Summit Schedules Second Quarter 2024 Earnings
Call and Announces 2023 K-3 Tax Form
Availability
HOUSTON, July 18,
2024 /PRNewswire/ -- Summit Midstream Partners, LP
(NYSE: SMLP) ("Summit," "SMLP" or the "Partnership") announced
today that, at its Special Meeting of Unitholders ("Special
Meeting") held today, unitholders voted to approve the conversion
from a master limited partnership ("MLP") to a C-corporation (the
"Corporate Reorganization").
Heath Deneke, President, Chief
Executive Officer, and Chairman of the Board, commented, "I would
like to thank all of our unitholders for their strong support for
Summit's conversion to a C-corporation. This transaction will
deliver significant benefits by reducing unitholders' tax burden
going forward, simplifying Summit's structure to make its equity
easier to own, enhancing trading liquidity and providing greater
transparency and easier decision-making for investors. In addition
to the conversion, the notes offering we announced yesterday and
expected upsizing of our ABL credit facility from $400 million to $500
million increases Summit's financial flexibility to execute
our strategy relative to our existing capital structure. Through
the C-corporation conversion, expected refinancing, active
portfolio management and steps to strengthen Summit's financial
profile, we have positioned Summit for continued growth and
success. We look forward to completing this set of transactions and
driving value creation for our investors."
Summit unitholders voted to approve the Corporate Reorganization
with more than 88% of votes cast in favor of the Corporate
Reorganization proposal. Unitholders also voted to approve all
other proposals presented at the Special Meeting. Summit will file
the final results of the Special Meeting with the Securities and
Exchange Commission on a Form 8-K, after certification of the
voting results by the independent Inspector of Elections for the
Special Meeting. The anticipated effective date of the transaction
is August 1, 2024, subject to
customary closing conditions.
Notes Offering
On July 17, Summit announced that
Summit Midstream Holdings, LLC, which is a subsidiary of the
Partnership, priced an upsized offering of $575 million in aggregate principal amount of new
8.625% Senior Secured Second Lien Notes due 2029 (the "New Notes").
It is expected that the New Notes will be guaranteed on a senior
second-priority basis by Summit and certain existing and future
subsidiaries and will initially be secured on a second-priority
basis by substantially the same collateral that is pledged for the
benefit of the Partnership's lenders under its ABL facility.
The New Notes, and expected upsizing of the ABL credit facility,
provides Summit with meaningfully improved financial flexibility.
Relative to Summit's existing second lien notes, the New Notes will
carry no free cash flow sweep mechanism. Subject to certain
leverage-based thresholds, the New Notes provide additional
flexibility to raise debt, address the capital structure associated
with Double E and pay preferred and common distributions. Summit
believes this additional flexibility enables us to execute on our
strategy with financial discipline and a supportive groups of
investors and lenders.
Second Quarter 2024 Earnings Call
Summit will host a conference call at 10:00 a.m. Eastern on August 9, 2024 to discuss its second quarter 2024
operating and financial results. The call can be accessed via
teleconference at: Q2 2024 Summit Midstream Partners LP Earnings
Conference Call
(https://register.vevent.com/register/BI5642f88da4d246f9af0ef347fdc495ea).
Once registration is completed, participants will receive a dial-in
number along with a personalized PIN to access the call. While not
required, it is recommended that participants join 10 minutes prior
to the event start. The conference call, live webcast and archive
of the call can be accessed through the Investors section of
Summit's website at www.summitmidstream.com.
2023 K-3 Tax Form
Availability
SMLP also announces that its 2023 Schedule K-3 tax forms are
available online. Unitholders requiring this information may access
their Schedule K-3 at https://partnerdatalink.com/Summit. SMLP will
also mail a 2023 Schedule K-3 to any unitholder making a request
for a physical copy of the Schedule K-3. For additional information
or assistance, unitholders may also contact Partner DataLink via
email at SummitK1Help@deloitte.com or via phone at (855) 375-4158
Monday through Friday from 8:00 a.m.
– 5:00 p.m. CST or visit SMLP's
website at www.summitmidstream.com under "Investors >> K-1
Tax Information."
A limited number of unitholders (primarily foreign unitholders,
unitholders computing a foreign tax credit on their tax return and
certain corporate and/or partnership unitholders) may need the
detailed information disclosed on Schedule K-3 for their specific
reporting requirements. To the extent Schedule K-3 is applicable to
your federal income tax return filing needs, we encourage you to
review the information contained on this form and refer to the
appropriate federal laws and guidance or consult with your tax
advisor.
Kirkland & Ellis LLP served as legal advisor for the
Corporate Reorganization and notes offering and TD Securities
(USA) LLC served as strategic
advisor to Summit for the Corporate Reorganization.
About Summit Midstream Partners, LP
SMLP is a value-driven limited partnership focused on
developing, owning and operating midstream energy infrastructure
assets that are strategically located in the core producing areas
of unconventional resource basins, primarily shale formations, in
the continental United States.
SMLP provides natural gas, crude oil and produced water gathering,
processing and transportation services pursuant to primarily
long-term, fee-based agreements with customers and counterparties
in four unconventional resource basins: (i) the Williston Basin, which includes the Bakken and
Three Forks shale formations in North
Dakota; (ii) the Denver-Julesburg Basin, which includes the
Niobrara and Codell shale
formations in Colorado and
Wyoming; (iii) the Fort Worth Basin, which includes the Barnett
Shale formation in Texas; and (iv)
the Piceance Basin, which includes the Mesaverde formation as well
as the Mancos and Niobrara shale formations in Colorado. SMLP has an equity method investment
in Double E Pipeline, LLC, which provides interstate natural gas
transportation service from multiple receipt points in the
Delaware Basin to various delivery
points in and around the Waha Hub in Texas. SMLP is headquartered in Houston, Texas.
Forward-Looking Statements
This communication contains forward-looking statements that are
subject to a number of risks and uncertainties, many of which are
beyond the control of the Partnership and Summit Midstream
Corporation (the "New Summit"), which may include statements
about:
- the occurrence of any event, change or other circumstances that
could give rise to the termination of the Agreement and Plan of
Merger (the "Merger Agreement");
- the risk that the failure to consummate the Corporate
Reorganization will disrupt ongoing or future strategic
alternatives, including a Potential Transaction (as defined in the
proxy statement/prospectus (the "Proxy Statement/Prospectus") filed
with the U.S. Securities and Exchange Commission (the
"SEC"));
- the outcome of any legal proceedings that may be instituted
against the Partnership or New Summit and others relating to the
Merger Agreement;
- the effect of the announcement of the Corporate Reorganization
on the Partnership's customer relationships, operating results and
business generally;
- the risks that the proposed Corporate Reorganization disrupts
current plans and operations;
- the amount of the costs, fees, expenses and charges related to
the Corporate Reorganization;
- the failure to satisfy the conditions to the consummation of
the Corporate Reorganization;
- the failure to realize a lower long-term cost of capital and
other anticipated benefits of the proposed Corporate
Reorganization;
- the closing of the notes offering;
- the Partnership and New Summit's ability to access the debt and
equity markets, which will depend on general market conditions and
the credit ratings for debt obligations;
- fluctuations in natural gas, natural gas liquids ("NGLs") and
crude oil prices, including as a result of political or economic
measures taken by various countries or the Organization of the
Petroleum Exporting Countries;
- the extent and success of the Partnership's and New Summit's
customers' drilling and completion efforts, as well as the quantity
of natural gas, crude oil, freshwater deliveries, and produced
water volumes produced within proximity of the Partnership's and
New Summit's assets;
- failure or delays by the Partnership's and New Summit's
customers in achieving expected production in their natural gas,
crude oil and produced water projects;
- competitive conditions in the Partnership's and New Summit's
industry and their impact on the Partnership's and New Summit's
ability to connect hydrocarbon supplies to the Partnership's and
New Summit's 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
the Partnership's and New Summit's shipper customers to meet their
financial obligations under the Partnership's and New Summit's
gathering agreements and the Partnership's and New Summit's ability
to enforce the terms and conditions of certain of the Partnership's
and New Summit's gathering agreements in the event of a bankruptcy
of one or more of the Partnership's and New Summit's
customers;
- the Partnership's and New Summit's ability to divest of certain
of the Partnership's and New Summit's 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 the Partnership's and New Summit's financing efforts, including
availability of funds in the credit and/or capital markets;
- restrictions placed on the Partnership and New Summit by the
agreements governing the Partnership's and New Summit's 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 the Partnership's and New Summit's
control;
- the current and potential future impact of the COVID-19
pandemic or other pandemics on the Partnership's and New Summit's
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;
- the Partnership's and New Summit's ability to comply with the
terms of the agreements comprising the Global Settlement (as
defined in the Proxy Statement/Prospectus);
- weather conditions and terrain in certain areas in which the
Partnership and New Summit operate;
- physical and financial risks associated with climate
change;
- any other issues that can result in deficiencies in the design,
installation or operation of the Partnership's and New Summit's
gathering, compression, treating, processing and freshwater
facilities;
- timely receipt of necessary government approvals and permits,
the Partnership's and New Summit's ability to control the costs of
construction, including costs of materials, labor and rights-of-way
and other factors that may impact the Partnership's and New
Summit's ability to complete projects within budget and on
schedule;
- the Partnership's and New Summit's ability to finance the
Partnership's and New Summit's 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 the Partnership's and New Summit's
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;
- the effects of litigation;
- interest rates;
- changes in general economic conditions; and
- other factors and uncertainties discussed in Proxy
Statement/Prospectus and the Partnership's filings with the SEC,
including the Partnership's Annual Report on Form 10-K for the year
ended December 31, 2023 and the
Partnership's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2024.
All of these types of statements, other than statements of
historical fact included in this communication, are forward-looking
statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "could," "should,"
"expect," "plan," "project," "intend," "anticipate," "believe,"
"estimate," "predict," "potential," "pursue," "target," "continue,"
the negative of such terms or other comparable terminology.
The forward-looking statements contained in the Proxy
Statement/Prospectus are largely based on the Partnership's
expectations, which reflect estimates and assumptions made by the
Partnership's management. These estimates and assumptions reflect
the Partnership's best judgment based on currently known market
conditions and other factors. Although the Partnership believes
such estimates and assumptions to be reasonable, they are
inherently uncertain and involve a number of risks and
uncertainties that are beyond the Partnership's control. In
addition, management's assumptions about future events may prove to
be inaccurate. All readers are cautioned that the forward-looking
statements contained in the Proxy Statement/Prospectus are not
guarantees of future performance, and the Partnership's
expectations may not be realized or the forward-looking events and
circumstances may not occur. Actual results may differ materially
from those anticipated or implied in the forward-looking statements
due to factors described in the section of the Proxy
Statement/Prospectus entitled "Risk Factors." The forward-looking
statements in the Proxy Statement/Prospectus speak only as of the
date of this document; we disclaim any obligation to update such
statements unless required by securities law, and we caution you
not to unduly rely on them.
Additional Information and Where to Find It
This communication relates to the proposed Corporate
Reorganization of the Partnership. This communication may be deemed
to be solicitation material in respect of the proposed Corporate
Reorganization. The proposed Corporate Reorganization has been
submitted to the Partnership's common unitholders for their
consideration. In connection with the proposed Corporate
Reorganization, New Summit has filed with the SEC a Form S-4
containing the Proxy Statement/Prospectus to be distributed to the
Partnership's common unitholders in connection with the
Partnership's solicitation of proxies for the vote of the
Partnership's common unitholders in connection with the proposed
Corporate Reorganization and other matters as described in such
Proxy Statement/Prospectus. The Proxy Statement/Prospectus also
serves as the prospectus relating to the offer of the securities to
be issued to the Partnership's common unitholders in connection
with the completion of the proposed Corporate Reorganization. The
Partnership and New Summit may file other relevant documents with
the SEC regarding the proposed Corporate Reorganization. The
definitive Proxy Statement/Prospectus has been mailed to the
Partnership's common unitholders. BEFORE MAKING ANY INVESTMENT
DECISION WITH RESPECT TO THE PROPOSED CORPORATE REORGANIZATION,
INVESTORS AND COMMON UNITHOLDERS AND OTHER INTERESTED PERSONS ARE
URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS REGARDING
THE PROPOSED CORPORATE REORGANIZATION (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND OTHER RELEVANT MATERIALS CAREFULLY AND IN
THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED CORPORATE REORGANIZATION.
The Proxy Statement/Prospectus, any amendments or supplements
thereto and other relevant materials, and any other documents filed
by the Partnership or New Summit with the SEC, may be obtained as
such documents are filed with the SEC free of charge at the SEC's
website at www.sec.gov or by directing a written request to the
Partnership at 910 Louisiana Street, Suite 4200, Houston, Texas 77002.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
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SOURCE Summit Midstream Partners, LP