ExxonMobil Holdings Corporation press release

Summit Midstream Corporation Reports Fourth Quarter and Full-Year 2024 Financial and Operating Results & Provides Full-Year 2025 Guidance

2025-03-10

NYSE - New York Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Bitumen · Sulfur · Hydrogen · Lithium · United States

PR Newswire

HOUSTON , March 10, 2025 /PRNewswire/ -- Summit Midstream Corporation (NYSE: SMC) ("Summit", "SMC" or the "Company") announced today its financial and operating results for fourth quarter and full-year 2024 and provided full-year 2025 financial guidance.

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Highlights

Fourth quarter 2024 net loss of $24.8 million , adjusted EBITDA of $46.2 million , cash flow available for distributions ("Distributable Cash Flow" or "DCF") of $22.1 million and free cash flow ("FCF") of $6.6 million Reduced total leverage to 3.9x 1 at year-end 2024 Successfully closed value- and credit-accretive acquisition of Tall Oak Midstream III Connected 23 wells during the fourth quarter, resulting in 156 wells connected in 2024 Active customer base with over 100 DUCs behind our systems and 125 to 185 wells expected in 2025 Closed the value- and credit-accretive bolt on acquisition of Moonrise Midstream in the DJ Basin on March 10, 2025 Reinstated cash dividend on the Series A Preferred Stock beginning March 15, 2025 Provided 2025 full-year financial guidance range 2 of $245 million to $280 million in adjusted EBITDA and total capital expenditures of $65 million to $75 million

Management Commentary

Heath Deneke , President, Chief Executive Officer and Chairman, commented, "2024 was an eventful and pivotal year for Summit. We executed on several key strategic milestones, including the sale of our Northeast business that accelerated de-levering and created additional financial flexibility with the refinancing of an upsized $500 million credit facility and new Second Lien Secured notes. With the support of our unitholders, we then successfully converted the Company from an MLP to a Corporation which expanded our investor base and significantly increased our trading liquidity. In December, we closed on the value- and credit-accretive acquisition of Tall Oak Midstream in the Arkoma , which increased the company's natural gas exposure in a supply basin that is very well positioned to help meet growing Gulf Coast natural gas demand. The transaction also further enhanced the balance sheet and helped drive leverage down to 3.9x as of year-end 2024. Our operational and financial results in 2024 remained in line with expectations, driven by steady well connections, active producer engagement, and continued optimization of our asset base. As we look ahead to 2025, Summit is well positioned to continue to execute on its corporate strategy with a strong balance sheet and ample liquidity to continue advancing our growth initiatives and maximizing value for our shareholders. The recently announced bolt-on acquisition of the Moonrise gathering and processing system in the DJ Basin is another example of Summit executing on its strategy to consolidate synergistic and high free cash flow generating assets around our operating footprint. The Moonrise transaction is both value- and credit- accretive and importantly expands our operational capacity and flexibility to help meet the volumetric growth we are expecting in the coming years from our existing customer base in the DJ Basin. At the mid-point of our 2025 financial guidance range we expect to generate over $260 million in adjusted EBITDA which translates to more than $100 million of levered free cash flow, after growth and maintenance capital expenditures, that we plan to utilize to continue to de-lever the balance sheet towards our long term 3.5x leverage target. Additionally, we approved paying the quarterly Series A corporate preferred dividend in cash beginning on March 15, 2025 , a necessary first step as we continue to work towards our plans to resume a common stock dividend for our shareholders in the future."

| | | 1 As of 12/31/2024, pro forma to the Tall Oak Midstream III transaction & the $250 million Second Lien add-on executed in Jan-2025. Excludes the potential earnout liability in connection with the Tall Oak Acquisition. | | 2 SMC's 2025 full-year guidance includes expected financial results associated with the Moonrise acquisition. |

Fourth Quarter 2024 Business Highlights

SMC's average daily natural gas throughput on its wholly owned operated systems increased 10.5% to 737 MMcf/d, while liquids volumes declined 2.9% to 68 Mbbl/d, relative to the third quarter of 2024. Double E pipeline transported average 613 MMcf/d and contributed $7.8 million in adjusted EBITDA, net to SMC, for the fourth quarter of 2024.

Natural gas price-driven segments :

Natural gas price-driven segments generated $24.6 million in combined segment adjusted EBITDA, a 22.5% increase relative to the third quarter and combined capital expenditures of $0.7 million in the fourth quarter of 2024. Mid-Con segment adjusted EBITDA totaled $12.8 million , an increase of $5.6 million relative to the third quarter of 2024, primarily due the acquisition of Tall Oak Midstream III that closed in December 2024 and an increase in volume throughput. Volume throughput on the system increased by 29% primarily due to incremental volume throughput from the Tall Oak assets, 27 new well connections in 2024 from our anchor customer in the Barnett, and the resumption of production that was temporarily shut-in in the Barnett. Currently, that Barnett customer has resumed flowing all its previously shut-in volume to-date in 2025. There are currently two rigs running, including one in the Barnett and one in the Arkoma , with 15 DUCs behind the system. Piceance segment adjusted EBITDA totaled $11.8 million , a decrease of $1.0 million from the third quarter of 2024, primarily due to a 2.5% decrease in volume throughput, an increase in operating expenses and no new wells connected to the system during the quarter.

Oil price-driven segments :

Oil price-driven segments generated $31.0 million of combined segment adjusted EBITDA, representing a 6.9% decrease relative to the third quarter of 2024, and had combined capital expenditures of $14.9 million . Rockies segment adjusted EBITDA totaled $23.2 million , a decrease of $1.6 million relative to the third quarter of 2024, primarily due to a 2.9% decrease in liquids volume throughput and lower freshwater sales, partially offset by a 2.3% increase in natural gas volume throughput. There were 23 new wells connected during the quarter, including six in the DJ Basin and 17 in the Williston Basin, all of which came online in December 2024 , resulting in limited contribution to volume or adjusted EBITDA during the fourth quarter. There are currently three rigs running and approximately 98 DUCs behind the systems. Permian segment adjusted EBITDA totaled $7.8 million , a decrease of $0.7 million from the third quarter of 2024, primarily due to a 7.2% decrease in volumes shipped on the Double E Pipeline leading to a decrease in proportionate adjusted EBITDA from our Double E joint venture.

The following table presents average daily throughput by reportable segment for the periods indicated:

| | Three Months Ended December 31, | | Year Ended December 31, | | | | | | | 2024 | | 2023 | | 2024 | | 2023 | | Average daily throughput (MMcf/d): | | | | | | | | | Northeast (1) | — | | 794 | | 202 | | 692 | | Rockies | 131 | | 126 | | 128 | | 113 | | Piceance | 277 | | 317 | | 291 | | 304 | | Mid-Con | 329 | | 182 | | 241 | | 183 | | Aggregate average daily throughput | 737 | | 1,419 | | 862 | | 1,292 | | | | | | | | | | | Average daily throughput (Mbbl/d): | | | | | | | | | Rockies | 68 | | 81 | | 72 | | 78 | | Aggregate average daily throughput | 68 | | 81 | | 72 | | 78 | | | | | | | | | | | Ohio Gathering average daily throughput

(MMcf/d) (2) | — | | 826 | | 212 | | 779 | | | | | | | | | | | Double E average daily throughput (MMcf/d) (3) | 613 | | 386 | | 573 | | 305 |

| | | | (1) | Exclusive of Ohio Gathering due to equity method accounting. | | (2) | Gross basis, represents 100% of volume throughput for Ohio Gathering, subject to a one-month lag. | | (3) | Gross basis, represents 100% of volume throughput for Double E. |

The following table presents adjusted EBITDA by reportable segment for the periods indicated:

| | Three Months Ended December 31, | | Year Ended December 31, | | | | | | | 2024 | | 2023 | | 2024 | | 2023 | | | (In thousands) | | (In thousands) | | | | | | Reportable segment adjusted EBITDA (1) : | | | | | | | | | Northeast (2) | $ — | | $ 28,443 | | $ 30,634 | | $ 94,249 | | Rockies | 23,245 | | 22,404 | | 93,827 | | 87,390 | | Permian (3) | 7,793 | | 7,924 | | 31,227 | | 24,207 | | Piceance | 11,792 | | 16,109 | | 52,704 | | 59,749 | | Mid-Con | 12,847 | | 5,791 | | 30,645 | | 26,171 | | Total | $ 55,677 | | $ 80,671 | | $ 239,037 | | $ 291,766 | | Less: Corporate and Other (4) | 9,498 | | 5,655 | | 34,413 | | 24,922 | | Adjusted EBITDA (5) | $ 46,179 | | $ 75,016 | | $ 204,624 | | $ 266,844 |

| | | | (1) | Segment adjusted EBITDA is a non-GAAP financial measure. We define segment adjusted EBITDA as total revenues less total costs and expenses, plus (i) other income (excluding interest income), (ii) our proportional adjusted EBITDA for equity method investees, (iii) depreciation and amortization, (iv) adjustments related to minimum volume commitments ("MVC") shortfall payments, (v) adjustments related to capital reimbursement activity, (vi) unit-based and noncash compensation, (vii) impairments and (viii) other noncash expenses or losses, less other noncash income or gains. | | (2) | Includes our proportional share of adjusted EBITDA for Ohio Gathering. Summit records financial results of its investment in Ohio Gathering on a one-month lag and is based on the financial information available to us during the reporting period. With the divestiture of Ohio Gathering in March 2024, proportional adjusted EBITDA includes financial results from December 1, 2023 through March 22, 2024. We define proportional adjusted EBITDA for our equity method investees as the product of (i) total revenues less total expenses, excluding impairments and other noncash income or expense items and (ii) amortization for deferred contract costs; multiplied by our ownership interest during the respective period. | | (3) | Includes our proportional share of adjusted EBITDA for Double E. We define proportional adjusted EBITDA for our equity method investees as the product of total revenues less total expenses, excluding impairments and other noncash income or expense items; multiplied by our ownership interest during the respective period. | | (4) | Corporate and Other represents those results that are not specifically attributable to a reportable segment or that have not been allocated to our reportable segments, including certain general and administrative expense items and transaction costs. | | (5) | Adjusted EBITDA is a non-GAAP financial measure. |

Capital Expenditures

Capital expenditures totaled $15.8 million in the fourth quarter of 2024, inclusive of maintenance capital expenditures of $4.3 million . Capital expenditures in the fourth quarter of 2024 were primarily related to pad connections and the previously announced optimization project in the Rockies segment.

| | | Year Ended December 31, | | | | | | 2024 | | 2023 | | | | (In thousands) | | | | Cash paid for capital expenditures (1) : | | | | | | Northeast | | $ 2,980 | | $ 4,695 | | Rockies | | 44,092 | | 54,969 | | Permian | | — | | — | | Piceance | | 2,361 | | 4,544 | | Mid-Con | | 1,312 | | 186 | | Total reportable segment capital expenditures | | $ 50,745 | | $ 64,394 | | Corporate and Other | | 2,866 | | 4,511 | | Total cash paid for capital expenditures | | $ 53,611 | | $ 68,905 |

| | | | (1) | Excludes cash paid for capital expenditures by Ohio Gathering and Double E due to equity method accounting. |

2025 Guidance

SMC is releasing guidance for 2025, which is summarized in the table below. These projections are subject to risks and uncertainties as described in the "Forward-Looking Statements" section at the end of this release. These projections are also inclusive of a partial year contribution from Moonrise Midstream that closed on March 10, 2025 .

Our guidance range is anchored by recent drilling and completion schedules provided by our customers and is reflective of the current commodity price environment. We have taken a consistent approach to our 2025 guidance range that we did with our 2024 guidance range. If our producer customers hit their production targets and timing of planned well connects, we would expect to be near the high end of our 2025 guidance range. The midpoint of our guidance range reflects a conservative, yet appropriate, level of risking to the most recent drill schedules and volume forecasts provided by our customers. The low end of our guidance range reflects additional delays to customer drilling and completion schedules and planned well connects.

We expect approximately 125 to 185 well connections in 2025. Of the expected well connections in 2025, approximately 25% are natural gas-oriented wells and approximately 75% are crude oil-oriented wells. Customers are currently running five rigs behind our systems, with more than 100 DUCs, providing line of sight to the 2025 estimated well connections and associated volume growth.

We expect our natural gas gathering system throughput to range from 900 MMcf/d to 965 MMcf/d. Double E existing take-or-pay contracts of 1,020 MMcf/d will contractually increase to 1,090 MMcf/d beginning in May 2024 . Liquids volumes are expected to range from 65 Mbbl/d to 75 Mbbl/d.

The midpoint of our guidance range assumes strip commodity prices as of February 6, 2025 and the high- and low-end sensitizes those prices by plus and minus 10%, respectively.

Adjusted EBITDA is expected to range from $245 million to $280 million . Our 2025 capital expenditure guidance of $65 million to $75 million , excluding Double E, includes capital reimbursements related to specific development projects with certain customers. Our full year 2025 growth capex guidance range is primarily related to new pad connections in the Rockies and Mid-Con segments and integration capital related to the acquisition of Tall Oak Midstream and Moonrise Midstream. Included in this range is approximately $15 million to $20 million of maintenance capex. Double E capital expenditures for 2025 are expected to be approximately $5 million , net to SMC, primarily related to a new plant connection. Summit's capital efficient operations are expected to generate a significant amount of free cash flow in 2025 resulting in further debt reduction and improved financial metrics.

| ($ in millions) | | | | 2025 Guidance Range | | | | | | | | Low | | High | | Well Connections | | | | | | | | Piceance | | | | — | | — | | Mid-Con | | | | 30 | | 45 | | Rockies | | | | 95 | | 140 | | Total | | | | 125 | | 185 | | | | | | | | | | Natural Gas Throughput (MMcf/d) | | | | | | | | Piceance | | 245 | | 255 | | | | Mid-Con | | 510 | | 550 | | | | Rockies | | 145 | | 160 | | | | Total | | 900 | | 965 | | | | | | | | | | | | Rockies Liquids Throughput (Mbbl/d) | | 65 | | 75 | | | | Double E Natural Gas Throughput (MMcf/d, gross) | | 700 | | 700 | | | | | | | | | | | | Adjusted EBITDA | | | | | | | | Piceance | | $40 | | $40 | | | | Mid-Con | | 105 | | 115 | | | | Permian | | 35 | | 35 | | | | Rockies | | 100 | | 125 | | | | Unallocated G&A, Other | | (35) | | (35) | | | | Total | | $245 | | $280 | | | | | | | | | | | | Capital Expenditures | | | | | | | | Growth | | | | $50 | | $55 | | Maintenance | | | | 15 | | 20 | | Total | | | | $65 | | $75 | | | | | | | | | | Investment in Double E equity method investee | | $5 | | $5 | | |

Capital & Liquidity

As of December 31, 2024 , SMC had $22.8 million in unrestricted cash on hand and $305 million drawn under its $500 million ABL Revolver with $194.2 million of borrowing availability, after accounting for $0.8 million of issued, but undrawn letters of credit. Subsequent to quarter end, SMC executed a $250 million add-on to its existing 8.625% Senior Secured Second Lien Notes due 2029 at 103.375% of par, with proceeds used to repay a portion of the outstanding borrowings under the ABL Revolver. After giving effect to the transaction, SMC had $55.0 million drawn under its $500 million ABL Revolver with $444.2 million of borrowing availability, after accounting for $0.8 million of issued, but undrawn letters of credit. As of December 31, 2024 , SMC's gross availability based on the borrowing base calculation in the credit agreement was $532 million , which is $32 million greater than the $500 million of lender commitments to the ABL Revolver. As of December 31, 2024 and including the pro forma impacts of the additional 2029 Secured Notes and Moonrise acquisition, SMC was in compliance with all financial covenants, including interest coverage of 2.8x relative to a minimum interest coverage covenant of 2.0x and first lien leverage ratio of 0.4x relative to a maximum first lien leverage ratio of 2.5x. As of December 31, 2024 , SMC reported a total leverage ratio of approximately 3.9x, excluding the potential earnout liability in connection with the Tall Oak Acquisition.

As of December 31, 2024 , the Permian Transmission Credit Facility balance was $129.3 million , a reduction of $4.0 million relative to the September 30, 2024 balance of $133.3 million due to scheduled mandatory amortization. Summit Midstream Permian has $2.5 million of cash-on-hand as of December 31, 2024 . The Permian Transmission Term Loan remains non-recourse to SMC.

MVC Shortfall Payments

SMC billed its customers $5.4 million in the fourth quarter of 2024 related to MVC shortfalls. For those customers that do not have MVC shortfall credit banking mechanisms in their gathering agreements, the MVC shortfall payments are accounted for as gathering revenue in the period in which they are earned. In the fourth quarter of 2024, SMC recognized $5.4 million of gathering revenue associated with MVC shortfall payments. SMC had no adjustments to MVC shortfall payments in the fourth quarter of 2024. SMC's MVC shortfall payment mechanisms contributed $5.4 million of total adjusted EBITDA in the fourth quarter of 2024.

| | Three Months Ended December 31, 2024 | | | | | | | | | MVC Billings | | Gathering revenue | | Adjustments to MVC shortfall payments | | Net impact to adjusted EBITDA | | | (In thousands) | | | | | | | | Net change in deferred revenue related to MVC

shortfall payments: | | | | | | | | | Piceance Basin | $ — | | $ — | | $ — | | $ — | | Total net change | $ — | | $ — | | $ — | | $ — | | | | | | | | | | | MVC shortfall payment adjustments: | | | | | | | | | Rockies | $ 458 | | $ 458 | | $ — | | $ 458 | | Piceance | 4,985 | | 4,985 | | — | | 4,985 | | Northeast | — | | — | | — | | — | | Mid-Con | — | | — | | — | | — | | Total MVC shortfall payment adjustments | $ 5,443 | | $ 5,443 | | $ — | | $ 5,443 | | | | | | | | | | | Total (1) | $ 5,443 | | $ 5,443 | | $ — | | $ 5,443 |

| | | | (1) | Exclusive of Ohio Gathering and Double E due to equity method accounting. |

| | Year Ended December 31, 2024 | | | | | | | | | MVC Billings | | Gathering revenue | | Adjustments to MVC shortfall payments | | Net impact to adjusted EBITDA | | | (In thousands) | | | | | | | | Net change in deferred revenue related to MVC

shortfall payments: | | | | | | | | | Piceance Basin | $ — | | $ — | | $ — | | $ — | | Total net change | $ — | | $ — | | $ — | | $ — | | | | | | | | | | | MVC shortfall payment adjustments: | | | | | | | | | Rockies | $ 2,085 | | $ 2,085 | | $ (529) | | $ 1,556 | | Piceance | 19,707 | | 19,707 | | — | | $ 19,707 | | Northeast | 2,288 | | 2,288 | | — | | $ 2,288 | | Mid-Con | 40 | | 40 | | — | | $ 40 | | Total MVC shortfall payment adjustments | $ 24,120 | | $ 24,120 | | $ (529) | | $ 23,591 | | | | | | | | | | | Total (1) | $ 24,120 | | $ 24,120 | | $ (529) | | $ 23,591 |

| | | | (1) | Exclusive of Ohio Gathering and Double E due to equity method accounting. |

Quarterly Dividend

The board of directors of Summit Midstream Corporation continued to suspend cash dividends payable on its common stock for the period ended December 31, 2024 . The board of directors of Summit Midstream Corporation reinstated cash dividends on its Series A fixed-to-floating rate cumulative redeemable perpetual preferred shares (the "Series A Preferred Stock") for the period ended March 14, 2025 . The dividend will be paid on March 15, 2025 . All unpaid dividends on the Series A Preferred Stock from prior periods remain accrued.