East Daley: U.S. Oil and Gas Midstream Sector To Grow By 14% in 2018, Propelled By Crude Oil Production Growth In the Permian Basin

The surge in crude oil production in the Permian is providing a
much-needed uplift for midstream companies such as Plains All American
Pipeline, Enterprise Products Partners and Magellan Midstream Partners

CENTENNIAL, Colo.–(BUSINESS WIRE)–#bakken—East
Daley Capital Advisors, Inc., an energy information and insights
provider that is redefining how markets view risk for midstream and
exploration and production (E&P) companies, reports that the overall
outlook is positive for most major U.S. oil and gas midstream companies.
However, delays in Northeast natural gas pipeline projects and recent
Federal Energy Regulatory Commission (FERC) tax policies are putting
downward pressure on midstream companies with natural gas exposure.

ÔÇ£We see the U.S. midstream sector growing by 14% in 2018 versus 2017,
which is great news for investors and midstream companies,ÔÇØ said Justin
Carlson, VP and Managing Director, Research at East Daley Capital.
ÔÇ£Permian crude oil and natural gas liquids production is really fueling
the growth in the sector and 2018 looks to be a rebound year for many
midstream companies. Now is a great time to look closely at midstream
investment opportunities.ÔÇØ

The surge in crude oil production has translated to a quicker than
expected ramp in volumes on Permian export pipelines. Many of the
marginal growth barrels are charged the higher walk-up tariff rates
providing a boost to the margin per barrel realized on throughput.
Additionally, takeaway constraints have caused regional spreads from
Midland to Cushing, Houston and the Louisiana Light Sweet hubs to widen
significantly. The significant uptick in crude oil production benefits
companies like Plains All American Pipeline (PAA), Enterprise Products
Partners (ETP) and Magellan Midstream Partners (MMP), which East Daley
has a more favorable view of versus consensus EBITDA estimates.

ÔÇ£Even though we see many midstream companies with natural gas exposure
growing in 2018, delayed infrastructure projects in the Northeast and
FERCÔÇÖs recent announcement to changes in tax policies have put downward
pressure on earnings expectations,ÔÇØ said Carlson. ÔÇ£Rover pipeline
expansion delays, the Mariner East 1 shut down and Mariner East 2
project delays will cause lower throughput and cash flows for companies
such as Antero Midstream, CNX Midstream and MPLX.ÔÇØ

East Daley recommends investors in midstream oil and gas companies to
look closely at the details of the new FERC rulings and how those
rulings apply to specific assets in midstream companies when evaluating
risk. However, East Daley views the impacts of the FERC tax policies
will have a modest downside risk on midstream companies EBITDA, with
most companies ranging from 0-5% of EBITDA at risk potentially, even
though outliers do exist.

Contact
East Daley for a copy of its most recent outlook on the
U.S. oil and gas sector.

East DaleyÔÇÖs largest asset database of U.S. energy infrastructure and
patent-pending production allocation model, combined with in-depth
analysis, brings greater transparency to the energy and commodity
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 information and insights provider 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 companyÔÇÖs performance, East Daley delivers asset and
commodity analysis that provides comprehensive, fact-based intelligence.
Supported by a team of unbiased, experienced financial and commodity
analysts, East Daley provides its clients unparalleled insight into how
midstream and E&P companies operate and generate cash flow, in addition
to commodity forecasting. East Daley uses publicly available fundamental
data and intersects that data with a companyÔÇÖs 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]