Q2 2024 Summit Midstream Corp Earnings Call

Operator: Good day, and thank you for standing by. Welcome to the 2024 Second Summit Midstream Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. You'll then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to our first speaker today, Randall Burton, Director of Finance and Investment Relations. Please go ahead.

Speaker Change: Good day and thank you for standing by. Welcome to the 2024 Second Summit Midstream Earnings Conference Call.

Speaker Change: At this time, all participants are in listen-only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during this session, you'll need to press star 1-1 on your telephone. You'll then hear an automated message advising your hand is raised.

Randall Burton: Thanks, Operator. And good morning, everyone.

Randall Burton: If you don't already have a copy of our earnings release, please visit our website at www.summitmidstream.com, where you'll find it on the homepage, events and presentations section or quarterly results section. With me today to discuss our second quarter of 2024 financial and operating results are Heath Denneke, our President, Chief Executive Officer, and Chairman, Bill Mault, our Chief Financial Officer, along with other members of our senior management. Before we start, I'd like to remind you that our discussion today may contain forward-looking statements.

Speaker Change: Thanks, Operator, and good morning, everyone. If you don't already have a copy of our earnings release, please visit our website at www.summitmidstream.com, where you'll find it on the home page, events and presentations section, or quarterly results section.

Speaker Change: With me today to discuss our second quarter of 2024 financial and operating results is Heath Denneke, our president, chief executive officer and chairman, Bill Mault, our chief financial officer, along with other members of our senior management team.

Randall Burton: These statements may include, but are not limited to, our estimates of future volumes, operating expenses, and capital expenditures. They may also include statements concerning anticipated cash flow, liquidity, business strategy, and other plans and objectives for future operations. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can provide no assurance that such expectations will prove to be correct. Please see SMLP's 2023 Annual Report on Form 10-K and Exhibit 99.1 to the Partnership's Current Report on Form 8-K filed with the SEC on June 3, 2024, as well as SMC's Registration Statement on Form S-IV, as declared effective on June 14, 2024, for a listing of factors that could cause actual results to differ materially from expected results.

Speaker Change: Before we start, I'd like to remind you that our discussion today may contain forward-looking statements. These statements may include, but are not limited to, our estimates of future volumes, operating expenses, and capital expenditures. They may also include statements concerning anticipated cash flow, liquidity, business strategy, and other plans and objectives for future operations.

Speaker Change: Although we believe that these expectations reflected in such forward-looking statements are reasonable, we can provide no assurance that such expectations will prove to be correct.

Speaker Change: Please see SMLP's 2023 Annual Report on Form 10-K and Exhibit 99.1 to the Partnership's Current Report on Form 8-K filed with the SEC on June 3, 2024, as well as SMC's Registration Statement on Form S-4, as declared effective on June 14, 2024, for a listing of factors that could cause actual results to differ materially from expected results.

Randall Burton: Please also note that on this call, we use the terms EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Free Cash Flow. These are non-GAAP financial measures, and we have provided reconciliations to the most directly comparable GAAP measures in our most recent earnings release. And with that, I'll turn the call over to Heath.

Heath: Please also note that on this call we use the terms EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Free Cash Flow. These are non-GAAP financial measures and we have provided reconciliations to the most directly comparable GAAP measures in our most recent earnings release. And with that I'll turn the call over to Heath.

Heath Denneke: Great. Hey, thanks. Thanks, Randall. And good morning, everyone.

Heath Denneke: Thanks for joining us on the call today to discuss our second quarter and our 2024 results. And our first call is Summit Midstream Corporation, or SMC. I wanted to start today by thanking all of our unit holders, now shareholders, for your support and participation in our special meeting where our unit holders voted to approve the conversion from an MLP to a C Corp. We believe this transaction will deliver significant benefits by reducing the unit holders' tax burden, simplifying the summit structure to make the equity much easier to own, and it will enhance our trading liquidity and greatly expand the universe of potential investors as we continue to execute on our As of August 1, 2024, we have officially converted to a C Corp, and the common stock has commenced trading on the New York Stock Exchange under the ticker symbol SMC.

Heath: Great. Hey, thanks. Thanks, Randall, and good morning, everyone. Thanks for joining the call today to discuss our second quarter, our 2024 results. And our first call is Summit Midstream Corporation, or SMC.

Heath Denneke: Additionally, on July 6, 2024, we closed on the refinancing of $575 million of new senior secured second lien notes due in 2029, as well as an upsized $500 million ABL facility also due in 2029. Through this refinancing, we have significantly improved Summit's financial flexibility. We've extended our maturities out to 2029 and created a solid runway to continue to execute on the base business, further commercialize the EE pipeline, and continue to delever the balance sheet to achieve our long-term leverage target of three and a half times. And as we accomplish this, then we'll potentially look at reinstating a sustainable distribution policy for our preferred and common equity shareholders.

Speaker Change: I wanted to start today by thanking all of our unit holders, now shareholders, for your support and participation in our special meeting where our unit holders voted to approve the conversion from an MLP to a C-Corp.

Speaker Change: We believe this transaction will deliver significant benefits by reducing unit holders' tax burden, simplifying Summit's structure to make the equity much easier to own, it will enhance our trading liquidity, and greatly expand the universe of potential investors as we continue to execute on our corporate plans.

Speaker Change: As of August 1, 2024, we have officially converted to a C Corp, and the common stock has commenced trading on the New York Stock Exchange under the ticker symbol SMC.

Speaker Change: Additionally, on July 6, 2024, we closed on the refinancing of $575 million of new senior-secured second-line notes due in 2029, as well as an upsized $500 million ABL facility also due in 2029.

Speaker Change: Through this refinancing, we have significantly improved Summit's financial flexibility. We've extended our maturities out to 2029 and created a solid runway to continue to execute on the base business.

Speaker Change: to further commercialize the EE pipeline and to continue to delever the balance sheet to achieve our long-term leverage target of three and a half times. And as we accomplish this, then we'll potentially look at reinstating a sustainable distribution policy for our preferred and common equity shareholders.

Heath Denneke: In addition to our focus on EE and executing on the base business, we continue to evaluate several value and credit-accretive M&A opportunities to kind of further rebuild our scale and position the platform for continued growth well into the future. We're extremely pleased with the progress we've made towards executing our long-term strategy and believe all of the actions taken this year further positions the company to continue to drive outstanding returns for our shareholders in the coming years.

Speaker Change: In addition to our focus on EE and executing on the base business, we continue to evaluate several value and credit accretive M&A opportunities to kind of further rebuild our scale and position the platform for continued growth well into the future.

Speaker Change: We're extremely pleased with the progress we've made towards executing our long-term strategy, and believe all of the actions taken this year further positions the company to continue to drive outstanding returns for our shareholders in the coming years.

Heath Denneke: Now turning to operations, we continue to see encouraging operating and financial results across all of our systems. Our second quarter results were solid despite some operational downtime and curtailments that Bill will get into more during his second quarter. We connected 34 wells to the system during the quarter and currently have three rigs running behind our systems, including one in the Barnett from our anchor customers.

Speaker Change: Now turning to operations, we continue to see encouraging operating and financial results across all of our systems.

Speaker Change: Our second quarter results were solid despite some operational downtime and curtailments that Bill will get into more during his section.

Bill: We connected 34 wells to the system during the quarter, and currently have three rigs running behind our systems, including one in the Barnett from our anchor customer.

Heath Denneke: I highlight Barnett because we continue to see our anchored customer connect highly productive wells to the system with 14 wells connected in the second quarter throughout the challenging natural gas price cycle, which is leading to both volume and EBITDA growth in that second quarter. We're extremely excited about this level of activity behind the system. And as we enter a more supportive natural gas price environment forecast in late 24 and 25, we believe there will likely be even more activity and volume behind the system than what we're seeing today. As natural gas demand starts to increase with incremental LNG and power demand, we think the Barnett is in a great position to help fill that demand with low cost, close to the gulf.

Bill: I highlight the Barnett because we continue to see our Anchor customer connect highly productive wells to the system with 14 wells connected in the second quarter throughout the Challenge natural gas price cycle, which is leading to both volume and EBITDA growth in that segment.

Bill: We're extremely excited about this level of activity behind the system, and as we enter a more supportive natural gas price environment forecast in late 24 and 25, we believe there will likely be even more activity and volume behind the system than what we're seeing today.

Bill: As natural gas demand starts to increase with incremental LNG and power demand, we think the Barnett is in a great position to help fill that demand with low cost, close to the goal supply.

Heath Denneke: We're also seeing robust activity levels continue in the second half of the year in the rocky segment as well, which is also positioning Summit to have a very strong second half of the year. Lastly, in the Permian, we continue to advance discussions with multiple shippers to subscribe to the remaining firm capacity on the EE pipeline under long-term contracts. We're very excited about the prospect of filling up EE in the near term and potentially expanding the pipeline via a midpoint compression project, which in the aggregate can more than double the current level of EBITDA Summit generates from the business.

Bill: We're also seeing robust activity levels continue in the second half of the year in the rocky segment as well, which is also positioning Summit to have a very strong second half of the year.

Bill: Lastly, in the Permian, we continue to advance discussions with multiple shippers to subscribe the remaining firm capacity on the EE pipeline under long-term contracts.

Bill: We're very excited about the prospect of filling up EE in the near term and potentially expanding the pipeline via midpoint compression projects, which in the aggregate could more than double the current level of EBITDA someone generates from the business.

Heath Denneke: We look forward to providing more updates throughout the year as we make further progress on our commercialization efforts. So just to recap, we've had a very productive year executing on the broader corporate strategy, and with the business continuing to perform well, we continue to expect to achieve our previously stated pro forma adjusted EBITDA guidance range of $170 to $200 million for the year. And we remain super excited about our ability to grow the business and shareholder returns from where we stand today. So with that, I'd like to hand the call over to Bill to provide additional detail on our financial segment results.

Bill: We look forward to providing more updates throughout the year as we make further progress on our commercialization efforts.

Bill: So just to recap, we've had a very productive year executing on the broader corporate strategy and with the business continuing to perform well, we continue to expect to achieve our previously stated pro forma adjusted EBITDA guidance range of $170 to $200 million for the year.

Bill: And we remain super excited about our ability to grow the business and shareholder returns from where we stand today.

Bill Mault: Thanks, Heath, and good morning everyone. Summit reported a second quarter net loss of $23.9 million, adjusted EBITDA of $43.1 million, and capital expenditures of $10.5 million. With the majority of the CapEx spend in the Rockies associated with PAC, With respect to SMLP's balance sheet, we had net debt of approximately $660 million with an undrawn $400 million ABL credit facility at quarter end, and our available powering capacity at the end of the second quarter totaled approximately 372 million, which includes approximately 4 million of LCs and 24 million of commitment reserve for the 2025 unsecured.

Bill: So with that, I'd like to hand the call over to Bill to provide additional detail on our financial segment results.

Bill: Thanks, Heath, and good morning, everyone. Summit reported second quarter net loss of $23.9 million.

Bill: Adjusted EBITDA of $43.1 million and capital expenditures of $10.5 million with the majority of the CapEx spend in the Rockies associated with PAC Connections.

Speaker Change: With respect to SMLP's balance sheet, we had net debt of approximately $660 million with an undrawn $400 million ABL credit facility at quarter end.

Speaker Change: And our available powering capacity at the end of the second quarter totaled approximately 372 million, which includes approximately 4 million of LCs and 24 million of commitment reserve for the 2025 unsecured nodes.

Bill Mault: As Heath mentioned, in July, subsequent to quarter end, we executed a refinancing of our capital structure, which included an upsized $500 million ABL credit facility and a new $575 million second lien note, both of which mature in 2029. Net proceeds from the new note issue and the ABL facility, along with cash on hand, were used to tender for all the outstanding 2026 senior secured second lane notes and the remaining 2025 unsecured notes.

Speaker Change: As Heath mentioned, in July , subsequent to quarter end, we executed a refinancing of our capital structure, which included and upsized the $500 million ABL credit facility and a new $575 million second lien note.

Speaker Change: both of which mature in 2029.

Speaker Change: Net proceeds from the new note issue and ABL facility, along with cash on hand, were used to tender for all the outstanding 2026 Senior Secured Second Lane Notes and the remaining 2025 Unsecured Notes.

Bill Mault: Now turning to the segments in the Rockies, which is inclusive of our DJ and Williston Basin systems. We generated $22.9 million at Yosset-Ibidov, which is relatively flat from the first quarter. We experienced a 1.4% increase in liquids volume throughput and a 4.8% increase in natural gas volume throughput, which was offset by lower product. We continue to experience some operational downtime at a compressor station on our system. This downtime resulted in an increase in the amount of volume Summit had to offload to a neighboring processing plant and impacted our product margin during the quarter by approximately 1.5 million. We expect this downtime to be partially resolved in the third quarter and fully resolved by the fourth.

Speaker Change: Now turning to the segments. In the Rockies, which is inclusive of our DJ and Williston Basin systems, we generated adjusted EBITDA of $22.9 million, which is relatively flat from the first quarter.

Speaker Change: We experienced a 1.4% increase in liquids volume throughput and a 4.8% increase in natural gas volume throughput, which was offset by lower product margin.

Speaker Change: We continue to experience some operational downtime at a compressor station on our system. This downtime resulted in an increase in the amount of volume Summit had to offload to a neighboring processing plant and impacted our product margin during the quarter by approximately $1.5 million.

Speaker Change: We expect this downtime to be partially resolved in the third quarter and fully resolved by the fourth quarter.

Bill Mault: On the crude side, liquids volumes averaged 75,000 barrels a day, a slight increase relative to the first quarter, due primarily to new wells connected to the system in the first half of the year, partially offset by natural production decline. Natural gas volumes averaged 130 million cubic feet a day, an increase of 6 million cubic feet a day relative to the first quarter, primarily due to the weather impacts we experienced in the first quarter.

Speaker Change: On the crude side, liquids volumes averaged 75,000 barrels a day, a slight increase relative to the first quarter, due primarily to new dwells connected to the system in the first half of the year, partially offset by natural production declines.

Speaker Change: Natural gas volumes averaged 130 million cubic feet a day, an increase of 6 million cubic feet a day relative to the first quarter, primarily due to the weather impacts we experienced in the first quarter.

Bill Mault: We connected 18 wells in the DJ and two wells in the Wilson during the quarter, and the Rocky segment currently has two rigs running behind the systems and approximately $90 million. The Permian Basin segment, which includes our 70% interest in the EE pipeline, reported adjusted EBITDA of $7.7 million, an increase of $0.4 million relative to the first quarter, due primarily to higher volume throughput on the pipe. Volume throughput on EE averaged 549 million cubic feet per day, representing a 17.5% increase relative to the first quarter. The PEON segment reported adjusted EBITDA of 12.8 million, a decrease of 2.4 million relative to the first quarter, primarily due to production decline.

Speaker Change: We connected 18 wells in the DJ and 2 wells in the Williston during the quarter, and the Rocky Segment currently has 2 rigs running behind the systems and approximately 90 ducks.

Speaker Change: The Permian Basin segment, which includes our 70% interest in the EE pipeline, reported adjusted EBITDA of 7.7 million, an increase of 0.4 million relative to the first quarter, due primarily to higher volume throughput on the pipe.

Speaker Change: Volume throughput on EE averaged 549 million cubic feet per day, representing a 17.5% increase relative to first quarter. The PEON segment reported adjusted EBITDA of 12.8 million, a decrease of 2.4 million relative to first quarter.

Bill Mault: Approximately 1 million known contractual step downs and approximately 200,000 of lower condensate sales during the summer months. We suspect that the extremely low Rockies natural gas prices realized during the quarter impacted customer production, with several of the new pads brought online in 2023 being choked back during the quarter. Volume throughput averaged 289 million cubic feet per day during the course. The Barnett segment reported a debit of 5.4 million, an increase of 0.3 million relative to the first quarter, primarily due to a 12.8% increase in volume throughput, partially offset by 700,000 increase in operating expenses associated with the timing of certain plan maintenance related costs.

Speaker Change: primarily due to production declines, approximately 1 million of known contractual step-downs, and approximately 200,000 of lower condensated sales during the summer months.

Speaker Change: We suspect that the extremely low Rockies natural gas prices realized during the quarter impacted customer production, with several of the new pads brought online in 2023 being choked back during the quarter.

Speaker Change: Volume throughput averaged 289 million cubic feet per day during quarter.

Speaker Change: The Barnett segment reported adjusted EBITDA of $5.4 million, an increase of $0.3 million relative to first quarter, primarily due to a 12.8% increase in volume throughput.

Speaker Change: Partially offset by $700,000 increase in operating expenses associated with the timing of certain plan maintenance related costs.

Bill Mault: The volume throughput increase is primarily due to our anchor customer completing and connecting 14 new wells during the quarter, and after quarter end, that customer brought in line a five-well pad with initial production of approximately 30 million cubic feet a day. Additionally, another customer on the system who has had production shut in partially resumed flowing approximately 10 to 15 million gallons a day of shutting gas in June. Well, that's certainly a positive event.

Speaker Change: A volume throughput increase is primarily due to our anchor customer completing and connecting 14 new wells during the quarter.

Speaker Change: And after quarter end, that customer turned in line a five-wall pad with initial production of approximately 30 million cubic feet a day.

Speaker Change: Additionally, another customer on the system who has had production shut in partially resumed flowing approximately 10 to 15 million of day of shutting gaps in June .

Bill Mault: We still believe there's an There's approximately 25 to 30 million of shut-in production behind that system currently. There's currently one rig running and 13 ducks down the system. And to give you an idea of how impactful some of these events have been, average volume on the system over the last five days has been averaging over 260 million cubic feet a day, or over 25% higher than the Q2 average throughput report that we're reporting today. And with that, I'll turn the call back over to Heath for closing remarks.

Speaker Change: Well, there's certainly a positive event. We still believe there's approximately 25 to 30 million of shut-in production behind that system currently.

Speaker Change: There's currently one rig running and 13 ducks down the system.

Speaker Change: And to give you an idea of how impactful some of these events have been, average volume on the system over the last five days has been averaging over 260 million cubic feet a day, or over 25% higher than the Q2 average throughput report that we're reporting today.

Heath Denneke: Yeah, thanks, Bill. As I said earlier, we're very pleased with the second quarter performance and the progress that we made in executing the corporate strategy. We look forward to continuing to build on that momentum throughout the year and certainly look forward to providing further updates on our progress throughout the year. With that, I'd like to thank you for your time and continued support. Operator, please open the call for questions. Thank you.

Speaker Change: And with that, I'll turn the call back over to Heath for closing remarks.

Heath: All right. Yeah, thanks, Bill. So, as I said earlier, we're very pleased with the second quarter performance and the progress that we made on executing the corporate strategy. We look forward to continuing to build on that momentum throughout the year and certainly look forward to providing further updates on our progress throughout the year.

Speaker Change: With that, I'd like to thank you for your time and continued support. Operator, please open the call for questions.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Again, as a reminder to ask a question, you will need to press star 11 on your telephone. I'm showing no questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Heath: i

Speaker Change: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Speaker Change: Again, as a reminder to ask a question, you'll need to press star 1-1 on your telephone.

Speaker Change: I'm showing no questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Speaker Change: www.summit.edu.au

Operator: Good day, and thank you for standing by.

Operator: Welcome to the 2024 second Summit Midstream earnings conference call. At this time, all participants are in this and only mode. After this speaker's presentation, there will be a question and answer session. To ask the question during this session, you'll need to press star one on one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again.

Operator: Please be advised that today's conference is being recorded.

Randall Burton: I'll not like to hand the conference over to your first speaker today, Randall Burton, Director of Finance and Vestual Relations. Please go ahead.

Randall Burton: Thanks operator, and good morning everyone. If you don't already have a copy of our earnings release, please visit our website at www.SummitMidstream.com, where you'll find it on the homepage of in some presentation section or quarterly results section.

Randall Burton: With me today to discuss our second quarter of 2024 financial and operating results, is Heath Denke, our president, chief executive officer and chairman, Bill Malt, our chief financial officer, along with other members of our senior management team. Before we start, I'd like to remind you that our discussion today may contain forward-looking statements. These statements may include that are not limited to our estimates of future volumes operating expenses and capital expenditures. They may also include statements concerning anticipated cash flow, liquidity, business strategy, and other plans and objectives for future operations.

Randall Burton: Although we believe that these expectations reflected in such forward-looking statements are reasonable, we can provide no assurance that such expectations will prove to be correct. Please see SMLP's 2023 Annual Report on Form 10K and exhibit 99.1 to the partnership's current report on Form 8K followed with the SEC on June 3rd, 2024, as well as SMC's registration statement on Form S4 as declared effective on June 14th, 2024, for a listing of factors that cause actual results to differ materially from expected results.

Randall Burton: Please also note that on this call, we use the term EBITDA, adjusted EBITDA, distributed cash flow, and free cash flow. These are non-gap financial measures and we've provided reconciliation to the most directly comparable gap measures in our most recent earnings release.

Heath Denke: And with that, I'll turn the call over to Heath. Great. Hey, thanks, Randall, and good morning, everyone.

Heath Denke: Thanks for joining the call today to discuss our second quarter, our 2024 results, and our first call is Summit Midstream Corporation, or SMC. I wanted to start today by thanking all of our unit holders, now shareholders, for your support and participation in our special meeting, where our unit holders voted to approve the conversion from an MLP to a C-Corp. We believe this transaction will deliver significant benefits by reducing unit holders, tax burden, simplifying summit structure to make the equity much easier to own. It will enhance our trading liquidity and greatly expand the universe of potential investors as we continue to execute on our corporate plans.

Heath Denke: As of August 1, 2024, we have officially converted to a C-Corp, and the common stock has commenced trading on the New York Stock Exchange under the ticker symbol SMC. Additionally, on July 6, 2024, we close on the refinancing of 575 million of new senior secured second-line notes due in 2029, as well as an upsized 500 million ABL facility, also due in 2029. Through this refinancing, we have significantly improved summit's financial flexibility with extended our maternities out to 2029 and created a solid runway to continue to execute on base business, to further commercialize the doubly pipeline and continue to de-lever the balance sheet to achieve our long-term leverage target of three and a half times.

Heath Denke: And as we accomplish this, we'll potentially look at reinstating the sustainable distribution policy for our preferred and common equity shareholders. In addition to our focus on doubly and executing on the base business, we continue to evaluate several value and credit-accretive M&A opportunities to further rebuild our scale and position the platform for continued growth well into the future.

Heath Denke: We're extremely pleased for the progress we've made towards executing our long-term strategy and believe all of the actions taken this year further positions the company to continue to drive outstanding returns for our shareholders in the coming years. Now, turning to operations, we continue to see encouraging operating and financial results across all of our systems. Our second quarter results were solid, despite some operational downtime and cutelments that Bill will get into more during his section.

Heath Denke: We connected 34 wells to the system during the quarter and currently have three rigs running behind our systems, including one in the Barnet from our anchor customer. I highlight the Barnet because we continue to see our anchor customer connect highly-productive wells to the system, with 14 wells connected in the second quarter throughout the challenge natural gas price cycle, which is leading to both volume and EBITDA growth in that segment. We're extremely excited about this level of activity by the system, and as we enter a more supportive natural gas price environment, forecast in late 24 and 25, we believe there will likely be even more activity and volume behind the system than what we're seeing today.

Heath Denke: As natural gas demand starts to increase within criminal LNG and power demand, we think the Barnet is in a great position to help fill that demand with low cost, close to the Gulf supply. We're also seeing robust activity levels continue in the second half of the year and the rocky segment as well, which is also a position in some that have a very strong second half of the year. Lastly, in the Permian, we continue to advance discussion with multiple shippers to subscribe the remaining firm capacity on the doubly pipeline under long-term contracts.

Heath Denke: We're very excited about the prospect of filling up doubly in the near-term, and potentially expanding the pipeline via midpoint compression project, which in the aggregate could more than double the current level of EBITDA if someone generates from the business.

Heath Denke: We look forward to providing more updates throughout the year as we make further progress on our commercialization efforts. So just to recap, we've had a very productive year, excuse me, on the broader, corporate strategy, and with the business continuing to perform well, we continue to expect to achieve our previously stated, pro-former-adjusted EBITDA guidance range of 170 to 200 million for the year. And we remain super excited about our ability to grow the business and shareholder returns from where we stand today.

Heath Denke: So with that, I'd like to hand the call over to Bill to provide additional detail on our financial segment results. Thank you, Ethan.

Bill Malt: Good morning, everyone. Summit reported, second quarter, net loss of 23.9 million. Adjusted EBITDA of 43.1 million, and capital expenditures of 10.5 million. With the majority of the CAPEX spend in the Rockies associated with PAC connections. With respect to our small P's balance sheet, we had net debt of approximately $660 million, with an undrawn $400 million ABL credit facility at quarter-end. And our available power and capacity at the end of the second quarter totaled approximately 372 million, which includes approximately 4 million ABLCs, and 24 million of commitment reserved for the 2025 unscored.

Bill Malt: Notes. As he mentioned in July subsequent quarter end, we executed a refinancing of our capital structure, which included an up size, the $500 million ABL credit facility, and a new $575 million second-line note, both of which mature in 2029. Net probe seeds from the new note issue and ABL facility, along with cash on hand, were used to tender for all the outstanding 2026 senior scared second-line notes and the remaining 2025 unscured notes.

Bill Malt: Now turning to the segments in the Rockies, which is inclusive of our DJ and Wilson Basin systems. We generated adjusted EBITDA of 22.9 million, which is relatively flat in the first quarter. We experienced a 1.4% increase in liquids volume throughput and a 4.8% increase in natural gas volume throughput, which was offset by lower product margin.

Bill Malt: We continued to experience some operational downtime at a compressor station on our system. This downtime resulted in an increase in the amount of volume Summit had to offload to a neighboring processing plant and impacted our product margin during the quarter by approximately 1.5 million. We expect this downtime to be partially resolved in the third quarter and fully resolved by the fourth quarter. On the crude side, liquids volumes averaged 75,000 barrels a day, a slight increase relative to the first quarter, due primarily to new dwells connected to the system in the first half of the year, partially offset by natural production declines.

Bill Malt: Natural gas volumes averaged 130,000,000 cubic feet a day, an increase of 6,000,000 cubic feet a day relative to the first quarter, primarily due to the weather and patch we experienced in the first quarter. We connected 18 wells in the DJ and two wells in the Wilson during the quarter. And the Rockies segment currently has two rigs running behind the systems and approximately 90 ducts.

Bill Malt: The Permian Basin segment, which includes our 70% interest in the doubly pipeline, reported adjusted EBITDA of 7.7 million, an increase of 0.4 million relative to the first quarter, due primarily to higher volume throughput on the pipe.

Bill Malt: Volume throughput on doubly averaged 549 million cubic feet a day, representing a 17.5% increase relative to the first quarter.

Bill Malt: The P&M segment reported adjusted EBITDA of 12.8 million, a decrease of 2.4 million relative to the first quarter, primarily due to production declines, approximately 1 million of known contractual step downs, and approximately 200,000 of lower condensate sales during the summer months.

Bill Malt: We suspect that the extremely low Rockies natural gas prices realized during the quarter impacted customer production with several of the new pads brought online in 2023 being choked back during the quarter. Volume throughput averaged 289 million cubic feet per day during the quarter.

Bill Malt: The Barnett segment reported just EBITDA of 5.4 million, an increase of 0.3 million relative to the first quarter, primarily due to a 12.8% increase in volume throughput, partially offset by 700,000 increase in operating expenses associated with the timing of certain planned maintenance related costs. The volume throughput increase is primarily due to our anchor customer completing and connecting 14 new wells during the quarter and after quarter and that customer turned in line a five wall pad with the national production of approximately 30 million QC today. Additionally, another customer on the system who has had production shut in partially resumed flowing approximately 10 to 15 million of day of shutting gaps in June.

Bill Malt: While there's certainly a positive event, we still believe there's approximately 25 to 30 million of shut in production behind that system currently. There's currently one rig running and 13 ducks down the system and to give you an idea of how impactful some of these events have been average volume on the system over the last five days has been averaging over 260 million QC today or over 25% higher than the Q2 average throughput. That will report that we're reporting today.

Heath Denke: And with that, I'll turn the call back over to Heath for closing remarks. Alright, thanks Bill. So I said earlier, we're very pleased with the second quarter performance and the progress that we made on executing the corporate strategy. We look forward to continuing to build on that momentum throughout the year and certainly look forward to providing further updates on our progress throughout the year.

Heath Denke: With that, I'd like to thank you for your time and continue to support.

Operator: Operator, please open the call for questions. Thank you. At this time, we will conduct the question as a session. As a reminder to ask the question, you'll need to press star 111 on your telephone and wait for your name to be announced. To withdraw your question, please press star 111 again. Please stand by while we compile the QNAME roster. Again, as a reminder to ask the question, you'll need to press star 111 on your telephone. I'm sure we know questions at this time. Thank you for your participation in today's conference.

Operator: This does conclude the program. You may now disconnect.