CENTENNIAL, Colo.--(BUSINESS WIRE)--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 firstname.lastname@example.org.
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.