On August 8, 2024, Summit Midstream Corp (SMC, Financial) released its 8-K filing detailing the financial and operating results for the second quarter of 2024. Summit Midstream Corp is a value-driven corporation focused on developing, owning, and operating midstream energy infrastructure assets in key U.S. shale formations.
Financial Performance and Challenges
Summit Midstream Corp reported a net loss of $23.8 million for Q2 2024. Despite this, the company achieved an adjusted EBITDA of $43.1 million, distributable cash flow (DCF) of $11.7 million, and free cash flow (FCF) of $2.7 million. The company connected 34 wells during the quarter and maintained an active customer base with three drilling rigs and over 100 drilled but uncompleted wells (DUCs) behind its systems.
Strategic Developments
Summit Midstream Corp successfully executed an upsized $500 million asset-based revolving credit facility and issued $575 million in new 8.625% Senior Secured Second Lien Notes due 2029. These actions are expected to provide improved financial flexibility. Additionally, the company completed its reorganization from a master limited partnership (MLP) to a C-corporation, which is anticipated to deliver significant tax benefits and enhance trading liquidity.
"Summit has made considerable progress towards executing on its long-term strategy over the last four months. With this maturity extension and improved liquidity profile, Summit is well positioned with a strong balance sheet and additional financial flexibility to support execution of the base business plan," said Heath Deneke, President, CEO, and Chairman.
Segment Performance
Summit Midstream Corp's average daily natural gas throughput decreased by 46% to 716 MMcf/d, while liquids volumes increased by 1.4% to 75 Mbbl/d compared to Q1 2024. The decline in volume was primarily due to the disposition of the Northeast segment. The Double E Pipeline saw an 18% increase in volumes transported, generating $7.8 million in adjusted EBITDA for the quarter.
| Segment | Adjusted EBITDA (Q2 2024) | Adjusted EBITDA (Q1 2024) |
|---|---|---|
| Piceance | $12.8 million | $15.2 million |
| Barnett | $5.4 million | $5.1 million |
| Permian | $7.7 million | $7.3 million |
| Rockies | $22.9 million | $22.8 million |
Capital Expenditures and Liquidity
Capital expenditures for Q2 2024 totaled $10.5 million, with maintenance capital expenditures accounting for $3.4 million. As of June 30, 2024, Summit Midstream Corp had $156.0 million in unrestricted cash and a fully undrawn $400 million asset-based revolving credit facility.
Outlook and Guidance
Summit Midstream Corp reiterated its pro forma 2024 adjusted EBITDA guidance of $170 million to $200 million. The company remains focused on leveraging its strong free cash flow to reduce debt and achieve its long-term leverage target of 3.5x.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Summit Midstream Corp for further details.
