Summit Midstream's Q1 2025: Unpacking Contradictions in Acquisitions, Financial Guidance, and Dividend Strategies
Earnings DecryptMonday, May 19, 2025 10:33 am ET
2min read
Acquisition and strategic transactions, financial guidance and forecasts, crude oil price impact on activity levels, Mid-Con segment volume growth, and dividend reinstatement are the key contradictions discussed in Summit Midstream's latest 2025Q1 earnings call.
Strong Financial Performance amid Market Challenges:
- Summit Midstream Corporation reported adjusted EBITDA of $57.5 million for Q1 2025.
- The growth was driven by strategic activities in 2024, a strong balance sheet, and opportunistic M&A, particularly the acquisition of Moonrise Midstream.
Rockies Segment Performance and Crude Price Impact:
- The Rockies segment reported adjusted EBITDA of $24.9 million, up $1.6 million from the fourth quarter.
- The increase was primarily due to higher liquids volume throughput, freshwater sales, and the Moonrise acquisition, but was partially offset by a decrease in natural gas volumes. The segment faces potential downside exposure due to recent reductions in crude oil prices.
Mid-Con Segment Growth:
- The Mid-Con segment reported adjusted EBITDA of $22.5 million, an increase of $9.6 million relative to the fourth quarter.
- This growth was primarily due to the acquisition of Tall Oak, an increase in volume throughput, and strong natural gas strip prices, despite initial production declines.
Permian Segment Expansion:
- The Permian Basin segment showed an increase in adjusted EBITDA to $8.3 million, with average daily volumes on the Double E pipeline growing by 8% quarter-over-quarter.
- Growth was driven by increasing gas volumes and the expectation of substantial residue gas growth in the Delaware Basin over the next five years.
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Strong Financial Performance amid Market Challenges:
- Summit Midstream Corporation reported adjusted EBITDA of $57.5 million for Q1 2025.
- The growth was driven by strategic activities in 2024, a strong balance sheet, and opportunistic M&A, particularly the acquisition of Moonrise Midstream.
Rockies Segment Performance and Crude Price Impact:
- The Rockies segment reported adjusted EBITDA of $24.9 million, up $1.6 million from the fourth quarter.
- The increase was primarily due to higher liquids volume throughput, freshwater sales, and the Moonrise acquisition, but was partially offset by a decrease in natural gas volumes. The segment faces potential downside exposure due to recent reductions in crude oil prices.
Mid-Con Segment Growth:
- The Mid-Con segment reported adjusted EBITDA of $22.5 million, an increase of $9.6 million relative to the fourth quarter.
- This growth was primarily due to the acquisition of Tall Oak, an increase in volume throughput, and strong natural gas strip prices, despite initial production declines.
Permian Segment Expansion:
- The Permian Basin segment showed an increase in adjusted EBITDA to $8.3 million, with average daily volumes on the Double E pipeline growing by 8% quarter-over-quarter.
- Growth was driven by increasing gas volumes and the expectation of substantial residue gas growth in the Delaware Basin over the next five years.
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