Market Overview

East Daley: Permian Growth Continues to Fuel Earnings in the U.S. Oil and Gas Midstream Sector


East Daley expects strong earnings results for midstream companies
with exposure to the Permian Basin, such as Plains All American
Pipeline, Enterprise Products Partners, Energy Transfer, NuStar, Targa
and Magellan Midstream Partners

Daley Capital Advisors, Inc.,
an energy information and insights
provider that is redefining how markets view risk for midstream and
exploration and production (E&P) companies released their Consensus
Comparison Report
for second quarter earnings that highlights East
Daley's views on how company earnings diverge from market consensus. The
Q2 analysis showcases significant volume growth for Plains All American
Pipeline (PAA), Enterprise Products Partners (EPD), Energy Transfer
(ETP), NuStar (NS) and Magellan Midstream Partners (MMP). Additionally,
the updated analysis comparing Q2 to Q1 reflect a more positive outlook
for natural gas, NGLs and petchem-exposed assets and a more pessimistic
view for crude oil-exposed assets.

"The majority of midstream companies are showing upside potential on
cash flows for 2018 and we are finally seeing the realization of the
ramped-up Permian production from earlier this year," said Justin
Carlson, VP and Managing Director, Research at East Daley Capital. "Our
analysis shows that only a handful of midstream companies will
underperform versus consensus. It's a great time to be investing in the
midstream sector but looking closely at long-term asset health is an
absolute must to truly understand a company."

The midstream sector received additional good news with the newly
released policy guidance from the Federal Energy Regulatory Commission
(FERC). The new ruling allows for complete elimination of accumulated
deferred income taxes (ADIT) from the cost of service equation
for master limited partnerships (MLPs) and pass-throughs and exempts
them from refunding any ADIT to customers. Elimination of ADIT from cost
of service can significantly lower calculated return on equity (ROE) for
natural gas pipelines, making it beneficial for some pipelines to stay
in an MLP ownership structure. The ADIT policy guidance was specifically
for pipelines in MLP and pass-through entities and did not afford the
same treatment for C-Corps.

"The impact of the new FERC rulings sent a shockwave through the U.S.
oil and gas midstream sector, and the market is already responding
positively," said Justin Carlson, VP and Managing Director, Research at
East Daley Capital. "When these type of decisions come through and
impact a market, that's when the value of East Daley's vital analysis
really comes into play to provide our clients an edge in midstream

East Daley's Consensus Comparison Report is released on a quarterly
basis and helps clients identify market opportunities by showing East
Daley's earning expectations versus the street. The quarterly report
brings together data from East Daley Capital's Blueprint Models for 27
companies under coverage. This comparison shows how EDC's unique
approach to analyzing companies down to the asset level can produce
different earnings expectations that of sell-side research. East Daley
goes down to the asset level in its forecasts allowing clients an easy
way to spot potential investment opportunities.

East Daley
for more information on the Consensus
Comparison Report.

East Daley has the largest asset database of U.S. energy infrastructure
tied to EBITDA and its patent-pending production allocation model,
combined with in-depth analysis, brings greater transparency to the
energy and commodity financial market by providing investors and market
participants with deeper, more accurate data to inform their investment
and strategy decisions.

About East Daley Capital Advisors, Inc.

East Daley Capital is an energy information and insights provider that
is redefining how markets view risk for midstream and exploration and
production (E&P) companies. In addition to using top-level financial
data to predict a company's performance, East Daley delivers asset and
commodity analysis that provides comprehensive, fact-based intelligence.
Supported by a team of unbiased, experienced financial and commodity
analysts, East Daley provides its clients unparalleled insight into how
midstream and E&P companies operate and generate cash flow, in addition
to commodity forecasting. East Daley uses publicly available fundamental
data and intersects that data with a company's reported financials to
asset-level adjusted-EBITDA and distributable cash flow (DCF). The
result allows for more informed investment decisions. Founded in 2014,
the company is based in Centennial, Colorado. For more information visit

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