Midstream Players Ride a Volume Wave
Ahh, it’s quarterly report card season again. A time to share the fruits of strategy, labor, and investments over a three-month gestation that gives financial analysts a purpose in life. For the nation’s larger midstreamers sharing their recent reports, a solid A+ grade seems fitting along with a standing ovation. But with so many reports hitting the news blotter and so finite character space to cover them all, Reese Energy Consulting today, alas, must narrow our selection coverage.
Let’s start with Energy Transfer, which has produced a 4Q video presentation that lacks nothing more than Tom Cruise riding a drone. ETC, which operates 125,000+ miles of pipelines across 44 states in every major basin, reported $1.33 billion in net income, an increase of $172 million in the same period last year, primarily due to its NGL pipeline, fractionation, and export volumes. And it’s teasing more acquisitions yet to come after last year’s $7.1 billion merger with Crestwood Equity Partners, which muscled up ETC’s gathering and processing prowess in the Permian Delaware, Williston, and Powder River.
Now to Targa, which is seriously kickin’ butt in the Permian with record volumes of natural gas flows, NGL processing, and LPG exports. The company reported 4Q adjusted EBITDA of $959.9 million, a 14% increase compared to the quarter before, and continues its fury of midstream buildouts in the Delaware and Midland with the latest completion of the Wildcat II gas plant with 275 MMCFD of capacity. The year ahead looks blinding bright for our pipe and processing friends, and we’re all in for the ride.