East Daley Analytics – Dissecting the Energy Value Chain
Energy Insights and News

Low Prices Slow Drilling on EnLink Anadarko System

Comments: 0

Low natural gas prices have taken a toll on rig counts in the Anadarko Basin and led to lower activity on EnLink Midstream’s (ENLC) Central Oklahoma (COK) system, one of the basin’s premier G&P systems.

Rig counts in the Anadarko Basin have declined by 40% in the last eight months, hovering just above 50 rigs currently vs ~70 rigs in June 2023. Activity on the COK system has tracked with the basin-wide decline.

tdn 2.21

Historical rig and operator data for the COK system are available in East Daley’s Energy Data Studio. ENLC – COK rig counts have fallen from 11 in June ‘23 to 6 rigs in February ’24, according to EDA’s rig allocation model, a 45% decline. Core operators Devon Energy (DVN), Citizen Energy, and Camino Natural Resources have all dropped rigs from the COK system in this period.

In the EnLink Financial Blueprint, EDA currently forecasts 7 rigs on ENLC – COK through the first half of 2025, increasing to 8 rigs through YE27. We tie the outlook for the Anadarko Basin and the COK system to the Macro Supply and Demand Forecast, which expects higher gas prices ahead when new LNG projects start. The COK system is one of ENLC’s largest assets, accounting for ~22% of total company EBITDA, according to the ENLC Blueprint.

After growing ~3% Q-o-Q since 2022, volumes reported by EnLink for the Oklahoma segment began to decrease in 3Q23. In the company’s 4Q23 earnings report this week, ENLC reported gathering and processing volumes were flat Q-o-Q for the Oklahoma segment.

East Daley currently projects volumes and activity on ENLC - COK to grow with the expected return of higher gas prices starting in 2025. However, if producers maintain 6 rigs on the COK system going forward, we project volumes would stay flat at current levels (see figure).

We estimate the COK system can return to growth mode with 7 rigs or more. Currently in the ENLC Blueprint, we forecast 2024 EBITDA of ~$303MM for the COK system; an average of 6 rigs would reduce earnings by 7%, or ~$28MM, in our asset model. - James Taylor Tickers: DVN, ENLC.




New Webinar: 2024 Outlook for Permian NGL Growth and Dock Exports

Join East Daley’s Natural Gas Liquids Team on Wednesday, February 28 for a new online webinar on the NGL market outlook. In our latest webinar, EDA will discuss the outlook for Permian supply growth and the impacts to NGL markets. We review the potential for LPG dock constraints and how long bottlenecks may last. We also look at the propane storage and price outlook in 2024. Join us February 28.


New EDA Product: West Coast Supply & Demand

The West Coast Supply & Demand report is your go-to resource for mastering the energy market from the California coast to the western Colorado Rockies. This dynamic product offers extensive regional coverage, precise production forecasts for key basins, and in-depth pricing analysis, specifically examining the Colorado pricing spread from CIG Mainline to NW Pipeline Rockies.

Stay ahead of the competition with strategic insights, ensuring you make informed decisions and capitalize on emerging opportunities. Elevate your business with unparalleled market intelligence – invest in the West Coast Supply & Demand report today.


New EDA Product: Houston Ship Channel Supply & Demand

The Houston Ship Channel Supply & Demand report allows users to dive deep in understanding, and monitoring Houston Ship Channel natural gas dynamics. The product contains monthly updates of relevant price spreads, pipeline flows, production and demand estimates affecting the South Texas market, with forecasts extending 5 years into the future. Learn more about the Houston Ship Channel Supply & Demand report.


Energy Data Studio

East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.

Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.

Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact insight@eastdaley.com.

The Daley Note

Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term

About the AuthorEast Daley Analytics