Analyst: Shale Producers, Midstream Should Brace For Impacts From Low Gas Prices

Production, volumes to process and move, EBITDA are all vulnerable in the near term, says Alerian.

fist of low gas prices

(Source: Shutterstock, HartEnergy.com)

Low natural gas prices will likely hurt production in the near term, and deliver hits to volume and EBITDA growth for many midstream companies, Alerian said in a recent report.

Getting through this period will require operators to redouble their efforts on cost efficiency and capital discipline, Alerian said, and diversified operators will have the edge.

“A midstream company with leverage to one producer in one basin clearly has a different risk profile than a diversified midstream company with multiple customers across different geographies and commodities,” Stacey Morris, Alerian’s director of research and author of the report, told HartEnergy.com. “That said, a midstream provider with an E&P parent may benefit from the support of the parent and their aligned interests.”

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Joseph Markman

Joseph Markman, senior editor for Hart Energy, covers markets and provides data analysis for all Hart Energy editorial products.