Summit Midstream (SMC) Q4 2025 Earnings Transcript

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DATE

Tuesday, March 17, 2026 at 10 a.m. ET

CALL PARTICIPANTS

• President, Chief Executive Officer, and Chairman — J. Heath Deneke
• Chief Financial Officer — William J. Mault
• Chief Commercial Officer — Chris Tennant
• Managing Director, Investor Relations — Randall Burton

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TAKEAWAYS

• Adjusted EBITDA -- Summit Midstream Corp. (NYSE:SMC) reported $58.6 million for the quarter and $243 million for the year, with 2026 guidance of $225 million to $265 million based on customer feedback and development schedules.
• Distributable Cash Flow -- $33.7 million generated in the quarter.
• Free Cash Flow -- $17 million achieved.
• Capital Expenditures -- $19 million for the quarter and $89 million for the year; 2026 guidance is $85 million to $105 million, split across base business growth, maintenance, and Double E joint venture contributions.
• Segment Adjusted EBITDA -- Rockies: $27.8 million (down $1.2 million QOQ); Permian: $8.7 million (up $0.1 million QOQ); Piceance: $10 million (down $2.5 million QOQ); Mid-Con: $21.5 million (down $2.1 million QOQ).
• Well Connections -- 33 new DJ Basin wells connected during the quarter; six Arkoma wells connected, no new Barnett connects. Outlook for 2026 is 116–126 total company well connections, 90–100 in Rockies (even DJ/Williston split), 26 in Mid-Con (nine Arkoma, 17 Barnett, all Barnett wells in DUC inventory).
• Drilling Activity -- Seven rigs running companywide: six Rockies (four Williston, two DJ), one Mid-Con; 90 DUCs across all segments supporting 2026 guidance.
• Double E Pipeline Commercial Progress -- Two new 11+ year firm transportation agreements totaling 440 million cubic feet per day plus a previously announced 200 million cubic feet per day agreement, securing over 500 million cubic feet per day of long-term, take-or-pay volumes in the past six months.
• Double E Pipeline Capacity Utilization and Expansion -- Mainline now fully subscribed; binding open season launched to support mainline compression project targeting a 50% capacity increase to about 800 million cubic feet per day.
• Double E Pipeline EBITDA Outlook -- Permian segment adjusted EBITDA projected to grow from $34 million in 2025 to $60 million by 2029 based on current contracts, with $90 million or more possible by 2030 if expansion is commercialized.
• Leverage and Liquidity -- Year-end net debt of $930 million (pro forma $890 million), leverage at 3.9x with $387 million of available borrowing capacity.
• Double E Refinancing and Distribution -- Closed $440 million term loan facility to repay Double E credit facility and subsidiary preferred equity, with $85 million distribution to Summit Midstream Corp.; $45 million of accrued preferred dividends and $40 million ABL paydown planned from these proceeds.
• Piceance Minimum Volume Commitment (MVC) Payments -- Expected to decline from $17 million in 2025 to $13 million in 2026, with all MVC-related shortfall payments fully rolling off in 2027.
• New Rockies Commercial Agreements -- Signed 10-year crude gathering contract in Divide County, ND, covering more than 200,000 acres, expanding dedicated acreage on Polar and Divide systems.
• Return of Capital Program -- "With the planned repayment of the Series A preferred stock accrued and unpaid dividends, Summit Midstream Corp. will have satisfied all conditions to allow for a return of capital program to its common shareholders."

SUMMARY

Management emphasized visible organic growth targets, projecting over $100 million of adjusted EBITDA expansion by 2030 from the existing portfolio. The call highlighted that the Double E pipeline segment is driving both near- and long-term EBITDA gains via secured long-term contracts and an ongoing mainline expansion effort. Leadership disclosed technical completion of key credit facility refinancing, which unlocks immediate dividend policy options contingent on attainment of leverage targets. The new 10-year gathering agreement in Divide County increases Summit Midstream Corp.’s dedicated acreage and supports future Rockies segment development. Customer consolidation and temporary upstream delays were directly cited as factors moderating near-term well connect activity expectations, but acceleration remains possible with sustained higher commodity prices.

• "we are also not taking our eyes off the ball. Further strengthening the balance sheet by maintaining our financial discipline, continuing our focus on achieving our long-term 3.5x leverage target at Summit Midstream Corp, and enhancing shareholder returns with a return of capital program are all key components that we believe will maximize shareholder value as we execute the business plan."
• Management stated that capital expenditures in G&P segments are expected to remain in the $50 million to $70 million per year range, with Double E-related spend at $30 million to $35 million annually, both largely funded by existing or new term facilities.
• Chris Tennant said, "if we are successful in fully commercializing the planned expansion capacity, that EBITDA contribution could increase to approximately $90,000,000 or more by 2030."
• Commodity price sensitivities on percentage-of-proceeds contracts in the DJ Basin could produce $5 million to $10 million margin upside not included in current guidance.

INDUSTRY GLOSSARY

• DUC: Drilled but uncompleted well — a well that has been drilled but not yet put into production by completing final operational steps.
• MVC: Minimum Volume Commitment — a contractual obligation where shippers pay for a minimum volume of commodity transport, regardless of actual throughput.
• Bcf/d: Billion cubic feet per day — a standard industry unit measuring natural gas flow volumes.
• Take-or-pay agreement: A contract requiring the buyer to either take delivery of a specified commodity volume or pay even if they do not take delivery.

Full Conference Call Transcript

Randall Burton: Thanks, Operator, and good morning, everyone. If you do not already have a copy of our earnings release and presentation, please visit our website at www.summitmidstream.com, where you will find it on the homepage, Events and Presentations section, or Quarterly Results section. With me today to discuss our fourth quarter and full year 2025 financial and operating results are J. Heath Deneke, our President, Chief Executive Officer and Chairman; William J. Mault, our Chief Financial Officer; and Chris Tennant, our Chief Commercial Officer, along with other members of our senior management team. Before we start, I would 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. 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 Summit Midstream Corp.'s Annual Report on Form 10-K for the fiscal year ended 12/31/2025, which the company filed with the SEC on 03/16/2026, as well as our other SEC filings, for a listing of factors that could cause actual results to differ materially from expected results.

Please also note that on this call, we use the terms EBITDA, segment adjusted 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 will turn the call over to Heath.

J. Heath Deneke: Great. All right. Well, thanks, Randall, and good morning, everyone. I wanted to start this morning by introducing you to a new voice you will hear on the call today. Chris Tennant, who joined Summit Midstream Corp. in February as our Chief Commercial Officer, is joining us. Chris brings more than three decades of experience across the oil, natural gas, and NGL value chain, and he will be leading our commercial organization going forward. Chris has hit the ground running since joining the team and is already making a strong impact across the organization. I am excited to have him here and look forward to the contributions he will make as we continue executing on Summit Midstream Corp.'s growth strategy.

Turning now to slide three. We are very pleased with the progress Summit Midstream Corp. made during the quarter and in the first couple of months of 2026. From a financial perspective, Summit Midstream Corp. generated approximately $58,600,000 of adjusted EBITDA in the fourth quarter, along with $33,700,000 of distributable cash flow and $17,000,000 of free cash flow. Operationally, and despite the weakening of oil prices in 2025, we continue to see solid development activity across our systems, with seven rigs currently running behind our footprint and approximately 90 drilled but uncompleted wells. At this point, we have visibility to between 116 and 126 well connections in 2026, which is relatively modest compared to prior years.

However, we could see more activity accelerate in the second half of the year as producers look to take advantage of the recent run-up in oil prices. On the commercial front, we have made a tremendous amount of progress since our last update. Starting with the Double E pipeline, we recently signed two 11-plus-year transportation agreements totaling 440,000,000 cubic feet per day of firm capacity. In addition, we received an affirmative FID notice on the previously announced Producers Midstream 200,000,000 cubic feet per day agreement that we announced last year. In the aggregate, this represents more than 0.5 Bcf/d of new long-term take-or-pay agreements that we have executed over the past six months.

With these new agreements and the corresponding step-up in committed take-or-pay volumes over the next several years, our Permian segment adjusted EBITDA is expected to grow from $34,000,000 in 2025 to roughly $60,000,000 by 2029. With these new contracts, Double E's existing mainline capacity is now generally fully subscribed. However, as Chris will get into further in the call, we have launched a binding open season to solicit additional customer commitments to support a mainline compression project that would expand the pipeline's capacity by approximately 50% to roughly 800,000,000 cubic feet per day.

Additionally, we successfully refinanced the Double E capital structure with a new $440,000,000 term loan facility, which enables an $85,000,000 distribution back to Summit Midstream Corp. that we intend to use to repay $45,000,000 of accrued and unpaid dividends and reduce borrowings under the ABL. We will walk through the details of the transaction later in the call, but this transaction is a major win for the company as it increases our financial flexibility while allowing us to continue to execute on these high-return growth projects at Double E, including the mainline compression project, without straining Summit Midstream Corp.'s corporate balance sheet.

In addition, the repayment of the accrued dividends on the Series A preferred stock further simplifies Summit Midstream Corp.'s balance sheet and is also an important step toward enabling a sustainable return of capital program for our shareholders in the future. We are also very excited about the growth outlook in the Rockies segment as we continue to see development activity up in the Bakken shift towards our pipeline footprint in Williams and Divide Counties. As Chris will cover later in the call, our Polar and Divide System is uniquely positioned to benefit from that shift as evidenced by a new long-term crude gathering agreement that we executed in the fourth quarter in Divide County.

There is also a lot of positive momentum building up around our G&P system in the DJ Basin that we are excited about as well. I am sure we will be updating everyone on this as we move throughout the rest of 2026. And finally, at the end of the call, I wanted to walk investors through a snapshot of Summit Midstream Corp.'s strong and highly visible organic growth outlook that will be led by our Permian and Rockies segments. We are very excited about the commercial momentum we have around the business and the growing backlog of very attractive, high-returning organic growth projects that we believe position the company to achieve over $100,000,000 of adjusted EBITDA growth by 2030.

We believe we will generate a tremendous amount of shareholder value in the coming years as we execute on these growth plans, maintain our financial discipline, and continue our focus on improving the balance sheet. And with that, I will turn the call over to Bill to walk through our financial results and guidance on slide four.

William J. Mault: Thanks, Heath, and good morning, everyone. And before jumping to slide four, why do we not stay on page three. Summit Midstream Corp. reported fourth quarter adjusted EBITDA of $58,600,000, resulting in full year 2025 adjusted EBITDA of $243,000,000. Capital expenditures totaled $19,000,000 for the quarter and $89,000,000 for the full year. With respect to Summit Midstream Corp.'s balance sheet, we ended the year with net debt of approximately $930,000,000 and approximately $890,000,000 pro forma for the $40,000,000 repayment of the ABL associated with the $85,000,000 one-time distribution from the new Summit Permian Transmission term loan. This brings pro forma leverage to approximately 3.9x.

Our available borrowing capacity at the end of the fourth quarter totaled approximately $387,000,000, which included roughly $1,000,000 of undrawn letters of credit. Now on to the segments. The Rockies segment, which includes our DJ and Williston Basin systems, generated adjusted EBITDA of $27,800,000, a decrease of $1,200,000 relative to the third quarter, primarily driven by a decline in liquids volumes due to natural production declines, partially offset by modest growth in natural gas volumes. Liquids volumes averaged approximately 66,000 barrels per day during the quarter, a decrease of roughly 6,000 barrels per day relative to the third quarter, primarily due to natural production declines and no new well connections.

Natural gas volumes averaged approximately 160,000,000 cubic feet per day, an increase of roughly 2,000,000 cubic feet per day relative to the third quarter as wells connected early in the year continued to ramp toward peak production. During the quarter, we connected 33 new wells in the DJ Basin, which we expect to reach peak production in 2026. We currently have six rigs running behind the system, including four in the Williston and two in the DJ, and approximately 65 DUCs, which provides good visibility into expected development activity in 2026.

The Permian Basin segment, which includes our 70% interest in the Double E pipeline, reported adjusted EBITDA of $8,700,000, an increase of $100,000 relative to the third quarter, primarily due to higher volume throughput on the pipeline. Volume throughput on Double E averaged 861,000,000 cubic feet per day during the quarter. The Piceance segment reported adjusted EBITDA of $10,000,000, a decrease of $2,500,000 relative to the third quarter, primarily due to a modest decline in volume throughput and certain revenues recognized in the prior quarter. Finally, the Mid-Con segment reported adjusted EBITDA of $21,500,000, a decrease of approximately $2,100,000, primarily due to lower volume throughput from natural production declines across the Arkoma and Barnett systems.

During the quarter, we connected six wells in the Arkoma and no new wells in the Barnett. Subsequent to quarter-end, we connected an additional six wells in the Arkoma, and there is currently one rig running behind the Arkoma and approximately 20 DUCs. Let me now turn to page four and discuss our outlook for 2026. We are establishing 2026 adjusted EBITDA guidance of $225,000,000 to $265,000,000 and total capital expenditures of approximately $85,000,000 to $105,000,000, which includes $35,000,000 to $50,000,000 in base business growth capital, approximately $15,000,000 to $20,000,000 of maintenance capital, and approximately $35,000,000 of contributions to the Double E joint venture.

The $35,000,000 of contributions to the Double E JV are expected to be fully funded through the new term loan facility we closed yesterday. The majority of the base business growth capital will be directed toward pad connections in the Rockies and Mid-Con regions, where we continue to see steady development activity behind our systems. Similar to previous years, our guidance range incorporates real-time feedback we are receiving from our customers regarding their development plans, and we actively track rigs and completion crews across our systems to ensure well connects remain on schedule.

Just as a reminder of our risking methodology, if our producers hit their current turn-in-line dates and production targets, we would expect to be near the high end of our adjusted EBITDA guidance range. The midpoint of the range reflects modest risking applied to current drilling schedules, while the low end assumes additional delays in well connects expected later in the year, which could push some of that activity into 2027. Across our footprint today, we currently have seven rigs running and approximately 90 DUCs behind our system, which provides line of sight to the 116 to 126 well connections expected in 2026.

Approximately 80% of those expected well connections are crude oil or oil-weighted wells, with the remaining 20% natural gas-oriented. Commodity price assumptions for this range assume average crude oil prices in the mid-$60s and a natural gas price of approximately $3.40 per MMBtu. There has obviously been a lot of upside movement in crude oil prices over the past few weeks, which, if sustained throughout the year, could lead to acceleration of activity from our customers and improvement in product margin associated with certain percentage-of-proceeds contracts in the DJ Basin. In the Rockies, we are currently expecting 90 to 100 well connects in 2026, a fairly even split between the DJ and the Williston.

This level of activity, along with the 33 wells connected in the fourth quarter, will drive volume throughput growth in natural gas and liquids. Additionally, of the roughly 45 to 50 wells expected in the Williston, we will be gathering both crude and produced water for nine of those wells, for which we expect around a three-to-one produced water to crude oil ratio. Expected well connections in the DJ are a little bit lower in 2026 than the historical average. This is primarily due to the recently announced acquisition of Verdad Resources, a key customer behind the system, by Peoria Resources, a subsidiary of J.P. Morgan’s core.

Long term, we are excited about the acquisition and expect it to be a net positive to development, but as with all upstream consolidation, it has created some near-term delays in development. In the Mid-Con, we are expecting 26 wells to be connected to the system, including nine in the Arkoma and 17 in the Barnett. In the Arkoma, all but three of those wells are already connected and flowing, and in the Barnett, all 17 wells are currently in DUC inventory.

Our key customer in the Arkoma is evaluating additional development in late 2026 and early 2027, but we have not included that potential activity in our financial guidance until we get confirmation that they intend to drill and complete those wells. With the level of activity included in our financial guidance, we would expect volumes in Mid-Con to be relatively flat year over year. In the Piceance, we are expecting no new well connects in 2026, which will result in continued decline in volume and EBITDA relative to 2025. Additionally, shortfall payments are expected to decline by approximately $4,000,000, from $17,000,000 in 2025 to approximately $13,000,000 in 2026.

As a reminder, MVCs and shortfall payments completely roll off in 2026, so 2027 will not have MVC shortfall payments in the Piceance. Shifting to the Permian, year-over-year EBITDA growth is primarily driven by contractual step-ups in the long-term take-or-pay transportation agreements that fully ramped in November 2025. Additionally, we expect two of the recently signed firm transportation agreements on Double E to begin service in 2026, which will provide some incremental EBITDA. I will now turn the call over to Chris to discuss the commercial momentum we are seeing on Double E and expected growth in EBITDA associated with recently executed commercial contracts on slide five.

Chris Tennant: Thanks, Bill, and good morning, everyone. Over the past several months, we have made significant progress commercializing the remaining free-flow capacity on the pipeline. With the recently executed transportation agreements, including the previously announced Producers Midstream contract, Double E has secured over 500,000,000 cubic feet per day of new long-term take-or-pay commitments over the past six months. Upon full ramp of those agreements, Double E will have approximately 1.6 Bcf per day of firm take-or-pay contracts with a group of prominent, primarily investment-grade shippers. These agreements also expand Double E's downstream connectivity with new and highly valued delivery points into the Transwestern Central Pool, the Hugh Brinson pipeline, and a planned future connection with the Desert Southwest pipeline.

These connections significantly increase the end-market optionality available to our shippers and improve access to several important demand centers. Given the strong commercial momentum we have seen, the remaining free-flow capacity on the pipeline is now effectively full, which has accelerated our efforts to pursue a mainline compression expansion. As Heath mentioned earlier, we recently launched a binding open season to solicit additional shipper commitments to support that project, which could expand Double E's capacity by approximately 50% from 1.6 Bcf per day to roughly 2.4 Bcf per day. Based on our currently contracted volumes, we expect the Permian segment adjusted EBITDA to reach approximately $60,000,000 by 2029.

Importantly, if we are successful in fully commercializing the planned expansion capacity, that EBITDA contribution could increase to approximately $90,000,000 or more by 2030. Stepping back for a moment, we continue to see strong underlying fundamentals across the Delaware Basin. Producers are continuing to improve drilling efficiencies and extend lateral lengths, while processing capacity across West Texas and New Mexico continues to expand. As a result, demand for reliable residue gas takeaway remains strong, and we believe Double E is very well positioned as a critical transportation corridor connecting the Delaware Basin to multiple downstream markets. With that commercial update, I will turn it back to Bill to walk through the recent Double E refinancing on slide six.

William J. Mault: Thanks, Chris. Yesterday, Summit Permian Transmission entered into a new $440,000,000 senior secured term loan facility maturing in March 2031, including $340,000,000 funded at closing, a $50,000,000 committed delayed draw facility to support expansion projects, and a $50,000,000 accordion feature for future growth opportunities. Proceeds from the facility were used to repay the existing Permian Transmission credit facility and the subsidiary preferred equity at Summit Permian Transmission HoldCo, simplifying the capital structure and extending the maturity profile of the asset.

The transaction also enabled an $85,000,000 distribution back to Summit Midstream Corp. and, as Heath mentioned earlier, Summit Midstream Corp. intends to use those proceeds to repay approximately $45,000,000 of accrued preferred dividends and reduce borrowings on the ABL by approximately $40,000,000. Beyond improving our leverage profile and strengthening the balance sheet, the new facility also provides the capital needed to fund the expected growth projects on Double E, including the recently announced plant connections and the potential mainline compression expansion project Chris mentioned. Overall, this transaction simplifies the capital structure, funds high-growth projects, and positions Summit Midstream Corp. with greater financial flexibility moving forward.

With the planned repayment of the Series A preferred stock accrued and unpaid dividends, Summit Midstream Corp. will have satisfied all conditions to allow for a return of capital program to its common shareholders. And with that, I will turn the call back to Chris to discuss our recent commercial success in the Williston Basin on slide seven.

Chris Tennant: Thanks, Bill. In the fourth quarter, we executed a new 10-year crude oil gathering agreement with a producer in Divide County, North Dakota. The agreement includes a large area of dedications, spanning more than 200,000 acres along our existing Polar and Divide systems, and represents a meaningful expansion of dedicated acreage supporting our infrastructure in the region. This new customer is currently running one rig on their development program. The first pad associated with this agreement, consisting of four three-mile laterals, is expected to be turned in line in early 2026. More broadly, we continue to be encouraged by the innovation we are seeing from Williston Basin operators, particularly as they extend lateral lengths and improve drilling and completion efficiency.

These improvements are helping drive development activity in areas such as northern Williams County and southern Divide County, where Summit Midstream Corp.'s systems are well positioned. This agreement expands both our dedicated acreage position and long-term development inventory, and we believe it positions us well to capture additional development across our footprint. Importantly, we are actively pursuing several additional commercial opportunities in the region and remain very encouraged by the level of engagement we are seeing from the operators. With that overview of the Williston activity, I will turn the call back to Heath for some closing remarks.

J. Heath Deneke: Thanks, Chris. Let us turn to page eight. Here, we have attempted to give investors a better sense of Summit Midstream Corp.'s long-term growth trajectory and some key assumptions that support it. Starting with activity across our G&P segments, we are currently projecting total system well connects in 2026 to come in below the historical averages we have experienced in recent years. We believe this is primarily due to timing impacts brought on by some significant upstream consolidation that involved key customers in our Rockies segment, and a recap that is underway in the Mid-Con segment.

We also believe that the oil price dip below the $60 mark toward the end of last year and into 2026 caused a temporary pause in second-half activity, which is still reflected in our current guidance for the year. However, as we look forward, with input from our customers, we expect activity levels to climb back up to at least the historical average levels we have experienced over the past three years, if not greater, in a low-$60 oil and low-to-mid-$3 gas price environment.

Given growing demand for natural gas and a tighter outlook on oil supply, we think this is a conservative but reasonable baseline assumption that has a lot of further upside potential, particularly in the 2028 to 2030 time frame. We should also point out that the outlook includes roughly $18,000,000 of MVC-related shortfall payments in the Piceance segment that roll off from 2025 to the second half of 2026, and, conservatively, also assumes no new well connects through 2030. Moving over to the top right section of the slide. As we have discussed, we expect Permian segment adjusted EBITDA to reach approximately $60,000,000 by 2029 based on the new contracts we have already secured on Double E.

If Chris and team are able to fully commercialize the capacity associated with the Double E mainline compression expansion, the Permian segment adjusted EBITDA contribution could grow to over $90,000,000 by 2030. Combining the Double E growth outlook along with the Rockies and Mid-Con expected segment growth, we believe Summit Midstream Corp.'s existing portfolio is very well positioned to add more than $100,000,000 of organic EBITDA growth by 2030.

Touching on the capital slide on the lower left-hand section of page eight, we are forecasting total capital expenditures to trend above our normal $50,000,000 to $70,000,000 range as we execute on these high-returning capital investments in the Permian and Rockies segments in 2026 through 2028, but we expect capital spending to normalize and transition back to primarily maintenance and well-connect capital in the out years. Taken together, these drivers provide visibility toward very meaningful earnings growth and significant value creation for our shareholders. As I have stated earlier, we are really excited about the growth outlook for the business, but I want to stress that we are also not taking our eyes off the ball.

Further strengthening the balance sheet by maintaining our financial discipline, continuing our focus on achieving our long-term 3.5x leverage target at Summit Midstream Corp., and enhancing shareholder returns with a return of capital program are all key components that we believe will maximize shareholder value as we execute the business plan. With that, Operator, I think we are ready to open the call for questions.

Operator: Thank you. Please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Our first question comes from the line of Mark Reichman with Noble Capital Markets. Your line is now open.

Mark Reichman: Thank you. With new take-or-pay agreements announced, what level of additional commercial commitments is needed to move forward with the mainline compression expansion to 2.4 Bcf per day, and when would a final investment decision occur?

J. Heath Deneke: Yeah. Okay. Thanks, Mark. I am going to let Chris Tennant, our new Chief Commercial Officer, take this one.

Chris Tennant: Hey, Mark. Thank you for the question. This is a very attractive project for Double E Pipeline with an estimated sub-3x build multiple. We are very hopeful to close half this open capacity early in the open season. CapEx and rate depending, if we follow that cadence we could see an FID decision as early as this summer.

Mark Reichman: And then would you discuss the capital needs between, say, 2026 and 2029 to achieve the $100,000,000 of EBITDA growth by 2030?

J. Heath Deneke: Yeah. Mark, it is Heath. So, look, if you kind of set Double E aside, right? If you look at our historical capital, we have come out in the range between $50,000,000 and $70,000,000 between growth and maintenance. We think that is likely to be what we would spend on the G&P segment businesses throughout the five-year forecast period. So really the step-up is going to be oriented around Double E and, as Bill pointed out in the call earlier, that capital is largely going to be financed through the new term loan that we put in place at Double E.

So just think of it as $50,000,000 to $70,000,000 for our general G&P segments per year, and for the next few years we will probably see a similar amount of capital for Double E, roughly in that $35,000,000 a year mark for the next two to three years.

William J. Mault: Yeah, Mark. And you can kind of read into it. We sized the delayed draw and the accordion at about $100,000,000 of incremental potential borrowings under that new term loan. So that should give you kind of a general sense. If we are $30,000,000 to $35,000,000 a year for the next, call it, two to three years, we are kind of utilizing that $100,000,000.

Mark Reichman: I see. That is very helpful. And then, with respect to the 2026 guidance of 116 to 126 well connections, which basins and/or factors are most likely to drive upside or downside to that outlook, and how sensitive is it to changes in commodity prices?

William J. Mault: Yeah. No. Great question, Mark. I will start with a couple of stats, and then I will give you some color on upside/downside volatility. So today, we have got 90 DUCs, so that represents the lion's share of that range of well connects already that are drilled but not completed. We also have seven rigs running, six in the Rockies, one in the Mid-Con. Those rigs right now, think about them as basically starting to drill up for activity that I would characterize more as late second quarter/third quarter-type well connects. So between the DUCs and the rigs, we have a lot of confidence in that range.

In the Mid-Con, as an example, we are only expecting nine wells in the Arkoma as we sit here today. We only need three more to round out that nine. We have already had six that came online in the first quarter. And then the Barnett, as an example, all 17 wells are DUCs. Those are slated to come online in the June/July time frame and really just require a completion crew to get out there to finish them up. We spend a lot of time looking at that data when we establish our guidance range so that we have confidence in what we are putting out there.

Now, as it relates to your upside/downside to the outlook, I would tell you that this plan is based on a $65 strip WTI and about $3.40 on Henry Hub. Strip today is $85 on crude and $3.70 on Henry Hub. In markets like this, historically, we have seen that this price indicator really incentivizes our customers to either accelerate development or try to bring on new well connects. So from an activity perspective, we are in a period where there is more upside than down from a commodity price perspective. And then lastly, as it relates to commodity price, as you know, in the DJ we have percentage-of-proceeds contracts.

If you just run through current strip—so that $85 and $3.70—that is, call it, anywhere from $5,000,000 to $10,000,000 of increased product margin that is not reflected in our guidance range today. Obviously, there is a lot of uncertainty around what is going on in the Middle East. We thought it was prudent to keep our conservative assumption around strip. I think that represents some pretty material upside for us this year based on what we are seeing right now.

J. Heath Deneke: Yeah. Mark, just to add a little bit to that too. I think when you think of the range, if you accept the producer-driven forecast—which, in 2025, we saw some slippage to the right on that, which is why we came in lower—but when you think about 2026, I think, given the commodity price signals, most of the customers we talk to are trying to accelerate that activity. So, more likely that they will hit their timing. If they hit their timing, that is generally going to push us to the higher end of the range.

Then the other component, it is not like you can snap your fingers overnight and get new rigs and new completion crews under contract, but we do know that several folks that were planning wells already for the 2027 time frame are looking to see if they can bring those wells into the fourth quarter. That will not add as big of an impact for the year because you will be talking probably just a few—two to three months maybe—of contribution, but it will be a good sign as you get some momentum going into 2027 at a minimum.

Mark Reichman: And then just lastly, following the Double E refinancing and preferred dividend repayment, how are you thinking about the path and timeline to reach the 3.5x leverage target? When could the company realistically consider starting common shareholder dividends, and would asset sales or joint ventures be part of the deleveraging strategy?

J. Heath Deneke: Yeah. Well, look. Mark, what I would say is, if you just look at, for example, the high end of the range, right? If we hit the $265,000,000 mark, we think our leverage will be roughly 3.6x. So I do not think it is out of the question for us to consider a dividend policy over the next 12 months. It is highly going to depend on this year and where we end up from an overall leverage perspective. But as you pointed out, the arrears are paid off.

That is a major step to get out of the way, and I think as soon as we feel comfortable that we are getting to our target and are able to sustain that leverage target, that is when you are going to see us want to turn on a dividend. On your question around asset sales or JVs being part of the deleveraging strategy, I would say I do not think those things are going to drive our deleveraging strategy. I think we are going to see that leverage come down as we execute our base plan. But we are very opportunistic.

We have done quite a bit of M&A, both on the sell side and the buy side, and optimized the portfolio. So when we think about JVs and growth, I think those are more likely going to be the triggers from the M&A front.

Mark Reichman: Well, this has been very helpful. Thank you very much.

Chris Tennant: Thank you, Mark.

Operator: Our next question comes from the line of Greg Brody with Bank of America. Your line is now open.

Greg Brody: Hey, guys. Just thinking—congrats on the Permian contracts. I was looking—it is an opportunity that is exciting there. Just thinking about longer term, I know in the past you have talked about folding the Permian asset into the company. Obviously, this opportunity allows you to delay that. Just curious if you think about, in terms of allocating capital, do you think about contributing capital into the JV to potentially reduce leverage and maybe collapse the unrestricted sub and restricted group, or are you thinking about that?

William J. Mault: Yeah. Greg, great question. And, look, we have talked a lot about that over the years. A couple things. One, our high-yield bonds mature in 2029, so I think it is reasonable to expect that sometime in 2028, a year or so in advance of that maturity, we would look to refinance that bond. One thing that we were successful in getting under this new term loan is really a supportive call protection structure. So it is non-call one, then it steps down to 102 in year two, 101 in year three, and par thereafter.

So if we are executing a refi and you get some of this EBITDA growth on these commercial contracts, we can really clean up that term loan and refinance it alongside our bonds in 2028 without a bunch of leakage. That was an important deal point for us when we were negotiating this transaction. And then, Greg, as you know, when you are in a high-growth period with a decent amount of capital spend, that really takes 12 to 24 months for that EBITDA to show up. This type of financing is actually a pretty attractive solution just to maintain a delevering profile at Summit Midstream Corp. corporate while we are executing on this growth.

Greg Brody: Yeah. That makes sense. Maybe just to touch on the question on M&A. It was asked, but maybe just a little bit more color around the opportunity set today and the activity level we could see over the next year.

J. Heath Deneke: Yeah. So, Greg, I would say this. We focused on today's call about the $100,000,000 of organic growth really to set the baseline for what is in the plan today, where we think this company will go with the existing portfolio, and we are not dependent on M&A to achieve that. I think one of the key things that we think is important for Summit Midstream Corp. and our investors is that the business needs to continue to scale up. I think if we can scale up and keep the balance sheet in good shape, we think that is going to dramatically improve the investability of the company. There will be more institutional-type investors that would come into the stock.

It just creates more room, if you will, for investors to come in and invest in Summit Midstream Corp. So I think we do think, and we are actively working on, opportunities around our portfolio that we can either bolt on synergistic assets and continue to do what we have done in the past, which is look for assets that are high free cash flow-generating that we can buy at a really attractive valuation and fold into the portfolio.

William J. Mault: Yeah. And, Greg, I would tell you that, as you know, we have spent a lot of time getting this balance sheet to where it is today. As we evaluate M&A, we have been very disciplined, looking for things that are at a minimum leverage-neutral and value-accretive, and also have focused on high free cash flowing businesses, as Heath mentioned. I do not think you are going to see us really veer off that kind of methodology as we evaluate potential acquisitions.

Greg Brody: Thank you for the time, guys.

William J. Mault: Thanks, Greg.

Operator: Thank you. That concludes the question-and-answer session. Thank you all for your participation on today's call. This does conclude the conference. You may now disconnect.

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