Righting a Wrong

The Marcellus/Utica: Balanced on a Knife’s Edge

Righting a Wrong solves this complex market and details the knife’s edge balance in the Marcellus and Utica, where a single event impacts every party along the value chain from producer, to gatherer, to processor to long-haul pipeline. Part One of the new research shows who wins the biggest piece of the total upside of $1.9 billion in annualized EBITDA for midstream gatherers and long-haul pipelines in the Northeast. Part One of the report also focuses on production growth centered in northern Pennsylvania and demand markets directly to the east. Part Two of the paper, to be released in May, will focus on the Marcellus and Utica in Eastern Ohio, Southwest Pennsylvania and West Virginia. It will also explore the impact on pricing and basis as the U.S. natural gas market is once again transformed.

Key findings from Part One of the report:

  • Expansions out of northeast Pennsylvania (NE PA) will result in $1.9 billion in EBITDA split almost evenly between midstream gathering and long-haul transportation.
  • Higher-risk long-haul transport projects account for $182 million in transportation EBITDA but $254 million in midstream gathering EBITDA.
  • Productive capacity for producers in NE PA is limited to 14.2 Bcf/d, 5.2 Bcf/d higher than current production levels.
  • Cabot, Chief, Seneca and Shell will all see over 100% increases in production growth.
  • Williams Partners (WPZ) will realize an upside of $658 million from NE PA, driven by production linked through their gathering systems to new long-haul expansions.
  • ETP’s NE PA gathering system will almost double from 16% to 28% of midstream segment EBITDA.
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Contact:

John Lange

jlange@eastdaley.com

303-499-5940

East Daley Capital is an energy asset research firm

that is redefining how markets view risk for midstream energy companies. In addition to using top-level financial data to forecast 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 decisions.