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    SMC
    Earnings call· Jun 2026(Q2 FY26)

    Summit Midstream Q2 FY26 earnings call SMC

    Aug 11, 2026 Source

    Executive summary

    Summit Midstream Q2 FY26 — Strong Q2, Tightened Guidance, and Accelerated Activity

    Summit Midstream delivered strong second-quarter results, driven by increased activity in its Rockies and Mid-Con segments. The company tightened its full-year adjusted EBITDA guidance and raised capital expenditure, primarily for high-returning projects in the Williston and Double E. Management remains focused on achieving its leverage target and reinstating a common dividend, while prioritizing organic growth opportunities over M&A.

    Highlights

    5

    • Adjusted EBITDA increased 12% quarter-over-quarter to $60.7 million.

    • Rockies segment adjusted EBITDA increased $4 million to $30.4 million, driven by a 6.3% increase in liquid volume throughput.

    • Mid-Con segment adjusted EBITDA increased $2 million to $21.4 million, with natural gas volume throughput up 9.9% to 523 million cubic feet per day.

    • Secured 2 new gathering agreements in Divide County, Williston, adding visibility to approximately 30 new well connections.

    • Total contracted volume on Double E pipeline reached over 1.9 Bcf per day with additional firm transportation agreements.

    Concerns

    3

    • Piceance segment adjusted EBITDA decreased $0.9 million due to a 5.7% decline in volume throughput.

    • Piceance MVC shortfall payments expiring at the end of Q3 FY26, expected to result in a $4 million quarterly step-down in EBITDA.

    • Full-year capital expenditure guidance raised to $100 million to $120 million, up from previous guidance.

    Guidance & targets

    4
    CategoryTargetConfidence
    Full-year 2026 Adjusted EBITDA
    $235 million to $255 million
    high materiality
    High
    Full-year 2026 Capital Expenditure
    $100 million to $120 million
    medium materiality
    High
    Leverage Target
    3.5x
    high materiality
    Medium
    Common Dividend Reinstatement
    Near future
    high materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Rockies
    Adjusted EBITDA increased $4 million relative to Q1 FY26, driven by a 6.3% increase in liquid volume throughput and higher realized crude oil and NGL prices, partially offset by a 3% decline in natural gas volume. Realized crude oil and composite NGL prices were up approximately 30% QoQ. Growth trajectory is strong due to accelerated activity and delineation of inventory in Williams and Divide Counties.
    Adjusted EBITDA: $30.4 millionLiquid volume throughput: 68,000 barrels per dayNatural gas volume throughput: 162 million cubic feet per dayWells connected in DJ Basin: 16Wells connected in Williston Basin (post-quarter end): 17Rigs running: 8 (6 in Williston, 2 in DJ)Drilled but uncompleted wells (DUCs): 75
    		———$30.4 million
    Permian
    Adjusted EBITDA increased $0.6 million relative to Q1 FY26, driven by a 6.7% increase in Double E volume throughput.
    Adjusted EBITDA: $9.4 millionDouble E volume throughput: 859 million cubic feet per day
    		———$9.4 million
    Piceance
    Adjusted EBITDA decreased $0.9 million relative to Q1 FY26, primarily due to a 5.7% decline in volume throughput driven by temporary shut-ins from low regional gas prices, natural production declines, and no new well connections. All previously shut-in production had begun flowing by end of July.
    Adjusted EBITDA: $8.7 millionVolume throughput decline: 5.7%
    		———$8.7 million
    Mid-Con
    Adjusted EBITDA increased $2 million relative to Q1 FY26, primarily due to a 9.9% increase in natural gas volume throughput. New wells are performing in line or slightly above expectations and holding production well.
    Adjusted EBITDA: $21.4 millionNatural gas volume throughput: 523 million cubic feet per dayNatural gas volume throughput growth: 9.9%New Barnett wells connected: 17New Arkoma wells connected: 3
    		———$21.4 million

    Operational metrics

    15
    Adjusted EBITDA
    $60.7 million12% increase QoQ
    Q2 FY26

    Driven by growth in Rockies and Mid-Con segments.

    Distributable cash flow
    $36.8 million
    Q2 FY26

    Non-GAAP financial measure.

    Total capital expenditures
    $25 million
    Q2 FY26

    Inclusive of $4.1 million of maintenance CapEx, with majority directed toward pad connections in Rockies and Mid-Con.

    Maintenance capital expenditures
    $4.1 million
    Q2 FY26

    Included in total capital expenditures.

    Unrestricted cash
    $21 million
    Q2 FY26

    As of quarter end.

    Drawn revolver balance
    $79 million
    Q2 FY26

    As of quarter end.

    Available borrowing capacity
    $418 million
    Q2 FY26

    After accounting for $2.7 million of undrawn letters of credit.

    Total leverage
    4.1x
    Q2 FY26

    As of quarter end.

    Summit Permian Transmission term loan balance
    $350 million
    Q2 FY26

    Remains nonrecourse to Summit.

    Shares repurchased
    35,000 shares
    Q2 FY26

    Part of the $35 million share repurchase program.

    Remaining share repurchase authorization
    $34 million
    Q2 FY26

    As of June 30.

    Rockies realized crude oil prices increase
    30%QoQ
    Q2 FY26

    Benefiting percentage of proceed contracts in the DJ Basin.

    Rockies composite NGL prices increase
    30%QoQ
    Q2 FY26

    Benefiting percentage of proceed contracts in the DJ Basin.

    Water to crude ratio
    3 barrels to 1
    Q2 FY26

    In the area of the Williston where 9 new wells were connected, making these wells extremely impactful to volume throughput.

    Organic growth target
    $100 million
    by 2030

    Driven primarily by the Rockies and Permian segments.

    Industry KPIs

    8
    MetricValueDetails
    D c efficiency rig activity8 rigsrigs
    Pipeline throughput storage1.9 Bcf per dayBcf/d
    Realized price differential30%%
    Sanctioned expansion backlog—
    Basin level production volume68,000 barrels per daybbl/d
    FCF shareholder distributions$9.4 millionUSD
    Take or pay contract structure1.9 Bcf per dayBcf/d
    Distributable cash flow per unit share$36.8 millionUSD

    Orderbook & backlog

    1
    Share repurchase program authorization$35 millionQ2 FY26

    Approximately $1 million executed in Q2 FY26, with $34 million remaining capacity.

    Deals & partnerships

    4
    Two new customersNew gathering agreements

    Secured in Divide County during the first half of the year. Both customers have a rig running behind the system today.

    Existing anchor customer20-year extension of gathering and processing agreement20 years

    Signed in the DJ Basin. Company is also working with other customers to potentially dedicate new acreage to the DJ footprint.

    Peoria Resources / Fundare ResourcesPeoria Resources acquired Fundare Resources

    Fundare is a key customer behind the Moonrise Midstream asset, which Summit acquired in March 2025. Peoria entered the DJ Basin by acquiring Verdad earlier this year.

    Multiple customersAdditional firm transportation agreements

    Executed during the quarter for the Double E pipeline.

    Capital programs

    1
    Double E compression expansionunderway
    Funding: Term loan + uncommitted accordion

    Benefit: Increased mainline capacity

    Open season extended through August to finalize additional firm transportation agreements. FID expected prior to open season conclusion. Financial partner at Summit Permian Transmission is working to secure $50 million uncommitted accordion to support the project.

    Risks & headwinds

    3
    Piceance MVC shortfall payments expiryStarting Q4 FY26

    Approximately $4 million per quarter step-down in EBITDA

    Mitigation: Management is conservative on future Piceance development in long-term outlook, but notes potential for gas demand from data center build-out or Canadian LNG.

    Commodity price volatilityH2 FY26

    Potential for dramatic drop in commodity values could impact lower end of EBITDA guidance.

    Mitigation: Current activity levels are largely locked in for H2 FY26, and producers are profitable at lower crude prices (mid-$50s to low-$60s).

    M&A market frothyCurrent

    Assets being sold at high valuations.

    Mitigation: Company maintains disciplined approach, prioritizing organic growth and leverage reduction. Believes opportunistic bolt-on deals will emerge from private sponsors.

    What to watch in Q3 FY26

    5

    Double E compression expansion FID

    Next quarter (prior to open season conclusion)
    CurrentOpen season extended through August
    TargetFinal Investment Decision announced

    Why it matters

    Sanctioning this project is key to future growth and EBITDA contribution from the Permian segment.

    We expect to be in a position to make a final investment decision prior to the open season conclusion, and we will provide updates as they become available.

    Q&A highlights

    6

    How much incremental adjusted EBITDA could the 30 new Williston well connections contribute in 2027, and what is the broader growth opportunity in the basin?

    The 30 incremental wells are expected to contribute around $10 million in EBITDA in 2027. Management anticipates additional activity beyond these wells, trending towards the higher end of 10% volumetric growth. They also see upside from potential additional rigs if crude prices hold and opportunities to bolt on new customers in Divide and Northern Williams County.

    “So the 30 incremental wells we're talking about, Mark, I would view that as somewhere around $10 million of kind of EBITDA contribution just from that development.”

    asked by Mark La Reichman · answered by William Mault

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 Performance Highlights and Activity Acceleration

    Summit Midstream reported strong Q2 FY26 adjusted EBITDA of $60.7 million, a 12% increase from Q1, driven by growth in the Rockies and Mid-Con segments. The company turned in line 36 wells (16 in DJ, 20 in Mid-Con) during the quarter, with an additional 17 wells in the Williston post-quarter end. There are now 8 rigs running behind Rockies systems, up from 5 in the previous quarter, including 6 in the Williston, indicating accelerated customer activity.

    02

    Rockies Segment Momentum and Williston Growth

    The Rockies segment is experiencing significant commercial momentum, securing new contracts and supporting high-returning expansion projects. Two new gathering agreements in Divide County, Williston, provide visibility to approximately 30 new well connections, primarily weighted towards Q4 FY26, positioning for strong 2027 volumes. In the DJ Basin, a new 20-year extension of a gathering and processing agreement was signed with an anchor customer, and discussions are ongoing for dedicating new acreage.

    03

    Double E Pipeline Expansion Progress

    Double E pipeline executed additional firm transportation agreements, bringing total contracted volume to over 1.9 Bcf per day. The mainline compression expansion open season was extended through August to finalize more agreements. Management expects to make a final investment decision (FID) for the compression project prior to the open season conclusion, with the capital funded through the existing term loan and an uncommitted accordion.

    04

    Mid-Con Segment Performance and Outlook

    The Mid-Con segment saw strong performance from new wells in an emerging dry gas region within its Arkoma footprint. These wells are performing in line or slightly above expectations and holding production well, suggesting a potential major catalyst for the segment in 2027 and beyond. The segment's adjusted EBITDA increased by $2 million, supported by 17 new Barnett wells and 3 new Arkoma well connections.

    05

    Piceance Segment Challenges and Future

    The Piceance segment experienced a decrease in adjusted EBITDA due to a 5.7% decline in volume throughput, primarily from temporary shut-ins due to low regional gas prices and natural production declines. While previously shut-in production has resumed, the expiry of MVC shortfall payments at the end of Q3 FY26 is expected to result in a quarterly EBITDA step-down of approximately $4 million. The long-term outlook for the Piceance segment is conservative, not banking on new development in the forecast through 2030.

    06

    Capital Allocation and Shareholder Returns

    Summit's capital allocation priorities are debt reduction to achieve a 3.5x leverage target, followed by organic growth investments, share repurchases, and potential reinstatement of a common dividend. The company repurchased 35,000 shares for $1 million under its $35 million program. Management believes that achieving the leverage target and reinstating a dividend are more meaningful for long-term intrinsic value than aggressive buybacks, which are used opportunistically to support the stock.

    AI-generated summary of the company’s earnings call. Not investment advice.