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 March 31, 2023

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	New York Stock Exchange

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 April 30, 2023	49,057,209
Number of shares of registrant’s Class C Common Stock, par value $0.0001 per share issued and outstanding as of April 30, 2023	94,089,038

TABLE OF CONTENTS

 

Item		Page
	PART I — FINANCIAL INFORMATION (UNAUDITED)
1.	FINANCIAL STATEMENTS	1
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2023 AND 2022	1
	CONDENSED CONSOLIDATED BALANCE SHEETS - AS OF MARCH 31, 2023 AND DECEMBER 31, 2022	2
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - THREE MONTHS ENDED MARCH 31, 2023 AND 2022	3
	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS - THREE MONTHS ENDED MARCH 31, 2023 AND 2022	4
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	5
	1.DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	5
	2.BUSINESS COMBINATIONS	6
	3.REVENUE RECOGNITION	7
	4.PROPERTY, PLANT AND EQUIPMENT	9
	5.GOODWILL AND INTANGIBLE ASSETS, NET	9
	6.EQUITY METHOD INVESTMENTS	10
	7.DEBT AND FINANCING COSTS	11
	8.ACCRUED EXPENSES	12
	9.LEASE	12
	10.EQUITY AND WARRANTS	13
	11.FAIR VALUE MEASUREMENTS	14
	12.DERIVATIVES AND HEDGING ACTIVITIES	15
	13.SHARE-BASED COMPENSATION	17
	14.INCOME TAXES	17
	15.NET INCOME PER SHARE	18
	16.COMMITMENTS AND CONTINGENCIES	18
	17.SEGMENTS	19
	18.SUBSEQUENT EVENTS	21
2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32
4.	CONTROLS AND PROCEDURES	32
	PART II — OTHER INFORMATION
1.	LEGAL PROCEEDINGS	33
1A.	RISK FACTORS	33
2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33
5.	OTHER INFORMATION	33
6.	EXHIBITS	35
	SIGNATURES	36

 

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

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

•Bcf. One billion cubic feet

•Bcf/d. One Bcf 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

•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

•GAAP. United States Generally Accepted Accounting Principles

•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

•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. United States Securities and Exchange Commission

•SOFR. Secured Overnight Financing Rate

•WTI. West Texas Intermediate crude oil

ii

FORWARD-LOOKING STATEMENTS AND RISK

This Quarterly Report on Form 10-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:

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

•competition from other pipelines, terminals or other forms of transportation and competition from other service providers for 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 our 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, 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;

•our ability to successfully implement our share repurchase program;

•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;

•general economic and political conditions, including the armed conflict in Ukraine, epidemics or pandemics and the actions taken by third parties in response to such epidemics or pandemics, the impact of continued inflation, central bank policy actions, bank failures and associated liquidity risks and other factors; and other factors disclosed in “Part I, Item 1A. — Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 7, 2023.

iii

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 March 31,
	2023		2022(4)
	(In thousands, except per share data)
Operating revenues:
Service revenue	$	103,425	$	80,445
Product revenue	173,824		174,928
Other revenue	3,791		1,876
Total operating revenues(1)	281,040		257,249
Operating costs and expenses:
Costs of sales (exclusive of depreciation and amortization shown separately below)(2)	115,877		120,275
Operating expenses	35,973		29,871
Ad valorem taxes	5,458		4,153
General and administrative expenses	27,511		22,752
Depreciation and amortization expenses	68,854		61,023
Loss on disposal of assets	102		110
Total operating costs and expenses	253,775		238,184
Operating income	27,265		19,065
Other income (expense):
Interest and other income	294		250
Gain on redemption of mandatorily redeemable Preferred Units	—		4,493
Loss on embedded derivative	—		(2,886)
Interest expense	(69,308)		(26,774)
Equity in earnings of unconsolidated affiliates	46,464		27,917
Total other (expense) income, net	(22,550)		3,000
Income before income taxes	4,715		22,065
Income tax expense	416		676
Net income including noncontrolling interest	4,299		21,389
Net income attributable to Preferred Unit limited partners	—		4,993
Net income attributable to common shareholders	4,299		16,396
Net income attributable to Common Unit limited partners	2,863		12,531
Net income attributable to Class A Common Stock Shareholders	$	1,436	$	3,865
Net (loss) income attributable to Class A Common Shareholders per share
Basic	$	(0.06)	$	0.10
Diluted	$	(0.06)	$	0.10
Weighted-average shares(3)
Basic	47,392		37,392
Diluted	47,605		37,426

(1)Includes amounts of $25.3 million and $15.6 million associated with related parties for the three months ended March 31, 2023 and 2022, respectively.

(2)Includes amounts of $14.6 million and $3.6 million associated with related parties for the three months ended March 31, 2023 and 2022, respectively.

(3)Share and per share amounts have been retrospectively restated to reflect the Company’s reverse stock split, which was effected June 8, 2022.

(4)The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the 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.

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

1

KINETIK HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,		December 31,
	2023		2022
	(In thousands, except per share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,984	$	6,394
Accounts receivable, net of allowance for credit losses of $1,000 in 2023 and 2022(1)	199,028		204,036
Derivative assets	13,834		6,963
Prepaid and other current assets	31,366		24,474
	246,212		241,867
NONCURRENT ASSETS:
Property, plant and equipment, net	2,634,173		2,535,212
Intangible assets, net	676,516		695,389
Derivative asset, non-current	124		—
Operating lease right-of-use assets	64,097		28,551
Deferred charges and other assets	85,551		32,275
Investment in unconsolidated affiliate	2,412,905		2,381,340
Goodwill	5,077		5,077
	5,878,443		5,677,844
Total assets	$	6,124,655	$	5,919,711
LIABILITIES, NONCONTROLLING INTEREST, AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	18,323	$	17,899
Accrued expenses	176,307		173,914
Derivative liabilities	6,662		5,718
Current portion of operating lease liabilities	39,773		22,810
Other current liabilities	7,236		7,487
	248,301		227,828
NONCURRENT LIABILITIES
Long term debt, net	3,511,648		3,368,510
Contract liabilities	21,991		22,693
Operating lease liabilities	25,238		6,023
Derivative liabilities	27,123		8,328
Other liabilities	4,310		2,677
Deferred tax liabilities	11,381		11,018
	3,601,691		3,419,249
Total liabilities	3,849,992		3,647,077
COMMITMENTS AND CONTINGENCIES (Note 16)
Redeemable noncontrolling interest — Common Unit limited partners	2,910,861		3,112,409
EQUITY:
Class A Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 49,054,411 and 45,679,447 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	5		5
Class C Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 94,089,038 and 94,270,000 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively(2)	9		9
Additional paid-in capital	229,672		118,840
Accumulated deficit	(863,452)		(958,629)
Treasury stock, at cost (81,862 and nil shares as of March 31, 2023 and December 31, 2022, respectively)	(2,432)		—
Total equity	(636,198)		(839,775)
Total liabilities, noncontrolling interest, and equity	$	6,124,655	$	5,919,711

(1)Includes amounts of $24.2 million and $17.6 million associated with related parties as of March 31, 2023 and December 31, 2022, respectively.

(2)Share amounts have been retrospectively restated to reflect the Company’s stock split, which was effected June 8, 2022.

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)

	Three Months Ended March 31,
	2023		2022
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests	$	4,299	$	21,389
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	68,854		61,023
Amortization of deferred financing costs	1,521		3,389
Amortization of contract costs	1,655		448
Distributions from unconsolidated affiliate	67,764		48,073
Derivatives settlement	974		(884)
Derivative fair value adjustment	11,770		(8,745)
Warrants fair value adjustment	(44)		—
Gain on redemption of mandatorily redeemable Preferred Units	—		(4,493)
Loss on disposal of assets	102		110
Equity in earnings from unconsolidated affiliates	(46,464)		(27,917)
Loss on debt extinguishment	—		129
Share-based compensation	17,540		6,132
Deferred income taxes	363		676
Changes in operating assets and liabilities:
Accounts receivable	5,008		(67,446)
Other assets	(2,206)		(456)
Accounts payable	(3,175)		(6,766)
Accrued liabilities	(10,679)		73,961
Other non-current liabilities	1,677		—
Operating leases	632		(230)
Net cash provided by operating activities	119,591		98,393
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment expenditures	(58,862)		(29,234)
Intangible assets expenditures	(9,755)		(3,559)
Investments in unconsolidated affiliate	(58,658)		—
Distributions from unconsolidated affiliate	5,793		—
Cash proceeds from disposals	14		—
Net cash (paid for) acquired in acquisitions	(125,000)		13,401
Net cash used in investing activities	(246,468)		(19,392)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt	—		(26,382)
Proceeds from revolver	267,000		7,000
Payments on revolver	(125,000)		—
Redemption of mandatorily redeemable Preferred Units	—		(60,702)
Cash dividends paid to Class A Common Stock shareholders	(16,927)		—
Distribution paid to Class C Common Unit limited partners	(174)		—
Repurchase of Class A Common Stock	(2,432)		—
Net cash provided by (used in) financing activities	122,467		(80,084)
Net change in cash	(4,410)		(1,083)
CASH, BEGINNING OF PERIOD	6,394		18,729
CASH, END OF PERIOD	$	1,984	$	17,646
SUPPLEMENTAL SCHEDULE OF INVESTING AND FINANCING ACTIVITIES
Cash paid for interest, net of amounts capitalized	$	36,745	$	25,801
Property and equipment and intangible accruals in accounts payable and accrued liabilities	$	32,715	$	14,340
Class A Common Stock issued through dividend and distribution reinvestment plan	$	87,658	$	—
Fair value of ALTM assets acquired	$	—	$	2,445,665
Class A Common Stock issued in exchange	—		1,013,745
ALTM liabilities and mezzanine equity assumed	$	—	$	1,431,920

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(2)		Redeemable Noncontrolling Interest — Common Unit Limited Partners		Class A Common Stock			Class C Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock		Total Equity
					Shares(1)	Amount		Shares(1)	Amount
	(In thousands)				(In thousands)
For the Three Months Ended March 31, 2022
Balance at December 31, 2021	$	—	$	1,006,843	—	$	—	50,000	$	5	$	—	$	—	$	—	$	5
ALTM acquisition	462,717		—		16,246	2		—	—		1,013,743		—		—		1,013,745
Distributions payable to Preferred Unit limited partners	(6,937)		—		—	—		—	—		—		—		—		—
Redemption of Common Units	—		(170,060)		2,740	—		(2,740)	—		170,060		—		—		170,060
Share-based compensation	—		—		—	—		—	—		6,132		—		—		6,132
Remeasurement of contingent consideration	—		—		—	—		—	—		4,450		—		—		4,450
Net income	4,993		12,531		—	—		—	—		—		3,865		—		3,865
Change in redemption value of noncontrolling interests	—		2,336,117		—	—		—	—		(1,194,385)		(1,141,732)		—		(2,336,117)
Balance at March 31, 2022	$	460,773	$	3,185,431	18,986	$	2	47,260	$	5	$	—	$	(1,137,867)	$	—	$	(1,137,860)
For the Three Months Ended March 31, 2023
Balance at December 31, 2022	$	—	$	3,112,409	45,679	$	5	94,270	$	9	$	118,840	$	(958,629)	$	—	$	(839,775)
Redemption of Common Units	—		(5,634)		181	—		(181)	—		5,634		—		—		5,634
Issuance of common stock through dividend and distribution reinvestment plan	—		—		3,071	—		—	—		87,658		—		—		87,658
Repurchase of Class A Common Stock	—		—		(82)	—		—	—		—		—		(2,432)		(2,432)
Share-based compensation	—		—		205	—		—	—		17,540		—		—		17,540
Net income	—		2,863		—	—		—	—		—		1,436		—		1,436
Change in redemption value of noncontrolling interests	—		(128,211)		—	—		—	—		—		128,211		—		128,211
Distribution paid to Common Units limited partners	—		(70,566)		—	—		—	—		—		—		—		—
Cash dividends on Class A Common Stock ($0.75 per share)	—		—		—	—		—	—		—		(34,470)		—		(34,470)
Balance at March 31, 2023	$	—	$	2,910,861	49,054	$	5	94,089	$	9	$	229,672	$	(863,452)	$	(2,432)	$	(636,198)

(1)Share amounts have been retrospectively restated to reflect the Company’s Stock Split, 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.

(2)Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 12—Series A Cumulative Redeemable Preferred Units in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Commission on March 7, 2023.

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

4

KINETIK HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

These condensed consolidated financial statements have been prepared by Kinetik Holdings Inc. (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, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 7, 2023.

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

Organization

BCP Raptor Holdco, LP (“BCP”), the Company’s predecessor for accounting purposes, 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 and CR Permian Holdings, LLC. 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.

Altus Midstream Company (“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. 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 (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. The transactions contemplated by the Contribution Agreement are referred to herein as the “Transaction.” In connection with the closing of the Transaction (the “Closing”), the Company changed its name from “Altus Midstream Company” 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.

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; accordingly, you should read these consolidated financial statements in conjunction with our

5

consolidated financial statements and related notes included in our 2022 Form 10-K.. 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. Therefore, the results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. 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 is consistent with our previous public filings and the terms of the Contribution Agreement.

Significant Accounting Policies

The accounting policies that we follow are set forth in Note 2 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our Annual Report. There were no significant updates or revisions to our accounting policies during the three months ended March 31, 2023.

Inventory

Other current assets include condensate, residue gas and NGLs inventories that are valued at the lower of cost or market. Inventory was valued at $4.2 million and $4.8 million as of March 31, 2023 and December 31, 2022, respectively.

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 $24.2 million and $17.6 million as of March 31, 2023 and December 31, 2022, respectively. Revenue from affiliates was $25.3 million and $15.6 million for the three months ended March 31, 2023 and 2022, respectively. Accrued expense due to affiliates was immaterial, and operating expenses were $0.3 million and nil for the three months ended March 31, 2023 and 2022, respectively.

In addition, the Company incurred cost of sales with two of its equity method investment (“EMI”) pipeline entities, Permian Highway Pipeline LLC (“PHP”) and Breviloba, LLC (“Breviloba”). The Company paid a demand fee to PHP and paid a capacity fee to Breviloba for certain volumes moving on the Shin Oak NGL Pipeline. For the three months ended March 31, 2023 and 2022, the Company recorded cost of sales of $14.6 million and $3.6 million, respectively, with these affiliates.

2.    BUSINESS COMBINATIONS

As of March 31, 2023, our allocation of purchase price for acquisitions made during 2023 and 2022 are detailed below:

	Acquisition Date	Acquisition	Considerations Transferred		Current Assets		Property Plant & Equipment		Intangible Assets		Other Long Term Assets		Goodwill		Liabilities		Noncontrolling Interest
			(In thousands)
(1)	Q1 2023	Midstream Infrastructure Assets and Incentive and Acceleration Agreement(a)	$	125,000	$	4,736	$	61,850	$	3,150	$	55,264	$	—	$	—	$	—
(2)	Q1 2022	Altus Midstream Company (“ALTM”)	$	1,013,745	$	38,750	$	634,923	$	13,200	$	1,752,500	$	5,077	$	(967,988)	$	(462,717)

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(a)Consideration includes $65 million paid for certain midstream assets and the $60 million paid related to the incentive and acceleration agreement.

Midstream Infrastructure Assets

The Partnership closed on a purchase and sale agreement for certain midstream assets for $65.0 million together with a new 20 year midstream service agreement. In addition, the Partnership entered into an incentive and acceleration agreement related to near term supplemental development activities on acreage dedicated for midstream services to affiliates of the Partnership. Such development activities will begin in 2023 and are subject to semi-annual performance milestones and subject to refund with consequential monetary penalty if not satisfied. Consideration for the incentive and acceleration agreement of $60 million was capitalized as a contract asset in accordance with ASC 606, of which $4.7 million is included in “Prepaid and Other Current Assets” and $55.3 million is included in “Deferred Charges and Other Assets” in the condensed consolidated balance sheet as of March 31, 2023. These transactions were accounted for as a business combination in accordance with ASC 805. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, the completion of the valuation of the underlying assets and liabilities assumed. The Company is continuing its review of these matters during the measurement period. Acquisition-related costs were immaterial for this transaction.

Altus Midstream Company

On February 22, 2022, the Company consummated the Transaction. Pursuant to the Contribution Agreement, in connection with 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 (the “Contributed Entities”) to the Partnership; and (ii) in exchange for such contribution, the Partnership transferred to Contributor 50,000,000 common units representing limited partner interests in the Partnership and 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share.

The Transaction was accounted as a reverse merger in accordance with ASC 805, which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. During the 12-month measurement period following the acquisition date, the Company made necessary adjustments as information became available to the purchase price allocation, including, but not limited to, working capital and valuation of the underlying assets of the equity method investments. The Company recorded goodwill of $5.1 million as of December 31, 2022 related to operational synergies. The Company incurred acquisition-related costs of nil and $5.7 million for the three months ended March 31, 2023 and 2022, respectively, related to the Transaction.

3.    REVENUE RECOGNITION

Disaggregation of Revenue

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

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Gathering and processing services	$	103,425	$	80,445
Natural gas, NGLs and condensate sales	173,824		174,928
Other revenue	3,791		1,876
Total revenues and other	$	281,040	$	257,249

There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2023. The Company recognized revenues from minimum volume commitment (“MVC”) deficiency payments of $1.1 million and nil for the three months ended March 31, 2023 and 2022, 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 March 31, 2023:

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	Amount
Fiscal Year	(In thousands)
Remaining of 2023	$	27,703
2024	38,970
2025	44,498
2026	34,631
2027	35,405
Thereafter	155,888
	$	337,095

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 March 31, 2023:

	Amount
	(In thousands)
Balance at December 31, 2022	$	29,300
Reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied	(2,059)
Cash received in advance and not recognized as revenue	669
Balance at March 31, 2023	27,910
Less: Current portion	5,919
Non-current portion	$	21,991

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 March 31, 2023 and December 31, 2022, the Company had contract acquisition cost assets of $76.2 million and $17.8 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 contracts. The Company recognized cost of sales associated with these assets of $1.7 million and $0.4 million for the three months ended March 31, 2023 and 2022, respectively.

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4.    PROPERTY, PLANT AND EQUIPMENT

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

	March 31,		December 31,
	2023		2022
	(In thousands)
Gathering, processing, and transmission systems and facilities	$	3,004,016	$	2,904,084
Vehicles	10,331		9,290
Computers and equipment	5,504		4,289
Less: accumulated depreciation and accretion	(512,451)		(474,258)
Total depreciable assets, net	2,507,400		2,443,405
Construction in progress	104,900		70,325
Land	21,873		21,482
Total property, plant, and equipment, net	$	2,634,173	$	2,535,212

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 $38.4 million and $30.8 million of depreciation expense for the three months ended March 31, 2023 and 2022, respectively. There were no triggering events for property, plant and equipment during the three months ended March 31, 2023 and 2022.

5.    GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill totaled $5.1 million as of March 31, 2023 and December 31, 2022. The goodwill of $5.1 million is within the Midstream Logistics segment, and pertains to excess of the purchase price over net assets acquired in connection with the Transaction.

Goodwill is tested at least annually as of November 30 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 March 31, 2023.

Intangible Assets

Intangible assets, net, are comprised of the following:

	March 31,		December 31,
	2023		2022
	(In thousands)
Customer contracts	$	1,142,278	$	1,137,831
Right of way assets	134,716		127,539
Less accumulated amortization	(600,478)		(569,981)
Total amortizable intangible assets, net	$	676,516	$	695,389

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.

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On March 31, 2023, remaining weighted average amortization periods for customer contracts and right of way assets were approximately 7.36 years and 6.95 years, respectively. Overall remaining weighted average amortization period for the intangible assets as of March 31, 2023 was approximately 7.31 years.

The Company recorded $30.5 million and $30.2 million of amortization expense for the three months ended March 31, 2023 and 2022, respectively. There was no impairment recognized on intangible assets for the three months ended March 31, 2023 and 2022.

6.    EQUITY METHOD INVESTMENTS

As of March 31, 2023, 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 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:

		March 31,		December 31,
	Ownership	2023		2022
		(In thousands)
Permian Highway Pipeline LLC ("PHP")	53.3%	$	1,519,825	$	1,474,800
Breviloba, LLC ("Breviloba")	33.0%	450,926		455,057
Gulf Coast Express Pipeline LLC ("GCX")	16.0%	442,154		451,483
		$	2,412,905	$	2,381,340

Additionally, as of March 31, 2023, the Company also owned 15.0% of Epic Crude Holdings, LP (“EPIC”). However, no dollar value was assigned through the Transaction’s purchase price allocation as an 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 months ended March 31, 2023.

The unamortized basis differences included in the EMI pipeline balances were $359.8 million and $363.2 million as of March 31, 2023 and December 31, 2022, respectively. 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 $14.7 million and $13.4 million as of March 31, 2023 and December 31, 2022, 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 three months ended March 31, 2023:

	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Total
	(In thousands)
Balance at December 31, 2022	$	1,474,800	$	455,057	$	451,483	$	2,381,340
Acquisitions	—		—				—
Contributions	57,218		—		—		57,218
Distributions	(42,570)		(11,869)		(19,118)		(73,557)
Capitalized interest	1,440		—		—		1,440
Equity income, net(1)	28,937		7,738		9,789		46,464
Balance at March 31, 2023	$	1,519,825	$	450,926	$	442,154	$	2,412,905

(1)For the three months ended March 31, 2023, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $1.9 million from PHP, $0.2 million from Breviloba, LLC and $1.6 million from GCX.

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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 months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
	2023						2022
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC
	(In thousands)
Revenues	$	92,840	$	45,901	$	89,748	$	97,856	$	48,521	$	89,973
Operating income	56,805		21,949		65,216		59,476		26,314		63,443
Net income	59,691		22,211		71,091		59,213		26,366		63,529

7.    DEBT AND FINANCING COSTS

The following table summarizes the Company’s debt obligations as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
$2.0 billion unsecured term loan	$	2,000,000	$	2,000,000
$1.0 billion 2030 senior unsecured notes	1,000,000		1,000,000
$1.25 billion revolving line of credit	537,000		395,000
Total long-term debt	3,537,000		3,395,000
Less: Debt issuance costs, net(1)	(25,352)		(26,490)
Total long-term debt, net	$	3,511,648	$	3,368,510

(1) Excluded unamortized debt issuance cost related to the revolving line of credit. Unamortized debt issuance cost associated with the revolving line of credit was $6.5 million and $6.9 million as of March 31, 2023 and December 31, 2022, respectively. The current and non-current portion of the unamortized debt issuance costs related to the revolving credit facilities were included in the “Prepaid and other current assets” and 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 March 31,
	2023		2022
	(In thousands)
Capitalized interest	$	(2,233)	$	(104)
Debt issuance costs	1,521		3,389
Interest expense	70,020		23,489
Total financing costs, net of capitalized interest	$	69,308	$	26,774

As of March 31, 2023 and December 31, 2022, unamortized debt issuance costs associated with the senior unsecured notes and the term loan were $25.4 million and $26.5 million, respectively. 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 $1.5 million and $3.4 million for the three months ended March 31, 2023 and 2022, respectively.

Compliance with our Covenants

Both the revolving credit agreement with Bank of America, N.A., as administrative agent and the term loan credit agreement with PNC Bank as administrative agent contain customary covenants and restrictive provisions which may, among other things, limit the 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. The 5.875% Senior Notes due 2030 also contain covenants and restrictive provisions.

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As of March 31, 2023, the Partnership was in compliance with all customary and financial covenants.

Fair Value of Financial Instruments

The fair value of the Company and its subsidiaries’ consolidated debt as of March 31, 2023 and December 31, 2022 was $3.52 billion and $3.34 billion, respectively. On March 31, 2023, the senior unsecured notes’ fair value was based on Level 1 inputs and the term loan and revolving line of credit’s fair value was based on Level 3 inputs.

8.    ACCRUED EXPENSES

The following table provides detail of the Company’s current accrued expenses on March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Accrued product purchases	$	95,922	$	115,773
Accrued taxes	5,785		19,509
Accrued salaries, vacation, and related benefits	3,143		3,934
Accrued capital expenditures	15,830		3,892
Accrued interest	38,774		24,815
Accrued other expenses	16,853		5,991
Total current accrued expenses	$	176,307	$	173,914

Accrued product purchases mainly accrue the liabilities related to producer payments and any additional business-related miscellaneous fees we owe to third parties, such as transport or capacity fees as of March 31, 2023.

9.    LEASE

Components of lease costs are included in the Condensed Consolidated Statements of Operations as general and administrative expense for real-estate leases and operating expense for non-real estate leases. Total operating lease costs were $10.8 million and $9.1 million for the three months ended March 31, 2023 and 2022, respectively. Short-term lease costs were $19 thousand and $2.6 million for the three months ended March 31, 2023 and 2022, respectively. Variable lease cost was immaterial for the three months ended March 31, 2023 and 2022.

The following table presents other supplemental lease information:

		Three Months Ended March 31,
		2023			2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	10,632		$	9,154
Right-of-use assets obtained in exchange for new operating lease liabilities		$	63		$	4,490
Weighted-average remaining lease term — operating leases (in years)		1.94			1.82
Weighted-average discount rate — operating leases		8.89		%	7.58		%

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10. EQUITY AND WARRANTS

Redeemable Noncontrolling Interest — Common Unit Limited Partners

On February 22, 2022, the Company consummated a business combination with Altus 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 transferred to Contributor 50,000,000 common units representing limited partner interests in the Partnership and 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share. 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 Sheets. During the first three months of 2023, 180,962 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 94,089,038 Common Units and an equal number of Class C Common Stock issued and outstanding as of March 31, 2023. The Common Units fair value was approximately $2.91 billion as of March 31, 2023.

Common Stock

As of March 31, 2023, there were 49,054,411 and 94,089,038 shares, respectively, of Class A Common Stock and Class C Common Stock issued and outstanding (collectively, “Common Stock”).

Public Warrants

As of March 31, 2023, 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 March 31, 2023, 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 $25 thousand for the Public Warrants and a fair value of $19 thousand for the Private Warrants as of March 31, 2023 on the Condensed Consolidated Balance Sheet in other non-current liabilities. Refer to Note 11—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.

Stock Repurchase Program

In February 2023, the Board of Directors (the “Board”) approved a share repurchase program (“Repurchase Program”), authorizing discretionary purchases of the Company’s Class A Common Stock up to $100.0 million in the aggregate. Repurchases may be made at management’s discretion from time to time, in accordance with applicable securities laws, on the open market or through privately negotiated transactions and may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act. Privately negotiated repurchases from affiliates are also authorized under the Repurchase Program, subject to such affiliates’ interest and other limitations. The repurchases will depend on market conditions and may be discontinued at any time without prior notice. For the three months ended March 31, 2023, the Company repurchased 81,862 shares at a total cost of $2.4 million.

Dividend

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During the three months ended March 31, 2023, the Company made cash dividend payments of $17.1 million to holders of Class A Common Stock and Class C Common Units and $87.9 million was reinvested in shares of Class A Common Stock by Reinvestment Holders.

See Note 18 - Subsequent Events for discussion of dividend declared on April 19, 2023.

11. FAIR VALUE MEASUREMENTS

The Company’s Condensed Consolidated Balance Sheets reflect a mixture of measurement methods for financial assets and liabilities. Public and private warrants, contingent liabilities and derivative financial instruments are reported at fair value. Other financial instruments are reported at historical cost or amortized cost on our Condensed Consolidated Balance Sheets. Long-term debt is primarily the other financial instrument for which carrying value could vary significantly from fair value. See Note 7—Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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 March 31, 2023 and December 31, 2022:

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	March 31, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swap	$	—	$	10,545	$	—	$	10,545
Interest rate derivatives	—		3,413		—		3,413
Total assets	$	—	$	13,958	$	—	$	13,958
Commodity swaps	$	—	$	7,529	$	—	$	7,529
Interest rate derivatives	—		26,256		—		26,256
Public warrants	25		—		—		25
Private warrants	—		—		19		19
Total liabilities	$	25	$	33,785	$	19	$	33,829

	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swap	$	—	$	4,288	$	—	$	4,288
Interest rate derivatives	—		2,675		—		2,675
Total assets	$	—	$	6,963	$	—	$	6,963
Commodity swaps	$	—	$	5,718	$	—	$	5,718
Interest rate derivatives	—		8,328		—		8,328
Public warrants	50		—		—		50
Private warrants	—		—		38		38
Total liabilities	$	50	$	14,046	$	38	$	14,134

Our derivative contracts consist of interest rate swaps and commodity swaps. Valuation of these derivative contracts involved both observable publicly quoted prices and certain inputs to the credit valuation that may not be readily observable in the marketplace. As such our derivative contracts are classified as Level 2 in the hierarchy. Refer to Note 12—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 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. Change in fair value of the warrants since closing of the Transaction through reporting date was recorded in “Interest and other income” of the Condensed Consolidated Statements of Operations.

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 months ended March 31, 2023 and 2022.

12. 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. To minimize counterparty credit risk in derivative instruments, the Company enters into transactions with high credit-rating counterparties. The Company did not elect to apply hedge accounting to these derivative contracts and recorded the fair value of the derivatives on the Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022.

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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’s objectives in using interest rate derivatives are 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.

During November 2022 and March 2023, the Company entered into three interest rate swaps with total notional amounts of $2.25 billion that are effective on May 1, 2023 and mature on May 31, 2025. Under these swaps, the Company pays a fixed rate ranging from 4.38% to 4.49% for the respective notional amounts.

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 assets were $3.4 million and $2.7 million as of March 31, 2023 and December 31, 2022, respectively. Interest rate swap derivative liabilities were $26.3 million and $8.3 million as of March 31, 2023 and December 31, 2022, respectively. The Company recorded cash settlements on interest rate swap derivatives of nil and $0.7 million for the three months ended March 31, 2023 and 2022, respectively, in “Interest expense” of the Condensed Consolidated Statements of Operations. In addition, the Company recorded fair value adjustments of $17.2 million and $11.6 million for the three months ended March 31, 2023 and 2022, respectively, in “Interest expense” of the Condensed Consolidated Statements of Operations.

Commodity Price Risk

The results of the Company’s operations may be affected by the market prices of oil, natural gas and NGLs. A portion of the Company’s revenue is directly tied to local natural gas, natural gas liquids and condensate prices in the Permian Basin and the U.S. Gulf Coast. Fluctuations in commodity prices also impact operating cost elements both directly and indirectly. Management regularly reviews the Company’s potential exposure to commodity price risk and manages exposure of such risk through commodity hedge contracts.

During the past two quarters, the Company has entered into numerous commodity swap contracts based on the OPIS NGL Mont Belvieu prices for ethane, propane and butane, the Waha Basis index and the NYMEX WTI index. These contracts are on various notional quantities of NGLs, natural gas and crude. Similarly, the Company has entered into various natural gas and crude basis spread swaps. These index swaps are effective over the next 1 to 15 months and are used to hedge against location price risk of the respective commodity resulting from supply and demand volatility and protect cash flows against price fluctuations. The table below presents detailed information of commodity swaps outstanding as of March 31, 2023 (in thousands, except volumes):

		March 31, 2023
Commodity	Instruments	Unit	Volume	Net Fair Value
Natural Gas	Commodity Swap	MMBtus	6,380,000	$	(6,254)
NGL	Commodity Swap	Gallons	157,281,600	9,252
Crude	Commodity Swap	Bbl	137,500	258
Natural Gas Basis Spread Swaps	Commodity Swap	MMBtus	29,850,000	(574)
Crude Gas Basis Spread Swaps	Commodity Swap	Bbl	496,000	334
				$	3,016

The fair value or settlement value of the swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets. Commodity swap derivative assets were $10.5 million and $4.3 million as of March 31, 2023 and December 31, 2022, respectively. Commodity swap derivative liabilities were $7.5 million and $5.7 million as of March 31, 2023 and December 31, 2022, respectively. The Company recorded cash settlements on commodity swap derivatives of $1.0 million and $0.2 million for the three months ended March 31, 2023 and 2022, respectively, in “Product revenue” of the Condensed Consolidated Statements of Operations. In addition, the Company recorded fair value adjustments of $5.4 million and nil for the

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change in fair value of commodity swap derivatives for the three months ended March 31, 2023 and 2022, respectively, in “Product revenue” of the Condensed Consolidated Statements of Operations.

13. SHARE-BASED COMPENSATION

Prior to the Closing, the Company 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-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, that such limited partners 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 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 Stock Split, replacement restricted share awards (“Replacement Awards”) to new employees that transitioned from ALTM as part of the Transaction. 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.

During the first quarter of 2023, pursuant to the Company’s 2019 Omnibus Compensation Plan, as amended from time to time (the “Plan”), the Company granted approximately 370,000 restricted stock units (“RSUs”) to its employees with cliff vesting on January 1, 2026 and approximately 181,000 RSUs to employees that were vested immediately. The 181,000 RSUs with no vesting terms were granted to employees who received their bonus in Company stock in lieu of cash bonus awards.

With respect to the above shares, the Company recorded compensation expenses of $17.5 million and $6.1 million for the three months ended March 31, 2023 and 2022, respectively, based on a straight-line amortization of the associated awards’ fair value over the respective vesting life of the shares.

14. 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 March 31,
	2023			2022
	(In thousands)
Income before income taxes	$	4,715		$	22,065
Income tax expense	$	416		$	676
Effective tax rate	8.82		%	3.06		%

The effective tax rate for the three months ended March 31, 2023 was lower than the statutory rate mainly due to the impact of tax attributable to noncontrolling interests related to the Common Units limited partners and valuation allowance.

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15.    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 March 31,
	2023		2022
	(In thousands, except per share amounts)
Net income attributable to Class A common shareholders	$	1,436	$	3,865
Less: Net income available to participating unvested restricted Class A common shareholders(1)	(4,156)		—
Total net income (loss) attributable to Class A common shareholders	$	(2,720)	$	3,865
Weighted average shares outstanding - basic(2)	47,392		37,392
Dilutive effect(3)(4) of unvested Class A common shares	213		34
Weighted average shares outstanding - diluted	47,605		37,426
Net income (loss) available per common share - basic	$	(0.06)	$	0.10
Net income (loss) available per common share - diluted	$	(0.06)	$	0.10

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

(2)Share amounts have been retrospectively 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 for further information.

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

(4)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.

16.    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 March 31, 2023 and December 31, 2022, 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 March 31,

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2023, 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 total monies paid under this arrangement are capped at $60.5 million. Amounts are payable on an annual basis over the earn-out period. Based on current forecasts and discussions with PDC, management revalues this contingent liability with updated assumptions at each reporting period. PDC’s actual annual Mcf volume did not exceed the incentive rate during the past three years and the Company did not expect PDC’s actual annual Mcf volume amounts to exceed forecasted amounts as of March 31, 2023; therefore, the estimated fair value of the contingent consideration liability was nil as of March 31, 2023 and December 31, 2022.

Original Altus Transaction

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

•    1,250,000 shares if the per share closing price of the Class A Common Stock as reported by the New York Stock Exchange (“NYSE”) 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 the NYSE 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 the 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.

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, Kinetik NGL Pipeline and Delaware Link Pipeline that is under development. The current operating pipelines transport crude oil, natural gas and NGLs.

The Midstream Logistics segment accounts for more than 99% of the Company’s operating revenues, cost of sales (excluding depreciation and amortization), operating expenses and ad valorem expenses. The Pipeline Transportation segment contains all of the Company’s equity method investments, which contribute more than 99% of the segment’s EBITDA. Corporate and Other contains the Company’s executive and administrative functions, including 85% of the Company’s general and administrative expenses and all of the Company’s debt service costs.

The following tables present the reconciliation of the segment profit measure as of and for the three months ended March

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31, 2023 and 2022:

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2023
Segment net income (loss) including noncontrolling interests	$	51,012	$	46,432	$	(93,145)	$	4,299
Add back:
Interest expense (income)	9		—		69,299		69,308
Income tax expense (benefit)	—		—		416		416
Depreciation and amortization	68,393		455		6		68,854
Contract assets amortization	1,655		—		—		1,655
Unrealized hedging (gain) loss	(4,987)		—		—		(4,987)
Proportionate EMI EBITDA	—		71,867		—		71,867
Share-based compensation	—		—		17,540		17,540
Loss (gain) on disposal of assets	102		—		—		102
Integration costs	7		—		918		925
Acquisition transaction costs	33		—		235		268
Other one-time costs or amortization	3,025		—		723		3,748
Deduct:
Warrant valuation adjustment	—		—		44		44
Equity income from unconsolidated affiliates	—		46,464		—		46,464
Segment adjusted EBITDA(3)	$	119,249	$	72,290	$	(4,052)	$	187,487

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
	(In thousands)
For the Three Months Ended March 31, 2022
Segment net income (loss) including noncontrolling interests	$	9,185	$	29,136	$	(16,932)	$	21,389
Add back:
Interest expense (income)	26,642		(1,614)		1,617		26,645
Gain on redemption of mandatorily redeemable Preferred units	—		—		(4,493)		(4,493)
Income tax expense (benefit)	457		(39)		258		676
Depreciation and amortization	60,893		130		—		61,023
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		40,741		—		40,741
Share-based compensation	—		—		6,132		6,132
Loss on disposal of assets	110		—		—		110
Loss on debt extinguishment	129		—		—		129
Unrealized loss on embedded derivatives	—		—		2,886		2,886
Integration costs	4,104		—		2,047		6,151
Acquisition transaction costs	4		—		5,672		5,676
Other one-time costs or amortization	918		—		277		1,195
Deduct:
Equity income from unconsolidated affiliates	—		27,917		—		27,917
Segment adjusted EBITDA(3)	$	102,890	$	40,437	$	(2,536)	$	140,791

(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.

(3)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.

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The following tables present the revenue for individual operating segment for the three months ended March 31, 2023 and 2022:

	Midstream Logistics		Pipeline Transportation		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2023
Revenue	$	276,555	$	694	$	277,249
Other revenue	3,789		2		3,791
Total segment operating revenue	$	280,344	$	696	$	281,040

	Midstream Logistics		Pipeline Transportation		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2022
Revenue	$	255,373	$	—	$	255,373
Other revenue	1,874		2		1,876
Total segment operating revenue	$	257,247	$	2	$	257,249

The following table presents total assets for each operating segment as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Midstream Logistics	$	3,637,003	$	3,486,948
Pipeline Transportation(1)	2,463,333		2,414,829
Segment total assets	6,100,336		5,901,777
Corporate and other	24,319		17,934
Total assets	$	6,124,655	$	5,919,711

(1)Includes investment in unconsolidated affiliates of $2.41 billion and $2.38 billion as of March 31, 2023 and December 31, 2022, respectively.

18.    SUBSEQUENT EVENTS

On April 19, 2023, 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 of record as of May 5, 2023 on May 17, 2023. 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.

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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 month periods ended March 31, 2023, as compared to our results of operations for the same periods in 2022. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods. The business combination 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 months ended March 31, 2022 and results of operations of ALTM from the Closing Date through March 31, 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.

Business Combination

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. The transactions contemplated by the Contribution Agreement are referred to herein as the “Transaction.” In connection with the closing of the Transaction (the “Closing”), the Company changed its name from “Altus Midstream Company” to “Kinetik Holdings Inc.” Upon closing of the business combination, 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 further information.

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 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. The Company’s corporate office is located in Houston, TX and our operations are strategically located in the heart of the Delaware Basin.

Our Operations and Segments

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 equity method investment (“EMI”) pipelines originating in the Permian Basin with various access points to the Texas Gulf Coast, Kinetik NGL Pipeline and Delaware Link Pipeline that is under development. The pipelines transport crude oil, natural gas and NGLs within the Permian Basin and to the Texas Gulf Coast.

Midstream Logistics

Gas Gathering and Processing. The Midstream Logistics segment provides gas gathering and processing services with over 1,500 miles of low and high-pressure steel pipeline located throughout the Delaware Basin. Gas processing assets are centralized at five processing complexes with total cryogenic processing capacity of approximately 2.0 Bcf/d.

Crude Oil Gathering, Stabilization and Storage Services. Crude gathering assets are centralized at the Caprock Stampede Terminal and the Pinnacle Sierra Grande Terminal. The system includes approximately 220 miles of gathering pipeline and 90,000 barrels of crude storage.

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Water Gathering and Disposal. The system includes over 360 miles of gathering pipeline and approximately 760,000 barrels per day of permitted disposal capacity.

Pipeline Transportation

EMI pipelines. The Company owns the following equity interests in four EMI pipelines in the Permian Basin with access to various points along the Texas Gulf Coast: 1) an approximate 53.3% equity interest in Permian Highway Pipeline LLC (“PHP”), which is also owned and operated by Kinder Morgan; 2) 16% equity interest in Gulf Coast Express Pipeline LLC (“GCX”), which is owned and operated by Kinder Morgan; 3) 33% equity interest in Shin Oak, which is owned by Breviloba, LLC, and operated by Enterprise Products Operating LLC; and 4) 15% equity interest in Epic Crude Holdings, LP (“EPIC”), which is operated by EPIC Consolidated Operations, LLC.

Kinetik NGL Pipeline. Approximately 30 miles of 20-inch NGL pipelines connected to our Diamond Cryogenic complex.

Delaware Link Pipeline. The Company is currently building the Delaware Link Pipeline, which will provide additional transportation capacity to Waha when it is put into service. The project is expected to be complete in the fourth quarter of 2023. Upon completion, this pipeline is estimated to be 40 miles and to have a capacity of approximately 1.0 Bcf/d.

Factors Affecting Our Business

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 the aftereffects of the COVID-19 pandemic and the armed conflict in Ukraine, and uncertainty from the recent banking turmoil and its effects on financial markets, 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, 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 resulting from the conflict would have a highly uncertain impact on the U.S. economy, which in turn, might affect our business and operations adversely. Our product sales revenue is exposed to commodity price fluctuations. Therefore, commodity price decline and sustained periods of low natural gas and NGL prices could have an adverse effect on our product revenue stream. Also, after a rapid rise of oil and natural gas prices in first half of 2022, oil and natural gas prices have moderated from their peaks during the past six months. 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. In addition, the Company, when economically appropriate, enters into fee-based arrangements that insulate the Company from commodity price volatility.

Inflation and Interest Rates

The annual rate of inflation in the United States dropped slightly to 5.0% in March 2023 compared to 8.5% in March 2022, as measured by the Consumer Price Index, which was the lowest since May 2021. However, the Federal Open Market Committee (“FOMC”) maintains its long run goals of maximum employment and inflation at the rate of 2.00%. In support of these goals, the FOMC decided to raise the target range for the federal funds rate to 4.75% and 5.00% during its meeting in March 2023. FOMC acknowledged the current stress on the banking system, stating that while the United States banking system is sound and resilient, recent developments are likely to result in tighter credit conditions for households and businesses and to affect economic activity, hiring, and inflation. The extent of these effects is uncertain. There is uncertainty regarding whether inflation will continue to be tamed by the FOMC’s effort or whether the FOMC will continue to tighten its monetary policy in the next 12 months. Increased interest rates will increase our operating costs and 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. The Company will continue to actively evaluate and analyze whether any additional forms of interest rate hedging should be implemented to mitigate interest rate exposure.

Supply Chain Considerations

During 2022, challenging supply chain issues emerged that we expect will continue at least through the first half of 2023. 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 the European Union has taken steps to reduce imports of Russian oil and natural gas. The principal supply issues facing our industry for the

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next twelve months include: raw materials availability, finished good inventory, rising freight costs, delays due to port congestion and overall labor shortages.

Recent Developments

Share Repurchase Program

In February 2023, the Board of Directors (the “Board”) approved a share repurchase program (“Repurchase Program”), authorizing discretionary purchases of the Company’s Class A Common Stock up to $100 million in the aggregate. Repurchases may be made at management’s discretion from time to time, in accordance with applicable securities laws, on the open market or through privately negotiated transactions and may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act. Privately negotiated repurchases from affiliates are also authorized under the Repurchase Program, subject to such affiliates’ interest and other limitations. The repurchases will depend on market conditions and may be discontinued at any time without prior notice.

For the three months ended March 31, 2023, the Company repurchased 81,862 shares at a total cost of $2.4 million. For additional information, see “Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” in this Quarterly Report on Form 10-Q.

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Results of Operations

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

	Three Months Ended March 31,
	2023		2022*		% Change
	(In thousands, except percentages)
Revenues:
Service revenue	$	103,425	$	80,445	29	%
Product revenue	173,824		174,928		(1	%)
Other revenue	3,791		1,876		102	%
Total operating revenues	281,040		257,249		9	%
Operating costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below)	115,877		120,275		(4	%)
Operating expenses	35,973		29,871		20	%
Ad valorem taxes	5,458		4,153		31	%
General and administrative expenses	27,511		22,752		21	%
Depreciation and amortization expenses	68,854		61,023		13	%
Loss on disposal of assets	102		110		(7	%)
Total operating costs and expenses	253,775		238,184		7	%
Operating income	27,265		19,065		43	%
Other income (expense):
Interest and other income	294		250		18	%
Gain on redemption of mandatorily redeemable Preferred Units	—		4,493		(100	%)
Gain on embedded derivatives	—		(2,886)		(100	%)
Interest expense	(69,308)		(26,774)		159	%
Equity in earnings of unconsolidated affiliates	46,464		27,917		66	%
Total other income (expense), net	(22,550)		3,000		NM
Income before income taxes	4,715		22,065		(79	%)
Income tax expense	416		676		(38	%)
Net income including noncontrolling interests	$	4,299	$	21,389	(80	%)

* 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 March 31, 2023 Compared to Three Months Ended March 31, 2022

Revenues

For the three months ended March 31, 2023, revenue increased $23.8 million, or 9%, to $281.0 million, compared to $257.2 million for the same period in 2022. The increase was primarily driven by period-to-period higher service revenues related to increases in gathered and processed gas volumes.

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 March 31, 2023, increased by $23.0 million, or 29%, to $103.4 million, compared to $80.4 million for the same period in 2022. This increase was primarily due to a period-over-period increase in gathered and processed gas volumes of 169.3 Mcf per day and 164.2 Mcf per day, respectively. Over 99% of service revenues are included 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 March 31, 2023, decreased by $1.1 million, or 1%, to $173.8 million, compared to $174.9 million for the same period in 2022. Product revenues were flat due to period over period decreases in natural gas, NGL and condensate prices, offset by increased sales volumes of these commodities. NGL prices decreased $23.20 per barrel, or 49%, and condensate prices decreased $20.61 per barrel, or 22%. NGL and condensate sales volumes increased 3.8 million barrels, or 165%. Similarly, natural gas prices decreased period over period by $3.14 per MMBtu, or 70%, while natural gas residue sales volumes increased by 0.3 million MMBtu, or 3%. 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 March 31, 2023, cost of sales decreased $4.4 million, or 4%, to $115.9 million, compared to $120.3 million for the same period in 2022. The decrease was primarily driven by lower transportation costs during the current quarter. Cost of sales (exclusive of depreciation and amortization) are included entirely in the Midstream Logistics segment.

Operating expenses

Operating expenses increased by $6.1 million, or 20%, to $36.0 million for the three months ended March 31, 2023, compared to $29.9 million for the same period in 2022. Of the total increase, $4.5 million was driven by the inclusion of Altus operations for the entire period, versus just over a month during the same period of 2022. The remaining increase is primarily the result of higher compression and electricity expenses from the increased gathered and processed volumes discussed above. Over 99% of operating expenses are included in the Midstream Logistics segment.

General and administrative

General and administrative expense increased by $4.8 million, or 21%, to $27.5 million for the three months ended March 31, 2023, compared to $22.8 million for the same period in 2022. The increase was driven by higher share-based compensation of $11.4 million related to a full quarter of stock compensation amortization during 2023 versus just over a month of amortization during the same period of 2022 and due to certain members of management opting to receive their bonuses in the form of stock compensation during March 2023. This increase was partially offset by a decrease of $5.7 million of costs related to the Transaction incurred during the first quarter of 2022.

Depreciation and amortization

Depreciation and amortization expense increased by $7.8 million, or 13%, to $68.9 million for the three months ended March 31, 2023, compared to $61.0 million for the same period in 2022. The increase was primarily driven by the new assets acquired through the Transaction, which closed on February 22, 2022.

Other Income (Expense)

Interest Expense

Interest expense increased by $42.5 million, or 159%, to $69.3 million for the three months ended March 31, 2023, compared to $26.8 million for the same period in 2022. The increase was primarily driven by higher interest rate swap valuation marks of $28.8 million when comparing the first quarter of 2023 to the same period in 2022. The remaining increase relates to higher debt obligations resulting from the comprehensive refinancing completed in June 2022, as well as an overall increase in interest rates associated with the Term Loan Credit Facility (as defined below) and Revolving Credit Facility (as defined below, which carried some variability. Refer to Note—12 Derivatives and Hedging Activities in the Notes to our Consolidated Financial Statements regarding the Company’s strategy in managing interest rate risk.

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Equity in earnings of unconsolidated affiliates

Income from EMI pipelines increased by $18.5 million, or 66%, to $46.5 million for the three months ended March 31, 2023, compared to $27.9 million for the same period in 2022. 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, which closed in February 2022. 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.

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.

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	Three Months Ended March 31,
	2023		2022*		% Change
	(In thousands, except percentages)
Reconciliation of net income including noncontrolling interests to Adjusted EBITDA
Net income including noncontrolling interests	$	4,299	$	21,389	(80)	%
Add back:
Interest expense	69,308		26,645		160	%
Income tax expense	416		676		(38)	%
Depreciation and amortization	68,854		61,023		13	%
Amortization of contract costs	1,655		448		NM
Proportionate EMI EBITDA	71,867		40,741		76	%
Share-based compensation	17,540		6,132		186	%
Loss on disposal of assets	102		110		(7)	%
Loss on debt extinguishment	—		129		(100)	%
Unrealized (gain) loss on commodity or embedded derivatives	(4,987)		2,886		NM
Integration Costs	925		6,151		(85)	%
Transaction Costs	268		5,676		(95)	%
Other one-time cost or amortization	3,748		1,195		NM
Deduct:
Warrant valuation adjustment	44		—		100	%
Gain on redemption of mandatorily redeemable Preferred Units	—		4,493		(100)	%
Equity income from EMI's	46,464		27,917		66	%
Adjusted EBITDA	$	187,487	$	140,791	33	%

* 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 $46.7 million, or 33%, to $187.5 million for the three months ended March 31, 2023, compared to $140.8 million for the same period in 2022. The increase was primarily driven by increases in add back related to the Company’s proportionate share of its EMI pipelines’ EBITDA of $31.1 million, or 76%, share-based compensation of $11.4 million, or 186%, and depreciation and amortization expense of $7.8 million. The increase in adjusted EBITDA was partially offset by EMI pipelines equity income of $18.5 million, a decrease in net income including noncontrolling interest of $17.1 million, or (80)%, and a decrease in integration costs of $5.2 million, or 85%.

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 adjusted EBITDA for the three months ended March 31, 2023 and 2022. Also refer to Note 16—Segments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for a reconciliation of segment adjusted EBITDA to net income including noncontrolling interests.

		Three Months Ended March 31,
		2023		2022*		% Change
	(In thousands, except percentages)
Midstream Logistics		$	119,249	$	102,890	16	%
Pipeline Transportation		72,290		40,437		79	%
Corporate and Other**		(4,052)		(2,536)		60	%
Total segment adjusted EBITDA		$	187,487	$	140,791	33	%

* 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.

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** 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 $16.4 million, or 16%, to $119.2 million for the three months ended March 31, 2023, compared to $102.9 million for the same period in 2022. The increase was primarily driven by an increase in segment net income including noncontrolling interests of $41.8 million and increases in the add back related to interest expense of $26.6 million due to increased balances on the Company’s credit facilities and depreciation and amortization expense of $7.5 million due to new operations acquired through the Transaction. The increase in adjusted EBITDA was partially offset by decreased in add back related to integration and acquisition costs of $4.1 million.

Pipeline Transportation segment adjusted EBITDA increased by $31.9 million, or 79%, to $72.3 million for the three months ended March 31, 2023, compared to $40.4 million for the same period in 2022. The increase was driven by investments in GCX, EPIC and Shin Oak as well as a 100% increase in the Company’s investment in PHP, which were all acquired through the Transaction closed in February 2022. During the three months ended March 31, 2022, the Company only held a 26.67% interest in PHP.

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 2023, the Company’s primary capital spending requirements are related to the PHP expansion project, the midstream infrastructure acquisition and other budgeted capital expenditures for construction of gathering and processing assets and the Company’s contractual debt obligations. The Company will continue to have Apache, Blackstone, I Squared and management reinvest 100% of their 2023 distribution and dividends into shares of our Class A Common Stock. In addition, the Board has approved the Repurchase Program authorizing discretionary purchases of the Company’s Class A Common Stock up to $100 million in aggregate.

During the three months ended March 31, 2023, the Company’s primary sources of cash were distributions from the EMI pipelines, borrowings under the Revolving Credit Facility and cash generated from operations. Based on the Company’s current financial plan and related assumptions including the Reinvestment Agreement (as defined below), the Company believes that cash from operations 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 over the next 12 months. Additionally, the Company has locked in the floating base rate on its Term Loan Credit Facility with interest rate swaps with a $2.25 billion notional that are effective through May 31, 2025 swapping floating SOFR for a fixed swap rate between 4.38% and 4.49%.

Comprehensive Refinancing

On June 8, 2022, the Partnership completed the private placement of $1.00 billion aggregate principal amount of 5.875% Senior Notes due 2030, which are fully and unconditionally guaranteed by the Company. The Notes are issued under our Sustainability-Linked Financing Framework and include sustainability-linked features. In addition, the Partnership entered into the revolving credit agreement with Bank of America, N.A., as administrative agent (the “Revolving Credit Agreement”), which provides for a $1.25 billion senior unsecured Revolving Credit Facility maturing on June 8, 2027 (the “Revolving Credit Facility”), and the term loan credit agreement with PNC Bank as administrative agent (the “TLA”), which provides for a $2.00 billion senior unsecured Term Loan Credit Facility maturing on June 8, 2025 (the “Term Loan Credit Facility”). 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.Note 8—Debt and Financing Costs in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K 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 three months ended March 31, 2023 and 2022, capital spending for property, plant and equipment totaled $56.7 million and $29.2 million, respectively and intangible asset purchases of $9.8 million and $3.6 million, respectively. The first quarter of 2023 also included capital spend of $65 million for certain midstream infrastructure assets, as discussed in Note 2 - Business Combinations. Management believes its existing gathering, processing and transmission infrastructure capacity is capable of fulfilling its midstream contracts to service its customers. During the three months ended March 31, 2023, the Company contributed $58.7 million to PHP, for the Capacity Expansion Project, which started in June 2022.

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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 over the next 12 months. For further information on EMIs, refer to Note 6—Equity Method Investments in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q.

Cash Flow

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

	Three Months Ended March 31,
	2023		2022
	(In thousands)
Cash provided by operating activities	$	119,591	$	98,393
Cash used in investing activities	$	(246,468)	$	(19,392)
Cash provided by (used in) financing activities	$	122,467	$	(80,084)

Operating Activities. Net cash provided by operating activities increased by $21.2 million for the three months ended March 31, 2023 compared with the same period in 2022. The change in the operating cash flows reflected increases in adjustments related to non-cash items of $46.1 million, offset by decreases in working capital of $7.8 million and decreases in net income including noncontrolling interests of $17.1 million.

Investing Activities. Net cash used in investing activities increased by $227.1 million for the three months ended March 31, 2023 compared with the same period in 2022. The increase was primarily driven by an increase in net cash (paid for) acquired in acquisition of $138.4 million, an increase in property, plant and equipment expenditures of $29.6 million, an increase in contributions made to unconsolidated affiliates of $58.7 million related to the PHP expansion project and an increase in intangible assets expenditure of $6.2 million.

Financing Activities. Net cash provided by financing activities was $122.5 million for the three months ended March 31, 2023, which was comprised of net borrowings from the Company’s Revolving Credit Facility of $142.0 million, offset by cash dividends of $17.1 million and repurchase of Class A common stock of $2.4 million. Net cash used in financing activities was $80.1 million for the three months ended March 31, 2022, which was comprised of redemption of mandatorily redeemable Preferred Units of $60.7 million and net payments on the Company’s long-term debt and Revolving Credit Facility of $19.4 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. The Audit Committee resolved that for the calendar year 2023, 100% of all distributions or dividends received by each Reinvestment Holder would be reinvested in shares of Class A Common Stock.

During the first three months of 2023, the Company made cash dividend payments of $17.1 million to holders of Class A Common Stock and Class C Common Units and $87.9 million was reinvested in shares of Class A Common Stock by the Reinvestment Holders.

Stock Split

On May 19, 2022, the Company announced the 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.

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Dividend

On April 19, 2023, 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 May 17, 2023. 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, which will be payable on May 17, 2023.

Stock Repurchase Program

In February 2023, the Board approved the Repurchase Program, authorizing discretionary purchases of the Company’s Class A Common Stock up to $100.0 million in the aggregate. Repurchases may be made at management’s discretion from time to time, in accordance with applicable securities laws, on the open market or through privately negotiated transactions and may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act. Privately negotiated repurchases from affiliates are also authorized under the Repurchase Program, subject to such affiliates’ interest and other limitations. The repurchases will depend on market conditions and may be discontinued at any time without prior notice. For the three months ended March 31, 2023, the Company repurchased 81,862 shares at a total cost of $2.4 million. For additional information regarding the Repurchase Program, see “Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” in this Quarterly Report on Form 10-Q. For more information regarding the 1% U.S. federal excise tax imposed on certain repurchases of stock by publicly traded U.S. corporations, please refer to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Business—Share Repurchase Program,” included in this Quarterly Report on Form 10-Q.

Liquidity

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

	March 31,		December 31,
	2023		2022
	(In thousands)
Cash and cash equivalents	$	1,984	$	6,394
Total debt, net of unamortized deferred financing cost	$	3,511,648	$	3,368,510
Available committed borrowing capacity	$	713,000	$	855,000

Cash and cash equivalents

As of March 31, 2023 and December 31, 2022, the Company had $2.0 million and $6.4 million, respectively, in cash and cash equivalents.

Total Debt and Available credit facilities

There is no assurance that the financial condition of banks with lending commitments to the 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.

Contractual Obligations

We have contractual obligations for principal and interest payments on our Term Loan Credit Facility. See Note 7—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 March 31, 2023.

Off-Balance Sheet Arrangements

As of March 31, 2023, there were no off-balance sheet arrangements.

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Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates from those disclosed on our Annual Report Form 10-K for the year ended December 31, 2022. Please refer to information regarding our critical accounting policies and estimates included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Commission on March 7, 2023.

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 continued to have significant impact on volatility and uncertainties in the financial markets during the first quarter of 2023.

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 crude, 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 12—Derivatives 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 March 31, 2023, the Company had interest bearing debt, net of deferred financing costs, with principal amount of $3.51 billion. The interest rates for the Revolving Credit Facility and the Term Loan Credit Facility 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 10.0%, the Company’s consolidated interest expense would have increased by approximately $60.8 million for the quarter ended March 31, 2023. 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 12—Derivatives 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. The Company also expects to realize 0.05% reductions to the effective interest rates of both the Revolving Credit Facility and the Term Loan Credit Facility during 2023 in relation to sustainability adjustment features embedded in these facilities. The rate reductions are dependent upon the Company meeting certain sustainability targets after 2022, which are currently subject to the completion of certain attestation procedures.

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.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of March 31, 2023, 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

32

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) and 15d-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 March 31, 2023.

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) and 15d-15(f) of the Exchange Act) during the quarter ended March 31, 2023, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For further information regarding legal proceedings, refer to Note 16—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” in the Company’s Annual Report Form 10-K for the year ended December 31, 2022 filed on March 7, 2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Repurchase of Class A Common Stock

Period	Total Number of Shares Purchased(1)	Average Price per Share(2)		Total Number of Shares Purchased as Part of Publicly Announced Plan(1)	Maximum number (or approximate dollar value) of Shares that May Yet be Purchased under the Plans
January 1 to January 31, 2023	—	$	—	—	$	100,000,000
February 1 to February 28, 2023	—	—		—	100,000,000
March 1 to March 31, 2023	81,862	29.71		81,862	97,567,798
Total	81,862	$	29.71	81,862	$	97,567,798

(1)On February 28, 2023, the Company announced that the Board had approved a share repurchase program (“Repurchase Program”), authorizing discretionary purchases of the Company’s Class A Common Stock up to $100 million in the aggregate.

(2)Average price paid per share included commission to repurchase shares.

ITEM 5. OTHER INFORMATION

Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934

Pursuant to Section 13(r) of the Exchange Act, we may be required to disclose in our annual and quarterly reports to the SEC whether we or any of our “affiliates” knowingly engaged in certain activities, transactions or dealings relating to Iran or with certain individuals or entities targeted by US economic sanctions. Disclosure is generally required even where the

33

activities, transactions or dealings were conducted in compliance with applicable law. Because the SEC defines the term “affiliate” broadly, it includes any entity under common “control” with us (and the term “control” is also construed broadly by the SEC).

The description of the activities below has been provided to us by Blackstone Inc. (“BX”), affiliates of which: (i) beneficially own more than 10% of our outstanding common stock and are members of our board of directors, and (ii) hold a minority non-controlling interest in Atlantia S.p.A. Atlantia S.p.A. may therefore be deemed to be under common “control” with us; however, this statement is not meant to be an admission that common control exists.

The disclosure below relates solely to activities conducted by Atlantia S.p.A. The disclosure does not relate to any activities conducted by us or by BX and does not involve our or BX’s management. Neither we nor BX has had any involvement in or control over the disclosed activities, and neither we nor BX has independently verified or participated in the preparation of the disclosure. Neither we nor BX is representing as to the accuracy or completeness of the disclosure nor do we or BX undertake any obligation to correct or update it.

We understand that BX disclosed the following in their most recent annual report on Form 10-K, and as of May 4, 2023, the company is unaware of any changes to the relationship status between BX and Atlantia S.p.A, therefore, the Company included BX’s disclosure of certain activities, transactions or dealings between BX and Iran.

Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934. Funds affiliated with BX first invested in Atlantia S.p.A. on November 18, 2022 in connection with the voluntary public tender offer by Schema Alfa S.p.A. for all of the shares of Atlantia S.p.A., pursuant to which such funds obtained a minority non-controlling interest in Atlantia S.p.A. Atlantia S.p.A. owns and controls Aeroporti di Roma S.p.A. (“ADR”), an operator of airports in Italy including Leonardo da Vinci-Fiumicino Airport. Iran Air has historically operated periodic flights to and from Leonardo da Vinci-Fiumicino Airport as authorized, from time to time, by an aviation-related bilateral agreement between Italy and Iran, scheduled in compliance with European Regulation 95/93, and approved by the Italian Civil Aviation Authority. ADR, as airport operator, is under a mandatory obligation to provide airport services to all air carriers (including Iran Air) authorized by the applicable Italian authority. The relevant turnover attributable to these activities (whose consideration is calculated on the basis of general tariffs determined by such independent Italian authority) in the quarter ended March 31, 2023 was less than €30,000. Atlantia S.p.A. does not track profits specifically attributable to these activities.

34

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*	–	KNTK - 2019 Omnibus Compensation Plan - Form RSU Agreement (2023 Form)
10.3*	–	KNTK - 2019 Omnibus Compensation Plan - Form RSU Agreement (Director Form)
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, 2023, 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:	May 4, 2023	/s/ Jamie Welch
		Jamie Welch
		Chief Executive Officer, President, Chief Financial Officer and Director
		(Principal Executive Officer)
Dated:	May 4, 2023	/s/ Steven Stellato
		Steven Stellato
		Executive Vice President, Chief Accounting and Chief Administrative Officer
		(Principal Financial Officer)

36

EX-10.2

Exhibit 10.2

KINETIK HOLDINGS INC.

2019 OMNIBUS COMPENSATION PLAN

RESTRICTED STOCK UNIT GRANT NOTICE

Pursuant to the terms and conditions of the Kinetik Holdings Inc. 2019 Omnibus Compensation Plan, as amended from time to time (the “Plan”), Kinetik Holdings Inc. (the “Company”) hereby 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 and conditions set forth herein and in the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, each of which is incorporated herein by reference. Capitalized terms used but not defined herein shall have the meanings set forth in the Plan or the Agreement, as applicable.

Participant:	________________
Date of Grant:	________________ (the “Date of Grant”)
Total Number of RSUs:	________________
Vesting Schedule:	Subject to the Agreement, the Plan and the other terms and conditions set forth herein, the RSUs shall vest and be settled according to the following schedule: Vesting Date RSUs Vesting   provided, that you remain continuously employed by the Company or an Affiliate, as applicable, from the Date of Grant through such vesting date (the “Vesting Date”). Shares will be issued with respect to the RSUs as set forth in Section 4 of the Agreement (which Shares when issued will be transferable and nonforfeitable).
Change of Control	Notwithstanding anything contained herein or in the Agreement to the contrary, upon the occurrence of a Change of Control, provided, that you remain continuously employed by the Company or an Affiliate, as applicable, from the Date of Grant through the occurrence of such Change of Control, the following number of RSUs granted hereunder shall vest and be settled pursuant to Section 4 of the Agreement: ________________.

Death; Disability	Notwithstanding anything contained herein or in the Agreement to the contrary, upon the termination of your employment with the Company and its Affiliates due to your death or Disability (as defined below), the following number of RSUs granted hereunder shall vest and be settled pursuant to Section 4 of the Agreement: ________________.
Retirement	Notwithstanding anything contained herein or in the Agreement to the contrary, upon the termination of your employment with the Company and its Affiliates due to your Retirement (as defined below), then, provided that you execute within the time provided to do so (and do not revoke within any time provided to do so) a release of all claims in a form acceptable to the Company, the following number of RSUs granted hereunder shall vest and be settled pursuant to Section 4 of the Agreement: ________________.
Definitions	As used in this Agreement, the following capitalized terms have the meanings set forth below: “Disability” means “disability” (or a term of like import) as defined under any employment or other service agreement between you and the Company or an Affiliate or, in the absence of such an agreement or definition, shall mean your inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than __ months.
	“Retirement” means “retirement” (or a term of like import) as defined under any employment or other service agreement between you and the Company or an Affiliate or, in the absence of such an agreement or definition, shall mean the termination of your employment with the Company and its Affiliates due to your voluntary resignation on or after attaining age __ and completing __ or more full years of service with the Company (or any predecessor) or an Affiliate.

By your signature below, you agree to be bound by the terms and conditions 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 fully understand all provisions of the Agreement, the Plan and this Grant Notice.

You hereby agree to accept as binding, conclusive and final all decisions or interpretations of the Committee regarding any 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 shall be deemed to be an original, but all of which together shall constitute one and 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 as provided above.

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 (this “Agreement”) is made as of the Date of Grant by and between Kinetik Holdings Inc., a Delaware corporation (the “Company”), (the “Participant”). Capitalized terms used but not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

1.Award.  In consideration of the Participant’s past and/or continued employment with 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 and the Plan. Unless and until the RSUs have become vested in the manner set forth in the Grant Notice, the Participant will have no right to receive any Stock 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 provisions set forth in the Grant Notice.  Unless and until the RSUs have vested in accordance with the vesting provisions set forth in the Grant Notice and 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, except as otherwise specifically provided for in the Plan or this Agreement (including Section 3). In the event of the termination of the Participant’s employment with the Company or an Affiliate prior to the vesting of all of the RSUs (but after giving effect to any accelerated vesting pursuant to the Grant Notice), any unvested RSUs (and all rights arising from such RSUs and from being a holder thereof) will terminate automatically without any further action by the Company and will be forfeited without further notice and at no cost to the Company.

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 pursuant to Section 4, the Company shall pay to the Participant an amount in cash equal to the cash dividends that 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 granted pursuant to this Agreement that have not been settled pursuant to Section 4 as of such record date, such payment to be made on or promptly following the date that the Company pays such dividend (however, in no event shall any dividend payment under this Section 3 be paid later than __ days following the date on which the Company pays such dividend to its stockholders generally).

4.Settlement of RSUs. As soon as administratively practicable following the vesting of the RSUs pursuant to the vesting provisions set forth in the Grant Notice, but in no event later than __ days after the applicable vesting date, the Company shall deliver to the Participant (or the Participant’s permitted transferee, if applicable) the number of shares of Stock subject to the RSUs that vested and are being settled. Any fractional RSU that becomes vested hereunder shall be rounded down at the time shares of Stock are issued in settlement of such RSU. No fractional shares of Stock, nor the cash value of any fractional shares of Stock, will be

A-1

issuable or payable to the Participant pursuant to this Agreement. All shares of Stock issued hereunder, if any, shall 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 shall not bear any interest owing to the passage of time. Neither this Section 4 nor any action taken pursuant to or in accordance with this Agreement shall be construed to create a trust or a funded or secured obligation of any kind.

5.Tax Withholding. To the extent that the receipt, vesting or settlement of this Award results in compensation income or wages to the Participant for federal, state, local or foreign tax purposes, the Participant shall make arrangements satisfactory to the Company for the satisfaction of obligations for the payment of withholding taxes and other tax obligations relating to this Award, which arrangements may include, at the Company’s election, the delivery of cash or cash equivalents, Stock (including previously owned Stock, net settlement, a broker-assisted sale, or other cashless withholding or reduction of the amount of cash or shares of Stock otherwise issuable or delivered pursuant to this Award), other property, or any other legal consideration the Committee deems appropriate. If such tax obligations are satisfied through the withholding of shares of Stock that are otherwise issuable to the Participant pursuant to this Award (or through the surrender of previously owned shares of Stock by the Participant to the Company), the maximum number of shares of Stock that may be so withheld (or surrendered) shall be the number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or surrender equal to the aggregate amount of such tax liabilities, determined based on the greatest withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that may be utilized without creating adverse accounting treatment for the Company with respect to this Award, as determined by the Committee. For the avoidance of doubt, to the extent any cash payments are made to the Participant under this Agreement, taxes related thereto will be withheld from such payments. The Participant acknowledges that there may be adverse tax consequences upon the receipt, vesting or settlement of this Award or disposition of the underlying shares of Stock and the Participant has been advised, and hereby is advised, to consult a tax advisor. The Participant acknowledges and agrees that none of the Board, the Committee, the Company or any Affiliate have made any representation or warranty as to the tax consequences to the Participant as a result of the receipt of the RSUs, the vesting of the RSUs or the forfeiture of any of the RSUs. The Participant represents that the Participant is in no manner relying on the Board, the Committee, the Company or an Affiliate 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.

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 Securities 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

A-2

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 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 payments of cash or 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 vested RSUs.

11.No Right to Continued Employment or Awards.

(a)For purposes of this Agreement, the Participant shall be considered to be employed by the Company as long as the Participant remains an employee of the Company or an Affiliate, or an employee of a corporation or other entity (or a parent or subsidiary of such corporation or other entity) assuming or substituting a new award for this Award. Without limiting the scope of the preceding sentence, it is specifically provided that the Participant shall be considered to have terminated his or her employment with the Company at the time of the termination of the “Affiliate” status of the entity or other organization that employs the Participant. Nothing in the adoption of the Plan, nor the award of the RSUs thereunder pursuant to the Grant Notice and this Agreement, shall confer upon the Participant the right to continued

A-3

employment by the Company or any Affiliate, or any other entity, or affect in any way the right of the Company or any such Affiliate, or any other entity to terminate such employment at any time. Unless otherwise provided in a written employment agreement or by applicable law, the Participant’s employment by the Company, or any such Affiliate, or any other entity, shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Participant or the Company, or any such Affiliate or any other entity for any reason whatsoever, with or without cause or notice. Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee or its delegate, and such determination shall be final, conclusive and binding for all purposes.

(b)The grant of the RSUs is a one-time benefit and does not create any 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: 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.

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

A-4

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 constitutes 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; provided, however, that the terms of this Agreement shall not modify and shall be subject to the terms and conditions of any employment or other service agreement between the Participant and the Company (or an Affiliate or other entity) or a severance plan in which the Participant participates, in each case, in effect as of the date a determination is to be made under this Agreement. 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 cash or 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.

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.

A-5

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 granted pursuant to this Agreement are intended to comply with the applicable requirements 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”), or an exemption therefrom, and shall be limited, construed and interpreted in accordance with such intent. Nevertheless, to the extent that the Committee determines that the RSUs may not be exempt from Section 409A, then, if the Participant is deemed to be a “specified employee” within the meaning of Section 409A, as determined by the Committee, at a time when the Participant becomes eligible for settlement of the RSUs upon his “separation from service” within the meaning of Section 409A, then to the extent necessary to prevent any accelerated or additional tax under Section 409A, such settlement will be delayed until the earlier of: (a) the date that is six months following the Participant’s separation from service and (b) the Participant’s death. Notwithstanding the foregoing, the Company and its Affiliates make no representations that the RSUs provided under this Agreement are exempt from or compliant with Section 409A and in no event shall the Company or any Affiliate be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A.

A-6

EX-10.3

Exhibit 10.3

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 be subject to the following vesting schedule: ________________.

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. 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 the Deferral Form. Unless and until the RSUs have been settled in the manner described herein, the Participant will have no right to receive any Stock 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 be subject to the following vesting schedule: ________________.  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 prior to the settlement of the RSUs, such RSUs (and all rights arising from such RSUs and from being a holder thereof) shall remain outstanding. 

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; provided, however, that such amount shall be (a) subject to the terms and conditions of the Company’s Dividend Reinvestment Plan (as amended from time to time, the “Reinvestment Plan”), and (b) immediately vested in full and paid to the Participant in accordance with the Reinvestment Plan at the time elected by the Participant under the Deferral Form. The Participant will not receive any interest regarding the payment of dividends pursuant to this Section 3 (“DERs”). 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. 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

Exhibit A-1

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 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 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.

A-2

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.

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

A-3

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, the Deferral Form and the Reinvestment Plan 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.

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.

A-4

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-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: May 4, 2023

/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: May 4, 2023

/s/ Steven Stellato

Steven Stellato

Executive Vice President, Chief Accounting and Chief Administrative 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 March 31, 2023 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: May 4, 2023

/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 March 31, 2023 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: May 4, 2023

/s/ Steven Stellato

Steven Stellato

Executive Vice President, Chief Accounting and Chief Administrative Officer

XML

Cover - shares	3 Months Ended
	Mar. 31, 2023	Apr. 30, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
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	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
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		49,057,209
Class C Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		94,089,038

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2023	Mar. 31, 2022	[1]
Operating revenues:
Total operating revenues		$ 281,040	$ 257,249
Operating costs and expenses:
Costs of sales (exclusive of depreciation and amortization shown separately below)	[2]	115,877	120,275
Operating expenses		35,973	29,871
Ad valorem taxes		5,458	4,153
General and administrative expenses		27,511	22,752
Depreciation and amortization expenses		68,854	61,023
Loss on disposal of assets		102	110
Total operating costs and expenses		253,775	238,184
Operating income		27,265	19,065
Other income (expense):
Interest and other income		294	250
Gain on redemption of mandatorily redeemable Preferred Units		0	4,493
Loss on embedded derivative		0	(2,886)
Interest expense		(69,308)	(26,774)
Equity in earnings of unconsolidated affiliates		46,464	27,917
Total other (expense) income, net		(22,550)	3,000
Income before income taxes		4,715	22,065
Income tax expense		416	676
Net income including noncontrolling interest		4,299	21,389
Net income attributable to Preferred Unit limited partners		0	4,993
Net income attributable to common shareholders		4,299	16,396
Net income attributable to Common Unit limited partners		2,863	12,531
Net income attributable to Class A Common Stock Shareholders		$ 1,436	$ 3,865
Net (loss) income attributable to Class A Common Shareholders per share
Basic (in USD per share)		$ (0.06)	$ 0.10
Diluted (in USD per share)		$ (0.06)	$ 0.10
Weighted-average shares
Basic (in shares)	[3]	47,392	37,392
Diluted (in shares)	[3]	47,605	37,426
Service
Operating revenues:
Total operating revenues		$ 103,425	$ 80,445
Product
Operating revenues:
Total operating revenues		173,824	174,928
Other revenue
Operating revenues:
Total operating revenues		$ 3,791	$ 1,876

[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 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] Includes amounts of $14.6 million and $3.6 million associated with related parties for the three months ended March 31, 2023 and 2022, respectively.

[3] Share and per share amounts have been retrospectively restated to reflect the Company’s reverse stock split, which was effected June 8, 2022.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2023	Mar. 31, 2022
Costs of sales (exclusive of depreciation and amortization shown separately below)	[1]	$ 115,877	$ 120,275	[2]
Affiliated Entity
Revenue from affiliate		25,300	15,600
Costs of sales (exclusive of depreciation and amortization shown separately below)		$ 14,600	$ 3,600

[1] Includes amounts of $14.6 million and $3.6 million associated with related parties for the three months ended March 31, 2023 and 2022, respectively.

[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 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 BALANCE SHEETS - USD ($) $ in Thousands		Mar. 31, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and cash equivalents		$ 1,984	$ 6,394
Accounts receivable, net of allowance for credit losses of $1,000 in 2023 and 2022(1)	[1]	199,028	204,036
Derivative assets		13,834	6,963
Prepaid and other current assets		31,366	24,474
Total assets, current		246,212	241,867
NONCURRENT ASSETS:
Property, plant and equipment, net		2,634,173	2,535,212
Intangible assets, net		676,516	695,389
Derivative asset, non-current		124	0
Operating lease right-of-use assets		64,097	28,551
Deferred charges and other assets		85,551	32,275
Investment in unconsolidated affiliate		2,412,905	2,381,340
Goodwill		5,077	5,077
Total assets, noncurrent		5,878,443	5,677,844
Total assets		6,124,655	5,919,711
CURRENT LIABILITIES:
Accounts payable		18,323	17,899
Accrued expenses		176,307	173,914
Derivative liabilities		6,662	5,718
Current portion of operating lease liabilities		39,773	22,810
Other current liabilities		7,236	7,487
Current liabilities		248,301	227,828
NONCURRENT LIABILITIES
Long term debt, net		3,511,648	3,368,510
Contract liabilities		21,991	22,693
Operating lease liabilities		25,238	6,023
Derivative liabilities		27,123	8,328
Other liabilities		4,310	2,677
Deferred tax liabilities		11,381	11,018
Noncurrent liabilities		3,601,691	3,419,249
Total liabilities		3,849,992	3,647,077
COMMITMENTS AND CONTINGENCIES (Note 16)
Redeemable noncontrolling interest — Common Unit limited partners		2,910,861	3,112,409
EQUITY:
Additional paid-in capital		229,672	118,840
Accumulated deficit		(863,452)	(958,629)
Treasury stock, at cost (81,862 and nil shares as of March 31, 2023 and December 31, 2022, respectively)		(2,432)	0
Total equity		(636,198)	(839,775)
Total liabilities, noncontrolling interest, and equity		6,124,655	5,919,711
Class A Common Stock
EQUITY:
Common stock		5	5
Class C Common Stock
EQUITY:
Common stock	[2]	$ 9	$ 9

[1] Includes amounts of $24.2 million and $17.6 million associated with related parties as of March 31, 2023 and December 31, 2022, respectively.

[2] Share amounts have been retrospectively restated to reflect the Company’s stock split, which was effected June 8, 2022.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accounts receivable, allowance for credit losses	$ 1	$ 1
Treasury stock, shares outstanding (in shares)	81,862	0
Affiliated Entity
Accounts receivable, affiliates	$ 24,200	$ 17,600
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)	49,054,411	45,679,447
Common stock, shares outstanding (in shares)	49,054,411	45,679,447
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)	94,089,038	94,270,000
Common stock, shares outstanding (in shares)	94,089,038	94,270,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including noncontrolling interests	$ 4,299	$ 21,389	[1]
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	68,854	61,023	[1]
Amortization of deferred financing costs	1,521	3,389
Amortization of contract costs	1,655	448
Distributions from unconsolidated affiliate	67,764	48,073
Derivatives settlement	974	(884)
Derivative fair value adjustment	11,770	(8,745)
Warrants fair value adjustment	(44)	0
Gain on redemption of mandatorily redeemable Preferred Units	0	(4,493)
Loss on disposal of assets	102	110	[1]
Equity in earnings from unconsolidated affiliates	(46,464)	(27,917)	[1]
Loss on debt extinguishment	0	129
Share-based compensation	17,540	6,132
Deferred income taxes	363	676
Changes in operating assets and liabilities:
Accounts receivable	5,008	(67,446)
Other assets	(2,206)	(456)
Accounts payable	(3,175)	(6,766)
Accrued liabilities	(10,679)	73,961
Other non-current liabilities	1,677	0
Operating leases	632	(230)
Net cash provided by operating activities	119,591	98,393
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment expenditures	(58,862)	(29,234)
Intangible assets expenditures	(9,755)	(3,559)
Investments in unconsolidated affiliate	(58,658)	0
Distributions from unconsolidated affiliate	5,793	0
Cash proceeds from disposals	14	0
Net cash (paid for) acquired in acquisitions	(125,000)	13,401
Net cash used in investing activities	(246,468)	(19,392)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt	0	(26,382)
Proceeds from revolver	267,000	7,000
Payments on revolver	(125,000)	0
Redemption of mandatorily redeemable Preferred Units	0	(60,702)
Cash dividends paid to Class A Common Stock shareholders	(16,927)	0
Distribution paid to Class C Common Unit limited partners	(174)	0
Repurchase of Class A Common Stock	(2,432)	0
Net cash provided by (used in) financing activities	122,467	(80,084)
Net change in cash	(4,410)	(1,083)
CASH, BEGINNING OF PERIOD	6,394	18,729
CASH, END OF PERIOD	1,984	17,646
SUPPLEMENTAL SCHEDULE OF INVESTING AND FINANCING ACTIVITIES
Cash paid for interest, net of amounts capitalized	36,745	25,801
Property and equipment and intangible accruals in accounts payable and accrued liabilities	32,715	14,340
Class A Common Stock issued through dividend and distribution reinvestment plan	87,658	0
Restructuring Cost and Reserve [Line Items]
Class A Common Stock issued in exchange		1,013,745
Altus Midstream LP
Restructuring Cost and Reserve [Line Items]
Fair value of ALTM assets acquired	0	2,445,665
Class A Common Stock issued in exchange	0	1,013,745
ALTM liabilities and mezzanine equity assumed	$ 0	$ 1,431,920

[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 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	Treasury Stock
Beginning balance at Dec. 31, 2021				$ 0	[1]	$ 1,006,843
Increase (Decrease) in Temporary Equity [Roll Forward]
ALTM acquisition	[1]			462,717
Distributions payable to Preferred Unit limited partners	[1]			(6,937)
Redemption of Common Units						(170,060)
Net income				4,993	[1]	12,531
Change in redemption value of noncontrolling interests						2,336,117
Ending balance at Mar. 31, 2022				460,773	[1]	3,185,431
Beginning balance, shares (in shares) at Dec. 31, 2021	[2]								0		50,000,000
Beginning balance at Dec. 31, 2021		$ 5							$ 0		$ 5		$ 0	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
ALTM acquisition (in shares)	[2]								16,246,000
ALTM acquisition		1,013,745							$ 2				1,013,743
Stock redeemed (in shares)	[2]								2,740,000
Redemption of Common Units		170,060									$ (2,740)	[2]	170,060
Share-based compensation		6,132											6,132
Remeasurement of contingent consideration		4,450											4,450
Net income (loss)		3,865	[3]											3,865
Change in redemption value of noncontrolling interests		(2,336,117)											(1,194,385)	(1,141,732)
Ending balance, shares (in shares) at Mar. 31, 2022	[2]								18,986,000		47,260,000
Ending balance at Mar. 31, 2022		(1,137,860)							$ 2		$ 5		0	(1,137,867)	0
Beginning balance at Dec. 31, 2022				0	[1]	3,112,409
Increase (Decrease) in Temporary Equity [Roll Forward]
Redemption of Common Units						(5,634)
Net income						2,863
Change in redemption value of noncontrolling interests						(128,211)
Distribution paid to Common Units limited partners						(70,566)
Ending balance at Mar. 31, 2023				$ 0	[1]	$ 2,910,861
Beginning balance, shares (in shares) at Dec. 31, 2022							45,679,447	94,270,000	45,679,000	[2]	94,270,000	[2]
Beginning balance at Dec. 31, 2022		(839,775)							$ 5		$ 9		118,840	(958,629)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock redeemed (in shares)	[2]								181,000
Redemption of Common Units		5,634									$ (181)	[2]	5,634
Issuance of common stock through dividend and distribution reinvestment plan(in shares)	[2]								3,071,000
Issuance of common stock through dividend and distribution reinvestment plan		87,658											87,658
Repurchase of Class A Common Stock (in shares)							(81,862)		(82,000)	[2]
Repurchase of Class A Common Stock		(2,432)					$ (2,400)								(2,432)
Share-based compensation (in shares)	[2]								205,000
Share-based compensation		17,540											17,540
Net income (loss)		1,436												1,436
Change in redemption value of noncontrolling interests		128,211												128,211
Dividends, common stock, cash		(34,470)												(34,470)
Ending balance, shares (in shares) at Mar. 31, 2023							49,054,411	94,089,038	49,054,000	[2]	94,089,000	[2]
Ending balance at Mar. 31, 2023		$ (636,198)							$ 5		$ 9		$ 229,672	$ (863,452)	$ (2,432)

[1] Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 12—Series A Cumulative Redeemable Preferred Units in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Commission on March 7, 2023.

[2] Share amounts have been retrospectively restated to reflect the Company’s Stock Split, 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.

[3] The results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. Refer to the 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 (Parenthetical)	3 Months Ended
	Mar. 31, 2023 $ / shares
Class A Common Stock
Cash dividends (in USD per share)	$ 0.75

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DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

BCP Raptor Holdco, LP (“BCP”), the Company’s predecessor for accounting purposes, 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 and CR Permian Holdings, LLC. 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.

Altus Midstream Company (“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. 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 (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. The transactions contemplated by the Contribution Agreement are referred to herein as the “Transaction.” In connection with the closing of the Transaction (the “Closing”), the Company changed its name from “Altus Midstream Company” 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.

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; accordingly, you should read these consolidated financial statements in conjunction with our

consolidated financial statements and related notes included in our 2022 Form 10-K.. 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. Therefore, the results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. 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 is consistent with our previous public filings and the terms of the Contribution Agreement.

Significant Accounting Policies

The accounting policies that we follow are set forth in Note 2 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our Annual Report. There were no significant updates or revisions to our accounting policies during the three months ended March 31, 2023.

Inventory

Other current assets include condensate, residue gas and NGLs inventories that are valued at the lower of cost or market. Inventory was valued at $4.2 million and $4.8 million as of March 31, 2023 and December 31, 2022, respectively.

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 $24.2 million and $17.6 million as of March 31, 2023 and December 31, 2022, respectively. Revenue from affiliates was $25.3 million and $15.6 million for the three months ended March 31, 2023 and 2022, respectively. Accrued expense due to affiliates was immaterial, and operating expenses were $0.3 million and nil for the three months ended March 31, 2023 and 2022, respectively.

In addition, the Company incurred cost of sales with two of its equity method investment (“EMI”) pipeline entities, Permian Highway Pipeline LLC (“PHP”) and Breviloba, LLC (“Breviloba”). The Company paid a demand fee to PHP and paid a capacity fee to Breviloba for certain volumes moving on the Shin Oak NGL Pipeline. For the three months ended March 31, 2023 and 2022, the Company recorded cost of sales of $14.6 million and $3.6 million, respectively, with these affiliates.

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BUSINESS COMBINATIONS

3 Months Ended

Mar. 31, 2023

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

As of March 31, 2023, our allocation of purchase price for acquisitions made during 2023 and 2022 are detailed below:

	Acquisition Date	Acquisition	Considerations Transferred		Current Assets		Property Plant & Equipment		Intangible Assets		Other Long Term Assets		Goodwill		Liabilities		Noncontrolling Interest
			(In thousands)
(1)	Q1 2023	Midstream Infrastructure Assets and Incentive and Acceleration Agreement(a)	$	125,000	$	4,736	$	61,850	$	3,150	$	55,264	$	—	$	—	$	—
(2)	Q1 2022	Altus Midstream Company (“ALTM”)	$	1,013,745	$	38,750	$	634,923	$	13,200	$	1,752,500	$	5,077	$	(967,988)	$	(462,717)

(a)Consideration includes $65 million paid for certain midstream assets and the $60 million paid related to the incentive and acceleration agreement.

Midstream Infrastructure Assets

The Partnership closed on a purchase and sale agreement for certain midstream assets for $65.0 million together with a new 20 year midstream service agreement. In addition, the Partnership entered into an incentive and acceleration agreement related to near term supplemental development activities on acreage dedicated for midstream services to affiliates of the Partnership. Such development activities will begin in 2023 and are subject to semi-annual performance milestones and subject to refund with consequential monetary penalty if not satisfied. Consideration for the incentive and acceleration agreement of $60 million was capitalized as a contract asset in accordance with ASC 606, of which $4.7 million is included in “Prepaid and Other Current Assets” and $55.3 million is included in “Deferred Charges and Other Assets” in the condensed consolidated balance sheet as of March 31, 2023. These transactions were accounted for as a business combination in accordance with ASC 805. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, the completion of the valuation of the underlying assets and liabilities assumed. The Company is continuing its review of these matters during the measurement period. Acquisition-related costs were immaterial for this transaction.

Altus Midstream Company

On February 22, 2022, the Company consummated the Transaction. Pursuant to the Contribution Agreement, in connection with 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 (the “Contributed Entities”) to the Partnership; and (ii) in exchange for such contribution, the Partnership transferred to Contributor 50,000,000 common units representing limited partner interests in the Partnership and 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share.

The Transaction was accounted as a reverse merger in accordance with ASC 805, which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. During the 12-month measurement period following the acquisition date, the Company made necessary adjustments as information became available to the purchase price allocation, including, but not limited to, working capital and valuation of the underlying assets of the equity method investments. The Company recorded goodwill of $5.1 million as of December 31, 2022 related to operational synergies. The Company incurred acquisition-related costs of nil and $5.7 million for the three months ended March 31, 2023 and 2022, respectively, related to the Transaction.

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REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2023

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 March 31,
	2023		2022
	(In thousands)
Gathering and processing services	$	103,425	$	80,445
Natural gas, NGLs and condensate sales	173,824		174,928
Other revenue	3,791		1,876
Total revenues and other	$	281,040	$	257,249

There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2023. The Company recognized revenues from minimum volume commitment (“MVC”) deficiency payments of $1.1 million and nil for the three months ended March 31, 2023 and 2022, 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 March 31, 2023:

	Amount
Fiscal Year	(In thousands)
Remaining of 2023	$	27,703
2024	38,970
2025	44,498
2026	34,631
2027	35,405
Thereafter	155,888
	$	337,095

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 March 31, 2023:

	Amount
	(In thousands)
Balance at December 31, 2022	$	29,300
Reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied	(2,059)
Cash received in advance and not recognized as revenue	669
Balance at March 31, 2023	27,910
Less: Current portion	5,919
Non-current portion	$	21,991

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 March 31, 2023 and December 31, 2022, the Company had contract acquisition cost assets of $76.2 million and $17.8 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 contracts. The Company recognized cost of sales associated with these assets of $1.7 million and $0.4 million for the three months ended March 31, 2023 and 2022, respectively.

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PROPERTY, PLANT AND EQUIPMENT

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

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

	March 31,		December 31,
	2023		2022
	(In thousands)
Gathering, processing, and transmission systems and facilities	$	3,004,016	$	2,904,084
Vehicles	10,331		9,290
Computers and equipment	5,504		4,289
Less: accumulated depreciation and accretion	(512,451)		(474,258)
Total depreciable assets, net	2,507,400		2,443,405
Construction in progress	104,900		70,325
Land	21,873		21,482
Total property, plant, and equipment, net	$	2,634,173	$	2,535,212

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 $38.4 million and $30.8 million of depreciation expense for the three months ended March 31, 2023 and 2022, respectively. There were no triggering events for property, plant and equipment during the three months ended March 31, 2023 and 2022.

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GOODWILL AND INTANGIBLE ASSETS, NET

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill totaled $5.1 million as of March 31, 2023 and December 31, 2022. The goodwill of $5.1 million is within the Midstream Logistics segment, and pertains to excess of the purchase price over net assets acquired in connection with the Transaction.

Goodwill is tested at least annually as of November 30 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 March 31, 2023.

Intangible Assets

Intangible assets, net, are comprised of the following:

	March 31,		December 31,
	2023		2022
	(In thousands)
Customer contracts	$	1,142,278	$	1,137,831
Right of way assets	134,716		127,539
Less accumulated amortization	(600,478)		(569,981)
Total amortizable intangible assets, net	$	676,516	$	695,389

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.

On March 31, 2023, remaining weighted average amortization periods for customer contracts and right of way assets were approximately 7.36 years and 6.95 years, respectively. Overall remaining weighted average amortization period for the intangible assets as of March 31, 2023 was approximately 7.31 years.

The Company recorded $30.5 million and $30.2 million of amortization expense for the three months ended March 31, 2023 and 2022, respectively. There was no impairment recognized on intangible assets for the three months ended March 31, 2023 and 2022.

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EQUITY METHOD INVESTMENTS

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

EQUITY METHOD INVESTMENTS

EQUITY METHOD INVESTMENTS

As of March 31, 2023, 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 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:

		March 31,		December 31,
	Ownership	2023		2022
		(In thousands)
Permian Highway Pipeline LLC ("PHP")	53.3%	$	1,519,825	$	1,474,800
Breviloba, LLC ("Breviloba")	33.0%	450,926		455,057
Gulf Coast Express Pipeline LLC ("GCX")	16.0%	442,154		451,483
		$	2,412,905	$	2,381,340

Additionally, as of March 31, 2023, the Company also owned 15.0% of Epic Crude Holdings, LP (“EPIC”). However, no dollar value was assigned through the Transaction’s purchase price allocation as an 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 months ended March 31, 2023.

The unamortized basis differences included in the EMI pipeline balances were $359.8 million and $363.2 million as of March 31, 2023 and December 31, 2022, respectively. 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 $14.7 million and $13.4 million as of March 31, 2023 and December 31, 2022, 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 three months ended March 31, 2023:

	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Total
	(In thousands)
Balance at December 31, 2022	$	1,474,800	$	455,057	$	451,483	$	2,381,340
Acquisitions	—		—				—
Contributions	57,218		—		—		57,218
Distributions	(42,570)		(11,869)		(19,118)		(73,557)
Capitalized interest	1,440		—		—		1,440
Equity income, net(1)	28,937		7,738		9,789		46,464
Balance at March 31, 2023	$	1,519,825	$	450,926	$	442,154	$	2,412,905

(1)For the three months ended March 31, 2023, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $1.9 million from PHP, $0.2 million from Breviloba, LLC and $1.6 million from GCX.

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 months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
	2023						2022
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC
	(In thousands)
Revenues	$	92,840	$	45,901	$	89,748	$	97,856	$	48,521	$	89,973
Operating income	56,805		21,949		65,216		59,476		26,314		63,443
Net income	59,691		22,211		71,091		59,213		26,366		63,529

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DEBT AND FINANCING COSTS

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

DEBT AND FINANCING COSTS

DEBT AND FINANCING COSTS

The following table summarizes the Company’s debt obligations as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
$2.0 billion unsecured term loan	$	2,000,000	$	2,000,000
$1.0 billion 2030 senior unsecured notes	1,000,000		1,000,000
$1.25 billion revolving line of credit	537,000		395,000
Total long-term debt	3,537,000		3,395,000
Less: Debt issuance costs, net(1)	(25,352)		(26,490)
Total long-term debt, net	$	3,511,648	$	3,368,510

(1) Excluded unamortized debt issuance cost related to the revolving line of credit. Unamortized debt issuance cost associated with the revolving line of credit was $6.5 million and $6.9 million as of March 31, 2023 and December 31, 2022, respectively. The current and non-current portion of the unamortized debt issuance costs related to the revolving credit facilities were included in the “Prepaid and other current assets” and 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 March 31,
	2023		2022
	(In thousands)
Capitalized interest	$	(2,233)	$	(104)
Debt issuance costs	1,521		3,389
Interest expense	70,020		23,489
Total financing costs, net of capitalized interest	$	69,308	$	26,774

As of March 31, 2023 and December 31, 2022, unamortized debt issuance costs associated with the senior unsecured notes and the term loan were $25.4 million and $26.5 million, respectively. 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 $1.5 million and $3.4 million for the three months ended March 31, 2023 and 2022, respectively.

Compliance with our Covenants

Both the revolving credit agreement with Bank of America, N.A., as administrative agent and the term loan credit agreement with PNC Bank as administrative agent contain customary covenants and restrictive provisions which may, among other things, limit the 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. The 5.875% Senior Notes due 2030 also contain covenants and restrictive provisions.

As of March 31, 2023, the Partnership was in compliance with all customary and financial covenants.

Fair Value of Financial Instruments

The fair value of the Company and its subsidiaries’ consolidated debt as of March 31, 2023 and December 31, 2022 was $3.52 billion and $3.34 billion, respectively. On March 31, 2023, the senior unsecured notes’ fair value was based on Level 1 inputs and the term loan and revolving line of credit’s fair value was based on Level 3 inputs.

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ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

ACCRUED EXPENSES

ACCRUED EXPENSES

The following table provides detail of the Company’s current accrued expenses on March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Accrued product purchases	$	95,922	$	115,773
Accrued taxes	5,785		19,509
Accrued salaries, vacation, and related benefits	3,143		3,934
Accrued capital expenditures	15,830		3,892
Accrued interest	38,774		24,815
Accrued other expenses	16,853		5,991
Total current accrued expenses	$	176,307	$	173,914

Accrued product purchases mainly accrue the liabilities related to producer payments and any additional business-related miscellaneous fees we owe to third parties, such as transport or capacity fees as of March 31, 2023.

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LEASE

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

LEASE

LEASE

Components of lease costs are included in the Condensed Consolidated Statements of Operations as general and administrative expense for real-estate leases and operating expense for non-real estate leases. Total operating lease costs were $10.8 million and $9.1 million for the three months ended March 31, 2023 and 2022, respectively. Short-term lease costs were $19 thousand and $2.6 million for the three months ended March 31, 2023 and 2022, respectively. Variable lease cost was immaterial for the three months ended March 31, 2023 and 2022.

The following table presents other supplemental lease information:

		Three Months Ended March 31,
		2023			2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	10,632		$	9,154
Right-of-use assets obtained in exchange for new operating lease liabilities		$	63		$	4,490
Weighted-average remaining lease term — operating leases (in years)		1.94			1.82
Weighted-average discount rate — operating leases		8.89		%	7.58		%

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EQUITY AND WARRANTS

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

EQUITY AND WARRANTS

EQUITY AND WARRANTS

Redeemable Noncontrolling Interest — Common Unit Limited Partners

On February 22, 2022, the Company consummated a business combination with Altus 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 transferred to Contributor 50,000,000 common units representing limited partner interests in the Partnership and 50,000,000 shares of the Company’s Class C Common Stock, par value $0.0001 per share. 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 Sheets. During the first three months of 2023, 180,962 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 94,089,038 Common Units and an equal number of Class C Common Stock issued and outstanding as of March 31, 2023. The Common Units fair value was approximately $2.91 billion as of March 31, 2023.

Common Stock

As of March 31, 2023, there were 49,054,411 and 94,089,038 shares, respectively, of Class A Common Stock and Class C Common Stock issued and outstanding (collectively, “Common Stock”).

Public Warrants

As of March 31, 2023, 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 March 31, 2023, 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 $25 thousand for the Public Warrants and a fair value of $19 thousand for the Private Warrants as of March 31, 2023 on the Condensed Consolidated Balance Sheet in other non-current liabilities. Refer to Note 11—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.

Stock Repurchase Program

In February 2023, the Board of Directors (the “Board”) approved a share repurchase program (“Repurchase Program”), authorizing discretionary purchases of the Company’s Class A Common Stock up to $100.0 million in the aggregate. Repurchases may be made at management’s discretion from time to time, in accordance with applicable securities laws, on the open market or through privately negotiated transactions and may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act. Privately negotiated repurchases from affiliates are also authorized under the Repurchase Program, subject to such affiliates’ interest and other limitations. The repurchases will depend on market conditions and may be discontinued at any time without prior notice. For the three months ended March 31, 2023, the Company repurchased 81,862 shares at a total cost of $2.4 million.

Dividend

During the three months ended March 31, 2023, the Company made cash dividend payments of $17.1 million to holders of Class A Common Stock and Class C Common Units and $87.9 million was reinvested in shares of Class A Common Stock by Reinvestment Holders.

See Note 18 - Subsequent Events for discussion of dividend declared on April 19, 2023.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The Company’s Condensed Consolidated Balance Sheets reflect a mixture of measurement methods for financial assets and liabilities. Public and private warrants, contingent liabilities and derivative financial instruments are reported at fair value. Other financial instruments are reported at historical cost or amortized cost on our Condensed Consolidated Balance Sheets. Long-term debt is primarily the other financial instrument for which carrying value could vary significantly from fair value. See Note 7—Debt and Financing Costs in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for further information.

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 March 31, 2023 and December 31, 2022:

	March 31, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swap	$	—	$	10,545	$	—	$	10,545
Interest rate derivatives	—		3,413		—		3,413
Total assets	$	—	$	13,958	$	—	$	13,958
Commodity swaps	$	—	$	7,529	$	—	$	7,529
Interest rate derivatives	—		26,256		—		26,256
Public warrants	25		—		—		25
Private warrants	—		—		19		19
Total liabilities	$	25	$	33,785	$	19	$	33,829

	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swap	$	—	$	4,288	$	—	$	4,288
Interest rate derivatives	—		2,675		—		2,675
Total assets	$	—	$	6,963	$	—	$	6,963
Commodity swaps	$	—	$	5,718	$	—	$	5,718
Interest rate derivatives	—		8,328		—		8,328
Public warrants	50		—		—		50
Private warrants	—		—		38		38
Total liabilities	$	50	$	14,046	$	38	$	14,134

Our derivative contracts consist of interest rate swaps and commodity swaps. Valuation of these derivative contracts involved both observable publicly quoted prices and certain inputs to the credit valuation that may not be readily observable in the marketplace. As such our derivative contracts are classified as Level 2 in the hierarchy. Refer to Note 12—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 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. Change in fair value of the warrants since closing of the Transaction through reporting date was recorded in “Interest and other income” of the Condensed Consolidated Statements of Operations.

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 months ended March 31, 2023 and 2022.

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DERIVATIVES AND HEDGING ACTIVITIES

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING ACTIVITIES

DERIVATIVES AND HEDGING ACTIVITIESThe 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. To minimize counterparty credit risk in derivative instruments, the Company enters into transactions with high credit-rating counterparties. The Company did not elect to apply hedge accounting to these derivative contracts and recorded the fair value of the derivatives on the Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022.

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’s objectives in using interest rate derivatives are 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.

During November 2022 and March 2023, the Company entered into three interest rate swaps with total notional amounts of $2.25 billion that are effective on May 1, 2023 and mature on May 31, 2025. Under these swaps, the Company pays a fixed rate ranging from 4.38% to 4.49% for the respective notional amounts.

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 assets were $3.4 million and $2.7 million as of March 31, 2023 and December 31, 2022, respectively. Interest rate swap derivative liabilities were $26.3 million and $8.3 million as of March 31, 2023 and December 31, 2022, respectively. The Company recorded cash settlements on interest rate swap derivatives of nil and $0.7 million for the three months ended March 31, 2023 and 2022, respectively, in “Interest expense” of the Condensed Consolidated Statements of Operations. In addition, the Company recorded fair value adjustments of $17.2 million and $11.6 million for the three months ended March 31, 2023 and 2022, respectively, in “Interest expense” of the Condensed Consolidated Statements of Operations.

Commodity Price Risk

The results of the Company’s operations may be affected by the market prices of oil, natural gas and NGLs. A portion of the Company’s revenue is directly tied to local natural gas, natural gas liquids and condensate prices in the Permian Basin and the U.S. Gulf Coast. Fluctuations in commodity prices also impact operating cost elements both directly and indirectly. Management regularly reviews the Company’s potential exposure to commodity price risk and manages exposure of such risk through commodity hedge contracts.

During the past two quarters, the Company has entered into numerous commodity swap contracts based on the OPIS NGL Mont Belvieu prices for ethane, propane and butane, the Waha Basis index and the NYMEX WTI index. These contracts are on various notional quantities of NGLs, natural gas and crude. Similarly, the Company has entered into various natural gas and crude basis spread swaps. These index swaps are effective over the next 1 to 15 months and are used to hedge against location price risk of the respective commodity resulting from supply and demand volatility and protect cash flows against price fluctuations. The table below presents detailed information of commodity swaps outstanding as of March 31, 2023 (in thousands, except volumes):

		March 31, 2023
Commodity	Instruments	Unit	Volume	Net Fair Value
Natural Gas	Commodity Swap	MMBtus	6,380,000	$	(6,254)
NGL	Commodity Swap	Gallons	157,281,600	9,252
Crude	Commodity Swap	Bbl	137,500	258
Natural Gas Basis Spread Swaps	Commodity Swap	MMBtus	29,850,000	(574)
Crude Gas Basis Spread Swaps	Commodity Swap	Bbl	496,000	334
				$	3,016

The fair value or settlement value of the swaps outstanding are presented on a gross basis on the Condensed Consolidated Balance Sheets. Commodity swap derivative assets were $10.5 million and $4.3 million as of March 31, 2023 and December 31, 2022, respectively. Commodity swap derivative liabilities were $7.5 million and $5.7 million as of March 31, 2023 and December 31, 2022, respectively. The Company recorded cash settlements on commodity swap derivatives of $1.0 million and $0.2 million for the three months ended March 31, 2023 and 2022, respectively, in “Product revenue” of the Condensed Consolidated Statements of Operations. In addition, the Company recorded fair value adjustments of $5.4 million and nil for the

change in fair value of commodity swap derivatives for the three months ended March 31, 2023 and 2022, respectively, in “Product revenue” of the Condensed Consolidated Statements of Operations.

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SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

Prior to the Closing, the Company 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-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, that such limited partners 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 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 Stock Split, replacement restricted share awards (“Replacement Awards”) to new employees that transitioned from ALTM as part of the Transaction. 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.

During the first quarter of 2023, pursuant to the Company’s 2019 Omnibus Compensation Plan, as amended from time to time (the “Plan”), the Company granted approximately 370,000 restricted stock units (“RSUs”) to its employees with cliff vesting on January 1, 2026 and approximately 181,000 RSUs to employees that were vested immediately. The 181,000 RSUs with no vesting terms were granted to employees who received their bonus in Company stock in lieu of cash bonus awards.

With respect to the above shares, the Company recorded compensation expenses of $17.5 million and $6.1 million for the three months ended March 31, 2023 and 2022, respectively, based on a straight-line amortization of the associated awards’ fair value over the respective vesting life of the shares.

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INCOME TAXES

3 Months Ended

Mar. 31, 2023

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 March 31,
	2023			2022
	(In thousands)
Income before income taxes	$	4,715		$	22,065
Income tax expense	$	416		$	676
Effective tax rate	8.82		%	3.06		%

The effective tax rate for the three months ended March 31, 2023 was lower than the statutory rate mainly due to the impact of tax attributable to noncontrolling interests related to the Common Units limited partners and valuation allowance.

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NET INCOME PER SHARE

3 Months Ended

Mar. 31, 2023

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 March 31,
	2023		2022
	(In thousands, except per share amounts)
Net income attributable to Class A common shareholders	$	1,436	$	3,865
Less: Net income available to participating unvested restricted Class A common shareholders(1)	(4,156)		—
Total net income (loss) attributable to Class A common shareholders	$	(2,720)	$	3,865
Weighted average shares outstanding - basic(2)	47,392		37,392
Dilutive effect(3)(4) of unvested Class A common shares	213		34
Weighted average shares outstanding - diluted	47,605		37,426
Net income (loss) available per common share - basic	$	(0.06)	$	0.10
Net income (loss) available per common share - diluted	$	(0.06)	$	0.10

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

(2)Share amounts have been retrospectively 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 for further information.

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

(4)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.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 and December 31, 2022, 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 March 31,

2023, 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 total monies paid under this arrangement are capped at $60.5 million. Amounts are payable on an annual basis over the earn-out period. Based on current forecasts and discussions with PDC, management revalues this contingent liability with updated assumptions at each reporting period. PDC’s actual annual Mcf volume did not exceed the incentive rate during the past three years and the Company did not expect PDC’s actual annual Mcf volume amounts to exceed forecasted amounts as of March 31, 2023; therefore, the estimated fair value of the contingent consideration liability was nil as of March 31, 2023 and December 31, 2022.

Original Altus Transaction

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

•    1,250,000 shares if the per share closing price of the Class A Common Stock as reported by the New York Stock Exchange (“NYSE”) 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 the NYSE 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 the 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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SEGMENTS

3 Months Ended

Mar. 31, 2023

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, Kinetik NGL Pipeline and Delaware Link Pipeline that is under development. The current operating pipelines transport crude oil, natural gas and NGLs.

The Midstream Logistics segment accounts for more than 99% of the Company’s operating revenues, cost of sales (excluding depreciation and amortization), operating expenses and ad valorem expenses. The Pipeline Transportation segment contains all of the Company’s equity method investments, which contribute more than 99% of the segment’s EBITDA. Corporate and Other contains the Company’s executive and administrative functions, including 85% of the Company’s general and administrative expenses and all of the Company’s debt service costs.

The following tables present the reconciliation of the segment profit measure as of and for the three months ended March

31, 2023 and 2022:

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2023
Segment net income (loss) including noncontrolling interests	$	51,012	$	46,432	$	(93,145)	$	4,299
Add back:
Interest expense (income)	9		—		69,299		69,308
Income tax expense (benefit)	—		—		416		416
Depreciation and amortization	68,393		455		6		68,854
Contract assets amortization	1,655		—		—		1,655
Unrealized hedging (gain) loss	(4,987)		—		—		(4,987)
Proportionate EMI EBITDA	—		71,867		—		71,867
Share-based compensation	—		—		17,540		17,540
Loss (gain) on disposal of assets	102		—		—		102
Integration costs	7		—		918		925
Acquisition transaction costs	33		—		235		268
Other one-time costs or amortization	3,025		—		723		3,748
Deduct:
Warrant valuation adjustment	—		—		44		44
Equity income from unconsolidated affiliates	—		46,464		—		46,464
Segment adjusted EBITDA(3)	$	119,249	$	72,290	$	(4,052)	$	187,487

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
	(In thousands)
For the Three Months Ended March 31, 2022
Segment net income (loss) including noncontrolling interests	$	9,185	$	29,136	$	(16,932)	$	21,389
Add back:
Interest expense (income)	26,642		(1,614)		1,617		26,645
Gain on redemption of mandatorily redeemable Preferred units	—		—		(4,493)		(4,493)
Income tax expense (benefit)	457		(39)		258		676
Depreciation and amortization	60,893		130		—		61,023
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		40,741		—		40,741
Share-based compensation	—		—		6,132		6,132
Loss on disposal of assets	110		—		—		110
Loss on debt extinguishment	129		—		—		129
Unrealized loss on embedded derivatives	—		—		2,886		2,886
Integration costs	4,104		—		2,047		6,151
Acquisition transaction costs	4		—		5,672		5,676
Other one-time costs or amortization	918		—		277		1,195
Deduct:
Equity income from unconsolidated affiliates	—		27,917		—		27,917
Segment adjusted EBITDA(3)	$	102,890	$	40,437	$	(2,536)	$	140,791

(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.

(3)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 months ended March 31, 2023 and 2022:

	Midstream Logistics		Pipeline Transportation		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2023
Revenue	$	276,555	$	694	$	277,249
Other revenue	3,789		2		3,791
Total segment operating revenue	$	280,344	$	696	$	281,040

	Midstream Logistics		Pipeline Transportation		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2022
Revenue	$	255,373	$	—	$	255,373
Other revenue	1,874		2		1,876
Total segment operating revenue	$	257,247	$	2	$	257,249

The following table presents total assets for each operating segment as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Midstream Logistics	$	3,637,003	$	3,486,948
Pipeline Transportation(1)	2,463,333		2,414,829
Segment total assets	6,100,336		5,901,777
Corporate and other	24,319		17,934
Total assets	$	6,124,655	$	5,919,711

(1)Includes investment in unconsolidated affiliates of $2.41 billion and $2.38 billion as of March 31, 2023 and December 31, 2022, respectively

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SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTSOn April 19, 2023, 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 of record as of May 5, 2023 on May 17, 2023. 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.

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

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

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; accordingly, you should read these consolidated financial statements in conjunction with our

consolidated financial statements and related notes included in our 2022 Form 10-K.. 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. Therefore, the results of the legacy ALTM business are not included in the Company’s consolidated financials prior to February 22, 2022. 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 is consistent with our previous public filings and the terms of the Contribution Agreement.

Inventory

InventoryOther current assets include condensate, residue gas and NGLs inventories that are valued at the lower of cost or market.

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.

Business Combination

The Transaction was accounted as a reverse merger in accordance with ASC 805, which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. During the 12-month measurement period following the acquisition date, the Company made necessary adjustments as information became available to the purchase price allocation, including, but not limited to, working capital and valuation of the underlying assets of the equity method investments. The Company recorded goodwill of $5.1 million as of December 31, 2022 related to operational synergies.

Revenue Recognition

Current and noncurrent contract liabilities are included in “Other Current Liabilities” and “Contract Liabilities,” respectively, of the Condensed Consolidated Balance Sheets. 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. 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 contracts.

Property, Plant and Equipment

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 November 30 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 amortization of the debt issuance costs was charged to interest expense for the periods presented.

Lease

Components of lease costs are included in the Condensed Consolidated Statements of Operations as general and administrative expense for real-estate leases and operating expense for non-real estate leases.

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.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. Pursuant to ASC 805, this earn-out consideration was a pre-existing contingency and accounted for as an assumed liability to the acquirer on the 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 Sheets.

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. During the first quarter of 2023, pursuant to the Company’s 2019 Omnibus Compensation Plan, as amended from time to time (the “Plan”), the Company granted approximately 370,000 restricted stock units (“RSUs”) to its employees with cliff vesting on January 1, 2026 and approximately 181,000 RSUs to employees that were vested immediately. The 181,000 RSUs with no vesting terms were granted to employees who received their bonus in Company stock in lieu of cash bonus awards.With respect to the above shares, the Company recorded compensation expenses of $17.5 million and $6.1 million for the three months ended March 31, 2023 and 2022, respectively, based on a straight-line amortization of the associated awards’ fair value over the respective vesting life of the shares.

Fair Value Measurements

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.

Equity Method Interests

Unamortized basis differences will be amortized into equity income over the useful lives of the underlying pipeline assets.

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BUSINESS COMBINATIONS (Tables)

3 Months Ended

Mar. 31, 2023

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

As of March 31, 2023, our allocation of purchase price for acquisitions made during 2023 and 2022 are detailed below:

	Acquisition Date	Acquisition	Considerations Transferred		Current Assets		Property Plant & Equipment		Intangible Assets		Other Long Term Assets		Goodwill		Liabilities		Noncontrolling Interest
			(In thousands)
(1)	Q1 2023	Midstream Infrastructure Assets and Incentive and Acceleration Agreement(a)	$	125,000	$	4,736	$	61,850	$	3,150	$	55,264	$	—	$	—	$	—
(2)	Q1 2022	Altus Midstream Company (“ALTM”)	$	1,013,745	$	38,750	$	634,923	$	13,200	$	1,752,500	$	5,077	$	(967,988)	$	(462,717)

(a)Consideration includes $65 million paid for certain midstream assets and the $60 million paid related to the incentive and acceleration agreement.

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REVENUE RECOGNITION (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31,
	2023		2022
	(In thousands)
Gathering and processing services	$	103,425	$	80,445
Natural gas, NGLs and condensate sales	173,824		174,928
Other revenue	3,791		1,876
Total revenues and other	$	281,040	$	257,249

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 March 31, 2023:

	Amount
Fiscal Year	(In thousands)
Remaining of 2023	$	27,703
2024	38,970
2025	44,498
2026	34,631
2027	35,405
Thereafter	155,888
	$	337,095

Schedule of Contract with Customer, Contract Liability

The following table provides information about contract liabilities from contracts with customers as of March 31, 2023:

	Amount
	(In thousands)
Balance at December 31, 2022	$	29,300
Reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied	(2,059)
Cash received in advance and not recognized as revenue	669
Balance at March 31, 2023	27,910
Less: Current portion	5,919
Non-current portion	$	21,991

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PROPERTY, PLANT AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

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

	March 31,		December 31,
	2023		2022
	(In thousands)
Gathering, processing, and transmission systems and facilities	$	3,004,016	$	2,904,084
Vehicles	10,331		9,290
Computers and equipment	5,504		4,289
Less: accumulated depreciation and accretion	(512,451)		(474,258)
Total depreciable assets, net	2,507,400		2,443,405
Construction in progress	104,900		70,325
Land	21,873		21,482
Total property, plant, and equipment, net	$	2,634,173	$	2,535,212

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GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, net, are comprised of the following:

	March 31,		December 31,
	2023		2022
	(In thousands)
Customer contracts	$	1,142,278	$	1,137,831
Right of way assets	134,716		127,539
Less accumulated amortization	(600,478)		(569,981)
Total amortizable intangible assets, net	$	676,516	$	695,389

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EQUITY METHOD INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investments

As of March 31, 2023, 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 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:

		March 31,		December 31,
	Ownership	2023		2022
		(In thousands)
Permian Highway Pipeline LLC ("PHP")	53.3%	$	1,519,825	$	1,474,800
Breviloba, LLC ("Breviloba")	33.0%	450,926		455,057
Gulf Coast Express Pipeline LLC ("GCX")	16.0%	442,154		451,483
		$	2,412,905	$	2,381,340

The following table presents the activity in the Company’s EMIs for the three months ended March 31, 2023:

	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Total
	(In thousands)
Balance at December 31, 2022	$	1,474,800	$	455,057	$	451,483	$	2,381,340
Acquisitions	—		—				—
Contributions	57,218		—		—		57,218
Distributions	(42,570)		(11,869)		(19,118)		(73,557)
Capitalized interest	1,440		—		—		1,440
Equity income, net(1)	28,937		7,738		9,789		46,464
Balance at March 31, 2023	$	1,519,825	$	450,926	$	442,154	$	2,412,905

(1)For the three months ended March 31, 2023, net of amortization of basis differences and capitalized interests, which represents undistributed earnings, the amortization was $1.9 million from PHP, $0.2 million from Breviloba, LLC and $1.6 million from GCX.

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 months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
	2023						2022
	Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC		Permian Highway Pipeline LLC		Breviloba, LLC		Gulf Coast Express Pipeline LLC
	(In thousands)
Revenues	$	92,840	$	45,901	$	89,748	$	97,856	$	48,521	$	89,973
Operating income	56,805		21,949		65,216		59,476		26,314		63,443
Net income	59,691		22,211		71,091		59,213		26,366		63,529

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DEBT AND FINANCING COSTS - (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-term Debt

The following table summarizes the Company’s debt obligations as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
$2.0 billion unsecured term loan	$	2,000,000	$	2,000,000
$1.0 billion 2030 senior unsecured notes	1,000,000		1,000,000
$1.25 billion revolving line of credit	537,000		395,000
Total long-term debt	3,537,000		3,395,000
Less: Debt issuance costs, net(1)	(25,352)		(26,490)
Total long-term debt, net	$	3,511,648	$	3,368,510

(1) Excluded unamortized debt issuance cost related to the revolving line of credit. Unamortized debt issuance cost associated with the revolving line of credit was $6.5 million and $6.9 million as of March 31, 2023 and December 31, 2022, respectively. The current and non-current portion of the unamortized debt issuance costs related to the revolving credit facilities were included in the “Prepaid and other current assets” and 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 March 31,
	2023		2022
	(In thousands)
Capitalized interest	$	(2,233)	$	(104)
Debt issuance costs	1,521		3,389
Interest expense	70,020		23,489
Total financing costs, net of capitalized interest	$	69,308	$	26,774

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ACCRUED EXPENSES (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Components of Accrued Expenses

The following table provides detail of the Company’s current accrued expenses on March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Accrued product purchases	$	95,922	$	115,773
Accrued taxes	5,785		19,509
Accrued salaries, vacation, and related benefits	3,143		3,934
Accrued capital expenditures	15,830		3,892
Accrued interest	38,774		24,815
Accrued other expenses	16,853		5,991
Total current accrued expenses	$	176,307	$	173,914

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LEASE (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Other Supplemental Lease Information

The following table presents other supplemental lease information:

		Three Months Ended March 31,
		2023			2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	10,632		$	9,154
Right-of-use assets obtained in exchange for new operating lease liabilities		$	63		$	4,490
Weighted-average remaining lease term — operating leases (in years)		1.94			1.82
Weighted-average discount rate — operating leases		8.89		%	7.58		%

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 and December 31, 2022:

	March 31, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swap	$	—	$	10,545	$	—	$	10,545
Interest rate derivatives	—		3,413		—		3,413
Total assets	$	—	$	13,958	$	—	$	13,958
Commodity swaps	$	—	$	7,529	$	—	$	7,529
Interest rate derivatives	—		26,256		—		26,256
Public warrants	25		—		—		25
Private warrants	—		—		19		19
Total liabilities	$	25	$	33,785	$	19	$	33,829

	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Commodity swap	$	—	$	4,288	$	—	$	4,288
Interest rate derivatives	—		2,675		—		2,675
Total assets	$	—	$	6,963	$	—	$	6,963
Commodity swaps	$	—	$	5,718	$	—	$	5,718
Interest rate derivatives	—		8,328		—		8,328
Public warrants	50		—		—		50
Private warrants	—		—		38		38
Total liabilities	$	50	$	14,046	$	38	$	14,134

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DERIVATIVES AND HEDGING ACTIVITIES (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Detail Information of Commodity Swaps Outstanding

table below presents detailed information of commodity swaps outstanding as of March 31, 2023 (in thousands, except volumes):

		March 31, 2023
Commodity	Instruments	Unit	Volume	Net Fair Value
Natural Gas	Commodity Swap	MMBtus	6,380,000	$	(6,254)
NGL	Commodity Swap	Gallons	157,281,600	9,252
Crude	Commodity Swap	Bbl	137,500	258
Natural Gas Basis Spread Swaps	Commodity Swap	MMBtus	29,850,000	(574)
Crude Gas Basis Spread Swaps	Commodity Swap	Bbl	496,000	334
				$	3,016

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INCOME TAXES (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31,
	2023			2022
	(In thousands)
Income before income taxes	$	4,715		$	22,065
Income tax expense	$	416		$	676
Effective tax rate	8.82		%	3.06		%

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NET INCOME PER SHARE (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31,
	2023		2022
	(In thousands, except per share amounts)
Net income attributable to Class A common shareholders	$	1,436	$	3,865
Less: Net income available to participating unvested restricted Class A common shareholders(1)	(4,156)		—
Total net income (loss) attributable to Class A common shareholders	$	(2,720)	$	3,865
Weighted average shares outstanding - basic(2)	47,392		37,392
Dilutive effect(3)(4) of unvested Class A common shares	213		34
Weighted average shares outstanding - diluted	47,605		37,426
Net income (loss) available per common share - basic	$	(0.06)	$	0.10
Net income (loss) available per common share - diluted	$	(0.06)	$	0.10

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

(2)Share amounts have been retrospectively 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 for further information.

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

(4)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.

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SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2023

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 months ended March

31, 2023 and 2022:

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2023
Segment net income (loss) including noncontrolling interests	$	51,012	$	46,432	$	(93,145)	$	4,299
Add back:
Interest expense (income)	9		—		69,299		69,308
Income tax expense (benefit)	—		—		416		416
Depreciation and amortization	68,393		455		6		68,854
Contract assets amortization	1,655		—		—		1,655
Unrealized hedging (gain) loss	(4,987)		—		—		(4,987)
Proportionate EMI EBITDA	—		71,867		—		71,867
Share-based compensation	—		—		17,540		17,540
Loss (gain) on disposal of assets	102		—		—		102
Integration costs	7		—		918		925
Acquisition transaction costs	33		—		235		268
Other one-time costs or amortization	3,025		—		723		3,748
Deduct:
Warrant valuation adjustment	—		—		44		44
Equity income from unconsolidated affiliates	—		46,464		—		46,464
Segment adjusted EBITDA(3)	$	119,249	$	72,290	$	(4,052)	$	187,487

	Midstream Logistics		Pipeline Transportation		Corporate and Other(1)		Consolidated(2)
	(In thousands)
For the Three Months Ended March 31, 2022
Segment net income (loss) including noncontrolling interests	$	9,185	$	29,136	$	(16,932)	$	21,389
Add back:
Interest expense (income)	26,642		(1,614)		1,617		26,645
Gain on redemption of mandatorily redeemable Preferred units	—		—		(4,493)		(4,493)
Income tax expense (benefit)	457		(39)		258		676
Depreciation and amortization	60,893		130		—		61,023
Contract assets amortization	448		—		—		448
Proportionate EMI EBITDA	—		40,741		—		40,741
Share-based compensation	—		—		6,132		6,132
Loss on disposal of assets	110		—		—		110
Loss on debt extinguishment	129		—		—		129
Unrealized loss on embedded derivatives	—		—		2,886		2,886
Integration costs	4,104		—		2,047		6,151
Acquisition transaction costs	4		—		5,672		5,676
Other one-time costs or amortization	918		—		277		1,195
Deduct:
Equity income from unconsolidated affiliates	—		27,917		—		27,917
Segment adjusted EBITDA(3)	$	102,890	$	40,437	$	(2,536)	$	140,791

(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.

(3)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 months ended March 31, 2023 and 2022:

	Midstream Logistics		Pipeline Transportation		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2023
Revenue	$	276,555	$	694	$	277,249
Other revenue	3,789		2		3,791
Total segment operating revenue	$	280,344	$	696	$	281,040

	Midstream Logistics		Pipeline Transportation		Consolidated
	(In thousands)
For the Three Months Ended March 31, 2022
Revenue	$	255,373	$	—	$	255,373
Other revenue	1,874		2		1,876
Total segment operating revenue	$	257,247	$	2	$	257,249

The following table presents total assets for each operating segment as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Midstream Logistics	$	3,637,003	$	3,486,948
Pipeline Transportation(1)	2,463,333		2,414,829
Segment total assets	6,100,336		5,901,777
Corporate and other	24,319		17,934
Total assets	$	6,124,655	$	5,919,711

(1)Includes investment in unconsolidated affiliates of $2.41 billion and $2.38 billion as of March 31, 2023 and December 31, 2022, respectively.

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DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)			3 Months Ended
		Jun. 08, 2022	Mar. 31, 2023 USD ($) entity	Mar. 31, 2022 USD ($)		Dec. 31, 2022 USD ($)
Accounting Policies [Abstract]
Interest in pipeline entities | entity			4
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Recorded cost of sales	[1]		$ 115,877,000	$ 120,275,000	[2]
Operating expenses			300,000	0
Inventory			4,200,000			$ 4,800,000
Affiliated Entity
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Recorded cost of sales			14,600,000	3,600,000
Accounts receivable, affiliates			24,200,000			17,600,000
Revenue from affiliate			25,300,000	15,600,000
Accounts receivable, affiliates			24,200,000			$ 17,600,000
Revenue from affiliate			$ 25,300,000	$ 15,600,000
Common Stock | Class A Common Stock
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Stock split, conversion ratio		2

[1] Includes amounts of $14.6 million and $3.6 million associated with related parties for the three months ended March 31, 2023 and 2022, respectively.

[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 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 COMBINATIONS - Allocation of Acquisition Costs to Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 13, 2023	Dec. 31, 2022	Feb. 22, 2022
Business Acquisition [Line Items]
Goodwill	$ 5,077		$ 5,077
Midstream Infrastructure Assets and Incentive and Acceleration Agreement
Business Acquisition [Line Items]
Considerations Transferred		$ 125,000
Current Assets		4,736
Property Plant & Equipment		61,850
Intangible Assets		3,150
Other Long Term Assets		55,264
Goodwill		0
Liabilities		0
Noncontrolling Interest		0
Assets acquired	$ 65,000
Incentive and acceleration agreement		$ 60,000
Altus Midstream Company
Business Acquisition [Line Items]
Considerations Transferred				$ 1,013,745
Current Assets				38,750
Property Plant & Equipment				634,923
Intangible Assets				13,200
Other Long Term Assets				1,752,500
Goodwill			$ 5,100	5,077
Liabilities				(967,988)
Noncontrolling Interest				$ (462,717)

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BUSINESS COMBINATIONS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 13, 2023	Dec. 31, 2022	Feb. 22, 2022
Business Acquisition [Line Items]
Goodwill	$ 5,077			$ 5,077
Transaction costs	$ 268	$ 5,676
Class C Common Stock
Business Acquisition [Line Items]
Common stock, shares issued (in shares)	94,089,038			94,270,000	50,000,000
Common stock, par value (in USD per share)	$ 0.0001			$ 0.0001	$ 0.0001
Altus Midstream LP
Business Acquisition [Line Items]
Common stock, shares issued (in shares)					50,000,000
BCP and BCP GP
Business Acquisition [Line Items]
Transaction costs	$ 0	$ 5,700
Midstream Infrastructure Assets and Incentive and Acceleration Agreement
Business Acquisition [Line Items]
Assets acquired	$ 65,000
Agreement term	20 years
Incentive and acceleration agreement			$ 60,000
Other long term assets			55,264
Goodwill			$ 0
Midstream Infrastructure Assets and Incentive and Acceleration Agreement | Prepaid Expenses and Other Current Assets
Business Acquisition [Line Items]
Other long term assets	$ 4,700
Midstream Infrastructure Assets and Incentive and Acceleration Agreement | Deferred Charges and Other Assets
Business Acquisition [Line Items]
Other long term assets	55,300
Midstream Infrastructure Assets and Incentive and Acceleration Agreement | Plan
Business Acquisition [Line Items]
Assets acquired	$ 65,000

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REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total operating revenues	$ 281,040	$ 257,249	[1]
Gathering and processing services
Disaggregation of Revenue [Line Items]
Total operating revenues	103,425	80,445
Natural gas, NGLs and condensate sales
Disaggregation of Revenue [Line Items]
Total operating revenues	173,824	174,928
Other revenue
Disaggregation of Revenue [Line Items]
Total operating revenues	$ 3,791	$ 1,876	[1]

[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 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
	Mar. 31, 2023	Mar. 31, 2022		Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Total operating revenues	$ 281,040	$ 257,249	[1]
Capitalized contract cost	76,200			$ 17,800
Amortization of contract costs	1,655	448
Minimum Volume Commitments
Disaggregation of Revenue [Line Items]
Total operating revenues	$ 1,100	$ 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 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	Mar. 31, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 337,095
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 27,703
Expected timing of satisfaction, period	9 months
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	$ 38,970
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	$ 44,498
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	$ 35,405
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 155,888
Expected timing of satisfaction, period

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REVENUE RECOGNITION - Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Contract with Customer, Liability [Roll Forward]
Beginning balance	$ 29,300
Reclassification of beginning contract liabilities to revenue as a result of performance obligations being satisfied	(2,059)
Cash received in advance and not recognized as revenue	669
Ending balance	27,910
Less: Current portion	5,919
Non-current portion	$ 21,991	$ 22,693

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PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation and accretion	$ (512,451,000)		$ (474,258,000)
Total depreciable assets, net	2,507,400,000		2,443,405,000
Total property, plant, and equipment, net	2,634,173,000		2,535,212,000
Depreciation expense	38,400,000	$ 30,800,000
Impairment of long-lived assets	0	$ 0
Gathering, processing, and transmission systems and facilities
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	3,004,016,000		2,904,084,000
Vehicles
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	10,331,000		9,290,000
Computers and equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	5,504,000		4,289,000
Construction in progress
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	104,900,000		70,325,000
Land
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, gross	$ 21,873,000		$ 21,482,000

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GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Goodwill	$ 5,077,000		$ 5,077,000
Finite-Lived Intangible Assets [Line Items]
Initial term	10 years
Option to renewal	10 years
Percent of original consideration paid	130.00%
Remaining weighted average amortization period	7 years 3 months 21 days
Amortization of intangible assets	$ 30,500,000	$ 30,200,000
Impairment of intangible assets	$ 0	$ 0
Customer Contracts
Finite-Lived Intangible Assets [Line Items]
Remaining weighted average amortization period	7 years 4 months 9 days
Right of way assets
Finite-Lived Intangible Assets [Line Items]
Useful life	10 years
Remaining weighted average amortization period	6 years 11 months 12 days
Minimum
Finite-Lived Intangible Assets [Line Items]
Remaining term	1 year
Maximum
Finite-Lived Intangible Assets [Line Items]
Remaining term	20 years
Operating Segments | Midstream Logistics
Segment Reporting Information [Line Items]
Goodwill	$ 5,100,000		$ 5,100,000

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GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Asset (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Less accumulated amortization	$ (600,478)	$ (569,981)
Total amortizable intangible assets, net	676,516	695,389
Customer contracts
Finite-Lived Intangible Assets [Line Items]
Total amortizable intangible assets, gross	1,142,278	1,137,831
Right of way assets
Finite-Lived Intangible Assets [Line Items]
Total amortizable intangible assets, gross	$ 134,716	$ 127,539

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EQUITY METHOD INVESTMENTS - Information of Equity Method Investments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022		Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Equity method interests	$ 2,412,905,000			$ 2,381,340,000
Contributions	58,658,000	$ 0
Equity in earnings of unconsolidated affiliates	46,464,000	27,917,000	[1]
Difference between carrying amount and underlying equity	359,800,000			363,200,000
Capitalized interest	14,700,000			13,400,000
Movement In Equity Method Interests [Roll Forward]
Beginning balance	2,381,340,000
Acquisitions	0
Contributions	57,218,000
Distributions	(73,557,000)
Capitalized interest	1,440,000
Equity income, net	46,464,000	$ 27,917,000	[1]
Ending balance	$ 2,412,905,000
Permian Highway Pipeline LLC
Schedule of Equity Method Investments [Line Items]
Ownership percentage	53.30%
Equity method interests	$ 1,519,825,000			1,474,800,000
Equity in earnings of unconsolidated affiliates	28,937,000
Movement In Equity Method Interests [Roll Forward]
Beginning balance	1,474,800,000
Acquisitions	0
Contributions	57,218,000
Distributions	(42,570,000)
Capitalized interest	1,440,000
Equity income, net	28,937,000
Ending balance	1,519,825,000
Amortization	$ (1,900,000)
Breviloba, LLC ("Breviloba")
Schedule of Equity Method Investments [Line Items]
Ownership percentage	33.00%
Equity method interests	$ 450,926,000			455,057,000
Equity in earnings of unconsolidated affiliates	7,738,000
Movement In Equity Method Interests [Roll Forward]
Beginning balance	455,057,000
Acquisitions	0
Contributions	0
Distributions	(11,869,000)
Capitalized interest	0
Equity income, net	7,738,000
Ending balance	450,926,000
Amortization	$ (200,000)
Gulf Coast Express Pipeline LLC ("GCX")
Schedule of Equity Method Investments [Line Items]
Ownership percentage	16.00%
Equity method interests	$ 442,154,000			$ 451,483,000
Equity in earnings of unconsolidated affiliates	9,789,000
Movement In Equity Method Interests [Roll Forward]
Beginning balance	451,483,000
Acquisitions
Contributions	0
Distributions	(19,118,000)
Capitalized interest	0
Equity income, net	9,789,000
Ending balance	442,154,000
Amortization	$ (1,600,000)
Epic Crude Holdings, LP
Schedule of Equity Method Investments [Line Items]
Ownership percentage	15.00%
Contributions	$ 0
Equity in earnings of unconsolidated affiliates	0
Movement In Equity Method Interests [Roll Forward]
Equity income, net	$ 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 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
	Mar. 31, 2023	Mar. 31, 2022
Schedule of Equity Method Investments [Line Items]
Operating income	$ 27,265	$ 19,065	[1]
Net income	4,299	21,389	[1]
Permian Highway Pipeline LLC
Schedule of Equity Method Investments [Line Items]
Revenues	92,840	97,856
Operating income	56,805	59,476
Net income	59,691	59,213
Breviloba, LLC
Schedule of Equity Method Investments [Line Items]
Revenues	45,901	48,521
Operating income	21,949	26,314
Net income	22,211	26,366
Gulf Coast Express Pipeline LLC ("GCX")
Schedule of Equity Method Investments [Line Items]
Revenues	89,748	89,973
Operating income	65,216	63,443
Net income	$ 71,091	$ 63,529

[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 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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DEBT AND FINANCING COSTS - Schedule of Long-Term Debt (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total long-term debt	$ 3,537,000,000	$ 3,395,000,000
Less: Debt issuance costs, net	(25,352,000)	(26,490,000)
Total long-term debt, net	3,511,648,000	3,368,510,000
Unamortized debt issuance cost	25,400,000	26,500,000
$1.25 billion revolving line of credit | Revolving Credit Facility
Debt Instrument [Line Items]
Unamortized debt issuance cost	6,500,000	6,900,000
Term Loan | $2.0 billion unsecured term loan
Debt Instrument [Line Items]
Face amount	2,000,000,000.0
Total long-term debt	2,000,000,000	2,000,000,000
Term Loan | $1.25 billion revolving line of credit
Debt Instrument [Line Items]
Face amount	1,250,000,000
Total long-term debt	537,000,000	395,000,000
Unsecured Debt | $1.0 billion 2030 senior unsecured notes
Debt Instrument [Line Items]
Face amount	1,000,000,000.0
Total long-term debt	$ 1,000,000,000	$ 1,000,000,000

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DEBT AND FINANCING COSTS - Schedule of Financing Costs, Net of Capitalized Interest (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Debt Disclosure [Abstract]
Capitalized interest	$ (2,233)	$ (104)
Debt issuance costs	1,521	3,389
Interest expense	70,020	23,489
Total financing costs, net of capitalized interest	$ 69,308	$ 26,774

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DEBT AND FINANCING COSTS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Debt Disclosure [Abstract]
Unamortized debt issuance cost	$ 25,400		$ 26,500
Amortization of deferred financing costs	1,521	$ 3,389
Debt, fair value	$ 3,520,000		$ 3,340,000
Senior Notes | 5.875% Senior Notes Due 2030
Debt Instrument [Line Items]
Stated percentage	5.875%

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ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued product purchases	$ 95,922	$ 115,773
Accrued taxes	5,785	19,509
Accrued salaries, vacation, and related benefits	3,143	3,934
Accrued capital expenditures	15,830	3,892
Accrued interest	38,774	24,815
Accrued other expenses	16,853	5,991
Total current accrued expenses	$ 176,307	$ 173,914

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LEASE - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating lease cost	$ 10,800	$ 9,100
Short-term lease cost	$ 19	$ 2,600

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LEASES - Schedule of Other Supplemental Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating cash flows from operating leases	$ 10,632	$ 9,154
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 63	$ 4,490
Weighted-average remaining lease term — operating leases (in years)	1 year 11 months 8 days	1 year 9 months 25 days
Weighted-average discount rate — operating leases	8.89%	7.58%

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EQUITY AND WARRANTS (Details)			3 Months Ended
		Jun. 08, 2022	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 31, 2022 USD ($) shares	Feb. 28, 2023 USD ($)	Dec. 31, 2022 USD ($) $ / shares shares	Feb. 22, 2022 $ / shares shares	Dec. 31, 2021 USD ($) shares
Class of Stock [Line Items]
Notice period to redeem warrants			30 days
Threshold trading days			20 days
Trading period			30 days
Warrants fair value adjustment | $			$ (44,000)	$ 0
Value of shares repurchased | $			2,432,000
Class A Common Stock issued through dividend and distribution reinvestment plan | $			$ 87,658,000	0
Public warrants
Class of Stock [Line Items]
Number of warrant outstanding (in shares)			12,577,350
Redemption price of warrants (in USD per share) | $ / shares			$ 0.01
Warrants fair value adjustment | $			$ 25,000
Private warrants
Class of Stock [Line Items]
Number of warrant outstanding (in shares)			6,364,281
Warrants fair value adjustment | $			$ 19,000
Class A Common Stock
Class of Stock [Line Items]
Common stock, shares issued (in shares)			49,054,411			45,679,447
Common stock, par value (in USD per share) | $ / shares			$ 0.0001			$ 0.0001
Common stock, redemption ratio			1
Common stock, shares outstanding (in shares)			49,054,411			45,679,447
Warrant exercise price (in USD per share) | $ / shares			$ 115.00
Stock repurchased during period (in shares)			81,862
Value of shares repurchased | $			$ 2,400,000
Class A Common Stock issued through dividend and distribution reinvestment plan | $			$ 87,900,000
Class A Common Stock | Maximum
Class of Stock [Line Items]
Authorized amount | $					$ 100,000,000
Class A Common Stock | Public warrants
Class of Stock [Line Items]
Class of warrant or right, purchase ratio for common stock			0.1
Class C Common Stock
Class of Stock [Line Items]
Common stock, shares issued (in shares)			94,089,038			94,270,000	50,000,000
Common stock, par value (in USD per share) | $ / shares			$ 0.0001			$ 0.0001	$ 0.0001
Common stock, shares outstanding (in shares)			94,089,038			94,270,000
Common Units limited partners
Class of Stock [Line Items]
Equity, carrying amount | $			$ 2,910,861,000	$ 3,185,431,000		$ 3,112,409,000		$ 1,006,843,000
Common Stock
Class of Stock [Line Items]
Stock price trigger (in USD per share) | $ / shares			$ 180.00
Common Stock | Class A Common Stock
Class of Stock [Line Items]
Common stock, shares outstanding (in shares)	[1]		49,054,000	18,986,000		45,679,000		0
Stock repurchased during period (in shares)	[1]		82,000
Dividends, cash | $			$ 17,100,000
Stock split, conversion ratio		2
Common Stock | Class C Common Stock
Class of Stock [Line Items]
Issued (in shares)			180,962
Common stock, shares outstanding (in shares)	[1]		94,089,000	47,260,000		94,270,000		50,000,000
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

[1] Share amounts have been retrospectively restated to reflect the Company’s Stock Split, 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	Mar. 31, 2023	Dec. 31, 2022
Liabilities
Total liabilities	$ 3,849,992	$ 3,647,077
Fair Value, Recurring
Assets
Derivative asset	13,958	6,963
Liabilities
Total liabilities	33,829	14,134
Fair Value, Recurring | Public warrants
Liabilities
Warrants outstanding, fair value	25	50
Fair Value, Recurring | Private warrants
Liabilities
Warrants outstanding, fair value	19	38
Fair Value, Recurring | Commodity swap
Assets
Derivative asset	10,545	4,288
Liabilities
Derivative liability	7,529	5,718
Fair Value, Recurring | Interest rate derivatives
Assets
Derivative asset	3,413	2,675
Liabilities
Derivative liability	26,256	8,328
Fair Value, Recurring | Level 1
Assets
Derivative asset	0	0
Liabilities
Total liabilities	25	50
Fair Value, Recurring | Level 1 | Public warrants
Liabilities
Warrants outstanding, fair value	25	50
Fair Value, Recurring | Level 1 | Private warrants
Liabilities
Warrants outstanding, fair value	0	0
Fair Value, Recurring | Level 1 | Commodity swap
Assets
Derivative asset	0	0
Liabilities
Derivative liability	0	0
Fair Value, Recurring | Level 1 | Interest rate derivatives
Assets
Derivative asset	0	0
Liabilities
Derivative liability	0	0
Fair Value, Recurring | Level 2
Assets
Derivative asset	13,958	6,963
Liabilities
Total liabilities	33,785	14,046
Fair Value, Recurring | Level 2 | Public warrants
Liabilities
Warrants outstanding, fair value	0	0
Fair Value, Recurring | Level 2 | Private warrants
Liabilities
Warrants outstanding, fair value	0	0
Fair Value, Recurring | Level 2 | Commodity swap
Assets
Derivative asset	10,545	4,288
Liabilities
Derivative liability	7,529	5,718
Fair Value, Recurring | Level 2 | Interest rate derivatives
Assets
Derivative asset	3,413	2,675
Liabilities
Derivative liability	26,256	8,328
Fair Value, Recurring | Level 3
Assets
Derivative asset	0	0
Liabilities
Total liabilities	19	38
Fair Value, Recurring | Level 3 | Public warrants
Liabilities
Warrants outstanding, fair value	0	0
Fair Value, Recurring | Level 3 | Private warrants
Liabilities
Warrants outstanding, fair value	19	38
Fair Value, Recurring | Level 3 | Commodity swap
Assets
Derivative asset	0	0
Liabilities
Derivative liability	0	0
Fair Value, Recurring | Level 3 | Interest rate derivatives
Assets
Derivative asset	0	0
Liabilities
Derivative liability	$ 0	$ 0

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FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loss on embedded derivative	$ 0	$ (2,886)	[1]
Change in fair value of warrants	$ (44)	$ 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 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 - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) agreement	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Number of instruments held | agreement	3
Derivative cash settlement	$ (974)	$ 884
Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount	2,250,000
Derivative asset	3,400		$ 2,700
Total liabilities	26,300		8,300
Derivative cash settlement	0	700
Unrealized losses	$ 17,200	(11,600)
Interest Rate Swap | Minimum
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, fixed interest rate	4.38%
Interest Rate Swap | Maximum
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, fixed interest rate	4.49%
Commodity Swap
Derivative Instruments, Gain (Loss) [Line Items]
Derivative asset	$ 10,500		4,300
Total liabilities	7,500		$ 5,700
Derivative cash settlement	1,000	200
Unrealized losses	$ (5,400)	$ 0

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DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Detail Information of Commodity Swaps Outstanding (Details) - Commodity Swap $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) MMBTU bbl gal
Derivative [Line Items]
Net Fair Value	$ 3,016
Natural Gas and Natural Gas Liquids
Derivative [Line Items]
Notional Quantity (Energy) | MMBTU	6,380,000
Net Fair Value	$ (6,254)
Crude Oil and Natural Gas Liquids (NGL)
Derivative [Line Items]
Notional Quantity (Volume) | gal	157,281,600
Net Fair Value	$ 9,252
Crude Oil
Derivative [Line Items]
Notional Quantity (Volume) | bbl	137,500
Net Fair Value	$ 258
Natural Gas Basis Spread Swaps
Derivative [Line Items]
Notional Quantity (Energy) | MMBTU	29,850,000
Net Fair Value	$ (574)
Crude Gas Basis Spread Swaps
Derivative [Line Items]
Notional Quantity (Volume) | bbl	496,000
Net Fair Value	$ 334

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SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands		3 Months Ended
	Feb. 22, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation		$ 17,540	$ 6,132
Restricted stock units awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		370,000
Restricted stock units awards | Immediate Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested (in shares)		181,000
Restricted stock units awards | No Vesting Terms
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested (in shares)		181,000
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)		49,054,411		45,679,447
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	94,089,038		94,270,000
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 (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income before income taxes	$ 4,715	$ 22,065	[1]
Income tax expense	$ 416	$ 676	[1]
Effective tax rate	8.82%	3.06%

[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 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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NET INCOME PER SHARE (Details) $ / shares in Units, shares in Thousands, $ in Thousands			3 Months Ended
		Jun. 08, 2022	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 31, 2022 USD ($) $ / shares shares
Earnings Per Share [Abstract]
Net income attributable to Class A common shareholders | $			$ 1,436	$ 3,865	[1]
Less: Net income available to participating unvested restricted Class A common shareholders | $			(4,156)	0
Net income attributable to vested Class A common shareholders | $			$ (2,720)	$ 3,865
Weighted average shares outstanding - basic (in shares) | shares	[2]		47,392	37,392	[1]
Dilutive effect of unvested Class A common shares (in shares) | shares			213	34
Weighted average shares outstanding - diluted (in shares) | shares	[2]		47,605	37,426	[1]
Net income available per common share - basic (in USD per share) | $ / shares			$ (0.06)	$ 0.10	[1]
Net income available per common share - diluted (in USD per share) | $ / shares			$ (0.06)	$ 0.10	[1]
Class A Common Stock | 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 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 and per share amounts have been retrospectively restated to reflect the Company’s reverse stock split, which was effected June 8, 2022.

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COMMITMENTS AND CONTINGENCIES (Details)	Feb. 22, 2022 USD ($) $ / shares shares	Feb. 28, 2021 USD ($) defendant	Jun. 11, 2019 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Loss Contingencies [Line Items]
Loss contingency accrual				$ 0	$ 0
Permian Gas
Loss Contingencies [Line Items]
Maximum annual amount to be paid			$ 60,500,000
Contingent liabilities				$ 0
Altus Midstream LP | Class A Common Stock
Loss Contingencies [Line Items]
Contingent liabilities	$ 4,500,000
Equity interest issuable (in shares) | shares	2,500,000
Altus Midstream LP | Class A Common Stock | Price Option One
Loss Contingencies [Line Items]
Equity interest issuable (in shares) | shares	1,250,000
Trading period	30 days
Stock price trigger (in USD per share) | $ / shares	$ 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) | shares	1,250,000
Trading period	30 days
Stock price trigger (in USD per share) | $ / shares	$ 160.00
Threshold trading days	20 days
Winter Storm Uri
Loss Contingencies [Line Items]
Number of defendants | defendant		2
Outstanding receivable		$ 19,600,000
Allowance for credit loss		$ 0

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SEGMENTS (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) stream Segment pipeline	Mar. 31, 2022 USD ($)		Dec. 31, 2022 USD ($)
Segment Reporting [Abstract]
Number of operating segments | Segment	2
Segment Reporting Information [Line Items]
Net income including noncontrolling interests	$ 4,299	$ 21,389	[1]
Add back:
Interest expense (income)	69,308	26,645
Income tax expense	416	676	[1]
Depreciation and amortization expenses	68,854	61,023	[1]
Amortization of contract costs	1,655	448
Unrealized hedging (gain) loss	(4,987)
Unrealized loss on embedded derivatives		2,886
Proportionate EMI EBITDA	71,867	40,741
Share-based compensation	17,540	6,132
Loss on disposal of assets	102	110	[1]
Loss (gain) on debt extinguishment	0	129
Integration costs	925	6,151
Acquisition transaction costs	268	5,676
Other one-time costs or amortization	3,748	1,195
Deduct:
Warrant valuation adjustment	44	0
Gain on redemption of mandatorily redeemable Preferred units		(4,493)
Equity income from unconsolidated affiliates	46,464	27,917	[1]
Segment adjusted EBITDA	187,487	140,791
Product sales	281,040	257,249
Assets	6,124,655			$ 5,919,711
Investment in unconsolidated affiliate	2,412,905			2,381,340
Product and Service
Deduct:
Product sales	277,249	255,373
Other revenue
Deduct:
Product sales	3,791	1,876
Operating Segments
Deduct:
Assets	$ 6,100,336			5,901,777
Operating Segments | Midstream Logistics
Segment Reporting Information [Line Items]
Number of streams in which a segment operates | stream	3
Net income including noncontrolling interests	$ 51,012	9,185
Add back:
Interest expense (income)	9	26,642
Income tax expense	0	457
Depreciation and amortization expenses	68,393	60,893
Amortization of contract costs	1,655	448
Unrealized hedging (gain) loss	(4,987)
Unrealized loss on embedded derivatives		0
Proportionate EMI EBITDA	0	0
Share-based compensation	0	0
Loss on disposal of assets	102	110
Loss (gain) on debt extinguishment		129
Integration costs	7	4,104
Acquisition transaction costs	33	4
Other one-time costs or amortization	3,025	918
Deduct:
Warrant valuation adjustment	0
Gain on redemption of mandatorily redeemable Preferred units		0
Equity income from unconsolidated affiliates	0	0
Segment adjusted EBITDA	119,249	102,890
Product sales	280,344	257,247
Assets	$ 3,637,003			3,486,948
Operating Segments | Midstream Logistics | Operating Revenues, Cost of Sales, Operating Expenses and Ad Valorem Expenses | Segment Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk, percentage	99.00%
Operating Segments | Midstream Logistics | Product and Service
Deduct:
Product sales	$ 276,555	255,373
Operating Segments | Midstream Logistics | Other revenue
Deduct:
Product sales	$ 3,789	1,874
Operating Segments | Pipeline Transportation
Segment Reporting Information [Line Items]
Number of pipelines with equity investment interest | pipeline	4
Net income including noncontrolling interests	$ 46,432	29,136
Add back:
Interest expense (income)	0	(1,614)
Income tax expense	0	(39)
Depreciation and amortization expenses	455	130
Amortization of contract costs	0	0
Unrealized hedging (gain) loss	0
Unrealized loss on embedded derivatives		0
Proportionate EMI EBITDA	71,867	40,741
Share-based compensation	0	0
Loss on disposal of assets	0	0
Loss (gain) on debt extinguishment		0
Integration costs	0	0
Acquisition transaction costs	0	0
Other one-time costs or amortization	0	0
Deduct:
Warrant valuation adjustment	0
Gain on redemption of mandatorily redeemable Preferred units		0
Equity income from unconsolidated affiliates	46,464	27,917
Segment adjusted EBITDA	72,290	40,437
Product sales	696	2
Assets	$ 2,463,333			2,414,829
Operating Segments | Pipeline Transportation | EBITDA | Segment Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk, percentage	99.00%
Operating Segments | Pipeline Transportation | Product and Service
Deduct:
Product sales	$ 694	0
Operating Segments | Pipeline Transportation | Other revenue
Deduct:
Product sales	2	2
Corporate and Other
Segment Reporting Information [Line Items]
Net income including noncontrolling interests	(93,145)	(16,932)
Add back:
Interest expense (income)	69,299	1,617
Income tax expense	416	258
Depreciation and amortization expenses	6	0
Amortization of contract costs	0	0
Unrealized hedging (gain) loss	0
Unrealized loss on embedded derivatives		2,886
Proportionate EMI EBITDA	0	0
Share-based compensation	17,540	6,132
Loss on disposal of assets	0	0
Loss (gain) on debt extinguishment		0
Integration costs	918	2,047
Acquisition transaction costs	235	5,672
Other one-time costs or amortization	723	277
Deduct:
Warrant valuation adjustment	44
Gain on redemption of mandatorily redeemable Preferred units		(4,493)
Equity income from unconsolidated affiliates	0	0
Segment adjusted EBITDA	(4,052)	$ (2,536)
Assets	$ 24,319			$ 17,934
Corporate and Other | General and Administrative Expenses and Debt Service Costs | Segment Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk, percentage	85.00%

[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 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) - Subsequent Event	Apr. 19, 2023 $ / shares
The Partnership
Subsequent Event [Line Items]
Distribution declared (in USD per share)	$ 0.75
Class A Common Stock
Subsequent Event [Line Items]
Dividends declared (in USD per share)	$ 0.75