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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20232024
or
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from        to        
Commission file number: 001-35666
Summit Midstream Partners, LP
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
910 Louisiana Street, Suite 4200
Houston, TX
(Address of principal executive offices)
45-5200503
(I.R.S. Employer
Identification No.)

77002
(Zip Code)
(832) 413-4770
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common UnitsSMLPNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x    Yes      o    No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
xYesoNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerx
Non-accelerated filerSmaller reporting companyx
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Acto
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes   x No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassAs of May 1, 2023April 30, 2024
Common Units10,354,65810,648,685 units


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TABLE OF CONTENTS

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COMMONLY USED OR DEFINED TERMS
2015 Blacktail Releasea 2015 rupture of our four-inch produced water gathering pipeline near Williston, North Dakota
2022 DJ Acquisitionsthe acquisition of Outrigger DJ Midstream LLC from Outrigger Energy II LLC, and each of Sterling Energy Investments LLC, Grasslands Energy Marketing LLC and Centennial Water Pipelines LLC from Sterling Investment Holdings LLC
2025 Senior Notes
Summit Holdings' and Finance Corp.’s 5.75% senior unsecured notes due April 2025

2026 Secured NotesSummit Holdings' and Finance Corp.’s 8.500% senior secured second lien notes due October 2026
2026 Secured Notes Indenture
Indenture, dated as of November 2, 2021, by and among Summit Holdings, Finance Corp., the guarantors party thereto and Regions Bank, as trustee

ABL Facility2026 Unsecured Notes
the asset-based lending credit facility governed by the ABL AgreementSummit Holdings’ and Finance Corp.’s 12.00% senior unsecured notes due October 2026

ABL Agreement
Loan and Security Agreement, dated as of November 2, 2021, among Summit Holdings, as borrower, SMLP and certain subsidiaries from time to time party thereto, as guarantors, Bank of America, N.A., as agent, ING Capital LLC, Royal Bank of Canada and Regions Bank, as co-syndication agents, and Bank of America, N.A., ING Capital LLC, RBC Capital Markets and Regions Capital Markets, as joint lead arrangers and joint bookrunners


ABL Facilitythe asset-based lending credit facility governed by the ABL Agreement
ASUAccounting Standards Update
Bison MidstreamBcf/dBison Midstream, LLCone billion cubic feet per day
Board of Directorsthe board of directors of our General Partner
Co-Issuers
Summit Holdings and Finance Corp., as co-issuers of the 2025 Senior Notes, the 2026
Unsecured Notes and the 2026 Secured Notes

condensate
a natural gas liquid with a low vapor pressure, mainly composed of propane, butane,
pentane and heavier hydrocarbon fractions

Co-IssuersSummit Holdings and Finance Corp.
DFW MidstreamDFW Midstream Services LLC
DJ BasinDenver-Julesburg Basin
Double EDouble E Pipeline, LLC
Double E Pipelinea 135 mile, 1.35 Bcf/d, FERC-regulated interstate natural gas transmission pipeline that commenced operations in November 2021 and provides transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha hub in Texas
Double E Projectthe development and construction of the Double E Pipeline
ECPEnergy Capital Partners II, LLC and its parallel and co-investment funds
EPAEnvironmental Protection Agency
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EPUearnings or loss per unit
FASBFinancial Accounting Standards Board
Finance Corp.Summit Midstream Finance Corp.
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frackingthe process of injecting liquid at high pressure into subterranean rocks, boreholes, etc. so as to force open existing fissures and extract oil or gas
frac-protect activitiesactivities that are designed to protect existing hydrocarbon wells from harm by shutting in existing hydrocarbon production until new well activities have concluded
GAAPaccounting principles generally accepted in the United States of America
General PartnerSummit Midstream GP, LLC
GPgeneral partner
Grand RiverGrand River Gathering, LLC
Guarantor Subsidiaries
Grand River and its subsidiaries, DFW Midstream, Summit Marketing, Summit Permian, Permian Finance, OpCo, Summit Utica, Meadowlark Midstream, Summit Permian II, LLC, Mountaineer Midstream, Epping Transmission Company, LLC, Red Rock Gathering, Polar Midstream, LLC and Summit Niobrara

Hubgeographic location of a storage facility and multiple pipeline interconnections
LIBORLondon Interbank Offered Rate
Mbbl/done thousand barrels per day
MD&AManagement's Discussion and Analysis of Financial Condition and Results of Operations
Meadowlark MidstreamMeadowlark Midstream Company, LLC
MMBTUmetric million British thermal units
MMcf/done million cubic feet per day
Mountaineer MidstreamMountaineer Midstream Company, LLC
MVCminimum volume commitment
NGLs
natural gas liquids; the combination of ethane, propane, normal butane, iso-butane and natural gasolines that when removed from unprocessed natural gas streams become liquid under various levels of higher pressure and lower temperature

NYSENew York Stock Exchange
OCCOhio Condensate Company, L.L.C.
OGCOhio Gathering Company, L.L.C.
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Ohio GatheringOhio Gathering Company, L.L.C. and Ohio Condensate Company, L.L.C.
OpCoSummit Midstream OpCo, LP
playa proven geological formation that contains commercial amounts of hydrocarbons
Permian FinanceSummit Midstream Permian Finance, LLC
Permian HoldcoSummit Permian Transmission Holdco, LLC
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Permian Term Loan Facility
the term loan governed by the Credit Agreement, dated as of March 8, 2021, among Summit Permian Transmission, LLC, as borrower, MUFG Bank Ltd., as administrative agent, Mizuho Bank (USA), as collateral agent, ING Capital LLC, Mizuho Bank, Ltd. and MUFG Union Bank, N.A., as L/C issuers, coordinating lead arrangers and joint bookrunners, and the lenders from time to time party thereto

Permian Transmission Credit Facilities
the credit facilities governed by the Credit Agreement, dated as of March 8, 2021, among Summit Permian Transmission, LLC, as borrower, MUFG Bank Ltd., as administrative agent, Mizuho Bank (USA), as collateral agent, ING Capital LLC, Mizuho Bank, Ltd. and MUFG Union Bank, N.A., as L/C issuers, coordinating lead arrangers and joint bookrunners, and the lenders from time to time party thereto

produced water
   water from underground geologic formations that is a by-product of natural gas and crude oil production

Red Rock GatheringRed Rock Gathering Company, LLC
Revolving Credit Facility
   the Third Amended and Restated Credit Agreement dated as of May 26, 2017, as amended by the First Amendment to Third Amended and Restated Credit Agreement dated as of September 22, 2017, the Second Amendment to Third Amended and Restated Credit Agreement dated as of June 26, 2019, the Third Amendment to Third Amended and Restated Credit Agreement dated as of December 24, 2019 and the Fourth Amendment to Third Amended and Restated Credit Agreement dated as of December 18, 2020

SECSecurities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
segment adjusted EBITDA
   total revenues less total costs and expenses; plus (i) other income excluding interest income, (ii) our proportional adjusted EBITDA for equity method investees, (iii)depreciation and amortization, (iv) adjustments related to MVC shortfall payments, (v) adjustments related to capital reimbursement activity, (vi) unit-based and noncash compensation, (vii) impairments and (viii) other noncash expenses or losses, less other noncash income or gains

Senior NotesThe 2025 Senior Notes and the 2026 Secured Notes, collectively
Series A Preferred Units
Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units issued
by the Partnership

shortfall payment
   the payment received from a counterparty when its volume throughput does not meet its MVC for the applicable period

SMLPSummit Midstream Partners, LP
SMLP LTIPSMLP Long-Term Incentive Plan
SMP HoldingsSummit Midstream Partners Holdings, LLC, also known as SMPH
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SMPH Term LoanSOFR
   the Term Loan Agreement, dated as of March 21, 2017, among SMP Holdings, as borrower, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral AgentSecured Overnight Financing Rate

Subsidiary Series A Preferred UnitsSeries A Fixed Rate Cumulative Redeemable Preferred Units issued by Permian Holdco
Summit HoldingsSummit Midstream Holdings, LLC
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Summit InvestmentsSummit Midstream Partners, LLC
Summit MarketingSummit Midstream Marketing, LLC
Summit NiobraraSummit Midstream Niobrara, LLC
Summit PermianSummit Midstream Permian, LLC
Summit Permian IISummit Midstream Permian II, LLC
Summit Permian TransmissionSummit Permian Transmission, LLC
Summit UticaSummit Midstream Utica, LLC
the PartnershipSummit Midstream Partners, LP and its subsidiaries
the Partnership Agreement
   the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership dated May 28, 2020, as amended

throughput volume
   the volume of natural gas, crude oil or produced water gathered, transported or passing through a pipeline, plant or other facility during a particular period; also referred to as volume throughput

unconventional resource basin
   a basin where natural gas or crude oil production is developed from unconventional sources that require hydraulic fracturing as part of the completion process, for instance, natural gas produced from shale formations and coalbeds; also referred to as an unconventional resource play

wellhead
   the equipment at the surface of a well, used to control the well's pressure; also, the point at which the hydrocarbons and water exit the ground


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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.

SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
2023
December 31,
2022
(In thousands, except unit amounts)
March 31,
2024
March 31,
2024
December 31,
2023
(In thousands, except unit amounts)(In thousands, except unit amounts)
ASSETSASSETS
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalentsCash and cash equivalents$22,631 $11,808 
Restricted cashRestricted cash652 1,723 
Accounts receivableAccounts receivable62,888 75,287 
Other current assetsOther current assets8,033 8,724 
Total current assetsTotal current assets94,204 97,542 
Property, plant and equipment, netProperty, plant and equipment, net1,712,494 1,718,754 
Intangible assets, netIntangible assets, net193,786 198,718 
Investment in equity method investeesInvestment in equity method investees504,683 506,677 
Other noncurrent assetsOther noncurrent assets40,268 38,273 
TOTAL ASSETSTOTAL ASSETS$2,545,435 $2,559,964 
LIABILITIES AND CAPITALLIABILITIES AND CAPITAL
LIABILITIES AND CAPITAL
LIABILITIES AND CAPITAL
Trade accounts payable
Trade accounts payable
Trade accounts payableTrade accounts payable$21,978 $14,052 
Accrued expensesAccrued expenses23,548 20,601 
Deferred revenueDeferred revenue8,788 9,054 
Ad valorem taxes payableAd valorem taxes payable3,256 10,245 
Accrued compensation and employee benefitsAccrued compensation and employee benefits2,915 16,319 
Accrued interestAccrued interest39,317 17,355 
Accrued environmental remediationAccrued environmental remediation1,342 1,365 
Accrued settlement payableAccrued settlement payable6,667 6,667 
Current portion of long-term debtCurrent portion of long-term debt11,782 10,507 
Other current liabilitiesOther current liabilities12,460 11,724 
Other current liabilities
Other current liabilities
Total current liabilitiesTotal current liabilities132,053 117,889 
Long-term debt, net of issuance costsLong-term debt, net of issuance costs1,465,555 1,479,855 
Noncurrent deferred revenueNoncurrent deferred revenue36,878 37,694 
Noncurrent accrued environmental remediationNoncurrent accrued environmental remediation2,074 2,340 
Other noncurrent liabilitiesOther noncurrent liabilities40,471 38,784 
TOTAL LIABILITIESTOTAL LIABILITIES1,677,031 1,676,562 
Commitments and contingencies (Note 14)
Commitments and contingencies (Note 14)
Commitments and contingencies (Note 14)
Mezzanine CapitalMezzanine Capital
Subsidiary Series A Preferred Units (93,039 units issued and outstanding at March 31, 2023 and December 31, 2022)118,702 118,584 
Mezzanine Capital
Mezzanine Capital
Subsidiary Series A Preferred Units (93,039 units issued and outstanding at March 31, 2024 and December 31, 2023)
Subsidiary Series A Preferred Units (93,039 units issued and outstanding at March 31, 2024 and December 31, 2023)
Subsidiary Series A Preferred Units (93,039 units issued and outstanding at March 31, 2024 and December 31, 2023)
Partners' CapitalPartners' Capital
Series A Preferred Units (65,508 units issued and outstanding at March 31, 2023 and December 31, 2022)87,966 85,327 
Common limited partner capital (10,354,658 and 10,182,763 units issued and outstanding at March 31, 2023 and December 31, 2022, respectively)661,736 679,491 
Partners' Capital
Partners' Capital
Series A Preferred Units (65,508 units issued and outstanding at March 31, 2024 and December 31, 2023)
Series A Preferred Units (65,508 units issued and outstanding at March 31, 2024 and December 31, 2023)
Series A Preferred Units (65,508 units issued and outstanding at March 31, 2024 and December 31, 2023)
Common limited partner capital (10,648,685 and 10,376,189 units issued and outstanding at March 31, 2024 and December 31, 2023, respectively)
Total partners' capitalTotal partners' capital749,702 764,818 
TOTAL LIABILITIES AND CAPITALTOTAL LIABILITIES AND CAPITAL$2,545,435 $2,559,964 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
20232022
(In thousands, except per-unit amounts)
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
202420242023
(In thousands, except per-unit amounts)(In thousands, except per-unit amounts)
Revenues:Revenues:
Gathering services and related fees
Gathering services and related fees
Gathering services and related feesGathering services and related fees$57,371 $64,020 
Natural gas, NGLs and condensate salesNatural gas, NGLs and condensate sales49,163 22,458 
Other revenuesOther revenues5,965 9,648 
Total revenuesTotal revenues112,499 96,126 
Costs and expenses:Costs and expenses:
Cost of natural gas and NGLsCost of natural gas and NGLs30,882 22,251 
Cost of natural gas and NGLs
Cost of natural gas and NGLs
Operation and maintenanceOperation and maintenance23,972 17,062 
General and administrativeGeneral and administrative9,987 12,960 
Depreciation and amortizationDepreciation and amortization29,824 30,445 
Transaction costsTransaction costs302 246 
Acquisition integration costsAcquisition integration costs1,502 — 
(Gain) loss on asset sales, net(68)
Gain on asset sales, net
Long-lived asset impairmentsLong-lived asset impairments— 14 
Total costs and expensesTotal costs and expenses96,401 82,981 
Other income, net56 — 
Other income (expense), net
Gain (loss) on interest rate swapsGain (loss) on interest rate swaps(1,273)7,028 
Gain on sale of businessGain on sale of business18 — 
Gain on sale of equity method investment
Gain on sale of equity method investment
Gain on sale of equity method investment
Interest expenseInterest expense(34,223)(24,163)
Loss before income taxes and equity method investment income(19,324)(3,990)
Income (loss) before income taxes and equity method investment income
Income (loss) before income taxes and equity method investment income
Income (loss) before income taxes and equity method investment income
Income tax benefit (expense)Income tax benefit (expense)252 (50)
Income from equity method investeesIncome from equity method investees4,909 4,035 
Net loss$(14,163)$(5)
Net income (loss)
Less: Net income attributable to Subsidiary Series A Preferred UnitsLess: Net income attributable to Subsidiary Series A Preferred Units(1,746)(5,713)
Net loss attributable to Summit Midstream Partners, LP$(15,909)$(5,718)
Net income (loss) attributable to Summit Midstream Partners, LP
Less: net income attributable to Series A Preferred UnitsLess: net income attributable to Series A Preferred Units(2,639)(2,220)
Add: deemed contribution from 2022 Preferred Exchange Offer— 20,974 
Net income (loss) attributable to common limited partnersNet income (loss) attributable to common limited partners$(18,548)$13,036 
Net loss per limited partner unit:
Net income (loss) attributable to common limited partners
Net income (loss) attributable to common limited partners
Net income (loss) per limited partner unit:
Common unit – basic
Common unit – basic
Common unit – basicCommon unit – basic$(1.82)$1.35 
Common unit – dilutedCommon unit – diluted$(1.82)$1.32 
Weighted-average limited partner units outstanding:Weighted-average limited partner units outstanding:
Weighted-average limited partner units outstanding:
Weighted-average limited partner units outstanding:
Common units – basic
Common units – basic
Common units – basicCommon units – basic10,213 9,670 
Common units – dilutedCommon units – diluted10,213 9,892 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
Partners' Capital
Series A Preferred UnitsCommon Limited Partners CapitalTotal
(In thousands)
Partners' capital, December 31, 2022$85,327 $679,491 $764,818 
Net income (loss)2,639 (18,548)(15,909)
Unit-based compensation— 1,929 1,929 
Tax withholdings and associated payments on vested SMLP LTIP awards— (1,136)(1,136)
Partners' capital, March 31, 2023$87,966 $661,736 $749,702 
Partners' Capital
Series A Preferred UnitsCommon Limited Partners CapitalTotal
(In thousands)
Partners' capital, December 31, 2023$96,893 $621,670 $718,563 
Net income3,220 125,937 129,157 
Unit-based compensation— 2,772 2,772 
Tax withholdings and associated payments on vested SMLP LTIP awards— (1,878)(1,878)
Partners' capital, March 31, 2024$100,113 $748,501 $848,614 


Partners' Capital
Series A Preferred UnitsCommon Limited Partners CapitalTotal
(In thousands)
Partners' capital, December 31, 2021$169,769 $734,594 $904,363 
Net income (loss)2,220 (7,938)(5,718)
Unit-based compensation— 1,690 1,690 
Tax withholdings and associated payments on vested SMLP LTIP awards— (562)(562)
Tax withholdings on 2022 Preferred Exchange Offer— (2,652)(2,652)
Effect of 2022 Preferred Exchange Offer, inclusive of a $20.9 million deemed contribution to common unit holders (Note 10)(92,587)92,587 — 
Partners' capital, March 31, 2022$79,402 $817,719 $897,121 
Partners' Capital
Series A Preferred UnitsCommon Limited Partners CapitalTotal
(In thousands)
Partners' capital, December 31, 2022$85,327 $679,491 $764,818 
Net income (loss)2,639 (18,548)(15,909)
Unit-based compensation— 1,929 1,929 
Tax withholdings and associated payments on vested SMLP LTIP awards— (1,136)(1,136)
Partners' capital, March 31, 2023$87,966 $661,736 $749,702 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
20232022
(In thousands)
Three Months Ended March 31,Three Months Ended March 31,
202420242023
(In thousands)(In thousands)
Cash flows from operating activities:Cash flows from operating activities:
Net loss$(14,163)$(5)
Net income (loss)
Net income (loss)
Net income (loss)
Adjustments to reconcile net loss to net cash provided by operating activities:Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortizationDepreciation and amortization30,059 30,679 
Noncash lease expenseNoncash lease expense784 279 
Amortization of debt issuance costsAmortization of debt issuance costs3,161 2,234 
Unit-based and noncash compensationUnit-based and noncash compensation1,929 1,690 
Income from equity method investeesIncome from equity method investees(4,909)(4,035)
Distributions from equity method investeesDistributions from equity method investees10,403 10,224 
(Gain) loss on asset sales, net(68)
Foreign currency gain(32)— 
Gain on asset sales, net
Foreign currency (gain) loss
Gain on sale of business
Gain on sale of business
Gain on sale of business
Gain on sale of equity method investment
Gain on sale of equity method investment
Gain on sale of equity method investment
Unrealized (gain) loss on interest rate swapsUnrealized (gain) loss on interest rate swaps2,417 (7,504)
Long-lived asset impairmentLong-lived asset impairment— 14 
Changes in operating assets and liabilities:Changes in operating assets and liabilities:
Accounts receivable
Accounts receivable
Accounts receivableAccounts receivable12,377 2,912 
Trade accounts payableTrade accounts payable6,033 4,467 
Accrued expensesAccrued expenses2,816 1,379 
Deferred revenue, netDeferred revenue, net(1,082)(1,369)
Ad valorem taxes payableAd valorem taxes payable(6,990)(5,723)
Accrued interestAccrued interest21,961 18,622 
Accrued environmental remediation, netAccrued environmental remediation, net(289)(904)
Other, netOther, net(14,712)(6,917)
Net cash provided by operating activitiesNet cash provided by operating activities49,695 46,046 
Cash flows from investing activities:Cash flows from investing activities:
Proceeds from sale of business
Proceeds from sale of business
Proceeds from sale of business
Proceeds from sale of equity method investment
Capital expendituresCapital expenditures(16,438)(8,703)
Proceeds from asset sale
Proceeds from asset sale
Proceeds from asset saleProceeds from asset sale— 1,850 
Investment in Double E equity method investeeInvestment in Double E equity method investee(3,500)(8,444)
Other, netOther, net(2,611)— 
Net cash used in investing activities(22,549)(15,297)
Other, net
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:Cash flows from financing activities:
Repayments on ABL Facility
Repayments on ABL Facility
Repayments on ABL Facility
Repayments on Permian Transmission Term LoanRepayments on Permian Transmission Term Loan(2,519)(1,095)
Repayments on ABL Facility(13,000)(34,000)
Distributions on Subsidiary Series A Preferred UnitsDistributions on Subsidiary Series A Preferred Units(1,628)— 
Distributions on Subsidiary Series A Preferred Units
Distributions on Subsidiary Series A Preferred Units
Debt issuance costs
Debt issuance costs
Debt issuance costsDebt issuance costs(97)— 
Other, net
Other, net
Other, netOther, net(150)(2,746)
Net cash used in financing activitiesNet cash used in financing activities(17,394)(37,841)
Net change in cash, cash equivalents and restricted cashNet change in cash, cash equivalents and restricted cash9,752 (7,092)
Cash, cash equivalents and restricted cash, beginning of periodCash, cash equivalents and restricted cash, beginning of period13,531 19,572 
Cash, cash equivalents and restricted cash, end of periodCash, cash equivalents and restricted cash, end of period$23,283 $12,480 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION, BUSINESS OPERATIONS AND PRESENTATION AND CONSOLIDATION
Organization. Summit Midstream Partners, LP (including its subsidiaries, collectively “SMLP” or the “Partnership”) is a Delaware limited partnership that was formed in May 2012 and began operations in October 2012. SMLP is a value-oriented limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in unconventional resource basins, primarily shale formations, in the continental United States. The Partnership’s business activities are primarily conducted through various operating subsidiaries, each of which is owned or controlled by its wholly owned subsidiary holding company, Summit Holdings, a Delaware limited liability company.
Business Operations. The Partnership provides natural gas gathering, compression, treating and processing services as well as crude oil and produced water gathering services pursuant to primarily long-term, fee-based agreements with its customers. In addition to these services, the Partnership also provides freshwater delivery services pursuant to short-term agreements with customers. The Partnership’s results are primarily driven by the volumes of natural gas that it gathers, compresses, treats and/or processes as well as by the volumes of crude oil and produced water that it gathers. OtherAs of March 31, 2024, other than the Partnership’s investmentsinvestment in Double E, and Ohio Gathering, all of its business activities are conducted through wholly owned operating subsidiaries.
Presentation and Consolidation. The Partnership prepares its condensed consolidated financial statements in accordance with GAAP as established by the FASB and pursuant to the rules and regulations of the SEC pertaining to interim financial information. The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented herein. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and related notes that are included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2022.2023.
The Partnership makes estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet dates, including fair value measurements, the reported amounts of revenues and expenses and the disclosure of commitments and contingencies. Although management believes these estimates are reasonable, actual results could differ from its estimates.
The unaudited condensed consolidated financial statements contained in this report include the assets, liabilities and results of operations of SMLP and its subsidiaries. All intercompany transactions among the consolidated entities have been eliminated in consolidation. Comprehensive income or loss is the same as net income or loss for all periods presented.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS APPLICABLE TO THE PARTNERSHIP
There have been no changes to the Partnership’s significant accounting policies since December 31, 2022.2023.
Accounting standards recently implemented.
ASU No. 2020-4 Reference Rate Reform (“ASU 2020-4”). ASU 2020-4 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform on financial reporting. The amendments in ASU 2020-4 are effective as of March 12, 2020 through December 31, 2022. The Partnership does not expect the provisions of ASU 2020-4 will have a material impact on its consolidated financial statements and disclosures.
New accounting standards not yet implemented.
ASU No. 2020-62020-06 Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815–40) (“ASU 2020-6”2020-06”). ASU 2020-62020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The provisions of ASU 2020-06 did not have a material impact on the Partnership’s condensed consolidated financial statements and disclosures.
New accounting standards not yet implemented. ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 enhances disclosures on reportable segments and provides additional detailed information about significant segment expenses. The guidance in ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Partnership continues to assess the impact of the new guidance, but does not expect the provisions of ASU 2020-62023-07 will have a material impact on its consolidated financial statements and disclosures.
3. ACQUISITIONS AND DIVESTITURES
Acquisition of Outrigger DJ. On December 1, 2022, the Partnership completed the acquisition of 100% of the equity interests of Outrigger DJ Midstream LLC (“Outrigger DJ”) from Outrigger Energy II LLC for cash consideration of $165.0 million, subject to customary working capital adjustments. The acquisition of Outrigger DJ constituted a business combination and was accounted for using the acquisition method of accounting. For tax purposes, the acquisition was accounted for as an acquisition of assets. The acquisition significantly increased the Partnership’s gas processing capacity and footprint in the DJ Basin and diversified its customer base.
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No material changes were made during three months3. DIVESTITURES
Summit Utica Sale. On March 22, 2024, the Partnership completed the disposition of Summit Utica, LLC (“Summit Utica”) to a subsidiary of MPLX LP (“MPLX”) for a cash sale price of $625.0 million, subject to customary post-closing adjustments (the “Utica Sale”). Summit Utica is the owner of (i) approximately 36% of the issued and outstanding equity interests in OGC, (ii) approximately 38% of the issued and outstanding equity interests in OCC, together with OGC, Ohio Gathering and (iii) midstream assets located in the Utica Shale. Ohio Gathering is the owner of a natural gas gathering system and condensate stabilization facility located in Belmont and Monroe counties in the Utica Shale in southeastern Ohio.
During the quarterly period ended March 31, 20232024, the Partnership recognized a total gain on the disposition of Summit Utica of $212.5 million based on total cash proceeds received of $625.0 million and net assets sold of $412.5 million. A portion of the cash proceeds was used to reduce amounts outstanding under the provisional purchase accounting measurements initially recorded in December 2022ABL Facility (see Note 8 - Debt, for the Outrigger DJ acquisition. The provisional measurementsadditional information) and are subject to change duringfinal working capital adjustments.
The $625.0 million sale price did not discretely list values for either OGC, OCC or the Partnership’s midstream assets located in the Utica Shale. Using fair value methods allowed by GAAP, the Partnership derived a preliminary fair value estimate for the disposed assets and then determined the appropriate gain recognition amount for each disposal to include in its unaudited condensed consolidated financial statements. The estimated fair values were determined utilizing a discounted cash flow technique based on estimated revenues, costs, capital expenditures and an appropriate discount rate. Given the unobservable nature of the inputs, the fair value measurement periodis deemed to use Level 3 inputs. These fair value estimates are preliminary, and subject to change and such changes could be material. The Partnership continues to assess theBased on these preliminary fair values, the Partnership recognized a gain on the disposition of the assets acquired and liabilities assumed. Certain data and assessments necessary to complete the purchase price allocation are still under evaluation, including, but not limited to, the final actualizationUtica midstream business of accrued liabilities and receivable balances and the valuation$86.2 million, which is recorded within gain on sale of property, plant and equipment and intangible assets. The Partnership will finalize the purchase price allocation during the twelve-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.
Acquisition of Sterling DJ. On December 1, 2022, the Partnership completed the acquisition of 100% of the equity interests in each of Sterling Energy Investments LLC, Grasslands Energy Marketing LLC and Centennial Water Pipelines LLC (collectively, “Sterling DJ”) from Sterling Investment Holdings LLC for cash consideration of $140.0 million, subject to customary working capital adjustments. The acquisition of Sterling DJ constituted a business combination and was accounted for using the acquisition method of accounting. For tax purposes, the acquisition was accounted for as an acquisition of assets. The acquisition significantly increased the Partnership’s gas processing capacity and footprint in the DJ Basin and diversified its customer base.
No material changes were made during three months ended March 31, 2023 to the provisional purchase accounting measurements initially recorded in December 2022 for the Sterling DJ acquisition. The provisional measurements are subject to change during the measurement period and such changes could be material. The Partnership continues to assess the fair values of the assets acquired and liabilities assumed. Certain data and assessments necessary to complete the purchase price allocation are still under evaluation, including, but not limited to, the final actualization of accrued liabilities and receivable balances and the valuation of property, plant and equipment and intangible assets. The Partnership will finalize the purchase price allocation during the twelve-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.
Divestiture of Lane G&P System. On June 30, 2022, the Partnership completed the sale of Summit Permian, which owns the Lane Gathering and Processing System (“Lane G&P System”), and Permian Finance to Longwood Gathering and Disposal Systems, LP (“Longwood”), a wholly owned subsidiary of Matador ͏Resources Company (“Matador”), for a cash sale price of $75.0 million, subject to customary working capital adjustments. In connection with the transaction, the Partnership released, to a subsidiary of Matador, and Matador agreed to assume, take or-pay firm capacity on the Double E Pipeline.
Divestiture of Bison Midstream. On September 19, 2022, the Partnership completed the sale of Bison Midstream, LLC (“Bison Midstream”), its gas gathering system in Burke and Mountrail Counties, North Dakota to a subsidiary of Steel Reef Infrastructure Corp. (“Steel Reef”), an integrated owner and operator of associated gas capture, gathering and processing assets in North Dakota and Saskatchewan, for cash consideration of $40.0 million.
Pro Forma Information (Unaudited)
The following unaudited supplemental pro forma condensed results of operations for the three months ended March 31, 2022 present consolidated information as though the acquisition of Sterling DJ and Outrigger DJ, and the divestiture of the Lane G&P System and Bison Midstream had occurred on January 1, 2021. The unaudited supplemental pro forma financial information was derived from the historical consolidated and combined statements of operations, and a gain of $126.3 million related to the Partnership, Sterling DJ, and Outrigger DJ and modified to include required conforming adjustments. These unaudited supplemental pro forma resultsdisposition of operations are provided for illustrative purposes only and do not purport to be indicativeOhio Gathering, which is recorded within gain on sale of the actual results that would have been achieved by the combined entities for the periods presented or that may be achievedequity method investment in the future. Future results may vary significantly from the results reflected in this unaudited pro forma financial information:
Three Months Ended
March 31,
2022
Revenues$122,494 
Net income$1,051 
condensed consolidated statements of operations.
4. REVENUE
The following table presents estimated revenue expected to be recognized during the remainder of 20232024 and over the remaining contract period related to performance obligations that are unsatisfied and are comprised of estimated minimum volume commitments.MVC shortfall payments.
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(In thousands)(In thousands)20232024202520262027Thereafter(In thousands)20242025202620272028Thereafter
Gathering services and related feesGathering services and related fees$57,576 $67,079 $46,803 $30,527 $9,038 $6,042 
Gathering services and related fees
Gathering services and related fees
Revenue by category. In the following tables, revenue is disaggregated by geographic area and major products and services. For more detailed information about reportable segments, see Note 15 – Segment Information.
Three Months Ended March 31, 2023
Gathering services and related feesNatural gas, NGLs and condensate salesOther revenuesTotal
(In thousands)
Reportable Segments:
Northeast$12,755 $— $— $12,755 
Rockies15,303 47,329 2,619 65,251 
Permian— — 893 893 
Piceance19,119 1,641 1,426 22,186 
Barnett10,194 193 1,064 11,451 
Total reportable segments57,371 49,163 6,002 112,536 
Corporate and other— — (37)(37)
Total$57,371 $49,163 $5,965 $112,499 
Three Months Ended March 31, 2022
Gathering services and related feesNatural gas, NGLs and condensate salesOther revenuesTotal
(In thousands)
Three Months Ended March 31, 2024Three Months Ended March 31, 2024
Gathering services and related feesGathering services and related feesNatural gas, NGLs and condensate salesOther revenuesTotal
(In thousands)(In thousands)
Reportable Segments:Reportable Segments:
Northeast
Northeast
NortheastNortheast$14,636 $— $— $14,636 
RockiesRockies17,789 13,659 5,157 36,605 
PermianPermian1,847 6,867 1,019 9,733 
PiceancePiceance20,071 1,895 1,275 23,241 
BarnettBarnett9,677 — 2,063 11,740 
Total reportable segmentsTotal reportable segments64,020 22,421 9,514 95,955 
Corporate and otherCorporate and other— 37 134 171 
TotalTotal$64,020 $22,458 $9,648 $96,126 
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Three Months Ended March 31, 2023
Gathering services and related feesNatural gas, NGLs and condensate salesOther revenuesTotal
(In thousands)
Reportable Segments:
Northeast$12,755 $— $— $12,755 
Rockies15,303 47,329 2,619 65,251 
Permian— — 893 893 
Piceance19,119 1,641 1,426 22,186 
Barnett10,194 193 1,064 11,451 
Total reportable segments57,371 49,163 6,002 112,536 
Corporate and other— — (37)(37)
Total$57,371 $49,163 $5,965 $112,499 
5. PROPERTY, PLANT AND EQUIPMENT
Details on the Partnership’s property, plant and equipment follow.
March 31, 2023December 31, 2022
(In thousands)
March 31, 2024March 31, 2024December 31, 2023
(In thousands)(In thousands)
Gathering and processing systems and related equipmentGathering and processing systems and related equipment$2,275,854 $2,262,330 
Construction in progressConstruction in progress64,148 59,036 
Land and line fillLand and line fill11,821 11,756 
OtherOther59,847 62,222 
TotalTotal2,411,670 2,395,344 
Less: accumulated depreciationLess: accumulated depreciation(699,176)(676,590)
Property, plant and equipment, netProperty, plant and equipment, net$1,712,494 $1,718,754 
Depreciation expense and capitalized interest for the Partnership follow.
Three Months Ended March 31,
20232022
(In thousands)
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
2024
2024
2024
(In thousands)
(In thousands)
(In thousands)
Depreciation expenseDepreciation expense$22,918 $24,048 
Capitalized interestCapitalized interest193 333 
Capitalized interest
Capitalized interest
6. EQUITY METHOD INVESTMENTS
TheAs of March 31, 2024, the Partnership has an equity method investmentsinvestment in Double E, and Ohio Gathering, the balancesbalance of which areis included in the Investment in equity method investees caption on the unaudited condensed consolidated balance sheets. On March 22, 2024, in connection with the Utica Sale, the Partnership sold its investment in Ohio Gathering and recognized an estimated $126.3 million gain, which is recorded within Gain on sale of equity method investment within the unaudited condensed consolidated statements of operations. See Note 3 - Divestitures for additional information.
Details of the Partnership’s equity method investments follow.
March 31, 2023December 31, 2022
(In thousands)
March 31, 2024March 31, 2024December 31, 2023
(In thousands)(In thousands)
Double EDouble E$282,162 $281,640 
Ohio GatheringOhio Gathering222,521 225,037 
TotalTotal$504,683 $506,677 
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7. DEFERRED REVENUE
Certain of the Partnership’s gathering and/or processing agreements provide for monthly or annual MVCs. The amount of the shortfall payment is based on the difference between the actual throughput volume shipped and/or processed for the applicable period and the MVC for the applicable period, multiplied by the applicable gathering or processing fee.
Many of the Partnership’s gas gathering agreements contain provisions that can reduce or delay the cash flows that it expects to receive from MVCs to the extent that a customer's actual throughput volumes are above or below its MVC for the applicable contracted measurement period.
The balances in deferred revenue as of March 31, 20232024 and December 31, 20222023 are primarily related to contributions in aid of construction which will be recognized as revenue over the life of the contract.
An update of current deferred revenue follows.
Total
(In thousands)
Current deferred revenue, December 31, 20222023$9,05410,196 
Add: additions9131,696 
Less: revenue recognized and other(1,179)(2,993)
Current deferred revenue, March 31, 20232024$8,7888,899 
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An update of noncurrent deferred revenue follows.
Total
(In thousands)
Noncurrent deferred revenue, December 31, 20222023$37,69430,085 
Add: additions563 
Less: reclassification to current deferred revenue and other(816)(1,887)
Noncurrent deferred revenue, March 31, 20232024$36,87828,761 

8. DEBT
Debt for the Partnership at March 31, 20232024 and December 31, 2022,2023, follows:
March 31, 2023December 31, 2022
(In thousands)
ABL Facility: Summit Holdings' asset based credit facility due May 1, 2026
$317,000 $330,000 
Permian Transmission Term Loan: Permian Transmission's variable rate senior
secured term loan due January 2028
152,833 155,353 
2025 Senior Notes: Summit Holdings' 5.75% senior unsecured notes due April 15, 2025
259,463 259,463 
2026 Secured Notes: Summit Holdings' and Finance Corp's 8.50% senior second lien notes due October 15, 2026
785,000 785,000 
Less: unamortized debt discount and debt issuance costs (36,959)(39,454)
Total debt1,477,337 1,490,362 
Less: current portion of Permian Transmission Credit Facility(11,782)(10,507)
Total long-term debt$1,465,555 $1,479,855 
March 31, 2024December 31, 2023
(In thousands)
ABL Facility: Summit Holdings' asset based credit facility due May 1, 2026
$— $313,000 
Permian Transmission Term Loan: Summit Permian Transmission's variable rate senior secured term loan due January 2028
141,052 144,846 
2026 Unsecured Notes: 12.00% senior unsecured notes due October 15, 2026
209,510 209,510 
2025 Senior Notes: 5.75% senior unsecured notes due April 15, 2025
49,783 49,783 
2026 Secured Notes: 8.50% senior second lien notes due October 15, 2026
785,000 785,000 
Less: unamortized debt discount and debt issuance costs (28,960)(31,449)
Total debt, net of unamortized debt discount and debt issuance costs1,156,385 1,470,690 
Less: current portion of Permian Transmission Term Loan and 2026 Secured Notes tender(29,098)(15,524)
Total long-term debt$1,127,287 $1,455,166 
ABL Facility. On November 2, 2021, the Partnership, the Partnership’s subsidiary, Summit Holdings, and the subsidiaries of Summit Holdings party thereto entered into a first-lien, senior secured credit facility, consisting of a $400.0 million asset-based revolving credit facility (the “ABL Facility”), subject to a borrowing base comprised of a percentage of eligible accounts receivable of Summit Holdings and its subsidiaries that guarantee the ABL Facility (collectively, the “ABL Facility Subsidiary Guarantors”) and a percentage of eligible above-ground fixed assets including eligible compression units, processing plants, compression stations and related equipment of Summit Holdings and the ABL Facility Subsidiary Guarantors. As of March 31, 2023,2024, the most recent borrowing base determination of eligible assets totaled $560.0$683.6 million, an amount greater than the $400.0 million of aggregate lending commitments.
The ABL Facility will mature on May 1, 2026; provided that (a) if the outstanding amount of the 2025 Senior Notes (or any permitted refinancing indebtedness in respect thereof that has a final maturity, scheduled amortization or any other scheduled
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repayment, mandatory prepayment, mandatory redemption or sinking fund obligation prior to the date that is 120 days after the Termination Date (as defined in the ABL Agreement)) on such date equals or exceeds $50.0 million, then the ABL Facility will mature on December 13, 2024. As of March 31, 2024, and (b) if both (i) any amountthe outstanding balance of the 2025 Senior Notes (or any permitted refinancing indebtedness in respect thereof that has a final maturity, scheduled amortization or any other scheduled repayment, mandatory prepayment, mandatory redemption or sinking fund obligation prior to the date that is 120 days after the Termination Date) is outstanding on such date and (ii) Liquidity (as defined in the ABL Agreement) is less than an amount equal to the sum of the then aggregate outstanding principal amount of the 2025 Senior Notes (or any permitted refinancing indebtedness in respect thereof that has a final maturity, scheduled amortization or any other scheduled repayment, mandatory prepayment, mandatory redemption or sinking fund obligation prior to the date that is 120 days after the Termination Date) plus the Threshold Amount (as defined in the ABL Agreement) on such date, then the ABL Facility will mature on January 14, 2025.was $49.8 million.
As of March 31, 2023,2024, the applicable margin under the adjusted LIBORSOFR borrowings was 3.50%3.25%, the interest rate was 8.42%8.69% and the available borrowing capacity of the ABL Facility totaled $78.7$383.7 million after giving effect to the issuance of $4.3 million in outstanding but undrawn irrevocable standby letters of credit.credit and $12.0 million of commitment reserves.
In connection with the closing of the Utica Sale, the ABL Facility was amended to, among other things, (i) permit the Utica Sale, (ii) amend the change of control provision to permit certain structural changes in connection with a conversion to a C-corporation and (iii) amend the Interest Coverage Ratio (as defined in the ABL Agreement) covenant such that the Interest Coverage Ratio as of the last day of any fiscal quarter must be less than (a) for any fiscal quarter ending on or before December 31, 2024, (x) if no loans under the Credit Agreement are outstanding and unrestricted cash exceeds $200.0 million, 1.50:1.00 and (y) if any loans under the Credit Agreement are outstanding or unrestricted cash is less than such threshold, 1.75:1.00 and (b) thereafter, 1.90:1.00.
The ABL Facility also requires that Summit Holdings not permit (i) the First Lien Net Leverage Ratio (as defined in the ABL Agreement) as of the last day of any fiscal quarter to be greater than 2.50:1.00, or (ii) the Interest Coverage Ratio (as defined in the ABL Agreement) as of the last day of any fiscal quarter to be less than 2.00:1.00. As of March 31, 2023,2024, the First Lien Net
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Leverage Ratio was 1.24:-0.26:1.00 and the Interest Coverage Ratio was 2.37:1.001.87:1.00. As of March 31, 2023,2024, the Partnership was in compliance with the financial covenants of the ABL Facility.
A portion of the proceeds from the Utica Sale were used to repay all amounts outstanding under the ABL Facility. As of March 31, 2024, there were no amounts outstanding under the ABL Facility.
Permian Transmission Credit Facility.Facilities. On March 8, 2021, the Partnership’s unrestricted subsidiary, Summit Permian Transmission, entered into a Credit Agreement which allows for $175.0 million of senior secured credit facilities (the “Permian Transmission Credit Facilities”), including a $160.0 million Term Loan Facility and a $15.0 million Working Capital Facility.working capital facility. The Permian Transmission Credit Facilities can be used to finance Summit Permian Transmission’s capital calls associated with its investment in Double E, debt service and other general corporate purposes. Unexpended proceeds from draws on the Permian Transmission Credit Facilities are classified as restricted cash on the accompanying unaudited condensed consolidated balance sheets.
As of March 31, 2023,2024, the applicable margin under adjusted LIBORterm SOFR borrowings was 2.375%2.475%, the average interest rate was 6.76%7.79% and the unused portion of the Permian Transmission Credit Facilities totaled $4.5 million, subject to a commitment fee of 0.7% after giving effect to the issuance of $10.5 million in outstanding but undrawn irrevocable standby letters of credit. Summit Permian Transmission, LLC entered into interest rate hedges with notional amounts representing approximately 90% of the Permian Term Loan facility at a fixed LIBORSOFR rate of 1.49%1.23%. As of March 31, 2023,2024, the Partnership was in compliance with the financial covenants of the Permian Transmission Credit Facilities.
Permian Transmission Term Loan. As described above,In accordance with the terms of the Permian Transmission Credit Facilities, in January 2022, the Permian Term Loan Facility was converted into a Term Loan (the “Permian Transmission Term Loan”). The Permian Transmission Term Loan is due January 2028. As of March 31, 2023,2024, the applicable margin under adjusted LIBORterm SOFR borrowings was 2.375%2.475% and the average interest rate was 6.76%7.79%. As of March 31, 2023,2024, the Partnership was in compliance with the financial covenants governing the Permian Transmission Term Loan.
In accordance with the terms of the Permian Transmission Term Loan, Summit Permian Transmission is required to make mandatory principal repayments. Below is a summary of the remaining mandatory principal repayments as of March 31, 2023:2024:
(In thousands)(In thousands)Total20232024202520262027Thereafter(In thousands)Total20242025202620272028
Amortizing principal repaymentsAmortizing principal repayments$152,833 $7,987 $15,524 $16,580 $16,967 $17,769 $78,006 
2026 Secured Notes. In 2021, the Co-Issuers issued $700.0 million of 8.500% Senior Secured Second Lien Notes due 2026 to eligible purchasers pursuant to Rule 144A and Regulation S of the Securities Act, at a price of 98.5% of their face value. Additionally, in November 2022, in connection with the 2022 DJ Acquisitions, the Co-Issuers issued an additional $85.0 million of 2026 Secured Notes at a price of 99.26% of their face value.The Co-Issuers pay interest on thevalue. The 2026 Secured Notes will pay interest semi-annually in cash in arrears on April 15 and October 15 of each year, commencing on April 15, 2022 and will beare jointly and severally guaranteed, on a senior second-priority secured basis (subject to permitted liens), by the Partnership and each restricted subsidiary of the Partnership (other than the Co-Issuers) that is an obligor under the ABL Agreement, or under the Co-Issuers’ 2025 Senior Notes on the issue date of the 2026 Secured Notes.
The 2026 Secured Notes are effectively subordinated to any of our or the guarantors’ current and future secured first lien indebtedness, including indebtedness incurred under the ABL Facility, to the extent of the value of the collateral securing such
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indebtedness, and our and the guarantors’ current and future debt that is secured by liens on assets other than the collateral, to the extent of the value of such assets. The 2026 Secured Notes are structurally subordinated to all indebtedness and other liabilities of our subsidiaries that do not guarantee the 2026 Secured Notes. The 2026 Secured Notes are effectively equal to our and the guarantors’ obligations under any future second lien indebtedness and effectively senior to all of our future junior lien indebtedness and existing and future unsecured indebtedness, including our outstanding senior unsecured notes, to the extent of the value of the collateral, and senior to any of our future subordinated indebtedness. The 2026 Secured Notes will mature on October 15, 2026.
BeforeAt any time prior to October 15, 2023, the Co-Issuers may redeemcould have on any one or more occasions redeemed up to 35% of the aggregate principal amount of the 2026 Secured Notes in whole or in part,(including any additional notes) issued under the 2026 Secured Notes Indenture at a redemption price equal to 100% of their108.5% of the principal amount of the 2026 Secured Notes, plus a make-whole premium, together with accrued and unpaid interest, if any, to, but not including the redemption date.date, in an amount not greater than the net cash proceeds of certain equity offerings by the Partnership, provided that: (i) at least 65% of the initial aggregate principal amount of the 2026 Secured Notes (including any additional notes) remains outstanding immediately after the occurrence of such redemption (excluding notes held by the Partnership and its subsidiaries); and (ii) the redemption occurs within 180 days of the date of the closing of each such equity offering by the Partnership. On and after October 15, 2023, the Co-Issuers may redeem all or part of the 2026 Secured Notes at redemption prices (expressed as percentages of principal amount) equal to: (a) 104.250% for the twelve-month period beginning October 15, 2023; (b) 102.125% for the twelve-month period beginning October 15, 2024; and (c) 100.000% for the twelve-month period beginning on October 15, 2025 and at any time thereafter, in each case plus accrued and unpaid interest, if any, to, but not including the redemption date. As of March 31, 2023,2024, the Partnership was in compliance with the financial covenants governing its 2026 Secured Notes.
Starting in the first quarter of 2023 with respect to the fiscal year ended 2022, and continuing annually through the fiscal year ended 2025, the Partnership is required under the terms of the 2026 Secured Notes Indenture to, if it has Excess Cash Flow (as defined in the 2026 Secured Notes Indenture), and subject to its ability to make such an offer under the ABL Facility, offer to purchase an amount of the 2026 Secured Notes, at 100% of the principal amount plus accrued and unpaid interest, equal to
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100% of the Excess Cash Flow generated in the prior year. Excess Cash Flow is generally defined as consolidated cash flow minus the sum of capital expenditures and cash payments in respect of permitted investments and permitted restricted payments.
Generally, if the Partnership does not offer to purchase designated annual amounts of its 2026 Secured Notes or reduce its first lien capacity under the 2026 Secured Notes Indenture per annum from 2023 through 2025, the interest rate on the 2026 Secured Notes is subject to certain rate escalations. Per the terms of the 2026 Secured Notes Indenture, the designated amounts are to offer to purchase $50.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2023, otherwise the interest rate shall automatically increase by 50 basis points per annum; $100.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2024, otherwise the interest rate shall automatically increase by 100 basis points per annum (minus any amount previously increased); and $200.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2025, otherwise the interest rate shall automatically increase by 200 basis points per annum (minus any amount previously increased).
Based on the amount of the Partnership’sour Excess Cash Flow for the fiscal year ended 2022,2023, on March 27, 2024, the Partnership wascommenced a cash tender offer to purchase up to $19.3 million aggregate principal amount of the outstanding 2026 Secured Notes at 100% of the principal amount plus accrued and unpaid interest. The cash flow offer expired on April 24, 2024 with $13.6 million tendered and validly accepted. Accordingly, $13.6 million of the 2026 Secured Notes is reflected as current debt in the March 31, 2024 unaudited condensed consolidated balance sheet.
As of April 1, 2024, the Partnership had not able to makemade offers to purchase in the designatedrequired amount for the fiscal year ended 2022; as a result,of $100.0 million and the interest rate on the 2026 Secured Notes increased an incremental 50 basis points to 9.00%9.50% effective with the first payment on April 1, 2023.such date.
To the extent the Partnership makes an offer to purchase, and the offer is not fully accepted by the holders of the 2026 Secured Notes, the Partnership may use any remaining amount not accepted for any purpose not prohibited by the 2026 Secured Notes Indenture or the ABL Facility.
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2026 Unsecured Notes. In November 2023, the Co-Issuers issued a total of $209.5 million aggregate principal amount of 2026 Unsecured Notes in exchange for $180.0 million aggregate principal amount of the 2025 Senior Notes and $29.5 million in cash. The cash raised was used to repurchase $29.7 million aggregate principal amount of the remaining 2025 Senior Notes that were not exchanged. The Partnership pays interest on the 2026 Unsecured Notes semi-annually in cash in arrears on April 15 and October 15 of each year. The 2026 Unsecured Notes are senior, unsecured obligations and rank equally in right of payment with all of the Partnership’s existing and future senior obligations. The 2026 Unsecured Notes are effectively subordinated in right of payment to all of the Partnership’s secured indebtedness, to the extent of the collateral securing such indebtedness.
The Co-Issuers have the right to redeem all or part of the 2026 Unsecured Notes at a redemption price of (a) on or before April 15, 2025, 101.000%, and (b) after April 15, 2025, 102.000%, plus accrued and unpaid interest, if any, to, but not including the redemption date.
As March 31, 2024, the Partnership was in compliance with the financial covenants of the 2026 Unsecured Notes. The 2026 Unsecured Notes will mature on October 15, 2026.
2025 Senior Notes. In February 2017, the Co-Issuers co-issued the 2025 Senior Notes. The Partnership pays interest on the 2025 Senior Notes semi-annually in cash in arrears on April 15 and October 15 of each year. The 2025 Senior Notes are senior, unsecured obligations and rank equally in right of payment with all of the Partnership’s existing and future senior obligations. The 2025 Senior Notes are effectively subordinated in right of payment to all of the Partnership’s secured indebtedness, to the extent of the collateral securing such indebtedness.
The Co-Issuers have the right to redeem all or part of the 2025 Senior Notes at a redemption price of 101.438% (with the redemption price declining ratably each year to 100.00% on April 15, 2023), plus accrued and unpaid interest, if any, to, but not including the redemption date.
As discussed above, in November, 2023, the Partnership exchanged $180.0 million aggregate principal amount of the 2025 Senior Notes and repurchased $29.7 million aggregate principal amount of the remaining 2025 Senior Notes that were not exchanged.
As of March 31, 2023,2024, the Partnership was in compliance with the financial covenants governing itsof the 2025 Senior Notes. The 2025 Senior Notes will mature on April 15, 2025.
9. FINANCIAL INSTRUMENTS
Fair Value. A summary of the estimated fair value of our debt financial instruments follows.
March 31, 2023December 31, 2022
Carrying
Value (1)
Estimated
fair value
(Level 2)
Carrying
Value (1)
Estimated
fair value
(Level 2)
(In thousands)
March 31, 2024March 31, 2024December 31, 2023
Carrying
Value (1)
Carrying
Value (1)
Estimated
fair value
(Level 2)
Carrying
Value (1)
Estimated
fair value
(Level 2)
(In thousands)(In thousands)
2025 Senior Notes2025 Senior Notes$259,463 $216,111 $259,463 $221,733 
2025 Senior Notes
2025 Senior Notes
2026 Secured Notes2026 Secured Notes785,000 751,965 785,000 750,983 
2026 Unsecured Notes
________
(1) Excludes applicable unamortized debt issuance costs and debt discounts.
The carrying values on the balance sheets of the ABL Facility and Permian Transmission Term Loan representsrepresent their fair value due to their floating interest rates. The fair values of the 2026 Unsecured Notes, 2026 Secured Notes and 2025 Senior Notes are based on an average of nonbinding broker quotes as of March 31, 20232024 and December 31, 2022.2023. The use of different market assumptions or valuation methodologies may have a material effect on their estimated fair value.value of the Senior Notes.
Deferred earn-out. As a result of the acquisition of Sterling DJ, the Partnership assumed aThe Partnership’s deferred earn-out liability which is remeasured each reporting period. As of March 31, 20232024 and December 31, 2022,2023, the estimated fair value of the deferred earn-out liability was $5.4$4.9 million and $5.2$5.1 million, respectively, and was estimated using a discounted cash flow technique based on estimated future fresh waterfreshwater deliveries and appropriate discount rates. Given the unobservable nature of the inputs, the fair value measurement of the deferred earn-out is deemed to use Level 3 inputs. The deferred earn-out sits within Centennial Water Pipelines LLC, one of the Partnership’s unrestricted subsidiaries.
Interest Rate Swaps. In connection with the Permian Transmission Term Loan, formerly the Permian Transmission Credit Facility, the Partnership entered into amortizing interest rate swap agreements. As of March 31, 20232024 and December 31, 2022,2023, the outstanding notional amounts of interest rate swaps were $137.6$126.9 million and $139.8$130.4 million, respectively. These interest rate swaps manage exposure to variability in expected cash flows attributable to interest rate risk. Interest rate swaps convert a
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portion of the Partnership’s variable rate debt to fixed rate debt. The Partnership chooses counterparties for its derivative instruments that it believes are creditworthy at the time the
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transactions are entered into, and the Partnership actively monitors the creditworthiness where applicable. However, there can be no assurance that a counterparty will be able to meet its obligations to the Partnership. The Partnership presents its derivative positions on a gross basis and does not net the asset and liability positions.
As of March 31, 20232024 and December 31, 2022,2023, the Partnership’s interest rate swap agreements had a fair value of $12.8$13.2 million and $15.2$11.9 million, respectively, and are recorded within other noncurrent assets within the unaudited condensed consolidated balance sheets. The derivative instruments’ fair value are determined using level 2 inputs from the fair value hierarchy. For the three months ended March 31, 2024 and 2023, the CompanyPartnership recorded a gain on interest rate swaps of $2.6 million and a loss on interest rate swaps of $1.3 million.million, respectively.
10. PARTNERS' CAPITAL AND MEZZANINE CAPITAL
Common Units. An update ofon the number of issued and outstanding common limited partner units is as follows for the period from December 31, 20222023 to March 31, 2023.2024.
Common Units
Units, December 31, 2022202310,182,76310,376,189 
Common units issued for SMLP LTIP, net171,895272,496 
Units, March 31, 2023202410,354,65810,648,685 
Series A Preferred Units. As of March 31, 2023,2024, the Partnership had 65,508 Series A Preferred Units outstanding and $24.1$36.3 million of accrued and unpaid distributions on its Series A Preferred Units.
Series A Preferred Unit Exchange Offers. In January 2022, the Partnership completed an offer to exchange its Series A Preferred Units for newly issued common units (the “2022 Preferred Exchange Offer”), whereby it issued 2,853,875 SMLP common units, net of units withheld for withholding taxes, in exchange for 77,939 Series A Preferred Units. As a result of the transaction, the Partnership recognized a deemed contribution of $20.9 million from the Series A Preferred Unit holders to the common unit holders.
Subsidiary Series A Preferred Units. The Partnership records its Subsidiary Series A Preferred Units at fair value upon issuance, net of issuance costs, and subsequently records an effective interest method accretion amount each reporting period to accrete the carrying value to a most probable redemption value that is based on a predetermined internal rate of return measure. If theThe Partnership electsalso elected to make payment-in-kind (“PIK”)PIK distributions to holders of itsthe Subsidiary Series A Preferred Units these PIK distributionsduring portions of the year ended December 31, 2022, which increase the liquidation preference on each Subsidiary Series A Preferred Unit. Ultimately, Net Income (Loss)income (loss) attributable to our common unitslimited partners includes adjustments for PIK distributions and redemption accretion.
As of March 31, 2023,2024, the Partnership had 93,039 Subsidiary Series A Preferred Units issued and outstanding.
If the Subsidiary Series A Preferred Units were redeemed on March 31, 2023,2024, the redemption amount would be $121.2$127.1 million when considering the applicable multiple of invested capital metric and make-whole amount provisions contained in the Subsidiary Series A Preferred Unit agreement.Amended and Restated Limited Liability Company Agreement of Permian Holdco.
The following table shows the change in ourthe Partnership’s Subsidiary Series A Preferred Unit balance from January 1, 20232024 to March 31, 2023,2024, net of $2.1$1.6 million and $2.2$1.7 million of unamortized issuance costs at March 31, 20232024 and December 31, 2022,2023, respectively:
(In thousands)
Balance at December 31, 20222023$118,584124,652 
Redemption accretion, net of issuance cost amortization1,7463,770 
Cash distribution (includes a $1.6 million distribution payable as of March 31, 2023)2024)(1,628)
Balance at March 31, 20232024$118,702126,794 
Cash Distribution Policy. The Partnership suspended its cash distributions to holders of its common units and Series A Preferred Units, commencing with respect to the quarter ended March 31, 2020. Upon the resumption of distributions, the Partnership Agreement requires that it distribute all available cash, subject to reserves established by its General Partner, within 45 days after the end of each quarter to unitholders of record on the applicable record date. The amount of distributions paid under this policy is subject to fluctuations based on the amount of cash the Partnership generates from its business and the decision to make any distribution is determined by the General Partner, taking into consideration the terms of the Partnership Agreement. There were no distributions paid during the three months ended March 31, 20232024 or during the twelve months ended December 31, 2022.2023.
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11. EARNINGS PER UNIT
The following table details the components of EPU.
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
202420242023
(In thousands, except per-unit amounts)(In thousands, except per-unit amounts)
Numerator for basic and diluted EPU:
Allocation of net loss among limited partner interests:
Allocation of net loss among limited partner interests:
Allocation of net loss among limited partner interests:
Net income (loss)
Net income (loss)
Net income (loss)
Less: Net income attributable to Subsidiary Series A Preferred Units
Net income (loss) attributable to Summit Midstream Partners, LP
Less: Net income attributable to Series A Preferred Units
Less: Net income attributable to Series A Preferred Units
Less: Net income attributable to Series A Preferred Units
Three Months Ended
March 31,
Net income (loss) attributable to common limited partners
20232022
Net income (loss) attributable to common limited partners
(In thousands, except per-unit amounts)
Numerator for basic and diluted EPU:
Allocation of net loss among limited partner interests:
Net loss$(14,163)$(5)
Less: Net income attributable to Subsidiary Series A Preferred Units(1,746)(5,713)
Net loss attributable to Summit Midstream Partners, LP$(15,909)$(5,718)
Less: Net income attributable to Series A Preferred Units$(2,639)$(2,220)
Add: Deemed capital contribution from 2022 Preferred Exchange Offer— 20,974 
Net loss attributable to common limited partners$(18,548)$13,036 
Net income (loss) attributable to common limited partners
Denominator for basic and diluted EPU:Denominator for basic and diluted EPU:
Denominator for basic and diluted EPU:
Denominator for basic and diluted EPU:
Weighted-average common units outstanding – basic
Weighted-average common units outstanding – basic
Weighted-average common units outstanding – basicWeighted-average common units outstanding – basic10,213 9,670 
Effect of nonvested phantom unitsEffect of nonvested phantom units— 222 
Weighted-average common units outstanding – dilutedWeighted-average common units outstanding – diluted10,213 9,892 
Net income per limited partner unit:
Net income (loss) per limited partner unit:
Net income (loss) per limited partner unit:
Net income (loss) per limited partner unit:
Common unit – basic
Common unit – basic
Common unit – basicCommon unit – basic$(1.82)$1.35 
Common unit – dilutedCommon unit – diluted$(1.82)$1.32 
Nonvested anti-dilutive phantom units excluded from the calculation of diluted EPUNonvested anti-dilutive phantom units excluded from the calculation of diluted EPU285 — 
Nonvested anti-dilutive phantom units excluded from the calculation of diluted EPU
Nonvested anti-dilutive phantom units excluded from the calculation of diluted EPU
12. SUPPLEMENTAL CASH FLOW INFORMATION
Three Months Ended March 31,
20232022
(In thousands)
Three Months Ended March 31,Three Months Ended March 31,
202420242023
(In thousands)(In thousands)
Supplemental cash flow information:Supplemental cash flow information:
Cash interest paid
Cash interest paid
Cash interest paidCash interest paid$9,420 $3,474 
Noncash investing and financing activities:Noncash investing and financing activities:
Noncash investing and financing activities:
Noncash investing and financing activities:
Capital expenditures in trade accounts payable (period-end accruals)Capital expenditures in trade accounts payable (period-end accruals)$8,735 $4,258 
Capital expenditures in trade accounts payable (period-end accruals)
Capital expenditures in trade accounts payable (period-end accruals)
Accretion of Subsidiary Series A Preferred Units, net of issuance cost amortizationAccretion of Subsidiary Series A Preferred Units, net of issuance cost amortization$1,746 $4,113 
2022 Preferred Exchange Offer$— $92,587 
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13. UNIT-BASED AND NONCASH COMPENSATION
SMLP Long-Term Incentive Plan. The Partnership’s Long-Term Incentive Plan (“SMLP LTIP”) provides for equity awards to eligible officers, employees, consultants and directors of the Partnership, thereby linking the recipients’ compensation directly to SMLP’s performance. Significant items to note: 
For the three-month period ended March 31, 2023,2024, the Partnership granted 212,893230,815 time-based phantom units and associated distribution equivalent rights to employees in connection with the Partnership’s annual incentive compensation award cycle. These awards had aThe grant date fair value of $16.00 per common unitthese awards totaled $3.7 million and the awards vest ratably over a 3-year period.
For the three-month period ended March 31, 2023,2024, the Partnership granted 110,478122,867 performance-based phantom units and associated distribution equivalent rights to certain members of management in connection with the
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Partnership’s annual incentive compensation award cycle. The grant date fair value of these awards total $2.2 million.totaled $2.4 million and the awards vest at the end of three years.
For the three-month period ended March 31, 2023,2024, the Partnership issued 38,10039,486 common units to the Partnership’s six independent directors in connection with their annual compensation plan. These awards had aThe grant date fair value of $16.00 per common unitthese awards totaled $0.6 million and became fully vested immediately.at the grant date.
As of March 31, 2023,2024, approximately 0.50.1 million common units remained available for future issuance under the SMLP LTIP, which includes the impact of 0.7 million granted but unvested phantom units.
14. COMMITMENTS AND CONTINGENCIES
Environmental Matters. Although the Partnership believes that it is in material compliance with applicable environmental regulations, the risk of environmental remediation costs and liabilities are inherent in pipeline ownership and operation. Furthermore, the Partnership can provide no assurances that significant environmental remediation costs and liabilities will not be incurred in the future. The Partnership is currently not aware of any material contingent liabilities that exist with respect to environmental matters, except as noted below.
As of March 31, 2023,2024, the Partnership has recognized (i) a current liability for remediation effort expenditures expected to be incurred within the next 12 months and (ii) a noncurrent liability for estimated remediation expenditures expected to be incurred subsequent to March 31, 2024.2025. Each of these amounts represent the Partnership’s best estimate for costs expected to be incurred. Neither of these amounts have been discounted to their present value.
An update of the Partnership’s undiscounted accrued environmental remediation is as follows and is primarily related to the 2015 Blacktail Release and other environmental remediation activities, as detailed below.
(In thousands)
Accrued environmental remediation, December 31, 20222023$3,7052,937 
Payments made(259)(226)
Changes in estimates(30)421 
Accrued environmental remediation, March 31, 20232024$3,4163,132 
In 2015, the Partnership learned of the rupture of a four-inch produced water gathering pipeline on the Meadowlark Midstream system near Williston, North Dakota (“2015 Blacktail Release”). On August 4, 2021, subsidiaries of the Partnership entered into the following agreements to resolve the U.S. federal and North Dakota state governments’ environmental claims with respect to the 2015 Blacktail Release: (i) a Consent Decree with the U.S. Department of Justice (“DOJ”), the U.S. Environmental Protection Agency (“EPA”), and the State of North Dakota (“Consent Decree”); (ii) a Plea Agreement with the United States (“Plea Agreement”); and (iii) a Consent Agreement with the North Dakota Industrial Commission (“Consent Agreement” together with the Consent Decree and Plea Agreement, the “Global Settlement”). As of March 31, 20232024 and December 31, 2022,2023, the accrued loss liability for the 2015 Blacktail Release was $28.3$21.7 million and are recorded within Other noncurrent liabilities and Accrued settlement payable within the unaudited condensed consolidated balance sheets.
Key terms of the Global Settlement included (i) payment of penalties and fines totaling $36.3 million, consisting of $1.25 million in natural resource damages payable to federal and state governments, a $25.0 million payable to the federal government over 5 years, and a $10.0 million payable to state governments over, for the federal and state civil amounts, six years and, for the federal criminal amounts, five years, with interest applied to unpaid amounts accruing at, for the federal and state civil amounts, a fixed rate of 3.25%, and, for the federal criminal amounts, a variable rate set by statute, and of which $6.7 million is expected to be paid within the next twelve months; (ii) continuation of remediation efforts at the site of the 2015 Blacktail Release; (iii) other injunctive relief including but not limited to control room management, environmental management system audit, training, and reporting; (iv) guilty pleas by Defendant subsidiary for (a) one charge of negligent
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discharge of a harmful quantity of oil and (b) one charge of knowing failure to immediately report a discharge of oil; and (v) organizational probation for a minimum period of three years from sentencing on December 6, 2021, including payment in full of certain components of the fines and penalty amounts. The agreements comprising the Global Settlement were subject to the approval of the U.S. District Court for the District of North Dakota (the “U.S. District Court”). The U.S. District Court entered an order making the civil components of the Global Settlement effective on September 28, 2021 and accepted the sentencing in the Plea Agreement on December 6, 2021, completing approval of the Global Settlement.
In conjunction with the criminal proceedings under the Plea Agreement, the U.S. District Court received two claims for restitution, including claims for diminution in property value and the cost of additional environmental testing. The prosecution notified the U.S District Court that the government declined to support the claims, citing “insufficient evidence to support the claims.” Defendant subsidiary of the Partnership has responded that restitution is not applicable in this matter because claimants did not provide any supporting evidence for their claims that showed any harm, and because the plea agreement in this matter does not permit restitution sought by the claimants. On August 4, 2022, the U.S. District Court denied the claims.
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Subsidiaries of the Partnership are also participating in two proceedings before the EPA as a result of the Plea Agreement becoming effective. Following the U.S. District Court’s entering judgment on Defendant subsidiary’s guilty plea to one count of negligent discharge of produced water in violation of the Clean Water Act, Defendant subsidiary was statutorily debarred by operation of law pursuant to 33 U.S.C. § 1368(a) to participate in federal awards performed at the “violating facility,” which EPA determined to be the Marmon subsystem of the produced water gathering system in North Dakota. The scope and effect of the debarment as defined do not materially affect our operations. Defendant has submitted a petition for reinstatement, which was denied by the EPA’s suspension and debarment office (“SDO”) on July 11, 2022. The SDO determined that the term of probation in the Plea Agreement was the appropriate period of time to demonstrate Defendant subsidiary’s change of corporate attitude, policies, practices, and procedures. The Partnership and certain subsidiaries have also received a show cause notice from the EPA requesting us to “show cause” why SDO should not issue a Notice of Proposed Debarment to the Defendant subsidiary and certain affiliates under 2 C.F.R. § 180.800(d), to which wethe Partnership has responded, and in which proceeding no further developments have responded.occurred.
Legal Proceedings. The Partnership is involved in various litigation and administrative proceedings arising in the ordinary course of business. In the opinion of management, any liabilities, that may result from thesewhich include insured claims, or those arising in the ordinary course of business would not individually or in the aggregate have a material adverse effect on the Partnership's financial position or results of operations.
15. SEGMENT INFORMATION
As of March 31, 2023,2024, the Partnership’s reportable segments are:
Rockies – Includes the Partnership’s wholly owned midstream assets located in the Williston Basin and the DJ Basin. In September 2022, the Partnership completed the sale of Bison Midstream and its gas gathering system in Burke and Mountrail Counties, North Dakota to a subsidiary of Steel Reef. Additionally, in December 2022 the Partnership completed the acquisitions of Sterling DJ and Outrigger DJ and their related midstream infrastructure. For additional information regarding these acquisitions and divestitures, see Note 3 - Acquisitions and Divestitures.
Permian – Includes the Partnership’s equity method investment in Double E and its wholly owned Lane G&P System, which was sold on June 30, 2022 to Matador. For additional information regarding the sale of the Lane G&P System, see Note 3 - Acquisitions and Divestitures.E.
Northeast Includes the Partnership’s wholly owned midstream assets located in the Utica and Marcellus shale playsplay and its wholly owned midstream assets located in the Utica shale play together with its equity method investment in Ohio Gathering that is focused on the Utica Shale. For additional information regarding the Utica Sale, see Note 3 - Divestitures regarding the disposition of Northeast assets.
Piceance – Includes the Partnership’s wholly owned midstream assets located in the Piceance Basin.
Barnett – Includes the Partnership’s wholly owned midstream assets located in the Barnett Shale.
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Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable; or (iii) have not been allocated to aour reportable segment for the purpose of evaluating their performance,segments, including certain general and administrative expense items, transaction costs, acquisition integration costs and transaction costs.interest expense.
Assets by reportable segment follow.
March 31, 2023December 31, 2022
(In thousands)
March 31, 2024March 31, 2024December 31, 2023
(In thousands)(In thousands)
Assets:Assets:
Rockies
Rockies
RockiesRockies$884,652 $886,629 
PermianPermian296,152 298,906 
NortheastNortheast591,215 591,091 
PiceancePiceance468,433 475,719 
BarnettBarnett292,280 295,473 
Total reportable segment assetsTotal reportable segment assets2,532,732 2,547,818 
Corporate and OtherCorporate and Other12,703 12,146 
Total assetsTotal assets$2,545,435 $2,559,964 
Segment adjusted EBITDA by reportable segment follows.
Three Months Ended March 31,
20232022
(In thousands)
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
202420242023
(In thousands)(In thousands)
Reportable segment adjusted EBITDAReportable segment adjusted EBITDA
Rockies
Rockies
RockiesRockies$23,130 $15,830 
PermianPermian5,073 4,149 
NortheastNortheast17,854 20,068 
PiceancePiceance13,983 15,768 
BarnettBarnett7,027 9,286 
Total of reportable segments' measures of profitTotal of reportable segments' measures of profit$67,067 $65,101 
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A reconciliation of income or loss before income taxes and income from equity method investees to total of reportable segments' measures of profit follows.
Three Months Ended March 31,
20232022
(In thousands)
Reconciliation of income (loss) before income taxes and income from equity method
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
202420242023
(In thousands)(In thousands)
Reconciliation of loss before income taxes and income from equity method
investees to total of reportable segments' measures of profit: investees to total of reportable segments' measures of profit:
Loss before income taxes and income from equity method investees$(19,324)$(3,990)
investees to total of reportable segments' measures of profit:
investees to total of reportable segments' measures of profit:
Income (loss) before income taxes and income from equity method investees
Income (loss) before income taxes and income from equity method investees
Income (loss) before income taxes and income from equity method investees
Add:Add:
Corporate and Other expense
Corporate and Other expense
Corporate and Other expenseCorporate and Other expense9,796 3,818 
Interest expenseInterest expense34,223 24,163 
Depreciation and amortization (1)
Depreciation and amortization (1)
30,059 30,679 
Proportional adjusted EBITDA for equity method investeesProportional adjusted EBITDA for equity method investees11,638 10,452 
Adjustments related to capital reimbursement activityAdjustments related to capital reimbursement activity(1,186)(1,728)
Unit-based and noncash compensationUnit-based and noncash compensation1,929 1,690 
(Gain) loss on asset sales, net(68)
Gain on asset sales, net
Gain on sale of business
Gain on sale of equity method investment
Long-lived asset impairmentLong-lived asset impairment— 14 
Total of reportable segments' measures of profitTotal of reportable segments' measures of profit$67,067 $65,101 
________
(1) Includes the amortization expense associated with our favorable gas gathering contracts as reported in other revenues.
(2) The Partnership records financial results of its investment in Ohio Gathering on a one-month lag and is based on the financial information available to us during the reporting period. With the divestiture of Ohio Gathering in March 2024, proportional adjusted EBITDA includes financial results from December 1, 2023 through March 22, 2024.
16. SUBSEQUENT EVENTS
Mountaineer Midstream. On May 1, 2024, the Partnership completed the sale of its Mountaineer Midstream system, to Antero Midstream LLC for a cash sale price of $70 million, subject to customary post-closing adjustments (the “Mountaineer Transaction”). Mountaineer Midstream is the owner of midstream assets located in the Marcellus Shale. Prior to closing the Mountaineer Transaction, the Partnership sold related compression assets located in the Marcellus Shale to a compression service provider for approximately $5 million in April 2024.
During the three months ended March 31, 2024, the Partnership recognized an impairment of $68 million, in connection with the Mountaineer Transaction and the sale of compression assets, based on total cash proceeds of approximately $75 million and net assets of approximately $143 million.
Cash Tender. As discussed in Note 8 - Debt, on March 27, 2024, the Partnership commenced a cash tender offer to purchase up to $19.3 million aggregate principal amount of the outstanding 2026 Secured Notes at 100% of the principal amount plus accrued and unpaid interest. The cash flow offer expired on April 24, 2024 with $13.6 million tendered and validly accepted. Accordingly, $13.6 million of the 2026 Secured Notes is reflected as current debt in the March 31, 2024 unaudited condensed consolidated balance sheet.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to inform the reader about matters affecting the financial condition and results of operations of the Partnership and its subsidiaries for the periods since December 31, 2022.2023. As a result, the following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this report and the MD&A and the audited consolidated financial statements and related notes that are included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 20222023 (the “2022“2023 Annual Report”). Among other things, those financial statements and the related notes include more detailed information regarding the basis of presentation for the following information. This discussion contains forward-looking statements that constitute our plans, estimates and beliefs. These forward-looking statements involve numerous risks and uncertainties, including, but not limited to, those discussed in Forward-Looking Statements. Actual results may differ materially from those contained in any forward-looking statements.
Overview
We are a value-driven limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in unconventional resource basins, primarily shale formations, in the continental United States.
Our financial results are driven primarily by volume throughput across our gathering systems and by expense management. We generate the majority of our revenues from the gathering, compression, treating and processing services that we provide to our customers. A majority of the volumes that we gather, compress, treat and/or process have a fixed-fee rate structure which enhances the stability of our cash flows by providing a revenue stream that is not subject to direct commodity price risk. We also earn a portion of our revenues from the following activities that directly expose us to fluctuations in commodity prices: (i) the sale of physical natural gas and/or NGLs purchased under percentage-of-proceeds or other processing arrangements with certain of our customers in the Rockies and Piceance segments, (ii) the sale of natural gas we retain from certain Barnett segment customers, (iii) the sale of condensate we retain from our gathering services in the Rockies and Piceance segment and (iv) additional gathering fees that are tied to the performance of certain commodity price indexes which are then added to the fixed gathering rates.
We also have indirect exposure to changes in commodity prices such that persistently low commodity prices may cause our customers to delay and/or cancel drilling and/or completion activities or temporarily shut-in production, which would reduce the volumes of natural gas and crude oil (and associated volumes of produced water) that we gather. If certain of our customers cancel or delay drilling and/or completion activities or temporarily shut-in production, the associated MVCs, if any, ensure that we will earn a minimum amount of revenue. Commodity prices have increased and remain at higher levels primarily due to recent production cuts by OPEC+ and Russia’s invasion of Ukraine which began in February 2022, which mitigates the risk of cancelled or delayed drilling and/or completion activities.
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The following table presents certain consolidated and reportable segment financial data. For additional information on our reportable segments, see the "Segment Overview for the Three Months Ended March 31, 20232024 and 2022"2023" section included herein.
Three Months Ended March 31,
20232022
(In thousands)
Net loss$(14,163)$(5)
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
202420242023
(In thousands)(In thousands)
Net income (loss)
Reportable segment adjusted EBITDAReportable segment adjusted EBITDA
Northeast
Northeast
NortheastNortheast$17,854 $20,068 
RockiesRockies23,130 15,830 
PermianPermian5,073 4,149 
PiceancePiceance13,983 15,768 
BarnettBarnett7,027 9,286 
Net cash provided by operating activitiesNet cash provided by operating activities$49,695 $46,046 
Net cash provided by operating activities
Net cash provided by operating activities
Capital expenditures (1)
Capital expenditures (1)
16,438 8,703 
Proceeds from sale of business
Proceeds from sale of equity method investment
Investment in Double E equity method investeeInvestment in Double E equity method investee3,500 8,444 
Repayments on ABL FacilityRepayments on ABL Facility(13,000)(34,000)
Repayments on Permian Transmission Term Loan
Repayments on Permian Transmission Term Loan
Repayments on Permian Transmission Term LoanRepayments on Permian Transmission Term Loan(2,519)(1,095)
________
(1)See "Liquidity and Capital Resources" herein to the unaudited condensed consolidated financial statements for additional information on capital expenditures.
Trends and Outlook
Our business has been, and we expect our future business to continue to be, affected by the following key trends:
Ongoing impact of political and economic conditions and events in foreign oil and natural gas producing countries on commodity prices, including the continued conflict in the Middle East, current Russia-Ukraine conflict, and the international sanctions against Russia on commodity prices;and other sustained military campaigns;
Natural gas, NGL and crude oil supply and demand dynamics;
Actions of the OPEC and its allies, including the ability and willingness of the members of OPEC and other exporting nations to agree to and maintain oil price and production controls;
Production from U.S. shale plays;
Capital markets availability and cost of capital; and
Inflation and shifts in operating costs.
Our expectations are based on assumptions made by us and information currently available to us. To the extent our underlying assumptions about, or interpretations of, available information prove to be incorrect, our actual results may vary materially from our expected results. For additional information, see the "Trends and Outlook" section of MD&A included in the 20222023 Annual Report.
Strategic DJ AcquisitionsSummit Utica Sale. . On December 1, 2022,As previously announced on March 22, 2024, we completed the 2022 DJ AcquisitionsUtica Sale for totala cash considerationsale price of $305.0$625.0 million, subject to customary post-closing adjustments. As a resultSummit Utica is the owner of (i) approximately 36% of the 2022 DJ Acquisitions, we acquiredissued and outstanding equity interests in OGC, (ii) approximately 38% of the issued and outstanding equity interests in OCC, together with OGC, Ohio Gathering and (iii) midstream assets located in the Utica Shale. Ohio Gathering is the owner of a natural gas gathering system and processing systems, a crude oil gathering system, freshwater rights,condensate stabilization facility located in Belmont and a subsurface freshwater delivery systemMonroe counties in the DJ Basin. The acquiredUtica Shale in southeastern Ohio.
Mountaineer Transaction. On May 1, 2024, we completed the Mountaineer Transaction for a cash sale price of $70 million, subject to customary post-closing adjustments. Mountaineer Midstream is the owner of midstream assets of Outrigger DJ and Sterling DJ are located in Weld, Morgan, and Logan Counties, Colorado and Cheyenne County, Nebraska. In 2023,the
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Marcellus Shale. Prior to closing the Mountaineer Transaction, we will spend time and resources integrating the 2022 DJ Acquisitions into our existing DJ Basinsold related compression assets and expect to attain capital and operating synergieslocated in the future.Marcellus Shale to a compression service provider for approximately $5 million in April 2024.
Conclusion of Strategic Alternatives Review. In connection with the announcement of the Utica Sale, we also announced the conclusion of the strategic alternative review process undertaken by our Board of Directors that was previously announced on October 3, 2023. While we have concluded our active process, we remain open to all potential value-enhancing transactions.
CostCapital structure optimization and portfolio management. The Partnership intendsWe intend to continue to improve itsour capital structure in the future by reducing itsour indebtedness with free cash flow, and when appropriate, itwe may pursue opportunistic transactions with the objective of increasing long term unitholder value. This may include opportunistic acquisitions, (such as the 2022 DJ Acquisitions), divestitures (such as the disposition of the Lane G&P System and of Bison Midstream)Utica Sale in 2024), re-allocation of capital to new or existing areas, and development of joint ventures involving our existing midstream assets or new investment opportunities. We believe that our current cash balance, internally generated cash flow, our ABL Facility, the Permian Term LoanCredit Facility, and access to debt (such as the Additionaladditional 2026 SecuredUnsecured Notes) or equity will be adequate to finance our strategic initiatives. To attain our overall
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corporate strategic objectives, we may conduct an asset divestiture, or divestitures, at a transaction valuation that is less than the net book value of the divested asset.
Ongoing impact of the current Russia-Ukraine conflictpolitical and the international sanctions against Russiaeconomic conditions and events in foreign oil and natural gas producing countries on commodity prices. Although we operate solely in the Partnership does not operateUnited States, certain events and conditions in Ukraine, Russia or other parts of Europe, there are certain impacts arising fromforeign oil and natural gas producing countries, such as the continued conflict in the Middle East, including the Hamas-Israel war and Russia’s invasion of Ukraine, that could have a potential effecteffects on the Partnership,us, including, but not limited to, volatility in currencies and commodity prices, higher inflation, cost and supply chain pressures and availability and disruptions in banking systems and capital markets. As of the date of filing, there have been no material impacts on the Partnership.to us.
Based on recently updated production forecasts and 20232024 development plans from our customers, we currently expect that 20232024 activity will be higher than 20222023 and be at an activity level near our historical periods prior to COVID-19.
Impact of recent increases in interest rates. Increases in interest rates could adversely affect our future ability to obtain financing or materially increase the cost of existing and any additional financing. Since March 2022, the Federal Reserve has raised its target range for the federal funds rate tenmultiple times to a current target range of 5.00-5.25%. The Federal Reserve may pause such rate hikes5.25% to 5.50%, and the timing of any potential further increases or increase its target range further.decreases remains uncertain. As of March 31, 2023,2024, we had approximately $1.0 billion principal of fixed-rate debt, $317.0 millionnil outstanding under our variable rate ABL Facility and $152.8$141.1 million outstanding under the variable rate Permian Transmission Term Loan (see Note 8 - Debt). As of March 31, 2023,2024, we had $137.6$126.9 million of interest rate exposure hedged to offset the impact of changes in interest rates on our Permian Transmission Term Loan.
The Inflation Reduction Act of 2022 could accelerateC-Corporation conversion. In connection with the transitionrecently concluded strategic alternatives review, we evaluated various corporate structures to determine how to drive the greatest long-term value for unitholders. We believe converting to a low carbon economyC-Corp positions us to maximize value by optimizing long-term tax consequences to unitholders, enhancing trading liquidity, and expanding the universe of potential investors. We plan to seek approval from Summit unitholders to convert the Partnership to a C-Corp at a Special Meeting later this year. Summit will impose new costs on our operations. On August 16, 2022,file a proxy statement to provide unitholders with additional information about the Inflation Reduction Act of 2022 (“IRA 2022”) was signed into law pursuant to the budget reconciliation process. The IRA 2022 contains hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehiclesrationale and supporting infrastructure and carbon capture and sequestration, among other provisions. These incentives could further accelerate the transitionbenefits of the U.S. economy away fromC-Corp conversion in advance of the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could decrease demand for the oil and gas and consequently materially and adversely affect our business and results of operations. We do not currently believe this legislation will have a material impact on our consolidated financial statements.Special Meeting.
How We Evaluate Our Operations
We conduct and report our operations in the midstream energy industry through five reportable segments: Northeast, Rockies, Permian, Piceance and Barnett. Each of our reportable segments provides midstream services in a specific geographic area and our reportable segments reflect the way in which we internally report the financial information used to make decisions and allocate resources in connection with our operations. For additional information see Note 15 - Segment Information.
Our management uses a variety of financial and operational metrics to analyze our consolidated and segment performance. We view these metrics as important factors in evaluating our profitability. These metrics include:
throughput volume;
revenues;
operation and maintenance expenses;
capital expenditures; and
segment adjusted EBITDA.
We review these metrics on a regular basis for consistency and trend analysis. There have been no changes in the composition or characteristics of these metrics during the three months ended March 31, 2023.2024.
Additional Information. For additional information, see the "Results of Operations" section herein and the notes to the unaudited condensed consolidated financial statements. For additional information on how these metrics help us manage our
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business, see the "How We Evaluate Our Operations" section of MD&A included in the 20222023 Annual Report. For information on impending accounting changes that are expected to materially impact our financial results reported in future periods, see Note 2 – Summary of Significant Accounting Policies and Recently Issued Accounting Standards Applicable to the Partnership.
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Results of Operations
Consolidated Overview for the Three Months Ended March 31, 20232024 and 20222023
The following table presents certain consolidated financial and operating data.
Three Months Ended March 31,
20232022
(In thousands)
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
202420242023
(In thousands)(In thousands)
Revenues:Revenues:
Gathering services and related fees
Gathering services and related fees
Gathering services and related feesGathering services and related fees$57,371 $64,020 
Natural gas, NGLs and condensate salesNatural gas, NGLs and condensate sales49,163 22,458 
Other revenuesOther revenues5,965 9,648 
Total revenuesTotal revenues112,499 96,126 
Costs and expenses:Costs and expenses:
Cost of natural gas and NGLsCost of natural gas and NGLs30,882 22,251 
Cost of natural gas and NGLs
Cost of natural gas and NGLs
Operation and maintenanceOperation and maintenance23,972 17,062 
General and administrativeGeneral and administrative9,987 12,960 
Depreciation and amortizationDepreciation and amortization29,824 30,445 
Transaction costsTransaction costs302 246 
Acquisition integration costsAcquisition integration costs1,502 — 
(Gain) loss on asset sales, net(68)
Gain on asset sales, net
Long-lived asset impairmentLong-lived asset impairment— 14 
Total costs and expensesTotal costs and expenses96,401 82,981 
Other income (expense), netOther income (expense), net56 — 
Gain (loss) on interest rate swapsGain (loss) on interest rate swaps(1,273)7,028 
Gain on sale of businessGain on sale of business18 — 
Gain on sale of equity method investment
Interest expenseInterest expense(34,223)(24,163)
Loss before income taxes and equity method investment income(19,324)(3,990)
Income (loss) before income taxes and equity method investment income
Income (loss) before income taxes and equity method investment income
Income (loss) before income taxes and equity method investment income
Income tax (expense) benefitIncome tax (expense) benefit252 (50)
Income from equity method investeesIncome from equity method investees4,909 4,035 
Net loss$(14,163)$(5)
Net income (loss)
Volume throughput (1):
Volume throughput (1):
Volume throughput (1):
Volume throughput (1):
Aggregate average daily throughput - natural gas (MMcf/d)
Aggregate average daily throughput - natural gas (MMcf/d)
Aggregate average daily throughput - natural gas (MMcf/d)Aggregate average daily throughput - natural gas (MMcf/d)1,185 1,306 
Aggregate average daily throughput - liquids (Mbbl/d)Aggregate average daily throughput - liquids (Mbbl/d)74 65 
________
(1)Excludes volume throughput for Ohio Gathering and Double E. For additional information, see the Northeast and Permian sections herein under the caption “Segment Overview for the Three Months Ended March 31, 20232024 and 2022”2023”.

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Volumes – Gas. Natural gas throughput volumes decreasedincreased 121142 MMcf/d for the three months ended March 31, 20232024 compared to the three months ended March 31, 2022,2023, primarily reflecting:
a volume throughput decreaseincrease of 150121 MMcf/d for the Northeast segment.
a volume throughput decreaseincrease of 25 MMcf/d for the Piceance segment.
a volume throughput decrease of 27 MMcf/d for the Permian segment.
a volume throughput increase of 7916 MMcf/d for the Rockies segment.
a volume throughput increasedecrease of 220 MMcf/d for the Barnett segment.
Volumes – Liquids. Crude oil and produced water throughput volumes at the Rockies segment increasedremained consistent for the three months ended March 31, 2023,2024, compared to the three months ended March 31, 2022,2023, primarily as a result of 5360 new well connections that came online subsequent to March 31, 2022,2023, offset by natural production declines and weather related downtime.declines.
For additional information on volumes, see the "Segment Overview for the Three Months Ended March 31, 20232024 and 2022"2023" section herein.
Revenues. Total revenues increased $16.4$6.4 million during the three months ended March 31, 20232024 compared to the prior year period,three months ended March 31, 2023, comprised of a $26.7$4.6 million increase in gathering services and related fees, a $1.8 million increase in other revenue; offset by a $0.1 million decrease in natural gas, NGLs and condensate sales, offset by a $6.6 million decrease in gathering services and related fees and a $3.7 million decrease in Other Revenue.sales.
Gathering Services and Related Fees. Gathering services and related fees decreased $6.6increased $4.6 million compared to the three months ended March 31, 2022,2023, primarily reflecting:
a $1.0$4.1 million decreaseincrease in the Northeast, primarily due to increased volume throughput;
a $1.3 million increase in the Piceance, primarily due to decreased volume throughput and the expiration of a customer’s minimum volume commitment;
a $1.9 million decrease in the Northeast, primarily due to decreasedincreased volume throughput;
a $2.5$1.2 million decreaseincrease in the Rockies, primarily due to increased volume throughput; offset by
a $2.0 million decrease in the sale of Bison Midstream in September 2022.Barnett, primarily due to decreased volume throughput.
Natural Gas, NGLs and Condensate Sales. Natural gas, NGLs and condensate revenues increaseddecreased $26.70.1 million compared to the three months ended March 31, 2022, primarily reflecting:
a $33.7 million increase in revenues in the Rockies, primarily as a result of the 2022 DJ Acquisitions in December 2022; offset by
a $6.9 million decrease in revenues from the Permian as a result of the disposition of the Lane G&P System in June 2022.2023.
Costs and Expenses. Total costs and expenses increased $13.4$77.2 million during the three months ended March 31, 20232024 compared to the three months ended March 31, 2022.2023.
Cost of Natural Gas and NGLs. Cost of natural gas and NGLs increased $8.6decreased $0.7 million for the three months ended March 31, 20232024, compared to the three months ended March 31, 2022, primarily driven by the acquisition of Sterling DJ in December 2022.2023.
Operation and Maintenance. Operation and maintenance expense increased $6.9$1.0 million for the three months ended March 31, 20232024, compared to the three months ended March 31, 2022 primarily as a result of the acquisitions of Sterling DJ and Outrigger DJ in December 2022, partially offset by the 2022 dispositions of the Lane G&P System in June 2022 and Bison Midstream in September 2022.
General and Administrative. General and administrative expense decreased $3.0 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily due to $2.4 million of employee severance costs incurred during the three months ended March 31, 2022.2023.
Acquisition Integration Costs. Acquisition integration costs in 2023 were primarily related to costs associated with the ongoing integration of the 2022 DJ Acquisitions.
Long-lived asset impairments. During the quarterly period ended March 31, 2024, we recognized an impairment charge of $67.9 million in connection with the Mountaineer Transaction.
Interest Expense. Interest expense increased $1.5$3.6 million for the three months ended March 31, 2023, compared to the three months ended March 31, 2022 as a result of our December 2022 acquisitions of Sterling DJ and Outrigger DJ.
Depreciation and Amortization. Depreciation and amortization expense decreased $0.6 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.
Interest Expense. The increase in interest expense for the three month period ended March 31, 2023,2024, compared to three months ended March 31, 2022,2023, primarily resulted from higherdue to $6.3 million of increased borrowing costs on the recently issued 2026 Unsecured Notes, partially offset by $3.0 million of reduced interest costs from the issuanceexpense as a result of the additional principal amountsexchange and repurchase of $209.7 million of the 2026 Secured2025 Senior Notes borrowings on the Permian Transmission Term Loan, higher amortization expense of debt issuance coststhat occurred in November 2023.
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and an increase of 50 basis points on the interest rate of our 2026 Secured Notes. Interest expense does not include the impact of gains or losses from our interest rate swaps entered into for the Permian Transmission Credit Facility.
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Segment Overview for the Three Months Ended March 31, 20232024 and 20222023
Northeast. 
Volume throughput for the Northeast reportable segment follows.
Northeast
Three Months Ended March 31,
20232022Percentage
Change
Northeast
Northeast
Northeast
Three Months Ended March 31,
2024
2024
20242023Percentage
Change
Average daily throughput (MMcf/d)Average daily throughput (MMcf/d)591 741 (20)%Average daily throughput (MMcf/d)712 591 591 20%20%
Average daily throughput (MMcf/d) (Ohio Gathering)Average daily throughput (MMcf/d) (Ohio Gathering)636 598 6%Average daily throughput (MMcf/d) (Ohio Gathering)849 636 636 33%33%
On March 22, 2024, we completed the disposition of Summit Utica. Summit Utica is also the owner of our equity method investment, Ohio Gathering.
Volume throughput for the Northeast, excluding Ohio Gathering, decreasedincreased 20% compared to the three months ended March 31, 2022,2023, primarily due to natural production declines as well as frac-protect activities during the three months ended March 31, 2023 which decreased average daily throughput by approximately 20 MMcf/d for the three months ended March 31, 2023, partially offset by 1829 well connections that came online subsequent to March 31, 2022.2023, partially offset by natural production declines as well as the disposition of Summit Utica as discussed above.
Volume throughput for the Ohio Gathering system increased 6%33%, compared to the three months ended March 31, 2022,2023, primarily as a result of 3843 new well connections that came online subsequent to March 31, 2022,2023, partially offset by natural production declines and approximately 50 MMcf/das well as the disposition of volume shut-in for frac-protect activities.Summit Utica as discussed above, which owns an interest in the Ohio Gathering System.
Financial data for our Northeast reportable segment follows.
Northeast
Three Months Ended March 31,
20232022Percentage
Change
(In thousands)
Northeast
Northeast
Northeast
Three Months Ended March 31,
2024
2024
20242023Percentage
Change
(In thousands)
Revenues:Revenues:
Revenues:
Revenues:
Gathering services and related fees
Gathering services and related fees
Gathering services and related feesGathering services and related fees$12,755 $14,636 (13)%$16,853 $$12,755 32%32%
Total revenuesTotal revenues12,755 14,636 (13)%Total revenues16,853 12,755 12,755 32%32%
Costs and expenses:Costs and expenses:
Operation and maintenanceOperation and maintenance2,085 1,647 27%
Operation and maintenance
Operation and maintenance1,893 2,085 (9%)
General and administrativeGeneral and administrative210 183 15%General and administrative201 210 210 (4%)(4%)
Depreciation and amortizationDepreciation and amortization4,453 4,300 4%Depreciation and amortization4,248 4,453 4,453 (5)%(5)%
Gain on asset sales, net— (10)*
Long-lived asset impairment
Long-lived asset impairment
Long-lived asset impairment67,916 — *
Total costs and expensesTotal costs and expenses6,748 6,120 10%Total costs and expenses74,258 6,748 6,748 **
Add:Add:
Depreciation and amortizationDepreciation and amortization4,453 4,300 
Depreciation and amortization
Depreciation and amortization
Adjustments related to capital
reimbursement activity
Adjustments related to capital
reimbursement activity
(20)(20)
Gain on asset sales, net— (10)
Adjustments related to capital reimbursement activity
Adjustments related to capital reimbursement activity
Proportional adjusted EBITDA for Ohio Gathering7,414 7,276 2%
Other— 
Long-lived asset impairment
Long-lived asset impairment
Long-lived asset impairment
Proportional adjusted EBITDA for Ohio Gathering (1)
Proportional adjusted EBITDA for Ohio Gathering (1)
Proportional adjusted EBITDA for Ohio Gathering (1)
14,282 7,414 93%
Segment adjusted EBITDASegment adjusted EBITDA$17,854 $20,068 (11)%
Segment adjusted EBITDA
Segment adjusted EBITDA$29,021 $17,854 63%
* Not considered meaningful
(1)The Partnership records financial results of its investment in Ohio Gathering on a one-month lag based on financial information available to us during the reporting period. With the divestiture of Ohio Gathering in March 2024, proportional adjusted EBITDA includes financial results from December 1, 2023 through March 22, 2024 ($2.5 million for March 1, 2024 - March 22, 2024).
Three months ended March 31, 20232024. Segment adjusted EBITDA decreasedincreased $2.211.2 million, compared to the three months ended March 31, 20222023 primarily as athe result of a $1.9an increase of $6.9 million, decrease in revenueproportional adjusted EBITDA from Ohio Gathering during the three months ended March 31, 2024, as well as an increase in gathering services and related fees as a resultfees. These results were partially offset by the disposition of lower volume throughput discussed above.Summit Utica on March 22, 2024.
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Rockies. 
Volume throughput for our Rockies reportable segment follows.
Rockies
Three Months Ended March 31,
20232022Percentage
Change
Rockies
Rockies
Rockies
Three Months Ended March 31,
2024
2024
20242023Percentage
Change
Aggregate average daily throughput - natural gas (MMcf/d)Aggregate average daily throughput - natural gas (MMcf/d)10829272%Aggregate average daily throughput - natural gas (MMcf/d)12410815%
Aggregate average daily throughput - liquids (Mbbl/d)Aggregate average daily throughput - liquids (Mbbl/d)746514%Aggregate average daily throughput - liquids (Mbbl/d)7474*
Natural gas. Natural gas volume throughput increased 15% 272% compared to the three months ended March 31, 2022,2023, primarily reflecting the 2022 DJ Acquisitions in December 2022 and 35120 new well connections that came online subsequent to March 31, 2022,2023, partially offset by winter related interruptions which occurred during the salefirst quarter of Bison Midstream in September 2022. Aggregate average daily throughput for2024.
For the three months ended March 31, 20222024 and 2023, costs of natural gas and NGLs includes 11 MMcf/d related to Bison Midstream assets, which have been sold.$11.2 million and $10.9 million, respectively, of gathering fees collected under percentage of proceeds arrangements.
Liquids. Liquids volume throughput increased 14%remained consistent compared to the three months ended March 31, 2022,2023, primarily associated with 5360 new well connections that came online subsequent to March 31, 2022, including 23 which came online in the three months ended March 31, 2023.2023 offset by natural production declines.
Financial data for our Rockies reportable segment follows.
Rockies
Three Months Ended March 31,
20232022Percentage
Change
(In thousands)
Rockies
Rockies
Rockies
Three Months Ended March 31,
2024
2024
20242023Percentage
Change
(In thousands)
Revenues:Revenues:
Revenues:
Revenues:
Gathering services and related fees
Gathering services and related fees
Gathering services and related feesGathering services and related fees$15,303 $17,789 (14)%$16,516 $$15,303 8%8%
Natural gas, NGLs and condensate salesNatural gas, NGLs and condensate sales47,329 13,659 247%Natural gas, NGLs and condensate sales47,970 47,329 47,329 1%1%
Other revenuesOther revenues2,619 5,157 (49)%Other revenues4,108 2,619 2,619 57%57%
Total revenuesTotal revenues65,251 36,605 78%Total revenues68,594 65,251 65,251 5%5%
Costs and expenses:Costs and expenses:
Cost of natural gas and NGLsCost of natural gas and NGLs29,808 13,422 122%
Cost of natural gas and NGLs
Cost of natural gas and NGLs29,808 29,808 *
Operation and maintenanceOperation and maintenance12,069 6,212 94%Operation and maintenance13,012 12,069 12,069 8%8%
General and administrativeGeneral and administrative673 684 (2%)General and administrative1,431 673 673 113%113%
Depreciation and amortizationDepreciation and amortization8,378 7,448 12%Depreciation and amortization8,945 8,378 8,378 7%7%
Integration costsIntegration costs411 — *Integration costs— 411 411 **
(Gain) loss on asset sales, net(57)14 *
Long-lived asset impairment— 13 *
Gain on asset sales, netGain on asset sales, net(19)(57)(67%)
Total costs and expenses
Total costs and expenses
Total costs and expensesTotal costs and expenses51,282 27,793 85%53,177 51,282 51,282 4%4%
Add:Add:
Depreciation and amortizationDepreciation and amortization8,378 7,448 
Depreciation and amortization
Depreciation and amortization
Integration costs
Integration costs
Integration costsIntegration costs411 — 
Adjustments related to capital
reimbursement activity
Adjustments related to capital
reimbursement activity
404 (478)
(Gain) loss on asset sales, net(57)14 
Long-lived asset impairment— 13 
Adjustments related to capital reimbursement activity
Adjustments related to capital reimbursement activity
Gain on asset sales, net
Gain on asset sales, net
Gain on asset sales, net
Other
Other
OtherOther25 — 21 
Segment adjusted EBITDASegment adjusted EBITDA$23,130 $15,830 46%
Segment adjusted EBITDA
Segment adjusted EBITDA$22,874 $23,130 *
* Not considered meaningful
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Three months ended March 31, 20232024. Segment adjusted EBITDA increased $7.3 million,remained consistent, compared to the three months ended March 31, 2022 primarily due to the 2022 DJ Acquisitions in December 2022, partially offset by the sale of Bison Midstream in September 2022.2023.
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Permian. 
Volume throughput for our Permian reportable segment follows.
Permian
Three Months Ended March 31,
20232022Percentage
Change
Average daily throughput (MMcf/d)n/a27 n/a
Average daily throughput (MMcf/d) (Double E)26418741%
On June 30, 2022, we completed the sale of our Lane G&P System.
Permian
Three Months Ended March 31,
20242023Percentage
Change
Average daily throughput (MMcf/d) (Double E)467 264 77%
Volume throughput for Double E increased 41% for the three months ended March 31, 202377% compared to the three months ended March 31, 2022, as a result of increased shipments on the Double E Pipeline.2023.
The following table presents the MVC quantities that Double E’s shippers have contracted to with firm transportation service agreements and related negotiated rate agreements. This table excludes two new firm transportation agreements executed during the fourth quarter of 2023 and first half of 2024 with large independent oil and gas exploration and production companies aggregating to 115,000 MMBTU/day. The firm transportation agreements contain 10 year contract terms and commence upon the completion of in service construction activities or other contractual start dates:
(Amounts in MMBTU/day)Weighted average MVC quantities for the year ended December 31,
2023831,096 
2024986,803 
20251,000,000 
20261,000,000 
20271,000,000 
20281,000,000 
20291,000,000 
20301,000,000 
2031879,452 
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(Amounts in MMBTU/day)Weighted average MVC quantities for the year ended December 31,
2024986,803 
20251,000,000 
20261,000,000 
20271,000,000 
20281,000,000 
20291,000,000 
20301,000,000 
2031879,452 
Financial data for our Permian reportable segment follows.
Permian
Permian
Permian
Three Months Ended March 31,
2024
2024
20242023Percentage
Change
(In thousands)
Revenues:
Revenues:
Revenues:
Other revenues
Other revenues
Other revenues910 893 2%
Total revenuesTotal revenues910 893 2%
Costs and expenses:
General and administrative
General and administrative
General and administrative36 44 (18)%
Total costs and expenses
Total costs and expenses
Total costs and expenses36 44 (18)%
Add:
Permian
Three Months Ended March 31,
20232022Percentage
Change
(In thousands)
Revenues:
Gathering services and related fees$— $1,847 *
Natural gas, NGLs and condensate sales— 6,867 *
Other revenues893 1,019 (12%)
Total revenues893 9,733 (91)%
Costs and expenses:
Cost of natural gas and NGLs— 7,092 *
Operation and maintenance— 1,304 *
General and administrative44 363 (88)%
Depreciation and amortization— 1,497 *
Proportional adjusted EBITDA for Double E
Total costs and expenses44 10,256 *
Add:
Depreciation and amortization— 1,497 
Proportional adjusted EBITDA for Double E
Proportional adjusted EBITDA for Double EProportional adjusted EBITDA for Double E4,224 3,175 33%6,391 4,224 4,224 51%51%
Segment adjusted EBITDASegment adjusted EBITDA$5,073 $4,149 22%
Segment adjusted EBITDA
Segment adjusted EBITDA$7,265 $5,073 43%
*Not considered meaningful
Three months ended March 31, 20232024. Segment adjusted EBITDA increased $0.92.2 million compared to the three months ended March 31, 2022,2023, primarily as a result of an increase in proportional adjusted EBITDA from our equity method investment in Double E.
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Piceance. 
Volume throughput for our Piceance reportable segment follows.
Piceance
Three Months Ended March 31,
20232022Percentage
Change
Aggregate average daily throughput (MMcf/d)287 312 (8%)
Piceance
Three Months Ended March 31,
20242023Percentage
Change
Aggregate average daily throughput (MMcf/d)312 287 9%
Volume throughput decreased 8%increased 9% compared to the three months ended March 31, 2022,2023 primarily as a result of natural production decline, partially offset by 848 new well connections that came online insubsequent to March 2023.31, 2023, partially offset by natural production declines.
Financial data for our Piceance reportable segment follows.
Piceance
Three Months Ended March 31,
20232022Percentage
Change
(In thousands)
Piceance
Piceance
Piceance
Three Months Ended March 31,
2024
2024
20242023Percentage
Change
(In thousands)
Revenues:Revenues:
Revenues:
Revenues:
Gathering services and related fees
Gathering services and related fees
Gathering services and related feesGathering services and related fees$19,119 $20,071 (5%)$20,387 $$19,119 7%7%
Natural gas, NGLs and condensate salesNatural gas, NGLs and condensate sales1,641 1,895 (13)%Natural gas, NGLs and condensate sales948 1,641 1,641 (42)%(42)%
Other revenuesOther revenues1,426 1,275 12%Other revenues1,245 1,426 1,426 (13)%(13)%
Total revenuesTotal revenues22,186 23,241 (5%)Total revenues22,580 22,186 22,186 2%2%
Costs and expenses:Costs and expenses:
Cost of natural gas and NGLs
Cost of natural gas and NGLs
Cost of natural gas and NGLsCost of natural gas and NGLs1,074 1,108 (3)%374 1,074 1,074 (65)%(65)%
Operation and maintenanceOperation and maintenance5,749 5,273 9%Operation and maintenance5,672 5,749 5,749 (1)%(1)%
General and administrativeGeneral and administrative239 328 (27)%General and administrative306 239 239 28%28%
Depreciation and amortizationDepreciation and amortization12,881 12,780 1%Depreciation and amortization10,468 12,881 12,881 (19%)(19%)
Gain on asset sales, netGain on asset sales, net(4)— *Gain on asset sales, net(8)(4)(4)100%100%
Total costs and expensesTotal costs and expenses19,939 19,489 2%
Total costs and expenses
Total costs and expenses16,812 19,939 (16)%
Add:Add:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortizationDepreciation and amortization12,881 12,780 
Adjustments related to capital reimbursement activityAdjustments related to capital reimbursement activity(1,245)(899)
Adjustments related to capital reimbursement activity
Adjustments related to capital reimbursement activity
Gain on asset sales, net
Gain on asset sales, net
Gain on asset sales, netGain on asset sales, net(4)— 
OtherOther104 135 
Other
Other
Segment adjusted EBITDASegment adjusted EBITDA$13,983 $15,768 (11%)
Segment adjusted EBITDA
Segment adjusted EBITDA$15,233 $13,983 9%
________
*Not considered meaningful
Three months ended March 31, 20232024. Segment adjusted EBITDA decreased $1.8increased $1.3 million, compared to the three months ended March 31, 2022, primarily reflecting a decrease in volume throughput as a result of natural production declines and reduction in a certain customer’s minimum volume commitment that expired in 2022, partially offset by 8 new well connections that came online in March 2023.
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Barnett. 
Volume throughput for our Barnett reportable segment follows.
Barnett
Three Months Ended March 31,
20232022Percentage
Change
Average daily throughput (MMcf/d)199 197 1%
Barnett
Three Months Ended March 31,
20242023Percentage
Change
Average daily throughput (MMcf/d)179 199 (10%)
Volume throughput increased 1%decreased 10% compared to the three months ended March 31, 2022,2023, primarily as a result of 12due to temporary production curtailments associated with reductions in commodity pricing, partially offset by 14 wells that came online subsequent to March 31, 2022, partially offset by natural production declines and approximately 6 MMcf/d of volume shut-in for frac-protect activities.2023.
Financial data for our Barnett reportable segment follows.
Barnett
Three Months Ended March 31,
20232022Percentage
Change
(In thousands)
Barnett
Barnett
Barnett
Three Months Ended March 31,
2024
2024
20242023Percentage
Change
(In thousands)
Revenues:Revenues:
Revenues:
Revenues:
Gathering services and related fees
Gathering services and related fees
Gathering services and related feesGathering services and related fees$10,194 $9,677 5%$8,229 $$10,194 (19%)(19%)
Natural gas, NGLs and condensate salesNatural gas, NGLs and condensate sales193 — *Natural gas, NGLs and condensate sales174 193 193 (10%)(10%)
Other revenues (1)
Other revenues (1)
1,064 2,063 (48%)
Other revenues (1)
1,457 1,064 1,064 37%37%
Total revenuesTotal revenues11,451 11,740 (2%)Total revenues9,860 11,451 11,451 (14%)(14%)
Costs and expenses:Costs and expenses:
Operation and maintenanceOperation and maintenance4,069 2,124 92%
Operation and maintenance
Operation and maintenance4,376 4,069 8%
General and administrativeGeneral and administrative265 242 10%General and administrative291 265 265 10%10%
Depreciation and amortizationDepreciation and amortization3,805 3,792 Depreciation and amortization3,820 3,805 3,805 **
Total costs and expensesTotal costs and expenses8,139 6,158 32%
Total costs and expenses
Total costs and expenses8,487 8,139 4%
Add:Add:
Depreciation and amortizationDepreciation and amortization4,039 4,026 
Depreciation and amortization
Depreciation and amortization
Adjustments related to capital reimbursement activity
Adjustments related to capital reimbursement activity
Adjustments related to capital
reimbursement activity
Adjustments related to capital
reimbursement activity
(324)(327)
Other— 
Segment adjusted EBITDASegment adjusted EBITDA$7,027 $9,286 (24)%
Segment adjusted EBITDA
Segment adjusted EBITDA$5,100 $7,027 (27)%
________
*Not considered meaningful
(1)Includes the amortization expense associated with our favorable gas gathering contracts as reported in Other revenues.
Three months ended March 31, 20232024. Segment adjusted EBITDA decreased $2.3$1.9 million, compared to the three months ended March 31, 2022,2023, primarily as a result of $1.7 million of commercial settlements that benefited the segment’s financial results in the first quarter of 2022 and did not occur for the remainder of 2022 or during the three months ended March 31, 2023.decreased throughput described above.
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Corporate and Other Overview for the Three Months Ended March 31, 20232024 and 20222023
Corporate and Other represents those results that are not specifically attributable to a reportable segment or that have not been allocated to our reportable segments, including certain general and administrative expense items, transaction costs, acquisition integration costs and interest expense. Corporate and Other includes intercompany eliminations.
Corporate and Other
Three Months Ended March 31,
20232022Percentage
Change
(In thousands)
Corporate and Other
Corporate and Other
Corporate and Other
Three Months Ended March 31,
2024
2024
20242023Percentage
Change
(In thousands)
Costs and expenses:Costs and expenses:
Operation and maintenance$— $502 *
Costs and expenses:
Costs and expenses:
General and administrative
General and administrative
General and administrativeGeneral and administrative8,556 11,157 (23)%12,520 8,556 8,556 46%46%
Transaction costsTransaction costs302 246 *Transaction costs7,791 302 302 **
Interest expenseInterest expense34,223 24,163 42%Interest expense37,846 34,223 34,223 11%11%
________
* Not considered meaningful
General and Administrativeadministrative. General and administrative expense decreasedexpenses increased by $2.6$4.0 million, compared to the three months ended March 31, 2022,2023, primarily due to increased employee salaries and benefit expense.
Transaction costs. Transaction costs in 2024 are primarily related to $2.4 million of employee severance costs incurred during the three months endedUtica Sale that closed on March 31, 2022.22, 2024.
Interest Expenseexpense. The increase in interestInterest expense increased $3.6 million for the three months ended March 31, 2023,2024, compared to three months ended March 31, 2022,2023, primarily resulted from higherdue to $6.3 million of increased borrowing costs on the recently issued 2026 Unsecured Notes, partially offset by $3.0 million of reduced interest costs from the issuanceexpense as a result of the additional principal amountsexchange and repurchase of $209.7 million of the 2026 Secured2025 Senior Notes and borrowings on the Permian Transmission Term Loan, higher amortization expense of debt issuance costs and an increase of 50 basis points on the interest rate of our 2026 Secured Notes. Interest expense does not include the impact of gains or losses from our interest rate swaps entered into for the Permian Transmission Credit Facility.that occurred in November 2023.
Liquidity and Capital Resources
We rely primarily on internally generated cash flows as well as current cash balance and external financing sources, including our ABL Facility,commercial bank borrowings, and the issuance of debt, equity and preferred equity securities, and proceeds from potential asset divestitures to fund our capital expenditures. We believe that our ABL Facility and Permian Transmission Credit Facility, together with internally generated cash flows, current cash balance and access to debt or equity capital markets, will be adequate to finance our operations for the next twelve months without adversely impacting our liquidity.
We may enter into off-balance sheet arrangements and transactions that can give rise to material off-balance sheet obligations. As of March 31, 2023,2024, our material off-balance sheet arrangements and transactions include (i) letters of credit outstanding against our ABL Facility aggregating to $4.3 million, and (ii) letters of credit outstanding against our Permian Transmission Credit Facility aggregating to $10.5 million. There are no other transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to materially affect our liquidity or availability of our capital resources.
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Indebtedness Compliance as of March 31, 2023.As of March 31, 2023,2024, we were in compliance with all covenants contained in the Senior Notes, the ABL Facility and the Permian Transmission Credit Facility. The ABL Facility requires that Summit Holdings not permit (i) the First Lien Net Leverage Ratio (as defined in the ABL Agreement) as of the last day of any fiscal quarter to be greater than 2.50:1.00, or (ii) the Interest Coverage Ratio (as defined in the ABL Agreement) as of the last day offor any fiscal quarter to beending on or before December 31, 2024, (x) if no loans under the Credit Agreement are outstanding and unrestricted cash exceeds $200.0 million, 1.50:1.00 and (y) if any loans under the Credit Agreement are outstanding or unrestricted cash is less than 2.00:such threshold, 1.75:1.00 and (b) thereafter, 1.90:1.00. As of March 31, 2023,2024, the First Lien Net Leverage Ratio and Interest Coverage Ratio was 1.24:-0.26:1.00 and 2.37:1.87:1.00, respectively.

Credit Agreements and Financing Activities
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ABL Facility. As of March 31, 2023,2024, we had a $400.0 million revolving ABL Facility with a maturity date of May 1, 2026. As of March 31, 2023, the2024, there were no amounts outstanding balance ofunder the ABL Facility was $317.0 million and the available borrowing capacity totaled $78.7$383.7 million after giving effect to the issuance thereunder of $4.3 million of outstanding but undrawn irrevocable standby letters of credit.credit and $12.0 million of commitment reserves.
2025 Senior Notes. In February 2017, the Co-Issuers co-issued $500.0 million of 5.75% senior unsecured notes maturing April 15, 2025 (the “2025 Senior Notes”). As of March 31, 2023,2024, the outstanding balance of the 2025 Senior Notes was $259.5$49.8 million. The 2025 Senior Notes are senior, unsecured obligations and rank equally in right of payment with all of our existing and future senior obligations. The 2025 Senior Notes are effectively subordinated in right of payment to all of our secured indebtedness, to the extent of the collateral securing such indebtedness. As of March 31, 2023,2024, the Co-Issuers could redeem all or part of the 2025 Senior Notes at a redemption price of 101.438% (and such redemption price has subsequently declined to 100.000% on April 15, 2023), plus accrued and unpaid interest, if any, to, but not including the redemption date.
2026 Secured Notes. In November 2021, we issued $700.0 million of the 2026 Secured Notes, at a price of 98.5% of face value. Additionally, in November 2022, in connection with the 2022 DJ Acquisitions, we issued an additional $85.0 million of 2026 Secured Notes at a price of 99.26% of their face value. The Co-Issuers pay interest on the 2026 Secured Notes semi-annually on April 15 and October 15 of each year, and the 2026 Secured Notes are jointly and severally guaranteed, on a senior second-priority secured basis (subject to permitted liens), by us and each of our restricted subsidiaries that is an obligor under the ABL Facility, or under the 2025 Senior Notes on the issue date of the 2026 Secured Notes. As of March 31, 2023,2024, the outstanding balance of the 2026 Secured Notes was $785.0 million.
The 2026 Secured Notes will mature on October 15, 2026; provided that, if the outstanding amount of the 2025 Senior Notes (or any refinancing indebtedness in respect thereof that has a final maturity on or prior to the date that is 91 days after the Initial Maturity Date (as defined in the 2026 Secured Notes Indenture)) is greater than or equal to $50.0 million on January 14, 2025, which is 91 days prior to the scheduled maturity date of the 2025 Senior Notes, then the 2026 Secured Notes will mature on January 14, 2025.
Starting in the first quarter of 2023 with respect to the fiscal year ended 2022, and continuing annually through the fiscal year ended 2025, we are required under the terms of the 2026 Secured Notes Indenture to, if it has Excess Cash Flow (as defined in the 2026 Secured Notes Indenture), and subject to its ability to make such an offer under the ABL Facility, offer to purchase an amount of the 2026 Secured Notes, at 100% of the principal amount plus accrued and unpaid interest, equal to 100% of the Excess Cash Flow generated in the prior year. Excess Cash Flow is generally defined as consolidated cash flow minus the sum of capital expenditures and cash payments in respect of permitted investments and permitted restricted payments.
Generally, if we do not offer to purchase designated annual amounts of its 2026 Secured Notes or reduce its first lien capacity under the 2026 Secured Notes Indenture per annum from 2023 through 2025, the interest rate on the 2026 Secured Notes is subject to certain rate escalations. Per the terms of the 2026 Secured Notes Indenture, the designated amounts are $50.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2023, otherwise the interest rate shall automatically increase by 50 basis points per annum; $100.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2024, otherwise the interest rate shall automatically increase by 100 basis points per annum (minus any amount previously increased); and $200.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2025, otherwise the interest rate shall automatically increase by 200 basis points per annum (minus any amount previously increased).
Based on the amount of our Excess Cash Flow for the fiscal year ended 2023, on March 27, 2024, we commenced a cash tender offer to purchase up to $19.3 million aggregate principal amount of the outstanding 2026 Secured Notes at 100% of the principal amount plus accrued and unpaid interest. The cash flow offer expired on April 24, 2024 with $13.6 million tendered and validly accepted. Accordingly, $13.6 million of the 2026 Secured Notes is reflected as current debt in the March 31, 2024 unaudited condensed consolidated balance sheet.
As of April 1, 2024, we have not made offers to purchase in the required amount of $100.0 million and the interest rate on the 2026 Secured Notes increased an incremental 50 basis points to 9.50% effective on such date.
To the extent we make an offer to purchase, and the offer is not fully accepted by the holders of the 2026 Secured Notes, we may use any remaining amount not accepted for any purpose not prohibited by the 2026 Secured Notes Indenture or the ABL Facility. Based on the amount
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Table of our Excess Cash Flow for the fiscal year ended 2022, we were not able to make offers to purchase in the designated amount for the fiscal year ended 2022; as a result, the interest rate on the 2026 Secured Notes increased 50 basis points to 9.00% effective with the first payment on April 1, 2023, resulting in increased annual interest expense of approximately $3.9 million.Contents
We may in the future use a combination of cash, secured or unsecured borrowings and issuances of our common units or other securities and the proceeds from asset sales to retire or refinance our outstanding debt or Series A Preferred Units through privately negotiated transactions, open market repurchases, redemptions, exchange offers, tender offers or otherwise, but we are under no obligation to do so. Any such transactions may produce allocations of taxable income to a unitholder, such as gains on asset sales or income from cancellation of indebtedness, that are large on a per-unit basis relative to the trading price of our common units and are not accompanied by any corresponding distribution of cash to fund the payment of the resulting tax liability to the unitholder.
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2026 Unsecured Notes. In November 2023, we issued a total of $209.5 million aggregate principal amount of 2026 Unsecured Notes in exchange for $180.0 million aggregate principal amount of the 2025 Senior Notes and $29.5 million in cash. As of March 31, 2024, the outstanding balance of the 2026 Unsecured Notes was $209.5 million. The 2026 Unsecured Notes bear interest at 12.00% and mature on October 15, 2026, in line with the maturity date of the 2026 Secured Notes. The 2026 Unsecured Notes are senior, unsecured obligations and rank equally in right of payment with all of our existing and future senior obligations. The 2026 Unsecured Notes are effectively subordinated in right of payment to all of our secured indebtedness, to the extent of the collateral securing such indebtedness. The Co-Issuers may redeem all or a part of the 2026 Unsecured Notes at a redemption price of (a) on or before April 15, 2025, 101.00%, and (b) after April 15, 2025, 102.00%, plus accrued and unpaid interest, if any, to, but not including the redemption date.

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Cash Flows
The components of the net change in cash and cash equivalents were as follows:
Three Months Ended March 31,
20232022
(In thousands)
Three Months Ended March 31,Three Months Ended March 31,
202420242023
(In thousands)(In thousands)
Net cash provided by operating activitiesNet cash provided by operating activities$49,695 $46,046 
Net cash used in investing activities(22,549)(15,297)
Net cash provided by (used in) investing activities
Net cash used in financing activitiesNet cash used in financing activities(17,394)(37,841)
Net change in cash, cash equivalents and restricted cashNet change in cash, cash equivalents and restricted cash$9,752 $(7,092)
Operating activities.
Cash flows provided by operating activities for the three months ended March 31, 2024 primarily reflected:
a net income of $132.9 million plus positive adjustments of $104.0 million for non-cash operating items; and
a $14.7 million change in working capital accounts.
Cash flows provided by operating activities for the three months ended March 31, 2023 primarily reflected:
a net loss of $14.2 million plus positive adjustments of $43.7 million for non-cash operating items.items; and
a $20.1 million increasechange in working capital accounts.
Investing activities.
Cash flows provided by operatinginvesting activities forduring the three months ended March 31, 20222024 primarily reflected:
a $12.5$332.7 million increase in working capital accounts;of cash inflows from the proceeds of the sale of our equity method investment;
$292.3 million of cash inflows from the proceeds of the sale of Summit Utica; and
positive adjustments$16.4 million of $33.6 millioncash outflows for non-cash items.capital expenditures.
Investing activities.
Cash flows used in investing activities during the three months ended March 31, 2023 primarily reflected:
$16.4 million of cash outflows for capital expenditures; and
$3.5 million offor cash investments in the Double E Project.
Cash flows used in investing activities during the three months ended March 31, 2022 primarily reflected:
$8.4 million for cash investments in the Double E Project;
$8.7 million of cash outflows for capital expenditures; offset by
$1.9 million of cash proceeds from the sale of compressors.
Financing activities.
Cash flows used in financing activities during the three months ended March 31, 20232024 primarily reflected:
$13.0313.0 million of cash outflowoutflows for repayments on the ABL Facility,Facility; and
$2.53.8 million of cash outflowoutflows for repayments on the Permian Transmission Term Loan.
Cash flows used in financing activities during the three months ended March 31, 20222023 primarily reflected:
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$34.013.0 million of cash outflowoutflows for repayments on the ABL Facility.Facility;
$2.5 million of cash outflows for repayments on the Permian Transmission Term Loan.
Capital Requirements
Overall.
Our business is capital intensive, requiring significant investment for the maintenance of existing gathering systems and the acquisition or construction and development of new gathering systems and other midstream assets and facilities. Our Partnership agreementAgreement requires that we categorize our capital expenditures as either:
maintenance capital expenditures, which are cash expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets or for the acquisition of existing, or the construction or development of, new capital assets) made to maintain our long-term operating income or operating capacity; or
expansion capital expenditures, which are cash expenditures incurred for acquisitions or capital improvements that we expect will increase our operating income or operating capacity over the long term.
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For the three months ended March 31, 2023,2024, cash paid for capital expenditures totaled $16.4 million which included $4.2$2.7 million of maintenance capital expenditures. For the three months ended March 31, 2023, there were no2024, we did not make any contributions to Double E and Ohio Gathering and we contributed $3.5 million to Double E.Gathering.
We rely primarily on internally generated cash flows, our current cash balance as well as external financing sources, including commercial bank borrowings and the issuance of debt, equity and preferred equity securities, and proceeds from potential asset divestitures to fund our capital expenditures. We believe that our internally generated cash flows, current cash balance, our ABL Facility and the Permian Transmission Credit Facility, and access to debt or equity capital markets, will be adequate to finance our operations for the next twelve months without adversely impacting our liquidity. .
We estimate that our 20232024 capital program will range from $45.0$30.0 million to $65.0$40.0 million, including between $10.0 million and $15.0 million of maintenance capital expenditures. We estimate that our 20232024 investment in our Double E equity method investee will be approximately $5.0 million.
There are a number of risks and uncertainties that could cause our current expectations to change, including, but not limited to, (i) the ability to reach agreements with third parties; (ii) prevailing conditions and outlook in the natural gas, crude oil and NGLs and markets, and (iii) our ability to obtain financing from commercial banks, the capital markets, or other financing sources.
Excess Cash Flow Offers to Purchase.
Starting in the first quarter of 2023 with respect to the fiscal year ended 2022, and continuing annually through the fiscal year 2025, we are required under the terms of the 2026 Secured Notes Indenture to, if it has Excess Cash Flow (as defined in the 2026 Secured Notes Indenture), and subject to its ability to make such an offer under the ABL Facility, offer to purchase an amount of the 2026 Secured Notes, at 100% of the principal amount plus accrued and unpaid interest, equal to 100% of the Excess Cash Flow generated in the prior year. Excess Cash Flow is generally defined as consolidated cash flow minus the sum of capital expenditures and cash payments in respect of permitted investments and permitted restricted payments.
Generally, if we do not offer to purchase designated annual amounts of its 2026 Secured Notes or reduce its first lien capacity under the 2026 Secured Notes Indenture per annum from 2023 through 2025, the interest rate on the 2026 Secured Notes is subject to certain rate escalations. Per the terms of the 2026 Secured Notes Indenture, the designated amounts are to offer to purchase $50.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2023, otherwise the interest rate shall automatically increase by 50 basis points per annum; $100.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2024, otherwise the interest rate shall automatically increase by 100 basis points per annum (minus any amount previously increased); and $200.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2025, otherwise the interest rate shall automatically increase by 200 basis points per annum (minus any amount previously increased).
Based on the amount of our Excess Cash Flow for the fiscal year ended 2022,2023, on March 27, 2024, we didcommenced a cash tender offer to purchase up to $19.3 million aggregate principal amount of the outstanding 2026 Secured Notes at 100% of the principal amount plus accrued and unpaid interest. The cash flow offer expired on April 24, 2024 with $13.6 million tendered and validly accepted. Accordingly, $13.6 million of the 2026 Secured Notes is reflected as current debt in the March 31, 2024 unaudited condensed consolidated balance sheet.
As of April 1, 2024, we had not makemade offers to purchase in the designatedrequired amount for the fiscal year ended 2022;of $100.0 million and as a result, the interest rate on the 2026 Secured Notes increased an incremental 50 basis points to 9.00%9.50% effective with the first payment on April 1, 2023, resulting in increased annual interest expensesuch date.
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To the extent we makesmake an offer to purchase, and the offer is not fully accepted by the holders of the 2026 Secured Notes, we may use any remaining amount not accepted for any purpose not prohibited by the 2026 Secured Notes Indenture or the ABL Facility.
Credit and Counterparty Concentration Risks
We examine the creditworthiness of counterparties to whom we extend credit and manage our exposure to credit risk through credit analysis, credit approval, credit limits and monitoring procedures, and for certain transactions, we may request letters of credit, prepayments or guarantees.
Certain of our customers may be temporarily unable to meet their current obligations. While this may cause disruption to cash flows, we believe that we are properly positioned to deal with the potential disruption because the vast majority of our gathering assets are strategically positioned at the beginning of the midstream value chain. The majority of our infrastructure is connected directly to our customers’ wellheads and pad sites, which means our gathering systems are typically the first third-party infrastructure through which our customers’ commodities flow and, in many cases, the only way for our customers to get their production to market.
We have exposure due to nonperformance under our MVC contracts whereby a potential customer, may not have the wherewithal to make its MVC shortfall payments when they become due. We typically receive payment for all prior-year MVC shortfall billings in the quarter immediately following billing. Therefore, our exposure to risk of nonperformance is limited to and accumulates during the current year-to-date contracted measurement period.
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Off-Balance Sheet Arrangements
During the three months ended March 31, 2023,2024, there were no material changes to the off-balance sheet obligations disclosed in our 20222023 Annual Report.
Summarized Financial Information
The supplemental summarized financial information below reflects SMLP's separate accounts, the combined accounts of Summit Holdings and Finance Corp. (together, the “Co-Issuers”) and its guarantor subsidiaries (the “Guarantor Subsidiaries” and together with the Co-Issuers, the “Obligor Group”) for the dates and periods indicated. The financial information of the Obligor Group is presented on a combined basis and intercompany balances and transactions between the Co-Issuers and Guarantor Subsidiaries have been eliminated. There were no reportable transactions between the Co-Issuers and Obligor Group and the subsidiaries that were not issuers or guarantors of the Senior Notes.
Payments to holders of the Senior Notes are affected by the composition of and relationships among the Co-Issuers, the Guarantor Subsidiaries and Permian Holdco and Summit Permian Transmission, both of which are unrestricted subsidiaries of SMLP and are not issuers or guarantors of the Senior Notes. The assets of our unrestricted subsidiaries are not available to satisfy the demands of the holders of the Senior Notes. In addition, our unrestricted subsidiaries are subject to certain contractual restrictions related to the payment of dividends, and other rights in favor of their non-affiliated stakeholders, that limit their ability to satisfy the demands of the holders of the Senior Notes.
On June 30, 2022,March 22, 2024, we completed the saledisposition of all the equity interests in Summit Permian and Permian FinanceUtica, to a third party. Additionally, on September 19, 2022, we completed the salesubsidiary of Bison Midstream to a third party.MPLX LP. In connection with these dispositions,the disposition, the status of Bison Midstream, Summit Permian and Permian FinanceUtica as guarantor subsidiaries,subsidiary, was modified prior to the occurrence of each respectivethe disposition.
On December 1, 2022, we completed the acquisition of Outrigger DJ for cash consideration of $165.0 million, subject to post-closing adjustments, and Sterling DJ for cash consideration of $140.0 million, subject to post-closing adjustments. In connection with the acquisitions, Summit DJ - O, LLC (formerly Outrigger DJ Midstream, LLC), Summit DJ - O Operating, LLC (formerly Outrigger DJ Operating, LLC), Summit DJ - S, LLC (formerly Sterling Energy Investments, LLC), Grasslands Energy Marketing, LLC and Centennial Water Pipelines, LLC became newly acquired entities. With the exception of Centennial Water Pipeline, LLC, all acquired entities guarantee our obligations under the 2025 Senior Notes and 2026 Secured Notes.
The summarized financial information below presents the activities and balances of Bison Midstream, Summit Permian and Summit FinanceUtica as guarantor subsidiaries for all summarized income statement periods and balance sheet dates presented in which they were owned by the Partnership. Bison Midstream, Summit Permian and Permian Finance wereUtica was not included in the Partnership’s balance sheet as of DecemberMarch 31, 2022.2024.
A list of each of SMLP’s subsidiaries that is a guarantor, issuer or co-issuer of our registered securities subject to the reporting requirements in Release 33-10762 is filed as Exhibit 22.1 to this report.

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Summarized Balance Sheet Information. Summarized balance sheet information as of March 31, 20232024 and December 31, 20222023 follows.
March 31, 2023
SMLPObligor Group
(In thousands)
March 31, 2024March 31, 2024
SMLPSMLPObligor Group
(In thousands)(In thousands)
AssetsAssets
Current assets
Current assets
Current assetsCurrent assets$3,523 $85,033 
Noncurrent assetsNoncurrent assets8,943 2,118,019 
LiabilitiesLiabilities
Liabilities
Liabilities
Current liabilities
Current liabilities
Current liabilitiesCurrent liabilities$8,347 $100,571 
Noncurrent liabilitiesNoncurrent liabilities2,147 1,400,180 
December 31, 2022
SMLPObligor Group
(In thousands)
December 31, 2023December 31, 2023
SMLPSMLPObligor Group
(In thousands)(In thousands)
AssetsAssets
Current assets
Current assets
Current assetsCurrent assets$2,553 $86,443 
Noncurrent assetsNoncurrent assets8,274 2,130,052 
LiabilitiesLiabilities
Liabilities
Liabilities
Current liabilities
Current liabilities
Current liabilitiesCurrent liabilities$16,345 $79,841 
Noncurrent liabilitiesNoncurrent liabilities2,172 1,410,370 
Summarized Statements of Operations Information. For the purposes of the following summarized statements of operations, we allocate a portion of general and administrative expenses recognized at the SMLP parent to the Obligor Group to reflect what those entities' results would have been had they operated on a stand-alone basis. Summarized statements of operations for the three months ended March 31, 20232024 and for the year ended December 31, 20222023 follow.
Three Months Ended
March 31, 2023
SMLPObligor Group
(In thousands)
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2024
SMLPSMLPObligor Group
(In thousands)(In thousands)
Total revenuesTotal revenues$— $112,480 
Total costs and expensesTotal costs and expenses597 94,101 
Loss before income taxes and income from equity method investees(597)(12,926)
Income (loss) before income taxes and income from equity method investees
Income from equity method investeesIncome from equity method investees— 3,191 
Net loss$(345)$(9,735)
Net income (loss)
Year Ended December 31, 2022
SMLPObligor Group
(In thousands)
Year Ended December 31, 2023Year Ended December 31, 2023
SMLPSMLPObligor Group
(In thousands)(In thousands)
Total revenuesTotal revenues$— $369,592 
Total costs and expensesTotal costs and expenses10,505 411,640 
Loss before income taxes and income from equity method investeesLoss before income taxes and income from equity method investees(10,505)(136,912)
Income from equity method investeesIncome from equity method investees— 13,358 
Net lossNet loss$(10,827)$(123,554)
Critical Accounting Estimates
We prepare our financial statements in accordance with GAAP. These principles are established by the FASB. We employ methods, estimates and assumptions based on currently available information when recording transactions resulting from business operations. There have been no significant changes to our critical accounting estimates from those disclosed on Form 10-K for the fiscal year ended December 31, 2022.2023.
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Forward-Looking Statements
Investors are cautioned that certain statements contained in this report as well as in periodic press releases and certain oral statements made by our officers and employees during our presentations are “forward-looking” statements. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements and may contain the words “expect,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” and similar expressions, or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible actions taken by us or our subsidiaries are also forward-looking statements. These forward-looking statements involve various risks and uncertainties, including, but not limited to, those described in Part II. Item 1A. Risk Factors included in this report.
Forward-looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond the control of our management team. All forward-looking statements in this report and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements in this paragraph. These risks and uncertainties include, among others:
our decision whether to pay, or our ability to grow, our cash distributions;
fluctuations in natural gas, NGLs and crude oil prices, including as a result of political or economic measures taken by various countries or OPEC;
the extent and success of our customers' drilling and completion efforts, as well as the quantity of natural gas, crude oil, fresh waterfreshwater deliveries, and produced water volumes produced within proximity of our assets;
the current and potential future impact of the COVID-19 pandemic on our business, results of operations, financial position or cash flows;
failure or delays by our customers in achieving expected production in their natural gas, crude oil and produced water projects;
competitive conditions in our industry and their impact on our ability to connect hydrocarbon supplies to our gathering and processing assets or systems;
actions or inactions taken or nonperformance by third parties, including suppliers, contractors, operators, processors, transporters and customers, including the inability or failure of our shipper customers to meet their financial obligations under our gathering agreements and our ability to enforce the terms and conditions of certain of our gathering agreements in the event of a bankruptcy of one or more of our customers;
our ability to divest of certain of our assets to third parties on attractive terms, which is subject to a number of factors, including prevailing conditions and outlook in the natural gas, NGL and crude oil industries and markets;
the ability to attract and retain key management personnel;
commercial bank and capital market conditions and the potential impact of changes or disruptions in the credit and/or capital markets;
changes in the availability and cost of capital and the results of our financing efforts, including availability of funds in the credit and/or capital markets;
restrictions placed on us by the agreements governing our debt and preferred equity instruments;
the availability, terms and cost of downstream transportation and processing services;
natural disasters, accidents, weather-related delays, casualty losses and other matters beyond our control;
the current and potential future impact of the COVID-19 pandemic or other pandemics on our business, results of operations, financial position or cash flows;
operational risks and hazards inherent in the gathering, compression, treating and/or processing of natural gas, crude oil and produced water;
our ability to comply with the terms of the agreements comprising the Global Settlement;
weather conditions and terrain in certain areas in which we operate;
physical and financial risks associated with climate change;
any other issues that can result in deficiencies in the design, installation or operation of our gathering, compression, treating, processing and freshwater facilities;
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timely receipt of necessary government approvals and permits, our ability to control the costs of construction, including costs of materials, labor and rights-of-way and other factors that may impact our ability to complete projects within budget and on schedule;
our ability to finance our obligations related to capital expenditures, including through opportunistic asset divestitures or joint ventures and the impact any such divestitures or joint ventures could have on our results;
the effects of existing and future laws and governmental regulations, including environmental, safety and climate change requirements and federal, state and local restrictions or requirements applicable to oil and/or gas drilling, production or transportation;
changes in tax status;
the effects of litigation;
interest rates;
changes in general economic conditions;
our ability to effect a transaction pursuant to our strategic review; and
certain factors discussed elsewhere in this report.
Developments in any of these areas could cause actual results to differ materially from those anticipated or projected or cause a significant reduction in the market price of our common units, preferred units and senior notes.
The foregoing list of risks and uncertainties may not contain all of the risks and uncertainties that could affect us. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this document may not in fact occur. Accordingly, undue reliance should not be placed on these statements. We undertake no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law.
Information About Us
Investors should note that we make available, free of charge on our website at www.summitmidstream.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We also post announcements, updates, events, investor information and presentations on our website in addition to copies of all recent news releases. We may use the Investors section of our website to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. Documents and information on our website are not incorporated by reference herein.
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Risk
Our interest rate risk exposure, which is largely related to our indebtedness, has not changed materially since December 31, 2022.2023. As of March 31, 2023,2024, we had approximately $1.0 billion principal of fixed-rate debt, $317.0 millionnil outstanding under our variable rate ABL Facility and $152.8$141.1 million outstanding under the variable rate Permian Transmission Term Loan (see Note 8 - Debt). As of March 31, 2023,2024, we had $137.6$126.9 million of interest rate exposure hedged to offset the impact of changes in interest rates on our Permian Transmission Term Loan. While existing fixed-rate debt mitigates the downside impact of fluctuations in interest rates, future issuances of long-term debt could be impacted by increases in interest rates, which could result in higher overall interest costs. In addition, the borrowings under our ABL Facility, which have a variable interest rate, also expose us to the risk of increasing interest rates. For additional information, see the "Interest Rate Risk" section included in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of the 20222023 Annual Report and updates to our risk factors included herein.
Commodity Price Risk
We generate a majority of our revenues pursuant to primarily long-term and fee-based gathering agreements, many of which include MVCs and areas of mutual interest. Our direct commodity price exposure relates to (i) the sale of physical natural gas and/or NGLs purchased under percentage-of-proceeds and other processing arrangements with certain of our customers in the Rockies and Piceance segments, (ii) the sale of natural gas we retain from certain Barnett segment customers and (iii) the sale of condensate we retain from certain gathering services in the Piceance segment. Our gathering agreements with certain Barnett customers permit us to retain a certain quantity of natural gas that we sell to offset the power costs we incur to operate our electric-drive compression assets. We manage our direct exposure to natural gas and power prices through the use of forward power purchase contracts with wholesale power providers that require us to purchase a fixed quantity of power at a fixed heat rate based on prevailing natural gas prices on the Henry Hub Index. We sell retainage natural gas at prices that are based on the Atmos Zone 3 Index. By basing the power prices on a system and basin-relevant market, we are able to closely associate the relationship between the compression electricity expense and natural gas retainage sales. We do not enter into risk management contracts for speculative purposes. Our current commodity price risk exposure has not changed materially since December 31, 2022.2023. For additional information, see the "Commodity Price Risk" section included in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of the 20222023 Annual Report.
Item 4. Controls and Procedures.
Under the direction of our General Partner's Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) our disclosure controls and procedures were effective as of March 31, 20232024 and (ii) no change in internal control over financial reporting occurred during the quarter ended March 31, 2023,2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Although we may, from time to time, be involved in litigation and claims arising out of our operations in the ordinary course of business, we are not currently a party to any significant legal or governmental proceedings, except as described below. In addition, we are not aware of any significant legal or governmental proceedings contemplated to be brought against us, under the various environmental protection statutes to which we are subject.
Fiberspar Corporation. On May 3, 2022, Fiberspar Corporation (“Fiberspar”) filed a petition in state court alleging, before costs and interest, over $5.0 million owed but not paid for orders of pipeline product from Fiberspar. The petition asserts causes of action for breach of contract and suit on sworn account. A civil action on the same claims had been filed by Fiberspar in 2016 but was dismissed without prejudice pursuant to a standstill and tolling agreement that expired in 2021. We filed an answer on September 6, 2022 denying Fiberspar’s claims and asserting counter claims. The case is pending in the District Court of Harris County, Texas. It is currently set for trial in July 2023, but the parties have filed a joint motion for a continuance seeking a trial date in or after October 2023. We are unable to predict the final outcome of this matter.
Global Settlement. On August 4, 2021, the Partnership and several of its subsidiaries entered into agreements to resolve government investigations into the previously disclosed 2015 Blacktail Release, from a pipeline owned and operated by Meadowlark Midstream, which at the time was a wholly owned subsidiary of Summit Investments, (together with Meadowlark Midstream, the “Companies”). The Companies entered into the following agreements to resolve the U.S. federal and North Dakota state governments’ environmental claims against the Companies with respect to the 2015 Blacktail Release: (i) a Consent Decree with (a) the DOJ, on behalf of the U.S. Environmental Protection
Agency and the U.S. Department of Interior, and (b) the State of North Dakota, on behalf of the North Dakota Department of Environmental Quality and the North Dakota Game and Fish Department, lodged with the U.S. District Court; (ii) a Plea Agreement with the United States, by and through the U.S. Attorney for the District of North Dakota, and the Environmental Crimes Section of the DOJ; and (iii) a Consent Agreement with the North Dakota Industrial Commission.Commission (together, the “Global Settlement”).
The Consent Decree provides for, among other requirements and subject to the conditions therein, (i) payment of total civil penalties and reimbursement of assessment costs of $21.25 million, with the federal portion of penalties payable over up to five years and the state portion of penalties payable over up to, for the federal and state civil amounts, six years and, for the federal criminal amounts, five years, with interest accruing at, for the federal and state civil amounts, a fixed rate of 3.25%; and, for the federal criminal amounts, a variable rate set by statute; (ii) continuation of remediation efforts at the site of the 2015 Blacktail Release; (iii) other injunctive relief including but not limited to control room management, an environmental management system audit, training, and reporting; and (iv) no admission of liability to the U.S. or North Dakota. The Consent Decree was entered by the U.S. District Court on September 28, 2021.
The Consent Agreement settles a complaint brought by the NDIC in an administrative action against the Companies for alleged violations of the North Dakota Administrative Code (“NDAC”) arising from the 2015 Blacktail Release on the following terms: (i) the Companies admit to three counts of violating the NDAC; (ii) the Companies agree to follow the terms and conditions of the Consent Decree, including payment of penalty and reimbursement amounts set forth in the Consent Decree; and (iii) specified conditions in the Consent Decree regarding operation and testing of certain existing produced water pipelines shall survive until those pipelines are properly abandoned.
Under the Plea Agreement, the Companies agreed to, among other requirements and subject to the conditions therein, (i) enter guilty pleas for one charge of negligent discharge of a harmful quantity of oil and one charge of knowing failure to immediately report a discharge of oil; (ii) sentencing that includes payment of a fine of $15.0 million plus mandatory special assessments over a period of up to five years with interest accruing at the federal statutory rate; (iii) organizational probation for a minimum period of three years from sentencing on December 6, 2021, which will include payment in full of certain components of the fines and penalty amounts; and (iv) compliance with the remedial measures in the Consent Decree.
On December 6, 2021, the U.S. District Court accepted the Plea Agreement. This settlementGlobal Settlement resulted in losses amounting to $36.3 million and will be paid over five to six years, of which we have paid $8.0principal amounts of $14.7 million as of March 31, 2023.
Verdad Resources.Verdad Resources LLC (“Verdad”) filed a complaint in Colorado state court for the district of Weld County against Sterling Energy Investments LLC (“Sterling”), Golden Resources, Inc., and Grasslands Energy Marketing LLC (“Grasslands”) on October 20, 2022, and amended on December 6, 2022 to exclude Golden Resources, Inc. as a defendant. In connection with the 2022 DJ Acquisitions, Sterling and Grasslands became subsidiaries of the Partnership. Verdad claims that Sterling did not have the right to assess marketing fees passed through from Grasslands’ purchase and resale of residue natural gas and natural gas liquids from Sterling. The relief requested by Verdad includes approximately $3.6 million in damages plus pre-judgment interest as well as declaratory relief and recovery of costs. We are unable to predict the final outcome of this matter.

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Highpoint Operating Corporation.Sterling and Highpoint Operating Corporation (“Highpoint”) are parties to a gas gathering agreement (the “Highpoint Agreement”). Sterling sued Highpoint in Colorado state court for the district of Denver County on June 15, 2020, alleging that Highpoint breached the Highpoint Agreement and seeking damages. Highpoint asserted counterclaims alleging that Sterling breached the Highpoint Agreement. In October 2021, after a bench trial, the court found against Sterling and in favor of Highpoint’s counterclaims. The court awarded Highpoint $2.4 million in damages. In December 2021, Sterling posted an appeal bond and filed its Notice of Appeal. In February 2022, the Colorado Court of Appeals granted Sterling’s Motion to Stay Execution of Judgment. On March 7, 2023, Summit DJ-S and Highpoint entered into a Confidential Settlement and Release Agreement that fully resolved all claims between the parties. On March 27, 2023, Highpoint filed a Notice of Satisfaction of Merits Judgment and Costs Award and the matter is now closed.2024.
Sage Natural Resources. In July 2022, the Partnership’s subsidiary DFW Midstream Services LLC filed a petition in the District Court of Dallas County, Texas seeking payment, before costs and interest, of almostapproximately $1.0 million in electric power costs for gathering services provided to Sage Natural Resources, LLC (“Sage”) in 2021-2022. Sage has denied the amounts are owed and has filed counterclaims seeking damages and other relief for DFW’sDFW Midstream’s alleged breaches of the gathering agreement. The issues in this case arose from events in February 2021 impacting the oil and gas industry in the Barnett during Winter Storm Uri. A non-jury trial is currently scheduled for FebruaryAugust 2024, and we are unable to predict the final outcome of this matter.
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Item 1A. Risk Factors.
The risk factors contained in the Item 1A. Risk Factors of the 20222023 Annual Report are incorporated herein by reference except to the extent they address risks arising from or relating to the failure of events described therein to occur, which events have since occurred.
Item 5. Other Information.
None.Mountaineer Disposition
On May 1, 2024, Mountaineer Midstream, a wholly owned subsidiary of the Partnership, closed the sale (the “Mountaineer Sale”) of its operated gathering system, the Mountaineer Midstream System, to Antero Midstream LLC (“Antero”) for a cash sale price of $70.0 million, subject to customary closing adjustments, pursuant to a purchase and sale agreement between Mountaineer Midstream and Antero, and solely for the purpose of unconditionally and irrevocably guaranteeing the payment and performance of all of Mountaineer Midstream’s obligations under the agreement, the Partnership, and its wholly owned subsidiary, Summit Midstream Holdings, LLC. Under the agreement, Mountaineer Midstream has agreed to customary indemnification obligations for breaches of covenants, warranties, and representations, including environmental representations.
The Mountaineer Midstream system, located within the Marcellus shale, is in Doddridge and Harrison counties in West Virginia.
The Partnership intends to use the proceeds from the Mountaineer Sale for general partnership purposes or future acquisitions. In addition, a subsidiary of the Partnership has agreed to provide customary transition services to Antero for an initial period of 60 days, unless terminated or otherwise extended.
The foregoing summary of the Purchase agreement is not complete and is qualified in its entirety by reference to the full and complete Purchase agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.
See the unaudited condensed consolidated proforma financial information of the Partnership filed as exhibit 99.1 to this Quarterly Report on form 10-Q.
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Item 6. Exhibits.
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Exhibit numberDescription
+
+
+
+
+
+
101.INS*Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*Inline XBRL Taxonomy Extension Schema
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
+ Filed herewith.
* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. The financial information contained in the XBRL (eXtensible Business Reporting Language)-related documents is unaudited and unreviewed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Summit Midstream Partners, LP
(Registrant)
By: Summit Midstream GP, LLC (its General Partner)
May 5, 20236, 2024/s/ WILLIAM J. MAULT
William J. Mault, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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