EXPECTS TO RECOMMEND A 52-PERCENT BASE DISTRIBUTION INCREASE
Subsequent to quarter-end, entered into a series of agreements to sell WES’s equity interests in multiple non-core assets for aggregate proceeds of $790 million and for an aggregate multiple of approximately 9.6 times 2023 Adjusted EBITDA.
Provided 2024 guidance ranges of $2.200 billion to $2.400 billion for Adjusted EBITDA(1), $700.0 million to $850.0 million for total capital expenditures(2), and $1.050 billion to $1.250 billion for Free cash flow(1), all of which include the impact of the non-core asset divestitures.
As a result of WES’s meaningful net leverage reduction, reduced unit count, and significant, sustainable Free cash flow generation, management plans to recommend a quarterly Base Distribution increase of $0.30 per unit, or $1.20 per unit annualized, starting in the first quarter of 2024(3).
Providing 2024 Base Distribution guidance of at least $3.20 per unit(3). This includes an increase to $0.875 per unit starting with our first quarter Base Distribution, which represents an annual rate of $3.50 per unit, a 52-percent increase over the prior annual rate of $2.30 per unit.
HOUSTON, Feb. 21, 2024 /PRNewswire/ — Today Western Midstream Partners, LP (NYSE: WES) (“WES” or the “Partnership”) announced the execution of multiple agreements to divest of WES’s remaining interest in the Marcellus Interest gathering system, Saddlehorn Pipeline Company LLC, Whitethorn Pipeline Company LLC, Panola Pipeline Company LLC, and Enterprise EF78 LLC, for aggregate proceeds of $790 million. Additionally, the sale of the interests in Enterprise EF78 LLC and Whitethorn Pipeline Company LLC, which closed on February 16, 2024, resolved the outstanding legal proceedings associated with those assets. The sale of the Marcellus Interest gathering system, Panola Pipeline Company LLC, and Saddlehorn Pipeline Company LLC are expected to close in the first or second quarters of 2024, subject to customary closing conditions.
“For the past few years, we have successfully executed our strategy of divesting non-core, non-operated assets and redeploying that capital into our operated asset base with the goal of driving operational efficiencies alongside additional growth, thus creating incremental value for our unitholders. Additionally, our ability to execute accretive, M&A transactions such as the Meritage Midstream acquisition, has allowed us to cost-efficiently grow and further diversify our asset footprint,” said Michael Ure, President and Chief Executive Officer.
“Through these divestitures, WES is expected to generate approximately $790 million in proceeds, which in the aggregate represents an attractive, accretive multiple of 9.6 times 2023 Adjusted EBITDA. By recycling these proceeds back into our core business, we can further grow our operated asset base and drive material Free cash flow generation, while at the same time meaningfully reduce net leverage towards our long-term goal of 3.0 times.”
“Since becoming a standalone partnership in 2020, we have worked diligently to pursue cost and capital efficiencies, bring additional volumes onto our systems, and maximize the overall value of our asset base. We have implemented new technologies and processes to increase operational efficiencies, enhance employee development and safety, and minimize our environmental footprint, all while maintaining a conscious eye on reducing costs. Furthermore, we have been incredibly focused on returning more capital to our stakeholders through our diversified, transparent capital-return framework,” Mr. Ure continued.
“The shift to Free cash flow generation has paved the way to strong results, including repurchasing 15-percent of our unaffected unit count, and following the closing of these non-core asset …
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