Summit Midstream Partners (SMLP) 15 Mar 242023 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2023 Summit Midstream Partners, LP Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I would now like to pass the call over to the Director of Finance, Treasurer, Investor Relations, Randall Burton.

Thanks, operator, and good morning, everyone.

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

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

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

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

to I'll that, turn Heath. And the call over with

quarter outlook, good our Thank XXXX is today to XXXX looking and also be current us discuss fourth joining you which Randall, solid for full everyone. We'll results. year to another discuss our morning, process, and price to we're which first, strategic alternatives environment the in. brief The update I'd review. very year in XXXX active. October our provide of to that a gas remains But we despite launched low Thanks, like

evaluate level from multiple unitholders. to value with We partnership for opportunities are the sales to asset all ranging continuing goal of our maximizing transactions,

While time several we we and the of line strategic opportunity unitholders, about stages progress definitive our made review, maximize to and for over our to months future. We into alternatives have remain we providing set past late are substantial now near we have to forward the look entering not review. a fulsome very more the excited value complete a in set the believe update further

XXXX about quarter from EBITDA to fourth million, EBITDA $XX results. and fourth $XXX which Now year of Summit XX% adjusted full on delivered quarter prior the growth adjusted the EBITDA and represents million of XXXX year.

over generated flow. of $XX $XXX we cash year, shy cash and free million flow just million of of the During distributable

Aside from operational XXXX beyond. results, our that commercial successes drive solid we and multiple we expect growth will in and had financial earnings

another we XXXX, XX,XXX and of wells XXXX. and be Gathering joint the window producer a of have drilled In owned Utica executed beginning behind a condensate in XX gathering agreement, our we first XX-year which venture, XXXX. fee That completed wholly in in is new compression acres we incremental Also the the X to basin. announced program over currently X-rig Ohio line the in in located compression previously resulting to in system, in wells with producer project, commissioned a Northeast, the the quarter an Northeast, and running behind dedicated a to system they expect indicated our turn

plant to day XXX new currently capture contract million will E will position that construction new our a in under is is We take-or-pay Pipeline. the also executed independent complex a and Double coming to as years. that contract with expanding Double processing E a us a behind XX-year large producer incremental connect volumes The

We Delaware very and are be setting in are we contracts, that believe commercializing on the to really additional the productive the progress year E. fundamentals to with we making Basin a expect Double other secure stage take-or-pay shippers for what

optimization XXXX. and certainly million the XXXX know, and a drive on you and we've systems, DJ, we to that XXXX in million starting XXXX beyond. Summit and integrating acquisitions. DJ was projects productive expect been utilize executed of year in will that we efficiently us a the continue very very $X drive believe focused, growth those number our in and $XX into completed in more allow Also to busy debottlenecking as Basin optimizing which and employees, value We will activities for the to between

dry Earlier $XXX connect million, full connects, approximately wells, to driven growth of year-over-year represents guidance the liquids-rich wells, and XX% midpoint we good gas-oriented wells million XXX pricing. the a announced are commodity growth. XXXX are given had year of we 'XX, which to to is especially to expected are XX% EBITDA This we're $XXX exposure, is in well currently crude seeing strip XX% X% in approximately gas this gas-oriented feel expect morning, connects and mix the by well XXXX. softness systems approximately oil-oriented Of which XXX we approximately in at adjusted natural the

well rigs their receiving real-time to plans, and our we are are previous incorporates crews remain development track our from Similar tracking to years, customers regarding feedback in connects XXXX. ensure completion on guidance we range and

quarter range would turn-in-line timing if as connects, reflects Just that have and guidance well hit methodology, are our targets, refresher at current end come of approximately producers further planned and second to of low we to beyond. the dates production EBITDA high their end to a to of 'XX. the online in and be our risking expect slated our the risk guidance we wells of and XX% range adjusted reduction in The

eye We'll continue we'll levels the on around an system and and throughout provide in activity our to keep updates year.

amount in this primarily year, includes show which the level of capital, and of $XX EBITDA generation XXXX This of Our the to capital and Rockies in capable flow segments. and expected is which operating the million Northeast connects XXXX guidance assets cash to leverage free producing. is range million goes resulting are adjusted these well from capital maintenance $XX to related

that, over call hand XXXX financial results provide the additional our to with on and to Bill guidance. I'll some details And

Heath, and everyone. morning, Thanks, good

included $XX outstanding at to totaled million to approximately Heath XXXX, million integration station bit and SMU. With more which, guidance. fourth million. is $XXX $XX.X color we capital related our a million performance, $XX for recently the as year full DJ discussing had quarter net reminder, providing of adjusted and respect XXXX loss of financial in our year compressor Basin expenditures expansion acquisitions As onetime start for the commissioned business and are adjusted XXXX trending by million, balance of ABL totaled full $XXX million as mentioned, a EBITDA up. million under Summit quarter $XXX had included great reported about and year which XXXX end expected I'll by of our and resulting million, $XX EBITDA capacity we the with our borrowing followed fourth LCs. million facility approximately of SMLP's a we how on our quarter $XX.X available sheet, the $X.X the $XX million of excited Capital shaping at

Now turning to segments. the

behind new wells by X quarter natural in partially quarter the and segment in SMU of and quarter, behind inclusive system, share Mountaineer joint our inclusive during OGC throughput system, the rigs EBITDA from of turned higher largely during third Northeast, day averaged our on of X the quarter. Bcf an our more systems, a volume is in venture. X/Xths This currently feet than SMU variance XXX 'XX. joint third the due and was declines wells totaled million our XX turned from cubic of increase adjusted OGC production offset our volumes the Gathering OGC, our wholly-owned wholly-owned and $X.X SMU million, contribution in the which behind a day Ohio proportionate X.XX of quarter system running venture systems. of of system SMU our the X are the full segment per $XX.X The behind In was to Marcellus line There XX million DUCs line

in X,XXX The inclusive a third quarter down quarter. to our system barrels declines million partially wells $XX.X by connected from $X.X third of which in production and $X to natural approximately primarily to Williston increase and lower in natural a the quarter, Rockies prices prices adjusted by per EBITDA DJ Basin. systems the the of of commodity lower our relative expenses. segment, margin quarter. averaged approximately DJ XX,XXX million $X We operating largely impacted POP from a barrels million of due during impacting volumes Liquids by new by realized volume the liquids during the gross contracts negatively declines and the X.X% decline generated volumes which offset X offset day, due estimate is gas natural million, production to day lower This X.X% decrease Basin commodity was a was partially

Natural in There of due quarter primarily new production the well XX of running we XXXX. DUCs, connected more quarter peak million gas expecting that majority XX X and day, to averaged behind to the reach wells XXX XXXX. day third in our which systems the the should during is system second quarter, represents the of currently feet connections a cubic quarter reaching are and peak volumes X a cubic an than increase to feet rig relative million wells the during second per production connected

continues pipeline in adjusted segment, due cubic giving cubic XXX third Permian an Double of the relative EBITDA confidence outlook volume announced long-term at $X which ramp-ups on Basin pipe. to million, throughput expansions plant third Eddy approximately XX% $X of take-or-pay Lea the to day. counties E includes and feet us of per in representing quarter. to the in our There of Basin Volume million the relative an the interest in to XXX Delaware per and Double fundamental to contractual XXX million increase quarter million the reported processing The primarily running feet be approximately day, rigs XX% averaged E increase

of quarter million well the reported million feet the system connects $XX.X million, segment cubic day during new to due to to third primarily to adjusted driving up Piceance XXX $X.X volume quarter, XX the relative The throughput quarter. EBITDA during the per

by increase we've DUCs of relative currently is from quarter, gas an volume million system. during and offset million during running The discussed behind XX decrease million due the reported primarily operating the the the X a of segment system of a prices, increase expenses, million, throughput $X.X rig $X.X connected as natural shut-in shut-ins impacted to to adjusted previously, and EBITDA production quarter. XX And continues we customer estimate these a the negatively approximately approximately the day EBITDA keep by $X.X new low to in X quarter. an to adjusted Barnett partially due to in wells There third

our further, the I'd like on midpoint reiterate our customers and to approximately of represents system XX% have well assumes the hit guidance of relative what the The even range high of to now end of timing Heath's XXX midpoint than at have end We targets. focus X timing which currently connections comments, guidance the and XXXX low provided. rigs risks the that to all well more connections behind the and risk DUCs, the of expected their range. customers

crude already Heath liquids-rich the favorable those mentioned, are and supportive from of as which crude oil we approximately areas, view gas-oriented And wells as oil-oriented XX% given strip.

to X/X are continued from run be line been develop online wells, in of wells already gas-oriented rig to Barnett 'XX. have XXXX, wells turned of and the a the new first that dry including in the of approximately expected that, a brought those who customer wells in has X throughout quarter For

a gas mentioned, this the XXXX, natural to area. keep the will is sensitive given expecting expecting currently believe OGC from Northeast, remainder with customer well XX in prices infrastructure decline with We have XX Williston. the the handful modest follow connects in the develop other will to we Rockies they and level volume more to 'XX. we connects wells of growth this throughput. and a are In well currently which less behind adjusted And of year and XXX flat to DJ drive the we second agreement our in at venture, to volume EBITDA new expect a and XXX gas coming region, in them liquids producer of This Ohio XXX XXXX largest activity range. Heath XX the to in XXXX we in volumes joint our did guidance relatively natural are midpoint with execute throughput the volumes in from in gas as In

year. towards due And be the in going of alleviated in Williston levels what in believe in the line We experienced gas slowdown should that we gathering would third-party activity with the the in expect basin primarily XXXX. half is be forward, latter the activity constraints to more to we

given the XXXX the see upstream surprised occurred activity terribly that M&A some delays to aren't activity up late mid- some also in We to in of Williston.

Piceance, Quickly a are in compared will XXXX. to new modest well we volume in on XXXX, decline no connects which result the EBITDA expecting and in

Now to wells behind we to X XX running and XXXX. Barnett, in to currently the relative we the system. XXXX, expecting rig XX% result XX expect in are XX growth will volume is DUCs throughput approximately There which

we speak. already X more with have line the quarter we drilled Additionally, and in in wells turned being completed first as

of end at earlier, low the that line system is the are back that XXXX, that we our shut-in behind of there reflective midpoint a expecting XX in in mentioned currently guidance day estimate I range. and of turn As the we and to is not current million production

the Shifting to Permian.

from recently XX during contracts. during that step up XXXX. long-term volume executed contract half the to to 'XX, is first primarily second EBITDA take-or-pay first and commitment the a day year-over-year related expect the contractual to its expected expect in growth our step-ups we of of contract We take-or-pay quarter million The

discussing spend CapEx sheet. balance some time I'll the Finally, and

for spend connections be have growth in to 'XX the CapEx. We spent a million for Rockies connects growth XXXX CapEx will for million the given are well $XX number $XX majority expecting in to of and the $XX $XX year. pad we CapEx to region, The million of of where amount expected of the million maintenance

available our flow we adjusted million free expect $XX $XX debt. to to down EBITDA to the million throughout cash and expect capital, total pay of course year. And midpoint and expected on Based to with we million of free of approximately flow million generate debt guidance $XX of million the generation $XXX of paydown cash significant $XX range, $XXX the to million

Heath over And with closing back to that, I'll for turn the call remarks.

right. Thanks, Great. All Bill.

pleased year. made and our beyond. So discussed we We with extremely while optimize base to really outlook the for look, our updates updates the continue review our on base that are that call on and progress on as strategic about execute to we'll on strategic providing the the XXXX and forward obviously throughout closing excited further we and we're here we provide to look XXXX set opportunity in today, certainly and alternatives continue believe review in business. We're soon, out the Summit focused business

up that, call the questions. I'd for operator, With to open like

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

and As always, thanks update. for the comprehensive guidance

of a couple comments. Just

Is more So the term. a strategic there review, terms in something you -- line? could be specific said expect of near time

Heath. think look, what at said this we've this Gregg, is can we point. I No, say

think I been very a process. robust it's

to stages into on entering think narrow in the are we think advanced I that going are starting and we alternatives value. maximize to

soon. here that time really and that's So further we'll like it I think Again, line, no can have say fairly direction here all guidance feel some does -- about we definitive now. something but

and the sale on longer you focusing a is -- no strategic -- as those what part your do, commentary can the of implies And said, review? you

to I intend that. didn't say imply or No, that

was press the too focused and asset being joint on looking sales venture too much I maybe type I activities. focused -- just release, at was on

And partnership-level that's what release in we well. transactions said as the

the still a But possibility? sale is

Sure.

Sure.

a You talk just how the contract your some Can And quantify release told mentioned that that the opportunities for you've us what out. expansion means the little you comments. this year. Okay. in about about Try more and on press plays obviously, Permian, to there? bit it

bet. you Yes,

the past calling the we've this Delaware activity, more the watched kind mean, see been up probably in all pipeline. kind of up. see Mexico on fill X infrastructure ramp started Basin. in production but look, other we the or We've this broadly New increase existing Double year I particularly We that for of volumes So to E

us importantly, by complex evidenced announced, we a $XX as take-or-pay but a contract, $XXX one XX-year it's just it And it's day it's and with huge investment-grade a connects that new million recent an million a this a day, shipper. to not

around on Mexico addition levels but New getting there the residue increase E pipeline we're will in just in Double be is to in not the that seeing current and around think area, to I the So that, the But takeaway constrained. that activity more come gas situation realization front. an

from a existing think in our new I around and to we of lot footprint near-term gas view, our the we So here see connect can deliver and opportunities that plants residue Waha.

continue So to gain environment, a ripe pretty to contracts. us XXXX in think, for additional we

there's area that add, pipeline. X Heath, I'll just expansions capture are Bcf reasonable Yes. of And the a that processing within of Gregg, about plant

infrastructure of as kind market's we're that we some with to we build as as planned potential well all prospects. of coming the about the excited the discussions infrastructure expected, customers So here view us this build, and recent

And we you. conference Q&A may participating, and Thank close call today. our conclude our Thank you for gentlemen, and that, with you ladies disconnect. and now