“In-Line to Better” The Theme of 2Q: Overall 2Q21 results for IG Energycompanies were in line to better than expected, aided by the much improvedcommodity price environment along with mgmt teams that continue to focus oncost controls and FCF generation. We cover in more detail each subsector’sperformance along with links to earnings notes published on each name. Ingeneral, Midstream continued to post stable earnings with several guidanceincreases as they remain focused on cost reductions, while larger nameshighlighted growth opportunities and opportunities utilizing existing assets to takeadvantage of the energy transition. The Integrated sector posted mostly beatsbolstered by higher upstream, chem, and midstream earnings while refiningcontinued to lag. FCF profiles improved, leverage came down q/q, and much ofthe subsector is now adopting increased shareholder returns through large buybackprograms. E&Ps similarly had a strong quarter on higher realizations, operatingefficiencies, and increased production. Integration of recently acquired assets hasthus far been successful and mgmt teams have impressively been able to addressdebt and reduce leverage. Servicers had an improved quarter and continue tohighlight strong 2H21 int’l growth with NAM expected to moderate a bit as USproducers exhaust budgets. Lastly, refining results were much improved but stillremain the most troubled of the lot. RINS prices and lower realizations put somepressure on margins, but overall the flip back to profitability in most cases afterseveral quarters of losses was a welcome development.