Summit Midstream (SMC) Q4 2023 earnings summary

Executive summary

• Strategic alternatives review entered advanced stages, with third-party interest spanning asset sales and Partnership-level transactions; no transaction is assured.

• 2023 adjusted EBITDA reached $266.8 million; Q4 adjusted EBITDA was $75.0 million, equivalent to a $300 million run rate.

• Commercial additions included a new 25,500-acre Ohio Gathering dedication and a 10-year Double E take-or-pay contract supporting a connection to a new processing plant.

Financial highlights

• Q4 revenue was $127.3 million versus $85.7 million YoY; net loss was $15.1 million versus $23.9 million.

• FY revenue was $458.9 million versus $369.6 million; net loss narrowed to $38.9 million from $123.5 million.

• Adjusted EBITDA was $75.0 million in Q4 and $266.8 million for FY 2023, versus $50.3 million and $212.3 million, respectively, in 2022.

• Q4 DCF was $37.8 million and FCF $20.4 million; FY DCF was $125.6 million and FCF $59.0 million.

• Q4 included a $10.9 million loss on early debt extinguishment; FY adjusted EBITDA excludes specified nonrecurring costs, including transaction, integration and severance expenses.

Outlook and guidance

• 2024 adjusted EBITDA guidance is $260 million–$300 million, with ~5% growth at the midpoint; guidance reflects current commodity prices and customer drilling schedules.

• Expected 2024 well connections are 170–230; five rigs and more than 140 DUCs were reported behind systems.

• 2024 owned-system natural gas throughput guidance is 1,255–1,345 MMcf/d; liquids throughput is 65–75 Mbbl/d.

• 2024 capital expenditure guidance is $30–$40 million, including $10–$15 million maintenance capex; Double E investment is expected to be $5 million net.

• If customers meet production targets and connection timing, results are expected near the high end; added schedule delays would weigh toward the low end.