Executive Summary

Q3 2023 delivered sequential re-acceleration: Revenue $121.19M, Net income $3.87M, Adjusted EBITDA $72.79M (+24% q/q), DCF $38.48M, FCF $21.92M; volumes up across segments; EBITDA run-rate trending toward ~$290M LTM by mid-2024 .
Guidance: Q3 came in within prior guidance ($65–$75M); Q4 Adjusted EBITDA reiterated at $75–$85M; full-year 2023 Adjusted EBITDA previously lowered to $260–$280M (from $290–$320M) due to timing delays/commodity headwinds .
Strategic catalysts: Board launched formal strategic alternatives review (asset sales, refinancing, potential sale) amid strong third-party interest; Williston Basin 15-year contract extension (30,000+ acres) and SMU low-pressure compression project underway (phase 1 in-service by year-end) .
Operating momentum: Connected 77 wells in Q3 (227 YTD), strong Rockies and Northeast growth; Double E volumes +34% q/q to 327 MMcf/d; OGC volumes +11% q/q to 870 MMcf/d .
Distributions remain suspended on common and Series A preferred units; leverage metrics improving as sequential EBITDA ramps (total leverage ~5.5x; first lien 1.2x at 9/30) .

What Went Well and What Went Wrong

What Went Well

Significant q/q EBITDA growth (+24%), with oil price-driven segments up 38.8% and natural gas price-driven segments up 17.4%; Rockies segment EBITDA +$8.2M q/q on higher liquids/gas throughput and better commodity realization .
Commercial wins: Williston Basin 15-year contract extension on >30,000 acres; SMU centralized compression project (phase 1) to add incremental compression fees starting Q1’24; management targeting ~$300M LTM EBITDA by mid-2024 .
Quote (CEO): “Summit delivered solid third quarter 2023 financial and operating results… supports our projection of approximately $300 million of LTM Adjusted EBITDA by mid-2024” .

What Went Wrong

Barnett volumes down 6.6% q/q from customer shut-ins (~20 MMcf/d) and lack of Q4 well adds; segment EBITDA -$1.2M q/q (q2 to q3) .
Elevated interest expense ($34.57M in Q3) weighed on GAAP earnings; per-unit EPS remained negative despite positive net income due to capital structure dynamics (-$0.27/unit) .
YoY headwinds lingered in select areas: Piceance EBITDA modestly up q/q but down vs 2022 YTD; commodity price variability earlier in the year drove lowered full-year guidance in Q2 .

Financial Results

Consolidated P&L, EPS and Margins (YoY and Seq.)

Metric	Q3 2022	Q2 2023	Q3 2023
Revenue ($USD Millions)	$88.68	$97.89	$121.19
Net Income ($USD Millions)	$(7.79)	$(13.54)	$3.87
Diluted EPS / Unit ($USD)	$(1.28)	$(1.91)	$(0.27)
Adjusted EBITDA ($USD Millions)	$54.74	$58.60	$72.79
Adjusted EBITDA Margin (%)	61.8%	59.8%	60.1%
Net Income Margin (%)	(8.8%)	(13.8%)	3.2%

Notes: Adjusted EBITDA Margin = Adjusted EBITDA / Total Revenues; Net Income Margin = Net Income / Total Revenues (calculated from cited values).

Segment Adjusted EBITDA ($USD Thousands)

Segment	Q3 2022	Q2 2023	Q3 2023
Northeast	$19,353	$20,201	$27,751
Rockies	$14,262	$16,858	$24,998
Permian (Double E JV)	$4,882	$5,370	$5,840
Piceance	$14,249	$14,365	$15,292
Barnett	$7,864	$7,269	$6,084
Total Segment EBITDA	$60,610	$64,063	$79,965
Less: Corporate & Other	$(5,868)	$(5,460)	$(7,175)
Adjusted EBITDA	$54,742	$58,603	$72,790

Operating KPIs

KPI	Q3 2022	Q2 2023	Q3 2023
Avg Daily Gas Throughput (MMcf/d, operated)	1,177	1,207	1,352
Avg Daily Liquids Throughput (Mbbl/d, Rockies)	66	71	85
Ohio Gathering (OGC) Avg Daily Gas (MMcf/d, gross)	783	781	870
Double E Avg Daily Gas (MMcf/d, gross)	314	243	327
Wells Connected (quarter)	N/A	89	77
Wells Connected (YTD)	N/A	150 H1	227
DUCs Behind Systems (approx.)	N/A	>180	>165
Drilling Rigs Behind Systems	N/A	11	6

Cash Flow and Capex

Metric ($USD Millions)	Q3 2022	Q2 2023	Q3 2023
Net Cash from Operating Activities	$36.65	$1.95	$59.12
Capital Expenditures	$6.09	$15.74	$17.69
Distributable Cash Flow (DCF)	$29.77	$24.41	$38.48
Free Cash Flow (FCF)	$24.30	$9.12	$21.92

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA	Q3 2023	$65–$75M (as of Aug 9)	Actual: $72.8M	Met guidance
Adjusted EBITDA	Q4 2023	$75–$85M (as of Oct 3)	Reiterated $75–$85M (Nov 3)	Maintained
Adjusted EBITDA (Full-Year)	FY 2023	$290–$320M (Q1 posture)	$260–$280M (updated Aug 9)	Lowered
Capex (Cash)	FY 2023	$45–$65M (original range)	Trending to midpoint of range	Maintained
Distributions	Q3 2023	Suspended common & Series A	Continued suspension	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2023)	Current Period (Q3 2023)	Trend
Strategic Alternatives	Not discussed in Q1; Q2 focused on revised guidance and timing delays	Formal review announced; strong third-party interest; options include asset sales/refinancing/whole-partnership sale	New strategic catalyst
SMU Compression (Utica)	Q1/Q2 focused on Northeast volumes and frac-protect impacts	Building phase 1; in-service by year-end; ~20 MMcf/d subject to incremental compression fee starting Q1’24	Execution underway
Williston Basin Contracts	Q1 noted DJ/Williston integration and well connections	15-year extension (>30,000 acres); pro forma acreage consolidation to enable longer laterals	Positive commercial durability
Double E Pipeline (Permian)	Q2 volumes dipped; anchor customer ramp starting	Volumes +34% q/q to 327 MMcf/d; anchor customer running 13 rigs; long-term outlook supportive	Strengthening
Commodity Price Headwinds	Q1/Q2 pressured DJ margins and delayed completions	Sequential improvement; Rockies EBITDA +$8.2M q/q with better realization; still monitoring price variability	Easing sequentially

Sources for call/transcript references: Nov 3, 2023 earnings call transcript ; Q3 press release .

Management Commentary

Heath Deneke (CEO): “Summit delivered solid third quarter 2023 financial and operating results… supports our projection of achieving approximately $300 million of LTM Adjusted EBITDA by mid-2024” .
On Williston: “We executed a 15-year contract extension… We expect our customer to begin a one-rig development program in mid-2024” .
On SMU compression: “We expect this first phase to be in-service by year-end… incremental compression fee on approximately 20 MMcf/d beginning in the first quarter of 2024” .
Strategic Review: “These alternatives may include… sale of assets, refinancing… sale of the Partnership by merger or cash, or any combination” .

Q&A Highlights

Guidance fidelity and cadence: Management reinforced Q4 Adjusted EBITDA $75–$85M and LTM trajectory to ~$300M by mid-2024; discussed sequencing of well turn-in-line across DJ/Williston/Northeast .
Strategic alternatives process: Addressed breadth of options and active inbound interest; emphasized continued operational focus during review .
SMU compression timing/revenue uplift: Clarified phase 1 timing and expected compression fees on ~20 MMcf/d beginning Q1’24; evaluation of broader system rollout ongoing .
Rockies development and longer laterals: Commented on integration timelines and benefits from pro forma acreage enabling more three-mile laterals .

Estimates Context

Wall Street consensus via S&P Global (SPGI) was unavailable for SMLP due to mapping constraints; as a result, comparisons vs consensus EPS/Revenue/EBITDA cannot be provided. If required, we can update once SPGI mapping is resolved [tool error from GetEstimates].

Key Takeaways for Investors

Sequential inflection confirmed: Q3 Adjusted EBITDA of $72.8M within guidance and +24% q/q; volumes up broadly; Double E and Rockies led the ramp .
Q4 guide reiterated ($75–$85M) and LTM ~$300M target by mid-2024 underpin deleveraging potential; watch execution on well timing and SMU compression monetization .
Strategic alternatives review is a material catalyst path (asset/Partnership transactions, capital structure moves); monitor announcements and potential valuation unlock .
Commercial durability improving: Williston 15-year extension (>30,000 acres) and DJ optimization support medium-term stability and growth .
Barnett remains a swing factor given customer shut-ins and limited near-term well adds (next tranche in H1’24); Northeast strength offsets with new wells and OGC trends .
Distributions remain suspended; equity holders should focus on FCF trajectory and leverage metrics (first lien 1.2x, total ~5.5x) as sequential EBITDA progresses .
Near-term trading: Stock may respond to any strategic review updates and continued quarterly EBITDA beats; medium-term thesis hinges on execution of compression/contract wins and potential strategic outcomes .

Sources: Q3 2023 8-K and press release (financials, guidance, KPIs, segment detail) ; Q3 operational update (strategic alternatives, throughput estimates) ; Q2 and Q1 2023 8-Ks (prior quarter baselines and guidance changes) . Earnings call transcript references: Nov 3, 2023 call transcript and press release PDF .

Summit Midstream Partners, LP (SMLP)·Q3 2023 Earnings Summary