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Overview of Summit Midstream Corporation
Summit Midstream Corporation (SMC) is a value-driven energy infrastructure enterprise that develops, owns, and operates critical midstream assets in key unconventional resource basins in the continental United States. With a focus on natural gas, crude oil, and produced water gathering, processing, and transportation, SMC leverages fee-based contractual agreements to secure stable cash flows while providing essential services across shale formations and other unconventional reservoirs.
Core Business Operations
SMC’s operations are anchored in strategically located midstream infrastructure. The company manages an extensive network of gathering systems in multiple basins including the Williston, Denver-Julesburg, Fort Worth, Piceance, and Arkoma basins. Each of these regions is characterized by mature and emerging shale formations that generate robust commodity streams. Its assets cater to the transportation and processing needs of natural gas and crude oil producers, ensuring efficient movement of resources from production sites to processing facilities and market hubs.
Strategic Asset Positioning
Positioned in the heart of America's unconventional resource plays, SMC has crafted a strong market presence by focusing on assets in regions known for sustained production activity and growth potential. By partnering on long-term, fee-based agreements, the company mitigates market volatility and underpins its operational stability. Its infrastructure is optimized for reliability and scalability, serving a broad spectrum of customers ranging from independent producers to large integrated energy companies.
Business Model and Revenue Generation
The company generates revenue primarily through contractually secured fee-based services. This model includes natural gas and oil gathering systems, produced water transportation, and processing facilities that are designed to serve high-demand unconventional basins. The fee-based structure provides operational predictability while allowing the company to invest in infrastructure enhancements and expand its asset base. This approach not only stabilizes cash flow during fluctuating market conditions but also reinforces its position within a competitive midstream industry.
Recent Strategic Initiatives and Operational Excellence
SMC has successfully transitioned from a master limited partnership structure to a C-corporation, an evolution that reflects its drive towards increased operational flexibility and improved capital management. This corporate reorganization has been accompanied by strategic acquisitions that enhance its scale and geographic footprint. A notable example is the acquisition of assets in the Arkoma Basin, which has diversified its portfolio and balanced its commodity exposure. Such initiatives underscore the company's commitment to fostering a resilient platform that is well-prepared to serve the needs of both producers and processing markets.
Market Position and Competitive Landscape
Operating in a highly specialized sector, Summit Midstream Corporation is recognized for its ability to deliver reliable, cost-effective midstream solutions in challenging environments. While the market is competitive, SMC distinguishes itself through a methodical asset acquisition strategy, robust infrastructure management, and a focus on fee-based, long-term agreements. These factors combine to create a stable platform that is indispensable to the unconventional resource market.
Operational and Technical Expertise
SMC has demonstrated advanced technical capability in deploying large-scale infrastructure projects. Leveraging industry best practices, the company integrates technologies and processes that optimize asset performance and ensure safety across operations. Its commitment to technical excellence is mirrored in its comprehensive approach to asset maintenance, capital expenditure management, and customer service. This deep industry expertise is crucial in navigating the intricacies of unconventional resource markets and maintaining high operational standards.
Conclusion
Summit Midstream Corporation stands as an exemplary model of a midstream energy infrastructure firm that combines strategic asset placement with a fee-based revenue model to achieve consistent operational performance. With a portfolio spanning several critical unconventional basins and a clear focus on operational excellence and capital efficiency, SMC remains a vital component of the U.S. energy infrastructure landscape. The company's detailed understanding of market dynamics and commitment to methodical growth position it as a key player in delivering efficient, reliable midstream solutions for the energy sector.
Summit Midstream (NYSE: SMC) has announced the availability of its 2024 tax packages, including final Schedule K-1s, for Summit Midstream Partners, LP. The tax documents can be accessed online at the Partner DataLink portal. Physical copies will be mailed to unitholders this week.
Notably, this will be the last tax package issued in this format, as SMC completed its conversion from a master partnership to a on August 1, 2024. Unitholders requiring assistance can contact Partner DataLink via email or phone during business hours (8:00 a.m. – 5:00 p.m. CDT).
Summit Midstream (NYSE: SMC) reported its Q4 and full-year 2024 results, posting a Q4 net loss of $24.8 million, adjusted EBITDA of $46.2 million, and free cash flow of $6.6 million. The company successfully reduced its total leverage to 3.9x by year-end 2024.
Key operational highlights include connecting 23 wells in Q4, totaling 156 wells in 2024, with 100+ DUCs behind their systems. Natural gas throughput increased 10.5% to 737 MMcf/d, while liquids volumes declined 2.9% to 68 Mbbl/d.
SMC completed two strategic acquisitions: Tall Oak Midstream III and Moonrise Midstream in the DJ Basin. The company provided 2025 guidance projecting adjusted EBITDA of $245-280 million and capital expenditures of $65-75 million. SMC expects 125-185 well connections in 2025 and has reinstated cash dividends on Series A Preferred Stock starting March 15, 2025.
Summit Midstream (NYSE: SMC) has acquired Moonrise Midstream from Fundare Resources for $90 million, comprising $70 million in cash and $20 million in SMC equity. The acquisition expands Summit's DJ Basin footprint with ~80 miles of natural gas gathering pipeline, ~25 miles of crude oil gathering pipeline, and 65 MMcf/d of processing capacity (expandable to ~100 MMcf/d).
The transaction represents a value-accretive acquisition multiple of approximately 5.0x 2024 Adjusted EBITDA. The Moonrise assets, located in Weld County, Colorado, include a 65 MMcf/d natural gas processing plant, 22,300 horsepower of compression, and long-term fee-based contracts covering approximately 60,000 leased acres from key customers including Fundare Resources, Verdad, Bison IV, and a large integrated energy company.
The acquisition aims to provide additional processing capacity and system redundancy while positioning Summit to handle future volume growth efficiently. Currently, three rigs are operating in Summit's dedicated acreage, with key customers planning multi-year development starting in 2026.
Summit Midstream (NYSE: SMC) has announced the resumption of its preferred dividend payments, with the board declaring a quarterly cash dividend of $51.27 per share on its Series A fixed-to-floating rate cumulative redeemable perpetual preferred stock. The dividend will be paid on March 15, 2025, to shareholders of record as of March 3, 2025. The payment will be distributed across 65,508 outstanding shares of Series A Preferred Stock. The company noted that previously unpaid dividends from prior periods remain accrued.
Summit Midstream (NYSE: SMC) has announced its schedule for the Fourth Quarter 2024 earnings call, which will take place on Tuesday, March 11, 2025. The company will release its operating and financial results before the New York Stock Exchange opens for trading on that day.
The conference call is scheduled for 10:00 a.m. Eastern on March 11, 2025, where SMC will discuss its quarterly performance. Interested participants can access the call via teleconference by registering through the provided link. Upon registration, participants will receive a dial-in number and a personalized PIN for call access. SMC recommends joining 10 minutes before the event starts.
The conference call, live webcast, and archive will be accessible through the Investors section of Summit Midstream's website at www.summitmidstream.com.
Summit Midstream (NYSE: SMC) has announced the pricing of an additional $250 million of 8.625% Senior Secured Second Lien Notes due 2029 at 103.375% of par. These Additional Notes will be combined with the existing $575 million notes under the same terms and conditions.
The company plans to use the proceeds to repay a portion of its asset-based lending credit facility (ABL Facility) and for general corporate purposes, including offering-related expenses. The offering is expected to close around January 10, 2025.
The Additional Notes will be guaranteed on a senior second-priority basis by SMC and certain subsidiaries, secured by the same collateral as the ABL Facility. The offering is exclusively available to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S of the Securities Act.
Summit Midstream (NYSE: SMC) has announced an offering of $250 million in additional 8.625% Senior Secured Second Lien Notes due 2029. These Additional Notes will be issued under the same indenture as the company's existing $575 million notes of the same type and will have substantially identical terms, except for the issue date and price. The net proceeds from this offering will be used to repay a portion of the outstanding borrowings under the company's asset-based lending credit facility and for general corporate purposes, including paying fees and expenses associated with the offering.
The Additional Notes will be guaranteed on a senior second-priority basis by the company and certain of its existing and future subsidiaries. Initially, they will be secured on a second-priority basis by the same collateral pledged for the benefit of the company's lenders under the ABL Facility. The offering is to qualified institutional buyers under Rule 144A and non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act of 1933.
This press release does not constitute an offer to sell or a solicitation to buy any security, nor will there be any sale of the Additional Notes or related guarantees in any jurisdiction where such activities would be unlawful.
Summit Midstream (NYSE: SMC) has completed the acquisition of Tall Oak Midstream III from Tailwater Capital for $155 million in cash, 7.5 million common units, and associated Class B Common Stock, plus up to $25 million in contingent consideration through March 2026. The strategic acquisition rebalances Summit's portfolio to approximately 50% natural gas-oriented drilling activities. The transaction received strong shareholder approval with 99.8% of votes in favor. Pro forma total leverage ratio stands at 3.8x as of September 30, 2024.
Summit Midstream (NYSE: SMC) has issued a correction regarding the access link for its upcoming Virtual Shareholder Meeting. The special meeting of stockholders will be held virtually via live audio webcast on November 29, 2024, at 2:00 PM Central Time. Shareholders can access the meeting at https://web.lumiconnect.com/217371229 using the password 'summit2024'. Participants will have the ability to vote their shares electronically during the meeting.
Summit Midstream (NYSE: SMC) reported Q3 2024 financial results with a net loss of $197.5 million, including $142.6 million non-cash income tax expense. The company generated adjusted EBITDA of $45.2 million, representing 9% quarter-over-quarter growth, and Distributable Cash Flow of $22.1 million. Average daily natural gas throughput decreased 6.8% to 667 MMcf/d, while liquids volumes decreased 6.7% to 70 Mbbl/d. The company connected 38 wells during Q3 and maintains six active drilling rigs. SMC expects Q4 2024 adjusted EBITDA between $45-50 million and continues to progress with the Tall Oak Midstream III acquisition, expected to close in Q4 2024.
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