HOUSTON, Aug. 5, 2021 /PRNewswire/ -- Summit Midstream
Partners, LP (NYSE: SMLP) ("Summit", "SMLP" or the "Partnership")
today announced that it has entered into criminal and civil
agreements to resolve previously disclosed government
investigations into the discovery, in January 2015 of a discharge of produced water
into Blacktail Creek, near Marmon, North
Dakota ("2015 Blacktail Release") and failure to report the
spill on a timely basis. The discharge emanated from a
ruptured pipeline owned by a Summit operating subsidiary,
Meadowlark Midstream Company, LLC ("Meadowlark"), which at the
time, was a subsidiary of, and operated by, Summit Midstream
Partners, LLC, the parent entity of SMLP ("Summit Investments,"
together with Meadowlark, the "Companies"). The Companies are
now subsidiaries of SMLP, since SMLP's acquisition of all the
outstanding membership interests in Meadowlark on March 4, 2016, and SMLP's acquisition of Summit
Investments on May 28, 2020.
The Companies have entered into multiple agreements with the
federal and state governments that would resolve environmental
claims from the U.S. and North
Dakota (the "Global Settlement"), with respect to the 2015
Blacktail Release, and are responsible for fulfilling certain
future requirements and the payment of an aggregate $36.3 million in pentalties, consisting of the
following:
- $20.0 million for a total penalty
payable pursuant to a civil consent decree over a period of up to 5
years for the $10.0 million federal
portion and over a period of up to 6 years for the $10.0 million state portion, with interest
accruing on the outstanding amount at a fixed rate of
3.25%;
- $1.25 million in natural resource
damages to the federal and state governments payable within 30 days
after the consent decree becomes effective; and
- $15.0 million for a total penalty
payable pursuant to a criminal plea agreement with the United States over a period of up to 5
years, with interest accruing on the outstanding amount at the
federal statutory interest rate (currently 0.07%)
Illustrative Annual Payment Schedule ($ in millions):
Oct-21
|
Sep-22
|
Sep-23
|
Sep-24
|
Sep-25
|
Sep-26
|
Sep-27
|
$ 3.1
|
$ 5.4
|
$ 7.2
|
$ 7.1
|
$ 7.0
|
$ 6.8
|
$ 1.7
|
The Global Settlement is subject to court approval before
becoming effective and also includes injunctive relief regarding
pipeline operations management practices, many of which have
already been implemented into our routine operations, and
continuation of Summit's remediation work at the Blacktail Creek
site.
Heath Deneke, President, Chief
Executive Officer and Chairman, commented, "As a company, we have
accepted responsibility for the produced water spill at the
Blacktail Creek site from the beginning and have been working
diligently over the past seven years on efforts to fully remediate
the environmental impacts to the area, while also investing heavily
in preventative system improvements, including state-of-the-art
leak detection technology, centralized control room monitoring and
alarm systems, and significant changes to our company-wide
operating practices and procedures. Since discovering the
spill in 2015, we have invested approximately $75 million on these overall system improvements
and environmental remediation measures at the Blacktail Creek
site. The Global Settlement is an important final step to
fully resolve the ongoing government investigations and legal
matters. While we consider the overall monetary settlement
penalties as severe under the circumstances, particularly given our
substantial remediation and mitigation efforts to date, we believe
that putting this matter behind us with manageable payment terms
over the next six years is in the best interest of all of Summit's
stakeholders and employees. We look forward to completing the
remaining steps to making this settlement effective, implementing
our remaining obligations efficiently and transparently, and
bringing closure to the unfortunate incident."
About Summit Midstream Partners, LP
SMLP is a value-oriented limited partnership focused on
developing, owning and operating midstream energy infrastructure
assets that are strategically located in the core producing areas
of unconventional resource basins, primarily shale formations, in
the continental United States. SMLP provides natural gas,
crude oil and produced water gathering, processing and
transportation services pursuant to primarily long-term, fee-based
agreements with customers and counterparties in six unconventional
resource basins: (i) the Appalachian Basin, which includes the
Utica and Marcellus shale
formations in Ohio and
West Virginia; (ii) the
Williston Basin, which includes
the Bakken and Three Forks shale formations in North Dakota; (iii) the Denver-Julesburg
Basin, which includes the Niobrara
and Codell shale formations in Colorado and Wyoming; (iv) the Permian Basin, which
includes the Bone Spring and Wolfcamp formations in New Mexico; (v) the Fort Worth Basin, which includes the Barnett
Shale formation in Texas; and (vi)
the Piceance Basin, which includes the Mesaverde formation as well
as the Mancos and Niobrara shale formations in Colorado.
SMLP has an equity investment in Double E Pipeline, LLC, which is
developing natural gas transmission infrastructure that will
provide transportation service from multiple receipt points in the
Delaware Basin to various delivery
points in and around the Waha Hub in Texas. SMLP also has an
equity investment in Ohio Gathering, which operates extensive
natural gas gathering and condensate stabilization infrastructure
in the Utica Shale in Ohio. SMLP is headquartered in
Houston, Texas.
Forward-Looking Statements
This press release includes certain statements concerning
expectations for the future that are forward-looking within the
meaning of the federal securities laws. Forward-looking
statements include, without limitation, any statement that may
project, indicate or imply future results, events, performance or
achievements and may contain the words "expect," "intend," "plan,"
"anticipate," "estimate," "believe," "will be," "will continue,"
"will likely result," and similar expressions, or future
conditional verbs such as "may," "will," "should," "would," and
"could." In addition, any statement concerning future
financial performance (including future revenues, earnings or
growth rates), ongoing business strategies and possible actions
taken by us or our subsidiaries are also forward-looking
statements. Forward-looking statements also contain known and
unknown risks and uncertainties (many of which are difficult
to predict and beyond management's control) that may cause
SMLP's actual results in future periods to differ materially from
anticipated or projected results. An extensive list of
specific material risks and uncertainties affecting SMLP is
contained in its 2020 Annual Report on Form 10-K filed with
the Securities and Exchange Commission (the
"SEC") on March 4, 2021, as amended and updated from time
to time. Any forward-looking statements in this press release are
made as of the date of this press release and SMLP
undertakes no obligation to update or revise any
forward-looking statements to reflect new information or
events.
SOURCE: Summit Midstream Partners, LP
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SOURCE Summit Midstream Partners, LP