• Summit to acquire Outrigger DJ Midstream LLC, and the operating subsidiaries of Sterling Energy Investments LLC, owners of natural gas gathering and processing systems, a crude oil gathering system, freshwater rights and a freshwater delivery system located near Summit's Hereford assets in Weld County, Colorado for an aggregate $305 million in cash
• Represents another meaningful strategic step in Summit's overall corporate strategy to streamline its portfolio and build scale in key basins that are well positioned for growth (re-investment of approximately $115 million from the recent divestitures)
• Triples Summit's DJ Basin gas processing capacity and adds an estimated 505,000 leased acres under dedication in rural Weld County with over 675 active permits and over 1,200 remaining locations with estimated crude-oil break-evens as low as $35 per barrel
• Diversifies overall customer base with a combination of fixed-fee and percentage-of-proceeds contracts, over 10-year weighted average remaining tenor and expands DJ system further south into the attractive northeastern extension in of the DJ Basin
• Attractive acquisition multiple of approximately 4.0x 2023 projected EBITDA is consistent with SMLP's value-accretive and credit-accretive consolidation strategy
• Significant free cash flow drives additional de-leveraging with approximately $70 to $80 million in estimated EBITDA and $10 million to $15 million of estimated capital expenditures in 2023
• Enables significant synergies, commercial upside and additional in-basin consolidation through approximately 70 MMcf/d of unutilized processing capacity at Hereford and Jackson Lake and a significantly expanded capture area through approximately 90 miles of high-pressure pipelines that traverse several highly economic areas of the DJ Basin
• Continue to expect to be at the high-end of our previously announced 2022 Adjusted EBITDA guidance range of $205 million to $220 million and, as outlined in more detail in our second quarter earnings release, we continue to expect at least 10% Adjusted EBITDA growth in our existing base business during 2023
• With the addition of the Outrigger DJ and Sterling DJ systems, 2023 Adjusted EBITDA is expected to reach at least $300 million resulting in total leverage of approximately 4.25x at year-end 2023 and sub-3.5x in 2024 to the extent that similar well connection activity across our operating footprint persists into 2024

Summit Midstream Partners announced today that its wholly owned subsidiary, Summit Midstream Holdings, LLC ("SMP Holdings"), has entered into definitive agreements with Outrigger Energy II LLC to acquire Outrigger DJ Midstream LLC ("Outrigger DJ") and with Sterling Investment Holdings LLC to acquire, Sterling Energy Investments LLC, Grasslands Energy Marketing LLC and Centennial Water Pipelines LLC (collectively, "Sterling DJ"), which own natural gas gathering and processing systems, a crude oil gathering system, freshwater rights, and a subsurface freshwater delivery system in the DJ Basin for cash consideration of $305 million, subject to customary transaction adjustments. The Outrigger DJ and Sterling DJ consolidated asset portfolio is located in Weld, Morgan, and Logan Counties, Colorado and Cheyenne County, Nebraska. The transactions are expected to close during the fourth quarter of 2022, subject to customary regulatory approvals.

Heath Deneke, President, Chief Executive Officer and Chairman, commented, 
"We are excited to announce the expansion of our DJ Basin presence with these strategic bolt-on acquisitions. These highly value- and credit-accretive transactions create a strategic franchise position in the DJ Basin that we believe will generate significant free cash flow growth for Summit in the coming years while immediately enhancing the quality and availability of services for our combined customer base in the region via the integration of our underutilized Hereford gathering and processing system with the capacity constrained Sterling DJ and Outrigger DJ systems. Combining operations of the three systems will create significant commercial and operating synergies and will provide substantial running room to grow dedicated producer volumes in the coming years with minimal capital expenditure requirements. Outrigger DJ and Sterling DJ customers are expected to connect over 75 new wells in 2023 and are well positioned to sustain and potentially grow that level of development activity in the coming years with more than 675 active permits currently held on dedicated acreage. Furthermore, given the prevalence of gas processing constraints across the DJ Basin, the connectivity of the combined asset footprint with other gathering systems and the integration of the underutilized Summit Hereford and Sterling DJ Jackson Lake processing complexes, we believe there will be additional near-term upside opportunities to grow volumes both organically and through offload arrangements with other midstream operators in the basin.

Given the attractive acquisition multiple of approximately 4.0x projected 2023 EBITDA, we believe these transactions create tremendous equity value for our unitholders while enhancing Summit's overall credit metrics and ability to de-lever the balance sheet over the next several years. The transactions received strong support from our existing commercial bank lenders and bondholders enabling us to finance the acquisitions through the combined $115 million of previously announced divestiture proceeds, borrowings under our credit facility, and an oversubscribed, fully committed, new issuance of $85 million of 8.5% Senior Secured Second Lien Notes due 2026.  While we are still several months away from providing formal 2023 guidance, we believe the combination of the previously announced projected 2023 Adjusted EBITDA growth associated with Summit's existing businesses and the $70 million to $80 million of Adjusted EBITDA projected from the Outrigger DJ and Sterling DJ systems next year will result in Summit's consolidated EBITDA exceeding $300 million in 2023 and lowering leverage to approximately 4.25x by year end. Furthermore, if the expected level of 2023 new well connect activity from Summit's current assets and the Outrigger DJ and Sterling DJ systems persist into 2024, we believe we are well positioned to achieve our sub-3.5x leverage target in 2024."

KeyFacts Energy: Acquisitions & Mergers news