Current SMLP Stock Info

System will process 60 MMcf/d, expandable to 600 MMcf/d

Summit Midstream Partners (ticker: SMLP) announced an agreement with XTO Energy on Friday to create a new natural gas system in the Permian.

The system will service Eddy and Lea counties in New Mexico, the northern portion of the Delaware basin. Summit will first construct a gathering and processing system with both high and low pressure gathering and discharge pipelines. Two compressor stations and a cryogenic processing plant will support the system’s planned 60 MMcf/d capacity.

If additional infrastructure is needed, Summit will be able to expand the system to over 600 MMcf/d. While XTO is the current primary customer for the processing system, the tremendous popularity of the Permian means that production from other companies may be processed as well. Summit expects the first phase of this system will cost about $110 million and will begin operations around June 2018.

Piceance, Williston currently Summit’s largest areas

This agreement marks Summit’s entry into the most popular shale basin in the world, the Permian. Summit’s current operations are split over five locations. The company’s Piceance/DJ basin operations are the largest, producing 33% of 2016 adjusted EBITDA. Summit’s crude oil gathering system in the Williston provides Just under one-quarter of 2016 adjusted EBITDA, and covers much of northwest North Dakota. While Summit’s Utica operations currently only make up 20% of adjusted EBITDA, the company believes that upcoming growth will significantly increase this share in future years. Activity in the Barnett and Marcellus represent the company’s remaining activity.

Summit Midstream Jumps Into Permian With XTO

Source: Summit Midstream Investor Presentation

Credit facility extended to 2022

Near the end of Q2 Summit Midstream announced the results of its redetermination. The company’s $1.25 billion revolving credit facility was extended, from maturity in November 2018 to May 2022. Summit President and CEO Newby commented on the result, saying “We sincerely appreciate the continued support of our lenders and the confidence they have in our company. This credit facility provides SMLP with significant liquidity and flexibility for the continued development of our assets. The revolving credit facility amendment also extends our long-term debt maturity profile such that SMLP has no significant debt maturities until 2022.”

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