Summit Midstream Partners, LP (NYSE: SMLP) ('Summit', 'SMLP' or the 'Partnership') announced today its financial and operating results for the three months ended March 31, 2023.
Highlights
First quarter 2023 net loss of $14.2 million, adjusted EBITDA of $60.4 million, cash flow available for distributions ('Distributable Cash Flow' or 'DCF') of $24.9 million and free cash flow ('FCF') of $7.6 million
Generated 20% quarter-over-quarter adjusted EBITDA growth
Connected 61 wells during the quarter, four times higher than the first quarter of 2022
Experienced 17% quarter-over-quarter growth in liquids volumes and 14% growth in DJ Basin natural gas volumes relative to December 2022
Active customer base with nine drilling rigs and 229 DUCs behind our systems
Successful integration of recently acquired DJ Basin gathering & processing assets
Management Commentary
Heath Deneke, President, Chief Executive Officer, and Chairman, commented, 'Summit's first quarter 2023 financial and operating results were in line with management expectations. We had a very active quarter, connecting more than 60 wells to our systems, with particularly strong growth in our Rockies segment, while we focused on the successful integration and optimization of our recently acquired assets in the DJ Basin. Liquids volumes increased 17% quarter-over-quarter and we gathered and processed 108 MMcf/d of natural gas in the DJ Basin, representing approximately 14% growth relative to December 2022. While we do expect some pull back in planned well completion activities this year in the Barnett and Piceance in response to weakening near-term gas prices, our customers remain active across every segment with nine drilling rigs running and more than 229 DUCs accumulated behind our systems. We continue to expect this level of activity to result in strong sequential quarterly growth in 2023, and we remain on track to hit our adjusted EBITDA guidance range of $290 million to $320 million.'
Business Highlights
SMLP's average daily natural gas throughput for its wholly owned operated systems increased by 37 MMcf/d to 1,185 MMcf/d, and liquids volumes increased by 11 Mbbl/d to 74 Mbbl/d, relative to the fourth quarter of 2022. OGC natural gas throughput decreased from 754 MMcf/d to 636 MMcf/d and generated $7.4 million of adjusted EBITDA net to SMLP for the first quarter of 2023. Double E Pipeline gross volumes transported declined by 25 MMcf/d to 264 MMcf/d and generated $4.2 million of adjusted EBITDA net to SMLP for the first quarter of 2023.
Natural gas price driven segments: Natural gas price-driven segments had combined quarterly segment adjusted EBITDA of $38.9 million and combined capital expenditures of $1.8 million in the first quarter of 2023.
Northeast segment adjusted EBITDA totaled $17.9 million, a decrease of $1.2 million from the fourth quarter 2022, primarily due to a 1.3% decline in volume on our wholly owned systems and a 16% decline in volume from our OGC joint venture. Segment volumes were impacted by customers temporarily shutting-in producing wells as they completed new wells on the pad site ('frac-protect activities'). We estimate frac-protect activities impacted quarterly volume by approximately 20 MMcf/d and 50 MMcf/d (8/8ths basis) on our wholly owned systems and OGC joint venture, respectively, and segment adjusted EBITDA by approximately $1.0 million. We expect these impacts to moderate later in the second quarter of 2023. Five new wells were brought online behind our wholly owned SMU system, and 12 new wells were connected behind our OGC joint venture during the quarter. There are currently four rigs running, including three rigs behind our wholly owned SMU system, and more than 55 DUCs behind the OGC, SMU and MTN systems.
Piceance segment adjusted EBITDA totaled $14.0 million, a decrease of $0.7 million from the fourth quarter of 2022, primarily due to a 2.7% decrease in volume throughput from natural production declines. Eight new wells were brought online in March 2023 and nine DUCs are expected to turn-in-line in May 2023. Based on recent customer conversations, we expect 2023 well connections in our Piceance segment to trend toward the lower end of our guidance range of 55 to 70 wells. There is currently one rig running behind the system.
Barnett segment adjusted EBITDA totaled $7.0 million, a decrease of $0.2 million relative to the fourth quarter of 2022, primarily due to a 6.1% decrease in volume throughput. We estimate frac-protect activities impacted quarterly volume by approximately 6 MMcf/d and segment adjusted EBITDA by approximately $0.3 million. Based on recent customer conversations and natural gas prices, we now expect approximately 15 well connections and segment adjusted EBITDA to trend toward, or slightly below, the low end of our guidance range of $35 million to $40 million. There is currently one rig running and 13 DUCs behind the system.
Oil price driven segments
Oil price-driven segments generated $28.2 million of combined segment adjusted EBITDA in the first quarter of 2023 and had combined capital expenditures of $13.4 million, as well as $3.5 million investment in our Double E joint venture.
Permian segment adjusted EBITDA totaled $5.1 million, an increase of $0.8 million from the fourth quarter of 2022, due to an increase in distributions from Double E as a result of contractual step-ups in take-or-pay contracts at our Double E joint venture.
Rockies segment adjusted EBITDA totaled $23.1 million, an increase of $9.3 million relative to the fourth quarter of 2022, primarily due to the addition of the Outrigger DJ and Sterling DJ assets that closed in December 2022 and liquids volume growth of 17% relative to the fourth quarter of 2022. Natural gas volume throughput averaged 108 MMcf/d during the quarter, representing approximately 14% growth relative to volume throughput in December 2022. There were 36 new wells connected during the quarter, and there are currently three rigs running and more than 150 DUCs behind the systems.
Contact:
Tel: 832-413-4770
Email: ir@summitmidstream.com
SUMMIT MIDSTREAM PARTNERS, LP 
