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Price declines, pipeline cancellations and bankruptcies draw attention to those contracted to transport hydrocarbons

Jon Haubert | 303.396.5996
Austin, TX (August 18, 2020) – Enverus, the leading oil and gas SaaS and data analytics company, has released its latest FundamentalEdge report which provides a financial and regulatory view of today’s besieged midstream sector — the companies responsible for transporting oil and gas to desired markets.

The introduction of Enverus’ report acknowledges a sobering setting. The oil price downturn began with a wave of announcements of planned capex declines from E&P operators. This was shortly followed by shut-ins, depleted liquidity and now the beginning of a tidal wave of bankruptcies. This environment challenges midstream operators with increased volumetric risk and contract risk — on top of the existing regulatory risk.

“It’s been a tough year for the industry and a rebalance will be anything but quick,” says Bernadette Johnson, vice president of Strategic Analytics at Enverus. “Somewhat caught in the middle between struggling E&P companies and the historical drop in demand from consumers, due to COVID-19, the midstream sector in particular is also vulnerable to regulatory threats, legal rulings and a challenging pipeline permit approval process,” added Johnson.

“Bankruptcies have a tendency to initiate a domino effect impacting everyone down the line. Contracts are called into question and so is timely delivery of payment. It certainly throws doubt and uncertainty into the mix,” says Johnson. “But this is a resilient industry and hydrocarbons aren’t going anywhere anytime soon.”

Enverus’ report takes a close look at reduced M&A activity, impacts tied to the Dakota Access Pipeline (DAPL), the cancellation of the Atlantic Coast Pipeline and multi-year delays for the Constitution Pipelines, Transco’s Atlantic Sunrise Expansion and the PennEast Pipeline.


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