Summit Midstream Partners, LP (NYSE:SMLP) shares are skyrocketing on Friday.

Today, the company announced the sale of Summit Midstream Utica to a subsidiary of MPLX LP for $625 million in cash. 

The transaction reduces Summit’s current net leverage by 1.5x to sub-4.0x, furthering progress toward achieving 3.5x net leverage target.

Summit Midstream Utica has 36% interest in Ohio Gathering Company, 38% interest in Ohio Condensate Company, and wholly-owned Utica assets. 

This transaction marks the conclusion of the thorough strategic review conducted by the Summit Board of Directors, in collaboration with external advisors, as publicly disclosed on October 3, 2023.

The development shifts Summit’s portfolio to approximately 55% crude oil-oriented basins.

“We continue to believe in the sizeable growth potential of the Delaware Basin and expect to further commercialize Double E’s available pipeline capacity,” said Heath Deneke, President and Chief Executive Officer.

The Utica Divestiture and strategic review’s conclusion garnered unanimous approval from the Board. 

While the Board and management have completed their active evaluation, they remain receptive to potential value-boosting transactions.

The deal increases liquidity with undrawn $400 million credit facility and more than $325 million of unrestricted cash.

The company revised pro forma 2024 Adjusted EBITDA guidance of $185 million to $220 million following the transaction.

“Further, we believe the DJ Basin and Williston Basin remain fragmented with a sizeable opportunity to pursue value-accretive and synergistic bolt-on acquisitions and organic growth opportunities,” Deneke added.

Price Action: SMLP shares are trading higher by 35.87% to $26.40 on the last check Friday.