WESTERN MIDSTREAM ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2023 RESULTS

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Reported fourth-quarter 2023 Net income attributable to limited partners of $281.6 million, generating fourth-quarter Adjusted EBITDA(1) of $570.7 million.
Reported full-year 2023 Net income attributable to limited partners of $998.5 million, generating full-year Adjusted EBITDA(1) of $2.069 billion, and exceeding the revised full-year 2023 Adjusted EBITDA range of $1.950 billion to $2.050 billion.
Reported fourth-quarter 2023 Cash flows provided by operating activities of $473.3 million, generating fourth-quarter Free cash flow(1) of $282.0 million.
Reported full-year 2023 Cash flows provided by operating activities of $1.661 billion, generating full-year Free cash flow(1) of $964.2 million, and falling within the full-year 2023 Free cash flow guidance range of $900.0 million to $1.000 billion.
Announced a fourth-quarter Base Distribution of $0.575 per unit, which is consistent with the third-quarter Base Distribution, or $2.30 on an annualized basis.

HOUSTON, Feb. 21, 2024 /PRNewswire/ — Today Western Midstream Partners, LP (NYSE: WES) (“WES” or the “Partnership”) announced fourth-quarter and full-year 2023 financial and operating results. Net income (loss) attributable to limited partners for the fourth quarter of 2023 totaled $281.6 million, or $0.74 per common unit (diluted), with fourth-quarter 2023 Adjusted EBITDA(1) totaling $570.7 million. Fourth-quarter Adjusted EBITDA(1) includes approximately $20.4 million of positive revenue recognition adjustments associated with our cost-of-service agreements in South Texas and on our DJ Basin oil system. Fourth-quarter 2023 Cash flows provided by operating activities totaled $473.3 million, and fourth-quarter 2023 Free cash flow(1) totaled $282.0 million.

Net income (loss) attributable to limited partners for full-year 2023 totaled $998.5 million, or $2.60 per common unit (diluted), with full-year 2023 Adjusted EBITDA(1) totaling $2.069 billion. Full-year 2023 Cash flows provided by operating activities totaled $1.661 billion, and full-year 2023 Free cash flow(1) totaled $964.2 million.

FOURTH-QUARTER AND FULL-YEAR 2023 HIGHLIGHTS

Achieved record annual natural-gas throughput of 4.4 Bcf/d, representing a 5-percent year-over-year increase(2), in-line with our revised 2023 expectations of mid-single-digits growth.
Gathered record annual crude-oil and NGLs throughput of 652 MBbls/d, representing a 7-percent year-over-year increase(3), exceeding our 2023 expectations of low-single-digits growth.
Gathered record annual produced-water throughput of 1,009 MBbls/d, representing a 21-percent year-over-year increase, exceeding our revised 2023 expectations of upper-teens growth.
Achieved year-over-year throughput growth across all products in the Delaware Basin of 11-percent, 8-percent, and 21-percent, for natural gas, crude oil and NGLs, and produced water, respectively.
Sanctioned the 250 MMcf/d North Loving processing plant in May 2023, and materially progressed construction of the 300 MMcf/d Mentone III processing train, both of which are underpinned by commercial agreements containing either acreage dedications or significant minimum-volume commitments.
Announced and closed the acquisition of Meritage Midstream Services II, LLC (“Meritage”), expanding WES’s position to the largest gathering and processing footprint in the Powder River Basin.
Executed on our capital return framework by returning $978.4 million in distributions, inclusive of two Base Distribution increases and the payment of our first Enhanced Distribution, and $134.6 million in unit repurchases, which represents approximately 15-percent of WES’s unaffected common unit count since becoming a standalone entity in early 2020.
Obtained full investment-grade ratings in May 2023 and raised $1.350 billion through two bond offerings to partially fund the Meritage acquisition, refinance existing borrowings, and enhance the partnership’s overall liquidity.

On February 13, 2024, WES paid its fourth-quarter 2023 per-unit Base Distribution of $0.575, consistent with the Partnership’s third-quarter Base Distribution. Fourth-quarter and full-year 2023 Free cash flow(1) after distributions totaled $58.6 million and negative $14.2 million, respectively. Fourth-quarter and full-year 2023 capital expenditures(4) totaled $180.7 million and $739.1 million, respectively.

Fourth-quarter 2023 natural-gas throughput(5) averaged 4.9 Bcf/d, representing a 9-percent sequential-quarter increase(2). Fourth-quarter 2023 throughput for crude-oil and NGLs assets(5) averaged 702 MBbls/d, representing a 5-percent sequential-quarter increase(3). Fourth-quarter 2023 throughput for produced-water assets(5) averaged 1,054 MBbls/d, representing a 2-percent sequential-quarter decrease.

Full-year 2023 natural-gas throughput(5) averaged 4.4 Bcf/d, representing a 5-percent year-over-year increase(2). Full-year 2023 throughput for crude-oil and NGLs assets(5) averaged 652 MBbls/d, representing a 7-percent year-over-year increase(3). Full-year 2023 throughput for produced-water assets(5) averaged 1,009 MBbls/d, representing a 21-percent year-over-year increase.

“2023 was a successful, pivotal year for WES as we achieved operated throughput growth of approximately 7-percent, 5-percent, and 21-percent for natural gas, crude-oil and NGLs, and produced water, respectively. We also continued to diversify our asset and customer base through accretive M&A in the Powder River Basin, all while returning $1.113 billion to unitholders through our capital-return framework. Our ability to successfully capture significant Delaware Basin throughput growth, efficiently expand our asset footprint, and maintain cost and capital discipline, positions WES to enter 2024 on solid financial footing with significant operational tailwinds,” said Michael Ure, President and Chief Executive Officer.

“Focusing on the Delaware Basin, this was an extremely successful year for WES as throughput increased across all three products resulting in record annual throughput from the basin for our partnership. We also extended the duration of our agreements and our firm-processing commitments with Occidental through 2035 and continued to diversify our customer base in the basin by adding 12 new third-party customers across our natural-gas and produced-water businesses. These accomplishments have resulted in meaningful growth and have helped WES grow its natural-gas volumes at a rate more than double the rate of throughput growth in the basin since early 2021. Our commercial successes were the primary drivers behind the sanctioning of both Mentone III and the North Loving plant, which together will increase our total operated processing capacity in the basin by 34-percent compared to year-end 2023 and maintain WES’s position as one of the top natural-gas processors in the Delaware Basin. In addition to advancing our strong Delaware Basin position, we remained focused on growing the entirety of our business. Our expansion in the Powder River Basin and volume growth expectations in the DJ Basin place our partnership in a position of strength as we enter 2024,” Mr. Ure continued.

“Additionally, concurrent with this release, we are announcing that we have entered into a series of agreements to sell WES’s equity interests in multiple non-core assets for aggregate proceeds of $790.0 million and for an aggregate multiple of approximately 9.6 times 2023 Adjusted EBITDA. These divestitures are in line with 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 throughput growth and creating incremental value for our unitholders,” concluded Mr. Ure.

CONFERENCE CALL TOMORROW AT 1:00 P.M. CT

WES will host a conference call on Thursday, February 22, 2024, at 1:00 p.m. Central Time (2:00 p.m. Eastern Time) to discuss its fourth-quarter and full-year 2023 results. 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 small number of phone lines are available for analysts; individuals should dial 888-390-0546 (Domestic) or 617-892-4906 (International) ten to fifteen minutes before the scheduled conference call time. A replay of the live audio webcast can be accessed on the Partnership’s website at www.westernmidstream.com for one year after 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

FILING OF ANNUAL REPORT ON FORM 10-K

Today WES announced the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, with the Securities and Exchange Commission. A copy of the report is available for viewing and downloading on the Western Midstream website at www.westernmidstream.com. Unitholders may request hard copies of the report, which contains WES’s audited financial statements, free of charge, by emailing investors@westernmidstream.com, or by submitting a written request to Western Midstream Partners, LP at the following address: 9950 Woodloch Forest Drive, Suite 2800, The Woodlands, TX 77380, Attention: Western Midstream Investor Relations.

ABOUT WESTERN MIDSTREAM

Western Midstream Partners, LP (“WES”) is a master limited partnership formed to develop, acquire, own, and operate midstream assets. With midstream assets located in Texas, New Mexico, Colorado, Utah, and Wyoming, 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 its customers under certain gas processing contracts. A substantial majority of WES’s cash flows are protected from direct exposure to commodity price volatility through fee-based contracts.

For more information about WES, please visit www.westernmidstream.com

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; the successful closing of the divestitures noted above; 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)

For the quarter- and year-ended December 31, 2023, includes an average of 331 MMcf/d and 83 MMcf/d, respectively, of throughput associated with the Meritage acquisition in the fourth quarter of 2023.

(3)

For the quarter- and year-ended December 31, 2022, excludes an average of 27 MBbls/d and 65 MBbls/d, respectively, of throughput associated with the sale of Cactus II in the fourth quarter of 2022. For the quarter and year-ended December 31, 2023, includes an average of 20 MBbls/d and 5 MBbls/d, respectively, of throughput associated with the Meritage acquisition in the fourth quarter of 2023.

(4)

Accrual-based, includes equity investments, excludes capitalized interest, and excludes capital expenditures associated with the 25% third-party interest in Chipeta.

(5)

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
Investors@westernmidstream.com 
866.512.3523

Rhianna Disch
Manager, Investor Relations
Investors@westernmidstream.com
866.512.3523

 

Western Midstream Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended
December 31,

Year Ended 
December 31,

thousands except per-unit amounts

2023

2022

2023

2022

Revenues and other

Service revenues – fee based

$

763,837

$

647,948

$

2,768,757

$

2,602,053

Service revenues – product based

49,515

46,971

191,727

249,692

Product sales

44,688

84,268

145,024

399,023

Other

168

250

968

953

Total revenues and other

858,208

779,437

3,106,476

3,251,721

Equity income, net – related parties

36,120

44,095

152,959

183,483

Operating expenses

Cost of product

40,803

92,663

164,598

420,900

Operation and maintenance

200,426

166,923

762,530

654,566

General and administrative

73,060

49,382

232,632

194,017

Property and other taxes

16,497

18,065

56,458

78,559

Depreciation and amortization

165,187

151,910

600,668

582,365

Long-lived asset and other impairments

4

20,491

52,884

20,585

Total operating expenses

495,977

499,434

1,869,770

1,950,992

Gain (loss) on divestiture and other, net

(6,434)

104,560

(10,102)

103,676

Operating income (loss)

391,917

428,658

1,379,563

1,587,888

Interest expense

(97,622)

(84,606)

(348,228)

(333,939)

Gain (loss) on early extinguishment of debt

15,378

91

Other income (expense), net

2,862

1,486

5,679

1,603

Income (loss) before income taxes

297,157

345,538

1,052,392

1,255,643

Income tax expense (benefit)

1,405

504

4,385

4,187

Net income (loss)

295,752

345,034

1,048,007

1,251,456

Net income (loss) attributable to noncontrolling interests

7,398

8,710

25,791

34,353

Net income (loss) attributable to Western Midstream Partners,
     LP

$

288,354

$

336,324

$

1,022,216

$

1,217,103

Limited partners’ interest in net income (loss):

Net income (loss) attributable to Western Midstream Partners, LP

$

288,354

$

336,324

$

1,022,216

$

1,217,103

General partner interest in net (income) loss

(6,724)

(7,747)

(23,684)

(27,541)

Limited partners’ interest in net income (loss)

$

281,630

$

328,577

$

998,532

$

1,189,562

Net income (loss) per common unit – basic

$

0.74

$

0.85

$

2.61

$

3.01

Net income (loss) per common unit – diluted

$

0.74

$

0.85

$

2.60

$

3.00

Weighted-average common units outstanding – basic

379,517

384,885

383,028

394,951

Weighted-average common units outstanding – diluted

381,140

386,482

384,408

396,236

 

Western Midstream Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

December 31,

thousands except number of units

2023

2022

Total current assets

$

992,410

$

900,425

Net property, plant, and equipment

9,655,016

8,541,600

Other assets

1,824,181

1,829,603

Total assets

$

12,471,607

$

11,271,628

Total current liabilities

$

1,304,056

$

903,857

Long-term debt

7,283,556

6,569,582

Asset retirement obligations

359,185

290,021

Other liabilities

495,680

400,053

Total liabilities

9,442,477

8,163,513

Equity and partners’ capital

Common units (379,519,983 and 384,070,984 units issued and outstanding at December 31,
     2023 and 2022, respectively)

2,894,231

2,969,604

General partner units (9,060,641 units issued and outstanding at December 31, 2023 and
      2022)

3,193

2,105

Noncontrolling interests

131,706

136,406

Total liabilities, equity, and partners’ capital

$

12,471,607

$

11,271,628

 

Full story available on Benzinga.com


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