Midstream hot topics and outstanding questions for 2Q earnings

Research evidence excerpt

Midstream hot topics and outstanding questions for 2Q earnings

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Integrateds, Refining, and Midstream

Midstream hot topics and outstanding

questions for 2Q earnings

Estimate Change

Topic 1: Net leverage to Waha/Permian NGL near-term 17 July 2026

As noted in our recent note, How much could NGLs grow from the unlocked Permian Equity

gas? Who benefits?, the gas egress starting up in the Permian right now is a net positive United States

for all NGL midstream operators, as we believe it will unlock significantly more NGL Oil & Gas

growth through 2030. However, in the near term, there will be some offsets as several Jean Ann Salisbury

operators (EPD, OKE, KNTK, TRGP) were making wide margins on the Waha-Henry Research Analyst

spread, which was extremely wide in 2Q but has rapidly closed in July as new pipelines BofAS+1 646 855-1470

came online. Understanding the 2Q26 vs 3Q26 and 2026 vs 2027 net offset (between jeanann.salisbury@bofa.com

Waha spread losses vs expected excess NGL growth) for each company will be topical, Naomi Marfatia

Research Analyst

including the cadence that they expect their shut in gas to return. BofAS

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Topic 2: Longevity of gas shadow backlog growth naomi.marfatia@bofa.com

James Larkin, CFA

Several major projects have been announced YTD, and so far, seemed to have more Research Analyst

interest than expected (MIST, Vector 2, Crossroads). Understanding how these open BofAS

+1 646 855 0116

seasons have progressed will be important. We are also interested KMI’s two major recent james.r.larkin@bofa.com

open seasons (TGP out of Appalachia, Permian Link to Midcon out of Permian). We believe Conor Fitzpatrick

there is more runway than investors believe at these levels of gas pipeline capex (see our Research Analyst BofAS