Summit Midstream Partners, LP (NYSE:SMLP) Q4 2019 Earnings Conference Call - Final Transcript
Feb 28, 2020 • 10:00 am ET
Welcome to the Fourth Quarter 2019 Summit Midstream Partners LP Earning Conference Call. My name is Hilda, and I will be your operator for today. [Operator Instructions]
I will now turn the call over to Mr. Blake Motley. Mr. Motley, you may begin.
Thanks, operator, and good morning, everyone. If you don't already have a copy of our earnings release that was issued earlier this morning, please visit our website at ww.summitmidstream.com where you'll find it on the home page or in the news section.
With me today to discuss our fourth quarter of 2019 financial and operating results is Heath Deneke, our President and Chief Executive Officer; Marc Stratton, 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 our earnings release that was issued earlier this morning for a listing of factors that could cause actual results to differ materially from expected results.
Please also note that on this call, we'll use the terms EBITDA, adjusted EBITDA and distributable 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. Heath Deneke
Okay. Thank you, Blake, and good morning, everyone. So earlier this morning, Summit reported fourth quarter 2019 adjusted EBITDA of $77.5 million, which was a new quarterly record. And this record was driven by record liquid volumes and that averaged nearly 119,000 barrels per day in the Williston Basin and a combination of higher volumes in many of our other segments and lower expenses relative to the third quarter of 2019. Distributable cash flow totaled $47.1 million, which generated a distribution coverage ratio of four times for the quarter based on our quarterly distribution of $0.125 per unit and enabled us to cover our common unit distribution by $35.4 million. So 2019 was certainly a challenging year for Summit and really for the midstream sector overall.
Looking forward into 2020, we are expecting the challenging macro backdrop to continue, which we think will result in further declines in drilling and completion activities across North America. The oil and gas market is currently in oversupply situation, which of course is weighing heavily on today's commodity prices. The natural gas market is particularly challenged and we are witnessing in real time the impact that the production surplus and one of the warmest winters that we've had on record is having on forward prices. Across the spectrum, we are seeing upstream companies