Summit Midstream Corporation Announces the Acquisition of Moonrise Midstream and Provides DJ Basin Operational Update
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) ha acquisito Moonrise Midstream da Fundare Resources per 90 milioni di dollari, di cui 70 milioni in contante e 20 milioni in azioni SMC. Questa acquisizione espande la presenza di Summit nel bacino DJ con circa 128 chilometri di pipeline per la raccolta di gas naturale, circa 40 chilometri di pipeline per la raccolta di petrolio greggio e una capacità di lavorazione di 65 MMcf/d (espandibile a circa 100 MMcf/d).
La transazione rappresenta un'acquisizione con un valore accrescitivo di circa 5,0x l'EBITDA rettificato del 2024. Gli asset di Moonrise, situati nella contea di Weld, Colorado, includono un impianto di lavorazione di gas naturale da 65 MMcf/d, 22.300 cavalli vapore di compressione e contratti a lungo termine basati su commissioni che coprono circa 60.000 acri in affitto da clienti chiave tra cui Fundare Resources, Verdad, Bison IV e una grande azienda energetica integrata.
L'acquisizione mira a fornire ulteriore capacità di lavorazione e ridondanza del sistema, posizionando Summit per gestire in modo efficiente la futura crescita del volume. Attualmente, tre trivelle stanno operando nell'area dedicata di Summit, con clienti chiave che pianificano sviluppi pluriennali a partire dal 2026.
Summit Midstream (NYSE: SMC) ha adquirido Moonrise Midstream de Fundare Resources por 90 millones de dólares, que comprende 70 millones en efectivo y 20 millones en acciones de SMC. La adquisición amplía la huella de Summit en la Cuenca DJ con aproximadamente 128 kilómetros de tuberías de recolección de gas natural, aproximadamente 40 kilómetros de tuberías de recolección de petróleo crudo y una capacidad de procesamiento de 65 MMcf/d (expandible a aproximadamente 100 MMcf/d).
La transacción representa un múltiplo de adquisición que aumenta el valor de aproximadamente 5.0x el EBITDA ajustado de 2024. Los activos de Moonrise, ubicados en el condado de Weld, Colorado, incluyen una planta de procesamiento de gas natural de 65 MMcf/d, 22,300 caballos de fuerza de compresión y contratos a largo plazo basados en tarifas que cubren aproximadamente 60,000 acres arrendados de clientes clave, incluidos Fundare Resources, Verdad, Bison IV y una gran empresa energética integrada.
La adquisición tiene como objetivo proporcionar capacidad de procesamiento adicional y redundancia del sistema, al tiempo que posiciona a Summit para manejar eficientemente el crecimiento futuro del volumen. Actualmente, tres plataformas están operando en el área dedicada de Summit, con clientes clave que planean desarrollos a largo plazo a partir de 2026.
Summit Midstream (NYSE: SMC)는 Fundare Resources로부터 Moonrise Midstream을 9천만 달러에 인수했습니다. 이는 현금 7천만 달러와 SMC 주식 2천만 달러로 구성됩니다. 이번 인수는 Summit의 DJ 분지에서 약 128킬로미터의 천연가스 수집 파이프라인, 약 40킬로미터의 원유 수집 파이프라인, 65 MMcf/d의 처리 용량(약 100 MMcf/d로 확장 가능)을 통해 입지를 확장합니다.
이번 거래는 2024년 조정 EBITDA의 약 5.0배에 해당하는 가치 상승 효과를 나타냅니다. 콜로라도 주 웰드 카운티에 위치한 Moonrise 자산에는 65 MMcf/d의 천연가스 처리 공장, 22,300 마력의 압축기 및 Fundare Resources, Verdad, Bison IV 및 대형 통합 에너지 회사를 포함한 주요 고객으로부터 약 60,000 에이커의 장기 요금 기반 계약이 포함됩니다.
이번 인수는 추가 처리 용량과 시스템 중복성을 제공하며, Summit이 향후 볼륨 성장을 효율적으로 처리할 수 있도록 포지셔닝하는 것을 목표로 합니다. 현재 Summit의 전용 지역에서 3개의 시추기가 운영되고 있으며, 주요 고객들은 2026년부터 다년간 개발을 계획하고 있습니다.
Summit Midstream (NYSE: SMC) a acquis une société Moonrise Midstream de Fundare Resources pour 90 millions de dollars, comprenant 70 millions en espèces et 20 millions en actions SMC. Cette acquisition étend la présence de Summit dans le bassin DJ avec environ 128 kilomètres de pipelines de collecte de gaz naturel, environ 40 kilomètres de pipelines de collecte de pétrole brut et une capacité de traitement de 65 MMcf/d (extensible à environ 100 MMcf/d).
La transaction représente un multiple d'acquisition créant de la valeur d'environ 5,0x l'EBITDA ajusté de 2024. Les actifs de Moonrise, situés dans le comté de Weld, Colorado, comprennent une usine de traitement de gaz naturel de 65 MMcf/d, 22 300 chevaux-vapeur de compression et des contrats à long terme basés sur des frais couvrant environ 60 000 acres loués de clients clés, y compris Fundare Resources, Verdad, Bison IV et une grande entreprise énergétique intégrée.
L'acquisition vise à fournir une capacité de traitement supplémentaire et une redondance du système, tout en positionnant Summit pour gérer efficacement la croissance future des volumes. Actuellement, trois foreuses sont en fonctionnement dans la zone dédiée de Summit, avec des clients clés prévoyant des développements pluriannuels à partir de 2026.
Summit Midstream (NYSE: SMC) hat Moonrise Midstream von Fundare Resources für 90 Millionen Dollar erworben, bestehend aus 70 Millionen in bar und 20 Millionen in SMC-Aktien. Die Akquisition erweitert die Präsenz von Summit im DJ-Becken mit etwa 128 Kilometern an Erdgas-Sammelleitungen, etwa 40 Kilometern an Rohöl-Sammelleitungen und einer Verarbeitungs Kapazität von 65 MMcf/d (erweiterbar auf etwa 100 MMcf/d).
Die Transaktion stellt ein wertsteigerndes Erwerbs-Multiple von etwa 5,0x dem bereinigten EBITDA 2024 dar. Die Moonrise-Assets, die sich im Weld County, Colorado, befinden, umfassen eine Erdgasverarbeitungsanlage mit 65 MMcf/d, 22.300 PS Kompression und langfristige gebührenbasierte Verträge, die etwa 60.000 gepachtete Acres von wichtigen Kunden wie Fundare Resources, Verdad, Bison IV und einem großen integrierten Energieunternehmen abdecken.
Die Akquisition zielt darauf ab, zusätzliche Verarbeitungskapazität und Systemredundanz bereitzustellen, während Summit positioniert wird, um zukünftiges Volumenwachstum effizient zu bewältigen. Derzeit sind drei Bohrgeräte im Einsatz, die sich in Summits zugewiesenem Gebiet befinden, wobei wichtige Kunden planen, ab 2026 mehrjährige Entwicklungen zu starten.
- Value-accretive acquisition at 5.0x 2024 EBITDA multiple
- Leverage-neutral transaction structure
- Adds 65 MMcf/d processing capacity, expandable to 100 MMcf/d
- Long-term fee-based contracts with 60,000 acres of dedications
- Operational synergies through existing system interconnections
- Provides additional capacity for customer growth starting 2026
- Current system constraints forcing customers to defer 2025 development activity
- $70 million cash portion financed through credit facility increasing debt
Insights
Summit Midstream's
The transaction's structure is particularly noteworthy. The
From an operational perspective, the acquisition provides immediate solutions to pressing capacity issues. Summit's existing DJ Basin infrastructure was approaching full utilization, creating a bottleneck that customer development. The addition of 65 MMcf/d processing capacity (approximately half immediately available for Summit's integrated system) removes this constraint, unlocking deferred development activity from the three active rigs operating on Summit's dedicated acreage.
The contractual profile significantly reduces risk, with
Beyond simple capacity expansion, the acquisition creates meaningful operational synergies through existing interconnections between the systems. Summit can now optimize plant operations, reduce reliance on third-party processing, enhance NGL recoveries, improve system reliability, and better manage capital expenditures as development shifts northward. These efficiencies should improve margins while providing customers with enhanced flow assurance.
The strategic fit with Summit's consolidation strategy is clear - this acquisition builds scale in a key basin where Summit can leverage its existing operational footprint to create additional value beyond what either system could deliver independently.
This acquisition represents a textbook example of value creation through strategic midstream consolidation. At a 5.0x EBITDA multiple, Summit has secured these assets significantly below typical trading multiples for midstream companies (generally 7-9x), creating immediate accretion.
The infrastructure synergies are compelling. By integrating the Moonrise assets with Summit's existing footprint, the company achieves what I call the "network effect" in midstream - where the combined system creates optimization opportunities impossible with standalone assets. The existing interconnections between systems accelerate integration benefits, allowing almost immediate operational improvements rather than waiting years for connection points to be established.
The timing is particularly strategic. Summit was facing a classic midstream dilemma - capacity constraints forcing customers to defer drilling, yet hesitant to expand capacity without firm commitments. This acquisition elegantly resolves this deadlock by providing ready-built capacity at a discount to greenfield development costs. The 65 MMcf/d processing capacity, expandable to 100 MMcf/d with minimal additional investment, represents significant effective "optionality" at an attractive price point.
The contract structure further enhances the acquisition value. The combination of life-of-lease agreements (
From a competitive positioning standpoint, this acquisition strengthens Summit's negotiating position with both producers and downstream markets. The expanded infrastructure footprint and processing capacity create additional routing flexibility and enhanced reliability that producers value, potentially allowing Summit to command premium rates while reducing operational costs through system optimization.
Highlights
- Expands Summit's gathering and processing footprint in the DJ Basin with ~80 miles of natural gas gathering pipeline, ~25 miles of crude oil gathering pipeline and 65 MMcf/d of additional processing capacity, expandable to ~100 MMcf/d with modest capital investment
- Provides Summit's DJ Basin customers with additional processing capacity, redundancy and flow assurance, while positioning Summit to handle sizeable volume growth expected in the future in a capital-efficient manner
- Represents the continuation of Summit's corporate consolidation strategy, building scale through strategic, bolt-on acquisitions in key basins where Summit can drive additional value through commercial and operational synergies
- Value-accretive acquisition multiple of approximately 5.0x 2024 Adjusted EBITDA
- Transaction structure includes
$70 million - Creates commercial and operational synergies, commercial upside and additional in-basin consolidation opportunities
Heath Deneke, President, Chief Executive Officer and Chairman, commented, "We are pleased to announce the successful completion of this strategic bolt-on acquisition that further enhances our position in the DJ Basin. This acquisition not only expands our footprint and dedicated acreage in one of the most active areas of the DJ Basin but also provides incremental processing capacity that we expect to utilize in the coming years as volumes behind our legacy systems continue to grow. Following the acquisitions of the Outrigger and Sterling systems in December 2022, we have experienced significant volume growth behind our integrated DJ gathering and processing system and certain areas of our system are nearing full utilization. As a result of the limited available system capacity, some of our customers have deferred development activity behind our system in 2025. There are currently three rigs running behind our dedicated acreage position in the DJ and two of our key customers have sizeable multi-year development plans beginning in 2026. Moonrise adds 65 MMcf/d of processing capacity, approximately half of which is expected to be available to help alleviate our integrated DJ system constraints and enable our customers to continue to increase activity and grow volumes in 2026 and beyond.
Summit is already operationally connected to the Moonrise system through multiple existing interconnections, and we expect to capture significant operational and commercial synergies with the combined systems. The expanded pipeline footprint will alleviate localized pipeline constraints on the northern end of our system and enable Summit to optimize capital expenditures as development shifts further north. With additional and expandable processing capacity at Moonrise, we will be able to further improve our plant operating margins, reduce reliance on third-party offloads, increase our overall system reliability and flow assurance, and optimize NGL recoveries, which will benefit both Summit and our customers.
We remain extremely excited about the long-term opportunities in the DJ Basin as our customers continue to execute their development programs, with more than 800 dedicated undeveloped locations and sizable acreage positions in the area that Summit is very well-positioned to serve with the combined systems."
Transaction Details
Under the terms of the acquisition agreements, Summit will acquire
Moonrise Midstream Overview
The Moonrise assets, located in
Advisors
Troutman Pepper Locke L.L.P. served as legal advisor to Summit. Evercore served as financial advisor and Baker Botts L.L.P. served as legal advisor to Fundare.
About Summit Midstream Corporation
SMC is a value-driven corporation focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in the core producing areas of unconventional resource basins, primarily shale formations, in the continental
Forward-Looking Statements
This press release includes certain statements concerning expectations for the future that are forward-looking within the meaning of the federal securities laws. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements and may contain the words "expect," "intend," "plan," "anticipate," "estimate," "believe," "will be," "will continue," "will likely result," and similar expressions, or future conditional verbs such as "may," "will," "should," "would" and "could," including, but not limited to, statements regarding the Issuer's plans to issue the Additional Notes, the expected timing of the closing of the Offering, the intended use of the net proceeds therefrom and other aspects of the Offering and the Additional Notes. In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies and possible actions taken by SMC or its subsidiaries are also forward-looking statements. Forward-looking statements also contain known and unknown risks and uncertainties (many of which are difficult to predict and beyond management's control) that may cause SMC's actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting SMC is contained in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, which the Company filed with the Securities and Exchange Commission (the "SEC") on November 12, 2024, as amended and updated from time to time, including by the Company's Current Report on Form 8-K filed with the SEC on January 7, 2025. Any forward-looking statements in this press release are made as of the date of this press release and SMC undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.
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SOURCE Summit Midstream Corporation
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