Webinar | The effect of tight oil distress on the midstream sector

The tight oil sector is in distress, probably the worst it has ever been. Very little new drilling makes sense at US$35/bbl (WTI). Whiting Petroleum has already filed Chapter 11 bankruptcy and we believe more are imminent if the macro situation does not improve. Capex has been cut by 40-50% for most of tight oil companies in response to the decline in prices. The silver lining in this is how quickly shale companies have responded. The rig count has already fallen by 50% since early March. The rapid response to the macro environment will help mitigate the financial stress this year but ultimately higher prices are needed.