Investment thesis
Altus Midstream (ALTM) has so far been a disastrous investment, but even if we assign a $0 valuation to Alpine High, there’s significant value in the company due to its interests in four top tier pipelines. Once the Permian Highway is online and ALTM redeems the preferred, the company will generate very strong cash flows.
Furthermore, when buying at current prices, we have what we could describe as a "call option" on Apache (APA) increasing Alpine High production due to significantly higher natural gas prices, which would drive incremental