Summit Midstream Partners LP (SMLP) Reports Q3 2023 Financial Results: Net Income of $3. ...
Summit Midstream Partners LP (NYSE:SMLP) reports Q3 2023 net income of $3.9 million, adjusted EBITDA of $72.8 million, and free cash flow of $21.9 million.
Connected 77 wells during the third quarter, bringing the total to 227 wells connected year-to-date.
Executed a 15-year contract extension dedicating more than 30,000 leased acres with a key customer in the Williston.
Launched a strategic alternatives review with the goal of maximizing unitholder value.
Summit Midstream Partners LP (NYSE:SMLP) announced its financial and operating results for the third quarter ended September 30, 2023, on November 3, 2023. The company reported a net income of $3.9 million, adjusted EBITDA of $72.8 million, cash flow available for distributions ("Distributable Cash Flow" or DCF) of $38.5 million, and free cash flow (FCF) of $21.9 million.
Financial Performance
The adjusted EBITDA of $72.8 million represents a quarter-over-quarter growth of approximately 24% and a run-rate of around $290 million. The company connected 77 wells during the third quarter, resulting in 227 wells connected year-to-date. SMLP remains on pace to connect a total of approximately 300 wells by the end of 2023.
Operational Highlights
SMLP's average daily natural gas throughput for its wholly owned operated systems increased 12% to 1,352 MMcf/d, and liquids volumes increased 20% to 85 Mbbl/d, relative to the second quarter of 2023. The company also executed a 15-year contract extension dedicating more than 30,000 leased acres with a key customer in the Williston.
Management Commentary
Heath Deneke, President, Chief Executive Officer, and Chairman, commented, Summit delivered solid third quarter 2023 financial and operating results that include a significant quarter-over-quarter increase in Adjusted EBITDA and operational progress that supports our projection of achieving approximately $300 million of LTM Adjusted EBITDA by mid-2024."
Capital Expenditures
Capital expenditures totaled $17.7 million in the third quarter of 2023, inclusive of maintenance capital expenditures of $2.8 million. These expenditures were primarily related to pad connections and DJ Basin integration projects in the Rockies segment.
Capital & Liquidity
As of September 30, 2023, SMLP had $17.1 million in unrestricted cash on hand and $295 million drawn under its $400 million ABL Revolver and $100.7 million of borrowing availability. The company reported a total leverage ratio of approximately 5.5x.
Strategic Alternatives Review
The company has launched a strategic alternatives review with the goal of maximizing unitholder value. These alternatives may include, but are not limited to, continued execution of the Partnerships business plan, sale of assets, refinancing parts or the entirety of its capital structure, sale of the Partnership by merger or cash, or any combination of these and other alternatives.
Explore the complete 8-K earnings release (here) from Summit Midstream Partners LP for further details.
This article first appeared on GuruFocus.
