Summit Midstream Corp. Q4 FY2025 earnings call

• Introduced Chris Tennant, new Chief Commercial Officer, who joined in February and is making an impact. - Summit made progress in fourth quarter and early 2026, generated adjusted EBITDA of 58.6 million, distributable cash flow of 33.7 million and free cash flow of 17 million. - Operationally, solid development activity with seven rigs running and 90 drilled but uncompleted wells. - Commercial progress on EE pipeline with signed transportation agreements and FID notice, Permian segment adjusted EBITDA expected to grow. - Successfully refinanced EE cap structure, enabling distribution back to Summit. - Rocky segment has growth outlook with development activity up in Bakken, and GNP system in DJ Basin has positive momentum. - Discussed Summit's strong organic growth outlook led by Permian and Rockies segments, aiming for over 100 million of adjusted EBITDA growth by 2030.

Rocky segment: Adjusted EBITDA was 27.8 million, a decrease of 1.2 million relative to the third quarter, primarily driven by a decline in liquids volume due to natural production declines, partially offset by modest growth in natural gas volumes. Liquids volumes averaged approximately 66,000 barrels per day during the quarter, a decrease of roughly 6,000 barrels a day relative to third quarter, primarily due to natural production climbs and no new well connections. Natural gas volumes averaged approximately 160 million cubic feet per day, an increase of roughly 2 million cubic feet per day relative to third quarter. Permian Basin segment: Adjusted EBITDA was 8.7 million, an increase of 0.1 million relative to the third quarter, primarily due to higher volume throughput on the pipeline. Volume throughput on EE averaged 861 million cubic feet per day during the quarter. Piont segment: Adjusted EBITDA was 10 million, a decrease of 2.5 million relative to third quarter, primarily due to modest decline in volume throughput and certain deferred revenues recognized in the prior quarter. Mid-con segment: Adjusted EBITDA was 21.5 million, a decrease of approximately 2.1 million, primarily due to lower volume throughput from natural production declines across the Arcoma and Barnett systems.

• Establishing 2026 adjusted EBITDA guidance of 225 million to 265 million. - Total capital expenditures approximately 85 million to 105 million, including 35 million to 50 million in base business growth capital, 15 to 20 million of maintenance capital, and approximately $35 million of contributions to the EE joint venture. - Guidance range incorporates real-time feedback from customers, rigs and completion crews tracked. - Commodity price assumptions: average crude oil prices in the mid 60s and natural gas price of approximately $3.40 per annum BTU. - Rockies expected 90 to 100 well connects in 2026, Mid-Con expecting 26 wells connected, Peons expecting no new well connects in 2026. - Year-over-year EBITDA growth in Permian primarily driven by contractual step-ups in long-term take-or-pay transportation agreements.

• Upstream consolidation created near-term delays in development in Rockies. - Commodity price波动 could impact customer development activity and product margin.

Q: With new take-or-pay agreements announced, what level of additional commercial commitments is needed to move forward with the mainline compression expansion to 2.4 bcf per day and when would a final investment decision occur?

A: This is a very attractive project for double e pipeline with an estimated sub three times build multiple. Very hopeful to close half this open capacity early in the open season, capex and rate depending. If follow that cadence, could see an FID decision as early as this summer.

Q: Would you discuss the capital needs between, say, 2026 and 2029 to achieve the $100 million of EBITDA growth by 2030?

A: For general GMP segments, likely to spend in the range between 50 and 70 million per year throughout the five-year forecast period. For EE, roughly $35 million a year for the next two to three years, utilizing the new term loan's delayed draw and accordion features.

Q: With respect to the 2026 guidance of 116 to 126 well connections, which basins and their factors are most likely to drive upside or downside to that outlook, and how sensitive is it to changes in commodity prices?

A: Today have 90 DUCs and seven rigs running. In mid-con, only expecting nine wells in Arcoma and all 17 wells in Barnett are ducts. Commodity price at $65 kind of strip WTI and about $340 on Henry Hub, historically price indicator incentivizes customers to accelerate development.

Q: Following the EE refinancing and preferred dividend repayment, how are you thinking about the path and timeline to reach the three and a half times leverage target? When could the company realistically consider reinstating common shareholder dividends and would asset sales or joint ventures be part of the deleveraging strategy?

A: If hit the 265 mark, leverage would be roughly 3.6 times. Highly depend on this year's overall leverage perspective to consider dividend policy. Don't think asset sales or JVs will drive deleveraging strategy primarily, but are opportunistic.

Q: Congrats on the Permian contract. Just thinking about longer term, in terms of allocating capital, do you think about contributing capital into the JV contract? potentially reduce leverage and maybe collapse the unrestricted sub and restricted group? Or how are you thinking about that?

A: Our high-yield bonds mature in 2019, reasonable to expect refinance in 28. Got supportive call protection structure in new term loan. This type of financing is attractive to maintain delivering profile up at Summit Corporate while executing on growth.

Q: Maybe just a little bit more color around the opportunity set today and the activity level you think we could see over the next year?

A: Focused on $100 million of organic growth with existing portfolio, not dependent on M&A to achieve that. Actively working on opportunities to bolt on synergistic assets, looking for high free cash flow generating assets at attractive valuations. Evaluating M&A disciplinedly, looking for leverage neutral and value accretive, high pre-cash flowing businesses.