The Daley Note: July 21, 2023
East Daley expects Crestwood Equity Partners (CEQP) to post higher earnings in 2Q23, lifted by higher volumes from the Williston Basin and a new producer tie-in agreement.
CEQP’s performance is closely tied to Bakken shale development, and we estimate overall gas volumes in the Williston increased by ~3% Y-o-Y in 2Q23 and by 5% compared to 1Q23.
CEQP reported 1Q23 EBITDA of $193MM and, based on the updated Financial Blueprint, East Daley expects the company to report EBITDA of $201MM in 2Q23. In our forecast, around $145MM comes from the North G&P segment composed of the Bakken (Arrow and Wild Basin) and Powder River assets.
Winter storms in 4Q22 and mid-1Q23 caused lower-than-expected volumes and well connect activity across CEQP’s G&P assets, but the systems have fully recovered. East Daley can observe this recovery through real-time pipeline samples and in plant-reported inlet data. Pipeline samples cover most dry gas production in the Bakken, allowing us to adjust our models before companies report earnings.
CEQP volumes should also get a lift from the start of a tie-in agreement with Chord Energy (CHRD). CEQP previously guided that it expects to bring online the initial wells of CHRD’s Rough Rider project in 2Q23. The dedication agreement represents a growth opportunity for Crestwood on the western edge of the Williston. East Daley expects the company’s Williston volumes to increase from an average of 290 MMcf/d in 2023 to 318 MMcf/d in 2024. – Maria Paz Urdaneta Tickers: CEQP, CHRD
Upcoming Webinar: Projecting US LNG Growth, Supply and Requisite Infrastructure
July 26, 2023 | 8 AM MT | Online Webinar
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Review the Year Ahead in Dirty Little Secrets
The 2023 Dirty Little Secrets is Now Available! Is Midstream on the cusp of another infrastructure wave? Find out in our new annual report.
Dirty Little Secrets reviews the outlook for Midstream and commodity markets in 2023 and the years ahead. East Daley discusses the outlook for crude oil, natural gas and NGLs and the impacts to midstream assets in our 2023 Dirty Little Secrets annual market report. Click here for a copy of the 2023 Dirty Little Secrets report.
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