reinvestment Plan, as amended from time to time. The Participant will not receive any interest regarding the payment of dividends pursuant to this Section 3 (“DERs”). Each additional RSU that results from the deemed reinvestment of DERs granted hereunder shall be subject to the following vesting schedule: __________________. Such additional RSUs shall also be entitled to DERs as additional cash dividends are paid, which shall similarly be reinvested in additional RSUs (rounded to the nearest whole RSU). The DERs and any amounts that may become payable in respect thereof will be treated separately from the RSUs for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, including the guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto (“Section 409A”) (including for the designation of the time and form of payments required by Section 409A).

4.Settlement of RSUs. At the time elected by the Participant under the Deferral Form, the Company shall deliver to the Participant a number of shares of Stock equal to the number of RSUs subject to this Award that vested (including any RSUs attributable to reinvested DERs pursuant to

Exhibit A-1

Section 3). All shares of Stock issued will be delivered either by delivering one or more certificates for such shares to the Participant or by entering such shares in book-entry form, as determined by the Committee in its sole discretion. The value of shares of Stock will not bear any interest because of the passage of time. Neither this Section 4 nor any action taken under this Agreement will be construed to create a trust or a funded or secured obligation of any kind.

5.Tax Consequences. The Participant acknowledges there may be adverse tax consequences on the receipt, vesting or settlement of this Award or disposition of the underlying shares and that the Participant has been advised, and is advised, to consult a tax advisor. The Participant represents that the Participant is in no manner relying on the Board, the Committee, the Company or any of its Affiliates or any of their respective managers, directors, officers, employees or authorized representatives (including, without limitation, attorneys, accountants, consultants, bankers, lenders, prospective lenders and financial representatives) for tax advice or an assessment of such tax consequences. The Participant further agrees to indemnify and hold the Company and its Affiliates harmless for any damages, costs, expenses, taxes, judgments or other actions or amounts resulting from any actions or inactions of the Participant regarding the tax consequences of this Award or the underlying shares.

6.Non-Transferability.  During the lifetime of the Participant, the RSUs may not be sold, pledged, assigned or transferred in any manner other than by will, divorce or the laws of descent and distribution, unless and until the shares of Stock underlying the RSUs have been issued, and all restrictions applicable to such shares have lapsed. Neither the RSUs nor any interest or right therein shall be liable for the debts, contracts or engagements of the Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

7.Compliance with Applicable Law. Notwithstanding any provision of this Agreement to the contrary, the issuance of shares of Stock hereunder, if any, will be subject to compliance with all applicable requirements of applicable law with respect to such securities and with the requirements of any stock exchange or market system upon which the Stock may then be listed. No shares of Stock will be issued hereunder if such issuance would constitute a violation of any applicable law or regulation or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, shares of Stock will not be issued hereunder unless (a) a registration statement under the Securities Act is in effect at the time of such issuance with respect to the shares to be issued or (b) in the opinion of legal counsel to the Company, the shares to be issued are permitted to be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary for the lawful issuance and sale of any shares of Stock hereunder will relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority has not been obtained. As a condition to any issuance of Stock hereunder, the Company may require the Participant to satisfy any requirements that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Company.

8.Legends. If a stock certificate is issued with respect to any shares of Stock delivered hereunder, such certificate shall bear such legend or legends as the Committee deems appropriate in order to reflect the restrictions set forth in this Agreement and to ensure compliance with the terms and provisions of this Agreement, the rules, regulations and other requirements of the SEC, any applicable laws or the requirements of any stock exchange on which the Stock is then listed. If the shares of Stock

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issued hereunder are held in book-entry form, then such entry will reflect that the shares are subject to the restrictions set forth in this Agreement.

9.Rights as a Stockholder. Neither the Participant nor any person claiming under or through the Participant shall have rights as a stockholder of the Company with respect to any shares of Stock that may become deliverable hereunder unless and until the Participant has become the holder of record of such shares of Stock, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares of Stock, except as otherwise specifically provided for in the Plan or this Agreement.

10.Execution of Receipts and Releases. Any issuance or transfer of shares of Stock or other property to the Participant or the Participant’s legal representative, heir, legatee or distributee, in accordance with this Agreement shall be in full satisfaction of all claims of such person hereunder. As a condition precedent to such payment or issuance, the Company may require the Participant or the Participant’s legal representative, heir, legatee or distributee to execute (and not revoke within any time provided to do so) a release and receipt therefor in such form as it shall determine appropriate; provided, however, that any review period under such release will not modify the date of settlement with respect to the RSUs.

11.No Right to Continued Service or Awards. Nothing in the adoption of the Plan, nor the grant of the RSUs under the Grant Notice and this Agreement, will confer on the Participant the right to a continued service relationship with the Company or affect the right of the Company to terminate such service relationship. The grant of the RSUs is a one-time benefit and creates no contractual or other right to receive a grant of Awards or benefits in lieu of Awards in the future. Any future Awards will be granted at the sole discretion of the Company.

12.Legal and Equitable Remedies. The Participant acknowledges that a violation or attempted breach of any of the Participant's covenants and agreements in this Agreement will cause such damage as will be irreparable, the exact amount of which would be difficult to ascertain and for which there will be no adequate remedy at law, and accordingly, the parties hereto agree that the Company and its Affiliates shall be entitled as a matter of right to an injunction issued by any court of competent jurisdiction, restraining the Participant or the affiliates, partners or agents of the Participant from such breach or attempted violation of such covenants and agreements, as well as to recover from the Participant any and all costs and expenses sustained or incurred by the Company or any Affiliate in obtaining such an injunction, including, without limitation, reasonable attorneys' fees. The parties to this Agreement agree that no bond or other security shall be required in connection with such injunction. Any exercise by either of the parties to this Agreement of its rights pursuant to this Section 12 shall be cumulative and in addition to any other remedies to which such party may be entitled.

13.Notices. All notices and other communications under this Agreement shall be in writing and shall be delivered to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to the Company, unless otherwise designated by the Company in a written notice to the Participant (or other holder):

Kinetik Holdings Inc.
2700 Post Oak Blvd., Suite 300

        Houston, Texas 77056

        Attn: Director of Human Resources

    If to the Participant, at the Participant’s last known address on file with the Company.

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Any notice that is delivered personally or by overnight courier or telecopier in the manner provided herein shall be deemed to have been duly given to the Participant when it is mailed by the Company or, if such notice is not mailed to the Participant, upon receipt by the Participant. Any notice that is addressed and mailed in the manner herein provided shall be conclusively presumed to have been given to the party to whom it is addressed at the close of business, local time of the recipient, on the fourth day after the day it is so placed in the mail.

14.Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format, the Participant agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports and all other forms of communications) in connection with this and any other Award made or offered by the Company. Electronic delivery may be via a Company electronic mail system or by reference to a location on a Company intranet to which the Participant has access. The Participant hereby consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may be required to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.

15.Agreement to Furnish Information. The Participant agrees to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirement imposed upon the Company by or under any applicable statute or regulation.

16.Entire Agreement; Amendment. This Agreement and the Deferral Form constitute the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to the RSUs granted hereby. Without limiting the scope of the preceding sentence, except as provided therein, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect. The Committee may, in its sole discretion, amend this Agreement from time to time in any manner that is not inconsistent with the Plan; provided, however, that except as otherwise provided in the Plan or this Agreement, any such amendment that materially reduces the rights of the Participant shall be effective only if it is in writing and signed by both the Participant and an authorized officer of the Company.

17.Severability and Waiver. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of such provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect. Waiver by any party of any breach of this Agreement or failure to exercise any right hereunder shall not be deemed to be a waiver of any other breach or right. The failure of any party to take action by reason of such breach or to exercise any such right shall not deprive the party of the right to take action at any time while or after such breach or condition giving rise to such rights continues.

18.Clawback. Notwithstanding any provision in the Grant Notice, this Agreement or the Plan to the contrary, to the extent required by (a) applicable law, including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any SEC rule or any applicable securities exchange listing standards and/or (b) any policy that may be adopted or amended by the Board from time to time, all shares of Stock issued hereunder shall be subject to forfeiture, repurchase, recoupment and/or cancellation to the extent necessary to comply with such law(s) and/or policy.

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19.Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

20.Successors and Assigns. The Company may assign any of its rights under this Agreement without the Participant’s consent. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein and in the Plan, this Agreement will be binding upon the Participant and the Participant's beneficiaries, executors, administrators and the person(s) to whom the RSUs may be transferred by will or the laws of descent or distribution.

21.Headings. Headings are for convenience only and are not deemed to be part of this Agreement.

22.Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic or digital signature, subject to applicable law, each of which shall be deemed an original and all of which together shall constitute one instrument. Delivery of an executed counterpart of the Grant Notice by facsimile or portable document format (.pdf) attachment to electronic mail shall be effective as delivery of a manually executed counterpart of the Grant Notice.

23.Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the RSUs and the DERs granted under this Agreement are intended to comply with the limitations and requirements of Section 409A and will be limited, construed and interpreted in accordance with such intent. Notwithstanding the foregoing, the Company makes no representations that the RSUs or the DERs provided under this Agreement comply with Section 409A and the Company will not or any of its Affiliates be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant because of non-compliance with Section 409A. Each payment under this Agreement is considered a separate payment for Section 409A.

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EX-10.3

Exhibit 10.3

KINETIK HOLDINGS INC.

2019 OMNIBUS COMPENSATION PLAN

DEFERRED STOCK UNIT GRANT NOTICE

Under the terms of the Kinetik Holdings Inc. 2019 Omnibus Compensation Plan, as amended from time to time (the “Plan”), Kinetik Holdings Inc., a Delaware corporation (the “Company”), grants to the individual listed below (“you” or the “Participant”) the number of fully vested Restricted Stock Units (the “DSUs”) set forth below. This award of DSUs (this ”Award”) is subject to the terms set forth herein, in the Deferred Stock Unit Agreement attached as Exhibit A (the “Agreement”), the Plan and the Director Compensation Deferral Form for the applicable calendar year, if any, entered into by and between the Company and you prior to the Date of Grant (as applicable, the “Deferral Form”), each of which is incorporated herein by reference. Capitalized terms used but not defined herein have the meanings in the Plan.

Participant:	________________
Date of Grant:	________________ (the “Date of Grant”)
Total Number of Deferred Stock Units:	________________
Vesting:	Subject to the Agreement, the Plan and the other terms and conditions set forth herein, the DSUs shall vest according to the following schedule, so long as you continuously provide services to the Company from the Date of Grant through each vesting date set forth below: Vesting Date Portion of DSUs that Vest

By your signature below, you agree to be bound by the terms of the Plan, the Agreement and this Deferred Stock Unit Grant Notice (this “Grant Notice”). You acknowledge that you have reviewed the Agreement, the Plan and this Grant Notice in their entirety and understand all provisions of the Agreement, the Plan and this Grant Notice. You agree to accept as binding, conclusive and final all decisions or interpretations of the Committee regarding questions or determinations that arise under the Agreement, the Plan or this Grant Notice. This Grant Notice may be executed in one or more counterparts (including portable document format (.pdf) and facsimile counterparts), each of which will be deemed to be an original, but all of which together will constitute the same agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Grant Notice to be executed by an officer thereunto duly authorized, and the Participant has executed this Grant Notice, effective for all purposes.

KINETIK HOLDINGS INC.

    By:

    Name:

    Title:

PARTICIPANT

    Name:

Signature Page to

Deferred Stock Unit Grant Notice

EXHIBIT A

DEFERRED STOCK UNIT AGREEMENT

This Deferred Stock Unit Agreement (with the Grant Notice to which this Agreement is attached, this “Agreement”) is made as of the Date of Grant in the Grant Notice to which this Agreement is attached between Kinetik Holdings Inc., a Delaware corporation (the “Company”), and _________ (the “Participant”). Capitalized terms used but not specifically defined have the meanings specified in the Plan or the Grant Notice.

1.Award.  In consideration of the Participant’s past and/or continued service to the Company or an Affiliate and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, effective as of the Date of Grant, the Company hereby grants to the Participant the number of DSUs set forth in the Grant Notice on the terms and conditions set forth in the Grant Notice, this Agreement and the Plan, which is incorporated herein by reference as a part of this Agreement. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control. Vesting and settlement of the DSUs shall occur at the times and subject to the terms and conditions set forth in the Grant Notice, this Agreement, the Plan and, if applicable, the Deferral Form. Unless and until the DSUs have vested and been settled in the manner described herein, the Participant will have no right to receive any cash in respect of the DSUs. Prior to settlement of this Award, the DSUs and this Award represent an unsecured obligation of the Company, payable only from the general assets of the Company.

2.Vesting of DSUs.  The DSUs shall vest in accordance with the vesting schedule set forth in the Grant Notice.  Unless and until the DSUs have vested and been settled for cash, the Participant will have no right to receive any dividends or other distribution (or other rights of ownership) with respect to the shares of Stock underlying the DSUs; provided, however, nothing in this Section 2 is intended to alter the Participant’s right to receive dividend equivalents pursuant and subject to Section 3. In the event of the termination of the Participant’s service relationship with the Company, the following treatment shall apply: _____________________________. 

3.Dividend Equivalents. In the event that the Company declares and pays a dividend in respect of its outstanding shares of Stock and, on the record date for such dividend, the Participant holds DSUs granted pursuant to this Agreement that have not been settled, the Participant shall be entitled to receive an amount equal to the cash dividends the Participant would have received if the Participant was the holder of record, as of such record date, of a number of shares of Stock equal to the number of DSUs held by the Participant that have not been settled as of such record date, which amount shall be credited to the Participant and deemed to be reinvested in additional DSUs (rounded to the nearest whole DSU) as of the date of payment of any such cash dividends based on the same amount at which dividends are reinvested pursuant to the Company’s Dividend Reinvestment Plan, as amended from time to time. The Participant will not receive any interest regarding the payment of dividends pursuant to this Section 3 (“DERs”). Each additional DSU that results from the deemed reinvestment of DERs granted hereunder shall be subject to the following vesting schedule: __________________. Such additional DSUs shall also be entitled to DERs as additional cash dividends are paid, which shall similarly be reinvested in additional DSUs (rounded to the nearest whole DSU). The DERs and any amounts that may become payable in respect thereof will be treated separately from the DSUs for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, including the guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto (“Section 409A”) (including for the designation of the time and form of payments required by Section 409A)

4.Settlement of DSUs. At the time elected by the Participant under the Deferral Form, the Company shall deliver to the Participant an amount, in cash, equal to (a) the Fair Market Value of a share of Stock on the settlement date, multiplied by (b) the number of vested DSUs subject to this

Exhibit A-1

Award (including any vested DSUs attributable to reinvested DERs pursuant to Section 3). Any cash paid to the Participant will not bear any interest because of the passage of time. Neither this Section 4 nor any action taken under this Agreement will be construed to create a trust or a funded or secured obligation of any kind.

5.Tax Consequences. The Participant acknowledges there may be adverse tax consequences on the receipt, vesting or settlement of this Award or disposition of the underlying shares and that the Participant has been advised, and is advised, to consult a tax advisor. The Participant represents that the Participant is in no manner relying on the Board, the Committee, the Company or any of its Affiliates or any of their respective managers, directors, officers, employees or authorized representatives (including, without limitation, attorneys, accountants, consultants, bankers, lenders, prospective lenders and financial representatives) for tax advice or an assessment of such tax consequences. The Participant further agrees to indemnify and hold the Company and its Affiliates harmless for any damages, costs, expenses, taxes, judgments or other actions or amounts resulting from any actions or inactions of the Participant regarding the tax consequences of this Award or the underlying shares.

6.Non-Transferability.  During the lifetime of the Participant, the DSUs may not be sold, pledged, assigned or transferred in any manner other than by will, divorce or the laws of descent and distribution, unless and until the shares of Stock underlying the DSUs have been issued, and all restrictions applicable to such shares have lapsed. Neither the DSUs nor any interest or right therein shall be liable for the debts, contracts or engagements of the Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

7.Rights as a Stockholder. Neither the Participant nor any person claiming under or through the Participant shall have rights as a stockholder of the Company with respect to any shares of Stock in respect of the DSUs, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares of Stock.

8.Execution of Receipts and Releases. Any payments of cash to the Participant or the Participant’s legal representative, heir, legatee or distributee, in accordance with this Agreement shall be in full satisfaction of all claims of such person hereunder. As a condition precedent to such payment or issuance, the Company may require the Participant or the Participant’s legal representative, heir, legatee or distributee to execute (and not revoke within any time provided to do so) a release and receipt therefor in such form as it shall determine appropriate; provided, however, that any review period under such release will not modify the date of settlement with respect to vested DSUs.

9.No Right to Continued Service or Awards. Nothing in the adoption of the Plan, nor the grant of the DSUs under the Grant Notice and this Agreement, will confer on the Participant the right to a continued service relationship with the Company or affect the right of the Company to terminate such service relationship. The grant of the DSUs is a one-time benefit and creates no contractual or other right to receive a grant of Awards or benefits in lieu of Awards in the future. Any future Awards will be granted at the sole discretion of the Company.

10.Legal and Equitable Remedies. The Participant acknowledges that a violation or attempted breach of any of the Participant's covenants and agreements in this Agreement will cause such damage as will be irreparable, the exact amount of which would be difficult to ascertain and for which there will be no adequate remedy at law, and accordingly, the parties hereto agree that the Company and its Affiliates shall be entitled as a matter of right to an injunction issued by any court of competent

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jurisdiction, restraining the Participant or the affiliates, partners or agents of the Participant from such breach or attempted violation of such covenants and agreements, as well as to recover from the Participant any and all costs and expenses sustained or incurred by the Company or any Affiliate in obtaining such an injunction, including, without limitation, reasonable attorneys' fees. The parties to this Agreement agree that no bond or other security shall be required in connection with such injunction. Any exercise by either of the parties to this Agreement of its rights pursuant to this Section 10 shall be cumulative and in addition to any other remedies to which such party may be entitled.

11.Notices. All notices and other communications under this Agreement shall be in writing and shall be delivered to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to the Company, unless otherwise designated by the Company in a written notice to the Participant (or other holder):

Kinetik Holdings Inc.
2700 Post Oak Blvd., Suite 300

        Houston, Texas 77056

        Attn: Director of Human Resources

    If to the Participant, at the Participant’s last known address on file with the Company.

Any notice that is delivered personally or by overnight courier or telecopier in the manner provided herein shall be deemed to have been duly given to the Participant when it is mailed by the Company or, if such notice is not mailed to the Participant, upon receipt by the Participant. Any notice that is addressed and mailed in the manner herein provided shall be conclusively presumed to have been given to the party to whom it is addressed at the close of business, local time of the recipient, on the fourth day after the day it is so placed in the mail.

12.Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format, the Participant agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports and all other forms of communications) in connection with this and any other Award made or offered by the Company. Electronic delivery may be via a Company electronic mail system or by reference to a location on a Company intranet to which the Participant has access. The Participant hereby consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may be required to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.

13.Agreement to Furnish Information. The Participant agrees to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirement imposed upon the Company by or under any applicable statute or regulation.

14.Entire Agreement; Amendment. This Agreement and, if applicable, the Deferral Form constitute the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to the DSUs granted hereby. Without limiting the scope of the preceding sentence, except as provided therein, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect. The Committee may, in its sole discretion, amend this Agreement from time to time in any manner that is not inconsistent with the Plan; provided, however, that except as otherwise provided in the Plan or this Agreement, any such

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amendment that materially reduces the rights of the Participant shall be effective only if it is in writing and signed by both the Participant and an authorized officer of the Company.

15.Severability and Waiver. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of such provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect. Waiver by any party of any breach of this Agreement or failure to exercise any right hereunder shall not be deemed to be a waiver of any other breach or right. The failure of any party to take action by reason of such breach or to exercise any such right shall not deprive the party of the right to take action at any time while or after such breach or condition giving rise to such rights continues.

16.Clawback. Notwithstanding any provision in the Grant Notice, this Agreement or the Plan to the contrary, to the extent required by (a) applicable law, including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any SEC rule or any applicable securities exchange listing standards and/or (b) any policy that may be adopted or amended by the Board from time to time, all cash paid hereunder shall be subject to forfeiture, repurchase, recoupment and/or cancellation to the extent necessary to comply with such law(s) and/or policy.

17.Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

18.Successors and Assigns. The Company may assign any of its rights under this Agreement without the Participant’s consent. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein and in the Plan, this Agreement will be binding upon the Participant and the Participant's beneficiaries, executors, administrators and the person(s) to whom the DSUs may be transferred by will or the laws of descent or distribution.

19.Headings. Headings are for convenience only and are not deemed to be part of this Agreement.

20.Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic or digital signature, subject to applicable law, each of which shall be deemed an original and all of which together shall constitute one instrument. Delivery of an executed counterpart of the Grant Notice by facsimile or portable document format (.pdf) attachment to electronic mail shall be effective as delivery of a manually executed counterpart of the Grant Notice.

21.Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the DSUs and the DERs granted under this Agreement are intended to comply with the limitations and requirements of Section 409A and will be limited, construed and interpreted in accordance with such intent. Notwithstanding the foregoing, the Company makes no representations that the DSUs or the DERs provided under this Agreement comply with Section 409A and the Company will not or any of its Affiliates be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant because of non-compliance with Section 409A. Each payment under this Agreement is considered a separate payment for Section 409A.

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Jamie Welch, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Kinetik Holdings Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2022

/s/ Jamie Welch

Jamie Welch

Chief Executive Officer, President, Chief Financial Officer and Director

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Steven Stellato, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Kinetik Holdings Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2022

/s/ Steven Stellato

Steven Stellato

Executive Vice President, Chief Accounting and Chief Administrative Operating Officer

EX-32.1

EXHIBIT 32.1

KINETIK HOLDINGS INC.

Certification of Principal Executive Officer

I, Jamie Welch, Chief Executive Officer, President, Chief Financial Officer and Director, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of Kinetik Holdings Inc. for the quarterly period ending June 30, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or §78o (d)) and that information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Kinetik Holdings Inc.

Date: August 9, 2022

/s/ Jamie Welch

Jamie Welch

Chief Executive Officer, President, Chief Financial Officer and Director

EX-32.2

EXHIBIT 32.2

KINETIK HOLDINGS INC.

Certification of Principal Financial Officer

I, Steven Stellato, Executive Vice President, Chief Accounting and Chief Administrative Operating Officer, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of Kinetik Holdings Inc. for the quarterly period ending June 30, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or §78o (d)) and that information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Kinetik Holdings Inc.

Date: August 9, 2022

/s/ Steven Stellato

Steven Stellato

Executive Vice President, Chief Accounting and Chief Administrative Operating Officer

XML

Cover - shares	6 Months Ended
	Jun. 30, 2022	Jul. 31, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-38048
Entity Registrant Name	KINETIK HOLDINGS INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-4675947
Entity Address, Address Line One	2700 Post Oak Blvd
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77056
City Area Code	713
Local Phone Number	621-7330
Title of 12(b) Security	Class A common stock, $0.0001 par value
Trading Symbol	KNTK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001692787
Current Fiscal Year End Date	--12-31
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		40,550,555
Class C Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		94,450,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands		3 Months Ended				6 Months Ended
		Jun. 30, 2022		Jun. 30, 2021		Jun. 30, 2022		Jun. 30, 2021
Operating revenues:
Total operating revenues	[1]	$ 335,572		$ 135,766		$ 592,821		$ 283,869
Operating costs and expenses:
Costs of sales (exclusive of depreciation and amortization shown separately below)	[1]	152,714		43,503		272,989		80,508
Operating expenses	[1]	35,280		25,280		65,151		40,844
Ad valorem taxes	[1]	5,880		3,414		10,033		5,765
General and administrative expenses	[1]	25,960		5,337		48,712		10,963
Depreciation and amortization	[1]	66,581		57,166		127,604		113,137
Loss (gain) on disposal of assets	[1]	8,546		422		8,656		454
Total operating costs and expenses	[1]	294,961		135,122		533,145		251,671
Operating income	[1]	40,611		644		59,676		32,198
Other income (expense):
Interest and other income	[1]	0		26		250		563
Gain on redemption of mandatorily redeemable Preferred Units	[1]	5,087		0		9,580		0
(Gain) loss on debt extinguishment		(27,975)		60		(27,975)		60
Unrealized gain on embedded derivative	[1]	91,448		0		88,562		0
Interest expense	[1]	(25,347)		(32,607)		(52,121)		(57,917)
Equity in earnings of unconsolidated affiliates	[1]	47,786		16,511		75,703		27,866
Total other income (expense), net	[1]	90,999		(16,010)		93,999		(29,428)
Income (loss) before income taxes	[1]	131,610		(15,366)		153,675		2,770
Income tax expense	[1]	162		0		838		0
Net income (loss) including noncontrolling interest	[1]	131,448		(15,366)		152,837		2,770
Net income attributable to Preferred Unit limited partners	[1]	109,502		0		114,495		0
Net Income (loss) attributable to common shareholders	[1]	21,946		(15,366)		38,342		2,770
Net income (loss) attributable to Common Unit limited partners	[1]	15,508		(15,366)		28,039		2,770
Net income attributable to Class A Common Shareholders	[1]	$ 6,438		$ 0		$ 10,303		$ 0
Net income attributable to Class A Common Shareholders per share
Basic (in USD per share)	[1]	$ 0.06		$ 0		$ 0.16		$ 0
Diluted (in USD per share)		$ 0.06	[1]	$ 0	[1]	$ 0.16	[1]	$ 0
Weighted-average shares
Basic (in shares)	[1],[2]	39,297		0		38,766		0
Diluted (in shares)	[1],[2]	39,329		0		38,796		0
Service
Operating revenues:
Total operating revenues	[1]	$ 102,080		$ 62,242		$ 182,525		$ 129,904
Product
Operating revenues:
Total operating revenues	[1]	229,651		71,099		404,579		151,092
Other revenue
Operating revenues:
Total operating revenues	[1]	$ 3,841		$ 2,425		$ 5,717		$ 2,873

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

[2] Share amounts have been retroactively restated to reflect the Company’s Stock Split (as defined in Note 10—Equity and Warrants), which was effected on June 8, 2022. Refer to Note 10 – Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Jun. 30, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash and cash equivalents		$ 5,319	$ 18,729
Accounts receivable, net of allowance for credit losses of $1,000 in 2022 and 2021		296,218	178,107
Prepaid and other current assets		40,226	20,683
Total assets, current		341,763	217,519
NONCURRENT ASSETS:
Property, plant and equipment, net		2,481,072	1,839,279
Intangible assets, net		747,721	786,049
Operating lease right-of-use assets		53,016	61,562
Deferred charges and other assets		26,384	22,320
Investment in unconsolidated affiliates		2,342,311	626,477
Goodwill		4,081	0
Total assets, noncurrent		5,654,585	3,335,687
Total assets		5,996,348	3,553,206
CURRENT LIABILITIES:
Accounts payable		10,907	12,220
Accrued expenses		245,951	135,643
Distribution payable to Preferred Unit limited partners		6,937	0
Derivative liabilities		0	2,667
Current portion of operating lease liabilities		35,327	31,776
Current portion of long-term debt, net		0	54,280
Other current liabilities		6,835	4,339
Current liabilities		305,957	240,925
NONCURRENT LIABILITIES:
Long-term debt, net		2,971,270	2,253,422
Contract liabilities		22,899	11,674
Operating lease liabilities		17,447	29,889
Embedded derivative liabilities		488	0
Derivative liabilities		0	200
Other liabilities		2,459	2,219
Contingent liabilities		0	839
Deferred tax liabilities		11,813	7,190
Mandatorily redeemable Preferred Units		30,717	0
Noncurrent liabilities		3,057,093	2,305,433
Total liabilities		3,363,050	2,546,358
COMMITMENTS AND CONTINGENCIES (Note 8)
Redeemable noncontrolling interest — Common Unit limited partners		3,251,290	1,006,838
Redeemable noncontrolling interest — Preferred Unit limited partners		563,338	0
EQUITY:
Accumulated deficit		(1,181,343)	0
Total equity		(1,181,330)	10
Total liabilities, noncontrolling interests, and equity		5,996,348	3,553,206
Class A Common Stock
EQUITY:
Common stock	[1]	4	0
Class C Common Stock
EQUITY:
Common stock	[1]	$ 9	$ 10

[1] Share amounts have been retroactively restated to reflect the Company’s Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Accounts receivable, allowance for credit losses	$ 1,000	$ 1,000
Class A Common Stock
Common stock, par value (in USD per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	1,500,000,000	1,500,000,000
Common stock, shares issued (in shares)	40,550,555	0
Common stock, shares outstanding (in shares)	40,550,555	0
Class C Common Stock
Common stock, par value (in USD per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	1,500,000,000	1,500,000,000
Common stock, shares issued (in shares)	94,450,000	100,000,000
Common stock, shares outstanding (in shares)	94,450,000	100,000,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income including noncontrolling interests	[1]	$ 152,837,000	$ 2,770,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	[1]	127,604,000	113,137,000
Amortization of deferred financing costs		6,538,000	6,637,000
Amortization of contract costs		896,000	896,000
Contingent liabilities remeasurement		(839,000)	0
Distributions from unconsolidated affiliates		117,544,000	27,882,000
Derivatives settlement		11,115,000	(16,297,000)
Derivatives fair value adjustment		(102,544,000)	13,409,000
Gain on redemption of mandatorily redeemable Preferred Units		(9,580,000)	0
Loss on disposal of assets	[1]	8,656,000	454,000
Equity in earnings from unconsolidated affiliates	[1]	(75,703,000)	(27,866,000)
(Gain) loss on debt extinguishment		27,975,000	(60,000)
Share-based compensation		18,304,000	0
Deferred income taxes		613,000	0
Change in operating assets and liabilities:
Accounts receivable		(100,511,000)	(62,213,000)
Other assets		(11,892,000)	(14,675,000)
Accounts payable		(3,844,000)	(777,000)
Accrued liabilities		102,094,000	49,570,000
Operating lease liabilities		(345,000)	1,343,000
Net cash provided by operating activities		268,918,000	94,210,000
CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment expenditures		(71,429,000)	(39,371,000)
Intangible assets expenditures		(8,516,000)	(2,682,000)
Investment in unconsolidated affiliates		(2,675,000)	(20,522,000)
Cash proceeds from disposals		160,000	58,000
Net cash acquired in acquisition		13,401,000	0
Net cash used in investing activities		(69,059,000)	(62,517,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt		3,000,000,000	30,189,000
Principal payments on long-term debt		(2,294,130,000)	(50,980,000)
Payment on debt issuance costs		(37,042,000)	(3,152,000)
Proceeds from revolver		7,000,000	21,500,000
Payment on revolver		(716,000,000)	(14,500,000)
Redemption of mandatorily redeemable Preferred Units		(152,580,000)	0
Distributions paid to mandatorily redeemable Preferred Units holders		(1,850,000)	0
Distributions paid to redeemable noncontrolling interests Preferred Units limited partners		(6,937,000)	0
Cash dividends paid to Class A Common Stock shareholders		(11,239,000)	0
Distributions paid to Class C Common Units limited partners		(491,000)	(30,189,000)
Equity contributions		0	14,890,000
Net cash (used in) provided by financing activities		(213,269,000)	(32,242,000)
Net change in cash		(13,410,000)	(549,000)
CASH, BEGINNING OF PERIOD		18,729,000	19,591,000
CASH, END OF PERIOD		5,319,000	19,042,000
SUPPLEMENTAL SCHEDULE OF INVESTING AND FINANCING ACTIVITIES
Cash paid for interest, net of amounts capitalized		52,982,000	54,308,000
Property and equipment and intangible accruals in accounts payable and accrued liabilities		20,344,000	9,322,000
Class A Common Stock issued through dividend and distribution reinvestment plan		87,697,000	0
Restructuring Cost and Reserve [Line Items]
Class A Common Stock issued in exchange		1,013,745,000
Altus Midstream LP
Restructuring Cost and Reserve [Line Items]
Fair value of ALTM assets acquired		2,446,430,000	0
Class A Common Stock issued in exchange		1,013,745,000	0
ALTM liabilities and mezzanine equity assumed		$ 1,432,685,000	$ 0

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS - USD ($) $ in Thousands		Total		Preferred Unit limited partners		Apache limited partner	Class A Common Stock	Class C Common Stock	Common Stock Class A Common Stock		Common Stock Class C Common Stock		Additional Paid-in Capital	Accumulated Deficit
Beginning balance at Dec. 31, 2020				$ 0	[1]	$ 1,041,655
Increase (Decrease) in Temporary Equity [Roll Forward]
Contribution						14,890
Distribution paid to Common Unit limited partners						(30,189)
Net loss	[2]	$ (2,770)
Net income						2,770
Ending balance at Jun. 30, 2021				0	[1],[3]	1,029,126
Beginning balance, shares (in shares) at Dec. 31, 2020	[4]								0		101,198,000
Beginning balance at Dec. 31, 2020		10							$ 0		$ 10		$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Contribution (in shares)	[4]										492,000
Contribution		0									$ 0
Distribution paid to common unit limited partners (in shares)	[4]										(996,000)
Distribution paid to Common Unit limited partners		0									$ 0
Net income (loss)	[2]	0
Ending balance, shares (in shares) at Jun. 30, 2021	[4],[5]								0		100,694,000
Ending balance at Jun. 30, 2021		10							$ 0		$ 10		0	0
Beginning balance at Mar. 31, 2021				0	[3]	1,044,492
Increase (Decrease) in Temporary Equity [Roll Forward]
Net loss		15,366	[2]			(15,366)
Ending balance at Jun. 30, 2021				0	[1],[3]	1,029,126
Beginning balance, shares (in shares) at Mar. 31, 2021	[5]								0		100,694,000
Beginning balance at Mar. 31, 2021		10							$ 0		$ 10		0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	[2]	0
Ending balance, shares (in shares) at Jun. 30, 2021	[4],[5]								0		100,694,000
Ending balance at Jun. 30, 2021		10							$ 0		$ 10		0	0
Beginning balance at Dec. 31, 2021				0	[1]	1,006,838
Increase (Decrease) in Temporary Equity [Roll Forward]
Distribution paid to Common Unit limited partners						(70,891)
ALTM acquisition	[1]			462,717
Distributions paid to Preferred Unit limited partners				(6,937)
Distributions payable to Preferred Unit limited partners	[1]			(6,937)
Redemption of Common Units						(172,559)
Net loss	[2]	(28,039)
Net income				114,495	[1]	28,039
Change in redemption value of noncontrolling interests						2,459,863
Ending balance at Jun. 30, 2022				563,338	[1],[3]	3,251,290
Beginning balance, shares (in shares) at Dec. 31, 2021							0	100,000,000	0	[4]	100,000,000
Beginning balance at Dec. 31, 2021		10							$ 0		$ 10		0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
ALTM acquisition (in shares)	[4]								32,493,000
ALTM acquisition		1,013,745							$ 3				1,013,742
Redemption of Common Units (in shares)									5,550,000	[4]	5,550,000
Redemption of Common Units (in shares)	[4]										(5,550,000)
Redemption of Common Units		172,559							$ 1		$ (1)		172,559
Issuance of Class A Common Stock through dividend and distribution reinvestment plan (in shares)									2,504,000
Issuance of Class A Common Stock through dividend and distribution reinvestment plan		87,697											87,697
Share-based compensation (in shares)									4,000
Share-based compensation		18,304											18,304
Remeasurement of contingent consideration		4,451											4,451
Net income (loss)		10,303	[2]											10,303
Change in redemption value of noncontrolling interests		(2,459,863)											(1,296,753)	(1,163,110)
Dividends, common stock, cash		(28,536)												(28,536)
Ending balance, shares (in shares) at Jun. 30, 2022							40,550,555	94,450,000	40,551,000	[4],[5]	94,450,000	[4],[5]
Ending balance at Jun. 30, 2022		(1,181,330)							$ 4		$ 9		0	(1,181,343)
Beginning balance at Mar. 31, 2022				460,773	[3]	3,185,431
Increase (Decrease) in Temporary Equity [Roll Forward]
Distribution paid to Common Unit limited partners						(70,891)
Distributions payable to Preferred Unit limited partners	[3]			(6,937)
Redemption of Common Units						(2,499)
Net loss	[2]	(15,508)
Net income				109,502	[3]	15,508
Change in redemption value of noncontrolling interests						123,741
Ending balance at Jun. 30, 2022				$ 563,338	[1],[3]	$ 3,251,290
Beginning balance, shares (in shares) at Mar. 31, 2022	[5]								37,973,000		94,520,000
Beginning balance at Mar. 31, 2022		(1,137,860)							$ 4		$ 9		0	(1,137,873)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Redemption of Common Units (in shares)	[5]								70,000
Redemption of Common Units (in shares)	[5]										(70,000)
Redemption of Common Units		2,499											2,499
Issuance of Class A Common Stock through dividend and distribution reinvestment plan (in shares)									2,504,000
Issuance of Class A Common Stock through dividend and distribution reinvestment plan		87,697											87,697
Share-based compensation (in shares)									4,000
Share-based compensation		12,173											12,173
Net income (loss)		6,438	[2]											6,438
Change in redemption value of noncontrolling interests		(123,741)											(102,369)	(21,372)
Dividends, common stock, cash		(28,536)												(28,536)
Ending balance, shares (in shares) at Jun. 30, 2022							40,550,555	94,450,000	40,551,000	[4],[5]	94,450,000	[4],[5]
Ending balance at Jun. 30, 2022		$ (1,181,330)							$ 4		$ 9		$ 0	$ (1,181,343)

[1] Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to the Condensed Consolidated Financial Statements.

[2] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

[3] Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

[4] Share amounts have been retroactively restated to reflect the Company’s Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

[5] Share amounts have been retroactively restated to reflect the Company’s Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS (Parenthetical) - $ / shares	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Class A Common Stock
Cash dividends (in USD per share)	$ 0.75	$ 0.75

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DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Transaction

On February 22, 2022 (the “Closing Date”), Kinetik Holdings Inc., a Delaware corporation (formerly known as Altus Midstream Company), consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021 (the “Contribution Agreement”), by and among the Company, Altus Midstream LP (now known as Kinetik Holdings LP), a Delaware limited partnership and subsidiary of Altus Midstream Company (the “Partnership”), New BCP Raptor Holdco, LLC, a Delaware limited liability company (“Contributor”), and BCP Raptor Holdco, LP, a Delaware limited partnership (“BCP”). The transactions are referred to herein as the “Transaction.”

Pursuant to the Contribution Agreement, in connection with the closing of the Transaction (the “Closing”), (i) Contributor contributed all of the equity interests of BCP and BCP Raptor Holdco GP, LLC, a Delaware limited liability company and the general partner of BCP (“BCP GP” and, together with BCP, the “Contributed Entities”), to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership (“Common Units”) and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share (“Class C Common Stock”), to Contributor.

The Company’s stockholders immediately prior to the Closing continued to hold their shares of the Company’s Class A Common Stock, par value $0.0001 per share (“Class A Common Stock,” and together with the Company’s Class C Common Stock, “Common Stock”). As a result of the Transaction, immediately following the Closing (i) Contributor held approximately 75% of the issued and outstanding Common Stock, (ii) Apache Midstream LLC, a Delaware limited liability company (“Apache Midstream”), held approximately 20% of the issued and outstanding Common Stock, and (iii) the Company’s remaining stockholders held approximately 5% of the issued and outstanding Common Stock.

The Company completed a two-for-one Stock Split in the form of a stock dividend on June 8, 2022. All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated elsewhere in this Form 10-Q to reflect the two-for-one Stock Split. However, the number of Common Units and shares of Class C Common Stock described in this Form 10-Q in relation to the Transaction are presented at pre-Stock-Split amounts to be consistent with our previous public filings and the terms of the Contribution Agreement.

In connection with the Closing, the Company changed its name from “Altus Midstream Company” (“ALTM”) to “Kinetik Holdings Inc.” Unless the context otherwise requires, “ALTM” refers to the registrant prior to the Closing and “we,” “us,” “our,” and the “Company” refer to Kinetik Holdings Inc., the registrant and its subsidiaries following the Closing.

Organization

BCP was formed on April 25, 2017 as a Delaware limited partnership to acquire and develop midstream oil and gas assets. BCP’s primary operating subsidiaries are EagleClaw Midstream Ventures, LLC (“EagleClaw”) and CR Permian Holdings, LLC (“CR Permian”). Both subsidiaries were formed to design, engineer, install, own and operate facilities and

provide services for produced natural gas gathering, compression, processing, treating and dehydration, and condensate separation, stabilization, and storage, crude oil gathering and storage, water gathering and disposal assets.

ALTM was originally incorporated on December 12, 2016 in Delaware under the name Kayne Anderson Acquisition Corp. (“KAAC”) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. KAAC completed its initial public offering in the second quarter of 2017. On August 3, 2018, Altus Midstream LP was formed in Delaware as a limited partnership and wholly-owned subsidiary of KAAC and entered into a contribution agreement with certain affiliates of Apache Corporation (“Apache” and such affiliates the “Altus Midstream Entities”), formed by Apache between May 2016 and January 2017, for the purpose of acquiring, developing, and operating midstream oil and gas assets in the Alpine High resource play and surrounding areas (“Alpine High”). On November 9, 2018, KAAC acquired all equity interests of the Altus Midstream Entities and changed its name to Altus Midstream Company.

On February 22, 2022, upon the Closing, BCP and its subsidiaries became wholly owned subsidiaries of the Partnership. The Transaction was accounted for as a reverse merger pursuant to ASC 805 Business Combination (“ASC 805”). Refer to Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements for additional details.

Nature of Operations

Through its consolidated subsidiaries, the Company provides comprehensive gathering, water disposal, transportation, compression, processing and treating services necessary to bring natural gas, NGLs and crude oil to market. Additionally, the Company owns equity interests in four separate Permian Basin pipeline entities that have access to various markets along the Texas Gulf Coast.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. Certain reclassifications of prior year balances have been made to conform such amounts to current year presentation. These reclassifications have no impact on net income. All adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. All intercompany balances and transactions have been eliminated in consolidation.

Prior to the Closing, the Company’s financial statements that were filed with the SEC were derived from ALTM’s accounting records. As the Transaction was determined to be a reverse merger, BCP was considered as the accounting acquirer and ALTM was the legal acquirer. The accompanying Condensed Consolidated Financial Statements herein include (1) BCP’s net assets carried at historical value, (2) BCP’s historical results of operations prior to the Transaction, (3) the ALTM’s net assets carried at fair value as of the Closing Date and (4) the combined results of operations with the Company’s results presented within the Condensed Consolidated Financial Statements from February 22, 2022 going forward. Refer to Note 2—Business Combination to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion.

The Company completed a two-for-one Stock Split on June 8, 2022. All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the two-for-one Stock Split, except for the number of Common Units and shares of Class C Common Stock described above in relation to the Transaction, which are presented at pre-Stock-Split amounts. This presentation election is consistent with our previous public filings and the terms of the Contribution Agreement.

Use of Estimates

Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its condensed consolidated financial statements, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the valuation of derivatives, tangible and intangible assets, share-based compensation, contingent liabilities, mandatorily redeemable Preferred Units (as defined below) and noncontrolling interests.

Variable Interest Entity

The Company uses a qualitative approach in assessing the consolidation requirement for variable interest entities. The approach focuses on identifying which enterprise has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. In the event that the Company is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity would be consolidated in our financial statements. The Company has determined that it has significant influence over the operating and financial policies of the four pipeline entities in which it is invested, but does not exercise control over them; and hence, it accounts for these investments using the equity method. Refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Redeemable Noncontrolling Interest — Common Units Limited Partners

Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share, to Contributor. Please refer to “The Transaction” above.

The Common Units are redeemable at the option of unit holders and accounted for in the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity. The Company records the redeemable noncontrolling interest at the higher of (i) its initial value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date. The redemption value was determined based on a 5-day volume weighted-average closing price of the Class A Common Stock. See discussion and additional details in Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

The Partnership issued Series A Cumulative Redeemable Preferred Units (“Preferred Units”) on June 12, 2019. As the Transaction was accounted for as a reverse merger, the Company assumed certain Preferred Units that were issued and outstanding were assumed at Closing for accounting purposes. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. In July 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

The Preferred Units are accounted for on the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units. Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s Condensed Consolidated Balance Sheet as a long-term liability embedded derivative. See discussion and additional detail in Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Equity Method Investments

The Company follows the equity method of accounting when it does not exercise control over its equity interests, but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity investments are carried originally at acquisition cost, increased by the Company’s proportionate share of the equity interest’s net income and contributions made, and decreased by the Company’s proportionate share of the equity interest’s net losses and distributions received. Please refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further details of the Company’s equity method investments. Equity method investments acquired in the Transaction were recorded at fair value upon Closing. See discussion and additional detail in Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for purchase price allocation of the Transaction.

Inventory

Other current assets include condensate, residue gas and NGLs inventories that are valued at the lower of cost or market. At the end of each reporting period, the Partnership assesses the carrying value of inventory and makes any adjustments necessary to reduce the carrying value to the applicable net realizable value. Inventory was valued at $13.0 million and $2.1 million as of June 30, 2022 and December 31, 2021, respectively.

Impairment of Long-Lived Assets

In accordance with Financial Accounting Standards Board (“FASB”) ASC 360, Property, Plant and Equipment, long-lived assets, excluding goodwill, to be held and used by the Company are reviewed for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the assets have decreased below their carrying value. For long-lived assets to be held and used, the Company bases their evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present.

The Company’s management assesses whether there has been an impairment trigger, and if a trigger is identified, then the Company would perform an undiscounted cash flow test at the lowest level for which identifiable cash flows are independent of cash flows from other assets. If the sum of the undiscounted future net cash flows is less than the net book value of the property, an impairment loss is recognized for any excess of the property’s net book value over its estimated fair value. The Company did not recognize impairment losses for long-lived assets during the three and six months ended June 30, 2022 and 2021.

Transactions with Affiliates

The accounts receivable from or payable to affiliates represent the net result of the Company’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache and its subsidiaries, who controlled the Company prior to the Transaction. Accounts receivable from affiliates was $20.2 million as of June 30, 2022. Revenue from affiliates was $30.5 million and $46.2 million for the three and six months ended June 30, 2022, respectively. Accrued expense due to affiliates was $0.2 million as of June 30, 2022, and operating expenses for the three and six months ended June 30, 2022 were immaterial.

Net Income Per Share

Basic net income per share is calculated by dividing net income attributable to Class A common shareholders by the weighted-average number of shares of Class A Common Stock outstanding during the period. Class C Common Stock is excluded from the weighted-average shares outstanding for the calculation of basic net income per share, as holders of Class C Common Stock are not entitled to any dividends or liquidating distributions. No net income per share was computed for the three and six months ended June 30, 2021, as no Class A Common Stock was outstanding with respect to BCP as the accounting acquirer as of June 30, 2021.

The Company uses the “if-converted method” to determine the potential dilutive effect of (i) an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) for shares of Class A Common Stock, (ii) an assumed exercise of the outstanding public and private warrants for shares of Class A Common Stock and (iii) an assumed exchange of the outstanding Preferred Units for shares of Class A Common Stock. The dilutive effect of any earn-out consideration payable in shares is only included in periods for which the underlying conditions for the issuance are met.

Recently Adopted Accounting Pronouncement

Effective January 1, 2022, the Company adopted ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value. With adoption of ASU 2021-08, the Company assumed contract liabilities at carrying value of $9.1 million upon Closing.

Effective January 1, 2022, the Company adopted ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 was issued to ease the potential accounting burden expected when global capital markets move away from LIBOR, the benchmark interest rate banks use to make short-term loans to each other. The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationship, and other transactions affected by

reference rate reform if certain criteria are met. Interest rate applied to the Company’s new debt resulting from the comprehensive refinance is based on Secured Overnight Financing Rate (“SOFR”), which is a broad measure of the cost of borrowing cash overnight collateralized by treasury securities. Refer to Note 6—Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements of this Form 10-Q for discussion of SOFR applicable to the Company’s debt structures.

Recent Accounting Pronouncement Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). The amendments in ASU 2022-03 clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments also require the following disclosures for equity securities subject to contractual sale restrictions: (1) The fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; (2) The nature and remaining duration of the restriction(s); (3) The circumstances that could cause a lapse in the restriction(s). This guidance is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the effect that ASU 2022-03 will have on its Consolidated Financial Statements.

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”). Current GAAP permits only prepayable financial assets and one or more beneficial interests secured by a portfolio of prepayable financial instruments to be included in a last-of-layer closed portfolio. The amendments in ASU 2022-01 allow nonprepayable financial assets also to be included in a closed portfolio hedged using the portfolio layer method. That expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. The amendments in ASU 2022-01 also clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers as follows: (1) an entity is required to maintain basis adjustments in an existing hedge on a closed portfolio basis (that is, not allocated to individual assets), (2) an entity is required to immediately recognize and present the basis adjustment associated with the amount of the designated layer that was breached in interest income. In addition, an entity is required to disclose that amount and the circumstances that led to the breach, (3) an entity is required to disclose the total amount of the basis adjustments in existing hedges as a reconciling amount if other areas of GAAP require the disaggregated disclosure of the amortized cost basis of assets included in the closed portfolio, and (4) an entity is prohibited from considering basis adjustments in an existing hedge when determining credit losses. The guidance is effective for public business entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in ASU 2017-02 for the corresponding period. The Company is currently evaluating the effect that ASU 2022-01 will have on its Consolidated Financial Statements.

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BUSINESS COMBINATION

6 Months Ended

Jun. 30, 2022

Business Combinations [Abstract]

BUSINESS COMBINATION

BUSINESS COMBINATION

On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share, to Contributor. Please refer to ““—The Transaction” discussed above.

The Transaction was accounted for as a business combination in accordance with ASC 805, which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. The Company also adopted ASU 2021-08, effective as of January 1, 2022, to record contract liabilities at their carrying value as of the acquisition date. Although the Company was the legal acquirer, BCP was determined to be the accounting acquirer and legal acquiree. As a result, BCP and its subsidiaries’ net assets were carried at historical value, acquired net assets were measured at fair value except contract liabilities being recorded at carrying value at the acquisition date, and results of operations of ALTM and its subsidiaries were included in the Company’s Condensed Consolidated Financial Statements from the Closing Date going forward.

The preliminary purchase price allocation is based on an assessment of the fair value of the assets acquired and liabilities assumed in the acquisition using inputs that are not observable in the market and thus level 3 inputs. The fair value of the processing plant, gathering system and related facilities and equipment are based on market and cost approaches. The goodwill of $4.1 million relates to operational synergies. The value of the Preferred Units and assumed contingent liability was determined through a probability-weighted analysis of the expected future cash flows and other applicable valuation techniques. See additional details for Preferred Units in Note 11—Series A Cumulative Redeemable Preferred Units and contingent liabilities in Note 8—Commitments and Contingencies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, valuation of the underlying assets of the equity method investments and liabilities assumed. However, the Company is continuing its review of these matters during the measurement period, and if new information obtained about facts and circumstances that existed at the acquisition date identifies adjustments to the liabilities initially recognized, as well as any additional liabilities that existed at the acquisition date, the acquisition accounting will be revised to reflect the resulting adjustments to the provisional amounts initially recognized. The Company will finalize the purchase price allocation during the 12-month period following the acquisition date.

The following table summarizes the preliminary estimated fair value of assets acquired and liabilities assumed in the Transaction in accordance with ASC 805:

(In thousands)	Amount
Cash and cash equivalent	$	13,401
Accounts receivable	1,919
Accounts receivable - affiliates	15,681
Property, plant, and equipment, net	634,923
Intangible assets, net	13,200
Investments in unconsolidated affiliates	1,755,000
Prepaid expense and other assets	8,225
Goodwill	4,081
Total assets acquired	2,446,430
Accrued expenses and other accrued liabilities	5,688
Long-term debt	657,000
Embedded derivative liabilities	89,050
Contract liabilities	9,102
Mandatory redeemable Preferred Units	200,667
Deferred tax liabilities	4,010
Contingent liabilities	4,451
Total liabilities assumed	969,968
Redeemable noncontrolling interest - Preferred Unit limited partners	462,717
Total consideration transferred	$	1,013,745

The Company incurred acquisition-related costs of $0.7 million and $6.4 million for the three and six months ended June 30, 2022, respectively.

Supplemental Pro Forma Information

The unaudited supplemental pro forma financials are for informational purposes only and are not indicative of future results. The results below for the three and six months ended June 30, 2022 and 2021 combine the results of the Company and the Partnership, giving effect to the Transaction as if it had been completed on January 1, 2021.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
(In thousands)	Pro forma		Pro forma		Pro forma		Pro forma
Revenues	$	335,572	$	171,359	$	619,674	$	353,608
Net income including noncontrolling interest	$	132,159	$	18,845	$	145,627	$	35,647

Given the assumed pro forma transaction date of January 1, 2021, we removed $0.7 million and $19.5 million of acquisition-related expenses for the three and six months ended June 30, 2022, respectively, and recognized $2.2 million and $31.1 million of total acquisition-related expenses for the three and six months ended June 30, 2021, respectively.

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REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Disaggregation of Revenue

The following table presents a disaggregation of the Company’s revenue.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Gathering and processing services	$	102,080	$	62,242	$	182,525	$	129,904
Natural gas, NGLs and condensate sales	229,651		71,099		404,579		151,092
Other revenue	3,841		2,425		5,717		2,873
Total revenues and other	$	335,572	$	135,766	$	592,821	$	283,869

There have been no significant changes to the Company’s contracts with customers during the three and six months ended June 30, 2022. Contracts with customers acquired through the Transaction had similar structures as the Company’s existing contracts with customers. The Company recognized revenues from MVC deficiency payments of $0.3 million and nil for the three months ended June 30, 2022 and 2021, respectively, and $0.3 million and $2.5 million for the six months ended June 30, 2022 and 2021, respectively.

Remaining Performance Obligations

The following table presents our estimated revenue from contracts with customers for remaining performance obligations that has not yet been recognized, representing our contractually committed revenues as of June 30, 2022:

	Amount
Fiscal Year	(In thousands)
Remaining of 2022	$	10,633
2023	43,177
2024	40,247
2025	49,182
2026	34,631
Thereafter	191,293
	$	369,163

Our contractually committed revenue, for purposes of the tabular presentation above, is generally limited to customer contracts that have fixed pricing and fixed volume terms and conditions, generally including contracts with payment obligations associated with MVCs.

Contract Liabilities

The following table provides information about contract liabilities from contracts with customers as of June 30, 2022:

	Amount
	(In thousands)
Balance at December 31, 2021	$	14,756
Reclassification of beginning contract liabilities to revenue as a result of performance obligation being satisfied	(3,224)
Cash received and not recognized as revenue	17,517
Balance at June 30, 2022	29,049
Less: Current portion	6,150
Non-current portion	$	22,899

Contract liabilities relate to payments received in advance of satisfying performance obligations under a contract, which result from contribution in aid of construction payments. Current and noncurrent contract liabilities are included in “Other Current Liabilities” and “Contract Liabilities,” respectively, of the Condensed Consolidated Balance Sheets.

Contract Cost Assets

The Company has capitalized certain costs incurred to obtain a contract that would not have been incurred if the contract had not been obtained. These costs are recovered through the net cash flows of the associated contract. As of June 30, 2022 and December 31, 2021, the Company had contract acquisition cost assets of $17.5 million and $18.4 million, respectively. Current and noncurrent contract cost assets are included in “Prepaid and Other Current Assets” and “Deferred Charges and Other Assets,” respectively, of the Condensed Consolidated Balance Sheets. The Company amortizes these assets as cost of sales on a straight-line basis over the life of the associated long-term customer contract. The Company recognized cost of sales associated with these assets of $0.4 million and $0.4 million for the three months ended June 30, 2022 and 2021, respectively, and $0.9 million and $0.9 million for the six months ended June 30, 2022 and 2021, respectively.

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PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are carried at cost or fair market value at the date of acquisition less accumulated depreciation. The cost basis of constructed assets includes materials, labor, and other direct costs. Major improvements or betterment are capitalized, while repairs that do not improve the life of the respective assets are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets.

Property, plant and equipment, at carrying value, is as follows:

	June 30, 2022		December 31, 2021
	(In thousands)
Gathering, processing and transmission systems and facilities	$	2,788,565	$	2,121,434
Vehicles	7,194		6,090
Computers and equipment	3,796		4,271
Less: accumulated depreciation	(402,994)		(337,030)
Total depreciable assets, net	2,396,561		1,794,765
Construction in progress	64,332		24,888
Land	20,179		19,626
Total property, plant and equipment, net	$	2,481,072	$	1,839,279

The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. These amounts represent property that is not yet available to be placed into productive service as of the respective reporting date. The Company recorded $36.6 million and $26.6 million of depreciation expense for the three months ended June 30, 2022 and 2021, respectively, and $67.5 million and $52.2 million of depreciation expense for the six months ended June 30, 2022 and 2021, respectively.

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GOODWILL AND INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The Company closed a business combination transaction on February 22, 2022, refer to the Transaction in Note 2—Business Combination in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. The Transaction was accounted for as a business combination pursuant to ASC 805. In connection with the Transaction, the Company recorded excess of the purchase price over net assets acquired as goodwill. The Company recorded goodwill of $4.1 million as of June 30, 2022.

Goodwill is tested at least annually as of December 31 of each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce fair value of a reporting unit below its carrying value. Company’s management assesses whether there have been events or circumstances that trigger the fair value of the reporting unit to be lower than its net carrying value since consummation of the Transaction, and concluded that goodwill was not impaired as of June 30, 2022.

Intangible Assets

Intangible assets, net are comprised of the following:

	June 30, 2022		December 31, 2021
	(In thousands)
Customer contracts	$	1,136,728	$	1,135,963
Right of way assets	120,401		99,345
Less accumulated amortization	(509,408)		(449,259)
Total amortizable intangible assets, net	$	747,721	$	786,049

The fair value of acquired customer contracts was capitalized as a result of acquiring favorable customer contracts as of the closing dates of certain past acquisitions and is being amortized using a straight-line method over the remaining term of the customer contracts, which range from one to twenty years. Right of way assets relate primarily to underground pipeline easements and have a useful life of ten years and are amortized using the straight-line method. The right of way agreements are generally for an initial term of ten years with an option to renew for an additional ten years at agreed upon renewal rates based on certain indices or up to 130% of the original consideration paid.

The Company recorded $30.0 million and $30.5 million of amortization expense for the three months ended June 30, 2022 and 2021, respectively, and $60.1 million and $60.9 million of amortization expense for the six months ended June 30, 2022 and 2021, respectively. There was no impairment recognized on intangible assets for the three and six months ended June 30, 2022 and 2021.

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DEBT AND FINANCING COSTS

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

DEBT AND FINANCING COSTS

DEBT AND FINANCING COSTS

June 2030 Senior Notes

On June 8, 2022, the Partnership completed a private placement of $1.00 billion aggregate principal amount of its 5.875% Sustainability-Linked Senior Notes due 2030 (the “Notes”), which are fully and unconditionally guaranteed by the Company.

The Notes were issued at 99.588% of their face amount and will mature on June 15, 2030. Interest accrues from June 8, 2022 and is payable semi-annually on June 15 and December 15 of each year, commencing December 15, 2022. The aggregate fees, expenses, and original issue discount paid to obtain the notes totaled $21.6 million and were capitalized as debt issuance cost and included in the Condensed Consolidated Balance Sheets as a direct deduction to the Notes as the Notes were transferred to third-party investors that pay the stated principal amount without deduction for the initial purchasers’ discount.

On or after June 15, 2027, the interest rate accruing on the Notes will be increased by an additional 0.250% per annum unless the Partnership satisfies, and an independent external verifier confirms satisfaction of the Sustainability Performance Targets (“SPT”) for the three key performance indicators outlined in the Sustainability-Linked Financing Framework published by the Company on May 16, 2022: 1) Scope 1 and Scope 2 greenhouse gas emissions intensity, 2) Scope 1 and Scope 2 methane gas emissions intensity and 3) female representation in corporate officer positions. The interest rate accruing on the Notes will be increased by an additional 0.083% per annum for each SPT which has not been satisfied and externally verified.

The Partnership may redeem some or all of the notes at any time or from time to time prior to maturity based on terms prescribed in the Notes. As of June 30, 2022, unamortized debt issuance costs associated with the Notes were $19.3 million.

Revolving Credit Facility

On June 8, 2022, the Partnership entered into a revolving credit agreement (the “Revolving Credit Agreement”) among Bank of America, N.A., as administrative agent (“Bank of America”), and the banks and other financial institutions party thereto, as lenders. The Revolving Credit Agreement provides for a $1.25 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”).

The Partnership may prepay borrowings under the Revolving Credit Facility at any time without premium or penalty (other than customary SOFR breakage costs), subject to certain notice requirements. All borrowings under the Revolving Credit Facility mature on June 8, 2027. The obligations under the Revolving Credit Agreement are fully and unconditionally guaranteed by the Company.

The Revolving Credit Agreement provides for borrowings of either, at the Partnership’s option, base rate loans or term SOFR loans. Base rate loans bear interest at a rate per annum equal to the greatest of (a) the prime rate as announced from time to time by Bank of America, (b) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, plus 1/2 of 1.00% and (c) the adjusted term SOFR rate for an interest period of one month plus 1.00%, plus a margin that ranges between 0.25% and 1.00%, depending on the credit rating of the Partnership. SOFR loans bear interest at a rate per annum equal to the term SOFR rate for such interest periods plus 0.10%, plus a margin that ranges between 1.25% and 2.00%, depending on the credit rating of the Partnership. In obtaining the Revolving Credit Agreement, the Partnership incurred fees and expenses totaling $7.8 million, which was capitalized and included in the Condensed Consolidated Balance Sheets as “Prepaid and other current assets” and “Deferred charges and other assets.”

In addition, the Partnership is required to pay to each lender a commitment fee on the daily unfunded amount of such lender’s revolving commitment, which accrues at a rate that ranges between 0.15% and 0.35% depending on the credit rating of the Partnership.

There were no outstanding borrowings under the Revolving Credit Facility as of June 30, 2022.

Term Loan Credit Facility

On June 8, 2022, concurrently with the closing of the Revolving Credit Facility , the Partnership entered into a term loan credit agreement (the “TLA”) among PNC Bank, National Association, as administrative agent (“PNC Bank”), and the banks and other financial institutions party thereto, as lenders. The TLA provides for a $2.00 billion senior unsecured term loan credit facility (the “Term Loan Credit Facility”). The TLA matures on June 8, 2025. The obligations under the TLA are fully and unconditionally guaranteed by the Company.

The TLA provides for borrowings of either, at the Partnership’s option, base rate loans or term SOFR loans. Base rate loans bear interest at a rate per annum equal to the greatest of (a) the prime rate as announced from time to time by PNC Bank, (b) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, plus 1/2 of 1.00% and (c) the adjusted term SOFR rate for an interest period of one month plus 1.00%, plus a margin that ranges between 0.25% and 1.0%, depending on the credit rating of the Partnership. SOFR loans bear interest at a rate per annum equal to the term SOFR rate for such interest periods plus 0.10%, that if the plus a margin that ranges between 1.25% and 2.0%, depending on the credit rating of the Partnership. In obtaining the TLA, the Partnership incurred fee and expenses totaled $7.6 million, which was capitalized as debt issuance cost and included in the Condensed Consolidated Balance Sheets as direct deduction to the Term Loan Credit Facility.

Both the Revolving Credit Agreement and the TLA contain a “Sustainability Adjustments” feature that could result in a 0.05% increase or reduction to the effective interest rate if the Company fails to meet certain sustainability targets after 2022. “Sustainability Rate Adjustment” means, with respect to any KPI Metrics Report, for any period between Sustainability Pricing Adjustment Dates, (a) positive 0.05%, if neither of the Sustainability Performance Targets as set forth in the KPI Metrics Report have been satisfied for the relevant calendar year, (b) 0.00% if only one of the Sustainability Performance Targets as set forth in the KPI Metrics Report has been satisfied for the relevant calendar year and (c) negative 0.05% if both of the Sustainability Performance Targets as set forth in the KPI Metrics Report have been satisfied for the relevant calendar year.

“Sustainability Performance Targets” in the Revolving Credit Agreement and TLA mean, for any calendar year, with respect to (a) the Female Representation KPI, the target percentage of female representation in corporate officer positions for such calendar year and (b) the Methane Emissions KPI, the percentage reduction in methane gas emissions intensity relative to the baseline year for such calendar year; provided that, in each case, if the Partnership subsequently issues a sustainability-linked debt instrument linked to the same KPI Metric and with an observation date for such calendar year, but with a higher percentage of representation or reduction, as the case may be, the relevant Sustainability Performance Target shall be automatically adjusted upward to equal the percentage of representation or reduction, as applicable, required by such subsequent sustainability-linked debt instrument.

Both the Revolving Credit Agreement and the TLA contain customary covenants and restrictive provisions which may, among other things, limit Partnership’s ability to create liens, incur additional indebtedness, make restricted payments, or liquidate, dissolve, consolidate with, or merge into or with any other person. As of June 30, 2022, the Partnership is in compliance with all customary and financial covenants.

Repayment of Existing Credit Facilities

In June 2022, the Company used the net proceeds from the Notes, together with cash on hand and proceeds from the term loan credit facility, to repay all outstanding borrowings under its existing credit facilities and to pay certain related fees and

expenses. In conjunction with the extinguishment of existing outstanding borrowings, the Company recognized a loss on extinguishment of debt of approximately $28.0 million. In addition, the unamortized debt issuance costs related to the existing outstanding borrowings were fully amortized and included in the loss on debt extinguishment calculation for the three and six months ended June 30, 2022.

The fair value of the term loan credit facility approximates fair value and is not publicly traded. The fair value of the Company and its subsidiaries’ consolidated debt as of June 30, 2022 and December 31, 2021 was $2.95 billion and $2.34 billion, respectively.

The following table summarizes the Company’s debt obligations as of June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
$2.0 billion unsecured term loan	$	2,000,000	$	—
$1.0 billion 2030 senior unsecured notes	1,000,000		—
$1.25 billion term loan	—		1,175,417
$690 million term loan	—		639,393
$513 million term loan	—		479,377
$125 million revolving line of credit	—		52,000
Total Long-term debt	3,000,000		2,346,187
Less: Debt issuance costs, net(1)	(28,730)		(38,485)
	2,971,270		2,307,702
Less: Current portion, net	—		(54,280)
Long-term portion of debt and finance lease obligations, net	$	2,971,270	$	2,253,422

(1) Excluded unamortized debt issuance cost related to the Revolving Credit Facility. Unamortized debt issuance cost associated with the Revolving Credit Facility was $7.7 million and $2.2 million as of June 30, 2022 and December 31, 2021, respectively, and were included in the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets.

The table below presents the components of the Company’s financing costs, net of capitalized interest:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Capitalized interest	$	197	$	275	$	301	$	486
Debt issuance costs	3,149		3,332		6,538		6,637
Interest expense	22,001		29,000		45,282		50,794
Total financing costs, net of capitalized interest	$	25,347	$	32,607	$	52,121	$	57,917

As of June 30, 2022 and December 31, 2021, unamortized debt issuance costs associated with the Notes and the Term Loan Credit Facility were $28.7 million and $38.5 million, respectively.

Debt issuance costs associated with the new and existing revolving credit facilities were $7.7 million and $2.2 million as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, the unamortized debt issuance costs associated with the new and existing revolving credit facilities were included in the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets as there were no borrowings on the new or existing revolving credit facilities. As of December 31, 2021, the current and non-current portion of the unamortized debt issuance costs were included in the “Other non-current assets” and “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets.

The amortization of the debt issuance costs was charged to interest expense for the periods presented. The amount of debt issuance costs included in interest expense was $3.1 million and $3.3 million for the three months ended June 30, 2022 and 2021, respectively, and $6.5 million and $6.6 million for the six months ended June 30, 2022 and 2021, respectively.

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ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

ACCRUED EXPENSES

ACCRUED EXPENSES

The following table provides detail of the Company’s accrued expenses at June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
Accrued product purchases	$	199,292	$	118,364
Accrued taxes	13,077		4,299
Accrued salaries, vacation, and related benefits	4,799		2,113
Accrued capital expenditures	11,255		2,995
Accrued interest expenses	3,787		—
Accrued other expenses	13,741		7,872
Total accrued expenses	$	245,951	$	135,643

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of June 30, 2022 and December 31, 2021, there were no accruals for loss contingencies.

Litigation

The Company is a party to various legal actions arising in the ordinary course of its businesses. In accordance with ASC 450, Contingencies, the Company accrues reserves for outstanding lawsuits, claims, and proceedings when a loss contingency is probable and can be reasonably estimated. The Company estimates the amount of loss contingencies using current available information from legal proceedings, advice from legal counsel and available insurance coverage. Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of the legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company from the legal proceedings in question. Thus, the Company’s exposure and ultimate losses may be higher, and possibly significantly more, than the amounts accrued.

The Company has entered into litigation with two third parties to collect outstanding receivables totaling $19.6 million that remain outstanding from the Winter Storm Uri during February of 2021. Given the counterparties’ sufficient creditworthiness and the valid claims that we hold, no allowance has currently been established for these items as we have legally enforceable agreements with these parties.

Environmental Matters

As an owner of infrastructure assets with rights to surface lands, the Company is subject to various local and federal laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the Company for the cost of pollution clean-up resulting from operations and subject the Company to liability for pollution damages. The Company is not aware of any environmental claims existing as of June 30, 2022, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity.

Contingent Liabilities

Permian Gas Acquisition

As part of the acquisition of Permian Gas on June 11, 2019, consideration included a contingent liability arrangement with PDC Permian, Inc. (“PDC”) The arrangement requires additional monies to be paid by the Company to PDC on a per Mcf basis if the actual annual Mcf volume amounts exceed forecasted annual Mcf volume amounts starting in 2020 and continuing through 2029. The arrangement defines the incentive rate per Mcf for each qualifying year and the total monies paid under this arrangement are capped at $60.5 million. Amounts are payable on an annual basis over the earn-out period. The fair value of the contingent liability recognized on the acquisition date of $3.9 million was estimated utilizing the following key assumptions: (1) present value factors based on the Company’s weighted-average cost of capital, 2) a probability weighted payout based on an estimate of future volumes and (3) a discount period consistent with the arrangement’s life and the respective due dates of the potential future payments. Based on current forecasts and discussions with PDC, management revalued this contingent liability with updated assumptions at each reporting period. The Company did not expect PDC’s actual annual Mcf volume amounts to exceed forecasted amounts as of June 30, 2022; therefore, the estimated fair value of the contingent consideration liability was nil as of June 30, 2022. The estimated fair value of the contingent consideration liability related to this acquisition was $0.8 million as of December 31, 2021.

The Transaction

As part of the Transaction, the Company assumed contingent liabilities of $4.5 million related to earn-out a consideration of up to 2,500,000 shares of Class A Common Stock as follows:

• 1,250,000 shares if the per share closing price of the Class A Common Stock as reported by Nasdaq during any 30-trading-day period ending prior to November 9, 2023 is equal to or greater than $140.00 for any 20 trading days within such 30-trading-day period.

• 1,250,000 shares if the per share closing price of the Class A Common Stock as reported by Nasdaq during any 30-trading-day period ending prior to November 9, 2023 is equal to or greater than $160.00 for any 20 trading days within such 30-trading-day period.

Pursuant to ASC 805, this earn-out consideration was a pre-existing contingency and accounted for as an assumed liability to the acquirer on acquisition date. Immediately subsequent to the Closing, the Company evaluated the earn-out consideration classification in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The Company determined the earn-out consideration to be classified as equity based on the settlement provision.

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EQUITY METHOD INVESTMENTS

6 Months Ended

Jun. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

EQUITY METHOD INVESTMENTS

EQUITY METHOD INVESTMENTS

As of June 30, 2022, the Company owned investments in the following long-haul pipeline entities in the Permian Basin. These investments were accounted for using the equity method of accounting. For each equity method investment (“EMI”) pipeline entity, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the EMI pipeline. The table below presents the ownership percentages and investment balances held by the Company for each entity:

	Ownership	June 30, 2022		December 31, 2021
		(In thousands)
Permian Highway Pipeline LLC(1)	53.3%	$	1,416,318	$	626,477
Breviloba, LLC (Shin Oak)	33.0%	465,444		—
Gulf Coast Express Pipeline LLC	16.0%	460,549		—
		$	2,342,311	$	626,477

(1) Ownership for Permian Highway Pipeline LLC (“PHP”) was 53.3% and 26.7% as of June 30, 2022 and December 31, 2021, respectively.

Additionally, as of June 30, 2022, the Company owned 15.0% of Epic Crude Holdings, LP (“EPIC”). However, no dollar value was assigned through the purchase price allocation as adjustment was made to eliminate equity in losses of EPIC. No additional contribution was made to EPIC and no distribution or equity income was received from EPIC during the three and six months ended June 30, 2022.

As of June 30, 2022, the unamortized basis differences included in the EMI pipelines balances were $414.3 million. There was no unamortized basis difference as of December 31, 2021. These amounts represent differences in the Company’s contributions to date and the Company’s underlying equity in the separate net assets within the financial statements of the respective entities. Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets. There was capitalized interest of $12.2 million and $12.8 million as of June 30, 2022 and December 31, 2021, respectively. Capitalized interest is amortized on a straight-line basis into equity income.

The following table presents the activity in the Company’s EMIs for the six months ended June 30, 2022:

		Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Total(2)
	(In thousands)
Balance at December 31, 2021		$	626,477	$	—	$	—	$	626,477
Acquisitions		815,000		470,000		470,000		1,755,000
Contributions		2,675		—		—		2,675
Distributions		(79,508)		(16,868)		(21,168)		(117,544)
Equity income, net(1)		51,674		12,312		11,717		75,703
Balance at June 30, 2022		$	1,416,318	$	465,444	$	460,549	$	2,342,311

(1)For the six months ended June 30, 2022, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $3.3 million from Permian Highway Pipeline LLC, $0.3 million from Breviloba, LLC and $2.7 million from Gulf Coast Express Pipeline, LLC.

(2)The EMIs acquired in the Transaction are included in the results from February 22, 2022 to June 30, 2022, and this is also the case for the additional 26.67% of PHP that was acquired in the Transaction. The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements of this Form 10-Q, for further information on the Company’s basis of presentation.

Summarized Financial Information

The following tables represent selected statement of operations data for the Company’s EMI pipelines (on a 100 percent basis) for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30,
	2022						2021
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Permian Highway Pipeline LLC(1)		Breviloba, LLC(1)		Gulf Coast Express Pipeline LLC(1)
	(In thousands)
Revenues	$	98,808	$	50,091	$	90,769	$	99,366	$	47,447	$	90,703
Operating income	61,294		25,359		64,816		62,444		28,002		60,766
Net income	61,307		25,284		64,461		62,329		27,645		60,551

	Six Months Ended June 30,
	2022					2021
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC	Permian Highway Pipeline LLC(1)		Breviloba, LLC(1)		Gulf Coast Express Pipeline LLC(1)
	(In thousands)
Revenues	$	196,664	$	98,612	180,742	$	197,214	$	81,976	$	179,072
Operating income	120,770		51,672		128,259	105,024		45,302		120,874
Net income	120,520		51,651		127,990	104,909		45,004		120,319

(1) For the three and six months ended June 30, 2021, the Company only had equity interest in Permian Highway Pipeline LLC.

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EQUITY AND WARRANTS

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

EQUITY AND WARRANTS

EQUITY AND WARRANTS

Redeemable Noncontrolling Interest — Common Unit Limited Partners

On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share, to Contributor. Please refer to “The Transaction” above.

The redemption option of the Common Unit is not legally detachable or separately exercisable from the instrument and is non-transferable, and the Common Unit is redeemable at the option of the holder. Therefore, the Common Unit is accounted for as redeemable noncontrolling interest and classified as temporary equity on the Company’s Condensed Consolidated Balance Sheet. During the first half of 2022, 5,550,000 common units were redeemed on a one-for-one basis for shares of Class A Common Stock and a corresponding number of shares of Class C Common Stock were cancelled. There were 94,450,000 Common Units and an equal number of Class C Common Stock issued and outstanding as of June 30, 2022. The Common Units fair value was approximately $3.25 billion as of June 30, 2022.

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

Upon Closing, the Company assumed certain Preferred Units that were issued and outstanding on acquisition date. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. Refer to Note 11—Series A Cumulative Redeemable Preferred Units for further discussion. In July 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

Public Warrants

As of June 30, 2022, there were 12,577,350 Public Warrants (as defined below) outstanding. Each whole public warrant entitles the holder to purchase one tenth of a share of Class A Common Stock at a price of $115.00 per share (the “Public Warrants”). The Public Warrants will expire on November 9, 2023 or upon redemption or liquidation. The Company may call the Public Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant with not less than 30 days’ notice provided to the Public Warrant holders. However, this redemption right can only be exercised if the reported last sale price of the Class A Common Stock equals or exceeds $180.00 per share for any 20-trading days within a 30-trading day period ending three business days prior to sending the notice of redemption to the Public Warrant holders.

Private Placement Warrants

As of June 30, 2022, there were 6,364,281 Private Placement Warrants (as defined below) outstanding, of which Apache holds 3,182,140. The private placement warrants will expire on November 9, 2023 and are identical to the Public Warrants discussed above, except (i) they will not be redeemable by the Company so long as they are held by the initial holders or their respective permitted transferees and (ii) they may be exercised by the holders on a cashless basis (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”).

The Company recorded a fair value of $0.1 million for the Public Warrants and a fair value of $0.1 million for the Private Warrants as of June 30, 2022 on the Condensed Consolidated Balance Sheet in other non-current liabilities. Refer to Note 15—Fair Value Measurement in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding valuation of the Warrants.

Dividend

On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with certain stockholders including BCP Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, APA Corporation Apache Midstream LLC, and certain individuals (each, a “Reinvestment Holder”). Under the Reinvestment Agreement, each Reinvestment Holder is obligated to reinvest at least 20% of all distributions on Common Units or dividends on shares of Class A Common Stock in the Company’s Class A Common Stock. Additionally, the Audit Committee and subsequently the Company’s Board of Directors (the “Board”) resolved that for the calendar year 2022, 100% of all distributions or dividends received by each Reinvestment Holder would be reinvested in newly issued shares of Class A Common Stock. As described in these Condensed Consolidated Financial Statements, as the context requires, dividends paid to holders of Class A Common Stock and distributions paid to holders of Common Units may be referred to collectively as “dividends.”

On May 17, 2022, the Company made cash dividend payments of $11.7 million to holders of Class A Common Stock and Common Units and $87.7 million was reinvested in shares of Class A Common Stock by each Reinvestment Holder.

On July 20, 2022, the Board declared a cash dividend of $0.75 per share on the Company’s Class A Common Stock and a distribution of $0.75 per Common Unit from the Partnership to the holders of Common Units. Dividends are payable on August 17, 2022. Certain holders of Class A Common Stock and Class C Common Stock will receive a cash dividend with the balance receiving additional shares of Class A Common Stock under the Reinvestment Agreement.

Stock Split

On May 19, 2022, the Company announced that its Board approved and declared a two-for-one stock split with respect to its Class A Common Stock and Class C Common Stock, in the form of a stock dividend (the “Stock Split”). The Stock Split was accomplished by distributing one additional share of Class A Common Stock for each share of Class A Common Stock outstanding and one additional share of Class C Common Stock for each share of Class C Common Stock outstanding. The additional shares of Common Stock were issued on June 8, 2022 to holders of record at the close of business on May 31, 2022.

All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the Stock Split.

  SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS

Prior to the Closing Date of the Transaction, the Partnership had 625,000 Preferred Units issued and outstanding. Immediately prior to the Closing, on February 22, 2022, the Partnership redeemed for cash, 100,000 Preferred Units in an amount equal to approximately $120.1 million. The Company assumed the remaining 525,000 Preferred Units as well as 29,983 paid-in-kind (“PIK”) Preferred Units that were issued and outstanding at the close of the acquisition. 150,000 of these Preferred Units and a pro rata amount of the PIK units contain a mandatory redemption feature as further discussed below.

Mandatorily Redeemable Preferred Units

At the close of the Transaction, the Company effectuated the Third Amended and Restated Agreement of Limited Partnership of the Partnership (“Partnership LPA”), which among other things, provides for mandatory pro-rata redemptions by the Partnership of 50,000 Preferred Units at or prior to each of the six-, twelve- and eighteen-month anniversaries of the effectiveness of the Partnership LPA, for an aggregate of 150,000 Preferred Units over the eighteen-month period. Given this mandatory redemption feature and pursuant to ASC 480, liability classification is required for these 150,000 Preferred Units and the pro rata PIK units. The Company values the liability as of each reporting date and records the change in valuation in the “Other income (expenses)” in the Condensed Consolidated Statements of Operations.

During the first half of 2022, the Partnership declared and paid mandatorily redeemable Preferred Units holders distribution of $1.9 million and the Partnership redeemed 125,000 units along with 7,138 PIK units for an aggregate amount totaling $152.6 million. Gains of $5.1 million and $9.6 million were recorded for the redemption for the three and six months ended June 30, 2022, respectively. For the remaining 25,000 Preferred Units that contain the mandatory redemption feature, the Company recorded $30.7 million as liability in “Other Liabilities” of the Condensed Consolidated Balance Sheet as of June 30, 2022. These remaining units were subsequently redeemed in July 2022. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

Redeemable Noncontrolling Interest Preferred Units

The remaining 375,000 Preferred Units assumed on the Closing Date do not contain a mandatory redemption feature, and are accounted for on the Company’s Condensed Consolidated Balance Sheets as a redeemable noncontrolling interest classified as temporary equity in accordance with the terms of the Preferred Units, including the redemption rights with respect thereto. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company.

The Company applies a two-step approach to measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the Company’s net income in accordance with the terms of the Partnership LPA.

After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Series A Redemption Price (as defined in the Partnership LPA) calculated at the seventh anniversary of the closing of the Preferred Unit Offering. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price.

Activities related to Preferred Units for the six months ended June 30, 2022 are as follows:

	Units Outstanding	Amount (3)
	(In thousands, except for unit data)
Redeemable noncontrolling interest — Preferred Units, immediately upon Closing Date of Transaction(1)	396,417	$	462,717
Cash distribution paid to Preferred Unit limited partners	—	(6,937)
Distribution payable to Preferred Unit limited partners		(6,937)
Allocation of net income	—	17,420
Accreted redemption value adjustment	—	97,075
Redeemable noncontrolling interest — Preferred Units, as of June 30, 2022	396,417	563,338
Embedded derivative liability(2)		488
		$	563,826

(1)Included 21,417 PIK units on a pro rata basis.

(2)Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. Refer to Note 15—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period.

(3)As of June 30, 2022, the Redemption Price would have been based on an 11.08% internal rate of return, which would equate to a redemption value of $700.0 million.

On July 8, 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

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SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS

EQUITY AND WARRANTS

Redeemable Noncontrolling Interest — Common Unit Limited Partners

On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share, to Contributor. Please refer to “The Transaction” above.

The redemption option of the Common Unit is not legally detachable or separately exercisable from the instrument and is non-transferable, and the Common Unit is redeemable at the option of the holder. Therefore, the Common Unit is accounted for as redeemable noncontrolling interest and classified as temporary equity on the Company’s Condensed Consolidated Balance Sheet. During the first half of 2022, 5,550,000 common units were redeemed on a one-for-one basis for shares of Class A Common Stock and a corresponding number of shares of Class C Common Stock were cancelled. There were 94,450,000 Common Units and an equal number of Class C Common Stock issued and outstanding as of June 30, 2022. The Common Units fair value was approximately $3.25 billion as of June 30, 2022.

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

Upon Closing, the Company assumed certain Preferred Units that were issued and outstanding on acquisition date. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. Refer to Note 11—Series A Cumulative Redeemable Preferred Units for further discussion. In July 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

Public Warrants

As of June 30, 2022, there were 12,577,350 Public Warrants (as defined below) outstanding. Each whole public warrant entitles the holder to purchase one tenth of a share of Class A Common Stock at a price of $115.00 per share (the “Public Warrants”). The Public Warrants will expire on November 9, 2023 or upon redemption or liquidation. The Company may call the Public Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant with not less than 30 days’ notice provided to the Public Warrant holders. However, this redemption right can only be exercised if the reported last sale price of the Class A Common Stock equals or exceeds $180.00 per share for any 20-trading days within a 30-trading day period ending three business days prior to sending the notice of redemption to the Public Warrant holders.

Private Placement Warrants

As of June 30, 2022, there were 6,364,281 Private Placement Warrants (as defined below) outstanding, of which Apache holds 3,182,140. The private placement warrants will expire on November 9, 2023 and are identical to the Public Warrants discussed above, except (i) they will not be redeemable by the Company so long as they are held by the initial holders or their respective permitted transferees and (ii) they may be exercised by the holders on a cashless basis (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”).

The Company recorded a fair value of $0.1 million for the Public Warrants and a fair value of $0.1 million for the Private Warrants as of June 30, 2022 on the Condensed Consolidated Balance Sheet in other non-current liabilities. Refer to Note 15—Fair Value Measurement in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding valuation of the Warrants.

Dividend

On February 22, 2022, the Company entered into a Dividend and Distribution Reinvestment Agreement (the “Reinvestment Agreement”) with certain stockholders including BCP Raptor Aggregator, LP, BX Permian Pipeline Aggregator, LP, Buzzard Midstream LLC, APA Corporation Apache Midstream LLC, and certain individuals (each, a “Reinvestment Holder”). Under the Reinvestment Agreement, each Reinvestment Holder is obligated to reinvest at least 20% of all distributions on Common Units or dividends on shares of Class A Common Stock in the Company’s Class A Common Stock. Additionally, the Audit Committee and subsequently the Company’s Board of Directors (the “Board”) resolved that for the calendar year 2022, 100% of all distributions or dividends received by each Reinvestment Holder would be reinvested in newly issued shares of Class A Common Stock. As described in these Condensed Consolidated Financial Statements, as the context requires, dividends paid to holders of Class A Common Stock and distributions paid to holders of Common Units may be referred to collectively as “dividends.”

On May 17, 2022, the Company made cash dividend payments of $11.7 million to holders of Class A Common Stock and Common Units and $87.7 million was reinvested in shares of Class A Common Stock by each Reinvestment Holder.

On July 20, 2022, the Board declared a cash dividend of $0.75 per share on the Company’s Class A Common Stock and a distribution of $0.75 per Common Unit from the Partnership to the holders of Common Units. Dividends are payable on August 17, 2022. Certain holders of Class A Common Stock and Class C Common Stock will receive a cash dividend with the balance receiving additional shares of Class A Common Stock under the Reinvestment Agreement.

Stock Split

On May 19, 2022, the Company announced that its Board approved and declared a two-for-one stock split with respect to its Class A Common Stock and Class C Common Stock, in the form of a stock dividend (the “Stock Split”). The Stock Split was accomplished by distributing one additional share of Class A Common Stock for each share of Class A Common Stock outstanding and one additional share of Class C Common Stock for each share of Class C Common Stock outstanding. The additional shares of Common Stock were issued on June 8, 2022 to holders of record at the close of business on May 31, 2022.

All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the Stock Split.

  SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS

Prior to the Closing Date of the Transaction, the Partnership had 625,000 Preferred Units issued and outstanding. Immediately prior to the Closing, on February 22, 2022, the Partnership redeemed for cash, 100,000 Preferred Units in an amount equal to approximately $120.1 million. The Company assumed the remaining 525,000 Preferred Units as well as 29,983 paid-in-kind (“PIK”) Preferred Units that were issued and outstanding at the close of the acquisition. 150,000 of these Preferred Units and a pro rata amount of the PIK units contain a mandatory redemption feature as further discussed below.

Mandatorily Redeemable Preferred Units

At the close of the Transaction, the Company effectuated the Third Amended and Restated Agreement of Limited Partnership of the Partnership (“Partnership LPA”), which among other things, provides for mandatory pro-rata redemptions by the Partnership of 50,000 Preferred Units at or prior to each of the six-, twelve- and eighteen-month anniversaries of the effectiveness of the Partnership LPA, for an aggregate of 150,000 Preferred Units over the eighteen-month period. Given this mandatory redemption feature and pursuant to ASC 480, liability classification is required for these 150,000 Preferred Units and the pro rata PIK units. The Company values the liability as of each reporting date and records the change in valuation in the “Other income (expenses)” in the Condensed Consolidated Statements of Operations.

During the first half of 2022, the Partnership declared and paid mandatorily redeemable Preferred Units holders distribution of $1.9 million and the Partnership redeemed 125,000 units along with 7,138 PIK units for an aggregate amount totaling $152.6 million. Gains of $5.1 million and $9.6 million were recorded for the redemption for the three and six months ended June 30, 2022, respectively. For the remaining 25,000 Preferred Units that contain the mandatory redemption feature, the Company recorded $30.7 million as liability in “Other Liabilities” of the Condensed Consolidated Balance Sheet as of June 30, 2022. These remaining units were subsequently redeemed in July 2022. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

Redeemable Noncontrolling Interest Preferred Units

The remaining 375,000 Preferred Units assumed on the Closing Date do not contain a mandatory redemption feature, and are accounted for on the Company’s Condensed Consolidated Balance Sheets as a redeemable noncontrolling interest classified as temporary equity in accordance with the terms of the Preferred Units, including the redemption rights with respect thereto. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company.

The Company applies a two-step approach to measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the Company’s net income in accordance with the terms of the Partnership LPA.

After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Series A Redemption Price (as defined in the Partnership LPA) calculated at the seventh anniversary of the closing of the Preferred Unit Offering. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price.

Activities related to Preferred Units for the six months ended June 30, 2022 are as follows:

	Units Outstanding	Amount (3)
	(In thousands, except for unit data)
Redeemable noncontrolling interest — Preferred Units, immediately upon Closing Date of Transaction(1)	396,417	$	462,717
Cash distribution paid to Preferred Unit limited partners	—	(6,937)
Distribution payable to Preferred Unit limited partners		(6,937)
Allocation of net income	—	17,420
Accreted redemption value adjustment	—	97,075
Redeemable noncontrolling interest — Preferred Units, as of June 30, 2022	396,417	563,338
Embedded derivative liability(2)		488
		$	563,826

(1)Included 21,417 PIK units on a pro rata basis.

(2)Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. Refer to Note 15—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period.

(3)As of June 30, 2022, the Redemption Price would have been based on an 11.08% internal rate of return, which would equate to a redemption value of $700.0 million.

On July 8, 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

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SHARE-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]
SHARE-BASED COMPENSATION	SHARE-BASED COMPENSATIONThe Company previously issued incentive units, which included performance and service conditions, to certain employees and board members. The units consisted of Class A-1, Class A-2, and Class A-3 units. These units derived value from the Company’s certain wholly owned subsidiaries. Class A-1 and A-2 units would have vested upon either (i) the date of consummation of a change in control or (ii) the date that is 1-year following the consummation of the initial public offering (“IPO”) of the Company (or its successor) (collectively “Exit Events”). Class A-3 units would have vested upon a change in control, if the participants were employed at the time of the event, or upon termination of the participant by the Company. Immediately upon Closing, all outstanding Class A-1 and Class A-2 units were cancelled and exchanged for 5,300,000 shares (the “Class A Shares”), post two-for-one stock split, of the Company’s Class A Common Stock. These Class A Shares are issued and outstanding as they were distributed pro rata to all holders of Class A-1 and Class A-2 units by the Common Unit limited partners from the 50,000,000 common units, pre-stock-split, they received upon the Closing. The Common Unit limited partners redeemed Common Units needed for the Class A shares distribution upon the Closing. The Class A Shares are held in escrow and will vest over three to four years. Similarly, the Class A-3 units were exchanged for approximately 326,000, post two-for-one stock split, Class C Common Stock and Common Units (the “Class C Shares”) and will vest over four years. The Company also issued approximately 76,000, post two-for-one stock split, replacement restricted share awards (“Replacement Awards”) to new employees that transitioned from ALTM as part of the merger. These changes for all three share types established a new measurement date. The Class A Shares, Class C Shares and Replacement Awards were valued based on the Company’s publicly quoted stock price on the measurement date, which was the Closing Date of the Transaction. With respect to these shares, the Company recorded compensation expenses of $12.2 million and $18.3 million for the three and six months ended June 30, 2022, respectively, based on a straight line amortization of the associated awards’ fair value over the respective vesting life of the shares. With respect to the incentive units, no compensation expenses were recorded for the three and six months ended June 30, 2021, as the incentive units were considered non-vested prior to their cancellation and exchange for Class A or Class C Common Stock.

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INCOME TAXES

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company is subject to U.S. federal income tax and the Texas margin tax. Income tax expense included in the Condensed Consolidated Financial Statements in this Form 10-Q is as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
	2022			2022
	(In thousands)
Income before income taxes	$	131,610		$	153,675
Income tax expense	$	162		$	838
Effective tax rate (1)	0.12		%	0.55		%

(1) Prior to the Closing on February 22, 2022, BCP, the accounting acquirer, was organized as limited partnership and was not subject to the U.S. federal income tax for the three and six months ended June 30, 2021.

The effective tax rate for the three and six months ended June 30, 2022 was lower than the statutory rate mainly due to the impact of tax attributable to noncontrolling interests related to the Common Units and Preferred Units limited partners and valuation allowance.

Upon Closing, the Company assumed certain uncertain tax positions from ALTM. The Company accounts for income taxes in accordance with ASC 740—Income Taxes, which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements. Tax positions generally refer to a position taken in a previously filed income tax return or expected to be included in a tax return to be filed in the future that is reflected in the measurement of current and deferred income tax assets and liabilities. Reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:

(In thousands)	Amount
Balance at December 31, 2021	$	—
Increase related to ALTM acquisition	5,238
Reduction related to current year activities	(2,455)
Balance at June 30, 2022	$	2,783

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NET INCOME PER SHARE

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

NET INCOME PER SHARE

NET INCOME PER SHARE

The computation of basic and diluted net income per share for the periods presented in the Condensed Consolidated Financial Statements is shown in the tables below.

	Three Months Ended June 30,
	2022					2021
	Income		Weighted-average shares(3)	Per Share		Income		Weighted-average shares(3)	Per Share
	(In thousands, except per share data)
Basic:
Net income attributable to Class A common shareholders	$	6,438	39,297	$	0.16	$	—	—	$	—
Less: Net income available to participating unvested restricted Class A common shareholders(4)	(4,184)		—	$	—	—		—	$	—
Total net income attributable to Class A common shareholders	$	2,254	39,297	$	0.06	$	—	—	$	—
Effect of dilutive securities:
Unvested Class A common shares	—		32	$	—	—		—	$	—
Diluted(1)(2):
Net income attributable to Class A common shareholders	$	2,254	39,329	$	0.06	$	—	—	$	—

	Six Months Ended June 30,
	2022					2021
	Income		Weighted-average shares(3)	Per Share		Income		Weighted-average share (3)	Per Share
	(In thousands, except per share data)
Basic:
Net income attributable to Class A common shareholders	$	10,303	38,766	$	0.27	$	—	—	$	—
Less: Net income available to participating unvested restricted Class A common shareholders(4)	(4,184)		—	$	—	—		—	$	—
Total net income attributable to Class A common shareholders	$	6,119	38,766	$	0.16	$	—	—	$	—
Effect of dilutive securities:
Unvested Class A common shares	—		30	$	—	—		—	$	—
Diluted(1)(2):
Net income attributable to Class A common shareholders	$	6,119	38,796	$	0.16	$	—	—	$	—

(1)The effect of an assumed exchange of the outstanding Preferred Units and outstanding public and private warrants for shares of Class A Common Stock would have been anti-dilutive for all periods presented in which the Preferred Units and public and private warrants were outstanding.

(2)The effect of an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for all periods presented in which the Common Units were outstanding.

(3)Share amounts have been retroactively restated to reflect the Company’s two-for-one Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

(4)Represents dividends paid to unvested restricted Class A common shareholders.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities measured at fair value on a recurring basis include cash and cash equivalents, accrued receivables, accounts receivable, accounts receivable from affiliates, dividends and distributions payable, interest rate and commodity swap derivatives, and Company’s private and public warrants and an embedded derivative liability related to the issuance of Preferred Units.

Topic 820 establishes a framework for measuring fair value in U.S. GAAP, clarifies the definition of fair value within that framework, and requires disclosures about the use of fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Topic 820 provides a framework for measuring fair value, establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of the counterparty’s creditworthiness when valuing certain assets.

Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1 inputs). The three levels of the fair value hierarchy under Topic 820 are described below:

Level 1 inputs: Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs: Inputs, other than quoted prices in active markets, that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 inputs: Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable. Valuation under Level 3 generally involves a significant degree of judgment from management.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or inventory parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity.

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021:

	June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Mandatorily redeemable Preferred Units	$	—	$	—	$	30,717	$	30,717
Embedded derivative	—		—		488		488
Public warrants	126		—		—		126
Private warrants	—		—		95		95
Total liabilities	$	126	$	—	$	31,300	$	31,426

	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swaps	$	—	$	205	$	—	$	205
Interest rate derivatives	—		2,662		—		2,662
Total liabilities	$	—	$	2,867	$	—	$	2,867

The Company is exposed to certain risks arising from both its business operations and economic conditions, and the Company enters into certain derivative contracts to manage the exposures. Refer to Note 16—Derivatives and Hedging Activities in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further discussion related to commodity swaps and interest rate derivatives.

The Company bifurcated and recognized the embedded derivative associated with the Preferred Units related to the exchange option provided to the Preferred Unit holders under the terms of the Partnership LPA. The valuation of the embedded derivative, (using an income approach), was based on expected future interest rates using the Black-Karasinski model, the Company’s imputed interest rate of 5.88%, interest rate volatility of 39.51%, the expected timing of periodic cash distributions, the estimated timing for the potential exercise of the exchange option of 4.0 years and anticipated dividend yields of the Preferred Units. The Company recorded unrealized gains of $91.4 million and $88.6 million for the three and six months ended June 30, 2022, which was recorded as an “Unrealized gain on embedded derivative” in the Condensed Consolidated Statement of Operations. The Company has classified these recurring fair value measurements as Level 3 in the fair value hierarchy.

The carrying value of the Company’s Public Warrants are recorded at fair value based on quoted market prices, a Level 1 fair value measurement. The carrying value of the Company’s Private Placement Warrants are recorded at fair value determined using an option pricing model, a Level 3 fair value measurement, which is calculated based on key assumptions related to expected volatility of the Company’s common stock, an expected dividend yield, the remaining term of the warrants outstanding and the risk-free rate based on the U.S. Treasury yield curve in effect at the time of the valuation. These assumptions are estimated utilizing historical trends of the Company’s common stock, Public Warrants and other factors. The Company has recorded a liability of $0.2 million as of June 30, 2022. There was no change in fair value of the warrants since closing of the Transaction through reporting date.

The carrying amounts reported on the Condensed Consolidated Balance Sheets for the Company’s remaining financial assets and liabilities approximate fair value due to their short-term nature. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three and six months ended June 30, 2022 and 2021.

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DERIVATIVES AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING ACTIVITIES

DERIVATIVES AND HEDGING ACTIVITIES

The Company is exposed to certain risks arising from both its business operations and economic conditions, and it enters into certain derivative contracts to manage exposure to these risks. The Company did not elect to apply hedge accounting to these derivative contracts and recorded fair value of the derivatives on the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021.

Interest Rate Risk

The Company manages market risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and by using derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high credit-rating counterparties.

The Company’s objectives in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract.

In June 2022, all of BCP PHP, LLC’s (“BCP PHP”) outstanding interest rate swaps were terminated as BCP PHP’s outstanding term loan credit facility was extinguished on June 8, 2022. Refer to Note 6—Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements for additional information about the refinancing transactions.

The fair value or settlement value of the consolidated interest rate swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets. Interest rate swap derivative liabilities were nil and $2.7 million as of June 30, 2022 and December 31, 2021, respectively. The Company recorded cash settlements on interest rate swap derivatives of $12.0 million and $0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $11.3 and $1.5 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations. In addition, the Company recorded fair value adjustments of $2.4 million and $1.9 million for the change in fair value of the interest rate swap derivatives for the three months ended June 30, 2022 and 2021, respectively, and $14.0 million and $3.1 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations.

Commodity Price Risk

Similarly, in 2020 and 2021 BCP Raptor, LLC (“BCP I”) and BCP Raptor II, LLC (“BCP II”) had WTI crude hedges at a specific notional that provides for a fixed price for crude in the Permian Basin and Waha basis hub hedges on various notional quantities of gas that either provided for a fixed price differential of natural gas in the Permian Basin relative to the NYMEX natural gas contract or provided for a fixed price for natural gas in the Permian Basin.

All of the Company’s commodity swaps had reached maturity as of December 31, 2021. The fair value or settlement value of the swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheet. Commodity swap derivative liability was nil and $0.2 million as of June 30, 2022 and December 31, 2021, respectively. The Company recorded cash settlements on commodity swap derivatives of nil and $14.1 million for the three months ended June 30, 2022 and 2021, respectively, and $0.2 million and $14.8 million for the six months ended June 30, 2022 and 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations. In addition, the Company recorded fair value adjustments of $1.0 million and $16.5 million for the change in fair value of commodity swap derivatives for the three and six months ended June 30, 2021, respectively, in “Interest Expense” of the Condensed Consolidated Statements of Operations. No fair value adjustment recognized for the three and six months ended June 30, 2022.

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SEGMENTS

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

SEGMENTS

SEGMENTS

Our two operating segments represent the Company’s segments for which discrete financial information is available and is utilized on a regular basis by our chief operating decision maker (“CODM”) to make key operating decisions, assess performance and allocate resources. Our Chief Executive Officer is the CODM. These segments are strategic business units with differing products and services. No operating segments have been aggregated to form the reportable segments. Therefore, our two operating segments represent our reportable segments. The activities of each of our reportable segments from which the Company earns revenues and incurs expenses are described below:

•Midstream Logistics: The Midstream Logistics segment operates under three streams, 1) gas gathering and processing, 2) crude oil gathering, stabilization and storage services and 3) water gathering and disposal.

•Pipeline Transportation: The Pipeline Transportation segment consists of equity investment interests in four Permian Basin pipelines that access various points along the Texas Gulf Coast, and our Delaware Link Pipeline that is under development. The current operating pipelines transport crude oil, natural gas and NGLs to the Texas Gulf Coast.

Upon Closing, our CODM reviewed the Company and ALTM’s reporting segment activities. The Company then renamed its Gathering and Processing segment to Midstream Logistics and its Transmission segment to Pipeline Transportation. These name changes were made to better align segment activities with the name of the respective segment. There was no change in segment composition or structure for the three and six months ended June 30, 2022.

The following tables present the reconciliation of the segment profit measure as of and for the three and six months ended June 30, 2022 and 2021:

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the three months ended June 30, 2022	(In thousands)
Segment net income including noncontrolling interests	$	14,563	$	46,277	$	70,608	$	131,448
Add back:
Interest expense	20,641		942		3,764		25,347
Income tax expense	162		—		—		162
Depreciation and amortization	66,459		122		—		66,581
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		71,340		—		71,340
Share-based compensation	—		—		12,174		12,174
Loss (gain) on disposal of assets	8,580		—		(34)		8,546
(Gain) loss on debt extinguishment	27,983		(8)		—		27,975
Integration costs	579		—		4,707		5,286
Acquisition transaction costs	—		—		674		674
Other one-time costs or amortization	1,239		—		1,020		2,259
Deduct:
Gain on redemption of mandatorily redeemable Preferred units	—		—		5,087		5,087
Unrealized gain on embedded derivatives	—		—		91,448		91,448
Equity income from unconsolidated affiliates	—		47,786		—		47,786
Segment adjusted EBITDA	$	140,654	$	70,887	$	(3,622)	$	207,919

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the three months ended June 30, 2021	(In thousands)
Segment net income (loss) including noncontrolling interests	$	(24,222)	$	11,310	$	(2,454)	$	(15,366)
Add back:
Interest expense	27,829		4,778		—		32,607
Depreciation and amortization	57,038		128		—		57,166
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		21,717		—		21,717
Loss on disposal of assets	422		—		—		422
Gain on debt extinguishment	(60)		—		—		(60)
Other one-time costs or amortization	485		13		17		515
Producer settlement	6,827		—		—		6,827
Deduct:
Interest and other income	24		—		—		24
Equity income from unconsolidated affiliates	—		16,511		—		16,511
Segment adjusted EBITDA	$	68,743	$	21,435	$	(2,437)	$	87,741

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the six months ended June 30, 2022	(In thousands)
Segment net income including noncontrolling interests	$	23,749	$	75,412	$	53,676	$	152,837
Add back:
Interest expense	47,412		(672)		5,381		52,121
Income tax expense (benefit)	457		(39)		420		838
Depreciation and amortization	127,352		252		—		127,604
Contract assets amortization	896		—		—		896
Proportionate EMI EBITDA	—		112,081		—		112,081
Share-based compensation	—		—		18,304		18,304
Loss (gain) on disposal of assets	8,690		—		(34)		8,656
Loss on debt extinguishment	27,983		(8)		—		27,975
Integration costs	4,683		—		6,755		11,438
Acquisition transaction costs	4		—		6,346		6,350
Other one-time costs or amortization	2,157		—		1,297		3,454
Deduct:
Interest and other income	—		—		—		—
Gain on redemption of mandatorily redeemable Preferred units	—		—		9,580		9,580
Unrealized gain on embedded derivatives	—		—		88,562		88,562
Equity income from unconsolidated affiliates	—		75,703		—		75,703
Segment adjusted EBITDA	$	243,383	$	111,323	$	(5,997)	$	348,709

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the six months ended June 30, 2021	(In thousands)
Segment net income (loss) including noncontrolling interests	$	(16,027)	$	23,739	$	(4,942)	$	2,770
Add back:
Interest expense	55,285		2,632		—		57,917
Depreciation and amortization	112,880		257		—		113,137
Contract assets amortization	896		—		—		896
Proportionate EMI EBITDA	—		37,973		—		37,973
Loss on disposal of assets	454		—		—		454
Gain on debt extinguishment	(60)		—		—		(60)
Derivatives loss due to Winter Storm Uri	13,456		—		—		13,456
Other one-time costs or amortization	874		21		(52)		843
Producer settlement	6,827		—		—		6,827
Deduct:
Interest and other income	41		—		—		41
Equity income from unconsolidated affiliates	—		27,866		—		27,866
Segment adjusted EBITDA	$	174,544	$	36,756	$	(4,994)	$	206,306

(1) Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

(2) Results do not include legacy ALTM prior to February 22, 2022. Refer to Note 1 —Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further information on the Company’s basis of presentation. Adjusted EBITDA is a non-GAAP measure; please see Key Performance Metrics in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q, for a definition and reconciliation to the GAAP measure.

The following tables present the revenue for individual operating segment for the three and six months ended June 30, 2022 and 2021:

	Midstream Logistics		Pipeline Transportation		Consolidated
For the three months ended June 30, 2022	(In thousands)
Revenue	$	331,731	$	—	$	331,731
Other revenue	3,839		2		3,841
Total segment operating revenue	$	335,570	$	2	$	335,572

	Midstream Logistics		Pipeline Transportation		Consolidated
For the three months ended June 30, 2021	(In thousands)
Revenue	$	133,341	$	—	$	133,341
Other revenue	2,423		2		2,425
Total segment operating revenue	$	135,764	$	2	$	135,766

	Midstream Logistics		Pipeline Transportation		Consolidated
For the six months ended June 30, 2022	(In thousands)
Revenue	$	587,104	$	—	$	587,104
Other revenue	5,713		4		5,717
Total segment operating revenue	$	592,817	$	4	$	592,821

	Midstream Logistics		Pipeline Transportation		Consolidated
For the six months ended June 30, 2021	(In thousands)
Revenue	$	280,996	$	—	$	280,996
Other revenue	2,869		4		2,873
Total segment operating revenue	$	283,865	$	4	$	283,869

The following table presents total assets for each operating segment as of June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
Midstream Logistics	$	3,619,400	$	2,916,774
Pipeline Transportation	2,362,248		635,784
Segment total assets	5,981,648		3,552,558
Corporate and other	14,700		648
Total assets	$	5,996,348	$	3,553,206

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

In July 2022, the Company redeemed the remaining 400,000 Preferred Units along with 22,845 PIK units for an aggregate redemption price of $492.2 million. Following the July redemptions, there were no outstanding Preferred Units or PIK units.

On July 12, 2022, the Company filed a registration statement on Form S-3 with the SEC to register up to a maximum offering price of $400,000,000 of shares of Class A Common Stock, shares of preferred stock, depositary shares and warrants of the Company and debt securities of the Partnership and to register 107,580,912 shares of Class A Common Stock that may be offered and sold by the selling stockholders named in the registration statement Form S-3 filed from time to time on any exchange on which the shares of Class A Common Stock are listed.

On July 20, 2022, the Board declared a cash dividend of $0.75 per share on the Company’s Class A Common Stock which will be payable to stockholders on August 17, 2022. The Company, through its ownership of the general partner of the Partnership, declared a distribution of $0.75 per Common Unit from the Partnership to the holders of Common Units. Please refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional information.

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DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of PresentationThe accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. Certain reclassifications of prior year balances have been made to conform such amounts to current year presentation. These reclassifications have no impact on net income. All adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. All intercompany balances and transactions have been eliminated in consolidation.

Principles of Consolidation

Prior to the Closing, the Company’s financial statements that were filed with the SEC were derived from ALTM’s accounting records. As the Transaction was determined to be a reverse merger, BCP was considered as the accounting acquirer and ALTM was the legal acquirer. The accompanying Condensed Consolidated Financial Statements herein include (1) BCP’s net assets carried at historical value, (2) BCP’s historical results of operations prior to the Transaction, (3) the ALTM’s net assets carried at fair value as of the Closing Date and (4) the combined results of operations with the Company’s results presented within the Condensed Consolidated Financial Statements from February 22, 2022 going forward. Refer to Note 2—Business Combination to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion.

The Company completed a two-for-one Stock Split on June 8, 2022. All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the two-for-one Stock Split, except for the number of Common Units and shares of Class C Common Stock described above in relation to the Transaction, which are presented at pre-Stock-Split amounts. This presentation election is consistent with our previous public filings and the terms of the Contribution Agreement.

Use of Estimates

Use of Estimates

Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its condensed consolidated financial statements, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the valuation of derivatives, tangible and intangible assets, share-based compensation, contingent liabilities, mandatorily redeemable Preferred Units (as defined below) and noncontrolling interests.

Variable Interest Entity

Variable Interest Entity

The Company uses a qualitative approach in assessing the consolidation requirement for variable interest entities. The approach focuses on identifying which enterprise has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. In the event that the Company is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity would be consolidated in our financial statements. The Company has determined that it has significant influence over the operating and financial policies of the four pipeline entities in which it is invested, but does not exercise control over them; and hence, it accounts for these investments using the equity method. Refer to Note 9—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Redeemable Noncontrolling Interest

Redeemable Noncontrolling Interest — Common Units Limited Partners

Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share, to Contributor. Please refer to “The Transaction” above.

The Common Units are redeemable at the option of unit holders and accounted for in the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity. The Company records the redeemable noncontrolling interest at the higher of (i) its initial value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date. The redemption value was determined based on a 5-day volume weighted-average closing price of the Class A Common Stock. See discussion and additional details in Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Redeemable Noncontrolling Interest — Preferred Unit Limited Partners

The Partnership issued Series A Cumulative Redeemable Preferred Units (“Preferred Units”) on June 12, 2019. As the Transaction was accounted for as a reverse merger, the Company assumed certain Preferred Units that were issued and outstanding were assumed at Closing for accounting purposes. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company. In July 2022, the Company redeemed all outstanding redeemable noncontrolling interest Preferred Units. See Note 18—Subsequent Events in the Notes to our Condensed Consolidated Financial Statements for additional information.

The Preferred Units are accounted for on the Company’s Condensed Consolidated Balance Sheet as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units. Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s Condensed Consolidated Balance Sheet as a long-term liability embedded derivative.

Equity Method Interests

Equity Method InvestmentsThe Company follows the equity method of accounting when it does not exercise control over its equity interests, but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity investments are carried originally at acquisition cost, increased by the Company’s proportionate share of the equity interest’s net income and contributions made, and decreased by the Company’s proportionate share of the equity interest’s net losses and distributions received.Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets.

Inventory

InventoryOther current assets include condensate, residue gas and NGLs inventories that are valued at the lower of cost or market. At the end of each reporting period, the Partnership assesses the carrying value of inventory and makes any adjustments necessary to reduce the carrying value to the applicable net realizable value.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

In accordance with Financial Accounting Standards Board (“FASB”) ASC 360, Property, Plant and Equipment, long-lived assets, excluding goodwill, to be held and used by the Company are reviewed for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the assets have decreased below their carrying value. For long-lived assets to be held and used, the Company bases their evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present.

The Company’s management assesses whether there has been an impairment trigger, and if a trigger is identified, then the Company would perform an undiscounted cash flow test at the lowest level for which identifiable cash flows are independent of cash flows from other assets. If the sum of the undiscounted future net cash flows is less than the net book value of the property, an impairment loss is recognized for any excess of the property’s net book value over its estimated fair value.

Transactions with Affiliates

Transactions with AffiliatesThe accounts receivable from or payable to affiliates represent the net result of the Company’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache and its subsidiaries, who controlled the Company prior to the Transaction.

Net Income per Share

Net Income Per Share

Basic net income per share is calculated by dividing net income attributable to Class A common shareholders by the weighted-average number of shares of Class A Common Stock outstanding during the period. Class C Common Stock is excluded from the weighted-average shares outstanding for the calculation of basic net income per share, as holders of Class C Common Stock are not entitled to any dividends or liquidating distributions. No net income per share was computed for the three and six months ended June 30, 2021, as no Class A Common Stock was outstanding with respect to BCP as the accounting acquirer as of June 30, 2021.

The Company uses the “if-converted method” to determine the potential dilutive effect of (i) an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) for shares of Class A Common Stock, (ii) an assumed exercise of the outstanding public and private warrants for shares of Class A Common Stock and (iii) an assumed exchange of the outstanding Preferred Units for shares of Class A Common Stock. The dilutive effect of any earn-out consideration payable in shares is only included in periods for which the underlying conditions for the issuance are met.

Recently Adopted Accounting Pronouncement and Recent Accounting Pronouncement Not Yet Adopted

Recently Adopted Accounting Pronouncement

Effective January 1, 2022, the Company adopted ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value. With adoption of ASU 2021-08, the Company assumed contract liabilities at carrying value of $9.1 million upon Closing.

Effective January 1, 2022, the Company adopted ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 was issued to ease the potential accounting burden expected when global capital markets move away from LIBOR, the benchmark interest rate banks use to make short-term loans to each other. The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationship, and other transactions affected by

reference rate reform if certain criteria are met. Interest rate applied to the Company’s new debt resulting from the comprehensive refinance is based on Secured Overnight Financing Rate (“SOFR”), which is a broad measure of the cost of borrowing cash overnight collateralized by treasury securities. Refer to Note 6—Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements of this Form 10-Q for discussion of SOFR applicable to the Company’s debt structures.

Recent Accounting Pronouncement Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). The amendments in ASU 2022-03 clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments also require the following disclosures for equity securities subject to contractual sale restrictions: (1) The fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; (2) The nature and remaining duration of the restriction(s); (3) The circumstances that could cause a lapse in the restriction(s). This guidance is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the effect that ASU 2022-03 will have on its Consolidated Financial Statements.

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”). Current GAAP permits only prepayable financial assets and one or more beneficial interests secured by a portfolio of prepayable financial instruments to be included in a last-of-layer closed portfolio. The amendments in ASU 2022-01 allow nonprepayable financial assets also to be included in a closed portfolio hedged using the portfolio layer method. That expanded scope permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. The amendments in ASU 2022-01 also clarify the accounting for and promote consistency in the reporting of hedge basis adjustments applicable to both a single hedged layer and multiple hedged layers as follows: (1) an entity is required to maintain basis adjustments in an existing hedge on a closed portfolio basis (that is, not allocated to individual assets), (2) an entity is required to immediately recognize and present the basis adjustment associated with the amount of the designated layer that was breached in interest income. In addition, an entity is required to disclose that amount and the circumstances that led to the breach, (3) an entity is required to disclose the total amount of the basis adjustments in existing hedges as a reconciling amount if other areas of GAAP require the disaggregated disclosure of the amortized cost basis of assets included in the closed portfolio, and (4) an entity is prohibited from considering basis adjustments in an existing hedge when determining credit losses. The guidance is effective for public business entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in ASU 2017-02 for the corresponding period. The Company is currently evaluating the effect that ASU 2022-01 will have on its Consolidated Financial Statements.

Business Combination

The Transaction was accounted for as a business combination in accordance with ASC 805, which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. The Company also adopted ASU 2021-08, effective as of January 1, 2022, to record contract liabilities at their carrying value as of the acquisition date. Although the Company was the legal acquirer, BCP was determined to be the accounting acquirer and legal acquiree. As a result, BCP and its subsidiaries’ net assets were carried at historical value, acquired net assets were measured at fair value except contract liabilities being recorded at carrying value at the acquisition date, and results of operations of ALTM and its subsidiaries were included in the Company’s Condensed Consolidated Financial Statements from the Closing Date going forward.The preliminary purchase price allocation is based on an assessment of the fair value of the assets acquired and liabilities assumed in the acquisition using inputs that are not observable in the market and thus level 3 inputs. The fair value of the processing plant, gathering system and related facilities and equipment are based on market and cost approaches. The goodwill of $4.1 million relates to operational synergies. The value of the Preferred Units and assumed contingent liability was determined through a probability-weighted analysis of the expected future cash flows and other applicable valuation techniques. See additional details for Preferred Units in Note 11—Series A Cumulative Redeemable Preferred Units and contingent liabilities in Note 8—Commitments and Contingencies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, valuation of the underlying assets of the equity method investments and liabilities assumed. However, the Company is continuing its review of these matters during the measurement period, and if new information obtained about facts and circumstances that existed at the acquisition date identifies adjustments to the liabilities initially recognized, as well as any additional liabilities that existed at the acquisition date, the acquisition accounting will be revised to reflect the resulting adjustments to the provisional amounts initially recognized. The Company will finalize the purchase price allocation during the 12-month period following the acquisition date.

Revenue Recognition

Current and noncurrent contract liabilities are included in “Other Current Liabilities” and “Contract Liabilities,” respectively, of the Condensed Consolidated Balance Sheets. Current and noncurrent contract cost assets are included in “Prepaid and Other Current Assets” and “Deferred Charges and Other Assets,” respectively, of the Condensed Consolidated Balance Sheets. The Company amortizes these assets as cost of sales on a straight-line basis over the life of the associated long-term customer contract.

Property, Plant and Equipment

Property, plant and equipment are carried at cost or fair market value at the date of acquisition less accumulated depreciation. The cost basis of constructed assets includes materials, labor, and other direct costs. Major improvements or betterment are capitalized, while repairs that do not improve the life of the respective assets are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets.The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated.

Goodwill

Goodwill is tested at least annually as of December 31 of each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce fair value of a reporting unit below its carrying value.

Debt and Financing Cost

The aggregate fees, expenses, and original issue discount paid to obtain the notes totaled $21.6 million and were capitalized as debt issuance cost and included in the Condensed Consolidated Balance Sheets as a direct deduction to the NotesIn obtaining the Revolving Credit Agreement, the Partnership incurred fees and expenses totaling $7.8 million, which was capitalized and included in the Condensed Consolidated Balance Sheets as “Prepaid and other current assets” and “Deferred charges and other assets.the Partnership incurred fee and expenses totaled $7.6 million, which was capitalized as debt issuance cost and included in the Condensed Consolidated Balance Sheets as direct deduction to the Term Loan Credit FacilityAs of June 30, 2022, the unamortized debt issuance costs associated with the new and existing revolving credit facilities were included in the “Deferred charges and other assets” of the Condensed Consolidated Balance SheetsAs of December 31, 2021, the current and non-current portion of the unamortized debt issuance costs were included in the “Other non-current assets” and “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets. The amortization of the debt issuance costs was charged to interest expense for the periods presented.

Commitments and Contingencies

Pursuant to ASC 805, this earn-out consideration was a pre-existing contingency and accounted for as an assumed liability to the acquirer on acquisition dateThe Company determined the earn-out consideration to be classified as equity based on the settlement provision.

Equity and Warrants

Therefore, the Common Unit is accounted for as redeemable noncontrolling interest and classified as temporary equity on the Company’s Condensed Consolidated Balance Sheet.All corresponding per-share and share amounts for periods prior to June 8, 2022 have been retroactively restated in this Form 10-Q to reflect the Stock Split.The remaining 375,000 Preferred Units assumed on the Closing Date do not contain a mandatory redemption feature, and are accounted for on the Company’s Condensed Consolidated Balance Sheets as a redeemable noncontrolling interest classified as temporary equity in accordance with the terms of the Preferred Units, including the redemption rights with respect thereto. The Preferred Units are exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders upon the occurrence of specified events, unless otherwise redeemed by the Company.

Share-Based Compensation

The Class A Shares, Class C Shares and Replacement Awards were valued based on the Company’s publicly quoted stock price on the measurement date, which was the Closing Date of the Transaction. With respect to these shares, the Company recorded compensation expenses of $12.2 million and $18.3 million for the three and six months ended June 30, 2022, respectively, based on a straight line amortization of the associated awards’ fair value over the respective vesting life of the shares.

Income Tax

The Company accounts for income taxes in accordance with ASC 740—Income Taxes, which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements.

Fair Value Measurements

The Company’s financial assets and liabilities measured at fair value on a recurring basis include cash and cash equivalents, accrued receivables, accounts receivable, accounts receivable from affiliates, dividends and distributions payable, interest rate and commodity swap derivatives, and Company’s private and public warrants and an embedded derivative liability related to the issuance of Preferred Units.

Topic 820 establishes a framework for measuring fair value in U.S. GAAP, clarifies the definition of fair value within that framework, and requires disclosures about the use of fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Topic 820 provides a framework for measuring fair value, establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of the counterparty’s creditworthiness when valuing certain assets.

Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1 inputs). The three levels of the fair value hierarchy under Topic 820 are described below:

Level 1 inputs: Unadjusted, quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs: Inputs, other than quoted prices in active markets, that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 inputs: Prices or valuations that require unobservable inputs that are both significant to the fair value measurement and unobservable. Valuation under Level 3 generally involves a significant degree of judgment from management.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or inventory parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity.

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BUSINESS COMBINATION (Tables)

6 Months Ended

Jun. 30, 2022

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary estimated fair value of assets acquired and liabilities assumed in the Transaction in accordance with ASC 805:

(In thousands)	Amount
Cash and cash equivalent	$	13,401
Accounts receivable	1,919
Accounts receivable - affiliates	15,681
Property, plant, and equipment, net	634,923
Intangible assets, net	13,200
Investments in unconsolidated affiliates	1,755,000
Prepaid expense and other assets	8,225
Goodwill	4,081
Total assets acquired	2,446,430
Accrued expenses and other accrued liabilities	5,688
Long-term debt	657,000
Embedded derivative liabilities	89,050
Contract liabilities	9,102
Mandatory redeemable Preferred Units	200,667
Deferred tax liabilities	4,010
Contingent liabilities	4,451
Total liabilities assumed	969,968
Redeemable noncontrolling interest - Preferred Unit limited partners	462,717
Total consideration transferred	$	1,013,745

Schedule of Pro Forma Information

The unaudited supplemental pro forma financials are for informational purposes only and are not indicative of future results. The results below for the three and six months ended June 30, 2022 and 2021 combine the results of the Company and the Partnership, giving effect to the Transaction as if it had been completed on January 1, 2021.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
(In thousands)	Pro forma		Pro forma		Pro forma		Pro forma
Revenues	$	335,572	$	171,359	$	619,674	$	353,608
Net income including noncontrolling interest	$	132,159	$	18,845	$	145,627	$	35,647

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REVENUE RECOGNITION (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Summary of Disaggregation of Revenue

The following table presents a disaggregation of the Company’s revenue.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Gathering and processing services	$	102,080	$	62,242	$	182,525	$	129,904
Natural gas, NGLs and condensate sales	229,651		71,099		404,579		151,092
Other revenue	3,841		2,425		5,717		2,873
Total revenues and other	$	335,572	$	135,766	$	592,821	$	283,869

Schedule of Remaining Performance Obligation, Expected Timing of Satisfaction

The following table presents our estimated revenue from contracts with customers for remaining performance obligations that has not yet been recognized, representing our contractually committed revenues as of June 30, 2022:

	Amount
Fiscal Year	(In thousands)
Remaining of 2022	$	10,633
2023	43,177
2024	40,247
2025	49,182
2026	34,631
Thereafter	191,293
	$	369,163

Schedule of Contract with Customer, Contract Liability

The following table provides information about contract liabilities from contracts with customers as of June 30, 2022:

	Amount
	(In thousands)
Balance at December 31, 2021	$	14,756
Reclassification of beginning contract liabilities to revenue as a result of performance obligation being satisfied	(3,224)
Cash received and not recognized as revenue	17,517
Balance at June 30, 2022	29,049
Less: Current portion	6,150
Non-current portion	$	22,899

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PROPERTY, PLANT AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, plant and equipment, at carrying value, is as follows:

	June 30, 2022		December 31, 2021
	(In thousands)
Gathering, processing and transmission systems and facilities	$	2,788,565	$	2,121,434
Vehicles	7,194		6,090
Computers and equipment	3,796		4,271
Less: accumulated depreciation	(402,994)		(337,030)
Total depreciable assets, net	2,396,561		1,794,765
Construction in progress	64,332		24,888
Land	20,179		19,626
Total property, plant and equipment, net	$	2,481,072	$	1,839,279

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GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, net are comprised of the following:

	June 30, 2022		December 31, 2021
	(In thousands)
Customer contracts	$	1,136,728	$	1,135,963
Right of way assets	120,401		99,345
Less accumulated amortization	(509,408)		(449,259)
Total amortizable intangible assets, net	$	747,721	$	786,049

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DEBT AND FINANCING COSTS - (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of Long-term Debt

The following table summarizes the Company’s debt obligations as of June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
$2.0 billion unsecured term loan	$	2,000,000	$	—
$1.0 billion 2030 senior unsecured notes	1,000,000		—
$1.25 billion term loan	—		1,175,417
$690 million term loan	—		639,393
$513 million term loan	—		479,377
$125 million revolving line of credit	—		52,000
Total Long-term debt	3,000,000		2,346,187
Less: Debt issuance costs, net(1)	(28,730)		(38,485)
	2,971,270		2,307,702
Less: Current portion, net	—		(54,280)
Long-term portion of debt and finance lease obligations, net	$	2,971,270	$	2,253,422

(1) Excluded unamortized debt issuance cost related to the Revolving Credit Facility. Unamortized debt issuance cost associated with the Revolving Credit Facility was $7.7 million and $2.2 million as of June 30, 2022 and December 31, 2021, respectively, and were included in the “Deferred charges and other assets” of the Condensed Consolidated Balance Sheets.

Schedule of Financing Costs, Net

The table below presents the components of the Company’s financing costs, net of capitalized interest:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Capitalized interest	$	197	$	275	$	301	$	486
Debt issuance costs	3,149		3,332		6,538		6,637
Interest expense	22,001		29,000		45,282		50,794
Total financing costs, net of capitalized interest	$	25,347	$	32,607	$	52,121	$	57,917

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ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Components of Accrued Expenses

The following table provides detail of the Company’s accrued expenses at June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
Accrued product purchases	$	199,292	$	118,364
Accrued taxes	13,077		4,299
Accrued salaries, vacation, and related benefits	4,799		2,113
Accrued capital expenditures	11,255		2,995
Accrued interest expenses	3,787		—
Accrued other expenses	13,741		7,872
Total accrued expenses	$	245,951	$	135,643

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EQUITY METHOD INVESTMENTS (Tables)

6 Months Ended

Jun. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investments

As of June 30, 2022, the Company owned investments in the following long-haul pipeline entities in the Permian Basin. These investments were accounted for using the equity method of accounting. For each equity method investment (“EMI”) pipeline entity, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the EMI pipeline. The table below presents the ownership percentages and investment balances held by the Company for each entity:

	Ownership	June 30, 2022		December 31, 2021
		(In thousands)
Permian Highway Pipeline LLC(1)	53.3%	$	1,416,318	$	626,477
Breviloba, LLC (Shin Oak)	33.0%	465,444		—
Gulf Coast Express Pipeline LLC	16.0%	460,549		—
		$	2,342,311	$	626,477

(1) Ownership for Permian Highway Pipeline LLC (“PHP”) was 53.3% and 26.7% as of June 30, 2022 and December 31, 2021, respectively.

The following table presents the activity in the Company’s EMIs for the six months ended June 30, 2022:

		Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Total(2)
	(In thousands)
Balance at December 31, 2021		$	626,477	$	—	$	—	$	626,477
Acquisitions		815,000		470,000		470,000		1,755,000
Contributions		2,675		—		—		2,675
Distributions		(79,508)		(16,868)		(21,168)		(117,544)
Equity income, net(1)		51,674		12,312		11,717		75,703
Balance at June 30, 2022		$	1,416,318	$	465,444	$	460,549	$	2,342,311

(1)For the six months ended June 30, 2022, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $3.3 million from Permian Highway Pipeline LLC, $0.3 million from Breviloba, LLC and $2.7 million from Gulf Coast Express Pipeline, LLC.

(2)The EMIs acquired in the Transaction are included in the results from February 22, 2022 to June 30, 2022, and this is also the case for the additional 26.67% of PHP that was acquired in the Transaction. The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements of this Form 10-Q, for further information on the Company’s basis of presentation.

Schedule of Equity Method Investment, Summarized Financial Information

The following tables represent selected statement of operations data for the Company’s EMI pipelines (on a 100 percent basis) for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30,
	2022						2021
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Permian Highway Pipeline LLC(1)		Breviloba, LLC(1)		Gulf Coast Express Pipeline LLC(1)
	(In thousands)
Revenues	$	98,808	$	50,091	$	90,769	$	99,366	$	47,447	$	90,703
Operating income	61,294		25,359		64,816		62,444		28,002		60,766
Net income	61,307		25,284		64,461		62,329		27,645		60,551

	Six Months Ended June 30,
	2022					2021
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC	Permian Highway Pipeline LLC(1)		Breviloba, LLC(1)		Gulf Coast Express Pipeline LLC(1)
	(In thousands)
Revenues	$	196,664	$	98,612	180,742	$	197,214	$	81,976	$	179,072
Operating income	120,770		51,672		128,259	105,024		45,302		120,874
Net income	120,520		51,651		127,990	104,909		45,004		120,319

(1) For the three and six months ended June 30, 2021, the Company only had equity interest in Permian Highway Pipeline LLC.

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SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS (Tables)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Schedule of Preferred Units

Activities related to Preferred Units for the six months ended June 30, 2022 are as follows:

	Units Outstanding	Amount (3)
	(In thousands, except for unit data)
Redeemable noncontrolling interest — Preferred Units, immediately upon Closing Date of Transaction(1)	396,417	$	462,717
Cash distribution paid to Preferred Unit limited partners	—	(6,937)
Distribution payable to Preferred Unit limited partners		(6,937)
Allocation of net income	—	17,420
Accreted redemption value adjustment	—	97,075
Redeemable noncontrolling interest — Preferred Units, as of June 30, 2022	396,417	563,338
Embedded derivative liability(2)		488
		$	563,826

(1)Included 21,417 PIK units on a pro rata basis.

(2)Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. Refer to Note 15—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period.

(3)As of June 30, 2022, the Redemption Price would have been based on an 11.08% internal rate of return, which would equate to a redemption value of $700.0 million.

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INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Schedule of Total Income Tax Provision (Benefit)

The Company is subject to U.S. federal income tax and the Texas margin tax. Income tax expense included in the Condensed Consolidated Financial Statements in this Form 10-Q is as follows:

	Three Months Ended June 30,			Six Months Ended June 30,
	2022			2022
	(In thousands)
Income before income taxes	$	131,610		$	153,675
Income tax expense	$	162		$	838
Effective tax rate (1)	0.12		%	0.55		%

(1) Prior to the Closing on February 22, 2022, BCP, the accounting acquirer, was organized as limited partnership and was not subject to the U.S. federal income tax for the three and six months ended June 30, 2021.

Schedule of Unrecognized Tax Benefits

Reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:

(In thousands)	Amount
Balance at December 31, 2021	$	—
Increase related to ALTM acquisition	5,238
Reduction related to current year activities	(2,455)
Balance at June 30, 2022	$	2,783

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NET INCOME PER SHARE (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Schedule of Net (Loss) Per Share

The computation of basic and diluted net income per share for the periods presented in the Condensed Consolidated Financial Statements is shown in the tables below.

	Three Months Ended June 30,
	2022					2021
	Income		Weighted-average shares(3)	Per Share		Income		Weighted-average shares(3)	Per Share
	(In thousands, except per share data)
Basic:
Net income attributable to Class A common shareholders	$	6,438	39,297	$	0.16	$	—	—	$	—
Less: Net income available to participating unvested restricted Class A common shareholders(4)	(4,184)		—	$	—	—		—	$	—
Total net income attributable to Class A common shareholders	$	2,254	39,297	$	0.06	$	—	—	$	—
Effect of dilutive securities:
Unvested Class A common shares	—		32	$	—	—		—	$	—
Diluted(1)(2):
Net income attributable to Class A common shareholders	$	2,254	39,329	$	0.06	$	—	—	$	—

	Six Months Ended June 30,
	2022					2021
	Income		Weighted-average shares(3)	Per Share		Income		Weighted-average share (3)	Per Share
	(In thousands, except per share data)
Basic:
Net income attributable to Class A common shareholders	$	10,303	38,766	$	0.27	$	—	—	$	—
Less: Net income available to participating unvested restricted Class A common shareholders(4)	(4,184)		—	$	—	—		—	$	—
Total net income attributable to Class A common shareholders	$	6,119	38,766	$	0.16	$	—	—	$	—
Effect of dilutive securities:
Unvested Class A common shares	—		30	$	—	—		—	$	—
Diluted(1)(2):
Net income attributable to Class A common shareholders	$	6,119	38,796	$	0.16	$	—	—	$	—

(1)The effect of an assumed exchange of the outstanding Preferred Units and outstanding public and private warrants for shares of Class A Common Stock would have been anti-dilutive for all periods presented in which the Preferred Units and public and private warrants were outstanding.

(2)The effect of an assumed exchange of outstanding Common Units (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for all periods presented in which the Common Units were outstanding.

(3)Share amounts have been retroactively restated to reflect the Company’s two-for-one Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

(4)Represents dividends paid to unvested restricted Class A common shareholders.

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021:

	June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Mandatorily redeemable Preferred Units	$	—	$	—	$	30,717	$	30,717
Embedded derivative	—		—		488		488
Public warrants	126		—		—		126
Private warrants	—		—		95		95
Total liabilities	$	126	$	—	$	31,300	$	31,426

	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swaps	$	—	$	205	$	—	$	205
Interest rate derivatives	—		2,662		—		2,662
Total liabilities	$	—	$	2,867	$	—	$	2,867

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SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following tables present the reconciliation of the segment profit measure as of and for the three and six months ended June 30, 2022 and 2021:

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the three months ended June 30, 2022	(In thousands)
Segment net income including noncontrolling interests	$	14,563	$	46,277	$	70,608	$	131,448
Add back:
Interest expense	20,641		942		3,764		25,347
Income tax expense	162		—		—		162
Depreciation and amortization	66,459		122		—		66,581
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		71,340		—		71,340
Share-based compensation	—		—		12,174		12,174
Loss (gain) on disposal of assets	8,580		—		(34)		8,546
(Gain) loss on debt extinguishment	27,983		(8)		—		27,975
Integration costs	579		—		4,707		5,286
Acquisition transaction costs	—		—		674		674
Other one-time costs or amortization	1,239		—		1,020		2,259
Deduct:
Gain on redemption of mandatorily redeemable Preferred units	—		—		5,087		5,087
Unrealized gain on embedded derivatives	—		—		91,448		91,448
Equity income from unconsolidated affiliates	—		47,786		—		47,786
Segment adjusted EBITDA	$	140,654	$	70,887	$	(3,622)	$	207,919

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the three months ended June 30, 2021	(In thousands)
Segment net income (loss) including noncontrolling interests	$	(24,222)	$	11,310	$	(2,454)	$	(15,366)
Add back:
Interest expense	27,829		4,778		—		32,607
Depreciation and amortization	57,038		128		—		57,166
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		21,717		—		21,717
Loss on disposal of assets	422		—		—		422
Gain on debt extinguishment	(60)		—		—		(60)
Other one-time costs or amortization	485		13		17		515
Producer settlement	6,827		—		—		6,827
Deduct:
Interest and other income	24		—		—		24
Equity income from unconsolidated affiliates	—		16,511		—		16,511
Segment adjusted EBITDA	$	68,743	$	21,435	$	(2,437)	$	87,741

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the six months ended June 30, 2022	(In thousands)
Segment net income including noncontrolling interests	$	23,749	$	75,412	$	53,676	$	152,837
Add back:
Interest expense	47,412		(672)		5,381		52,121
Income tax expense (benefit)	457		(39)		420		838
Depreciation and amortization	127,352		252		—		127,604
Contract assets amortization	896		—		—		896
Proportionate EMI EBITDA	—		112,081		—		112,081
Share-based compensation	—		—		18,304		18,304
Loss (gain) on disposal of assets	8,690		—		(34)		8,656
Loss on debt extinguishment	27,983		(8)		—		27,975
Integration costs	4,683		—		6,755		11,438
Acquisition transaction costs	4		—		6,346		6,350
Other one-time costs or amortization	2,157		—		1,297		3,454
Deduct:
Interest and other income	—		—		—		—
Gain on redemption of mandatorily redeemable Preferred units	—		—		9,580		9,580
Unrealized gain on embedded derivatives	—		—		88,562		88,562
Equity income from unconsolidated affiliates	—		75,703		—		75,703
Segment adjusted EBITDA	$	243,383	$	111,323	$	(5,997)	$	348,709

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
For the six months ended June 30, 2021	(In thousands)
Segment net income (loss) including noncontrolling interests	$	(16,027)	$	23,739	$	(4,942)	$	2,770
Add back:
Interest expense	55,285		2,632		—		57,917
Depreciation and amortization	112,880		257		—		113,137
Contract assets amortization	896		—		—		896
Proportionate EMI EBITDA	—		37,973		—		37,973
Loss on disposal of assets	454		—		—		454
Gain on debt extinguishment	(60)		—		—		(60)
Derivatives loss due to Winter Storm Uri	13,456		—		—		13,456
Other one-time costs or amortization	874		21		(52)		843
Producer settlement	6,827		—		—		6,827
Deduct:
Interest and other income	41		—		—		41
Equity income from unconsolidated affiliates	—		27,866		—		27,866
Segment adjusted EBITDA	$	174,544	$	36,756	$	(4,994)	$	206,306

(1) Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable or (iii) have not been allocated to a reportable segment for the purpose of evaluating their performance, including certain general and administrative expense items.

(2) Results do not include legacy ALTM prior to February 22, 2022. Refer to Note 1 —Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q, for further information on the Company’s basis of presentation. Adjusted EBITDA is a non-GAAP measure; please see Key Performance Metrics in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q, for a definition and reconciliation to the GAAP measure.

The following tables present the revenue for individual operating segment for the three and six months ended June 30, 2022 and 2021:

	Midstream Logistics		Pipeline Transportation		Consolidated
For the three months ended June 30, 2022	(In thousands)
Revenue	$	331,731	$	—	$	331,731
Other revenue	3,839		2		3,841
Total segment operating revenue	$	335,570	$	2	$	335,572

	Midstream Logistics		Pipeline Transportation		Consolidated
For the three months ended June 30, 2021	(In thousands)
Revenue	$	133,341	$	—	$	133,341
Other revenue	2,423		2		2,425
Total segment operating revenue	$	135,764	$	2	$	135,766

	Midstream Logistics		Pipeline Transportation		Consolidated
For the six months ended June 30, 2022	(In thousands)
Revenue	$	587,104	$	—	$	587,104
Other revenue	5,713		4		5,717
Total segment operating revenue	$	592,817	$	4	$	592,821

	Midstream Logistics		Pipeline Transportation		Consolidated
For the six months ended June 30, 2021	(In thousands)
Revenue	$	280,996	$	—	$	280,996
Other revenue	2,869		4		2,873
Total segment operating revenue	$	283,865	$	4	$	283,869

The following table presents total assets for each operating segment as of June 30, 2022 and December 31, 2021:

	June 30, 2022		December 31, 2021
	(In thousands)
Midstream Logistics	$	3,619,400	$	2,916,774
Pipeline Transportation	2,362,248		635,784
Segment total assets	5,981,648		3,552,558
Corporate and other	14,700		648
Total assets	$	5,996,348	$	3,553,206

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DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The Transaction (Details)	Jun. 08, 2022	Jun. 30, 2022 $ / shares shares	Feb. 22, 2022 $ / shares shares	Dec. 31, 2021 $ / shares shares
Schedule Of Organization [Line Items]
Percent of common stock, issued and outstanding, owned			5.00%
Class C Common Stock
Schedule Of Organization [Line Items]
Common stock, shares issued (in shares)		94,450,000	50,000,000	100,000,000
Common stock, par value (in USD per share) | $ / shares		$ 0.0001	$ 0.0001	$ 0.0001
Class A Common Stock
Schedule Of Organization [Line Items]
Common stock, shares issued (in shares)		40,550,555		0
Common stock, par value (in USD per share) | $ / shares		$ 0.0001	$ 0.0001	$ 0.0001
Common Stock | Class C Common Stock
Schedule Of Organization [Line Items]
Stock split, conversion ratio	2
Common Stock | Class A Common Stock
Schedule Of Organization [Line Items]
Stock split, conversion ratio	2
Altus Midstream LP
Schedule Of Organization [Line Items]
Common stock, shares issued (in shares)			50,000,000
BCP Raptor Holdco, LLC
Schedule Of Organization [Line Items]
Percent of common stock, issued and outstanding, owned			75.00%
Apache Midstream LLC
Schedule Of Organization [Line Items]
Percent of common stock, issued and outstanding, owned			20.00%

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DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Redeemable Noncontrolling Interest (Details) - $ / shares	Jun. 30, 2022	Feb. 22, 2022	Dec. 31, 2021
Class C Common Stock
Class of Stock [Line Items]
Common stock, shares issued (in shares)	94,450,000	50,000,000	100,000,000
Common stock, par value (in USD per share)	$ 0.0001	$ 0.0001	$ 0.0001
Altus Midstream LP
Class of Stock [Line Items]
Common stock, shares issued (in shares)		50,000,000

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DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($)		3 Months Ended				6 Months Ended
		Jun. 30, 2022		Jun. 30, 2021		Jun. 30, 2022		Jun. 30, 2021	Feb. 22, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Inventory		$ 13,000,000				$ 13,000,000				$ 2,100,000
Impairment of long-lived assets		0		$ 0		0		$ 0
Accounts receivable, affiliates		20,200,000				20,200,000
Revenue from affiliate		30,500,000				46,200,000
Accrued expense due to affiliate		$ 200,000				$ 200,000
Basic (in USD per share)	[1]	$ 0.06		$ 0		$ 0.16		$ 0
Diluted (in USD per share)		$ 0.06	[1]	$ 0	[1]	$ 0.16	[1]	$ 0
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract liability		$ 29,049,000				$ 29,049,000				$ 14,756,000
Class A Common Stock
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Shares outstanding (in shares)				0				0
Accounting Standards Update 2021-08
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract liability									$ 9,100,000

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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BUSINESS COMBINATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Feb. 22, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill	$ 4,081		$ 4,081			$ 0
BCP and BCP GP
Business Acquisition [Line Items]
Goodwill	4,100		4,100		$ 4,081
Acquisition-related transaction costs	700	$ 2,200	6,400	$ 31,100
Reversal of acquisition related expenses	$ 700		$ 19,500
Class C Common Stock
Business Acquisition [Line Items]
Common stock, shares issued (in shares)	94,450,000		94,450,000		50,000,000	100,000,000
Common stock, par value (in USD per share)	$ 0.0001		$ 0.0001		$ 0.0001	$ 0.0001
Altus Midstream LP
Business Acquisition [Line Items]
Common stock, shares issued (in shares)					50,000,000

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BUSINESS COMBINATION - Allocation of Acquisition Costs to Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Feb. 22, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill	$ 4,081		$ 0
BCP and BCP GP
Business Acquisition [Line Items]
Cash and cash equivalent		$ 13,401
Accounts receivable		1,919
Accounts receivable - affiliates		15,681
Property, plant, and equipment, net		634,923
Intangible assets, net		13,200
Investments in unconsolidated affiliates		1,755,000
Prepaid expense and other assets		8,225
Goodwill	$ 4,100	4,081
Total assets acquired		2,446,430
Accrued expenses and other accrued liabilities		5,688
Long-term debt		657,000
Embedded derivative liabilities		89,050
Contract liabilities		9,102
Mandatory redeemable Preferred Units		200,667
Deferred tax liabilities		4,010
Contingent liabilities		4,451
Total liabilities assumed		969,968
Redeemable noncontrolling interest - Preferred Unit limited partners		462,717
Total consideration transferred		$ 1,013,745

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BUSINESS COMBINATION - Pro Forma (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Business Combination and Asset Acquisition [Abstract]
Revenues	$ 335,572	$ 171,359	$ 619,674	$ 353,608
Net income including noncontrolling interest	$ 132,159	$ 18,845	$ 145,627	$ 35,647

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REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Total operating revenues	[1]	$ 335,572	$ 135,766	$ 592,821	$ 283,869
Gathering and processing services
Disaggregation of Revenue [Line Items]
Total operating revenues		102,080	62,242	182,525	129,904
Natural gas, NGLs and condensate sales
Disaggregation of Revenue [Line Items]
Total operating revenues		229,651	71,099	404,579	151,092
Other revenue
Disaggregation of Revenue [Line Items]
Total operating revenues	[1]	$ 3,841	$ 2,425	$ 5,717	$ 2,873

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Total operating revenues	[1]	$ 335,572	$ 135,766	$ 592,821	$ 283,869
Capitalized contract cost		17,500		17,500		$ 18,400
Amortization of contract costs		400	400	896	896
Minimum Volume Commitments
Disaggregation of Revenue [Line Items]
Total operating revenues		$ 300	$ 0	$ 300	$ 2,500

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 369,163
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 10,633
Expected timing of satisfaction, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 43,177
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 40,247
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 49,182
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 34,631
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 191,293
Expected timing of satisfaction, period

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REVENUE RECOGNITION - Contract Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Contract with Customer, Liability [Roll Forward]
Beginning balance	$ 14,756
Reclassification of beginning contract liabilities to revenue as a result of performance obligation being satisfied	(3,224)
Cash received and not recognized as revenue	17,517
Ending balance	29,049
Less: Current portion	6,150
Non-current portion	$ 22,899	$ 11,674

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PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation	$ (402,994)		$ (402,994)		$ (337,030)
Total depreciable assets, net	2,396,561		2,396,561		1,794,765
Total property, plant and equipment, net	2,481,072		2,481,072		1,839,279
Depreciation expense	36,600	$ 26,600	67,500	$ 52,200
Gas Gathering and Processing Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	2,788,565		2,788,565		2,121,434
Vehicles
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	7,194		7,194		6,090
Computer Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	3,796		3,796		4,271
Construction in progress
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	64,332		64,332		24,888
Land
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	$ 20,179		$ 20,179		$ 19,626

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GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Feb. 22, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill	$ 4,081,000		$ 4,081,000			$ 0
Finite-Lived Intangible Assets [Line Items]
Initial term			10 years
Option to renewal			10 years
Percent of original consideration paid	130.00%		130.00%
Amortization of intangible assets	$ 30,000,000	$ 30,500,000	$ 60,100,000	$ 60,900,000
Impairment of intangible assets	0	$ 0	$ 0	$ 0
Right of way assets
Finite-Lived Intangible Assets [Line Items]
Useful life			10 years
Minimum
Finite-Lived Intangible Assets [Line Items]
Remaining term			1 year
Maximum
Finite-Lived Intangible Assets [Line Items]
Remaining term			20 years
BCP and BCP GP
Business Acquisition [Line Items]
Goodwill	$ 4,100,000		$ 4,100,000		$ 4,081,000

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GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Asset (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Less accumulated amortization	$ (509,408)	$ (449,259)
Total amortizable intangible assets, net	747,721	786,049
Customer contracts
Finite-Lived Intangible Assets [Line Items]
Total amortizable intangible assets, gross	1,136,728	1,135,963
Right of way assets
Finite-Lived Intangible Assets [Line Items]
Total amortizable intangible assets, gross	$ 120,401	$ 99,345

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DEBT AND FINANCING COSTS - Additional Information (Details) - USD ($)			3 Months Ended		6 Months Ended
	Jun. 15, 2027	Jun. 08, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Deferred financing costs			$ 28,730,000		$ 28,730,000		$ 38,485,000
Gain (loss) on extinguishment of debt			(27,975,000)	$ 60,000	(27,975,000)	$ 60,000
Debt, fair value			2,950,000,000		2,950,000,000		$ 2,340,000,000
Amortization of deferred financing costs			3,149,000	$ 3,332,000	6,538,000	$ 6,637,000
Revolving Credit Facility | One-Month SOFR
Debt Instrument [Line Items]
Effective percentage		1.00%
Revolving Credit Facility | One-Month SOFR | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		0.25%
Revolving Credit Facility | One-Month SOFR | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.00%
Revolving Credit Facility | One, Three or Six-Month SOFR
Debt Instrument [Line Items]
Effective percentage		0.10%
Revolving Credit Facility | One, Three or Six-Month SOFR | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.25%
Revolving Credit Facility | One, Three or Six-Month SOFR | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		2.00%
Revolving Credit Facility | Overnight Bank Funding Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		0.50%
Term Loan Credit Facility | One-Month SOFR
Debt Instrument [Line Items]
Effective percentage		1.00%
Term Loan Credit Facility | One-Month SOFR | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		0.25%
Term Loan Credit Facility | One-Month SOFR | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.00%
Term Loan Credit Facility | One, Three or Six-Month SOFR
Debt Instrument [Line Items]
Effective percentage		0.10%
Term Loan Credit Facility | One, Three or Six-Month SOFR | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.25%
Term Loan Credit Facility | One, Three or Six-Month SOFR | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		2.00%
Term Loan Credit Facility | Overnight Bank Funding Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		0.50%
Additional Percent Added | Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)		0.05%
If Neither of the Sustainability Performance Targets as Set Forth | Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)		0.05%
If Only One of the Sustainability Performance Targets as Set Forth | Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)		0.00%
If Both of the Sustainability Performance Targets as Set Forth | Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)		(0.05%)
Senior Notes
Debt Instrument [Line Items]
Deferred financing costs			19,300,000		$ 19,300,000
Senior Notes | 5.875% Senior Notes Due 2030
Debt Instrument [Line Items]
Face amount		$ 1,000,000,000
Stated percentage		5.875%
Debt instrument, redemption price, percentage					99.588%
Fee, expense, and original issue discounts			21,600,000		$ 21,600,000
Senior Notes | 5.875% Senior Notes Due 2030 | Forecast
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)	0.25%
Senior Notes | 5.875% Senior Notes Due 2030 | Forecast | Additional Increase if Sustainability Performance Targets are Met
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)	0.083%
Unsecured Debt | Revolving Credit Facility
Debt Instrument [Line Items]
Debt maximum borrowing capacity		$ 1,250,000,000
Debt instrument incurred fees and expenses		$ 7,800,000
Debt outstanding			0		0
Unsecured Debt | Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Line of credit facility, unused capacity, commitment fee percentage		0.15%
Unsecured Debt | Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Line of credit facility, unused capacity, commitment fee percentage		0.35%
Unsecured Debt | Term Loan Credit Facility
Debt Instrument [Line Items]
Deferred financing costs			$ 7,600,000		7,600,000
Debt maximum borrowing capacity		$ 2,000,000,000
Line of Credit
Debt Instrument [Line Items]
Gain (loss) on extinguishment of debt					$ 28,000,000
Term Loan | Additional Percent Added
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)		0.05%
Term Loan | If Neither of the Sustainability Performance Targets as Set Forth
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)		0.05%
Term Loan | If Only One of the Sustainability Performance Targets as Set Forth
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)		0.00%
Term Loan | If Both of the Sustainability Performance Targets as Set Forth
Debt Instrument [Line Items]
Debt instrument, interest rate, increase (decrease)		(0.05%)

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DEBT AND FINANCING COSTS - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Total Long-term debt	$ 3,000,000	$ 2,346,187
Less: Debt issuance costs, net	(28,730)	(38,485)
Debt outstanding	2,971,270	2,307,702
Less: Current portion, net	0	(54,280)
Long-term debt, net	2,971,270	2,253,422
$2.0 billion unsecured term loan
Debt Instrument [Line Items]
Face amount	2,000,000
$1.0 billion 2030 senior unsecured notes
Debt Instrument [Line Items]
Face amount	1,000,000
Total Long-term debt	1,000,000	0
$1.25 billion term loan
Debt Instrument [Line Items]
Face amount	1,250,000
$690 million term loan
Debt Instrument [Line Items]
Face amount	690,000
$513 million term loan
Debt Instrument [Line Items]
Face amount	513,000
$125 million revolving line of credit
Debt Instrument [Line Items]
Debt maximum borrowing capacity	125,000
$1.25 billion unsecured revolving credit facility | Revolving Credit Facility
Debt Instrument [Line Items]
Unamortized debt issuance cost	7,700	2,200
Term Loan | $2.0 billion unsecured term loan
Debt Instrument [Line Items]
Total Long-term debt	2,000,000	0
Term Loan | $1.25 billion term loan
Debt Instrument [Line Items]
Total Long-term debt	0	1,175,417
Term Loan | $690 million term loan
Debt Instrument [Line Items]
Total Long-term debt	0	639,393
Term Loan | $513 million term loan
Debt Instrument [Line Items]
Total Long-term debt	0	479,377
Line of Credit | $125 million revolving line of credit
Debt Instrument [Line Items]
Total Long-term debt	$ 0	$ 52,000

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DEBT AND FINANCING COSTS - Schedule of Financing Costs, Net of Capitalized Interest (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Debt Disclosure [Abstract]
Capitalized interest	$ 197	$ 275	$ 301	$ 486
Debt issuance costs	3,149	3,332	6,538	6,637
Interest expense	22,001	29,000	45,282	50,794
Total financing costs, net of capitalized interest	$ 25,347	$ 32,607	$ 52,121	$ 57,917

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ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued product purchases	$ 199,292	$ 118,364
Accrued taxes	13,077	4,299
Accrued salaries, vacation, and related benefits	4,799	2,113
Accrued capital expenditures	11,255	2,995
Accrued interest expenses	3,787	0
Accrued other expenses	13,741	7,872
Accrued expenses	$ 245,951	$ 135,643

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Feb. 22, 2022	Jun. 11, 2019	Jun. 30, 2022	Dec. 31, 2021
Loss Contingencies [Line Items]
Loss contingency accrual			$ 0	$ 0
Permian Gas
Loss Contingencies [Line Items]
Maximum annual amount to be paid		$ 60,500,000
Consideration transferred		$ 3,900,000
Contingent liabilities			0	$ 800,000
Altus Midstream LP | Class A Common Stock
Loss Contingencies [Line Items]
Contingent liabilities	$ 4,500,000
Equity interest issuable (in shares)	2,500,000
Altus Midstream LP | Class A Common Stock | Price Option One
Loss Contingencies [Line Items]
Equity interest issuable (in shares)	1,250,000
Trading period	30 days
Stock price trigger (in USD per share)	$ 140.00
Threshold trading days	20 days
Altus Midstream LP | Class A Common Stock | Price Option Two
Loss Contingencies [Line Items]
Equity interest issuable (in shares)	1,250,000
Trading period	30 days
Stock price trigger (in USD per share)	$ 160.00
Threshold trading days	20 days
Winter Storm Uri
Loss Contingencies [Line Items]
Outstanding receivable			$ 19,600,000

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EQUITY METHOD INVESTMENTS - Information of Equity Method Investments (Details) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Feb. 22, 2022	Dec. 31, 2021
Schedule of Equity Method Investments [Line Items]
Equity method interests		$ 2,342,311,000		$ 2,342,311,000			$ 626,477,000
Difference between carrying amount and underlying equity		414,300,000		414,300,000			0
Capitalized interest		12,200,000		12,200,000			$ 12,800,000
Movement In Equity Method Interests [Roll Forward]
Beginning balance				626,477,000
Acquisitions				1,755,000,000
Contributions				2,675,000
Distributions				(117,544,000)
Equity income, net	[1]	47,786,000	$ 16,511,000	75,703,000	$ 27,866,000
Ending balance		$ 2,342,311,000		$ 2,342,311,000
Permian Highway Pipeline (“PHP”)
Movement In Equity Method Interests [Roll Forward]
Ownership percentage by noncontrolling owners						26.67%
Permian Highway Pipeline LLC
Schedule of Equity Method Investments [Line Items]
Ownership percentage		53.30%		53.30%			26.70%
Equity method interests		$ 1,416,318,000		$ 1,416,318,000			$ 626,477,000
Movement In Equity Method Interests [Roll Forward]
Beginning balance				626,477,000
Acquisitions				815,000,000
Contributions				2,675,000
Distributions				(79,508,000)
Equity income, net				51,674,000
Ending balance		$ 1,416,318,000		1,416,318,000
Amortization				$ (3,300,000)
Breviloba, LLC (Shin Oak)
Schedule of Equity Method Investments [Line Items]
Ownership percentage		33.00%		33.00%
Equity method interests		$ 465,444,000		$ 465,444,000			0
Movement In Equity Method Interests [Roll Forward]
Beginning balance				0
Acquisitions				470,000,000
Contributions				0
Distributions				(16,868,000)
Equity income, net				12,312,000
Ending balance		$ 465,444,000		465,444,000
Amortization				$ (300,000)
Gulf Coast Express Pipeline LLC
Schedule of Equity Method Investments [Line Items]
Ownership percentage		16.00%		16.00%
Equity method interests		$ 460,549,000		$ 460,549,000			$ 0
Movement In Equity Method Interests [Roll Forward]
Beginning balance				0
Acquisitions				470,000,000
Contributions				0
Distributions				(21,168,000)
Equity income, net				11,717,000
Ending balance		$ 460,549,000		460,549,000
Amortization				$ (2,700,000)
EPIC Crude Holdings, LP
Schedule of Equity Method Investments [Line Items]
Ownership percentage		15.00%		15.00%

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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EQUITY METHOD INVESTMENTS - Summarized Financial Information of Equity Method Investments (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Schedule of Equity Method Investments [Line Items]
Operating income	[1]	$ 40,611	$ 644	$ 59,676	$ 32,198
Net income	[1]	131,448	(15,366)	152,837	2,770
Permian Highway Pipeline LLC
Schedule of Equity Method Investments [Line Items]
Revenues		98,808	99,366	196,664	197,214
Operating income		61,294	62,444	120,770	105,024
Net income		61,307	62,329	120,520	104,909
Breviloba, LLC
Schedule of Equity Method Investments [Line Items]
Revenues		50,091	47,447	98,612	81,976
Operating income		25,359	28,002	51,672	45,302
Net income		25,284	27,645	51,651	45,004
Gulf Coast Express Pipeline LLC
Schedule of Equity Method Investments [Line Items]
Revenues		90,769	90,703	180,742	179,072
Operating income		64,816	60,766	128,259	120,874
Net income		$ 64,461	$ 60,551	$ 127,990	$ 120,319

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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EQUITY AND WARRANTS (Details)					3 Months Ended		4 Months Ended		6 Months Ended
	Jul. 20, 2022 $ / shares	Jun. 08, 2022	May 19, 2022	May 17, 2022 USD ($)	Jun. 30, 2022 USD ($) $ / shares shares		Jun. 30, 2022 USD ($) $ / shares shares		Jun. 30, 2022 USD ($) $ / shares shares		Mar. 31, 2022 shares	[2]	Feb. 22, 2022 $ / shares shares	Dec. 31, 2021 $ / shares shares		Jun. 30, 2021 shares	[1],[2]	Mar. 31, 2021 shares	[2]	Dec. 31, 2020 shares	[1]
Class of Stock [Line Items]
Notice period to redeem warrants									30 days
Threshold trading days									20 days
Trading period									30 days
Derivatives fair value adjustment | $							$ 0
Percent of distributions or dividends reinvested in newly issued Class A shares													100.00%
Dividends, common stock, cash | $					$ 28,536,000				$ 28,536,000
Public warrants
Class of Stock [Line Items]
Number of warrant outstanding (in shares)					12,577,350		12,577,350		12,577,350
Redemption price of warrants (in USD per share) | $ / shares					$ 0.01		$ 0.01		$ 0.01
Derivatives fair value adjustment | $									$ 100,000
Private warrants
Class of Stock [Line Items]
Number of warrant outstanding (in shares)					6,364,281		6,364,281		6,364,281
Derivatives fair value adjustment | $									$ 100,000
Class A Common Stock
Class of Stock [Line Items]
Common stock, shares issued (in shares)					40,550,555		40,550,555		40,550,555					0
Common stock, par value (in USD per share) | $ / shares					$ 0.0001		$ 0.0001		$ 0.0001				$ 0.0001	$ 0.0001
Common stock, redemption ratio									1
Common stock, shares outstanding (in shares)					40,550,555		40,550,555		40,550,555					0
Warrant exercise price (in USD per share) | $ / shares					$ 115.00		$ 115.00		$ 115.00
Percent of required investment													20.00%
Dividends, common stock, cash | $				$ 87,700,000
Stock split, additional share issued for each share outstanding (in shares)			1
Class A Common Stock | Subsequent Event
Class of Stock [Line Items]
Dividends declared (in USD per share) | $ / shares	$ 0.75
Class A Common Stock | Public warrants
Class of Stock [Line Items]
Class of warrant or right, purchase ratio for common stock					0.1		0.1		0.1
Class C Common Stock
Class of Stock [Line Items]
Common stock, shares issued (in shares)					94,450,000		94,450,000		94,450,000				50,000,000	100,000,000
Common stock, par value (in USD per share) | $ / shares					$ 0.0001		$ 0.0001		$ 0.0001				$ 0.0001	$ 0.0001
Common stock, shares outstanding (in shares)					94,450,000		94,450,000		94,450,000					100,000,000
Stock split, additional share issued for each share outstanding (in shares)			1
Common Stock
Class of Stock [Line Items]
Stock price trigger (in USD per share) | $ / shares					$ 180.00		$ 180.00		$ 180.00
Dividends, cash | $				$ 11,700,000
Common Stock | Class A Common Stock
Class of Stock [Line Items]
Common stock, shares outstanding (in shares)					40,551,000	[1],[2]	40,551,000	[1],[2]	40,551,000	[1],[2]	37,973,000			0	[1]	0		0		0
Stock split, conversion ratio		2
Common Stock | Class C Common Stock
Class of Stock [Line Items]
Stock redeemed (in shares)					70,000	[2]			5,550,000	[1]
Common stock, shares outstanding (in shares)					94,450,000	[1],[2]	94,450,000	[1],[2]	94,450,000	[1],[2]	94,520,000			100,000,000		100,694,000		100,694,000		101,198,000
Stock split, conversion ratio		2
Altus Midstream LP
Class of Stock [Line Items]
Common stock, shares issued (in shares)													50,000,000
Apache | Private warrants
Class of Stock [Line Items]
Number of warrant outstanding (in shares)					3,182,140		3,182,140		3,182,140
The Partnership | Subsequent Event
Class of Stock [Line Items]
Distribution declared (in USD per share) | $ / shares	$ 0.75

[1] Share amounts have been retroactively restated to reflect the Company’s Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

[2] Share amounts have been retroactively restated to reflect the Company’s Stock Split. Refer to Note 10—Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Additional Information (Details) - USD ($) $ in Thousands				3 Months Ended		6 Months Ended
		Mar. 28, 2022	Feb. 22, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Class of Stock [Line Items]
Gain on redemption of mandatorily redeemable Preferred Units	[1]			$ 5,087	$ 0	$ 9,580	$ 0
Noncurrent liabilities				3,057,093		3,057,093		$ 2,305,433
Prior to Eighteen-Month Period
Class of Stock [Line Items]
Stock redeemed (in shares)			50,000
Over Eighteen-Month Period
Class of Stock [Line Items]
Stock redeemed (in shares)			150,000
Mandatory Redemption Feature
Class of Stock [Line Items]
Stock redeemed (in shares)			150,000
Without Mandatory Redemption Feature
Class of Stock [Line Items]
Temporary equity, shares outstanding (in shares)			375,000
Preferred Unit limited partners
Class of Stock [Line Items]
Number of preferred units sold (in shares)			625,000
Stock redeemed (in shares)			100,000
Stock redeemed value			$ 120,100			152,600
Shares outstanding (in shares)			525,000
Distribution declared and paid to mandatorily preferred units holders						1,900
Noncurrent liabilities				$ 30,700		$ 30,700
Temporary equity, shares outstanding (in shares)			396,417	396,417		396,417
Preferred Unit limited partners | Partnership LPA [Member]
Class of Stock [Line Items]
Stock redeemed (in shares)						125,000
Gain on redemption of mandatorily redeemable Preferred Units				$ 5,100		$ 9,600
Preferred Unit limited partners | Mandatory Redemption Feature
Class of Stock [Line Items]
Stock redeemed (in shares)		25,000
Paid-in-Kind Units
Class of Stock [Line Items]
Shares outstanding (in shares)			29,983
Paid-in-Kind Units | Partnership LPA [Member]
Class of Stock [Line Items]
Stock redeemed (in shares)						7,138

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Activity Related to Preferred Units (Details) - USD ($) $ in Thousands		3 Months Ended		4 Months Ended	6 Months Ended
	Feb. 22, 2022	Jun. 30, 2022		Jun. 30, 2022	Jun. 30, 2022		Dec. 31, 2021
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance					$ 0
Ending balance		$ 563,338		$ 563,338	563,338
Embedded derivative liability		$ 488		$ 488	$ 488		$ 0
Paid-in-kind (in shares)					21,417
With Initial Rate of Return
Increase (Decrease) in Temporary Equity [Roll Forward]
Stock redeemed value					$ 700,000
Preferred Unit limited partners
Movement In Preferred Units [Roll Forward]
Redeemable noncontrolling interest - preferred units: beginning of period (in shares)				396,417
Redeemable noncontrolling interest - preferred units: end of period (in shares)	396,417	396,417		396,417	396,417
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance				$ 462,717
Cash distribution paid to Preferred Unit limited partners				(6,937)
Distribution payable to Preferred Unit limited partners		$ 6,937	[1]	6,937	$ 6,937	[2]
Allocation of net income				17,420
Accreted redemption value adjustment				97,075
Ending balance	$ 462,717	563,338		563,338	563,338
Embedded derivative liability		488		488	488
Redeemable noncontrolling interest, including embedded derivative liability		$ 563,826		$ 563,826	$ 563,826
Redemption, internal rate of return		11.08%		11.08%	11.08%
Stock redeemed value	$ 120,100				$ 152,600

[1] Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

[2] Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 11—Series A Cumulative Redeemable Preferred Units in the Notes to the Condensed Consolidated Financial Statements.

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SHARE-BASED COMPENSATION (Details) - USD ($)		3 Months Ended		6 Months Ended
	Feb. 22, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation		$ 12,200,000	$ 0	$ 18,304,000	$ 0
New Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issued (in shares)				76,000
Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares issued (in shares)		40,550,555		40,550,555		0
Class A Common Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period				3 years
Class A Common Stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period				4 years
Class C Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares issued (in shares)	50,000,000	94,450,000		94,450,000		100,000,000
Award vesting period				4 years
Altus Midstream LP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares issued (in shares)	50,000,000
Class A-1 and Class A-2 Units | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued for exchange (in shares)	5,300,000
Class A-3 Units | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued for exchange (in shares)	326,000

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INCOME TAXES - Income Tax Expense (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Income before income taxes	[1]	$ 131,610	$ (15,366)	$ 153,675	$ 2,770
Income tax expense	[1]	$ 162	$ 0	$ 838	$ 0
Effective tax rate		0.12%		0.55%

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance at December 31, 2021	$ 0
Increase related to ALTM acquisition	5,238
Reduction related to current year activities	(2,455)
Balance at June 30, 2022	$ 2,783

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NET INCOME PER SHARE (Details) $ / shares in Units, shares in Thousands, $ in Thousands			3 Months Ended				6 Months Ended
		Jun. 08, 2022	Jun. 30, 2022 USD ($) $ / shares shares		Jun. 30, 2021 USD ($) $ / shares shares		Jun. 30, 2022 USD ($) $ / shares shares		Jun. 30, 2021 USD ($) $ / shares shares
Basic:
Net income attributable to Class A common shareholders	[1]		$ 6,438		$ 0		$ 10,303		$ 0
Net income attributable to Class A common shareholders (in shares) | shares	[1],[2]		39,297		0		38,766		0
Net income attributable to Class A common shareholders (in dollars per share) | $ / shares			$ 0.16		$ 0		$ 0.27		$ 0
Less: Net income available to participating unvested restricted Class A common shareholders(4)			$ (4,184)		$ 0		$ (4,184)		$ 0
Net income attributable to vested Class A common shareholders			$ 2,254		$ 0		$ 6,119		$ 0
Net income attributable to vested Class A common shareholders (in USD per share) | $ / shares	[1]		$ 0.06		$ 0		$ 0.16		$ 0
Effect of dilutive securities:
Unvested Class A common shares			$ 0		$ 0		$ 0		$ 0
Replacement awards (in shares) | shares			32		0		30		0
Replacement awards (in USD per share) | $ / shares			$ 0		$ 0		$ 0		$ 0
Diluted:
Net income attributable to Class A Common Shareholders			$ 2,254		$ 0		$ 6,119		$ 0
Net income (loss) attributable to Class A common shareholders (in shares) | shares	[1],[2]		39,329		0		38,796		0
Net income (loss) attributable to Class A common shareholders (in USD per share) | $ / shares			$ 0.06	[1]	$ 0	[1]	$ 0.16	[1]	$ 0
Common Stock | Class A Common Stock
Equity, Class of Treasury Stock [Line Items]
Stock split, conversion ratio		2

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

[2] Share amounts have been retroactively restated to reflect the Company’s Stock Split (as defined in Note 10—Equity and Warrants), which was effected on June 8, 2022. Refer to Note 10 – Equity and Warrants in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Liabilities
Embedded derivative liabilities	$ 488	$ 0
Warrants outstanding, fair value	200
Total liabilities	3,363,050	2,546,358
Total liabilities	0	2,700
Fair Value, Measurements, Recurring
Liabilities
Total liabilities	31,426
Total liabilities		2,867
Fair Value, Measurements, Recurring | Public warrants
Liabilities
Warrants outstanding, fair value	126
Fair Value, Measurements, Recurring | Private warrants
Liabilities
Warrants outstanding, fair value	95
Fair Value, Measurements, Recurring | Mandatorily redeemable Preferred Units
Liabilities
Mandatorily redeemable Preferred Units	30,717
Fair Value, Measurements, Recurring | Embedded derivative
Liabilities
Embedded derivative liabilities	488
Fair Value, Measurements, Recurring | Commodity swaps
Liabilities
Total liabilities		205
Fair Value, Measurements, Recurring | Interest rate derivatives
Liabilities
Total liabilities		2,662
Fair Value, Measurements, Recurring | Level 1
Liabilities
Total liabilities	126
Total liabilities		0
Fair Value, Measurements, Recurring | Level 1 | Public warrants
Liabilities
Warrants outstanding, fair value	126
Fair Value, Measurements, Recurring | Level 1 | Private warrants
Liabilities
Warrants outstanding, fair value	0
Fair Value, Measurements, Recurring | Level 1 | Mandatorily redeemable Preferred Units
Liabilities
Mandatorily redeemable Preferred Units	0
Fair Value, Measurements, Recurring | Level 1 | Embedded derivative
Liabilities
Embedded derivative liabilities	0
Fair Value, Measurements, Recurring | Level 1 | Commodity swaps
Liabilities
Total liabilities		0
Fair Value, Measurements, Recurring | Level 1 | Interest rate derivatives
Liabilities
Total liabilities		0
Fair Value, Measurements, Recurring | Level 2
Liabilities
Total liabilities	0
Total liabilities		2,867
Fair Value, Measurements, Recurring | Level 2 | Public warrants
Liabilities
Warrants outstanding, fair value	0
Fair Value, Measurements, Recurring | Level 2 | Private warrants
Liabilities
Warrants outstanding, fair value	0
Fair Value, Measurements, Recurring | Level 2 | Mandatorily redeemable Preferred Units
Liabilities
Mandatorily redeemable Preferred Units	0
Fair Value, Measurements, Recurring | Level 2 | Embedded derivative
Liabilities
Embedded derivative liabilities	0
Fair Value, Measurements, Recurring | Level 2 | Commodity swaps
Liabilities
Total liabilities		205
Fair Value, Measurements, Recurring | Level 2 | Interest rate derivatives
Liabilities
Total liabilities		2,662
Fair Value, Measurements, Recurring | Level 3
Liabilities
Total liabilities	31,300
Total liabilities		0
Fair Value, Measurements, Recurring | Level 3 | Public warrants
Liabilities
Warrants outstanding, fair value	0
Fair Value, Measurements, Recurring | Level 3 | Private warrants
Liabilities
Warrants outstanding, fair value	95
Fair Value, Measurements, Recurring | Level 3 | Mandatorily redeemable Preferred Units
Liabilities
Mandatorily redeemable Preferred Units	30,717
Fair Value, Measurements, Recurring | Level 3 | Embedded derivative
Liabilities
Embedded derivative liabilities	$ 488
Fair Value, Measurements, Recurring | Level 3 | Commodity swaps
Liabilities
Total liabilities		0
Fair Value, Measurements, Recurring | Level 3 | Interest rate derivatives
Liabilities
Total liabilities		$ 0

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FAIR VALUE MEASUREMENTS - Additional Information (Details)		3 Months Ended		4 Months Ended	6 Months Ended
		Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrealized gain on embedded derivative	[1]	$ 91,448,000	$ 0		$ 88,562,000	$ 0
Warrants outstanding, fair value		$ 200,000		$ 200,000	$ 200,000
Change in fair value of warrants				$ 0
Level 3 | Risk Free Interest Rate | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded derivative liability, measurement input		0.0588		0.0588	0.0588
Level 3 | Interest Rate Volatility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded derivative liability, measurement input		0.3951		0.3951	0.3951
Expected timing until exercise of exchange option					4 years

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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DERIVATIVES AND HEDGING ACTIVITIES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	$ 0		$ 0		$ 2,700,000
Derivative cash settlement			(11,115,000)	$ 16,297,000
Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Derivative cash settlement	12,000,000	$ (700,000)	11,300,000	(1,500,000)
Unrealized gains	2,400,000		14,000,000	3,100,000
Unrealized losses		1,900,000
Commodity Swap
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	0		0		$ 200,000
Derivative cash settlement	0	(14,100,000)	(200,000)	(14,800,000)
Unrealized gains	0		0
Unrealized losses	$ 0	$ 1,000,000	$ 0	$ 16,500,000

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SEGMENTS (Details)		3 Months Ended		6 Months Ended
		Jun. 30, 2022 USD ($) pipeline stream	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) Segment pipeline stream	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Segment Reporting [Abstract]
Number of operating segments | Segment				2
Segment Reporting Information [Line Items]
Net income including noncontrolling interests	[1]	$ 131,448,000	$ (15,366,000)	$ 152,837,000	$ 2,770,000
Income tax expense	[1]	162,000	0	838,000	0
Depreciation and amortization	[1]	66,581,000	57,166,000	127,604,000	113,137,000
Share-based compensation		12,200,000	0	18,304,000	0
Loss (gain) on disposal of assets	[1]	8,546,000	422,000	8,656,000	454,000
(Gain) loss on debt extinguishment		27,975,000	(60,000)	27,975,000	(60,000)
Interest and other income	[1]	0	26,000	250,000	563,000
Unrealized gain (loss) on embedded derivative	[1]	91,448,000	0	88,562,000	0
Equity income from unconsolidated affiliates	[1]	47,786,000	16,511,000	75,703,000	27,866,000
Assets		5,996,348,000		5,996,348,000		$ 3,553,206,000
Operating Segments
Segment Reporting Information [Line Items]
Assets		$ 5,981,648,000		$ 5,981,648,000		3,552,558,000
Operating Segments | Midstream Logistics
Segment Reporting Information [Line Items]
Number of streams in which a segment operates | stream		3		3
Net income including noncontrolling interests		$ 14,563,000	(24,222,000)	$ 23,749,000	(16,027,000)
Interest expense		20,641,000	27,829,000	47,412,000	55,285,000
Income tax expense		162,000		457,000
Depreciation and amortization		66,459,000	57,038,000	127,352,000	112,880,000
Contract assets amortization		448,000	448,000	896,000	896,000
Proportionate EMI EBITDA		0	0	0	0
Share-based compensation		0		0
Loss (gain) on disposal of assets		8,580,000	422,000	8,690,000	454,000
(Gain) loss on debt extinguishment		27,983,000	(60,000)	27,983,000	(60,000)
Integration costs		579,000		4,683,000
Acquisition transaction costs		0		4,000
Other one-time costs or amortization		1,239,000	485,000	2,157,000	874,000
Producer settlement			6,827,000		6,827,000
Interest and other income			24,000	0	41,000
Gain on redemption of mandatorily redeemable Preferred units		0		0
Unrealized gain (loss) on embedded derivative		0		0	(13,456,000)
Equity income from unconsolidated affiliates		0	0	0	0
Segment adjusted EBITDA		140,654,000	68,743,000	243,383,000	174,544,000
Revenue from contract with customer		335,570,000	135,764,000	592,817,000	283,865,000
Assets		3,619,400,000		3,619,400,000		2,916,774,000
Operating Segments | Midstream Logistics | Product and Service
Segment Reporting Information [Line Items]
Revenue from contract with customer		331,731,000	133,341,000	587,104,000	280,996,000
Operating Segments | Midstream Logistics | Other revenue
Segment Reporting Information [Line Items]
Revenue from contract with customer		$ 3,839,000	2,423,000	$ 5,713,000	2,869,000
Operating Segments | Pipeline Transportation
Segment Reporting Information [Line Items]
Number of pipelines with equity investment interest | pipeline		4		4
Net income including noncontrolling interests		$ 46,277,000	11,310,000	$ 75,412,000	23,739,000
Interest expense		942,000	4,778,000	(672,000)	2,632,000
Income tax expense		0		(39,000)
Depreciation and amortization		122,000	128,000	252,000	257,000
Contract assets amortization		0	0	0	0
Proportionate EMI EBITDA		71,340,000	21,717,000	112,081,000	37,973,000
Share-based compensation		0		0
Loss (gain) on disposal of assets		0	0	0	0
(Gain) loss on debt extinguishment		(8,000)	0	(8,000)	0
Integration costs		0		0
Acquisition transaction costs		0		0
Other one-time costs or amortization		0	13,000	0	21,000
Producer settlement			0		0
Interest and other income			0	0	0
Gain on redemption of mandatorily redeemable Preferred units		0		0
Unrealized gain (loss) on embedded derivative		0		0	0
Equity income from unconsolidated affiliates		47,786,000	16,511,000	75,703,000	27,866,000
Segment adjusted EBITDA		70,887,000	21,435,000	111,323,000	36,756,000
Revenue from contract with customer		2,000	2,000	4,000	4,000
Assets		2,362,248,000		2,362,248,000		635,784,000
Operating Segments | Pipeline Transportation | Product and Service
Segment Reporting Information [Line Items]
Revenue from contract with customer		0	0	0	0
Operating Segments | Pipeline Transportation | Other revenue
Segment Reporting Information [Line Items]
Revenue from contract with customer		2,000	2,000	4,000	4,000
Corporate and Other
Segment Reporting Information [Line Items]
Net income including noncontrolling interests		70,608,000	(2,454,000)	53,676,000	(4,942,000)
Interest expense		3,764,000	0	5,381,000	0
Income tax expense		0		420,000
Depreciation and amortization		0	0	0	0
Contract assets amortization		0	0	0	0
Proportionate EMI EBITDA		0	0	0	0
Share-based compensation		12,174,000		18,304,000
Loss (gain) on disposal of assets		(34,000)	0	(34,000)	0
(Gain) loss on debt extinguishment		0	0	0	0
Integration costs		4,707,000		6,755,000
Acquisition transaction costs		674,000		6,346,000
Other one-time costs or amortization		1,020,000	17,000	1,297,000	(52,000)
Producer settlement			0		0
Interest and other income			0	0	0
Gain on redemption of mandatorily redeemable Preferred units		5,087,000		9,580,000
Unrealized gain (loss) on embedded derivative		91,448,000		88,562,000	0
Equity income from unconsolidated affiliates		0	0	0	0
Segment adjusted EBITDA		(3,622,000)	(2,437,000)	(5,997,000)	(4,994,000)
Assets		14,700,000		14,700,000		$ 648,000
Consolidated
Segment Reporting Information [Line Items]
Net income including noncontrolling interests		131,448,000	(15,366,000)	152,837,000	2,770,000
Interest expense		25,347,000	32,607,000	52,121,000	57,917,000
Income tax expense		162,000		838,000
Depreciation and amortization		66,581,000	57,166,000	127,604,000	113,137,000
Contract assets amortization		448,000	448,000	896,000	896,000
Proportionate EMI EBITDA		71,340,000	21,717,000	112,081,000	37,973,000
Share-based compensation		12,174,000		18,304,000
Loss (gain) on disposal of assets		8,546,000	422,000	8,656,000	454,000
(Gain) loss on debt extinguishment		27,975,000	(60,000)	27,975,000	(60,000)
Integration costs		5,286,000		11,438,000
Acquisition transaction costs		674,000		6,350,000
Other one-time costs or amortization		2,259,000	515,000	3,454,000	843,000
Producer settlement			6,827,000		6,827,000
Interest and other income			24,000	0	41,000
Gain on redemption of mandatorily redeemable Preferred units		5,087,000		9,580,000
Unrealized gain (loss) on embedded derivative		91,448,000		88,562,000	(13,456,000)
Equity income from unconsolidated affiliates		47,786,000	16,511,000	75,703,000	27,866,000
Segment adjusted EBITDA		207,919,000	87,741,000	348,709,000	206,306,000
Revenue from contract with customer		335,572,000	135,766,000	592,821,000	283,869,000
Consolidated | Product and Service
Segment Reporting Information [Line Items]
Revenue from contract with customer		331,731,000	133,341,000	587,104,000	280,996,000
Consolidated | Other revenue
Segment Reporting Information [Line Items]
Revenue from contract with customer		$ 3,841,000	$ 2,425,000	$ 5,717,000	$ 2,873,000

[1] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the Form 10-Q basis of presentation in Note 1—Description of the Organization and Summary of Significant Accounting Policies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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SUBSEQUENT EVENTS (Details) - USD ($)				1 Months Ended	3 Months Ended	6 Months Ended
	Jul. 20, 2022	Jul. 12, 2022	Feb. 22, 2022	Jul. 31, 2022	Jun. 30, 2022	Jun. 30, 2022
Subsequent Event [Line Items]
Offering price					$ 2,499,000	$ 172,559,000
Preferred Unit limited partners
Subsequent Event [Line Items]
Stock redeemed (in shares)			100,000
Stock redeemed value			$ 120,100,000			$ 152,600,000
Subsequent Event
Subsequent Event [Line Items]
Preferred units (in shares)				400,000
Offering price		$ 400,000,000
Subsequent Event | The Partnership
Subsequent Event [Line Items]
Distribution declared (in USD per share)	$ 0.75
Subsequent Event | Paid-in-Kind Units
Subsequent Event [Line Items]
Stock redeemed (in shares)				22,845
Subsequent Event | Preferred Unit limited partners
Subsequent Event [Line Items]
Stock redeemed value				$ 492,200,000
Subsequent Event | Class A Common Stock
Subsequent Event [Line Items]
Issued (in shares)		107,580,912
Dividends declared (in USD per share)	$ 0.75