North American Midstream Takeaways from Our J.P. Morgan Natural Resources Conference

Research evidence excerpt

North American Midstream Takeaways from Our J.P. Morgan Natural Resources Conference

cklog, with Hugh Brinson and Desert Southwest anchoring

Permian egress, FGT expansions serving Florida utility and data center demand, and

constructive investment backdrops in Arkansas and Ohio driving incremental gas

logistics opportunities across the broader footprint.

• M&A market lighter, but still some packages left. In our conversations with

midstreamers, organic growth opportunities clearly take priority over inorganic growth

plans. However, WES’ recent Brazos Midstream acquisition expands the company;’s

Permian footprint at an attractive multiple (8x stepping down to 7.5x). In our meeting,

WES noted higher M&A potential now than at the start of the year, with portfolio

optimization potentially bringing additional assets to market. At our conference, ET

noted focused evaluation of M&A targets, particularly where the target lacks ET’s full

value chain capabilities. Momentum Midstream in the Haynesville represents the most

in-focus candidate to keep an eye on, At our dinner, WMB commented on a full-fledged

buyer book forming for Momentum Midstream, where they have identified operational

and financial synergies as the core industrial logic, though the team acknowledged the

outcome depends on whether financial buyers, ultimately outbid WMB in the process.

Here, we see financial discipline as paramount as investors expect a very full multiple to

be paid, presenting high risk of an adverse market reaction for the ulimate buyer.

• Compression fundamentals poised to hit record levels; KGS remains best in class.

KGS confirmed two 10-year contract renewals in 1H26 covering ~500k HP, reinforcing

the infrastructure nature of large HP compression and providing exceptional downside