Summit Midstream Achieves Strategic Growth in Q3 2024

Summit Midstream Corporation Reports Third Quarter Results

Summit Midstream Corporation (NYSE: SMC) has published its financial and operational performance for the third quarter of 2024. The company experienced an active period filled with achievements that underline its continued commitment to growth and operational excellence.

Financial Highlights

The third quarter of 2024 resulted in a significant net loss of $197.5 million, impacted by a $142.6 million non-cash income tax expense. This provision primarily relates to adjustments made for the deferred tax liabilities linked to SMC's C-Corp conversion. Despite the loss, the company reported an adjusted EBITDA of $45.2 million, indicating a 9% growth from the previous quarter, along with a Distributable Cash Flow (DCF) of $22.1 million and free cash flow (FCF) reaching $9.9 million.

Looking Ahead

SMC anticipates generating approximately $45 million to $50 million in adjusted EBITDA for the fourth quarter of 2024, aided by robust operational activities. The company connected a total of 38 wells during the third quarter, maintaining a strong relationship with an active customer base featuring six drilling rigs and over 100 drilled but uncompleted wells behind its systems. Additionally, SMC successfully executed its C-Corp conversion along with various refinancing transactions aimed at simplifying its corporate structure.

Transformational Acquisition News

In a major strategic move, SMC announced the acquisition of Tall Oak Midstream III in the Arkoma Basin. The definitive proxy related to this acquisition has been filed, and a special meeting of stockholders is set to occur soon. This acquisition reflects Summit's strategic vision and intent to enhance its midstream operations significantly.

Operational Insights

During the third quarter of 2024, Summit's average daily natural gas throughput decreased to 667 MMcf/d, while liquids volumes also faced a slight decline to 70 Mbbl/d compared to the previous quarter. Nonetheless, the company effectively increased the gross volumes transported via the Double E Pipeline, rising from 549 MMcf/d to 661 MMcf/d, thus achieving a 20.4% increase quarter-over-quarter. This pipeline generated adjusted EBITDA amounting to $8.5 million for the third quarter.

Market Performance Analysis

The company reported a combined quarterly segment adjusted EBITDA of $20.1 million from its natural gas price-driven segments, showcasing a 1.1% increase from the second quarter. The Barnett segment made notable advancements with an adjusted EBITDA of $7.3 million, supported by an uptick in volumes from a primary customer. As operations continue to ramp up in the Rockies and other areas, SMC anticipates sustained growth in throughput and EBITDA performance.

Capital Expenditure Overview

With capital expenditures totaling $10.9 million in Q3 2024, SMC concentrated its investments primarily on essential pad connections in the Rockies segment. This proactive approach to capital investment solidifies its long-term operational capabilities and market presence.

Liquidity and Capital Management

As of September 30, 2024, SMC reported $17.8 million in unrestricted cash alongside $150 million drawn from its $500 million ABL Revolver, indicating significant liquidity. The company remains well-capitalized with substantial borrowing availability and compliance with all financial covenants, reflecting its robust financial position.

Future Outlook and Strategic Focus

Looking forward, SMC is poised to capitalize on upcoming opportunities with several investor conferences scheduled. The management team is committed to driving growth through key acquisitions and operational strategies that align with market demands and stakeholder interests.

Frequently Asked Questions

What were the key financial results for Summit Midstream in Q3 2024?

In Q3 2024, Summit Midstream reported a net loss of $197.5 million but generated an adjusted EBITDA of $45.2 million, showcasing a 9% growth quarter-over-quarter.

What strategic acquisitions has Summit Midstream announced?

Summit Midstream announced the acquisition of Tall Oak Midstream III in the Arkoma Basin, which is anticipated to enhance its operational capabilities.

How did Summit's throughput performance change in Q3 2024?

Summit reported an average daily natural gas throughput of 667 MMcf/d in Q3 2024, which represented a decrease from the prior quarter.

What is Summit's outlook for future adjusted EBITDA?

Summit Midstream expects an adjusted EBITDA of approximately $45 million to $50 million for the fourth quarter of 2024 as operational activities continue to expand.

What were the capital expenditures for Summit in the recent quarter?

Summit incurred $10.9 million in capital expenditures during Q3 2024, primarily focusing on the Rockies segment for pad connections.

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