RBN partner and Spotlight Series contributor East Daley Capital is excited to release, 2020 Dirty Little Secrets – Molecules to Money: Asset-Level ROCE
Dirty Little Secrets is the definitive guide to uncovering opportunities and navigating risk in the U.S. oil and gas sector.
Highlights from Dirty Little Secrets 2020:
- The market is underestimating production growth. East Daley’s 2020 U.S. production forecast calls for annual average crude production to hit 13.0 MMb/d (up 0.8 MMb/d Y-o-Y), natural gas to average 98.3 Bcf/d (up 6 Bcf/d Y-o-Y), and NGL supply from processing plants to average 5.4 MMb/d (up 0.5 MMb/d Y-o-Y). The Permian Basin will lead the charge with average crude oil production growth of 16% from 2019 to 2020.
- Midstream companies providing G&P, NGL transportation, and fractionation in associated gas basins like the Permian and Bakken will enjoy EBITDA growth in 2020 that outpaces production growth and market expectations.
- In the Permian, companies like Targa, Energy Transfer, and Enterprise Products will realize average G&P and NGL downstream growth of 21% and 25%, respectively.
- In the Bakken, OKE will be the largest benefactor of ethane recovery in the Williston, generating up to $424 million of fee-based revenue on an annualized basis in 2022, filling the Elk Creek pipeline sooner than the market might expect.
- Investors are overestimating the near-term value of owning Permian long-haul pipelines given the impending overbuild of crude oil pipeline capacity out of the Permian and Cushing will negatively impact marketing earnings as well as walk-up (spot) shipments for legacy pipelines. The Dirty Little Secret is that these two categories make up approximately half of all forecasted EBITDA declines for assets under our coverage totaling about $2.6 billion.
- There is unrealized opportunity for those companies that can avoid the near-term steep inclines on the Treadmill Incline Intensity (TII). East Daley shows companies like Enbridge (ENB), Targa (TRGP), Antero Midstream (AM), NuStar (NS), and Energy Transfer (ET) will be able to grow earnings most efficiently.
Purchase of Dirty Little Secrets includes a 200+-page PDF Report which is divided into four sections: Midstream Equity Fundamentals, Commodity Fundamentals, Midstream Corporate Strategy and an overview of the 25 midstream companies under East Daley coverage.