SMLP - Earnings call transcript Q3 2019 | Summit Midstream Partners, LP

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Operator

Welcome to the Q3, 2019 Summit Midstream Partners, LP, Earnings Conference Call. My name is Vanessa and I'll be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note this conference is being recorded.

it Head Blake of turn of Vice now and Strategy Investor will over Motley, to President I Relations.

Blake Motley

Thanks, operator, everyone. and good morning,

don't summitmidstream.com or where in copy a find it was morning, already news home earnings you'll visit you page the please at that this issued section. of website our the on release earlier If our have

along With and Chief Heath Officer, is President and other operating Executive Chief me Marc with Deneke, today our to discuss our team. our third of results quarter of XXXX Stratton, Officer; senior financial members our Financial management

They our and Before today statements anticipated concerning like we objectives not of and plans start, to liquidity, may I'd flow, but cash expenditures. volumes, include, contain remind limited strategy, for These also you statements. include future and that our operations. other estimates expenses, the discussion statements forward-looking to future business are may operating may capital

in can expectations from actual February statements to to annual that we forward-looking filed a of see our on other Form are expectations report such that such cause the assurance that SEC SEC XXXX on as we reflected results. reasonable, expected will correct. listing XXXX, XX-K, no which Please could as Although was the be believe prove filings well materially with for differ XX, factors provide our results

to have reconciliations distributable release. EBITDA, Please earnings These also provided note in that most are and on our use gap the cash measures flow. and we recent financial this EBITDA, adjusted directly call, terms most we'll non-GAAP comparable measures, the

over I'll that, Heath. with the call to And turn

Heath Deneke

earnings by I've excitement business enthusiasm I've exhibited Summit's Since CEO. company on in-depth joining dedication of of in to want thoroughly review conduct mid-September, our the by an in and been serving thank expressing impressed aptitude and the all Summit's my employees. had the by joining to opportunity the and for and Blake Thanks, I start everyone. third XXXX quarter I'll morning us as new call. good everyone

the and for continued really there's softness in drive value current and upstream stakeholders. the addition and outlook sector the our macro navigate potential tremendous spite I this that In through in business of regarding near-term the significant of overall and environment long-term and optimistic to I'm backdrops, believe

While producer area focus most and the the the is our and we the of oil sit top drill activity America. stack levels, the can't acreage control core of gas in North DJ, in Utica to at the Permian the economic Bakken,

that behind these and customers We that our oil generate capital in and solid XXX believe gas deploy we areas environment returns plus currently can are in. in the XX systems

core Our of largely without room on significant GMP focus grow amount built ample follow out systems in these a also requirements. areas capital to are with

levels Piceance Our a or cash the with the middle the current legacy next of decade. flows largely portion significant continue are and through and regions the near XXXX, that at NBCs by area, continue of end that supported Marcellus the through

our gathering Also $X by of nice that that's to inclusive has per fees. our production relatively PDP cost Barnett MCF produce of of acreage underpinned marginal a low declined estimate less a wedge we and than is

the also amount considerable remaining We inventory have a on drilling of system.

cycle LNG their are meet assets will suggests Hub to the anchor which the be Henry significant large current acreage, Gulf versus our we dock believe and the inclusive Barnett supported also Barnett Our they gas commitments drilling hub to at LNG by of tenant price in commitments that gathering and transporting that has region have develop costs LOE, DNC, committed those help is buying and to a advantage it cost results to facilities. transportation strip from the production

basin, system. the Permian equity E the in most by firm who largest anchored Pipeline Basin, the project way commitments the gas in by world-class flight Furthermore, now the we among also and in Double partner in a from a venture strategic joint is pipeline the and owner and is which active is major have

to So positioned I stable it's wanted and near the activity. for here that, in comes the for large our term base point stands ground well business think out-years I this in is the highly very growth without that the make and I attractive and a accretive on in very development believe need pickup

more not recognize that on forward. control capital going leverage, cost sheet that, and said overall having a balance rigorous and be Now need we we is from and then discipline where fully we warranted a are much standpoint to focus

and ability base concerns We set also regarding on simplification. on words. management's the the fronts. investor those post on guidance that acknowledge is with One, our two that confidence sponsors we speak time the deliver benefit we'd much alignment two restore than doubt to and we two, to view my get need actions of to Well, louder topics, will commitment and that like

call, We think sponsored our demonstrating our later commitment to a and and alignment that step today's its major in I'll on the is more with a transaction, SMLP DPPO which little cover in stakeholders. continued bit

and new In our our setting that as to going opportunity sheet providing for the CEO priority management's forward expectations and are realistic addition, delivering at commitment a operations customers. want capital the to discipline, and as emphasize I reliable safe, balance cost the of list to now top on responsible take very is them control, improving

the me quarter the across a of of various operating and the third playing highlights key hit few let Now out are that segments. themes a on currently results few

results of adjusted the $X results included of flow X.XX. a for EBITDA distributable EBITDA Basin million, included temporary our of happen within come XXXX cash First, of of over coverage with disruption operational to to and in approximately operating of $XX $XX.X million million These quarter segment. third loss distribution our million both associated and quarter Williston that $X.X remediation the non-recurring expense ratio

quarter quarter-over-quarter volume than would out the more the by which X a in as behind quarter, Customer events, million line approximately in expectations now and would been Excluding which segments. our our also us, with reportable the EBITDA are $XX X second growth over increase our for have expectations of these adjusted in have represents of levels demonstrated be activity line XXXX. XX% with trended

Basin DJ segment, of quarter of new million adjusted segment startup $X.X as to quarter. volumes with XX% The a from are quarter. compared our of along second related the up in demand volume quarterly second plant to resulted In our the growth Hereford combination the increase third payments our XXX% in EBITDA the

operated flow utilize by to Our generated expected we Wattenberg of their support by who field in two are Point better currently customers one and well service the further our Resources, Hereford rigs Northeast operating is are acreage. has Herford High asset recently which of their encouraged than highlighted area, in by results cash development strategy to drilling their

and activity think Basin to it growth processing DJ gathering contribute as primary look forward we will and Our continued will beneficiary of be volume the into systems we this XXXX.

have a for liquid Williston us Summit volumes our continues driver expectations. be at The Basin ahead topline here as trended of to

in XX.X for to as turn exceeding for result of represents customers month new were line This day. of growth are over estimates a barrels. thousand wells a it excess exit Summit, is internal in of curve per rate also September Our in new quarter XXX,XXX XX relative volumes and volumes the type many the second record barrels quarter, which the XX% of

report growth, XX% which Utica, quarter-over-quarter. the third was excited EBITDA yet quarter to adjusted are again up a we segments over In consecutive of

pad XXXX. excited that are perspective, one in in half recently in we to this pad that XXXX. third very excess we turned quarter expected put Looking To in SMU system XX% behind this approximately site drilled it's the of pad was of of to volumes yield production segment a our expected in about five should line to and level first produce day once rates half of site beginning continue $XXX million our the completed well is initial a first and in forward once grow

see are CapEx Permian third pointing in system recent out the driven decrease completion and new which also plant our levels platform we DJ quarter, expansions. It's the processing that the GMP across worth by to was of beginning

the CapEx station the expansion decrease will Angus expected levels in will finish spend DJ. the compressor further quarter as We our up we in fourth

our the to volumetric are in a without XXXX capture in capital position out growth forward. and and all built expansions additional GMP major largely our As wind focus of are systems much Permian great a again going core DJ down, lot in the of areas

that we areas. year really at downtime and remediation the a referenced all to focus $XXX nearly Williston that I or for third Looking activity in year quarter in of ahead real-time basis, expect and million near segment X our to our fourth million. EBITDA quarter-over-quarter Accounting field for core to the a across on the rig we quarter, calendar at well monitor point volume trend based end continue this to of continue on expect through the non-recurring in growth the come the we earlier, the

detail. our now So hand Marc review quarterly CFO, Stratton in to with to that more our I'll over it results

Marc Stratton

a morning and $X.X feet cubic by which is Great, of gathered our segment XXX on a four and adjusted up and in XX.X% begin in of system. in gas good second averaged line SMU volumes thanks comprise favorable everyone. XXXX. the segments full mix segment. system the areas day Utica third totaled with I'll This new core quarter that million quarter pad and provided from was Heath Shale due start the focus more wells late that quarter a EBITDA walking million, I'll The through quarter growth turned of the were from to the second level the

seen which these quarter volumes our the quarters over cubic behind from gathering volume the times directly than topline than the in fee system, day three quarter. is approximately trajectory, More three daily a is volume originating XX% and our XX% revenue of driver TPL-X in second increase fee a represents given connected volumes This on we level earn that an was continuation connector. we've XXX from SMUs that feet million that pad pad represents or trend a level sites last higher a a important of growth pad average generate gathered to the the

in two Looking and the confidence forward, throughout simultaneous resumed we Shale impact of early due customer activities. on the that wells us see and from segment gives The these wells also balance completion five volume our were connected Utica flows drilling October older previously that shut-in strength has anchor our in to new continued year. wells will

quarter half customer’s referenced of in first a which well ahead the line addition first earlier this turn pad expected to XXXX five of Heath two customer a million in separate day In plans plan XXXX. commission that wells is has of XXX in to the another

dry up flat commissioning. remind to range shown to eight million hold are to historically and with XX these million have you, Just gas XX the IP initial for to upon large rates in wells a months Utica day

we as our move five wells forward. five significant catalyst can even this needle pad a such, in the As represents well for look business particular growth and

segment, XXXX, to gathering quarter averaged Turning million returned the the in prior a XXX as wells bringing year-to-date. day, new of third total throughput our from Ohio in gross the line to wells XX XX quarter X% volume up

Our customers service our are area, ducts will inventory, currently have head are two we operating backlog completed XX to expected in in be duct into also XXXX. as the currently These rigs customers which increase which XXXX. in

Beyond that of are the windows gas to third-party behind evaluating system that region. the the commitments programs certain targeting in drilling new OGC made cracker feedstock for satisfy wet the to customers a provide Utica they've and ethane condensate

will the in service system this commitments baseload pick is and gathering has over several activity placed the filled. years up facility are drilling expect Ohio behind as We next

day, liquids volumes XX% up connections. or XX quarter In XXX,XXX second XXXX averaged third per quarter approximately behind XX,XXX of the the day nearly barrels well barrels new segment, from a Williston

in throughput per We fourth to-date the period in average with fourth expect the maintain momentum of liquids the XXX,XXX excess quarter upward of and barrels volumes in September month their into quarter to day.

for are behind in gathering the currently inventory, into throughout XXXX. balance the XX operating expectations supports continued our our have customers year rigs two and systems and of liquids which growth Our ducts

disruption occurred negatively expense normal of Heath $X.X third The referenced, lingering EBITDA fourth remediation the in full to segment and operational for associated quarter operating Bison in As Midstream our Williston and portion anticipated in Bison no impacted million than late levels continued restored are quarter capacity an loss related a more expenses our higher for Midstream of the with million the third late system by quarter. that and $X second system quarter. August was on EBITDA Basin adjusted of to was than

the In fourth new eight wells our exit represents line an for being in us, Bison in turned addition as XXXX. we have which towards we growth catalyst system visibility behind quarter, attractive

XX% second XXX% volume adjusted to we the the increase of quarter of recognize ramp the two coming by in working DJ $X.X began EBITDA new for well the Basin totaled in has higher of segment with plant. commissioning of increased line service XXXX third to in driven and trended and The our million with third in $X.X rigs volumes should the expectations the quarter bode processing million connection a payments utilization our currently quarters. XXXX, rates in area quarter segment increase compared a EBITDA that demand and and for our EBITDA adjusted in

Lastly, the third the $XXX,XXX expenses. Basin the Permian and over XX.X% driven second quarter in in by segment for throughput quarter increase adjusted a EBITDA results operating a volume increased by decrease in $XXX,XXX

The June volume facilitated quarter new to benefit for was commissioned gathering station, full new which Blue of throughput Quail quarter was processing source in the our third first our compressor system. from and and a

for of two in operating duct to inventory third one active XX the our wells. their area much increased I've service remained customers Our to have and quarter rigs

XX visibility line higher improve our which quarters. be quarter, in throughput to behind We and over in turned wells Permian efficiencies our the have will good the system new coming fourth operating for facilitate

currently Now EBITDA our and quarter $XX.X and of that turning by results flow. continue and million back of on this this XXXX, primarily across trend we through cash end of are X.X%, levels At third that was financial Relative of flow quarter we the volumes year the driven reported systems the of expect was our partnership. of volumes adjusted of to the segments. included million monitoring. across X% connection eight EBITDA many increasing rig SMLP six cash based second distributable well increasing $XX up to adjusted distributable up point to

This non-cash of Based a reported of impairment from This Marcellus SMLP which this current our the the million, in on Shale quarter to due $XX.XX but benefit segments. SMLP Mountaineer goodwill ratio million on outlook a unclear. quarter, is outlook were additional for impairment more included that in line wells our per reportable generated distribution of the third new to quarter XXXX on system in also distribution related is net five a unit, third for $XX.X X.XXx. environment primarily coverage temperate a turned of system. activity volume $XX.X quarterly expense of did the system the loss

million the with were approximately lower the expenditures CapEx Capital quarter $XX the of and calls of pipeline decrease to $X.X given plant second investment equity our XXXX day XXXX and commissioning Double fourth These million DJ of E third in the for expansion capital our we quarter quarter project. totaled further million compressor recent associated than the expect including Permian. in the million investments in a our new station the processing $XX of $XX

only We financial capacity revolving limit in billion generated Piceance $XXX $X.XX of segments, areas, subject with our which facility legacy borrowing outstanding end X.Xx. approximately free maximum Shale Marcellus capital the under the quarter to leverage available approximately at to Barnett include quarter million $XXX $XX.X of of Shale was XX, million Basin, Our compared September cash flow limitations. and $X of expenditures. million credit total a covenant X.Xx XXXX million at and had Total

call turn to I'll that Heath. with over the And back

Heath Deneke

Marc. Thanks,

So few lineup I'd like touch themes open to strategic we questions. for on before the a

on-time state. our third in project to meet March a XXXX in and their received So expectations. of start us making In cost the let FERC now our the in XXXX, with in intent the team line we project write an respect environmental a me progress the to locked the away from which quarter issue server with great of project. notice on majority favorable for our on-budget the is Having Double with that assessment E a pipe and September, is in remains to

plans our of E, majority XXXX. the Double currently that beginning we to As substantial SMLP's to it would for financing from market fairly relates level asset thoroughly Double and evaluated quarter first we've financial the of are capital third-parties expenditures E advancing our revolver in a shift

the sheet. would for accelerate plans financing significant us Summit utilize the Our several years the capital free will help and excess to third-party to cash strengthen position and balance next deleveraging alleviate over flow obligation a

also Double the ability capture The strategy exposure E project. upside our financing long and to attractive highly term maintains to

we of a the will XX.X prepayment make will DPPO or exchange that current of the million a cash DPPO common XX.XX in XX% in the prior Regarding remaining announced balance SMLP and that reduce transaction XXX.XX of million get to and units morning, million. issue SMLP moved we balance in by million XXX.XX this nearly will balance

all DPPO approximately the is relative that done extended XXXX to payment an final otherwise required with to you date We've in also XXXX already payment June the the requirement of SMLP reflecting yesterday's the issue from make million to sure million December math implied $XXX.XX another XXXX. premium the units I'm payment closing common $XXX.XX with XX% have to price. January price make in of

I also remaining as enterprise well balance and support XXXX company particularly support Capital an and reflects the the it to flexibility creditors the alignment overall outcome LPs market Energy component, also with the remaining and in portion flexibility solution the good us forward to also all company, is believe XXXX of uncertainty balanced for needs, a combination [Indiscernible] the the Partners time mix very stock environment. for a all pay the and that of SMLPs, with It deferral not each. and the step willingness all substantial to transaction our also retire premium reflect DPPO remaining current only to or more funding therefore and in We develop stakeholders. for January deferral puts we as more a preserve an of the in Company's gives equity but optimal the all that the the to important balance. in the the DPPO implied cash, to This flexibility balance of consideration believe

said of sheet acknowledge we leverage and reduce importantly, steps and having strengthen to with a that Now most we financial balance lot runway, on within now longer remaining done the our a work take to improve left still that, forward. the control even DPPO, fully meaningful flexibility to be to that there's are need our going

let me for then a that we're of taking we'll up those few the cover open line steps So, and questions.

least in expense just $XX we've of These expect rate run wide structure our $XX to we year are the savings in addition suite with cost disclosed reoccurring conference left and unturned, an cost annual the out consultants at no and up call. million million field bottom organizational of that first, the conducted generate of million and completed of per opportunities $X savings we sea leaving we assessment efficiency the previously XXXX identified that's team to both number at outside a of employees an August cost which So was savings to that whether a amounts top in will or The and level. in thereafter. stone review, comprised

outcome make that safe, include staff targets providing and decisions of the we've challenges are facing intensive the which by meet to and cost this coming and a market current our a objectivity ability been commitment embedded Also the responsible values take has and well effort with Well, achievable, core in this saving the from remarkable. transformational across not strong our our time, there are demonstrated put of did reliable acknowledge our The as I stewardship a months, our that our to the number want operating of reflects to the we'll amount operations was and very of that rise our that and culture, made opportunity appropriate conflict in for organization initiative. and that effort difficult character, in is organization confident employees tremendous customers. have to to professionalism employees level are The conditions. have we into simply as the

expansions in on core well with we our focus future Second, concentrated our pipeline growth infrastructure of E areas. disciplined will the as remain respect These activities. continue to to as will activities project, Double accretive be

the than expect our come program in our XXXX. again, expect $XXX in that's in Double and $XX million to relative less we fund third-party Excluding million program to XXXX we with which investment will expected capital, E capital

I are meaningful on behind out. GMP modest XXXX, as So, the going core And systems Capital capacity forward. growth a us, call requirements with mentioned with of programs in capital our of amount focus built the to capture area ample very the chunky virtually volume earlier they have XXXX future all

divestiture expanding JVs include we our And are sales in program finally, potential our of and assets to focus core and our our asset -- areas.

opportunities legacy at market pursue we're transact a the asset us no sake giving remain continue While willing deal reasonable the We're made forward. for not that a to on done. have to serious value we're getting as for But, conditions continuing challenging to find up. are we're going not price. going doubt of and it buyers to there's compromise we willing discipline And to to just patience sales, evaluate current

you patience our wrap holders, unit market. up, and all your to to to challenging to again for wanted I of So continued thank support be just say, lenders, stakeholders and our what a and continues our

of some announced this has to be Summit. And help chapter beyond. next company its we've leading think business to the to and XXXX to I in reposition and want important into look the reiterate I successful evolution. what forward I future optimism my steps the for certainly in-store important here very

call let's the for And up open that, so, with questions.

Operator

Thank Richardson go you. SunTrust. Tristan from with comes first [Operator Instructions] ahead. Please Our question

Tristan Richardson

guys. be environment. the of commentary your actions entirely, sponsor alignment, morning, about extent confidence particularly might production would there? out just good size talk and the the waive on to actions about the the thinking appreciate Can mixor in for Hey, due that operating restoring to unequivocal remainder you costs Heath, the growth sponsor which in initiatives potential potential changing DPPO

Heath Deneke

roughly with to think at the just it the what out, hope I away. XX% well. of push the we the the anticipate you're going you sponsor, lot we almost two from close, out it be don't us to relative obviously obviously certainly saying will business for to work price the make and flexibility consideration created look But as if sponsor the our optimal flexibility are on We No, show is the way. that, a And does yesterday's I do need the Tris, obligations premium down DPPO sponsors can think provide I today basically retire will when to of remaining what we we road, doing that think a sure it. XXXX. the implied sure going look Yes, to we in transaction giving well flexible, share that years an this now, mix, thanks, that extension, more forward, very is I'm

Tristan Richardson

Appreciate it. for And then about remains Heath equity either or accept targets willing the issuance? cost of in further Marc, extent can you that for be distribution which when remainder lower to terms and sort you of to the coverage, equity talk and option bookends just you'd split such, the about DPPO equity as of the capital, think of an potential

Heath Deneke

at Well, mean, that's years at we're this about away, -- we're something least point, talking I couple right. a

go. all I that we also like the we most retain to certainly stock combination flexibility use or if felt way use we cash to as did of any it. think about So, the we was it, And appropriate think could

sheet issues trading how to time it. units to how create we aggressively the over lot and on to will our the built we at based our of the and we'll So, determination are balance on a achieve strong and that balance resolve of years. in next in how financial a well I much point flexibility, make how flexibility lot of depend a And, if delver think business the couple plans performs sheet going

Tristan Richardson

across it, is one the me, last new XX% approximately in just for or just just is then different the that, effectively generally? to units, forma And for it pro the is own Thanks. on it would sponsor trying triangulate buckets

Marc Stratton

issuance, by ECP or XX%, Marc. either directly pro SMP is new forma the Sure, Tristan. This approximately owned for through XX%. Yes it’s Holdings units

Tristan Richardson

Thank much. it. appreciate Helpful, you guys very

Heath Deneke

Thanks, Tristan.

Operator

Tillett next go comes ahead. question Please Our Barclays. with from Christopher

Christopher Tillett

or me guys the that of I types the guys, could funded by just for you I guess pipeline be to you that on capital, structures third-party are morning. E to looking mentioned, you guess, at Hi good Double you is speak considerations first there? expect

Marc Stratton

this Yes, Marc. sure. is Chris,

and So, fairly we spot. in regarding look a there's and interest options discussions finance going investors of I'd out lot good in we're XX% say as productive forward some a very our interest world-class there. having E mentioned, a Double investor we're is say to project, -- this Obviously, with I’d

So, just give got fourth about $XX million $XX And under the million of invested spend, the only you have to revolver. in we today. to early another we've the really about $X a quarter, over balance E which little expect million background, capital Double do of we

investments and other of we Our prepare pipeline the larger make begin in on construction. to capital as payments will first our begin for to Really quarter XXXX. really materials

our from are But third-party to as a level we we asset period. forms about construction way to financing, that serious substantial of during third-party and is the takeaway evaluating financing efficient think take longer commitment number to term are capital progressing. SMLP's for that a the But very shift consideration strategy, of giving E we a think Double could this we a majority be would which us a I revolver think

would throughout we positive into partnership to after really balance capture funding the future credit amount back operations. the XXXX the sheet strengthening opportunity Obviously, enable us continue the more long really have accelerate over to we think for would a by of as and revolver this would and to for term and longer-term be it remove sometime bringing deleveraging substantial a obviously, commercial SMLP the upside it

quarter. have make don't tuned for fourth I continue the to updates stay we we to specifics throughout say while announce as progress just So today, any

Christopher Tillett

in the DPPO be of can guess do cost and kind I exceed thinking all-in is may to you. just it of terms renegotiated if repaying given Thank still all of a the X% that that that million I by the the my shifting you you or you the until the be remaining guys this wait might second, XXXX math was then speak that seems on to interest so, And like might for asked amount to the it XXX amount remaining portion earlier what the timing reason year.

that? about of So be wondering thinking just how kind we should

Heath Deneke

this think obviously Heath. Chris, part the a stab the was interest think take mix other and X% we time I we the relative fairly of I is think a structures. is hi that at bought mean potential is I Yes, look, ourselves cash that consideration something paying to attractive rate I'll

So we more is defer, payments have XXXX we kind that de-lever as and pay my self-run don't until it financial the success we've that if create we make to while off the down flexibility. of on view on and have on have could this asset road we

on news it good like of the and advantage our makes it and prepayment do be another is we But if a well that. lot think, I So we're sense we've end flexibility positioned a take have certainly on to of that we will much options I that answer got question. now to of going that lot it more one have level a I resolve time again forward. manageable and felt balance, just hope we and think your to

Christopher Tillett

it, Yes, all that's guys. you, got for Thanks. me thank

Heath Deneke

Thanks Chris.

Operator

Thank you.

Our Cantor comes Terran go next Fitzgerald. with question Please Miller from ahead.

Terran Miller

like you Good of number target number target XXXX? leverage to do asset achieve two morning. questions, us a and sale Two willing by is, are to quick level have an one give you'd is, end level you the

Heath Deneke

don't what I didn't, I I I'm first follow really think you're question can repeat sorry asking. you your

Terran Miller

sales, asset are some doing potentially willing potential program? about if you wondering size I to talking You're that was

Heath Deneke

the program? Size potential

Terran Miller

Yes.

Heath Deneke

we that depending prepay de-lever look, flow it exactly immediately whether sheet that's balance we us A&D assets on little we're to how core know you do I'm looking some there. what a by cash the I going include that not of flexibility think obviously sells or manner I the to program joint outright help is expanding to and for our DPPO if much want we're sure our you're a will But, what can. that raise looking ventures, at in

I in a not mind. there's So specific think target

some just a to value we're as not and at take extreme focused if very flexibility as of healthy certainly we get target But mind. again It's doing our [Indiscernible] in of de-lever kind think and a assets what about can some I and point possible. creating really [Indiscernible] on quickly will of that. this advantage we

Terran Miller

end to do the level have And a in second XXXX? like is, this which question, terms target to get of you'd you by leverage of

Heath Deneke

we can. as fast as really or term long think I Look

the kind be should or less success things. and so around the obviously performs, other think on that we timing the get slow we four dictated and like four can and below. feel is to by I of levering not But to our going business be at times business asset that or we're base going down side the times until in definitely, sale how

Terran Miller

you. Thank

Operator

Thank you.

question your line next Elvira is Elvira with Our comes ahead. from RBC now please Capital, open. go Scotto

Elvira Scotto

Hi, of I Good couple a had clarification sorry. just questions. morning.

was the the the but that the we the portion any is actually of reduction DPPO maybe DPPO? further million like this earlier, DPPO, by and it for On noticed $XX.XX looks potential of asked there remaining sponsor reduced

Heath Deneke

reduction Yes. is mean I that the you to we the at think at you whether or look, as where more should think when look balance I of stock back million think a be a premium in $XX we it of it take trading. indicative willingness

as we'll settle evaluate we of again look that to kind think I balance. the

you more price will necessarily a trading look an just I felt was being like. that negotiated current I we So market looked at to the impairment just we mix, think where the directionally don't we reflective DPPO what this was if should we I consideration balance. of wouldn't to be opposed the there's of when think it as as any, think

Elvira Scotto

up That I Double wanted makes just, E. and sense on the to then follow

are when think think I the financing CapEx place help the already about So level this on your discussions you're in was asset all growth and in guidance just you assumes financing, E? talking you of million in have that me $XX mentioned XXXX, understand, I you Double third-party

Marc Stratton

that morning. E. equity in press the morning release million Marc. the in our investment outlined business reflects is and we've Yes, $XX so today that excluding visibility our this CapEx remarks Elvira we in Double have our good This Yes,

as mentioned quarter expenditures of are really call really and Double of E XXXX. the to earlier to capital the So, significant related I ramp through, the first that up continue here in end project going XXXX

capital And in perspective conducting the by underway such first and so, have place well formally we with quarter that XXXX. have begun third-party the process is investors of conversations we that

Elvira Scotto

work, a way the time then, right the comes back does line they that But think just would that investment for you about this them period. how would by buy certain Is when make over this? have and to return the you it that then pipeline and third-parties on

Heath Deneke

It's development it finance to Yes. of the us think we back subject following into Elvira. partnership obviously about That's -- think the construction that's the and the capital exactly that projects return right the about certain way have it. would operation commercial bring period the the way asset, to to ability to of during a exactly the to the I'd for way third-party utilize

Elvira Scotto

are really got any if mean, sales core the in you just you, I you of assets asset would bid? attractive sell terms of then, a And

Heath Deneke

we Yes, would.

Elvira Scotto

assets. potentially I these think JV, like assets? also then, that something do JV mentioned could with similar the do your some you sponsor And of on you a you think Is

Heath Deneke

all could think that the I be to case third-parties. Yes,

areas it put be have consolidate of to further footprint around only obviously de-lever someone that made grow would generate as the I a think our the some sense to inclined capital growth to I amount in Permian. well. do with to those to we that proceeds but and tremendous If in also not to DJ, think Bakken particularly, systems the work

Elvira Scotto

that's now. all for you, I had Thanks. Got

Heath Deneke

Thank you much. very

Operator

Thank you.

a have Tristan. with from go question follow-up Richardson SunTrust ahead. We Tristan Please

Tristan Richardson

Hey sorry guys.

one follow quick me. for Just

a that you extent etcetera, unsuccessful that as DPPO flexibility flexibility as You a flexibility that project the financing max process, whether policy, or about about lever additional near-term? it's distribution create offers, sort thinking or to the forward of flexibility and arrangement lever about on Thinking new be etcetera. the look is are just a sales to either it talked asset prolonged potential

Heath Deneke

with we to rate would that's kind Tristan just $XX the plans I over the our budget, at just we're of realize savings OpEx the a million it years. just going we year. a at a roughly and What which the decision positive capital time transaction, around to the told just potentially end of to asset now past position of announced that to close run average through, with I consideration we're end to of DPPO and and some planning a bought XX% distribution look with I is even generating made level year. We're the our we in you good efforts cut certainly We E year couple of that's current free its going our maintain Yes, by start look to reduce towards going level. our ourselves customers think us and going think XXXX obviously say, million a I question. deep cash Double there. for mean, just right we're our just the we to that We million hit financing, year $XXX give, outlined of Marc minimum by $XX by flow cut should here and worked this annual lot that

materially look, level And heroic built and really, they'll are A&D a have systems focus sales our out premium. that the largely that we doesn't doing market amount program combination the standpoint. EBITDA activity growth are needle an that from take in we of to ventures our warrant asset even and and to this it we, core areas, where of expanding core in include a drive The believe

lot these of at and steps next decision in when got you think quarter. wood all I distribution look we've chop now the total, to between a

get But course using diligently We're us and say, we're the going possible. going quarter the of forward, and a of going options we're then that do now will going best balance sure we've were make determination got to the our one our got over evaluate cash So time into lot the the always But priority and between months year. those next few is here every lot manner to of to work distributable the front distribution. and a they number quarter a sheet -- make to I there. of going as I through look, flow our in

Tristan Richardson

much. very guys Thanks

Operator

time have questions. at further no Thank you this and we

go back remarks please Turning the Deneke, to final ahead. for Heath call

Heath Deneke

forward. Thanks We want the joining business I upcoming we'll We the and here work hope everyone. hey soon. Yes. for years. thank look everyone team to continuing to better are reposition thank how we everyone thank I With appreciation to for left update to a you to for with and today. talk management us going in that the going our coming our to conferences you on investor and and progress forward success forward look

Operator

for you Thank conference. disconnect. your participation, this may and ladies gentlemen, you now Thank concludes today's you

Summit Midstream Partners (SMLP) 8 Nov 192019 Q3 Earnings call transcript