WES

WESTERN MIDSTREAM PARTNERS LP

Energy | Large Cap

$0.85

EPS Forecast

$926.5

Revenue Forecast

The company already released most recent quarter's earnings. We will publish our AI's next quarter's forecast around 2024-12-31
EX-99.1 2 wes2023q1xearningsrelease.htm EX-99.1 Document

EXHIBIT 99.1
wesprlogo.jpg

WESTERN MIDSTREAM ANNOUNCES
FIRST-QUARTER 2023 RESULTS

Reported first-quarter 2023 Net income attributable to limited partners of $199.0 million, generating first-quarter Adjusted EBITDA(1) of $498.7 million.
Reported first-quarter 2023 Cash flows provided by operating activities of $302.4 million, generating first-quarter Free cash flow(1) of $141.6 million.
Announced a first-quarter distribution of $0.856 per unit, which includes the Partnership’s Base Distribution of $0.500 per unit, as well as an Enhanced Distribution of $0.356 per unit.

HOUSTON—(BUSINESS WIRE)—May 3, 2023 – Today Western Midstream Partners, LP (NYSE: WES) (“WES” or the “Partnership”) announced first-quarter 2023 financial and operating results. Net income (loss) attributable to limited partners for the first quarter of 2023 totaled $199.0 million, or $0.52 per common unit (diluted), with first-quarter 2023 Adjusted EBITDA(1) totaling $498.7 million. First-quarter 2023 Cash flows provided by operating activities totaled $302.4 million, and first-quarter 2023 Free cash flow(1) totaled $141.6 million.
RECENT HIGHLIGHTS
Processed record Delaware Basin natural-gas throughput of 1.57 Bcf/d for the first quarter, representing a 3-percent sequential-quarter increase.
Gathered record Delaware Basin produced-water throughput of 977 MBbls/d for the first quarter, representing a 13-percent sequential-quarter increase.
After quarter end, executed a long-term amendment to Occidental’s natural-gas processing agreement in the Delaware Basin to provide up to 300 MMcf/d of additional firm-processing capacity supported by significant corresponding minimum-volume commitments.
In conjunction with the Delaware Basin processing agreement amendment, executed an amendment to Occidental’s natural-gas gathering agreement in the Delaware Basin extending the original term by three years through 2035.
Obtained investment-grade status, and subsequent to quarter end, closed an offering of $750.0



million in aggregate principal amount of 6.150% senior notes due 2033.
Retired $213.1 million of floating rate senior notes in January of 2023.
After quarter end, executed an amendment to the revolving credit facility extending the maturity to April of 2028 for an aggregate principal amount of up to $2.0 billion, which currently is undrawn.

On May 15, 2023, WES will pay its first-quarter 2023 per-unit distribution of $0.856, which includes the Partnership’s quarterly Base Distribution of $0.500 per unit and an Enhanced Distribution of $0.356 per unit pertaining to the Partnership’s 2022 financial performance. Through quarter-end, total common unit repurchases increased to $494.7 million of the $1.250 billion repurchase program, which runs through December 31, 2024. First-quarter 2023 Free cash flow(1) after distributions totaled $(55.0) million. First-quarter 2023 capital expenditures(2) totaled $179.3 million.
First-quarter 2023 natural-gas throughput(3) averaged 4.1 Bcf/d, representing a 3-percent sequential-quarter decrease. First-quarter 2023 throughput for crude-oil and NGLs assets(3) averaged 611 MBbls/d, representing a 6-percent sequential-quarter decrease. First-quarter 2023 throughput for produced-water assets(3) averaged 957 MBbls/d, representing a 12-percent sequential-quarter increase.
“In the Delaware Basin, strong producer activity levels led to increased throughput across all three products and resulted in record natural-gas and produced-water throughput,” said Michael Ure, President and Chief Executive Officer. “Despite continued growth in the Delaware Basin, overall natural-gas and crude-oil throughput declined sequentially due to expected declines in the DJ Basin, reduced throughput from our equity investments, and inclement weather that impacted our legacy Rocky Mountain assets in Utah and Wyoming. Additionally, increased sequential gross margin from the Delaware Basin was offset by the expected reduction in deficiency revenue and margin from non-core assets and reduced gross margin contribution from equity investments, primarily due to the sale of Cactus II in 2022. With that said, we expect quarterly profitability to gradually improve as throughput increases for the remainder of the year.”
Mr. Ure continued, “Our commercial team continues to generate substantial value for our partnership. Since this time last year, and inclusive of the new amendments with Occidental, we have now executed agreements providing up to 950 MMcf/d of firm processing commitments with some of our largest customers.”
“Additionally, we continue to see strong producer forecasts from our Delaware Basin customers, which may require us to increase our processing capacity at our West Texas complex to satisfy future volume growth. We will update the market in due time of any changes that could potentially affect our
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previously disclosed capital expenditures and Free cash flow guidance ranges. With that said, we are committed to safely meeting the processing needs of our customers, growing our Delaware Basin footprint, and continuing to generate meaningful value for our stakeholders,” concluded Mr. Ure.

CONFERENCE CALL TOMORROW AT 1:00 P.M. CT
WES will host a conference call on Thursday, May 4, 2023, at 1:00 p.m. Central Time (2:00 p.m. Eastern Time) to discuss first-quarter 2023 results. To participate, individuals should dial 888-770-7129 (Domestic) or 929-203-2109 (International) ten to fifteen minutes before the scheduled conference call time and enter the participant access code of 2187921. To access the live audio webcast of the conference call, please visit the investor relations section of the Partnership’s website at www.westernmidstream.com. A replay of the conference call also will be available on the website following the call.
For additional details on WES’s financial and operational performance, please refer to the earnings slides and updated investor presentation available at www.westernmidstream.com.

ABOUT WESTERN MIDSTREAM
Western Midstream Partners, LP (“WES”) is a Delaware master limited partnership formed to acquire, own, develop, and operate midstream assets. With midstream assets located in Texas, New Mexico, Colorado, Utah, Wyoming, and Pennsylvania, WES is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural-gas liquids, and crude oil; and gathering and disposing of produced water for its customers. In its capacity as a natural-gas processor, WES also buys and sells natural gas, natural-gas liquids, and condensate on behalf of itself and as an agent for its customers under certain contracts.
For more information about Western Midstream Partners, LP, please visit www.westernmidstream.com.
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This news release contains forward-looking statements. WES’s management believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this news release. These factors include our ability to meet financial guidance or distribution expectations; our ability to safely and efficiently operate WES’s assets; the supply of, demand for, and price of oil, natural gas, NGLs, and related products or services; our ability to meet projected in-service dates for capital-growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the “Risk Factors” section of WES’s most-recent Form 10-K filed with the Securities and Exchange Commission and other public filings and press releases. WES undertakes no obligation to publicly update or revise any forward-looking statements.
______________________________________________________________
(1)Please see the definitions of the Partnership’s non-GAAP measures at the end of this release and reconciliation of GAAP to non-GAAP measures.
(2)Accrual-based, includes equity investments, excludes capitalized interest, and excludes capital expenditures associated with the 25% third-party interest in Chipeta.
(3)Represents total throughput attributable to WES, which excludes (i) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary and (ii) for natural-gas throughput, the 25% third-party interest in Chipeta, which collectively represent WES’s noncontrolling interests.


# # #
WESTERN MIDSTREAM CONTACTS

Daniel Jenkins
Director, Investor Relations
Daniel.Jenkins@westernmidstream.com
832.636.1009


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Western Midstream Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months Ended 
March 31,
thousands except per-unit amounts20232022
Revenues and other
Service revenues – fee based
$647,867 $631,598 
Service revenues – product based
46,810 40,867 
Product sales39,025 85,589 
Other280 243 
Total revenues and other733,982 758,297 
Equity income, net – related parties39,021 49,607 
Operating expenses
Cost of product51,459 72,848 
Operation and maintenance174,239 128,976 
General and administrative51,117 48,602 
Property and other taxes6,831 18,442 
Depreciation and amortization144,626 134,582 
Long-lived asset and other impairments52,401 — 
Total operating expenses480,673 403,450 
Gain (loss) on divestiture and other, net(2,118)370 
Operating income (loss)290,212 404,824 
Interest expense(81,670)(85,455)
Other income (expense), net1,215 106 
Income (loss) before income taxes209,757 319,475 
Income tax expense (benefit)1,416 1,805 
Net income (loss)208,341 317,670 
Net income (loss) attributable to noncontrolling interests4,696 8,953 
Net income (loss) attributable to Western Midstream Partners, LP
$203,645 $308,717 
Limited partners’ interest in net income (loss):
Net income (loss) attributable to Western Midstream Partners, LP
$203,645 $308,717 
General partner interest in net (income) loss(4,686)(6,783)
Limited partners’ interest in net income (loss)$198,959 $301,934 
Net income (loss) per common unit – basic$0.52 $0.75 
Net income (loss) per common unit – diluted$0.52 $0.75 
Weighted-average common units outstanding – basic384,468 403,254 
Weighted-average common units outstanding – diluted385,750 404,460 

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Western Midstream Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
thousands except number of unitsMarch 31,
2023
December 31,
2022
Total current assets$735,298 $900,425 
Net property, plant, and equipment8,541,222 8,541,600 
Other assets1,835,968 1,829,603 
Total assets$11,112,488 $11,271,628 
Total current liabilities$581,327 $903,857 
Long-term debt6,693,941 6,569,582 
Asset retirement obligations293,718 290,021 
Other liabilities441,938 400,053 
Total liabilities8,010,924 8,163,513 
Equity and partners’ capital
Common units (384,615,227 and 384,070,984 units issued and outstanding at March 31, 2023, and December 31, 2022, respectively)2,964,712 2,969,604 
General partner units (9,060,641 units issued and outstanding at March 31, 2023, and December 31, 2022) 2,261 2,105 
Noncontrolling interests134,591 136,406 
Total liabilities, equity, and partners’ capital$11,112,488 $11,271,628 

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Western Midstream Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended 
March 31,
thousands20232022
Cash flows from operating activities
Net income (loss)$208,341 $317,670 
Adjustments to reconcile net income (loss) to net cash provided by operating activities and changes in assets and liabilities:
Depreciation and amortization144,626 134,582 
Long-lived asset and other impairments52,401 — 
(Gain) loss on divestiture and other, net2,118 (370)
Change in other items, net(105,062)(175,424)
Net cash provided by operating activities$302,424 $276,458 
Cash flows from investing activities
Capital expenditures$(173,088)$(83,971)
Contributions to equity investments - related parties(110)(2,070)
Distributions from equity investments in excess of cumulative earnings – related parties12,366 9,925 
Proceeds from the sale of assets to third parties 383 
(Increase) decrease in materials and supplies inventory and other(18,346)4,116 
Net cash used in investing activities$(179,178)$(71,617)
Cash flows from financing activities
Borrowings, net of debt issuance costs$220,000 $— 
Repayments of debt(313,138)— 
Increase (decrease) in outstanding checks18,768 (7,088)
Distributions to Partnership unitholders(196,569)(134,749)
Distributions to Chipeta noncontrolling interest owner(2,240)(1,984)
Distributions to noncontrolling interest owner of WES Operating(4,271)(2,805)
Net contributions from (distributions to) related parties 409 
Unit repurchases(7,061)(5,149)
Other(12,746)(7,225)
Net cash provided by (used in) financing activities$(297,257)$(158,591)
Net increase (decrease) in cash and cash equivalents$(174,011)$46,250 
Cash and cash equivalents at beginning of period286,656 201,999 
Cash and cash equivalents at end of period$112,645 $248,249 
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Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES

WES defines Adjusted gross margin attributable to Western Midstream Partners, LP (“Adjusted gross margin”) as total revenues and other (less reimbursements for electricity-related expenses recorded as revenue), less cost of product, plus distributions from equity investments, and excluding the noncontrolling interest owners’ proportionate share of revenues and cost of product.
WES defines Adjusted EBITDA as net income (loss), plus (i) distributions from equity investments, (ii) non-cash equity-based compensation expense, (iii) interest expense, (iv) income tax expense, (v) depreciation and amortization, (vi) impairments, and (vii) other expense (including lower of cost or market inventory adjustments recorded in cost of product), less (i) gain (loss) on divestiture and other, net, (ii) gain (loss) on early extinguishment of debt, (iii) income from equity investments, (iv) interest income, (v) income tax benefit, (vi) other income, and (vii) the noncontrolling interest owners’ proportionate share of revenues and expenses.
WES defines Free cash flow as net cash provided by operating activities less total capital expenditures and contributions to equity investments, plus distributions from equity investments in excess of cumulative earnings. Management considers Free cash flow an appropriate metric for assessing capital discipline, cost efficiency, and balance-sheet strength. Although Free cash flow is the metric used to assess WES’s ability to make distributions to unitholders, this measure should not be viewed as indicative of the actual amount of cash that is available for distributions or planned for distributions for a given period. Instead, Free cash flow should be considered indicative of the amount of cash that is available for distributions, debt repayments, and other general partnership purposes.
Below are reconciliations of (i) gross margin (GAAP) to Adjusted gross margin (non-GAAP), (ii) net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDA (non-GAAP), and (iii) net cash provided by operating activities (GAAP) to Free cash flow (non-GAAP), as required under Regulation G of the Securities Exchange Act of 1934. Management believes that Adjusted gross margin, Adjusted EBITDA, and Free cash flow are widely accepted financial indicators of WES’s financial performance compared to other publicly traded partnerships and are useful in assessing WES’s ability to incur and service debt, fund capital expenditures, and make distributions. Adjusted gross margin, Adjusted EBITDA, and Free cash flow as defined by WES, may not be comparable to similarly titled measures used by other companies. Therefore, WES’s Adjusted gross margin, Adjusted EBITDA, and Free cash flow should be considered in conjunction with net income (loss) attributable to Western Midstream Partners, LP and other applicable performance measures, such as gross margin or cash flows provided by operating activities.
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Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
(Unaudited)

Adjusted Gross Margin
Three Months Ended
thousandsMarch 31,
2023
December 31,
2022
Reconciliation of Gross margin to Adjusted gross margin
Total revenues and other$733,982 $779,437 
Less:
Cost of product51,459 92,663 
Depreciation and amortization
144,626 151,910 
Gross margin537,897 534,864 
Add:
Distributions from equity investments51,975 69,282 
Depreciation and amortization
144,626 151,910 
Less:
Reimbursed electricity-related charges recorded as revenues23,569 23,577 
Adjusted gross margin attributable to noncontrolling interests (1)
15,774 17,490 
Adjusted gross margin
$695,155 $714,989 
Gross margin
Gross margin for natural-gas assets (2)
$393,673 $403,043 
Gross margin for crude-oil and NGLs assets (2)
89,281 75,690 
Gross margin for produced-water assets (2)
59,549 61,189 
Adjusted gross margin
Adjusted gross margin for natural-gas assets
$480,009 $492,591 
Adjusted gross margin for crude-oil and NGLs assets
145,577 150,611 
Adjusted gross margin for produced-water assets69,569 71,787 
(1)For all periods presented, includes (i) the 25% third-party interest in Chipeta and (ii) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary, which collectively represent WES’s noncontrolling interests.
(2)Excludes corporate-level depreciation and amortization.

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Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
(Unaudited)

Adjusted EBITDA
Three Months Ended
thousandsMarch 31,
2023
December 31,
2022
Reconciliation of Net income (loss) to Adjusted EBITDA
Net income (loss)$208,341 $345,034 
Add:
Distributions from equity investments51,975 69,282 
Non-cash equity-based compensation expense7,199 6,538 
Interest expense81,670 84,606 
Income tax expense1,416 504 
Depreciation and amortization144,626 151,910 
Impairments52,401 20,491 
Other expense200 209 
Less:
Gain (loss) on divestiture and other, net(2,118)104,560 
Equity income, net – related parties39,021 44,095 
Other income1,215 1,484 
Adjusted EBITDA attributable to noncontrolling interests (1)
11,015 12,654 
Adjusted EBITDA$498,695 $515,781 
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA
Net cash provided by operating activities$302,424 $489,219 
Interest (income) expense, net81,670 84,606 
Accretion and amortization of long-term obligations, net(1,692)(1,783)
Current income tax expense (benefit)492 262 
Other (income) expense, net(1,215)(1,486)
Distributions from equity investments in excess of cumulative earnings – related parties12,366 22,839 
Changes in assets and liabilities:
Accounts receivable, net4,037 (96,659)
Accounts and imbalance payables and accrued liabilities, net136,460 72,881 
Other items, net(24,832)(41,444)
Adjusted EBITDA attributable to noncontrolling interests (1)
(11,015)(12,654)
Adjusted EBITDA$498,695 $515,781 
Cash flow information
Net cash provided by operating activities$302,424 $489,219 
Net cash used in investing activities(179,178)138,015 
Net cash provided by (used in) financing activities(297,257)(499,671)
(1)For all periods presented, includes (i) the 25% third-party interest in Chipeta and (ii) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary, which collectively represent WES’s noncontrolling interests.
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Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
(Unaudited)

Free Cash Flow
Three Months Ended
thousandsMarch 31,
2023
December 31,
2022
Reconciliation of Net cash provided by operating activities to Free cash flow
Net cash provided by operating activities$302,424 $489,219 
Less:
Capital expenditures173,088 145,723 
Contributions to equity investments – related parties110 733 
Add:
Distributions from equity investments in excess of cumulative earnings – related parties12,366 22,839 
Free cash flow$141,592 $365,602 
Cash flow information
Net cash provided by operating activities$302,424 $489,219 
Net cash used in investing activities(179,178)138,015 
Net cash provided by (used in) financing activities(297,257)(499,671)

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Western Midstream Partners, LP
OPERATING STATISTICS
(Unaudited)
 Three Months Ended
March 31,
2023
December 31,
2022
Throughput for natural-gas assets (MMcf/d)
Gathering, treating, and transportation369 402 
Processing3,454 3,520 
Equity investments (1)
423 463 
Total throughput4,246 4,385 
Throughput attributable to noncontrolling interests (2)
139 154 
Total throughput attributable to WES for natural-gas assets4,107 4,231 
Throughput for crude-oil and NGLs assets (MBbls/d)
Gathering, treating, and transportation309 315 
Equity investments (1)
314 347 
Total throughput623 662 
Throughput attributable to noncontrolling interests (2)
12 13 
Total throughput attributable to WES for crude-oil and NGLs assets611 649 
Throughput for produced-water assets (MBbls/d)
Gathering and disposal977 868 
Throughput attributable to noncontrolling interests (2)
20 17 
Total throughput attributable to WES for produced-water assets957 851 
Per-Mcf Gross margin for natural-gas assets (3)
$1.03 $1.00 
Per-Bbl Gross margin for crude-oil and NGLs assets (3)
1.59 1.24 
Per-Bbl Gross margin for produced-water assets (3)
0.68 0.77 
Per-Mcf Adjusted gross margin for natural-gas assets (4)
$1.30 $1.27 
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (4)
2.65 2.53 
Per-Bbl Adjusted gross margin for produced-water assets (4)
0.81 0.92 
(1)Represents our share of average throughput for investments accounted for under the equity method of accounting.
(2)For all periods presented, includes (i) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary and (ii) for natural-gas assets, the 25% third-party interest in Chipeta, which collectively represent WES’s noncontrolling interests.
(3)Average for period. Calculated as Gross margin for natural-gas assets, crude-oil and NGLs assets, or produced-water assets, divided by the respective total throughput (MMcf or MBbls) for natural-gas assets, crude-oil and NGLs assets, or produced-water assets.
(4)Average for period. Calculated as Adjusted Gross margin for natural-gas assets, crude-oil and NGLs assets, or produced-water assets, divided by the respective total throughput (MMcf or MBbls) attributable to WES for natural-gas assets, crude-oil and NGLs assets, or produced-water assets.
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Western Midstream Partners, LP
OPERATING STATISTICS (CONTINUED)
(Unaudited)

Three Months Ended
March 31,
2023
December 31,
2022
Throughput for natural-gas assets (MMcf/d)
Delaware Basin1,569 1,524 
DJ Basin1,306 1,343 
Equity investments423 463 
Other948 1,055 
Total throughput for natural-gas assets 4,246 4,385 
Throughput for crude-oil and NGLs assets (MBbls/d)
Delaware Basin205 203 
DJ Basin69 77 
Equity investments314 347 
Other35 35 
Total throughput for crude-oil and NGLs assets623 662 
Throughput for produced-water assets (MBbls/d)
Delaware Basin977 868 
Total throughput for produced-water assets977 868 

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