How did Western Midstream perform in the third quarter of 2024?

The Partnership reported net income attributable to limited partners of $281.8 million, or $0.74 per common unit (diluted), and Adjusted EBITDA of $566.9 million. Operating cash flow was $551.3 million and Free cash flow was $365.1 million. Management said profitability declined slightly from the prior quarter, mainly due to lower NGL recoveries and commodity prices in the Delaware Basin, lower equity-investment distributions, and higher operation and maintenance expense.

Is the distribution changing?

No. The third-quarter Base Distribution is $0.875 per unit, or $3.50 per unit annualized, in line with the prior quarter. It is payable on November 14, 2024. Free cash flow after distributions for the quarter was $24.3 million.

What is the outlook for 2024?

Management estimates increased Adjusted EBITDA in the fourth quarter, driven by steady throughput growth in its core basins and lower operation and maintenance expense. Full-year Adjusted EBITDA is expected to be towards the high end of the previously announced $2.2 billion to $2.4 billion range. Average year-over-year crude-oil and NGLs and produced-water throughput growth expectations were reduced.

How did the Partnership strengthen its balance sheet?

In August, WES issued $800.0 million of 5.450% senior notes due 2034, with proceeds to repay a portion of its senior notes due in 2025 and for general partnership purposes. Management said the trailing-twelve-month net leverage ratio has reached its year-end 2024 threshold of 3.0 times. Long-term debt was $6,929.2 million at September 30, 2024, compared with $7,283.6 million at December 31, 2023.

WES 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.

Western Midstream Partners, LP (NYSE: WES) reported third-quarter 2024 net income attributable to limited partners of $281.8 million^a, or $0.74 per common unit (diluted), and Adjusted EBITDA of $566.9 million, compared with $578.1 million for the second quarter of 2024 as shown in the filing's reconciliation.

Cash flows provided by operating activities were $551.3 million^b and Free cash flow was $365.1 million. Management attributed the slight quarter-over-quarter decline in profitability mainly to lower natural-gas liquids recoveries and lower commodity prices in the Delaware Basin, lower distributions from equity investments, and higher operation and maintenance expense, which the CEO described as typical for the third quarter. Operation and maintenance expense was $231.1 million, up from $204.4 million in the prior-year quarter.

Operationally, the Partnership reported record natural-gas and crude-oil and NGLs throughput in the Delaware Basin and continued throughput growth in the Powder River Basin following the Meritage Midstream acquisition. Total throughput attributable to WES was 5.0 Bcf/d for natural gas (1-percent sequential increase), 506 MBbls/d for crude oil and NGLs (2-percent sequential decrease), and 1,099 MBbls/d for produced water (2-percent sequential increase). Management expects fourth-quarter Adjusted EBITDA to increase, and expects full-year 2024 Adjusted EBITDA towards the high end of its previously announced $2.2 billion to $2.4 billion^c range, while reducing its average year-over-year crude-oil and NGLs and produced-water throughput growth expectations.

On the financing side, the Partnership issued $800.0 million^d of 5.450% senior notes due 2034, with proceeds to repay a portion of its 2025 senior notes and for general partnership purposes. Management said its trailing-twelve-month net leverage ratio has reached its year-end 2024 threshold of 3.0 times. The Base Distribution is $0.875 per unit ($3.50 annualized), unchanged from the prior quarter, payable November 14, 2024.

Free cash flow after distributions was $24.3 million for the quarter. Subsequent to quarter-end, the Partnership executed agreements to realign the Mi Vida joint venture, providing 100 MMcf/d of dedicated natural-gas processing capacity in the Delaware Basin beginning in mid-2025.

02—Key points

Key Highlights

Third-quarter 2024 net income attributable to limited partners of $281.8 million, or $0.74 per common unit (diluted), with Adjusted EBITDA of $566.9 million versus $578.1 million in the second quarter of 2024.
Cash flows from operating activities of $551.3 million and Free cash flow of $365.1 million; Free cash flow after distributions of $24.3 million; capital expenditures of $198.1 million.
Base Distribution of $0.875 per unit ($3.50 annualized) for the third quarter, in line with the prior quarter, payable November 14, 2024.
Record Delaware Basin throughput of 1.9 Bcf/d natural gas and 246 MBbls/d crude oil and NGLs; Powder River Basin natural-gas throughput of 505 MMcf/d, a 19-percent sequential increase.
Issued $800.0 million of 5.450% senior notes due 2034; management cites the best 10-year credit spread in WES's history and a trailing-twelve-month net leverage ratio of 3.0 times, its year-end 2024 threshold.
Full-year 2024 Adjusted EBITDA expected towards the high end of the $2.2 billion to $2.4 billion guidance range, while average year-over-year crude-oil and NGLs and produced-water throughput growth expectations were reduced.
Mi Vida joint venture realignment provides 100 MMcf/d of dedicated natural-gas processing capacity in the Delaware Basin beginning in mid-2025.

03—Questions

Frequently Asked Questions

How did Western Midstream perform in the third quarter of 2024?
The Partnership reported net income attributable to limited partners of $281.8 million, or $0.74 per common unit (diluted), and Adjusted EBITDA of $566.9 million. Operating cash flow was $551.3 million and Free cash flow was $365.1 million. Management said profitability declined slightly from the prior quarter, mainly due to lower NGL recoveries and commodity prices in the Delaware Basin, lower equity-investment distributions, and higher operation and maintenance expense.
Is the distribution changing?
No. The third-quarter Base Distribution is $0.875 per unit, or $3.50 per unit annualized, in line with the prior quarter. It is payable on November 14, 2024. Free cash flow after distributions for the quarter was $24.3 million.
What is the outlook for 2024?
Management estimates increased Adjusted EBITDA in the fourth quarter, driven by steady throughput growth in its core basins and lower operation and maintenance expense. Full-year Adjusted EBITDA is expected to be towards the high end of the previously announced $2.2 billion to $2.4 billion range. Average year-over-year crude-oil and NGLs and produced-water throughput growth expectations were reduced.
How did the Partnership strengthen its balance sheet?
In August, WES issued $800.0 million of 5.450% senior notes due 2034, with proceeds to repay a portion of its senior notes due in 2025 and for general partnership purposes. Management said the trailing-twelve-month net leverage ratio has reached its year-end 2024 threshold of 3.0 times. Long-term debt was $6,929.2 million at September 30, 2024, compared with $7,283.6 million at December 31, 2023.

04—Continue

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