Summit Midstream Partners, LP Completes Bolt-on Acquisitions in the DJ Basin

Rhea-AI Summary

Summit Midstream Partners, LP (NYSE: SMLP) announced the closure of the DJ Basin acquisitions of Outrigger DJ Midstream LLC and Sterling Energy Investments LLC for approximately $305 million. This strategic move aims to streamline its portfolio and enhance value through reinvestment in core growth basins. The transactions were funded via borrowings from its credit facility and $85 million in Senior Secured Second Lien Notes due in 2026. Integration of Outrigger DJ and Sterling DJ assets is expected to improve efficiency and reliability for midstream services in the northern DJ Basin.

Positive

• Acquisition of Outrigger DJ and Sterling DJ for $305 million enhances Summit's portfolio.
• Transaction funded through credit facility and senior secured notes, minimizing immediate financial strain.
• Streamlined operations expected to improve midstream service efficiency in the northern DJ Basin.

Negative

• Funding through debt may lead to increased financial obligations in the future.

HOUSTON, Dec. 1, 2022 /PRNewswire/ -- Summit Midstream Partners, LP (NYSE: SMLP) ("Summit", "SMLP" or the "Partnership") announced today that its wholly owned subsidiary, Summit Midstream Holdings, LLC ("SMP Holdings"), successfully closed on the previously announced DJ Basin acquisitions of Outrigger DJ Midstream LLC ("Outrigger DJ") and Sterling Energy Investments LLC, Grasslands Energy Marketing LLC and Centennial Water Pipelines LLC (collectively, "Sterling DJ") for approximately $305 million in cash. The acquisition of Outrigger DJ and Sterling DJ combined with the previously announced divestitures of the Lane G&P and Bison Gas Systems represents a meaningful step forward on Summit's overall corporate strategy to streamline its portfolio and create value through reinvestment in accretive transactions that build scale in our core growth basins. Summit funded these acquisitions through a combination of borrowings under Summit's credit facility and an issuance of $85 million of Senior Secured Second Lien Notes due in 2026.  With the official closing of these transactions, efforts are now fully underway to integrate and optimize the Outrigger DJ, Sterling DJ and Summit-Hereford gas gathering and processing assets, which we believe will meaningfully improve the availability of safe, reliable and efficient midstream services for northern DJ Basin producers while creating meaningful value for SMLP's stakeholders going forward.    

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 five unconventional resource basins: (i) the Appalachian Basin, which includes the Utica and Marcellus shale formations in Ohio and West Virginia; (ii) the Williston Basin, which includes the Bakken and Three Forks shale formations in North Dakota; (iii) the Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in Colorado and Wyoming; (iv) the Fort Worth Basin, which includes the Barnett Shale formation in Texas; and (v) 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 also has an equity method investment in Ohio Gathering, which operates extensive natural gas gathering and condensate stabilization infrastructure in the Utica Shale in Ohio. SMLP is headquartered in Houston, Texas.

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 the estimated closing date of the acquisitions, sources and uses of funding, the benefits of the acquisitions to us and any related opportunities. In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies and possible actions taken by us or our 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 SMLP's actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting SMLP is contained in its 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 28, 2022, as amended and updated from time to time. Any forward-looking statements in this press release are made as of the date of this press release and SMLP undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.

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SOURCE Summit Midstream Partners, LP

FAQ

What is the significance of Summit Midstream's acquisition of Outrigger DJ and Sterling DJ?

The acquisition represents a strategic effort to streamline Summit's portfolio and reinvest in its core growth areas, enhancing overall operational efficiency.

How did Summit Midstream finance the DJ Basin acquisitions?

Summit financed the acquisitions through a combination of borrowings under its credit facility and the issuance of $85 million in Senior Secured Second Lien Notes due in 2026.

What are the expected benefits of the recent acquisitions for SMLP?

The integration of the newly acquired assets is expected to enhance the availability of reliable midstream services and create value for stakeholders.

When was the acquisition of Outrigger DJ and Sterling DJ completed?

The acquisition was officially closed on December 1, 2022.