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Press Release: East Daley Capital Introduces “Dirty Little Secrets” — A New Report on Midstream Energy Sector Risk

February 1, 2017 — East Daley Capital Advisors, Inc., an energy assets research firm redefining how markets view risk in midstream energy companies, announced a new report: “Dirty Little Secrets: Lifting the Covers on Midstream Energy Company Risk.” The report details 23 prominent companies in the midstream space and subdivides them into a detailed asset-level view that provides key insights for 2017.

“Typically, energy financial analysts examine SEC filings, company presentations and press releases to ascertain the information needed to determine a company’s level of risk,” said Justin Carlson, VP and Managing Director, Research at East Daley Capital. “However that information just scratches the surface and what lies beneath can reveal more actionable insights. Our report quantifies exposure to commodity markets by asset and provides the basic tools for understanding a company’s true risk components.”

For example, by breaking down a company’s macro reported gas gathering and processing (G&P) segment by system within a basin, East Daley can uncover information about counterparty risk, minimum volume commitments, declining well profiles and intersegment synergies. This data allows investors and financial analysts to more accurately evaluate future risk to a company’s cash flow.

Key findings in the report include:

  • Ethane, Ethane, Ethane! It’s coming, it’s in Q4, it’s quantifiable, and it will likely be joined by another new fractionator.
  • Liquefied petroleum gas (LPG) exports are overbuilt in the short term and terminal fees are dropping. If there is a storm, minimum volume commitments (MVCs) provide cover but not shelter.
  • New natural gas pipeline expansions will collide with legacy contract cliffs as the sector nears the verge of yet another shake down.
  • In the Permian Basin, horizontal wells drilled are at a new high and logging initial production rates 47 percent and 40 percent higher than 2014 for oil and gas. The degree of uplift across the midstream space will vary significantly.
  • The surge of growth in the Permian will usher in a new wave of crude oil expansions as the region quickly goes from too much to too little capacity in 2017.

East Daley’s asset-level 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.

For more information or to access the report, visit: Dirty Little Secrets: Lifting the Covers on Midstream Energy Company Risk.

About East Daley Capital Advisors, Inc.

East Daley Capital is an energy assets research firm that is redefining how markets view risk for midstream energy 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 companies operate and generate cash flow. East Daley uses publicly available fundamental data and intersects that data with a company’s reported financials to break midstream companies down to asset-level cash flows. 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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