Summit Midstream Partners (SMLP) 3 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Summit Midstream Partners Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to your host, Randall Burton. Please go ahead.

morning, good and operator, everyone. Thanks,

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

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

in can expectations from actual March statements to to annual we expectations forward-looking filed a of see our on other Form are believe report such that such cause the assurance that SEC SEC XXXX on as we reflected results. reasonable, expected will correct. listing XXXX, XX-K, no which Please could as these was that be Although prove filings well materially with for differ X, factors provide our results

over have release. measures, call turn we cash most recent EBITDA, Please our free also and that, note comparable And to that reconciliations cash non-GAAP Heath. on GAAP with I'll use most the flow directly and distributable financial in These this EBITDA, adjusted to call, earnings the terms measures we flow. the are provided

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

briefly review financial third by start October. then results, our launched in strategic that alternatives So the and on today, quarter and touch operating we I'll discussing I'll

in did would to our online that was about in slower-than-expected I which, originally during the growth we and course, a slated half the momentum first XX% of driven quarter of a quarter. in as come primarily line were EBITDA shift well quarter-over-quarter. year. behind have regain now mentioned, that volume connects That in start third the turned systems, adjusted significant previously roughly of by we with So timing the second wells new XX drove

We're during quarter And today about during the we're above more segment $XX.X equal that joint next OGC we XX%. adjusted also on of that connected our Northeast, bit X guidance and in XX the track EBITDA in report resulted pleased over wholly EBITDA This venture. certainly original the of results our of demonstrates adjusted range. SMU to new behind Drilling to down our which adjusted our year. segment behind of of third LTM EBITDA million, our a first back -- to EBITDA owned wells $XXX midpoint million achieve the on system growth was half quarter-over-quarter quarter,

of quarter, throughout additional and our we third to an wells, drive and behind continue end the the which we SMU Since the next into will XX expect growth system quarter volume fourth EBITDA have year. connected

activity -- had of wells will provide we also our that segment, service we year-to-date. project we're And pleased project this now as we that that a parts announce, connected did to SMU morning, with multiphase caught of the the first compression system. we delays timing had off centralized in the low-pressure kicked on XX half levels up year Despite our in have fully the -- are

compression of the years, result XXXX The installing first additional out-of-pocket levels. and compression will mitigates a be project will cost The of production. And have that will significantly service in in our we revenues overall first system which additional about units next positive the Virginia, Mountaineer a again, over system, million in and will anticipate of production of the believe latent take will West centralized capital project quarter the add impact project combined the existing our phase $XX fee of from on advantage on compression behind phases of incremental day during couple we which, on project.

wells or well and the nearly the the XX% and system adjusted to way, EBITDA XXX Rockies which Moving during wells and we're DJ XX% in about on including drove in we XX segment, the to growth X be connected quarter, still XX during the additional the connected behind by fourth liquid growth. XX the wells connects the in the Full so year-to-date to expecting Williston, quarter. Rockies volume system

on includes acquisition have to the beyond existing focus over the our behind made and in in XX-year last of by the to a end capital Southern XX,XXX Williams year. acreage These our the of Basin extension executed year Rockies. continue meaningfully will the as undeveloped we integration complete County. that margins A systems. the integrate operating which contract XXXX Basin, other majority largely system key Williston a expect we enhance few projects recently DJ highlights We key of customer We and the the projects in in with

one-rig this in expect development We customer to program mid-XXXX. begin a

certainly might additionally, of versus here about forma customer our historically. development excited anchor here activity, major status position the create combination. The to that some quo. more to And enable do develop laterals acreage X customers during able merged had in X-mile been will quarter. while to and third they've segment And our X-mile -- pro the we relative dampened create this really the contiguous Williston We're combination very laterals near-term

development for overall, going segment. very think it's So we a to be positive the

to to next performing plans XX X half behind much It's are would about complete anchor we our a which the nice first that, Barnett early really communicated volume Barnett, wells talk but during wells the XXXX, XX tell XXXX, will also some in system you bit well. too very has customer the to lead the that in to year. which quarter, of growth connected customer Quickly

year. a really just come our as had in of higher gas about We're XX much than experienced customers the one in prices we elected soon we've see what that day to continue hopeful to announced, million production, production, in will previously that, back production also we as strengthen. the future thus online of shut prices anticipating Additionally, ] far [

So quarter at the we wells XXX third $XX to to expected least new look, online with and we that to $XX expect XX quarter are wells EBITDA the adjusted million continue year-end, million. through that connected range from turn by to fourth

Looking activity. further ahead, with the we're customer cadence pleased of very

that As year. year. about track to that of -- level in we keeps we gets slated continue $XXX we adjusted And to on again and of year. million first demonstrates the during between have business this next LTM now us XXX are wells the half line the will believe first turn said, the sometime It half in next next EBITDA really of the achieve momentum of activity

goal from our of these to prudent strategic with whole before advisers I alternatives, from with So We're partnership. our alternatives to in sell announced review maximizing the on we've transactions ranging level the specific wanted multiple involve over evaluate was the asset pleased the various parties handing also sales we early our of units the I touch a value obviously, Board to to received unitholders. help external that felt for of to Bill, -- engage call it October. that interest

definitely parts provide These execution capital or sale timetable deadline now, of continued partnership company that the while refinancing plan the no focused committed include, of process these on we're of to the operational other alternatives or really and play. There's in and as but definitive existing the review, are continuation for under the assets, business review. combination are set or remains entirety sale its strategic updates Board performance any by of its alternatives like appropriate. remind but I'd -- further alternatives we're on of not we certain the merger business conducts structure, to to, or of plan. limited of execution the this are completing The everyone cash

So turn segment and to Bill call expectations. that, results to let more with on me the details give over

representing good an increase joint [ to morning, wells our inclusive of venture totaled segment including an new -- EBITDA of million, during adjusted to OGC proportionate due In XX million our our million Thanks, X everyone. system increase which our system behind day cubic and XX OGC X system, volumes. quarter, of wells of connected $XX.X Marcellus new inclusive feet relative growth of and the averaged primarily million, XXX ] the We XX% behind joint Ohio day Heath, new per feet Northeast, $X.X share volumes. the Gathering wholly Segment in our SMU This and a was quarter. cubic SMU the X,XXX is owned venture. the wells during quarter, second

running rigs of quarter, impacting day, segment, million, increase to inclusive behind water the XXX DJ the Basin primarily million million the fresh DJ, increase averaged reach connected XXXX, the an The we've Subsequent second and system currently due to increased DUCs. additional volumes, generated quarter our $XX approximately and the $X.X which wells X of there's EBITDA from of adjusted primarily XX quarter systems Rockies XX is of the is of result first higher POP in positively Williston volume an connected second and a our commodity prices end, per production. gas to during increase peak XX throughput which feet to sales contracts. In starting year, natural XX% relative an representing cubic of wells an quarter with

reach to would production expect of volume connected the through wells XXXX. we peak end which the to fourth the year quarter growth during to and second into expect We XX continue quarter, result in the during the

per In online XX,XXX quarter XX% the of relative the to coming second new Williston, averaged barrels as throughput -- during quarter, volume XX liquids quarter. the result a day wells the increase during a second

the We rigs lead fourth wells are the XXX currently and over of be than the continued which systems. will continue DUCs volume to XXXX. behind connected growth behind new in There to X mostly expect in systems XX to the quarter, first the DJ, more half running in

Double cubic million adjusted the increase feet wells DUCs. The which are Double quarter. the again Double per announced will relative of Piceance which million to million the contracts quarter. increase running due of E day. Volume relative by of cubic turned the November, and our quarter. bring Permian relative another quarter. the the in Counties, reported second EBITDA which expected And of the New just the from XX% quarter. increase pipeline in adjusted that the have primarily cubic been and XX second second of the Double E of $X.X segment, million ramp the to of recent in million averaged basin. The XXX segment revenue E million we Lea We long-term quarter the to adjusted expect Mexico, trajectory $XX.X throughput our behind per the feet feet to XX will connected expansions segment outlook second million, $X.X as the to and an the averaged $X.X a to of end primarily wells XXX representing the an to relative includes relative $X.X during million day the $X.X quarter, other of be increase in several Subsequent XXX all in in to pipeline million interest line XXX a $X.X recognized in an connected end, EBITDA year, million and second rigs customers of region reported remain with Eddy EBITDA contracted in plan system, for additional X.X% currently day, total to due volume Barnett per reported decrease production an The of were XX% recent volume on X Volumes on of confident fundamental to second E reminder, quarter anchor

million that by to gas day shut-in XX million. customer keep we $X.X a those of due shut-ins impacted low and approximately adjusted continues Our estimate to negatively approximately natural production prices, EBITDA

will X growth which connected in fourth result volume wells anchor the in customer quarter. Our in September,

behind In the rig connections addition, to XX communicated has this today. is well X customer plans running anchor DUCs system the first There XX for and currently XX half in initial XXXX. of

EBITDA adjusted Quickly SMLP quarter, income in on related the and and maintenance was Heath million in the for expenditures costs the $X.X CapEx. net associated mentioned expectations partnership. Capital The third the pad with quarter with $XX.X million $X integration of Northeast of million earlier. project DJ Rockies Basin connection majority of the included of of approximately $XX approximately projects and the and reported quarter CapEx million spend centralized to in during compression and the line

million had debt credit. SMLP's billion. third respect of which With approximately $X.XX the of totaled of letters end liquidity approximately approximately to $X balance Total sheet, net included of at $XXX we million, quarter the

in growth significant of next of and to towards I'll trend closing quarter-over-quarter, see over in XXXX. approximately back the to we delevering the LTM quarters to several $XXX with EBITDA, a over continue And leverage turns As of adjusted call EBITDA for result as remarks. the X.X total the half has expect decreased Heath adjusted we turn that, first million

Thank you, Bill.

So the system excited just very we the growth. EBITDA and volume and the levels about resulting mean, remain recap. I to behind activity

we business, on momentum The fourth as third quarter strong build that very quarter expect and represents and to continue in XXXX. for into a quarter head we the to the

We updates review to as to regarding certainly, look year they and closing we'll develop. the further forward continue our alternatives strong strategic provide

open up questions. with operator, that, And So the time for the call let's and thanks continued support. for

of Bank [Operator Gregg Brody America. the with Instructions] Our from first of question line comes

a couple. for ] Thanks [ the have I just confidential update.

away. Is anything limit we on you there But be that to that's able we that giving strategic too to limitation should think about the to without may a that X selling think with any to need answer So sort might consider? as much just review, questions sales of what there's pieces there I say. appreciate can respect or in you something you the asset company taxes, limit about

question seem what's I you're the guess, there the of just that second on? like say announced changed you be strategy are questions. doesn't the part to my strategic assets buying the those And before And is seem then I'd that be priority. to review, focused to

evaluating of bring that as far -- what tax think we'll assets far I the changed. changed, Got us don't don't really we we're prohibitive it's that think limit has to asset what's about being to from monetize Yes. particular might consideration. as inbounds as the mean Thanks, -- kind and it. we into think take Gregg. evaluating, it's something I of that the given if But situation going right able get be anything certainly I sales, value Look, as we're

that DJ. We assets have higher we're for that. at Xx. think obviously, see around announced, think, the other in recently And assets some opportunistic I can traded area I than as you multiples in bought that can those probably see, you

found of operations acquisition have really good us So existing lot opportunity good with think I just of we on led buy last that a synergies to to that closing a kind our year.

we overly review is this really pleased was, our as I year, with just strategic the being look discussed activity think as prompted we obviously, with as this ahead, well what has alternative stock where as been some inbound not price trading.

So I don't think it's a shift in strategy.

assets some to a on partnership, to responsive high-quality trading folks some of taking and excess That's that that's enterprise whole our for being asset that. that we're at think something look quo status likewise, us just some now. that, indications the I recognize there's frankly, prompting the portfolio buying And value in multiple case. in market what's evaluating the relative probably hard we're really of sale the is maybe

But again, tuck-in of say really -- think still that's opportunities it. and lot assets footprint. that on we the I there's I around good it's can not that So think to a about I think in all --

over Hopefully, assets be I that's about part able what we think might this here of find make that sense time like additional time. over some we'll to to in. tuck position

kind that Gregg, quarter seeing my $XX the And on this leverage solid X.X bringing as good, delevering, we're quarter I million and in in to $XXX rolling kind of old the acquisition resulted quarter rate total remarks, of quarter. of thing add in which Yes. a prepared a off just million, I'd mentioned on front, turns only run

of that at we push assets. of acquired over better delevering the us highly think synergistic bolt-ons. position quarters. that as year well the synergies when business, the having broader we're So some for we looking here integrating as the not some going we the next And moment, several refinancing But can that kind Basin potentially end next additional also as that focused those to the of really commercial done you have will accelerate been of only here by at DJ so year I really think acquisition, about mentioned we these

just throw in I'll related business. the more X And to here

clearly, customer getting is as on particular, a alluded can call, downside. which out, oil of to the in to just prices, come seems a considering there come What's the little ramp and a more where this now, quite delayed appetites back you your the obviously, out pointed you're So be for on this next And some happening upside year. you year gas commodity risk prices have where there bit. to sense

Yes.

rest of have the to and scheduled I I that mean, I are year half we we've over the look, little that the good on I sight year. during think period. a said, think time -- of XXX online mean, And of a line got we as be next turned wells first

think have continue much us at we've kind a of XXXX. least to we the I So continuation -- to date we that see what in of front in of cadence experienced is what very

half the with Second you. kind of agree I year, generally of

I now, said, think, committed in gas on of our drill and commodity kind good side, to XX as Barnett, like thing, and anchor they've of the wells the are same kind is we next to of in that's and resiliency XX shown spite the there thing up prices year -- customer the gas the the half where first prices in Utica. of

seeing given of other think growth we're our the the production think more -- out we in past. bit been just to wells relative and than activity Utica, overall just have inventory footprint still little necessarily the I of I amount a getting you're are we're economic, not but and systems,

be some into to we So of strong I cover to mean we XXXX. so continue say momentum far, kind there expect as I'd

the blend of kind that If XX just Gregg, you quarter, and down then right? wells expect here XXX, that we've got we And $XXX in breaking remaining million. fourth Yes. the

You're of to we've And XX you range. our talking been kind second in I gives and guidance of cadence first about just of of in XX-K the half, quarter we'll about our think during a when XX February. type kind that make of But that call a kind that certainly wells we a quarter early wells a normal sense XX, XX trending on release half. XX-ish that kind to do throughout certainly

This Q&A today's Thank today's for concludes participating on call. conference. That today's session. you concludes

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