However, infrastructure can’t be relocated like rigs, and those contracts with producers eventually expire, leaving midstreamers scrambling to fill pipes and feed processing plants in plays where producers are pulling back or exiting. The construction of pipelines, processing plants, storage facilities and other hard assets is commonly supported by volume commitments from producers. Over the last two decades, midstream companies took on the massive task of funding an infrastructure build-out to support surging production from the Shale Revolution. If you didn’t read it then, this is your opportunity to see what you missed! In observance of today’s holiday, we are revisiting a recently published blog discussing our newest Spotlight Report on Western Midstream. In the encore edition of today’s RBN blog, we discuss highlights from RBN and East Daley’s Spotlight Report on Western Midstream Partners and how the master limited partnership has been working to reduce its debt and make the most of its strong base in the Permian’s Delaware Basin. Midstream companies face a different set of challenges than oil and gas producers in repairing their balance sheet and restoring investor confidence, however, mostly because midstream investment decisions are determined both by downstream market changes and by E&Ps’ development and production activity - including producers’ ever-increasing focus on the Permian at the expense of other basins. But what about midstreamers? They too have been buffeted in recent years by volatile commodity prices, eroding investor support, shifting upstream investment patterns, and finally, a global pandemic.
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E&Ps, whipsawed over the last decade by extreme price volatility and negative investor sentiment, have adopted a new fiscal discipline that de-emphasizes production growth and prioritizes generation of free cash flow to reduce debt and reward shareholders. We’ve written a lot lately about how U.S.