Rig counts rise and rigs counts fall. Oil and gas prices rise and oil and gas prices fall. While oil is almost like money, the currency’s value can change on a dime. What was a viable project at the first of the year can turn into a dog within a few months. Acreage dedications and minimum volume commitments once virtually guaranteed a midstream gatherer, transporter or processor’s economic position. Now savvy shippers with well-crafted agreements may not only negate a gatherer and processor’s acreage dedication or volume commitment, the producer may simply demand that the parties include no such commitment and such demands may be heated due to the gatherer’s desire to expend capital or build revenue. Such is the market that today’s gatherers and processors find themselves.
The domestic shale boom has resulted in an oil and gas production surge that creates prolific opportunities. From the geologist to the reservoir engineer, from the frac specialist to the downstream oil or liquid marketer and from the midstream gatherer and processor to the purity product transporter, niches can be created, risks can be rewarded and strong customer service can result in long term profits. But the oil and gas business has never been kind to the weak hearted. Today’s markets, including today’s midstream markets, demand nimbleness, a safety focus, a commitment to cost efficiencies and a relentless desire to meet the producer and downstream market’s needs.
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