EDITORS: Partner: Jonathan Bobinger Associates: Jude Dworaczyk, Nathaniel Richards CONTRIBUTORS: Partners: James Barkley, Jonathan Bobinger, Michael Bresson, Chris Carr, Joshua Davidson, Michael Didriksen, James Douglass, A.J. Ericksen, Manny Grillo, Justin Hoffman, Thomas Holmberg, Matthew Levitt, Don Lonczak, Scott Looper, Steve Marcus, Barbara De Marigny, Jim Marshall, Hamish McArdle, Jim Prince, Jason Rocha, Jay Ryan, Timothy Taylor, Elaine Walsh, Matt West Counsel: Emil Barth, Peter del Vecchio, Matt Donnelly, Bart Seitz Associates: Sean Aguirre, Megan Conner, Sofia Doudountsaki, Jude Dworaczyk, Peter Farrell, Kyle Henne, Leslie Hodge, Branden Lankford, Nathaniel Richards Senior Advisors: David Gabathuler, Leigh Hancher

To our clients and friends,

Early each year, we take the opportunity to review significant developments in the worldwide energy industry for the previous year and offer our views on what these developments may mean for the coming year.

While 2019 was a banner year for the broader market, with the S&P 500 Index increasing close to 30% on the year, not all parts of the energy sector saw the benefits of this market increase. 2019 will be remembered much more in the sector as a year of change than a year of superb performance or returns. There were certainly bright spots, with utility and mineral and royalty stocks having strong years and the renewables space continuing to see notable progress and increasing tailwinds. However, concerns about over-supply, international trade and economic deceleration in China and other international markets, along with a laser focus from Wall Street on free cash flow over growth, all contributed to what was a challenging market for much of the oil and gas space. As a result, 2019 saw a good deal of industry consolidation and restructurings, particularly in the upstream and oilfield services spaces, and an evolution in how companies look to finance projects, particularly in the midstream space. The growing concern over climate change undeniably played a large role in 2019 as well and led to an increase in investments in renewables, even by traditional bellwether oil and gas companies.

Looking ahead, 2020 has already gotten off to an eventful start with U.S. and Iranian tensions coming close to a boiling point and the outbreak of the coronavirus beginning to inject anxiety into the market and place downward pressure on oil prices. With the U.S. presidential elections this coming November and the dust beginning to settle on the UK’s recent withdrawal from the EU, the remainder of 2020 promises to be just as exciting and momentous for the energy sector. In the face of great uncertainty ahead for the global markets generally, and the energy industry in particular, the only thing that seems certain is that, in the words of Bob Dylan, “the times they are a changin.”

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