Summit Midstream Attracts Buzz? Strategic Review Enters Critical Phase with High Interest

Summit Midstream Partners, LP SMLP reported a fourth-quarter FY23 revenue growth of 48.5% to $127.32 million.

Adjusted EBITDA of $75.0 million, was higher than $50.3 million a year ago. EPS loss of $(2.12) was better than $(3.03) a year ago. 

Average daily natural gas throughput for its wholly owned operated systems rose 5.0% Q/Q to 1,419 MMcf/d, and liquids volumes fell 4.7% Q/Q to 81 Mbbl/d. OGC natural gas throughput dropped 5.1% Q/Q to 826 MMcf/d.

Combined adjusted EBITDA from Natural gas price-driven segments stood at $50.3 million (up 2.5% Q/Q), and oil price-driven segments came in at $30.3 million (+3.3% Q/Q) in the quarter.

The company connected 77 wells in the fourth quarter, resulting in 304 wells connected in 2023. Capital expenditures stood at $19.0 million in the fourth quarter of 2023, including maintenance capital expenditures of $3.3 million. 

Outlook: For FY24, the company expects adjusted EBITDA of $260 million to $300 million, reflecting the current headwinds, particularly in natural gas prices.

Summit Midstream expects approximately 170 to 230 well connections in 2024. The company projects wholly owned natural gas gathering system throughput of 1,255 MMcf/d-1,345 MMcf/d, with volume throughput growth expected from the Rockies and Barnett segments.

Strategic Alternatives Update: In October 2023, SMLP initiated a formal review process to evaluate strategic alternatives.

The company revealed today that the strategic review process is entering advanced stages. The company disclosed a continued strong level of interest from third parties for potential transactions‎, ranging from the sale of specific assets to the consideration of Partnership-level transactions.

Price Action: SMLP shares traded lower by 0.54% at $20.24 on the last check Friday.