Midstream has long touted its stable earnings stream, built on fee-based infrastructure contracted to ride out commodity cycles. In parts of the sector, the framing holds. But a bottoms-up analysis reveals that for a large share, midstream investments also buy upstream credit risk, packaged inside an infrastructure multiple.
Using the ‘Gathering & Processing’ dashboard in Energy Data Studio, East Daley Analytics reviewed producer concentration across the 13 largest public G&P system operators. We measured the Producer Concentration Ratio: the share of throughput held by a system’s largest upstream counterparty.
The most consequential finding is intrinsic to size. Expand Energy (EXE), the Haynesville and Appalachian giant formed from the Chesapeake-Southwestern merger, casts a long shadow in the G&P space.
Expand accounts for over half (52%) of DT Midstream’s (DTM) gathering volumes, and EXE is 32% of Williams’ (WMB) and 21% of Energy Transfer’s (ET) G&P throughput (see table below). An investor running a diversified midstream book including these companies effectively holds three separate equity tickets, but one underlying producer bet.
If EXE has company-specific events, such as production curtailments, refinancing stress or a basin exit, it would hit multiple earnings calls in the same quarter. Adding to the risk: Chesapeake and Southwestern only merged in early 2025, so DTM investors are underwriting an integration that, at a 52% concentration, hasn’t fully settled.
Williams has seen this movie before. When Chesapeake filed for Chapter 11 in June 2020, WMB was forced to cut its Haynesville gathering fees, accepting lower rates in exchange for mineral acreage to keep CHK drilling on its systems. A federal bankruptcy court approved the restructured contract in December 2020.
Now as EXE, the same counterparty remains a big part of WMB’s portfolio at ~32% of current throughput. The risk didn’t go away, but has been repackaged.
Private, Public Counterparties Pose Different Risk
Not all concentration carries the same risk profile. BP accounts for 28% of Kinder Morgan’s (KMI) G&P throughput, which is uncomfortably high, but BP’s activity is also auditable. Investors have a 10-K, a balance sheet and a hedge book to monitor future risks.
HG Energy, at 42% of Antero Midstream’s (AM) business, is in a different category. The private E&P files nothing publicly, and investors modeling AM’s distribution coverage are implicitly underwriting a producer they cannot audit. Add in Antero Resources (AR; 17%) and Diversified Energy at 15%, and AM relies on three producers for ~74% of cash flow. In the matrix on page 1, the dark cells tell this story.
Minimum volume commitments (MVCs) buffer some of this exposure. But MVCs protect the floor, and the upside case for most of these systems remains a volumetric bet on one driller.
Investor Takeaway: DTM and AM are in the highest-risk tier based on our producer concentration ratio. EPD and ET, with more diversified counterparty bases, are at the other end of the matrix. That distance is not priced into current multiples.
Using Energy Data Studio, investors can identify the key driller before buying a midstream multiple, and identify risks as a public vs private company. – Jaxson Fryer Tickers: AM, AR, DTM, EPD, ET, EXE, KMI, WMB.
One Market, One Model: Gain a Holistic View of North America Supply & Demand
East Daley Analytics is pleased to announce the Canada Supply & Demand report. The Canada S&D completes our North American model, providing a fully integrated supply and demand forecast for crude oil and natural gas. East Daley follows molecules from Canadian production through US infrastructure to end-markets. Clients now have a continental view to anticipate trends, from how Canadian gas is reshaping Midwest markets, to how crude imports flow to Gulf Coast refiners. The Canada S&D report and dataset is available exclusively in Energy Data Studio. Reach out to learn more about East Daley’s North American energy model.
Reading the Signals: Staying Ahead of Gas, Crude & NGL Markets Through Year-End
Volatility is defining today’s energy markets, and East Daley’s July webinar will help make sense of what’s next.
Prices are the signal producers can’t ignore. Natural gas prices remain under pressure while crude oil markets continue to react to geopolitical tensions in the Middle East. When realized prices compress, producers respond: deferring completions, high-grading acreage and re-underwriting economics in real time. The question isn’t whether producers are adapting — it’s how fast, and where the next pressure point emerges.
Infrastructure is the other half of the equation. In the NGL market, rising Waha gas prices, driven by new pipeline capacity, are eroding the cost advantage that’s long favored ethane rejection. In the Permian, the math is even more binding: How much longer can oil and associated gas production keep growing as crude takeaway capacity tightens? Infrastructure doesn’t just move barrels. It sets the ceiling on what producers can economically bring to market.
And none of this happens in isolation. Gas, crude and NGLs are structurally linked through associated production, processing economics and shared basin infrastructure. A shift in one commodity’s price or takeaway capacity ripples through the others, which means forecasting any single molecule in a vacuum gets you the wrong answer.
Join East Daley’s analysts as they connect these dots: breaking down the market forces shaping 2H26, what they mean for producers and midstream operators, and the key indicators to watch in the months ahead.
Click here to register for our July webinar on Wednesday, July 29 at 10 am MT.
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