Summit Midstream Partners NYSE: SMC reported second-quarter 2026 adjusted EBITDA of $60.7 million, up 12% from the first quarter, as growth in its Rockies and Mid-Con segments outweighed weaker results in the Piceance business.
President, Chief Executive Officer and Chairman Heath Deneke said the company is seeing accelerating customer activity across its systems, including increased drilling activity in the Rockies and new commercial agreements in the Williston Basin and Permian Basin.
“Volumes are growing and customer activity behind our systems is accelerating,” Deneke said during the company’s earnings call.
Guidance narrowed as capital spending rises
Summit narrowed its full-year 2026 adjusted EBITDA guidance to a range of $235 million to $255 million. Deneke said the company has better visibility into second-half volumes following a solid first half and an increase in customer activity.
The company raised its full-year capital expenditure guidance to $100 million to $120 million, including contributions to the Double E joint venture. The increase reflects approximately 30 additional Williston well connections not included in Summit’s original plan, as well as incremental Double E spending associated with newly executed firm transportation agreements.
Deneke said the added spending is directed toward projects that are contracted or committed and are expected to begin contributing to earnings in 2027. The Double E capital is expected to be funded through term loans established earlier in the year.
During the quarter, Summit placed 36 wells into service, including 16 in the DJ Basin and 20 in the Mid-Con region. After quarter-end, it connected another 17 wells in the Williston Basin. The company had roughly 75 drilled but uncompleted wells across its footprint.
Summit now has eight rigs operating behind its Rockies systems, up from five in the prior quarter. Six of those rigs are in the Williston Basin and two are in the DJ Basin.
Rockies activity expands
The Rockies segment generated adjusted EBITDA of $30.4 million, an increase of $4 million from the first quarter. The improvement was driven by a 6.3% increase in liquids throughput and higher realized crude oil and natural gas liquids prices, partly offset by a 3% decline in natural gas throughput.
Liquids volumes averaged 68,000 barrels per day and natural gas volumes averaged 162 million cubic feet per day during the quarter. Realized crude oil and composite NGL prices each rose about 30% sequentially, benefiting Summit’s percentage-of-proceeds contracts in the DJ Basin.
Summit secured two new gathering agreements in Divide County during the first half of the year. Both customers have rigs operating behind the system, giving the company visibility into roughly 30 new Williston well connections that were not reflected in its prior guidance. Those connections are weighted toward the fourth quarter and are expected to provide limited 2026 volume benefits but support growth in 2027.
Chief Financial Officer Bill Mault said the 30 additional Williston wells could contribute about $10 million of EBITDA in 2027. He said nine recently connected wells that receive both crude oil and produced-water gathering services had averaged about 15,000 barrels per day of combined crude and produced-water throughput through August.
In the DJ Basin, Summit signed a new 20-year extension of a gathering and processing agreement with an existing anchor customer. Deneke also said the company is working with other customers that could dedicate additional acreage to its DJ footprint.
Double E contracting and segment results
In the Permian segment, adjusted EBITDA increased $600,000 sequentially to $9.4 million. Double E throughput rose 6.7% to an average of 859 million cubic feet per day.
Summit executed additional firm transportation agreements during the quarter, bringing total contracted volume on Double E to more than 1.9 billion cubic feet per day. The company extended its mainline compression expansion open season through the end of August as it works to finalize further transportation agreements.
Senior Vice President and Chief Commercial Officer Chris Tennant said Summit was finalizing two precedent agreements that would move the compression project beyond its final investment decision threshold. He said the initial FID case would have a build multiple below 6x, while fully contracting the remaining capacity could reduce that multiple to 3x or less.
Mault said existing Double E contracts support approximately $70 million of EBITDA, while the company’s presentation showed more than $90 million with compression. The EBITDA contribution at FID would be between those amounts, he said, with Summit targeting full commercialization of remaining capacity by year-end.
Mid-Con adjusted EBITDA rose $2 million from the first quarter to $21.4 million, supported by a 9.9% increase in natural gas throughput to 523 million cubic feet per day. The company connected 17 Barnett wells and three Arkoma wells during the quarter. Management said the new wells were performing in line with or slightly above expectations.
Piceance adjusted EBITDA fell $900,000 sequentially to $8.7 million as throughput declined 5.7%, reflecting temporary shut-ins caused by low regional natural gas prices, natural production declines and no new well connections. Mault said all previously shut-in production had resumed flowing by the end of July.
However, Mault said investors should expect a step-down in Piceance cash flow beginning in the fourth quarter as minimum volume commitment shortfall payments expire at the end of the third quarter. He estimated the payments had contributed roughly $4 million per quarter, leaving normalized flowing EBITDA of about $4 million to $4.5 million per quarter.
Liquidity, leverage and capital allocation
Summit ended the quarter with $21 million of unrestricted cash and $79 million outstanding on its revolver, leaving approximately $418 million of available borrowing capacity after letters of credit. Total leverage was approximately 4.1x at quarter-end.
The Summit Permian Transmission term loan had a $350 million balance and remains non-recourse to Summit, Mault said. The company is also working with its financial partner to secure an uncommitted $50 million accordion to support the Double E compression project.
During the quarter, Summit repurchased about 35,000 shares for $1 million under its $35 million authorization, leaving about $34 million available as of June 30.
Deneke said debt reduction remains the company’s first capital-allocation priority, followed by organic growth investment, share repurchases and a potential return of the common dividend. He said Summit continues to target leverage of 3.5x and expects it could reach that level within roughly 12 to 18 months, depending on operating momentum and other catalysts.
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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