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Which operators are negatively affected by midstream agreements in a US$30/bbl world?

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31 March 2020

Which operators are negatively affected by midstream agreements in a US$30/bbl world?

Report summary

Dedicated pipeline takeaway can be advantageous as companies try to grow production but can hamper the ability for an operator to respond as prices fall. But in periods of low oil prices, it can become a burden that requires an operator to choose between drilling uneconomic wells or paying fines for missing production quotas. Aligning the proper amount of takeaway capacity with production growth can be very challenging. Ambitious growth strategies can be a double-edged sword and can leave an operator exposed during a prolonged price shock. An added layer of complexity in all of this is the recent discussions from the Texas RRC around potential production limits in order to support oil prices. What would that mean for midstream contracts? We don’t know yet.

Table of contents

  • Executive Summary

Tables and charts

This report includes 1 images and tables including:

  • Company level risk of violating midstream agreements (Parsley and Oasis have been updated)

What's included

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  • Document

    Which operators are negatively affected by midstream agreements in a US$30/bbl world?

    PDF 802.58 KB

  • Document

    MVC and FT agreements.xlsx

    XLSX 60.06 KB

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