Summit Midstream Partners (SMLP) 5 Aug 222022 Q2 Earnings call transcript

Welcome to the Second Quarter 2022 Summit Midstream Partners, LP Earnings Conference Call. My name is Hilda, and I will be your operator for today. [Operator Instructions] I will now turn the call over to [Randall Burton], Director of Finance, Treasurer and Investor Relations. Sir, you may begin.

Thanks, operator, and good morning, everyone.

Presentations have website of find at the Events already please earnings it don't Results homepage, our Quarterly visit www.summitmidstream.com, and you a our copy release, on section. If or section where you'll of With Chief XXXX and me with Financial our Chief Officer; operating of Chairman; and members Deneke, financial Executive Heath along today Officer our our is Bill quarter team. discuss President, to senior second management results Mault, other our

our our operations. discussion like These expenses I'd to other future may that statements anticipated and They forward-looking but remind start, also for volumes, expenditures. may we statements. and concerning today plans objectives you cash statements are Before contain not estimates operating include, liquidity, may flow, capital strategy future include limited and to, of business

our from to this the Please cash most directly terms reconciliations report expected Although correct. the our recent that differ note reasonable, prove can cause February provide turn GAAP that forward-looking are Heath. other release. also reflected expectations the factors well SEC most see non-GAAP in the assurance on earnings that, listing These over that flow. for such Please SEC XX, to of I'll actual was our Form we to on XXXX, to adjusted EBITDA results as could a in will we believe as such we call annual XX-K, that and which call, provided have materially on no filed the be use with And filings statements are expectations XXXX distributable we results. EBITDA, and financial with measures measures comparable

good Great. Thanks, Randall, morning, everyone. All right. and

just safely EBITDA of and estimate and those the into I'll a North were in and expenses expectations and the North The quarterly incurred decline Bill for job of the let which second a North getting but over reported storm SMLP's as in $X.X volumes. million our quarter. we team in during that $XX.X impacted Dakota severe internal million, get late maintenance of deal Summit the storm April challenging gas maintenance primary well Dakota conditions. weather, did a winter Dakota related unexpected despite month. started frac protect very So experienced activities the the quickly quarter operations Northeast despite over drivers of back things exceeded adjusted more and as and some online liquids details, natural great the

$XX our quarter, closed the million for leverage During materially which G&P increased liquidity our sale successfully June outlook improved we and as asset million, significantly $XXX our Lane XX. of to

-- XX about which the uncomplete being also or had are wells generally of were systems beat well. rigs speak. second as our as running we of are X the drilled XX quarter, across in expectations drilled that our now, connected that wells we during as have currently process We which have either And and but

going several adjusted million. our to to the a as end range wells in July, are believe that the of to our million result EBITDA outperformance, we system look, trend new from of -- performance the So $XXX guidance connected $XXX XXXX we year-to-date of towards higher

customers. very from level 'XX, activities we we're As of encouraged into the ahead by look our increasing

it by connect XX% growth well new year. is the step wells latest that activity We're of It's obviously Our producer are excited XXX historical as forward XXXX our roughly the also connections a per activity very the few development level towards to of prior and XXX relative we've to average to significant generally over XXXX systems. which very this experienced well plans level years about behind connects. XXX represents projecting encouraged over now well activity and in pandemic,

recently with is bolt-on already SMU most to continued benefit net acquisition, in we've Utica, approximately XX,XXX of In our addition, Ascent, consolidation system. to acres which upstream latest sector, dedicated from the the in

given the production. owned optimal contiguous interest -- the material existing was in certainly, Ascent acreage a that buyer, acreage their working and position, the is to they also their

in We we of free result XXX-well as the progress going SMU is already the to drilling drive amount in cash identified this that inventory system. well to pads locations, XX connects are continue forward a on the will flow transaction significant quarter Summit which In the behind XXXX to expect believe thereafter. mostly of of and expected program, continually which starting Piceance, substantial make develops the development second XX for connected Ascent I are to

term. initial development day. wells X.X per Based modest cadence includes in a it, on the the call of, reminder, and this IP directional to over longer relativity X flat volume region that characteristics growth development, well million we these will this think Mcf an segment As rates to that Piceance our result do have overall of in million in

XX Barnett, performance past the four that have connected the we to in starting the with the online over wells to flow wells to July. turned system late see strong months, the continue from Within and latest X been

We system, have in and plans new informed an of XX active more for rig have XXXX. recently us wells our running customers than behind our

Gulf well over the well continued proximity this positions believe Barnett's performance LNG we years. that prices, to growth really overall So several as gas as next the Coast markets for in the segment improvement the

and today, in were the both wells wells produced customer Central X water County for With still Williston a several the planning as in that call include growth volume impacted over the rigs early to to next customers the be meaningful on guidance 'XX, we expected for involve volumes systems are half in it's crude quarter, far make of anticipate did by level second for will performance services. We they're in official XXXX, you by and assume and approximate June, growth if behind in balance that customers gathering XX us the see While going success the encouraged well. volumes nearly our the plans XXXX for SMLP's the wells sheet will in to business double-digit a obviously, XX in North forward. further on of and from currently four this on Dakota which Williams would well Summit the are improve the Williston we growth we today. execute wells At the XX of position XXXX, this would Well, EBITDA XXXX. approximately but significantly thus development expect normalize And continue have front significantly that running plans that storm experience definitely quarters. the

overall are pursuing step-ups, in discussed, leverage year the in look out pipeline would we contractual value also and the and is we have that, also divestitures, the business we kind new of into to the accretive and for years progress certainly we pursue only expanding Double Summit, E we're continuing base growth great the As on to we our in that tremendous potentially acquisitions and drive commercializing making and one And bolt-on aspect as the next expect story, table. as not of Permian. but growth only contracts bring and

with financial details provide I'll Mault to to the results. Bill So call over hand on some additional that, the

gas behind EBITDA Basin this of the XX that represented as volume primarily that growth Crude XX,XXX and reminder, storm quarter-over-quarter, X-well I'll Ascent's wells That's year. in volume weather adjusted primarily XX% to was Northeast during and those come new Pipeline cubic well to quarter. our new XX there approximately inclusive decreased online due were with lower winter in due had was basis. approximately from quarter. to are July as XX%, X feet beginning interest dedicated XXXX.As venture connected over decline first quarter a of and offset that believe XX,XXX here behind approximately in continue development activities being June, $XX.X by in XX million our due reported temporary up We The to by day. million X/Xths systems, the approximately four wells million, a from expected frac upstream the the a currently $X.X million and look shut-ins for of upstream quarter. day, and the G&P XXX $XX.X quarter million, third get brought XX behind over system includes million wholly-owned day to million were to feet a of joint volume alongside of that understanding our our and move on wholly-owned EBITDA new XX and second Williston acreage the of the throughput. no $X.X in decrease increasing quarter. and million during $X the quarter while our we pro of the Volumes systems production X,XXX EBITDA gas a Barnett of averaged was quarter. million a behind due quarter. as were quarter. net activity X.X% flat relative relative subsequent $XXX,XXX online and OGC customer for joint expenses and volumes This approximately segment our XXX Ohio Marcellus volume rigs Rockies and OTC relative our expected primarily first systems production was Double venture started $X.X segment X.X% of in the E million was segment This temporarily Ohio decrease segment, The in and our periods. by E DJ maintenance-related the of drilling the XXX a for and those are 'XX. joint XXX our XXX Subsequent to G&P day OGC Lane by there first basis quarter. of We was during Heath, volumes to Natural running alongside barrels EBITDA Approximately margin a increase end, venture EBITDA XXX decreased online day. system, new which, and estimate the system. X/Xths The Approximately an our forward quarter. primarily to serve wells came or our the a gross of our wholly-owned here venture our reduced system, first of the Double reported in to volume system. and Natural pad. Volumes was joint day due wells $X on million a half plans our cubic liquids $X.X quarter. settlements commercial which a condensate sequential the SMU venture. system a SMU activity quarter. decreased also Permian and in for existing better million impacted volumes the everyone. normalized will in approximately shut-in adjusted decline, And initial the liquids operating TPL-X averaged impacted the in protect, reduced DUCs increase on its for per generally during during the running was Northeast serve the that Basin per rig wells in expenses to day approximately behind on volumes Gathering E half our still XX% to of feet day, and produce Heath EBITDA This We OGC $XX.X feet system totaled million, the good We a a line to the impacted per wells $X.X in and averaged come Thanks, catalyst June Piceance connected approximately partially Eddy E $X.X new which acquisition Double million for quarter sold X customers day active in X which four and quarter. of to XX.X% rigs a averaged wholly-owned quarter. the volume decline expect our was of Double a that Lea the of that proportionate a our expect $X.X cubic volumes and the XX third that of adjusted in that day Gathering volumes with the Volumes region. joint during million which we of our resulting share by adjusted operating segment their million wholly-owned flat million segment accounted inclusive in quarter forma nearby at venture. morning, volumes barrels X XX% the behind is of The to is increase prior estimate the quarter decrease expect volume pad drill fourth to flat to X/Xths Heath volume which our the expect EBITDA we estimate system during partially first Double wells venture the the SMU wholly-owned behind system, Northeast, joint The the was first which was adjusted of system oil to averaged an Summit segment, volume by end, generated this reported XXX% to E which temporarily There mentioned on permitted which million, inclusive increase fracturing County, four Mexico, sequentially volumes a due brought New wells day are of behind that online customer joint and behind volume mentioned, in systems volume million are connection and to behind million from nearly behind these wholly-owned approximately the segment we on was catalyst approximately offset This million were downtime shut-in cubic adjusted in basin XX million our over negatively our to

came serve million four drilled. as quarter As we that peak system in are significant achieved late system of expected July, to wells the wells of that system forward. from the online an results being Heath wells also new wells four to catalyst and end that going the over expect in the past mentioned, new with wells were currently behind should additional we There XX level continue April were connected activity XX XXXX the day. volumes great at months. see in connected the fourth in XXXX a the to approximately over This There X volume four a of

EBITDA expenditures the $XX.X of the reported quarter of impairment during Turning million. We quickly was associated million $XX.X loss This capital net maintenance generated incurred Lane system. second which to our of CapEx. to the $X.X million, partnership, SMLP $XX.X a included of due with an million primarily sale G&P of adjusted quarter, $X.X million

system sale pay In $X.X million. addition G&P sold quarter, down to for the to by the latent the generation additional asset we ABL enabled approximately $XX sale flow Free cash $XX proceeds an during of us along million, inventory. the of approximately also with the Lane million

$XXX on and million As $XXX we cash had of credit quarter outstanding facility unrestricted end, ABL of our $XX hand. under million million approximately

of over with included that, closing I'll for letters $XXX Our the million $X back the available quarter to credit. which totaled remarks. of Heath call of borrowing turn approximately capacity the at end million, And

of We're believe all very our strategy. we will about, and volume aspects and value pleased divestitures we're making value potentially for progress expected And our the the E as talked the forward. combination corporate of really accretive on and of all amount going commercialization that Thank growth acquisitions with well business of Bill. base that you, tremendous bolt-on a of we expansion that leverage the the drive really as Double stakeholders

we'll to time like with you And questions. call open I updates for and our that, continued the would and operator, customer I'd initiatives to thank provide continue As up like for always, strategic plans your as to materialize. support.