OIL2020. Midstream Update - Macroeconomic Landscape and M&A Environment

After a decade of robust growth, US Onshore both production growth and energy infrastructure buildout is moderating. Producers are likely to allow production to decline amidst stretched balance sheets and focus on Free Cash Flow. The rapid deceleration of drilling has occurred across shale plays resulting in lower expected growth for midstream. From a Midstream perspective, the industry is experiencing widespread reductions in Capex budgets and dividend payouts. Industry structure suggests midstream assets should consolidate, however, meaningful consolidation across the midstream space has yet to materialize due to several factors including challenges with relative value discussions, leverage issues and social challenges.

Learning Objectives:

• Assess the current market outlook
• Identify M&A trends
• Discover reasons why industry consolidation has yet to materialize