Summit Midstream (SMC) Q3 2026 Earnings Call Transcript

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DATE

Tuesday, Nov. 10, 2026

CALL PARTICIPANTS

• President, Chief Executive Officer and Chairman - Heath Deneke
• Chief Financial Officer - Bill Mault

TAKEAWAYS

• Adjusted EBITDA -- $70.7 million, representing a 16% increase compared to the second quarter of 2026.
• Net Income -- $15.9 million for the third quarter of 2026.
• Full-Year Adjusted EBITDA Guidance -- $250 million to $260 million, raised from the previous range of $235 million to $255 million due to strong producer activity.
• Total Net Leverage Ratio -- 3.9x at quarter end, with a projected decrease to 3.6x by the end of 2026 reflecting disciplined balance sheet management.
• Capital Expenditures -- $100 million to $120 million for the full year 2026, driven by incremental high-return growth projects and acceleration of Williston wells.
• Rockies Segment Adjusted EBITDA -- $40 million, an increase of $9.6 million from the second quarter of 2026.
• Rockies Liquids Throughput -- 95,000 barrels per day, reflecting a 39.7% increase quarter over quarter due to 51 new well connections.
• Double E Pipeline Throughput -- 1,002 million cubic feet per day, a 16.6% increase compared to the previous quarter.
• Permian Segment Adjusted EBITDA -- $11.2 million, driven by new contracts and record volume throughput on the Double E system.
• Mid-Con Segment Adjusted EBITDA -- $22.8 million, up 7% relative to the second quarter of 2026.
• Mid-Con Natural Gas Throughput -- 561 million cubic feet per day, reflecting a full quarter of contribution from wells connected in the second quarter.
• Well Connections -- 51 wells during the third quarter, including 32 in the Williston Basin and 19 in the Denver-Julesburg Basin.
• Drilled but Uncompleted (DUC) Inventory -- Approximately 140 wells, providing visibility for volume growth heading into 2027.
• 2027 Connection Forecast -- 200 to 250 wells expected next year based on current customer development plans.
• Permian EBITDA Target -- $100 million by 2029, up from approximately $40 million in 2026, due to new long-term take-or-pay agreements.
• Double E Expansion Project Cost -- $130 million to $140 million net to the company, aimed at increasing delivery capacity to 2.4 billion cubic feet per day.
• Rockies EBITDA CAGR -- Up to 30% projected over the next two years, supported by customer migration to Williams and Divide counties.
• Distributable Cash Flow -- $32.6 million for the third quarter of 2026.
• Free Cash Flow -- $5.2 million for the third quarter of 2026.
• Piceance Minimum Volume Commitment Revenue -- $4.1 million for the third quarter, noting that these contractual mechanisms expired at the end of the period.
• Lateral Lengths -- 4-mile lateral lengths are becoming more common, improving well results compared to historical 2-mile averages.

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RISKS

• Mault noted that minimum volume commitments in the Piceance segment "expired at the end of the third quarter," removing a mechanism that contributed $4.1 million to quarterly adjusted EBITDA.
• Mault stated that the company expects full-year capital expenditures "to be near the high end" of the $100 million to $120 million guidance range.
• Deneke warned that "if we start seeing crude dip below $60, I'm sure there could be some adjustments in the plans" regarding customer drilling and development activity.

SUMMARY

Summit Midstream Corporation (NYSE:SMC) reported third quarter results driven by volume growth in the Rockies and Permian segments, prompting management to raise its full-year 2026 adjusted EBITDA guidance. The company reached a final investment decision for the Double E mainline compression expansion, which is projected to increase delivery capacity by 50% by late 2028. Management confirmed that the company is on track to reach its long-term leverage target of 3.6x by year-end, which may facilitate the reinstatement of a common dividend in 2027. Operations are supported by a backlog of 140 drilled-but-uncompleted wells and current drilling activity involving seven rigs across key basins.

• Deneke stated, "We're looking at a substantial pickup of activity from Chord and Kraken behind our systems in Williams County in both '27 and '28."
• Mault noted that lateral lengths of "3, 4 miles is kind of becoming the status quo these days" as producers improve well results in the Rockies.
• Deneke reported that "in the DJ, based on the latest development plans from Bison and Prairie, we're expecting to fill up our existing processing plants by the end of 2027."
• Mault indicated the company will "take those distributions, reinvest them into Double E to fund this growth capital" over the next 18 to 24 months.
• Deneke stated, "I would expect us to really start considering a dividend policy towards early next year" as the company nears its leverage goals.
• The company is evaluating a brownfield expansion of the Jackson Lake processing complex to accommodate anticipated growth in the Denver-Julesburg Basin through 2028.

INDUSTRY GLOSSARY

• Adjusted EBITDA: A non-GAAP financial measure used to assess operating performance by excluding interest, taxes, depreciation, and other non-cash or non-recurring items.
• MVC (Minimum Volume Commitment): A contract requiring a customer to ship a specified volume or pay a shortfall fee.
• DUC (Drilled but Uncompleted): A well that has been drilled but has not yet been hydraulically fractured for production.
• Double E Pipeline: A natural gas transmission system connecting the Delaware Basin to the Waha Hub.
• Waha Hub: A significant natural gas pricing and physical delivery point in the Permian Basin of West Texas.
• MMcf/d: Million cubic feet per day, a standard unit of measurement for natural gas volume.
• Bcf/d: Billion cubic feet per day.
• CAGR (Compound Annual Growth Rate): The mean annual growth rate of a metric over a specified period longer than one year.
• FID (Final Investment Decision): The stage in a capital project where the company formally commits to funding and execution.
• Jackson Lake: A natural gas processing complex located in the Denver-Julesburg Basin.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the Third Quarter 2026 Summit Midstream Corporation Earnings Conference Call. [Operator Instructions] 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.

Randall Burton: 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 Presentations section or Quarterly Results section. With me 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 differ 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.

J. Deneke: 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 our Rockies 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 $16.5 million of quarterly adjusted EBITDA since the first quarter or approximately 30% growth in just 2 quarters. That really highlights the momentum embedded in this business. And with 7 rigs currently running behind our system and our DUC 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 3 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 million to $260 million, which is up from $235 million to $255 million previously. We continue to expect full year capital expenditures, including Double E of roughly $100 million 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 3.6x, 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 DUC 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 2 to 3 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 Williston 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 are seeing happen. We're looking at a substantial pickup of activity from Chord 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-acre new area of dedication up in Divide County.

In the DJ, based on the latest development plans from Bison and Prairie, we're expecting to fill up our existing processing plants by the end of 2027, and we are 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 activity levels hold, we're looking at as high as a 30% CAGR in Rockies segment adjusted EBITDA over the next 2 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 Double E 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 Waha 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 Waha 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 2 mainline compression expansion that could add an additional Bcf a day plus of additional bidirectional capacity in the 2030 time frame 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 Mid-Con. 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 Arkoma 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 that area came on at roughly 50 million a day across just 3 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 Mid-Con in the years ahead.

So look, taken together, the strong outlook in the Rockies and Permian segments, along with a steady outlook in the Mid-Con, could drive a mid- to high teens compound annual growth rate in adjusted EBITDA over the next several years. What's most exciting is that this growth is 100% organic and is mostly driven by customers developing acreage that's already dedicated to our systems and already under long-term contracts on Double E. 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.

William Mault: Thanks, Heath, and good morning, everyone. Summit reported third quarter 2026 adjusted EBITDA of $70.7 million, distributable cash flow of $32.6 million and free cash flow of $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 pad connections in the Rockies and Mid-Con segments. We also contributed $10.9 million to Double E 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 3.9x and we expect to end the year at approximately 3.6x. The Summit Permian Transmission term loan had a balance of $360 million at quarter end and remains nonrecourse to Summit and Summit Midstream Permian had $9.2 million of cash on hand at quarter end. Now on to the segments.

The Rockies 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, 9 wells, which we provide both crude oil and produced water gathering services. And just as a reminder, the water-to-crude ratio in this area of the Williston is approximately 3 barrels to 1.

So these wells are extremely impactful to volume throughput and were a meaningful contributor to the uplift in liquids volumes this quarter. Further, we continue to see producers improve well results and extend lateral lengths from a historical average of 2-mile laterals to some wells this year being 4-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 6 rigs running behind the systems, 4 in the Williston and 2 in the DJ with approximately 140 DUCs.

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 Double E volume throughput. Double E averaged 1 Bcf a day of throughput during the quarter. The Piceance 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 Piceance 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 Mid-Con 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 Arkoma systems.

There is currently 1 rig running in the Barnett. And with that, I'll turn the call back over to Heath for closing remarks.

J. Deneke: Thanks, Bill. 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 2 to 3 years. Additionally, I'm very proud of the fact that the 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 3.6x 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 Cowen 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.

Operator: [Operator Instructions] And our first question comes from Mark Reichman of NOBLE Capital Markets.

Mark La Reichman: It's certainly a favorable outlook. I just had a couple of questions. First, on the Double E 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, Summit's proportionate capital requirements and then the anticipated incremental EBITDA?

J. Deneke: Yes. Mark, this is Heath. And Bill, maybe you can kind of go back over the capital items. But yes, Mark, what -- 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 where we're going to end the year this year. On the CapEx front, roughly -- go ahead.

William Mault: Yes, yes. So Mark, so think about it from everything that's been contracted, this is going to include compression. We're looking at $130 million to $140 million of capital net to Summit. So think about that as for $60 million of contracted EBITDA growth, a fairly attractive build multiple.

Mark La Reichman: Sure. And then for the first 9 months of 2026, if I've got these numbers right, Summit recognized about a little over, what, $26.6 million of proportional adjusted EBITDA from Double E 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, it will be a more meaningful source of net cash flow growth to Summit.

William Mault: It will, Mark. And that is really why we financed 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 Double E to fund this growth capital as well as utilize the accordion we announced on the credit facility at Summit Permian Transmission. That will effectively fund this growth capital over the next 2 years. Once you get to that, call it, '28, '29 time frame, 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.

Mark La Reichman: And so really, the same would track for, say, EBITDA growth versus cash flow generation right now.

Unknown Executive: Yes [indiscernible].

Mark La Reichman: 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?

William Mault: Yes. So in some of Heath's remarks, Mark, you probably caught on to -- there's a handful of what I'd call 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 we're still kind of working through some of this stuff and haven't formally FID-ed some of these projects but you could see some facility expansion capital kind of bump up in the 2027 time frame relative to where we're at today.

J. Deneke: Yes. I would just add, Mark, that -- and 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.

In the Williston, you can see the activity pick up. We don't see that slowing down. So in the Arkoma, 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 just a lot of momentum and probably some additional upside as we think about some of these high-returning organic growth projects.

William Mault: To the extent we get these FID here in the near term, Mark, we'll obviously provide 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 across our footprint.

J. Deneke: 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.

Mark La Reichman: 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 is going to be commodity prices, et cetera?

J. Deneke: Yes, good question. So look, I think the -- what underlies that assumption is based on activity levels and drilling and development forecast 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 it's not inclusive of the organic projects.

So I think to think of it like to get there, yes, we are including some assumptions around some of the volumes and capital programs to get to that, kind of, call it, mid- to high teens. But I think they're going to be high single digits, low double digits even without those growth projects.

William Mault: And Mark, that would also include -- think about Double E net to Summit getting north of $100 million of EBITDA net to Summit's 70% interest.

Operator: And our next question comes from Jason Gabelman of TD Cowen.

Jason Gabelman: 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 do you think about sizing that relative to the business?

J. Deneke: Yes. 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 we're not going to turn on the dividend until we reach our, call it, mid to 3.5x leverage ratio. And so as we said on the call in our earnings release, we currently expect to end the year at about 3.6x. So I think that long-standing goal of ours is just around the corner here to meet. Now look, obviously, we've got Board stuff to get through and what have you, but I would expect us to really start considering a dividend policy towards early next year.

And 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 the only thing -- 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, start 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 this -- we're certain -- 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.

Jason Gabelman: Yes, 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 DUCs, which maybe derisks 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 locked 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?

J. Deneke: Yes. Very good question, 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.

But 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 [indiscernible] in executing it signing -- getting permits, signing drilling contracts and 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 at how the curve has been set up over the past 6 months, it hasn't been as backwardated as it typically is. And we understand that a lot of -- particularly our 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 as long as we're kind of above that $60 environment in the Rockies segment, 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 2 core customers practically right now in the DJ and 2 or 3 core customers up in the Bakken. And so a lot of what's occurred over the past couple of years, we think, isn't so much around, hey, the prices weren't good enough to respond.

It was sort of 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 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 of years and why our activity levels have been somewhat depressed.

William Mault: Yes. And Jason, I think the one other thing I would add, I mentioned it in kind of prepared remarks, but we are seeing -- like we're getting to a point, Jason, where a 2-mile lateral is kind of the irregular development cadence. 3, 4 miles is kind of becoming the status quo these days. You're hearing that on Chord 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 lengths.

Jason Gabelman: Yes, 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?

William Mault: 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 8x pre-G&A EBITDA. And when we're trading sub 8x 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 4x to 6x acquisition multiples, given where we trade, given some of the financing considerations around buying an asset for north of 8x, 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, sub 5x 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.

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

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