Summit Midstream Partners Q1 Earnings Call Highlights

Key Points

• Q1 results were in line with expectations: Summit Midstream reported first-quarter 2026 Adjusted EBITDA of $54.2 million and said full-year results are still expected to trend toward the midpoint of its $225 million to $265 million guidance range. Strength in the Rockies helped offset weaker MidCon volumes and lower residue gas prices.
• Double E Pipeline is gaining momentum: After quarter-end, Summit signed another 10-year take-or-pay agreement for 100 million cubic feet per day, bringing total contracted volumes on Double E to just over 1.7 billion cubic feet per day. The company is working toward a potential investment decision this summer for an expansion project.
• Balance sheet and growth plans improved: Summit repaid preferred dividends, completed a $42 million equity placement, and refinanced a term loan, helping simplify its balance sheet and support organic growth. Management said it sees more than $100 million of potential organic EBITDA growth by 2030 and hopes to restore a common dividend in the near future.

Summit Midstream Partners NYSE: SMC said first-quarter 2026 results were broadly in line with expectations, as strength in its Rockies business helped offset weaker volumes and lower realized residue gas prices in its MidCon segment.

President, CEO and Chairman Heath Deneke said Summit reported first-quarter Adjusted EBITDA of $54.2 million and continues to expect 2026 results to trend toward the midpoint of its original Adjusted EBITDA guidance range of $225 million to $265 million. The midpoint is $245 million.

“Summit reported first quarter 2026 Adjusted EBITDA of $54.2 million, which was generally in line with expectations despite lower volumes and realized residue gas prices in the Arkoma,” Deneke said. He added that MidCon underperformance was partially offset by gains in the Rockies segment, driven by higher-than-budgeted crude oil pricing.

Commodity outlook supports activity

Deneke described the macro backdrop as increasingly constructive for Summit, noting that crude oil prices had recovered from lows earlier in the year. He said roughly 80% of Summit’s expected 2026 well connects are in crude oil-oriented basins, which could improve producer economics and support higher activity levels.

Several Rockies customers have told Summit they are working on plans to accelerate activity into 2026 and increase activity in 2027, Deneke said. He also cited benefits from higher crude prices for field condensate sales and optimization activities in the Rockies segment.

On natural gas, Deneke said Henry Hub pricing remains constructive, LNG export demand continues to grow, and longer-term demand from data centers and electrification is supportive of the company’s natural gas infrastructure in the MidCon and Permian segments.

Well connects and segment performance

Summit connected 37 wells during the first quarter, including the first four Williston wells under a new 10-year crude gathering agreement in Divide County. Deneke said early production from those wells has been encouraging.

In the Arkoma, Summit saw lower-than-expected well performance from two pads during the quarter, which Deneke said was a primary driver of the segment’s volume underperformance. The pads were drilled on the outer edges of Summit’s dedicated acreage footprint to test the boundaries of proven but undeveloped locations in the Caney and Woodford formations.

More recently, Summit brought online a three-well pad in the dry gas area of its Arkoma system. Deneke said those wells are outperforming internal expectations and have averaged about 50 million cubic feet per day combined over the past couple of days since being turned in line.

Chief Financial Officer Bill Mault said Summit reported Distributable Cash Flow of $26.9 million and Free Cash Flow of $11.4 million for the quarter. Total capital expenditures were $19.3 million, including $3.7 million of maintenance capital, with most growth capital directed toward pad connections in the Rockies and MidCon segments.

• Rockies: Adjusted EBITDA was $26.4 million, down $1.5 million from the fourth quarter of 2025. Mault cited a non-cash imbalance, a 3% decline in liquids volumes, lower realized residue gas prices on percentage-of-proceeds contracts and lower freshwater sales, partially offset by higher natural gas throughput and stronger crude oil and NGL prices beginning in March.
• Permian: Adjusted EBITDA was $8.7 million, flat with the prior quarter. Double E volumes averaged 805 million cubic feet per day.
• Piceance: Adjusted EBITDA was $9.6 million, down $0.4 million from the fourth quarter, mainly due to throughput declines, temporary shut-ins and natural production declines.
• MidCon: Adjusted EBITDA was $19.3 million, down $2.1 million from the fourth quarter, driven primarily by natural production declines, partially offset by six new Arkoma well connections.

Mault said customers in the Piceance currently have about 20 million cubic feet per day of volume shut in because of low regional gas prices, primarily at the White River Hub. Based on current forward prices, Summit expects that production to begin resuming in the third quarter of 2026.

Double E Pipeline gains another commitment

Summit also highlighted progress on the Double E Pipeline. Deneke said that after quarter-end, the company executed another 10-year take-or-pay precedent agreement for 100 million cubic feet per day of firm capacity, expected to start in the first half of 2027. The agreement brings total contracted volumes on Double E to just over 1.7 billion cubic feet per day.

Deneke said Summit continues to build momentum in its open season for commitments supporting a previously announced midpoint compressor expansion project of 800 million cubic feet per day. He said the company remains optimistic about securing additional contracts needed to make a final investment decision this summer.

During the question-and-answer session, Deneke said Double E is competitively positioned because many competing pipelines have filled existing takeaway capacity and may require more expensive greenfield or looping projects to expand. He said Summit believes Double E is “one of the only options in town” that can be available by the end of 2028 to meet incremental Permian residue gas growth.

Deneke also said LNG growth has been a major catalyst for infrastructure development from Waha toward East Texas and Louisiana, but shippers are also showing interest in markets to the west, MidCon and Midwest. He noted discussions with data center and power generation customers near Double E seeking access to low-cost Permian gas.

Balance sheet and capital allocation

Summit ended the quarter with $43.4 million of unrestricted cash and $116 million drawn on its revolving credit facility. Mault said the company had about $381 million of available borrowing capacity after accounting for $2.7 million of undrawn letters of credit.

Deneke said Summit repaid all $45 million of accrued Series A preferred stock dividends, completed a $42 million private placement of common stock to an affiliate of Tailwater Capital LLC, and closed the Summit Permian Transmission LLC term loan refinancing. He said those steps improved and simplified the balance sheet and supported funding for organic growth, including Double E Pipeline capital growth.

On capital allocation, Mault said Summit has been prioritizing debt repayment with remaining free cash flow after growth capital as it works toward a long-term leverage target of 3.5 times. He added that many organic growth projects have estimated unlevered returns of more than 20% to 30%.

Deneke said Summit remains active in evaluating acquisitions, particularly in the Rockies, where he sees more near-term opportunities involving privately owned systems. He said Permian opportunities may be larger and more complex, while near-term focus is more concentrated on Rockies opportunities.

Deneke closed by saying Summit sees more than $100 million of potential organic EBITDA growth from its existing portfolio by 2030 and has a path toward reaching its leverage target and reinstating a common dividend “in the near future.”

About Summit Midstream Partners NYSE: SMC

Summit Midstream Partners is a publicly traded master limited partnership that provides gathering, compression, processing and transportation services for natural gas, natural gas liquids (NGLs) and crude oil in key U.S. onshore basins. The company's assets include a network of intrastate and interstate pipelines, processing plants, fractionators and storage facilities designed to serve producers, marketers and end users throughout the Appalachian, Gulf Coast, Mid-Continent and Western Canadian Sedimentary basins.

In the Appalachian region, Summit operates extensive gathering lines and multiple gas-processing complexes connected to the Mountaineer NGL Hub, one of the largest fractionation and storage hubs in the Mid-Atlantic.

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