Summit Midstream expands DJ Basin operations with $90m Moonrise Midstream acquisition

Summit Midstream Corporation has announced the acquisition of Moonrise Midstream, LLC from Fundare Resources Company Holdco, LLC in a $90 million transaction. The deal includes $70 million in cash and $20 million in Summit Midstream Corporation equity. This acquisition strengthens Summit’s infrastructure in the DJ Basin, enhancing its natural gas gathering and processing capabilities. The move is expected to address capacity constraints and position the company for future volume growth as drilling activity continues to expand in the region.

How Will the Moonrise Midstream Acquisition Impact Summit’s DJ Basin Operations?

Summit Midstream Corporation’s acquisition of Moonrise Midstream significantly expands its footprint in the DJ Basin. The newly acquired assets include approximately 80 miles of natural gas gathering pipelines, 25 miles of crude oil gathering infrastructure, and a 65 MMcf/d processing facility that can be expanded to 100 MMcf/d with minimal capital investment.

The acquisition is expected to provide additional processing capacity and operational flexibility, enabling Summit Midstream Corporation to meet growing demand from producers operating in the region. The company has been experiencing strong volume growth in its DJ Basin network following its previous acquisitions of the Outrigger and Sterling systems in 2022. However, with certain areas nearing full utilization, some customers had begun deferring development activities due to system constraints.

With the addition of Moonrise Midstream, Summit will alleviate these bottlenecks, allowing producers to resume drilling programs and increase output. The deal also enhances flow assurance and provides greater redundancy, which is critical for maintaining reliability in the natural gas supply chain.

What Are the Strategic Benefits of This Acquisition for Summit Midstream Corporation?

The Moonrise Midstream acquisition aligns with Summit’s long-term strategy of building scale through targeted, bolt-on acquisitions. By integrating these assets into its existing network, the company aims to capture commercial and operational synergies, optimize capital expenditures, and improve overall efficiency.

Summit is already connected to the Moonrise Midstream system through multiple interconnections, allowing for a seamless integration of operations. The expanded pipeline network will ease localized pipeline constraints, particularly in the northern section of its DJ Basin system. Additionally, with Moonrise’s processing plant, Summit will be able to improve plant operating margins, reduce reliance on third-party offloads, and enhance natural gas liquids (NGL) recoveries. These improvements will not only drive cost savings but also provide more stable and predictable revenue streams.

According to Summit Midstream Corporation’s leadership, the acquisition strengthens the company’s ability to support customers with long-term development plans in the DJ Basin. More than 800 dedicated undeveloped locations are positioned for future drilling activity, making the region a key growth area for midstream infrastructure investment.

What Are the Financial Details of the Moonrise Midstream Acquisition?

Summit Midstream Corporation is acquiring 100% of the membership interest in Moonrise Midstream, LLC under a deal structured with an upfront $70 million cash payment and an equity component valued at $20 million. The cash portion of the transaction is being financed through Summit’s credit facility.

The deal represents a value-accretive multiple of approximately 5.0x 2024 adjusted EBITDA, with the upfront cash portion being leverage-neutral at around 3.9x 2024 adjusted EBITDA. By structuring the transaction in this manner, Summit is maintaining financial flexibility while still expanding its operational capabilities in a high-growth region.

How Will the Acquisition Affect Summit’s Customers and DJ Basin Producers?

The acquisition of Moonrise Midstream is expected to deliver immediate benefits to Summit Midstream Corporation’s DJ Basin customers. The addition of 65 MMcf/d of processing capacity—half of which will be available immediately—will help alleviate system constraints, allowing producers to ramp up drilling programs that had been postponed due to capacity limitations.

Summit’s customers include both large integrated energy companies and independent producers, many of whom have multi-year development plans. By integrating Moonrise Midstream’s assets, Summit will be able to accommodate these customers’ expansion efforts while ensuring greater operational reliability.

With the expanded infrastructure, Summit can optimize its pipeline footprint, reduce operational bottlenecks, and improve flow assurance. The ability to process additional volumes internally, rather than relying on third-party facilities, will enhance Summit’s competitive positioning while offering cost advantages to producers.

What Are the Long-Term Growth Prospects for Summit Midstream Corporation in the DJ Basin?

Summit Midstream Corporation’s continued investment in the DJ Basin reflects the region’s long-term growth potential. The area remains one of the most active unconventional plays in the United States, with strong drilling economics and well-established takeaway infrastructure.

The company’s acquisition strategy has been focused on increasing its market share in key basins where it can drive operational efficiencies and capture incremental volumes. With the addition of Moonrise Midstream, Summit further solidifies its position as a leading midstream provider in the DJ Basin.

As producers continue to develop acreage in the region, midstream infrastructure will play a crucial role in ensuring efficient gathering, processing, and transportation of hydrocarbons. Summit’s expanded network will enable it to meet rising demand while maintaining system reliability and optimizing cost structures.

What Does This Acquisition Mean for Investors and Market Sentiment?

The market’s response to Summit Midstream Corporation’s latest acquisition will likely depend on how effectively the company integrates Moonrise Midstream’s assets and capitalizes on the additional processing capacity. Investors will be watching closely to see if the deal translates into higher earnings and improved cash flow generation.

Given the current market conditions, midstream consolidation remains a key theme, with companies seeking to enhance operational efficiencies and drive value through strategic mergers and acquisitions. If Summit successfully executes its growth strategy, the acquisition could be viewed as a positive step toward strengthening its financial position and increasing shareholder value.

Summit Midstream Corporation has engaged Troutman Pepper Locke L.L.P. as its legal advisor, while Evercore acted as financial advisor. Fundare Resources Company Holdco, LLC received legal counsel from Baker Botts L.L.P.

Summit Midstream Corporation’s acquisition of Moonrise Midstream is a strategic move that enhances its position in the DJ Basin by expanding its gathering and processing infrastructure. The deal is expected to alleviate system constraints, provide greater processing capacity, and support long-term customer growth in the region. By integrating these assets, Summit aims to optimize capital expenditures, improve operational efficiencies, and strengthen its market position in one of the most active energy-producing basins in the United States.