Good day and thank you for standing by. Welcome to the third quarter 2026 Summit Midstream Corporation earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Randall Burton. Please go ahead.

Thanks, operator, and good morning, everyone. If you don't already have a copy of our earnings release, please visit our website at summitmidstream.com, where you'll find it on the homepage, events and presentation section, or quarterly results section. We'd need today to discuss our third quarter of 2026 financial and operating results, is Heath Deneke, our president, chief executive officer and chairman, Bill Mault, our chief financial officer, along with other members of our senior management team. Before we start, I'd like to remind you that our discussion today may contain forward-looking statements. These statements may include but are not limited to our estimates of future volumes, operating expenses, and capital expenditures. They may also include statements concerning anticipated cash flow, liquidity, business strategy, and other plans and objectives for future operations. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can provide no assurance that such expectations will prove to be correct. Please see SMC's annual report on Form 10-K for the fiscal year ended December 31, 2025, which the company filed with the SEC on March 16, 2026, as well as our other SEC filings for a listing of factors that could cause actual results to defer materially from expected results. Please also note that on this call we use the terms EBITDA, adjusted EBITDA, distributable cash flow, and free cash flow. These are non-GAAP financial measures, and we have provided reconciliations to the most directly comparable GAAP measures in our most recent earnings release. And with that, I'll turn the call over to Heath.

All right, great. Thanks, Randall. So Summit reported strong third quarter results with adjusted EBITDA of $70.7 million, which is a 16% increase relative to the second quarter and one of the strongest quarters in Summit's history. The increase was driven primarily by a rocky segment where the activity we talked about on our last call really showed up this quarter. We connected 51 wells across the Williston and DJ and liquids volumes increased 40% quarter over quarter. And when you step back and look at where we started the year, the supportive commodity price environment has led our customers to accelerate development and the new wells and volume growth that have come with it have added roughly 16 and a half million of quarterly adjusted EBITDA since the first quarter. or approximately 30% growth in just two quarters. That really highlights the momentum embedded in this business. And with seven rigs currently running behind our system in our duct inventory growing to approximately 140, we have a lot of visibility into the volumes as we head into 2027. With that kind of momentum, I'd like to touch on guidance before we get into what we're seeing in each basin. With three quarters in the books now and strong activity heading into year end, we are raising our full year 2026 adjusted EBITDA guidance to a range of $250 to $260 million, which is up from $235 to $255 million previously. We continue to expect full year capital expenditures, including EE, of roughly $100 to $120 million, which is consistent with the update we provided last quarter. We're also expecting to end the year with a total net leverage ratio of approximately 3.6 times, which is paving the way for us to consider turning on a common dividend next year. As we look into 2027, it's already shaping up to be another strong year. Based on the current rig activity and duck inventory behind our systems, we expect to connect 200 to 250 wells next year, which we think will drive meaningful year over year volume and EBITDA growth. Looking ahead, we are beginning to see a real step change in the company's organic growth outlook over the next two to three years, which is driven primarily by our Rockies and Permian segments. In the Rockies, the higher crude price environment has accelerated development plans across both the Wilson and the DJ, and our producers are submitting plans that show a substantial pickup in activity levels and volumes well into 2028 and beyond. In the Williston, we've been talking about the migration of drilling activity from McKenzie County, which is largely drilled out, into Williams and Divide County, which is exactly what we're seeing happen. We're looking at a substantial pickup of activity from Cord and Kraken behind our systems in Williams County in both 27 and 28. And we're also seeing an activity pickup on the new contracts we announced earlier in the year that span a 240,000 new area of dedication up in Divide County. and the DJ, based on the latest development plans from Bison and Peoria, we're expecting to fill up our existing processing plants by the end of 2027, and we're now evaluating a brownfield expansion of our Jackson Lake processing complex, which will help us enable future growth into 2028 for both new and existing customers. We'll keep you apprised on the status of the Jackson Lake expansion as we continue to work towards FID in the coming months. In the aggregate, if these plans and activities level hold, we're looking at as high as a 30% CAGR in Rocky's segment adjusted EBITDA over the next two years. In the Permian, associated gas production continues to grow at a rapid pace. And while a lot of new pipeline egress projects out of the basin, like Desert Southwest, Solitude, and Permian Link, they appear adequate through at least 2030 to handle the ramp up in Permian supply. However, the in-basin pipeline infrastructure necessary to transport that gas from processing plant tailgates to those egress pipelines are constrained. And that has really increased the reliance on EE and is driving the need to further expand our infrastructure. As previously announced, we are proceeding with our mainline compression expansion, which we expect to be online by the end of 2028. This expansion increases our mainline and delivery capacity to the Oaxaca by 50%, and it also allows for more bidirectional capacity that can access additional markets and outlets on the northern end of the pipeline. We're still expecting to sell out our remaining forward haul capacity to Oaxaca in the coming months, and we will be launching a new open season soon to solicit interest in the bidirectional capability. With the momentum and success we're having securing new long-term take-or-pay agreements, we fully expect to see adjusted EBITDA in the Permian segment grow from approximately $40 million in 2026 to over $100 million in 2029. And we're not planning on stopping there. We're in early planning stages to develop a Phase II mainline compression expansion that could add an additional BCF a day plus of additional bidirectional capacity in the 2030 timeframe as well. So look, lots of momentum in our Permian gas transmission segment as well, and we look forward to continuing to update you as we make progress. Shifting to the MidCon, volumes were up this quarter on a full quarter of contribution from the wells connected in the second quarter. We're also seeing producers in the Acoma begin to focus on an emerging dry gas window near our system. As we mentioned earlier this year, the first gas pad we connected in an area came on at roughly 50 million a day across just three wells. Those are some of the biggest wells we've seen on the system, and they've clearly caught the attention of producers in the area. We're working closely with our customers on what development in that window could look like, and while it's still early, we think it could become a meaningful growth opportunity for the segment over time. So that, combined with steady activity in the Barnett, we see a solid outlook for the MidCon in the years ahead. So taken together, the strong outlook in the Rockies and Permian segments, along with a steady outlook in the MidCon, could drive a mid to high team compound annual growth rate in adjusted EBITDA over the next several years. What's most exciting is that this growth is 100% organic and it's mostly driven by customers developing acreage that's already dedicated to our systems and already under long-term contracts on EE. And that gives us a lot of visibility and confidence in the outlook of the business ahead. We look forward to providing more detail on our 2027 financial outlook when we provide guidance early next year, and we'll keep you posted on major milestones along the way. So with that, I'll turn the call over to Bill to walk through the financials.

Thanks, Heath, and good morning, everyone. Summit reported third quarter 2026 adjusted EBITDA $70.7 million, distributable cash flow $32.6 million, and free cash flow $5.2 million. Total capital expenditures were $21.2 million for the quarter, inclusive of $4.7 million of maintenance capex, with the majority of growth capital directed toward PAC connections in the Rockies and MidCon segments. We also contributed $10.9 million to EE during the quarter to fund new laterals in the mainline compression expansion project. With respect to Summit's balance sheet, we ended the quarter with $12.5 million of unrestricted cash and 80 million drawn on our revolving credit facility with approximately 417 million of available borrowing capacity after accounting for 2.7 million of undrawn letters of credit. Total net leverage at the end of the quarter was approximately 3.9 times and we expect to end the year at approximately 3.6 times. The Summit Permian Transmission Term Loan had a balance of 360 million at quarter end and remains non-recourse to Summit and Summit Midstream Permian had 9.2 million of cash on hand at quarter end. Now onto the segments. The Rocky segment generated adjusted EBITDA of 40 million, an increase of 9.6 million relative to the second quarter of 2026, driven by a 39.7% increase in liquids volume throughput. Liquids volumes averaged 95,000 barrels a day and natural gas volumes averaged 168 million cubic feet per day during the quarter, We connected 51 wells during the quarter, including 32 in the Williston Basin and 19 in the DJ Basin. And in the Williston, nine wells, which we provide both crude oil and produce water gathering services. And just as a reminder, the water to crude ratio in this area of the Williston is approximately three barrels to one. So these wells are extremely impactful to volume throughput and were a meaningful contributor to the uplifting liquids volumes this quarter. Further, we continue to see producers improve well results and extend lateral lengths from a historical average of two mile laterals to some wells this year being four mile lateral lengths. Several of the wells brought online behind our system in Williams County are actually outperforming internal expectations. And while it's still a bit early, we are encouraged by the preliminary results of some of the new wells brought online in Divide County this year. The momentum continues with six rigs running behind the systems four in the Williston and two in the DJ with approximately 140 ducks. The Permian segment reported adjusted EBITDA of $11.2 million, an increase of $1.8 million relative to the second quarter, driven by new contracts placed into service during the quarter and a 16.6% increase in EE volume throughput. EE average one BCF a day of throughput during the quarter. The Peon segment reported adjusted EBITDA of $8.3 million, a decrease of $0.4 million relative to the second quarter, as higher operating expenses offset a 4.2% increase in volume throughput. The volume increase reflects the return of previously shut-in production, and there were no new wells connected during the quarter. As a reminder, the minimum volume commitments underpinning our PIONS gathering agreements, which represent substantially all of our MVC shortfall payments, expired at the end of the third quarter. Those mechanisms contributed 4.1 million of adjusted EBITDA in the third quarter. So that's something to keep in mind as you think about that segment going forward. Finally, the MEDCON segment reported adjusted EBITDA of 22.8 million, an increase of 1.4 million relative to the second quarter, primarily due to a 7.3% increase in natural gas volume throughput to 561 million cubic feet per day, reflecting the full quarter of contribution from the wells connected in the second quarter across both the Barnett and Arcoma systems. There's currently one rig running in the Barnett. And with that, I'll turn the call back over to Heath for closing remarks.

Thanks, Phil. So to wrap up, this was a very strong quarter, and we have a lot of momentum across the business heading into year end. 2026 is shaping up to be a great year for Summit. And based on what we can see from our customer development plans right now, we're setting up for an industry-leading outlook for the business over the next two to three years. Additionally, I'm very proud of the fact that achievement of our long-term leverage target is just around the corner. For those of you that have been watching Summit's story over the past few years, this is a major accomplishment and reflects the dedication, discipline, and focus this company has maintained to improve the balance sheet throughout the ups and downs of the sector. As we finish 2026 around 3.6 times leverage and with a robust growth outlook for the business, there's a very compelling value proposition out there for investors. particularly given that we're currently trading at such a steep discount to our peer group. We're excited that TD Cohen and Noble have picked up equity research coverage this year and we hope to continue to add to that coverage soon to help increase investor awareness on the very bullish outlook for Summit. So with that, operator, please open the call for questions.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from Mark Reichman of Noble Capital Markets. Your line is open.

Mark, your line is open. Please unmute.

Thank you, and good morning, and certainly a favorable outlook. I just had a couple of questions. First, on the EE expansion, the increase in capacity from 1.6 BCF to 2.4 BCF per day, could you just refresh my memory on the expected total project costs, some of its proportionate capital requirements, and then the anticipated incremental EBITDA?

Yeah. Hey, Mark. This is Heath and Bill. Maybe you can kind of go back over the capital items. But yeah, Mark, the way that we project this is if you kind of look between now and 2029, and we've got some tables in our latest investor deck that kind of lays out in a little bit more detail. But generally speaking, we expect when we fill up the 2.4 BCF a day forward haul to Waha, that should push us somewhere over $100 million of EBITDA. and that's relative to call it 40 million, I think is about what we're gonna end the year this year. On the CapEx front, you're roughly- Yeah, yeah.

So Mark, so think about it from everything that's been contracted. This is gonna include compression. We're looking at 130 to 140 million of capital net to summit. So think about that as, you know, for $60 million of contracted EBITDA growth, You know, a fairly attractive build multiple.

Sure. And then, you know, for the first nine months of 2026, if I've got these numbers right, you know, Summit recognized about a little over, what, 26.6 million of proportional adjusted EBITDA from EE and then received 24.3 million in distributions and contributed about 17.4 million of capital. And so I was wondering how to think about the timing of future capital contributions relative to distributions. In other words, at some point, you know, it'll be a more meaningful source of net cash flow growth to summit.

It will, Mark. And that is really why we finance that asset the way we did. So think about over the next, call it 18 to 24 months. We're effectively going to take those distributions, reinvest them into EE to fund this growth capital, as well as utilize the accordion we announced on the credit facility at Summit Permian Transmission. That'll effectively fund this growth capital over the next two years. Once you get to that, call it 28-29 timeframe, you're really going to see this asset transition into a high free cash flowing, low capital intensity Asset. Now look, there's other things we're working on. We talked about kind of compression 2.0. There's some additional growth projects that are attractive that we'll continue to evaluate and to the extent we FID, some of that kind of growth capital will kind of continue to layer into that business over time. But these are all very attractive projects that we're pursuing.

And so really the same would track for say EBITDA growth versus cash flow generation right now. Yeah. Okay. And then just on the CapEx, I mean, it looks like you expect to be kind of at the upper end of the guidance range. Any thoughts on 27 or even 28? Yeah.

So in some of Heath's remarks, Mark, you probably caught on to, you know, there's a handful of what I've called kind of organic brownfield type expansion opportunities we're looking at, one being Jackson Lake. Think about that as kind of further debottlenecking and unlocking some of the processing capacity behind that plant. I'll tell you, Mark, in order to kind of get to that FID, we are working on some incremental commercial contracts that would support that expansion. So, you know, We're still kind of working through some of this stuff and haven't formally FID'd some of these projects, but you could see some facility expansion capital kind of bump up in the 2027 timeframe relative to where we're at today.

Yeah, I would just add, Mark, that there's a handful of these projects and certainly could be more material from a CapEx than what we've historically spent. But as Bill pointed out, there's going to be some incremental revenues and EBITDA that's driving it. And in the aggregate, these are going to be very high unlevered returns for the business. And I'd say north of 20% type unlevered returns. So we'll be really excited to be able to announce these as we kind of move them along. But even without those, we're certainly seeing a lot of growth in the DJ. As we mentioned, we're going to fill up our existing processing plants by the end of 27. and the Williston. And you can see the activity pick up. We don't see that slowing down. So in the Arcoma, we kind of mentioned some of the dry gas results that we had that were fantastic, honestly. And we probably could see some additional infrastructure around that area. But just in the aggregate, you should think about, you know, just a lot of momentum and probably some additional upside as we think about some of these high returning organic growth projects.

We get these.

To the extent we get these FID'd here in the near term, Mark, we'll obviously provide, you know, some more detail on kind of the revenue implications alongside it. But to Heath's point, I mean, this is pretty exciting growth opportunities that, quite frankly, as a company and as an industry, like we're really starting to get some traction, you know, across our footprint. And maybe one more comment, Mark, is that these are really customer push projects that we're looking at based on the activity that we're seeing. So it's really exciting for us to evaluate them.

Well, I agree. And just in terms of the operating momentum, and I think Heath really kind of touched on this in his remarks, but the mid to high teens annual EBITDA growth over the next several years, would you just maybe flesh that out a little bit more in terms of the principal assumptions? I mean, How much of it will be recurring volume growth versus growth projects? How much of it's going to be commodity prices, et cetera?

Yeah, good question. So look, I think what underlines that assumption is based on activity levels and drilling and development forecasts that we have today with our customers. And we have visibility not just for 27, but they go on into 28 and sometimes even further. So that is really what's driving this. Now in response to it, if we get the level of acceleration that we're talking about plus some additional contracts, that's where kind of the growth comes into play. But I would say the majority of that growth, the vast majority of that growth is not inclusive of the organic projects. So I think think of it like to get there, yeah, we are including some presumptions around some of the volumes and capital programs that get to that, you know, kind of call it mid to high team. But I think you're going to be, you know, high single digits, low double digits, even without those growth projects.

Yeah.

And Mark, that would also include, think about double E net to summit getting north of $100 million of EBITDA net to summit 70% interest.

Well, that's very helpful. And thank you so much.

Yeah, you bet. Thanks for the question, Mark.

Thank you. And our next question comes from Jason Gabelman of TD Cowen. Your line is open.

Yeah, hey, thanks for taking my questions. You mentioned just looking to restart the dividend. Can you remind us where leverage needs to go in order to be in a comfortable place to restart the dividend and then how you would think about sizing that relative to the business?

Yeah, you bet, Jason. I'll start and Bill can add some color. But look, we've been on this journey for several years now. And what we've consistently told the market is, you know, we're not going to turn on the dividend until we reach our, call it, you know, mid three and a half times leverage ratio. And so as we said on the call and in our earnings release, we currently expect to end the year at about 3.6 times so I think that you know that that long-standing goal of ours is just around the corner here to meet now look you know obviously we've got you know board stuff to get through and what have you but you know I would expect us to really start considering a you know a dividend policy towards early next year and you know if things kind of continue anywhere close to the trajectory that we see in the business I think it's likely that we'll at least be positioned relative to our balance sheet goals to enable a distribution. Now, a couple of things I would point out, Jason, just on the size of the dividend. We've also told the market that we're going to be very conservative, started out relatively small. As we had thought and as we're experiencing We've got a lot of good organic growth ahead of us, and we don't want to come out with an outsized distribution. We want to get one potentially out there and started, and we want to have a lot of room to grow it. But just given the growth trajectory of the business, we want to make sure that we don't start out too big, and whatever we do put out there we can sustain forever and have a lot of room to grow it.

Yeah, that makes sense. And my follow-up is just going back to the kind of oil price sensitivity to your Rockies region. And it seems like your customers have built up a decent amount of ducks, which maybe de-risks the outlook to 2027. But as we're seeing oil prices fall here, Does that kind of impact in the near term or medium term how you think your customers will handle drilling? Prices are super volatile, so I wonder if you're seeing customers kind of lock in pricing further out that gives you more confidence beyond 27 or it's just too difficult to say right now what plans will look like.

Yeah, very good question, Tom and Jason. A couple of things, and I'm going to apologize in advance for a little bit of a long winded answer, but I think it's pretty important for everyone to understand. So the short answer is we do believe that the current projections are going to be pretty resilient to commodity prices. Now, if we start seeing crude dip below 60, I'm sure there could be some adjustments in the plans. based on the feedback we've had from our customers they pretty much locked in the next 12 to 24 months of activity levels and they're they're knee-deep in executing it signing you know getting permits signing drilling contracts and and you know ensuring that they have everything they need in place to be able to achieve those plans the other thing I would tell you is if you look you know at how the curve has been set up over the past six months it hasn't been as backward dated as it typically is and we understand that a lot of particular private customers have done a lot of hedging to kind of lock in some of those higher prices. The third thing I would tell you, and this is really kind of speaks back to the resiliency of, you know, as long as we're kind of above that $60 environment in the Rocky segment, you know, I think what we've really seen happen here, if you look both in the DJ and the Bakken, both of those basins have been subject to a tremendous amount of consolidation. I mean, we're down to like two core customers practically right now on the DJ and two or three, you know, core customers up in the Bakken. and so you know a lot of you know what was occurred over the past couple years we think isn't so much around hey the prices weren't good enough to respond it was sort of the the lagging impact if you will of a new operator stepping in consolidating kind of reordering their plans and then finally kind of getting back into into drilling and development mode and so that I think that's probably a very important point when you kind of look back at where crude prices have been over the past couple years and why our activity levels have been somewhat depressed

Yeah, and Jason, I think that the one other thing I would add, I mentioned it kind of prepared remarks, but, you know, we are seeing that like we're getting to a point, Jason, where a two mile lateral is kind of the irregular development cadence. You know, three, four miles is kind of becoming the status quo these days. You're hearing that, you know, out of court publicly. We're seeing it in the wells that we're connecting behind our systems. And again, that's just really kind of driving down those breakeven economics for these producers. And quite frankly, relative to history, we don't need as many well connects to kind of get to the same spot given the lateral links.

Yeah, that makes sense. Maybe my last one. Just on the M&A environment, we've obviously seen some activity within your Rockies footprint. Can you just talk to the kind of opportunity set you're seeing on the M&A front?

Jason, I'll tell you, this is another one that, quite frankly, we get a little frustrated given how Summit trades in the public market, and we're seeing... asset-level deals, some of which are single-customer, one-basin type transactions that are getting done at north of eight times pre-G&A EBITDA. And when we're trading sub-eight times post-G&A, it just doesn't add up. I will say that we were very active on the M&A front when we were in a position and where the market was enabling call it anywhere from four to six times acquisition multiples. Given where we trade, given some of the financing considerations around buying an asset for north eight times, I think you should expect that we'll probably slow down on the M&A front. The beauty of it is we are loaded with really, really, really good organic growth projects that quite frankly, some of the build multiples are beating What we used to get done on an M&A basis, you know, sub five times type build multiples. So happy that we've got those in the hopper. But I do think you should expect us to kind of slow down on the M&A front. But we'll keep looking and you never know. But that's just kind of directionally how things have played out over the past 12 months.

Yep. Got it. Thanks for the call, guys.

Yeah. Thanks, Jason.

Thank you. This concludes our question and answer session and also today's conference call. Thank you for participating and you may now disconnect.