Surviving the WAHA Wave; and Poised to Thrive on Gassier Permian Prospects

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Surviving the WAHA Wave; and Poised to Thrive on Gassier Permian Prospects

n a nutshell: Our biggest takeaway from KNTK's NDR is that many of the growth levers KNTK

had socialized before FY25 (G&P volume growth, new processing plants, NGL recontracting benefits, and

OpEx savings) remain intact. That view seems to coincide with our investor conversations that have started

to consider whether KNTK's FY25 mishaps were more a function of poor timing and unforeseen Waha

discount severity (and consequences), and less an indictment of the company's growth potential. We believe

the narrative around KNTK has also shifted away from M&A and back to what the medium-term growth

rate could be as KNTK realizes G&P volume growth. Customers appear to be posturing for strong growth

as seen by recent contract restructurings and KNTK's decision to secure more USGC takeaway capacity.

Additionally, KNTK endorsed the view that the Permian is set to get gassier as new Permian residue egress

comes online, that will allow for a more permanent return of gas-sensitive production and give producers

the green light on drilling / well completion in gassier benches.

What do we think of shares here? We are more constructive overall and believe KNTK has about as much

torque as any Permian G&P to more activity, and a gassier Permian narrative. We remain Hold as near-

term visibility on volumes remains wait and see, with the anticipated inflection increasingly skewed toward

late-2026 and limited proof points likely over the next several months to support a re-rating. At the same time,

recent share outperformance has brought valuation back to more balanced territory, with the stock now

trading near our price target and in-line with peers and implying a risk/reward that appears largely reflected