Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 21, 2024

WESTERN MIDSTREAM PARTNERS, LP

(Exact name of registrant as specified in its charter)

Delaware

001-35753

46-0967367

(State or other jurisdiction
of incorporation or organization)

(Commission
File Number)

(IRS Employer
Identification No.)

9950 Woodloch Forest Drive, Suite 2800

The Woodlands, Texas 77380

(Address of principal executive office) (Zip Code)

(346) 786-5000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of exchange
on which registered

Common units

WES

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On February 21, 2024, Western Midstream Partners, LP issued a press release announcing fourth-quarter and full-year 2023 results. The Partnership also simultaneously made the slide presentation for tomorrow’s earnings call available on the Western Midstream website, www.westernmidstream.com. The press release is included in this report as Exhibit 99.1.

Item 7.01 Regulation FD.

On February 21, 2024, Western Midstream Partners, LP issued a press release announcing 2024 guidance. The Partnership also simultaneously made the slide presentation for tomorrow’s guidance call available on the Western Midstream website, www.westernmidstream.com. The press release is included in this report as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


99.1						Press release dated February 21, 2024.
99.2						Press release dated February 21, 2024.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WESTERN MIDSTREAM PARTNERS, LP

By:

Western Midstream Holdings, LLC,
its general partner

Dated:

February 21, 2024

By:

/s/ Kristen S. Shults

Kristen S. Shults
Senior Vice President and Chief Financial Officer

EXHIBIT 99.1

WESTERN MIDSTREAM ANNOUNCES

FOURTH-QUARTER AND FULL-YEAR 2023 RESULTS

•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—(PR NEWSWIRE)—February 21, 2024 – 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.

# # #

Source: Western Midstream Partners, LP

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

Western Midstream Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Year Ended December 31,
thousands	2023		2022
Cash flows from operating activities
Net income (loss)	$	1,048,007	$	1,251,456
Adjustments to reconcile net income (loss) to net cash provided by operating activities and changes in assets and liabilities:
Depreciation and amortization	600,668		582,365
Long-lived asset and other impairments	52,884		20,585

(Gain) loss on divestiture and other, net	10,102		(103,676)
(Gain) loss on early extinguishment of debt	(15,378)		(91)
Change in other items, net	(34,949)		(49,213)
Net cash provided by operating activities	$	1,661,334	$	1,701,426
Cash flows from investing activities
Capital expenditures	$	(735,080)	$	(487,228)

Acquisitions from third parties	(877,746)		(40,127)
Contributions to equity investments - related parties	(1,153)		(9,632)
Distributions from equity investments in excess of cumulative earnings – related parties	39,104		63,897
Proceeds from the sale of assets to related parties	—		200
Proceeds from the sale of assets to third parties	(87)		264,121
(Increase) decrease in materials and supplies inventory and other	(32,329)		(9,468)
Net cash used in investing activities	$	(1,607,291)	$	(218,237)
Cash flows from financing activities
Borrowings, net of debt issuance costs	$	2,448,733	$	1,389,010
Repayments of debt	(1,967,928)		(1,518,548)
Commercial paper borrowings (repayments), net	609,916		—
Increase (decrease) in outstanding checks	3,516		2,206
Distributions to Partnership unitholders	(978,430)		(735,755)
Distributions to Chipeta noncontrolling interest owner	(7,641)		(10,736)
Distributions to noncontrolling interest owner of WES Operating	(22,850)		(24,898)
Net contributions from (distributions to) related parties	—		1,423
Unit repurchases	(134,602)		(487,590)
Other	(18,626)		(13,644)
Net cash provided by (used in) financing activities	$	(67,912)	$	(1,398,532)
Net increase (decrease) in cash and cash equivalents	$	(13,869)	$	84,657
Cash and cash equivalents at beginning of period	286,656		201,999
Cash and cash equivalents at end of period	$	272,787	$	286,656

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.

Western Midstream Partners, LP

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)

(Unaudited)

Adjusted Gross Margin


	Three Months Ended				Year Ended
thousands	December 31, 2023		September 30, 2023		December 31, 2023		December 31, 2022
Reconciliation of Gross margin to Adjusted gross margin
Total revenues and other	$	858,208	$	776,013	$	3,106,476	$	3,251,721
Less:
Cost of product	40,803		27,590		164,598		420,900
Depreciation and amortization	165,187		147,363		600,668		582,365
Gross margin	652,218		601,060		2,341,210		2,248,456
Add:
Distributions from equity investments	46,661		41,562		194,273		250,050
Depreciation and amortization	165,187		147,363		600,668		582,365
Less:
Reimbursed electricity-related charges recorded as revenues	25,273		29,981		102,109		81,764
Adjusted gross margin attributable to noncontrolling interests (1)	19,412		18,095		70,195		73,632
Adjusted gross margin	$	819,381	$	741,909	$	2,963,847	$	2,925,475

Gross margin
Gross margin for natural-gas assets (2)	$	484,688	$	450,130	$	1,738,125	$	1,676,732
Gross margin for crude-oil and NGLs assets (2)	103,228		87,911		368,444		346,406
Gross margin for produced-water assets (2)	70,509		70,353		259,541		245,274
Adjusted gross margin
Adjusted gross margin for natural-gas assets	$	579,278	$	518,765	$	2,067,528	$	2,031,600
Adjusted gross margin for crude-oil and NGLs assets	157,048		139,430		589,091		607,769
Adjusted gross margin for produced-water assets	83,055		83,714		307,228		286,106

(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.

Western Midstream Partners, LP

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)

(Unaudited)

Adjusted EBITDA


	Three Months Ended				Year Ended
thousands	December 31, 2023		September 30, 2023		December 31, 2023		December 31, 2022
Reconciliation of Net income (loss) to Adjusted EBITDA
Net income (loss)	$	295,752	$	284,398	$	1,048,007	$	1,251,456
Add:
Distributions from equity investments	46,661		41,562		194,273		250,050
Non-cash equity-based compensation expense	9,970		7,171		32,005		27,783
Interest expense	97,622		82,754		348,228		333,939
Income tax expense	1,405		905		4,385		4,187
Depreciation and amortization	165,187		147,363		600,668		582,365
Impairments	4		245		52,884		20,585
Other expense	71		1,269		1,739		555
Less:
Gain (loss) on divestiture and other, net	(6,434)		(1,480)		(10,102)		103,676
Gain (loss) on early extinguishment of debt	—		8,565		15,378		91
Equity income, net – related parties	36,120		35,494		152,959		183,483

Other income	2,862		27		6,976		1,648

Adjusted EBITDA attributable to noncontrolling interests (1)	13,459		12,134		48,345		54,049
Adjusted EBITDA	$	570,665	$	510,927	$	2,068,633	$	2,127,973
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA
Net cash provided by operating activities	$	473,300	$	394,787	$	1,661,334	$	1,701,426
Interest (income) expense, net	97,622		82,754		348,228		333,939
Accretion and amortization of long-term obligations, net	(2,174)		(1,882)		(8,151)		(7,142)
Current income tax expense (benefit)	1,315		806		3,341		2,188
Other (income) expense, net	(2,862)		1,270		(5,679)		(1,603)

Distributions from equity investments in excess of cumulative earnings – related parties	7,389		8,536		39,104		63,897
Changes in assets and liabilities:
Accounts receivable, net	17,773		60,614		78,346		116,296
Accounts and imbalance payables and accrued liabilities, net	(19,021)		(12,535)		68,019		7,812
Other items, net	10,782		(11,289)		(67,564)		(34,791)
Adjusted EBITDA attributable to noncontrolling interests (1)	(13,459)		(12,134)		(48,345)		(54,049)
Adjusted EBITDA	$	570,665	$	510,927	$	2,068,633	$	2,127,973
Cash flow information
Net cash provided by operating activities	$	473,300	$	394,787	$	1,661,334	$	1,701,426
Net cash used in investing activities	(1,068,707)		(207,916)		(1,607,291)		(218,237)
Net cash provided by (used in) financing activities	378,700		88,670		(67,912)		(1,398,532)

Western Midstream Partners, LP

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)

(Unaudited)

Free Cash Flow


	Three Months Ended				Year Ended
thousands	December 31, 2023		September 30, 2023		December 31, 2023		December 31, 2022
Reconciliation of Net cash provided by operating activities to Free cash flow
Net cash provided by operating activities	$	473,300	$	394,787	$	1,661,334	$	1,701,426
Less:
Capital expenditures	198,653		201,857		735,080		487,228
Contributions to equity investments – related parties	—		1,021		1,153		9,632
Add:
Distributions from equity investments in excess of cumulative earnings – related parties	7,389		8,536		39,104		63,897
Free cash flow	$	282,036	$	200,445	$	964,205	$	1,268,463
Cash flow information
Net cash provided by operating activities	$	473,300	$	394,787	$	1,661,334	$	1,701,426
Net cash used in investing activities	(1,068,707)		(207,916)		(1,607,291)		(218,237)
Net cash provided by (used in) financing activities	378,700		88,670		(67,912)		(1,398,532)

Western Midstream Partners, LP

OPERATING STATISTICS

(Unaudited)


	Three Months Ended				Year Ended
	December 31, 2023		September 30, 2023		December 31, 2023		December 31, 2022
Throughput for natural-gas assets (MMcf/d)
Gathering, treating, and transportation	516		457		435		409
Processing	4,043		3,699		3,692		3,474
Equity investments (1)	489		495		466		483
Total throughput	5,048		4,651		4,593		4,366
Throughput attributable to noncontrolling interests (2)	172		167		161		156
Total throughput attributable to WES for natural-gas assets	4,876		4,484		4,432		4,210
Throughput for crude-oil and NGLs assets (MBbls/d)
Gathering, treating, and transportation	368		334		332		317
Equity investments (1)	347		347		333		373
Total throughput	715		681		665		690
Throughput attributable to noncontrolling interests (2)	13		14		13		14
Total throughput attributable to WES for crude-oil and NGLs assets	702		667		652		676
Throughput for produced-water assets (MBbls/d)
Gathering and disposal	1,076		1,101		1,029		853
Throughput attributable to noncontrolling interests (2)	22		22		20		17
Total throughput attributable to WES for produced-water assets	1,054		1,079		1,009		836
Per-Mcf Gross margin for natural-gas assets (3)	$	1.04	$	1.05	$	1.04	$	1.05
Per-Bbl Gross margin for crude-oil and NGLs assets (3)	1.57		1.40		1.52		1.38
Per-Bbl Gross margin for produced-water assets (3)	0.71		0.69		0.69		0.79

Per-Mcf Adjusted gross margin for natural-gas assets (4)	$	1.29	$	1.26	$	1.28	$	1.32
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (4)	2.43		2.27		2.48		2.46
Per-Bbl Adjusted gross margin for produced-water assets (4)	0.86		0.84		0.83		0.94

(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.

Western Midstream Partners, LP

OPERATING STATISTICS (CONTINUED)

(Unaudited)


	Three Months Ended				Year Ended
	December 31, 2023	September 30, 2023	Inc/ (Dec)		December 31, 2023	December 31, 2022	Inc/ (Dec)
Throughput for natural-gas assets (MMcf/d)
Operated
Delaware Basin	1,704	1,674	2	%	1,635	1,470	11	%
DJ Basin	1,341	1,331	1	%	1,322	1,331	(1)	%
Powder River Basin	369	40	NM		120	33	NM
Other	998	990	1	%	930	914	2	%
Total operated throughput for natural-gas assets	4,412	4,035	9	%	4,007	3,748	7	%
Non-operated
Equity investments	489	495	(1)	%	466	483	(4)	%
Other	147	121	21	%	120	135	(11)	%
Total non-operated throughput for natural-gas assets	636	616	3	%	586	618	(5)	%
Total throughput for natural-gas assets	5,048	4,651	9	%	4,593	4,366	5	%
Throughput for crude-oil and NGLs assets (MBbls/d)
Operated
Delaware Basin	225	220	2	%	214	198	8	%
DJ Basin	81	68	19	%	71	82	(13)	%
Powder River Basin	20	—	100	%	5	—	100	%
Other	42	46	(9)	%	42	37	14	%
Total operated throughput for crude-oil and NGLs assets	368	334	10	%	332	317	5	%
Non-operated
Equity investments	347	347	—	%	333	373	(11)	%
Total non-operated throughput for crude-oil and NGLs assets	347	347	—	%	333	373	(11)	%
Total throughput for crude-oil and NGLs assets	715	681	5	%	665	690	(4)	%
Throughput for produced-water assets (MBbls/d)
Operated
Delaware Basin	1,076	1,101	(2)	%	1,029	853	21	%



Total operated throughput for produced-water assets	1,076	1,101	(2)	%	1,029	853	21	%

NM—Not meaningful

EXHIBIT 99.2

WESTERN MIDSTREAM ANNOUNCES

2024 GUIDANCE AND NON-CORE ASSET SALES FOR AGGREGATE PROCEEDS OF $790 MILLION

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—(PR NEWSWIRE)—February 21, 2024 – 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 divestitures, we would expect our net debt to EBITDA to decrease by more than 1.5 times by year-end 2024 relative to 2019. These actions have put our partnership in a position of strength, resulting in our ability to accelerate the return of capital to our unitholders and target an increase in our Base Distribution by 52-percent relative to our prior quarter’s distribution. As we have in the past, we will continue to evaluate the Base Distribution on a quarterly basis with the intention of approving a level of distribution that is sustainable and aligned with the outlook of our business. Even with an increase of this magnitude, we believe we will still have room to target additional Base Distribution increases in future years as the business performs and Free cash flow generation continues to grow,” concluded Mr. Ure.

2024 GUIDANCE

Based on the most current production forecast information from our producer customers, and including the impact of our non-core asset divestitures, WES is providing 2024 guidance as follows:

•Adjusted EBITDA(1) between $2.200 billion and $2.400 billion

•Total capital expenditures(2) between $700.0 million and $850.0 million

•Free cash flow(1) between $1.050 billion and $1.250 billion

•Full-year 2024 Base Distribution of at least $3.20 per unit(3), which excludes the impact of any Enhanced Distribution

“The financial outlook for WES remains strong as we transition into 2024, which we expect will be driven by another year of throughput growth that generates material increases in both Adjusted EBITDA and Free cash flow,” commented Kristen Shults, Senior Vice President and Chief Financial Officer. “Based on these growth expectations, we anticipate Adjusted EBITDA to range between $2.200 billion to $2.400 billion for full-year 2024, growing approximately 11-percent year-over-year at the midpoint.”

“Similar to years past, the Delaware Basin will continue to be the partnership’s growth engine as our diversified customer base continues to allocate substantial capital to the region, and we expect last year’s increased producer activity levels to result in annual throughput growth in the DJ Basin for the first time since 2021. Additionally, we expect the integration of the Meritage asset base to drive additional throughput growth and contribute to our overall profitability, and we will continue capturing operational synergies and implementing efficiencies over our expanded Powder River Basin footprint.”

“As the construction of Mentone III and North Loving continues in 2024, and we prepare for continued throughput growth, we expect total capital expenditures to range between $700.0 million to $850.0 million. Approximately 81-percent of our capital expenditures will be spent in the Delaware Basin, focused on the construction of the North Loving plant, which will enable us to accommodate future growth and process additional volumes in 2025 and beyond.”

“Finally, taking into consideration our expectations of year-over-year Adjusted EBITDA growth and our projected capital expenditure needs, we estimate our Free cash flow will increase by approximately 19-percent at the midpoint, which positions WES to continue returning capital to stakeholders. As demonstrated with our plan to recommend an increase to the Base Distribution of 52-

percent for the first quarter, we remain committed to returning more of WES’s Free cash flow to investors over time as the business continues to grow,” Ms. Shults continued.

“Management’s confidence in the sustainability of Free cash flow led to our decision to recommend an increase to the Base Distribution, rather than pay a material Enhanced Distribution in future years. While the Enhanced Distribution is a critical component of our capital allocation framework, we believe aligning the Base Distribution with our baseline cash generation expectations for the business generates maximum unitholder value and allows the Enhanced Distribution to provide for incremental returns of capital when the business outperforms,” concluded Ms. Shults.

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

As previously announced, 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, and 2024 guidance. 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.

ABOUT WESTERN MIDSTREAM

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

______________________________________________________________

(1)A reconciliation of the Adjusted EBITDA range to net cash provided by operating activities and net income (loss), and a reconciliation of the Free cash flow range to net cash provided by operating activities, is not provided because the items necessary to estimate such amounts are not reasonably estimable at this time. These items, net of tax, may include, but are not limited to, impairments of assets and other charges, divestiture costs, acquisition costs, or changes in accounting principles. All of these items could significantly impact such financial measures. At this time, WES is not able to estimate the aggregate impact, if any, of these items on future period reported earnings. Accordingly, WES is not able to provide a corresponding GAAP equivalent for the Adjusted EBITDA or Free cash flow ranges.

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

(3)Full-year 2024 Base Distribution (paid in 2024) of at least $3.20 per unit, which includes the February 2024 distribution of $0.575 per unit. Board action on any distribution increase will be requested in April 2024, and is subject to the Board’s assessment of the needs of the business at that time.

# # #

Source: Western Midstream Partners LP

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

Cover Page	Feb. 21, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Feb. 21, 2024
Entity Registrant Name	WESTERN MIDSTREAM PARTNERS, LP
Entity Incorporation, State or Country Code	DE
Entity File Number	001-35753
Entity Tax Identification Number	46-0967367
Entity Address, Address Line One	9950 Woodloch Forest Drive, Suite 2800
Entity Address, City or Town	The Woodlands
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77380
City Area Code	346
Local Phone Number	786-5000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common units
Trading Symbol	WES
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001423902
Amendment Flag	false