Common Stock of Summit Midstream Corporation to Commence Trading on NYSE on Thursday, August 1

Rhea-AI Summary

Summit Midstream Partners, LP (NYSE: SMLP) announced the completion of its conversion from a master partnership to a C-, effective August 1, 2024. The new entity, Summit Midstream , will trade on the NYSE under the ticker symbol "SMC". This Corporate Reorganization, approved by unitholders on July 18, 2024, involves exchanging each of the 10,648,685 outstanding common units for one share of common stock in New Summit. Additionally, 65,508 9.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units will be exchanged for equivalent shares of Series A Preferred Stock. The Series A Preferred Stock will not be listed on any securities exchange.

Positive

• Successful completion of corporate reorganization from MLP to C-
• Continuation of NYSE listing under new ticker symbol SMC
• One-to-one exchange of units to shares, maintaining shareholder equity

Negative

• Series A Preferred Stock will not be listed on any securities exchange

Financial Analyst

The corporate reorganization of Summit Midstream Partners from a master partnership (MLP) to a C- marks a significant shift in the company's structure, with potential implications for investors and the broader midstream energy sector. This move, while not uncommon in the industry, warrants close attention.

Key points to consider:

• Ticker symbol change: From SMLP to SMC, reflecting the new corporate identity.
• Share exchange: A 1:1 conversion of common units to common stock, maintaining the existing ownership structure.
• Preferred units: Also converted on a 1:1 basis, but notably, the new Series A Preferred Stock will not be listed on any exchange, potentially impacting liquidity for these holders.

The transition to a C-corp structure could broaden the investor base by making the stock more accessible to institutional investors who may have restrictions on MLP investments. This could potentially improve liquidity and valuation multiples. However, it's important to note that this change may also affect the tax treatment of distributions, which could impact investor returns.

From a financial perspective, while the immediate impact on the balance sheet may be minimal, the long-term implications on cash flows and tax liabilities need careful evaluation. Investors should watch for any changes in dividend policy or capital allocation strategies that may follow this reorganization.

Overall, this move aligns Summit Midstream with a growing trend in the midstream sector, as companies seek to simplify their structures and attract a wider investor base. The market's reaction in the coming weeks will be telling, as it adjusts to the new corporate structure and assesses its implications for growth and shareholder value.

Legal Expert

The corporate reorganization of Summit Midstream Partners represents a significant legal and structural transformation that merits careful consideration. Here are the key legal aspects to note:

• Shareholder approval: The reorganization was approved by unitholders on July 18, 2024, fulfilling a important legal requirement for such a fundamental change.
• Entity conversion: The shift from a master partnership to a C- involves complex legal processes, including the transfer of assets, liabilities and contractual obligations.
• Securities exchange: The 1:1 exchange of partnership units for corporate shares must comply with securities laws and regulations, ensuring fair treatment of all unitholders.
• Preferred stock treatment: The decision not to list the new Series A Preferred Stock raises questions about the rights and protections afforded to these shareholders under the new structure.

From a governance perspective, this transition likely involves changes to the company's bylaws, board structure and shareholder rights. Investors should carefully review any new corporate governance documents to understand how their rights may have changed.

Tax implications are another critical legal consideration. The shift from a pass-through entity (MLP) to a C- could significantly alter the tax treatment of distributions for shareholders. It's advisable for investors to consult with tax professionals to understand the personal impact of this change.

Lastly, the regulatory landscape for the company may shift. As a C-, New Summit may face different reporting requirements and regulatory scrutiny compared to its previous MLP structure. This could affect compliance costs and operational flexibility going forward.

In conclusion, while the reorganization appears to have followed proper legal procedures, investors should remain vigilant about the evolving legal framework surrounding their investment in New Summit.

HOUSTON, July 31, 2024 /PRNewswire/ -- Summit Midstream Partners, LP (NYSE: SMLP) (the "Partnership" or "SMLP"), announced today that it will complete the previously announced conversion (the "Corporate Reorganization") from a master limited partnership to a C-corporation on Thursday, August 1, 2024. Pursuant to the Corporate Reorganization, the unitholders of the Partnership will become shareholders of Summit Midstream Corporation ("New Summit"). The Common Stock will commence trading on the New York Stock Exchange on Thursday, August 1, 2024 under the ticker symbol "SMC." As previously announced, unitholders approved the Corporate Reorganization, along with all other proposals presented, at the Partnership's Special Meeting of Unitholders held on July 18, 2024.

The 10,648,685 common units representing limited partner interests in the Partnership ("Common Units") that were outstanding immediately before the Corporate Reorganization will each be exchanged for one share of common stock, par value $0.01 per share, of New Summit ("Common Stock"), pursuant to the terms of the Corporate Reorganization. Additionally, 65,508 9.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests in the Partnership that were outstanding immediately before the Corporate Reorganization will each be exchanged for one share of Series A Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share ("Series A Preferred Stock"), pursuant to the terms of the Corporate Reorganization. New Summit does not intend to apply for the listing of the Series A Preferred Stock on any securities exchange.

About Summit Midstream Partners, LP

SMLP is a value-driven limited partnership 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 United States. SMLP provides natural gas, crude oil and produced water gathering, processing and transportation services pursuant to primarily long-term, fee-based agreements with customers and counterparties in four unconventional resource basins: (i) the Williston Basin, which includes the Bakken and Three Forks shale formations in North Dakota; (ii) the Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in Colorado and Wyoming; (iii) the Fort Worth Basin, which includes the Barnett Shale formation in Texas; and (iv) the Piceance Basin, which includes the Mesaverde formation as well as the Mancos and Niobrara shale formations in Colorado. SMLP has an equity method investment in Double E Pipeline, LLC, which provides interstate natural gas transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha Hub in Texas. SMLP is headquartered in Houston, Texas.

Forward-Looking Statements

This communication contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond the control of the Partnership and New Summit, which may include statements about:

• the occurrence of any event, change or other circumstances that could give rise to the termination of the Agreement and Plan of Merger (the "Merger Agreement");
• the risk that the failure to consummate the Corporate Reorganization will disrupt ongoing or future strategic alternatives, including a Potential Transaction (as defined in the proxy statement/prospectus (the "Proxy Statement/Prospectus") filed with the U.S. Securities and Exchange Commission (the "SEC"));
• the outcome of any legal proceedings that may be instituted against the Partnership or New Summit and others relating to the Merger Agreement;
• the effect of the announcement of the Corporate Reorganization on the Partnership's customer relationships, operating results and business generally;
• the risks that the proposed Corporate Reorganization disrupts current plans and operations;
• the amount of the costs, fees, expenses and charges related to the Corporate Reorganization;
• the failure to satisfy the conditions to the consummation of the Corporate Reorganization;
• the failure to realize a lower long-term cost of capital and other anticipated benefits of the proposed Corporate Reorganization;
• the Partnership and New Summit's ability to access the debt and equity markets, which will depend on general market conditions and the credit ratings for debt obligations;
• fluctuations in natural gas, natural gas liquids ("NGLs") and crude oil prices, including as a result of political or economic measures taken by various countries or the Organization of the Petroleum Exporting Countries;
• the extent and success of the Partnership's and New Summit's customers' drilling and completion efforts, as well as the quantity of natural gas, crude oil, freshwater deliveries, and produced water volumes produced within proximity of the Partnership's and New Summit's assets;
• failure or delays by the Partnership's and New Summit's customers in achieving expected production in their natural gas, crude oil and produced water projects;
• competitive conditions in the Partnership's and New Summit's industry and their impact on the Partnership's and New Summit's ability to connect hydrocarbon supplies to the Partnership's and New Summit's gathering and processing assets or systems;
• actions or inactions taken or nonperformance by third parties, including suppliers, contractors, operators, processors, transporters and customers, including the inability or failure of the Partnership's and New Summit's shipper customers to meet their financial obligations under the Partnership's and New Summit's gathering agreements and the Partnership's and New Summit's ability to enforce the terms and conditions of certain of the Partnership's and New Summit's gathering agreements in the event of a bankruptcy of one or more of the Partnership's and New Summit's customers;
• the Partnership's and New Summit's ability to divest of certain of the Partnership's and New Summit's assets to third parties on attractive terms, which is subject to a number of factors, including prevailing conditions and outlook in the natural gas, NGL and crude oil industries and markets;
• the ability to attract and retain key management personnel;
• commercial bank and capital market conditions and the potential impact of changes or disruptions in the credit and/or capital markets;
• changes in the availability and cost of capital and the results of the Partnership's and New Summit's financing efforts, including availability of funds in the credit and/or capital markets;
• restrictions placed on the Partnership and New Summit by the agreements governing the Partnership's and New Summit's debt and preferred equity instruments;
• the availability, terms and cost of downstream transportation and processing services;
• natural disasters, accidents, weather-related delays, casualty losses and other matters beyond the Partnership's and New Summit's control;
• the current and potential future impact of the COVID-19 pandemic or other pandemics on the Partnership's and New Summit's business, results of operations, financial position or cash flows;
• operational risks and hazards inherent in the gathering, compression, treating and/or processing of natural gas, crude oil and produced water;
• the Partnership's and New Summit's ability to comply with the terms of the agreements comprising the Global Settlement (as defined in the Proxy Statement/Prospectus);
• weather conditions and terrain in certain areas in which the Partnership and New Summit operate;
• physical and financial risks associated with climate change;
• any other issues that can result in deficiencies in the design, installation or operation of the Partnership's and New Summit's gathering, compression, treating, processing and freshwater facilities;
• timely receipt of necessary government approvals and permits, the Partnership's and New Summit's ability to control the costs of construction, including costs of materials, labor and rights-of-way and other factors that may impact the Partnership's and New Summit's ability to complete projects within budget and on schedule;
• the Partnership's and New Summit's ability to finance the Partnership's and New Summit's obligations related to capital expenditures, including through opportunistic asset divestitures or joint ventures and the impact any such divestitures or joint ventures could have on the Partnership's and New Summit's results;
• the effects of existing and future laws and governmental regulations, including environmental, safety and climate change requirements and federal, state and local restrictions or requirements applicable to oil and/or gas drilling, production or transportation;
• the effects of litigation;
• interest rates;
• changes in general economic conditions; and
• other factors and uncertainties discussed in Proxy Statement/Prospectus and the Partnership's filings with the SEC, including the Partnership's Annual Report on Form 10-K for the year ended December 31, 2023, the Partnership's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, and Exhibit 99.1 to the Partnership's Current Report on Form 8-K filed with the SEC on June 3, 2024.

All of these types of statements, other than statements of historical fact included in this communication, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursue," "target," "continue," the negative of such terms or other comparable terminology.

The forward-looking statements contained in the Proxy Statement/Prospectus are largely based on the Partnership's expectations, which reflect estimates and assumptions made by the Partnership's management. These estimates and assumptions reflect the Partnership's best judgment based on currently known market conditions and other factors. Although the Partnership believes such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond the Partnership's control. In addition, management's assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in the Proxy Statement/Prospectus are not guarantees of future performance, and the Partnership's expectations may not be realized or the forward-looking events and circumstances may not occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described in the section of the Proxy Statement/Prospectus entitled "Risk Factors." The forward-looking statements in the Proxy Statement/Prospectus speak only as of the date of such document; we disclaim any obligation to update such statements unless required by securities law, and we caution you not to unduly rely on them.

Additional Information and Where to Find It

This communication relates to the proposed Corporate Reorganization of the Partnership. This communication may be deemed to be solicitation material in respect of the proposed Corporate Reorganization. The proposed Corporate Reorganization has been submitted to the Partnership's common unitholders for their consideration. In connection with the proposed Corporate Reorganization, New Summit has filed with the SEC a Form S-4 containing the Proxy Statement/Prospectus to be distributed to the Partnership's common unitholders in connection with the Partnership's solicitation of proxies for the vote of the Partnership's common unitholders in connection with the proposed Corporate Reorganization and other matters as described in such Proxy Statement/Prospectus. The Proxy Statement/Prospectus also serves as the prospectus relating to the offer of the securities to be issued to the Partnership's common unitholders in connection with the completion of the proposed Corporate Reorganization. The Partnership and New Summit may file other relevant documents with the SEC regarding the proposed Corporate Reorganization. The definitive Proxy Statement/Prospectus has been mailed to the Partnership's common unitholders. BEFORE MAKING ANY INVESTMENT DECISION WITH RESPECT TO THE PROPOSED CORPORATE REORGANIZATION, INVESTORS AND COMMON UNITHOLDERS AND OTHER INTERESTED PERSONS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED CORPORATE REORGANIZATION (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED CORPORATE REORGANIZATION.

The Proxy Statement/Prospectus, any amendments or supplements thereto and other relevant materials, and any other documents filed by the Partnership or New Summit with the SEC, may be obtained as such documents are filed with the SEC free of charge at the SEC's website at www.sec.gov or by directing a written request to the Partnership at 910 Louisiana Street, Suite 4200, Houston, Texas 77002.

No Offer or Solicitation

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

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SOURCE Summit Midstream Partners, LP

FAQ

When will Summit Midstream (SMC) start trading on the NYSE?

Summit Midstream (SMC) will commence trading on the New York Stock Exchange on Thursday, August 1, 2024.

What is the exchange ratio for SMLP common units to SMC common stock?

Each common unit of Summit Midstream Partners, LP (SMLP) will be exchanged for one share of common stock in Summit Midstream (SMC).

How many common units of SMLP were outstanding before the reorganization?

There were 10,648,685 common units representing partner interests in Summit Midstream Partners, LP (SMLP) outstanding immediately before the Corporate Reorganization.

What happens to the Series A Preferred Units of SMLP after the reorganization?

The 65,508 9.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units will each be exchanged for one share of Series A Floating Rate Cumulative Redeemable Perpetual Preferred Stock in the new