Summit Midstream Partners (SMLP) 3 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the First Quarter Summit Midstream Partners, LP Earnings Conference Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Randall Burton, Director of Investor Relations. ahead. go Please

good and Thanks, morning, operator, everyone.

section don't our of you find on and a section. www.summitmidstream.com, copy release, please it Presentations Events homepage, have earnings the Quarterly visit you'll Results If where already or our at website

our to other management our and Chief Deneke, quarter of Chief Financial Mault, members our Executive senior Officer Officer; With operating discuss XXXX is with results of me our team. first today Bill along Heath President, financial and Chairman;

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

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

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

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

discuss ] our this on strategic all Virginia. had our Mountaineer we've divestiture -- XXXX review, of morning, system as up everyone. also the announced we Thank quarter, really of in our wrapped our Starting you the on [ closed Utica gathering sale West position. on And the Thanks, joining successfully a strategic really Randall, today announced we first alternatives results. We for morning, quarter perspective, and to on us first fronts. very busy good

focus organic segment and we bolt-on Permian several our opportunities on acquisition approximately the aggregate, and shifting $XXX Northeast around sold million, our and Rockies In segments. and for our we're now in

forma forma million of $XXX a cash. undrawn completely and pro $XXX of little With around X.Xx, leverage unrestricted over million our pro a revolver

well target those progress opportunities while continue of very to X.Xx. to balance delever or achieving make positioned sheet are sub the We our further pursue progress leverage long-term we to towards and

incremental with on award in successful processing Double a discussions resulted This extremely a Earlier continue that open million week, really Commercial E of of remain we the to subsidiary Matador was commitments productive. XX-year season take-or-pay day of Resources. XX this a concluded there commitment to connected XXX Marlin their to expansion of in the the plant day Marlin The ] support in come XXXX. to the first scheduled is their online pipeline, complex expansion half of million plant Double plant [ is E a Mexico. and already

to provided XX-year commitment, X, extended volume their addition service the restated approximate agreements are amended new and term firm the to of extension XXXX. for In an existing now a May X.X-year effective and Matador agreement

for rate day along expansions XXX received in season, nonbinding million of had have also new We've a that of that XXXX. million interruptible recently up announced for Furthermore, XX-year volumes. and other parties Additionally, as XXX we with take-or-pay looking E incremental from multiple max in a of connections parties plant plant to we ] part agreement in are the new a the Double find Mexico dialogue corridor. open [ bids day New third

the these contracts, of contract for systems. Matador plants contract and both the to processing both our [indiscernible] look, are connected So already

capital not associated or connections. Double to any if So much really E, therefore, they're really extremely these value with accretive there's

believe Delaware Basin market. long-term that level needs takeaway Double meet capacity continue We're is to the positioned and out E increasing residue for and demand the excited the of of uniquely near-term very to of both gas we to see the materialize,

year weather, great severe half the guidance turned to Utica good achieve transaction year in pro operationally line and to line forma Marcellus Operationally, a full be to the first start had in expecting of $XXX the our wells primarily $XXX quarter, despite pro for that exceeded our Basin. activity position million. This range in execute revised we for which XX in us the during some the the level and million we're adjusted for to should XXXX. quarter to We forma represents and of the turned expectations put nearly continue wells EBITDA of a DJ

strategically, we're the for maintaining through rest great summary, to we of and financially, in So operationally start look a year. that the momentum both off and to the year, forward

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

of $XXX Thanks, with the associated Rockies Heath, EBITDA adjusted CapEx ] $XX.X connections. With $XXX the expenditures million, and in credit reported quarter approximately respect had balance million income good first majority the ABL of spend debt of with sheet, an [ morning, undrawn net to with and everyone. net $XXX.X of $XX.X million, Summit of SMLP's facility. pad million capital we million

million capacity end of the upcoming the notes million of unsecured commitment majority. at the first $X.X includes borrowing quarter letters credit of million, of which available XXXX reserve and totaled Our $XXX $XX for

liquids and by percentage quarter of the EBITDA In adjusted fourth segment, Now margin generated natural our of project which which the million, our from commodity systems, gas million $XX.X inclusive proceeds largely from $X.X contracts DJ of due to turning we Basin from volumes. increased an to Williston of partially prices, Rockies the and higher is lower segments. offset increase was

and to a quarter, of weather volumes fourth a XX to production the Williston declines. per relative of feet quarter. averaged X,XXX second due natural during day liquids decrease day, barrels XX X to averaged volume gas connected quarter. Natural cubic the experienced day volumes DJ to quarter, million quarter which the a relative the DJ the impacted in and the a negatively a the by drive operational will day million in a gas We primarily X fourth volumes we wells day, growth the due during primarily natural we in expect barrels in million extreme XX,XXX XXX downtime Basin that Liquid and approximately decrease wells

Rockies more segment docks X than XX has The on systems running the [ currently and ]. rigs

The fourth $X of day, million fourth segment, primarily representing revenue to fourth Permian of due which to throughput includes Basin EBITDA the relative the quarter. Double quarter. on reported our in million of feet interest increase XXX E recognized the E per million cubic XX% XX% pipeline of Volume averaged decrease other in Double relative an quarter million, to adjusted a the $X.X $X.X

with the contracting the we capacity, extremely mentioned, already the significant Double Heath long-term remain for in momentum As prospects E. remaining about excited

relative during cubic $X.X Volume down to averaged The relative fourth Piceance EBITDA XXX adjusted the the due a X natural reported throughput the feet million the and quarter, no declines to a day primarily to to $XX.X quarter day fourth of decline cubic during quarter. connections quarter. the feet segment system new production million, million million well a

[ approximately is offset Barnett to customer ] day a by XX estimate gas quarter, adjusted currently million, primarily The million connected quarter. relative XX a to negatively system. running There low natural segment day the and throughput, reported the volume million wells EBITDA of that feet prices. a due system of to a X docks million the keep shut-in rig impacted X million during to new continues and to by cubic partially $X.X of decrease the adjusted the We $X behind shut-ins lower XX due production EBITDA $X.X fourth of

feet Northeast. the segment to million, an on fourth million OGC quarter. cubic Bcf day The volumes. inclusive Briefly quarter during XX million per the averaged day increase $X.X adjusted And totaled segment a the of of of EBITDA XXX X.XX relative $XX

the we system beyond behind X [ Midstream, Antero sale announced sale segment ]. million of aggregate and X proceeds. May the have with as Northeast During exited And connected X, as quarter, wells of the Mountaineer the in successfully the ] system $XXX today, asset [ to we OGC we SMU wells with

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

very we've the on believe in Yes. to look quarter momentum progress to build balance with the and continue our pleased on said our progress certainly as performance, an made and sheet. first the We we Thanks, and Look, system we're progress, forward great levels environment activity opportunity-rich throughout year. that Bill. earlier, behind the I the

a wanted X:XX I associated call the vote. I everyone for to upcoming with Before of of Limited we to should questions, certainly the are Time. of on everyone X, held remind Meeting XXXX up will proxy meeting, which are reported All agenda, virtually on important be have open p.m. Central Annual to the certainly encourage they the and the items Partners, number partnership materials May unitholders at received

where and to the approval for the preparing a making we to C-Corp will we good conversion, seek intend proxy convert to announced Additionally, in meeting, including unitholders Summit's subsequent ] progress C-Corp. are previously a [ special partnership from

While number third meeting proxy a the exact rationale during expect the the year. early on track the timing unitholders of the we second and the are quarter, and the conversion depends C-Corp on information hold statement about of factors, file the of quarter as with and sometime to additional to special a provide currently benefits as the

going savings that unitholders future value strongly to for certainly provide positions and believe our a company the We will continue forward. and converting tax for long-term maximize shareholders to to C-Corp significant current

time your call continued I With And and the open questions. operator, like you support. for for thank would please that, to

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

all on Congrats the transactions.

opportunity you're M&A Northeast and now, the conclusion in to is assets? that Just Rockies. bit Can company that? and the that Can concluded the talk a done little the the you've the of sold is mean the pruning all it's you you review, with like on strategic about the talk it assets you it's focused what Is strategic about Permian adding review your and about -- there? respect in sounds --

mean, are think and it the is, Yes. of think of at -- they're short Good we the Yes, that's right long value. kind I pruning questions. I done of assets. in terms obviously, we

the base ] on of on an would revolver to with kind I sheet. ample of cash close balance the we X.Xx balance would now. sheet, $XXX of you think, liquidity not in but to, undrawn that's of we've levered got plan. and amount as I [ think, see think continue an consider plus what, got we've it, kind We the

So Rockies really than enough liquidity our to and support an strategy M&A Permian that's segments. more around

of kind maintain and a leverage we're good try see achieve the is Look, I market goal -- in of segment target of target do a potentially advantage set and of both #X around what to bit for our the is Rockies now. think to buyers think to do opportunity Permian we take long-term X.X. But and we quite right

mentioned we million E, just Yes. And would connections. as kind proposals of additional nonbinding you add day think Double got of I the for -- we XXX Gregg, to about plant a

I think at organic well. there's out E a strategy Double growth really good as

a I debt, opportunities think investment that may we there asset-level some with but be finance lot could there. of

And then Williston I'd and And priority tell about they're we as a to you existing a greater bolt-on our extent a a synergistic see in list think pretty pretty, of perspective. exhaustive DJ. highly the footprint. number targets kind to we primarily from of of acquisition opportunities high you, the all keep And -- in

is? you Could big that set of a us how give sense opportunity

as million Yes. that's think to $XX ambitious could double size if about Summit. feel all of as we from them EBITDA done, would we Gregg, them Obviously, strategy. I million. But of ranging $XX like could low to $XX I get million pretty as as high a the

-- there's how there? -- is are many type And out of and opportunities -- that's the

Gregg. say on, eye a there's, XX that I'd keep so call or we close it,

one I don't I Got there we're that not there just some you it. about that thinking announced saw just see then value the Antero's out for about? think yesterday. creation there. the on other when X.Xx guidance last asset And based you Is that sale,

Yes.

Gregg, that'd do one, if on that revised [ right ] EBITDA. on at math put the So midpoint XX.X reduction guidance, you the you our at

of Gregg, remember, there's 'XX million expire $X to almost shortfall system. that behind in 'XX that though, got and payments about You

to it help will kind that more EBITDA, about the I gap. $XX think $XX think as So flowing EBITDA, value like if perception the you million million of on of bridge

obviously asset you us, there you've about Got we should And How cash, thinking do the you mandatory Could the out think holding then bondholders? think of structure? any M&A. payments that it. to as I are use associated with about remind be sales about financing capital pointed

Gregg, some lien, provision. reinvestment second the extensions have period So a certain XXX-day does does in circumstances. have It

big Obviously, a So we have an release end, And chunk kind that be of revolver, of would offer. and you commentary, you of required Heath's when of Gregg, tremendous in paid amount some back would we've the your the got on a may sale down to asset be noticed the make revolver. liquidity.

is a this think balancing Gregg. I act,

debt and So I if you with paydown additional continued additional some I some maybe and repayment. profile us shocked debt down, debt of to think kind try wouldn't balance saw be pay do the come out liquidity

And refinancing what eventually about the about just capital how you think structure?

a Look, the right seems it's lot comp to We've back said the great extension kind we're sort to of harvest constructive QX be and know, deal. prints. you we of deal now, for Yes. of our was kind as a need bank done very Obviously, kind always 'XX interesting market us. But is got Yes. question. open The end date. Gregg, out seeing that of an an of

get of safe out, that I lines to in get that at and between positioned market we the something we're done working refi. we're everything to a to So the I get the And year kind bit say time done, think now window that on real to when the the along evaluate takes time. the are here extension of end view trying time, of the of more on it's ironed little but it more that

And obviously, revolver the think size? any, the about you the extension, say, just stays as revolver same else? you anything are find don't you anticipating Let's assuming

-- bit we're a certainly I to we'll think upsize here, try it Gregg.

opportunity prepayable as these footprint. see I going that as see of to you're the expand we is having -- within think, million balancing advantage our continue bullet really I crazy, $XXX kind bond of think to of and debt, we've liquidity And scale between it's as here think there. a front to in regain act discussed, sizable a well opportunities million, $XX take continue to of here business kind us. I maybe do there don't and or to anything

be chatting what part So those like out sort any we all decision-making our here and That's as bank of the market to we're year. and are about deal kind the later the bond potential group, this the with things the as of banks the of we'll join to we're new balancing. banks and to relates go it of size

some think wins in those? just we operations. Permian. then turning associated contract to incremental And the Obviously, with the about How EBITDA should

Yes. step Matador we next both year. The contract this interruptible could year the the ones will kind agreement of that announced, start up contributing

quarter, quite dates. announced the of will And it's as incremental late just we I and we 'XX, think see few are in somewhere corridor. announced, then kind kind late ] pay that to service call second it up again, [ kind the when quarter second highlighted, kind in tick are is of those publicly of expansions early the mid- up. do capacity of Many late of up XXXX a step down

our opportunity think we'll in 'XX drive think step-up So a lot that And we and of EBITDA. can materially kind see sizable of 'XX. beyond we

million a up contract, XX to Yes. about [indiscernible] ramps day. And between think you Gregg, as that

million working got they're all another opportunities XX you the if that other right kind day. million $X get exclude will revenue then million, that growth of And you ramped. You the at we're X new fully a now, of once Matador

flow And then capacity will if just We gone up we that of our to EBITDA fill of you I of the you the investor free and you show -- kind pipe. Summit think point would kind Summit the presentation. be up where

from EBITDA will that in get So mid-XXs $XX million somewhere the you the today. to relative

talked -- we of last things can once is that you're possibly Double potentially bringing know E can on it's sort here. the you today, Based component the happen? transaction. leverage when see in a out I just JV here think the are And of where one you've neutral about for

model probably right? to tell ramping Yes. Gregg, XX it out, How over we are you 'XX contracts lot type it's time frame, these I'd XX A of next months. the

if uplift to just you rearview issue, -- EBITDA willing truly going contractual of that we and ramp some that in. the maybe kind was it's in of was you of knew in be So marginal some kind roll leverage need LTM mirror, see would to a it

be frame. markets it we right. today. I the LTM it opportunity, and relates that's may well. time think Gregg, see ramp as pop a the profile to contract Double of as kind another to of think about But That about go E, capital EBITDA I'd deal it off So 'XX-ish probably how

And it. Got just has clarification I your one believe the stepped as here. XX X? [indiscernible] up 'XX another on April points of basis

the delevering sale asset coupon. But They with a step a lien Gregg, that, It's up second I can't holder got proceeds has unfortunate, major did. in think a win these and nice circumvent here

you a permanent refinance -- that? up And step that's way until there's no

Next year, to as down, would could of Gregg. year, suspect catch get I have the before go this it all anyway. refi clean up But we kind mentioned, ECF point I we that next up with on theoretically, that

in you the program. concludes the Thank session. This question-and-answer today's concludes participation for your conference. This

now may You disconnect.