Summit Midstream Corporation · NYSE:SMC
Summit Midstream — Merger or Acquisition (October 2024)
18 slides from Summit Midstream's merger presentation, Oct 2, 2024
Slide 1: Summit Midstream Corporation Tall Oak Midstream Acquisition
Summit Midstream Corporation Tall Oak Midstream Acquisition October 1, 2024 Exhibit 99.2
Slide 2: Forward-Looking Statements, Legal Disclaimers & Use of Non-GAAP
2 Forward-Looking Statements, Legal Disclaimers & Use of Non-GAAP Investors are cautioned that certain statements contained in this presentation are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Ac
Slide 3: SMC's Corporate & Execution Strategy
3 SMC’s Corporate & Execution Strategy SMC’s corporate strategy is built on a foundation of sound environmental, social and governance policies and grounded by financial discipline and value-driven growth to maximize shareholder value ➢ Independent board of directors works alongside management to de
Slide 4: Accelerating Several Key Strategic Milestones
4 $10 $15 $20 $25 $30 $35 $40 $45 May-23 Aug-23 Nov-23 Feb-24 May-24 Aug-24 Accelerating Several Key Strategic Milestones Historical SMC Stock Price (1) Refinancing ▪ Increased liquidity, maturity extension and cash interest savings provides additional financial flexibility, incremental cash flow an
Slide 5: Transaction Aligns with Summit's Strategy
5 Source: Management projections and other public disclosure. (1) Based on the midpoint of the low- and high-end asset-level Adjusted EBITDA range, as referenced on page 16, which is based on current assumptions and may vary significantly. Adjusted EBITDA is a Non-GAAP financial measure. Please see
Slide 6: Re-Balancing SMC Portfolio with Additional Gas Exposure
6 $3.37 $3.65 $3.67 $3.58 2025E 2026E 2027E 2028E $ / M M B tu Henry Hub Strip 1.2 2.4 4.3 7.5 9.5 10.1 10.8 10.8 13.4 14.8 16.7 19.8 24.7 36.6 2016 2018 2020 2022 2024 2026 2028 B a s e lo a d N a m e p la te C a p a c it y ( B c f/ d ) Re-Balancing SMC Portfolio with Additional Gas Exposure Natura
Slide 7: Pro Forma SMC Poised for Continued Growth and De-Levering
7 ~ $180 ~ $290 2024E PF 2028E PF 3.8x 2.4x 2024E PF 2028E PF ~ $250 ~ $350 2024E PF 2028E PF 2025E PF 2026E PF 2027E PF 2028E PF Pro Forma SMC Poised for Continued Growth and De-Levering Re-Building Scale with Peer Leading Expected Growth (Adjusted EBITDA(1)) Source: Management projections. (1) Pro
Slide 8: Key Financial Metrics Align with Peers, Offering Valuation Upside
8 Key Financial Metrics Align with Peers, Offering Valuation Upside Enterprise Value ($Bn) 2025E Adjusted EBITDA ($MM) Net Debt / 2024E Adjusted EBITDA(2) EV / 2025E Adjusted EBITDA $12.9 $11.2 $10.6 $10.4 $5.4 $5.2 $4.6 $1.9 $1.8 Peer A Peer B Peer D Peer C Peer E Peer F Peer G PF SMC Peer H $1,413
Slide 9: SMC adopted an independent governance structure
9 SMC adopted an independent governance structure when it acquired its General Partner in May 2020 Board Member Summary Background Heath Deneke (Class II) ▪ President, CEO and Chairman ▪ Board Member Since: 2019 ▪ Prior Experience / Affiliations: Crestwood Equity Partners, El Paso Corporation James
Slide 10: Aligned Relationship with Tailwater Capital
10 Source: Tailwater Capital (1) Includes Tailwater Fund I-IV, Pivotal I-II, Tailwater Royalties I, Tailwater Royalties II (amount committed-to- date), Verdad Resources, and Tailwater E&P SPV. (2) Includes Tailwater Fund II-IV, Pivotal I-II, and Tailwater Royalties. (3) Includes non-Tailwater contro
Slide 11: Transaction Details & Tall Oak Overview
Transaction Details & Tall Oak Overview
Slide 12: Key Transaction Details
12 4.4x ~3.8x <3.5x Current Pro Forma At Close 2026+ Key Transaction Details Overview of Proposed Transaction Structure Sources and Uses Detail ➢ Consideration mix consists of ~60% equity / ~34% cash / ~6% earnout ▪ $155mm of upfront cash and ~7.5MM of Class B Common Stock and SMLP Common Units ➢ Cu
Slide 13: Expansive Footprint with Strategic Connectivity
13 Expansive Footprint with Strategic Connectivity Tall Oak Asset Map Key Customers Summary Dedicated Acreage Contract Life (Years) Volume MMcf/d(1) 2025E Well Connects Customer A 170,000 ~13 138 18 – 30 Customer B 35,000 ~14 30 0 – 3Customer C 66,000 ~14 16 Customer D 47,000 ~12 30 Total 318,000 ~1
Slide 14: Advantages of the Arkoma Basin
14 Advantages of the Arkoma Basin NGL Yield Enhances Producer Returns ➢ Shallow reservoir depths and lower pore pressures in the Arkoma create an environment conducive to low-risk, predictable development ➢ Modern infrastructure to service growing volumes coming out of the liquids-rich core of the A
Slide 15: Sizable Dedicated Acreage Position with Attractive Break-Evens
15 168 228 260 207 206 291 20 35 10 0 18 - 33 2021 2022 2023 2024 2025E Volume (MMcf/d) Well Connects Sizable Dedicated Acreage Position with Attractive Break-Evens Highlights Historical Activity Tall Oak System Map Active Rig Average Natural Gas Historical Price ($/MMbtu)(1) $3.91 $6.42 $2.54 $2.31
Slide 16: Tall Oak Financial Profile and 2025 Outlook
16 $81 $66 ~$65 ~$95 $0 $30 $60 $90 $120 2023A 2024E 2025E Tall Oak Financial Profile and 2025 Outlook Overview Adjusted EBITDA(1) ($mm) 2025E Projected Adjusted EBITDA and Capex Adjusted EBITDA(1) Capex(3) 80% 20% Growth Maintenance ~80% ~20% Fixed Fees Settlement Margin ~$80mm Source: Management p
Slide 17: Appendix
_ Appendix a: Awe. | a NYSE
Slide 18: Reconciliation of Tall Oak Net Income to Adjusted EBITDA
18 Year ended ($s in 000s) December 31, 2023 Net income / (loss) 32.6$ Add: Interest expense, net 7.8 Depreciation and amortization 22.9 Adjustments related to capital reimbursement activity (0.0) Other non-recurring (1) 6.0 Adjusted EBITDA 69.3$ Allocated Corporate G&A (2) 10.2 Asset-Level Adjusted
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