DCP Midstream Partners Competition
Now Viewing DCP Midstream Partners's competition in: Natural Gas Production and Distribution (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company's major customers? - Major wholesale end-users are industrial companies, electricity generators, or local distribution companies.
Who are the company's major competitors? -
Is competition based mainly on pricing or on ability to deliver? -
Does the company have long-term sales/supply contracts? -
Do these contracts specify fixed-price levels or are prices adjustable? -
For producers: -
What percentage of sales is to marketers versus wholesale end-users? - Marketers are becoming a larger presence in the industry.
Competitive Landscape
Demand for natural gas depends partly on the health of the US economy and partly on the price of crude oil, a competitive product. The profitability of natural gas companies depends largely on the efficiency of their operations. There are large economies of scale in the production, processing, and distribution of gas, but small companies can effectively compete with large ones in exploration, where technical ability is more important than size.
Full Industry Overview For Natural Gas Production and Distribution
Business Challenges
CRITICAL ISSUES
Volatility of Natural Gas Prices - Because of changing crude oil prices and distribution bottlenecks, prices for natural gas can vary substantially from month to month. In the last few years, the average US wellhead price varied from $2 to $10 per thousand cubic feet (mcf) with changes of more than 50 percent within a 12-month period.
Dependence on Regulators - State and federal regulators control the interstate distribution and retail pricing of natural gas. In recent years, the goal of government efforts was to deregulate the industry, but deregulation difficulties in California slowed the process. State and federal legislation could reintroduce tighter regulations. Political pressures for re-regulation increase when prices are high.
Industries Where DCP Midstream Partners Competes
- Energy & Utilities
- Oil & Gas Transportation & Storage
- Natural Gas Gathering & Processing Systems(primary)
- Refined Petroleum Pipelines
- Oil & Gas Transportation & Storage
