East Daley: Significant Increases in U.S. Oil and Gas Production to Boost U.S. Midstream Sector in 2018

New report from East Daley indicates that many U.S. midstream
companies positioned in key producing regions such as the Bakken and the
Marcellus will get a substantial uplift from incremental crude oil and
natural gas production in 2018

CENTENNIAL, Colo.–(BUSINESS WIRE)–East
Daley Capital Advisors, Inc., an energy assets research and data
firm redefining how markets view risk in midstream and exploration and
production (E&P) companies, released a new report identifying key
factors that are poised to give a much-needed boost to the U.S. oil and
gas midstream sector in 2018. The newly released report, “2018 Guidance
Outlook: Opportunities Abound for Midstream Investors,” shows how
anticipated increases in production in crude oil and natural gas will
have a positive impact on many well-positioned midstream companies in
2018.

“The most influential midstream theme in 2018 is our forecast for
significant oil and gas production growth,” said Justin Carlson, VP and
Managing Director, Research at East Daley Capital. “The main lag with
production in 2017 has been the long lead time for contracting frac
crews needed to complete the newly-drilled wells. We see that changing
dramatically in 2018. We do not anticipate that being an issue next year
as field service providers are really ramping up their frac fleets.
Completions will increase significantly in 2018.”

The report says the Bakken formation, located primarily in North Dakota,
will rebound from 2017 levels and midstream companies located in that
region will benefit greatly. East Daley sees a turnaround in the Bakken
as rig activity has increased steadily throughout 2017 as crude prices
stabilized. Given current prices, guidance from producers and service
companies, and the stable forward curve, EDC forecasts that well
completions in the Bakken will continue to grow, leading to robust basin
growth in 2018. The forecasted production growth will positively impact
basin midstream companies such as ONEOK (OKE), Kinder Morgan (KMI),
Targa (TRGP), Enbridge (EEP), and Tallgrass (TEP).

“The Marcellus will continue to be the best location for midstream
companies exposed to natural gas,” said Carlson. “Production in the
Northeast is poised to ramp up significantly in 2018 as new pipeline
projects debottleneck the region. Given our optimistic forecast for
Northeast gas production, midstream companies levered to the area such
as Energy Transfer (ETP), MPLX (MPLX), EQT Midstream (EQM), Williams
(WPZ), Antero Midstream (AM), and Rice Midstream (RMP) should continue
to benefit.”

Key findings from the 2018 Guidance Outlook:

• East Daley’s analysis indicates that impending 2018 midstream
  financial guidance announcements could deviate significantly from
  market expectations
• East Daley’s 2018 overall adjusted-EBITDA forecasts skew positive vs.
  current market consensus, indicating midstream sentiment may be too
  pessimistic
• Pessimistic midstream sentiment, higher production growth, and natural
  gas contract risk are three major themes that will drive the midstream
  sector in 2018

To access a complimentary copy of East Daley’s 2018 Guidance Outlook go
to http://eastdaley.com/2018-midstream-guidance/
or email [email protected].

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 with deeper, more accurate data to inform
their investment 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 discounted 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]