Summit Midstream Partners, LP Reports First Quarter 2017 Financial Results

2017 Financial Guidance

SMLP is reaffirming its 2017 financial guidance with adjusted EBITDA expected to range from $295.0 million to $315.0 million and an annualized fourth quarter 2017 adjusted EBITDA run rate between $325.0 million and $345.0 million. 

SMLP expects to incur $100.0 million to $150.0 million of capex in 2017, including maintenance capex of $15.0 million to $20.0 million.  SMLP's 2017 capex guidance reflects the inclusion of our contributions to equity method investees.  SMLP expects full year distribution coverage will range from 1.15x to 1.25x. 

First Quarter 2017 Segment Results

The following table presents average daily throughput by reportable segment:

Utica Shale

The Utica Shale reportable segment includes our 40% ownership interest in Ohio Gathering, a natural gas gathering system in service and under development spanning the condensate, liquids-rich and dry gas windows of the Utica Shale in Harrison, Guernsey, Noble, Belmont and Monroe counties in southeastern Ohio.  Segment adjusted EBITDA for the Utica Shale includes our proportional share of adjusted EBITDA from Ohio Gathering, based on a one-month lag.  The Utica Shale reportable segment also includes Summit Utica, the natural gas gathering system we operate which is currently in service and under development in Belmont and Monroe counties in southeastern Ohio.  Summit Utica gathers and delivers dry natural gas to interconnections with a third-party intrastate pipeline which provides access to the Clarington Hub. 

Segment adjusted EBITDA for the first quarter of 2017 totaled $17.0 million, up 9.0% from $15.6 million for the prior-year period, primarily due to significantly higher volume throughput across Summit Utica, partially offset by lower volume throughput on Ohio Gathering and lower stabilization revenue at Ohio Condensate.  Volume throughput on the Ohio Gathering system, which is based on a one-month lag, averaged 769 MMcf/d, gross, in the first quarter of 2017 compared to 870 MMcf/d, gross, in the prior-year period and 848 MMcf/d, gross, in the fourth quarter of 2016.  Volume throughput on Ohio Gathering in the first quarter of 2017 was impacted by natural declines from existing wells on the system. 

Ohio Gathering commissioned the Larew Compressor Station in March 2017 which is expected to facilitate incremental dry gas production beginning in the second quarter of 2017, and generates an incremental compression fee on all dry gas volumes.  Currently, our customers are running five drilling rigs across the Ohio Gathering footprint, and we expect to see the volume benefit from this activity beginning in the second half of 2017. 

Volume throughput on the Summit Utica system averaged 275 MMcf/d in the first quarter of 2017 compared to 132 MMcf/d in the prior-year period and 211 MMcf/d in the fourth quarter of 2016.  Volume throughput for the first quarter of 2017 increased relative to the prior-year period due to our continued buildout of the Summit Utica gathering system and our connection of 23 new wells throughout 2016 and another four new wells during the first quarter of 2017.  We expect volumes on Summit Utica will continue to grow throughout the balance of the year as new wells located on new and existing pad sites are completed. 

In April 2017, we commissioned a new project to offload capacity constrained natural gas from a third-party gathering system adjacent to the Summit Utica system.  We expect this project to significantly increase volumes on Summit Utica beginning in the second quarter of 2017, albeit at a lower gathering rate, given that we are providing high-pressure gathering and compression services and not low-pressure wellhead gathering services.

Williston Basin

The Bison Midstream, Polar and Divide and Tioga Midstream systems provide our midstream services for the Williston Basin reportable segment.  Bison Midstream gathers associated natural gas production in Mountrail and Burke counties in North Dakota and delivers to third-party pipelines serving a third-party processing plant in Channahon, Illinois.  The Polar and Divide system gathers crude oil production in Williams and Divide counties in North Dakota and delivers to the COLT and Basin Transload rail terminals, as well as other third-party, intra- and interstate pipelines.  The Polar and Divide system also gathers and delivers produced water to various third-party disposal wells in the region.  Tioga Midstream is a crude oil, produced water and associated natural gas gathering system in Williams County, North Dakota.  All crude oil and natural gas gathered on the Tioga Midstream system is delivered to third-party pipelines, and all produced water is delivered to third-party disposal wells.

Segment adjusted EBITDA for the Williston Basin segment totaled $17.8 million for the first quarter of 2017 compared to $19.7 million for the prior-year period.  Compared to the prior-year period, first quarter 2017 volumes were negatively impacted due to a minimal number of new wells being commissioned behind our gathering systems during the first quarter of 2017.  In addition to lower volumes, a certain Williston customer has gathering rates that reset up or down annually, based on actual volumes delivered, relative to a pre-determined schedule.  The higher gathering rates that we enjoyed for this particular customer in the first quarter of 2016 were lowered in the second half of 2016 and impacted our sequential quarterly and year-over-year comparisons for this segment.  Without any new drilling activity in 2017, we would expect to see gathering rates for this particular customer to reset higher in 2018.  The Williston Basin segment benefitted from the recognition of $2.6 million in the first quarter of 2017 related to the settlement of a business interruption insurance claim associated with the temporary suspension of produced water gathering activities in 2015.    

Liquids volumes averaged 76.4 Mbbl/d in the first quarter of 2017, a decrease of 19.6% over the prior-year period and a decrease of 7.2% compared to the fourth quarter of 2016.  Lower liquids volumes were primarily related to natural declines from existing wells on the Polar and Divide system as no new wells were commissioned during the quarter.  Certain of our customers remain active across the Polar and Divide system, with three drilling rigs currently working and adding to an existing backlog of more than 40 drilled uncompleted wells ("DUCs") currently behind our Williston gathering systems.  We expect many of these DUCs to begin to be commissioned over the next several months following the start-up of new, third-party, long-haul takeaway pipeline.

Associated natural gas volumes averaged 17 MMcf/d in the first quarter of 2017, a decrease of 32% over the prior-year period and flat compared to the fourth quarter of 2016.  Volume declines were primarily related to natural declines from existing wells on the Bison Midstream and Tioga Midstream systems as only three new wells were connected during the quarter.  In addition, the severe winter weather experienced late in the fourth quarter of 2016 continued into the beginning of 2017 and negatively impacted volumes during the quarter relative to the prior-year period.     

Piceance/DJ Basins

The Grand River and the Niobrara G&P systems provide our midstream services for the Piceance/DJ Basins reportable segment.  These systems provide natural gas gathering and processing services for producers operating in the Piceance Basin located in western Colorado and eastern Utah and in the Denver-Julesburg ("DJ") Basin located in northeastern Colorado.  

Segment adjusted EBITDA totaled $29.0 million for the first quarter of 2017, an increase of 16.8% from $24.8 million for the prior-year period.  First quarter 2017 volume throughput averaged 615 MMcf/d, an increase of 7.5% from 572 MMcf/d in the prior-year period and flat with the fourth quarter of 2016.  Volume growth relative to the prior-year period was primarily due to ongoing drilling and completion activity from our single-basin focused, private equity-backed customers.  These customers commissioned dozens of new wells across our Piceance and DJ Basin gathering systems in 2016, and in the first quarter of 2017, these customers commissioned another 31 new wells.  This activity was partially offset by the impact of our anchor customer's continued suspension of drilling activities in the basin and the resulting natural declines from existing production.  This impact of our anchor customer's volume declines was partially offset by higher minimum volume commitment ("MVC") shortfall payment adjustments associated with our gas gathering agreements.  Certain of our customers remain active across our Piceance and DJ gathering systems with three drilling rigs currently working.

Barnett Shale

The DFW Midstream system provides our midstream services for the Barnett Shale reportable segment.  This system gathers and delivers low-pressure natural gas received from pad sites, primarily located in southeastern Tarrant County, Texas, to downstream intrastate pipelines serving various natural gas hubs in the region. 

Segment adjusted EBITDA for the Barnett Shale segment totaled $12.1 million for the first quarter of 2017, a decrease of 14.1% from the prior-year period.  Volume throughput of 286 MMcf/d in the first quarter of 2017 was down 16.1% compared to the prior-year period average of 341 MMcf/d and flat with the fourth quarter of 2016.  No new wells were commissioned behind the DFW gathering system in the first quarter of 2017, but drilling activity behind the system has recently increased with two rigs added to the field since the end of the first quarter of 2017 and workover rigs returning several dormant wells to service late in the first quarter of 2017.  This increased level of activity is largely due to the customer turnover we've experienced behind the system in the last several quarters, and we expect that it will lead to increasing volumes in the second half of 2017.

Marcellus Shale

The Mountaineer Midstream system provides our midstream services for the Marcellus Shale reportable segment. This system gathers high-pressure natural gas received from upstream pipeline interconnections with Antero Midstream Partners, LP and Crestwood Equity Partners LP.  Natural gas on the Mountaineer Midstream system is delivered to the Sherwood Processing Complex located in Doddridge County, West Virginia. 

Segment adjusted EBITDA for the Marcellus Shale segment totaled $5.6 million for the first quarter of 2017, an increase of 22.8% from $4.6 million for the prior-year period, primarily due to $1.2 million of right-of-way repair expenses incurred in the prior-year period.  Volume throughput for this segment averaged 434 MMcf/d in the first quarter of 2017, a decrease of 4.2% from 453 MMcf/d in the prior-year period, and an increase of 16.0% from the 374 MMcf/d in the fourth quarter of 2016.  Volume throughput increased relative to the fourth quarter of 2016 as a result of our customer commissioning new wells behind our system.  We expect our customer to continue to complete its inventory of DUCs behind the Mountaineer Midstream system throughout the balance of the year which we expect will drive volumes higher, particularly in the second half of 2017. 

MVC Shortfall Payments

SMLP billed its customers $7.0 million in the first quarter of 2017 related to MVCs.  For those customers that do not have credit banking mechanisms in their gathering agreements, or do not have the ability to use MVC shortfall payments as credits, the MVC shortfall payments are accounted for as gathering revenue in the period that they are earned.  For the first quarter of 2017, SMLP recognized $45.4 million of gathering revenue associated with MVC shortfall payments from certain customers in the Marcellus Shale, Piceance/DJ Basins, Williston Basin and Barnett Shale reportable segments.  Of this amount, $37.7 million was related to a certain Williston Basin customer with whom we entered into a gathering agreement amendment during the first quarter of 2017.  Pursuant to the amendment, the customer forfeited its MVC credit bank, which had been recorded on SMLP's balance sheet in prior periods as deferred revenue. 

MVC shortfall payment adjustments in the first quarter of 2017 totaled ($28.6) million and included ($38.5) million of deferred revenue related to MVC shortfall payments and $9.8 million related to MVC shortfall payment adjustments from certain customers in the Piceance/DJ Basins, Williston Basin and Barnett Shale reportable segments.

SMLP's MVC shortfall payment mechanisms contributed $16.8 million of adjusted EBITDA in the first quarter of 2017.

	Three months ended March 31, 2017
	MVC billings					Gathering revenue				Adjustments to MVC shortfall payments				Net impact to adjusted EBITDA
	(In thousands)
Net change in deferred revenue related to MVC shortfall payments:
Utica Shale	$	—				$	—			$	—			$	—
Williston Basin	—					37,693				(37,693) Werbung Mehr Nachrichten zur SUMMIT MIDSTREAM P.LP UTS Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 10:30 - PR Newswire Fidelity China Special Situations Plc - Monthly Factsheet 07:34 - Market Depth SolarBank: Solarboom 2024: 5 Gründe die für diese Aktie sprechen… 05:32 - PR Newswire Capital Gearing Trust Plc - Quarterly Report Solarboom 2024:    5 Gründe die für diese Aktie sprechen… weiterlesen» Anzeige wo-site-teaser-box-16746_site-teaser-box_2024-04-24_08%253A00%253A00_2024-04-25_09%253A00%253A59