#United States #Houston #Summit Midstream #DJ Basin #Moonrise Midstream

Summit Midstream Corporation's Strategic Acquisition of Moonrise Midstream

Houston, TX – Summit Midstream Corporation (NYSE: SMC), a leading name in midstream energy infrastructure, has recently confirmed its acquisition of Moonrise Midstream, LLC from Fundare Resources Company Holdco, LLC. This deal amounts to a total consideration of $90 million, composed of $70 million in cash and $20 million in equity, marking a significant step in Summit's expansion strategy within the DJ Basin.

Enhancing Operational Capacity

The acquisition is poised to extend Summit Midstream's footprint in the DJ Basin, allowing for approximately 80 miles of natural gas gathering pipelines and another 25 miles dedicated to crude oil collecting, alongside an additional 65 million cubic feet per day (MMcf/d) of processing capacity. This capacity can potentially expand to 100 MMcf/d with further investment, dramatically increasing the company’s ability to accommodate future volume growth efficiently.

The added processing capacity serves a dual purpose: enhancing operational redundancy and ensuring flow assurance for Summit's customers in the DJ Basin. With the growing demand in this area, this acquisition aligns with Summit’s long-term strategy to consolidate operations and drive value through commercial and operational synergies.

A Thoughtful Corporate Strategy

Heath Deneke, the President and CEO of Summit, articulated the importance of this acquisition, indicating, "This strategic bolt-on acquisition not only bolsters our presence in the highly active DJ Basin but also provides critical processing capacity for our legacy systems at a time when we are experiencing significant volume growth."

Previously, in December 2022, Summit acquired the Outrigger and Sterling systems, which have led to increased operational throughput. Deneke mentioned that some customers had paused their development plans due to capacity constraints. This new processing capability at Moonrise aims to alleviate these issues and support continued growth in activity into 2026 and beyond, as they forecast an increase in production as a result of integrated system capabilities.

The operational connections already in place between Summit and Moonrise will allow for the seamless integration of systems, enabling the company to optimize both its capital expenditures and plant operating margins effectively. As the market dynamics evolve, particularly toward more sustainable practices, broadened operational synergies will be a boon for both Summit Midstream and its customers.

Transaction Overview

Summit's acquisition of Moonrise Midstream confirms its commitment to maintaining a strong presence in the DJ Basin, specifically targeting the highly prolific Niobrara and Codell formations. The deal includes an impressive array of assets consisting of a natural gas processing plant, extensive gathering lines, and solid contractual agreements supporting long-term reliability with customers.

The strategic implications of this merger are clear: it sets the stage for significant capital efficiency and operational excellence, enhancing Summit’s potential to meet its growing clientele's needs while driving down reliance on third-party services. The dedicated acreage associated with Moonrise Midstream translates into sustainable production levels and offers profitable opportunities within Summit's operational model.

In summary, this acquisition not only expands Summit Midstream's infrastructure in the DJ Basin but also fortifies its market position amidst increasing demands for oil and gas infrastructure. With over 800 dedicated undeveloped locations available for potential growth, Summit stands ready to leverage this strategic acquisition to enhance its operational strategy and deliver long-term value to both stakeholders and customers.