Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 1, 2022, Summit Midstream Holdings, LLC ("SMP Holdings"), a wholly
owned subsidiary of Summit Midstream Partners, LP (NYSE: SMLP) ("Summit," "SMLP"
or the "Partnership"), completed the acquisition of Outrigger DJ Midstream LLC
("Outrigger DJ") from Outrigger Energy II LLC, and each of Sterling Energy
Investments LLC, Grasslands Energy Marketing LLC and Centennial Water Pipelines
LLC (collectively, "Sterling DJ") from Sterling Investment Holdings LLC,
respectively, pursuant to definitive agreements, each dated October 14, 2022
(collectively, the "Transactions").
As previously reported, as a result of the Transactions, SMLP acquired natural
gas gathering and processing systems, a crude oil gathering system, freshwater
rights, and a subsurface freshwater delivery system in the DJ Basin for an
aggregate cash consideration of $305 million, subject to customary post-closing
adjustments. The Outrigger DJ and Sterling DJ consolidated asset portfolio is
located in Weld, Morgan, and Logan Counties, Colorado and Cheyenne County,
Nebraska.
In the Transactions, Summit acquired 100% of the membership interests in
Outrigger DJ from Outrigger Energy II LLC for cash consideration of $165
million, subject to post-closing adjustments, and 100% of the membership
interests in each of Sterling Energy Investments LLC, Grasslands Energy
Marketing LLC and Centennial Water Pipelines LLC from Sterling Investment
Holdings LLC for cash consideration of $140 million, subject to post-closing
adjustments.
The Transactions were financed through a combination of borrowings under
Summit's ABL Credit Facility and $85 million aggregate principal amount of
additional 8.500% Senior Secured Second Lien Notes due 2026 issued at a price of
99.26% of their face value on November 14, 2022. The Transactions represent a
reinvestment of approximately $115 million of the net proceeds received from the
previously announced divestitures of Summit's Lane Gathering and Processing
System, in the Delaware Basin, and Bison Gas Gathering System, in the Williston
Basin.
Giving effect to the Transactions, SMLP has approximately $335 million drawn on
its $400 million ABL Credit Facility.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
In connection with the completion of the Transactions, SMP Holdings and Summit
Midstream Finance Corp., a Delaware corporation (together with SMP Holdings, the
"Co-Issuers"), called for redemption all of the $85 million aggregate principal
amount of the issued and outstanding 8.500% Senior Secured Second Lien Notes due
2026 (the "Mirror Notes") issued to certain purchasers pursuant to Section
4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to the temporary notes indenture, dated November 14, 2022, at a
redemption price equal to 100% of the aggregate principal amount thereof. The
consideration paid to each such holder to redeem the Mirror Notes consisted only
of an equal principal amount of additional 8.500% Senior Secured Second Lien
Notes due 2026 (the "Additional 2026 Notes") issued pursuant to the Indenture
dated as of November 2, 2021, by and among the Co-Issuers, the subsidiaries of
Summit Holdings party thereto, the Partnership and Regions Bank, as trustee and
collateral agent (the "Additional 2026 Notes Indenture").
The Additional 2026 Notes constitute an additional issuance of the Co-Issuers'
Additional 2026 Notes pursuant to the Additional 2026 Notes Indenture, under
which the Co-Issuers previously issued $700 million in aggregate principal
amount of Additional 2026 Notes.
Item 7.01 Regulation FD Disclosure.
On December 1, 2022, the Partnership issued a press release announcing the
consummation of the Transactions, a copy of which is furnished as Exhibit 99.1
to this Current Report on Form 8-K and incorporated herein by reference.
The information furnished in this Item 7.01 shall not be deemed "filed" for
purposes of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and shall not be deemed incorporated by reference in any filing with the
Securities and Exchange Commission, whether or not filed under the Securities
Act of 1933, as amended, or the 1934 Act, regardless of any general
incorporation language in such document.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The Partnership will file the financial statements required by Item 9.01(a) of
Form 8-K by an amendment to this Current Report on Form 8-K no later than 71
calendar days from the date this Current Report on Form 8-K is required to be
filed.
(b) Pro Forma Financial Information.
The Partnership will file the pro forma financial information required by Item
9.01(b) of Form 8-K by an amendment to this Current Report on Form 8-K no later
than 71 calendar days from the date this Current Report on Form 8-K is required
to be filed.
(d) Exhibits.
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Exhibit Number Description
99.1 Press Release, date d December 1 , 2022
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document
2
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