East Daley: Opportunities Abound for Midstream Investors in 2018

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 East Daley’s 2018 overall adjusted-EBITDA forecasts skew positive versus current market consensus, indicating midstream sentiment may be too pessimistic. The new report identifies three key themes that will dominate the midstream sector in 2018.

“The midstream sector is at an inflection point as market sentiment has deviated from market fundamentals,” said Justin Carlson, VP and Managing Director, Research at East Daley Capital. “Even though many midstream companies have taken a beating in 2017, East Daley’s data and models show 2018 could be very positive for many well-positioned companies.”

The report says three themes will exist in 2018 that will impact the midstream sector. First, the market is being overly pessimistic on midstream companies as East Daley’s adjusted-EBITDA forecasts are skewed positive versus consensus estimates. Second, rising oil and gas production in 2018, despite lagging in 2017, will provide an earnings boost to midstream companies in most major U.S. basins. And third, some midstream companies, however, will be impacted negatively by large amounts of long-haul natural gas pipeline capacity contracts that will either be terminated or renewed at a lower-rate, putting downward pressure on earnings in some cases.

“It’s a really great time to assess opportunities in the U.S. midstream sector. It only makes sense that more investors will take a hard look at this distressed space,” said Carlson. “We are already seeing increased interest in this sector and we only expect that to continue into 2018. Not all midstream companies are equal, however, our analysis indicates there are many midstream companies with healthy assets that will generate cash-flow growth in 2018.”

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 insight@eastdaley.com.

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.

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