East Daley: U.S. Oil and Gas Midstream Sector to Benefit Greatly From the Bakken, Denver Julesburg, Powder River and Haynesville Producing Regions in 2018
“Dirty Little Secrets 2018,” a new analytical report from East Daley
Capital Advisors, indicates that the U.S. oil and gas midstream sector
is on the verge of a banner year in 2018
CENTENNIAL, Colo.–(BUSINESS WIRE)–#bakken—East
Daley Capital Advisors, Inc., an energy assets research firm
redefining how markets view risk in midstream energy companies,
announced that “Dirty Little Secrets – The Naked Truth: Uncovering
Opportunities in the Midstream Sector,” is now available. The
165-page report details the risk for 28 companies in the midstream
sector by subdividing their cash flow at an asset-level providing key
insights and EBITDA forecasts for 2018 and beyond.
“Increased oil and gas production will drive uplift in the U.S.
midstream sector, but it’s not just the Permian and Marcellus that will
see major increases in 2018,” said Justin Carlson, VP and Managing
Director, Research at East Daley Capital. “The Bakken, Denver Julesburg
and Powder River should experience double-digit crude oil production
growth in 2018. The same goes for natural gas production. Given the
current forward curve the Haynesville and East Texas should grow for the
first time in years – in addition to prodigious associated gas
production. Even though the Permian and Marcellus get a lot of
attention, we are already seeing a resurgence in other parts of the
country that will bring a lot of new supply to the market.”
According to East Daley, U.S. oil supply from shale basins will increase
by 1.3 MMb/d YoY in 2018, led by the Permian Basin which will require
new infrastructure to handle the growth. U.S. natural gas production
will increase 5.6 Bcf/d YoY in 2018, led by the Marcellus and Utica
feeding new long-haul natural gas pipelines. The dirty little secret is
supply growth in second-tier plays, like the Bakken, Denver Julesburg,
Powder River and Haynesville, are also ramping in 2018 and will have a
profound impact on the U.S. midstream sector.
“From a midstream perspective, growing supply is the first sign of
opportunity for companies that handle, transport and process energy
products,” said Carlson. “However, not all companies are created equal.
Deciphering between operational and capital structure challenges will be
a key distinction to assessing those opportunities in 2018. To properly
assess an investment opportunity, it’s vital to quantify exposure to
commodity markets by asset to understand a company’s most important risk
components.”
Key findings Dirty Little Secrets 2018 include:
-
$7.2 billion (15%) in cash-flow growth from midstream companies in
2018 will be transformational for an industry beaten down in 2017. -
17 of 28 companies covered in this report are expected to outperform
market consensus, highlighting East Daley’s positive outlook for
midstream growth. -
Coverage and leverage are key metrics but they can mask insight into
future company performance that is only uncovered from detailed
asset-level analysis, such as the case with BWP and ETP. -
Gas and oil production is expected to surge across the country,
boosting oil output by 1.3 MMB/d and gas extraction by 5.6 Bcf/d
YoY…bolstering earnings across the sector. -
Supply growth has been underappreciated in basins like the Bakken,
Powder River and Marcellus. Growth in those basins is contrary to
market sentiment for rate and volume risk. -
The infrastructure of tomorrow could be in the ground today with old
infrastructure finding new life in the Permian, Bakken and DJ. -
Tax cuts have raised return on equity for natural gas pipelines, oil,
and NGL lines, increasing the risk of significant revenue cuts via
rate cases or rate freezes.
Featured midstream companies: AM, BPL, BWP, CEQP, CNXM, DCP, EEP,
ENBL, ENLK, EPD, EQM, ETP, GEL, KMI, KML, MMP, MPLX, OKE, PAA, RMP,
SEMG, SEP, SXE, TCP, TEP, TRGP, WES and WPZ.
To request the Dirty Little Secrets report, visit http://eastdaley.com/request-dirty-little-secrets/
or email [email protected].
Dirty Little Secrets is used by investors, institutional banks,
fund managers, private equity, midstream companies and E&Ps to
understand how changing energy market dynamics will impact the midstream
sector in 2018 and beyond. This report is made possible by East Daley’s
dedicated team of midstream analysts, leveraging the largest database of
U.S. energy infrastructure that delivers unprecedented clarity into the
vast network of midstream assets.
East Daley’s largest asset database of U.S. energy infrastructure and
patent-pending production allocation model, combined with in-depth
analysis, brings greater transparency to the midstream energy financial
market by providing investors and market participants with deeper, more
accurate data to inform their investment and strategy decisions.
About East Daley Capital Advisors, Inc.
East Daley Capital is an energy assets research firm that is redefining
how markets view risk for midstream and exploration and production (E&P)
companies. In addition to using top-level financial data to predict a
company’s performance, East Daley delivers asset-level analysis that
provides comprehensive, fact-based intelligence. Supported by a team of
unbiased, experienced research analysts, East Daley provides its clients
unparalleled insight into how midstream and E&P companies operate and
generate cash flow. East Daley uses publicly available fundamental data
and intersects that data with a company’s reported financials to
asset-level adjusted-EBITDA and distributable cash flow (DCF). The
result allows for more informed portfolio decisions. Founded in 2014,
the company is based in Centennial, Colorado. For more information visit http://www.eastdaley.com.
Contacts
East Daley Capital
John Lange, 303-499-5940
Vice-President,
Managing Director of Sales and Marketing
[email protected]
