How did Western Midstream perform in 2024 relative to its guidance?

The filing states full-year 2024 Adjusted EBITDA of $2.344 billion exceeded the midpoint of the $2.200 billion to $2.400 billion guidance range, and Free Cash Flow of $1.324 billion exceeded the high end of the $1.050 billion to $1.250 billion range.

What is the Pathfinder pipeline and when will it be in service?

Pathfinder is a 42-mile, 30-inch steel produced-water pipeline with capacity to transport over 800 MBbls/d before expansions, sanctioned to move volumes to disposal facilities in eastern Loving County. The related infrastructure, costing an estimated $400.0 million to $450.0 million over 24 months, is expected to be in service by January 1, 2027.

Will the distribution to unitholders increase in 2025?

The partnership plans to recommend a Base Distribution increase of $0.035 per unit to $0.910 per unit, starting with the first-quarter 2025 distribution payable in May, a 13 percent year-over-year increase in Base Distributions paid in 2025. It will not pay an Enhanced Distribution in 2025 and is targeting mid-to-low single-digit annual distribution growth. Board action on any increase is requested quarterly and subject to the Board's assessment.

What drove the 2025 capital expenditure guidance?

The $625.0 million to $775.0 million capital expenditure range includes initial Pathfinder construction costs, the produced-water gathering and disposal expansion, completion of the North Loving plant in the Delaware Basin, and additional gathering and compression facilities in the Powder River Basin. Approximately 50 percent of capital expenditures are expected to be spent in the Delaware Basin.

What does the Occidental agreement provide?

The new long-term produced-water agreement with Occidental provides up to 280 MBbls/d of firm gathering and transportation capacity and up to 220 MBbls/d of firm disposal capacity, supported by corresponding minimum-volume commitments. The filing also describes amendments to legacy produced-water agreements and an extension of DJ Basin natural-gas gathering arrangements by two years through mid-2035.

WES 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed February 26, 2025. Cited figures are marked; the original filing is the authoritative source.

Western Midstream Partners, LP (NYSE: WES) reported fourth-quarter 2024 net income attributable to limited partners of $325.9 million^a and Adjusted EBITDA of $590.7 million, with Free Cash Flow of $309.3 million.

For full-year 2024, net income attributable to limited partners was $1.537 billion^b, Adjusted EBITDA was $2.344 billion, and Free Cash Flow was $1.324 billion, which the company said exceeded the high end of its $1.050 billion to $1.250 billion Free Cash Flow guidance range and the midpoint of its $2.200 billion to $2.400 billion Adjusted EBITDA guidance range. Full-year 2024 distributions to unitholders totaled $1.246 billion, and the partnership reached its year-end net leverage target of 3.0 times in the third quarter of 2024. For 2025, the partnership guided to Adjusted EBITDA of $2.350 billion to $2.550 billion, total capital expenditures of $625.0 million to $775.0 million, and Free Cash Flow of $1.275 billion to $1.475 billion.

It sanctioned the Pathfinder produced-water pipeline, capable of transporting over 800 MBbls/d, and a related expansion of its produced-water gathering and disposal system, with an estimated cost of $400.0 million to $450.0 million^c over 24 months and expected in-service by January 1, 2027. These projects are supported by a new long-term produced-water agreement with Occidental Petroleum Corporation. The partnership also plans to recommend raising the Base Distribution by $0.035 per unit to $0.910 per unit starting in the first quarter of 2025, and it will no longer pay an Enhanced Distribution in 2025.

The filing also covers the company's 2025 capital allocation shift toward organic growth and bolt-on acquisitions, with a stated target of mid-to-low single-digit annual distribution growth. Investors should weigh the higher 2025 capital spending and the Pathfinder build-out against the distribution outlook.

02—Key points

Key Highlights

Q4 2024 net income attributable to limited partners of $325.9 million ($0.85 per diluted unit); Q4 Adjusted EBITDA of $590.7 million, including $9.2 million of positive revenue recognition adjustments.
Full-year 2024 Adjusted EBITDA of $2.344 billion and Free Cash Flow of $1.324 billion, above the high end of the $1.050 billion to $1.250 billion Free Cash Flow guidance range.
Divested multiple non-operated, non-core assets for $794.8 million, with proceeds used to reduce long-term debt; long-term debt fell to $6.93 billion at December 31, 2024 from $7.28 billion a year earlier.
Sanctioned the Pathfinder pipeline (800+ MBbls/d produced-water transport) and a produced-water system expansion, backed by a new Occidental agreement with up to 280 MBbls/d of firm gathering and transportation capacity and up to 220 MBbls/d of firm disposal capacity.
2025 guidance: Adjusted EBITDA of $2.350 billion to $2.550 billion, capital expenditures of $625.0 million to $775.0 million, and Free Cash Flow of $1.275 billion to $1.475 billion.
Planned Base Distribution increase of $0.035 per unit to $0.910 per quarter ($3.64 annualized) starting Q1 2025; the Enhanced Distribution will not be paid in 2025 and the concept is being retired.
Full-year 2024 Base Distribution-related returns to unitholders of $1.246 billion, and a long-term target of mid-to-low single-digit annual distribution growth.

03—Questions

Frequently Asked Questions

How did Western Midstream perform in 2024 relative to its guidance?
The filing states full-year 2024 Adjusted EBITDA of $2.344 billion exceeded the midpoint of the $2.200 billion to $2.400 billion guidance range, and Free Cash Flow of $1.324 billion exceeded the high end of the $1.050 billion to $1.250 billion range.
What is the Pathfinder pipeline and when will it be in service?
Pathfinder is a 42-mile, 30-inch steel produced-water pipeline with capacity to transport over 800 MBbls/d before expansions, sanctioned to move volumes to disposal facilities in eastern Loving County. The related infrastructure, costing an estimated $400.0 million to $450.0 million over 24 months, is expected to be in service by January 1, 2027.
Will the distribution to unitholders increase in 2025?
The partnership plans to recommend a Base Distribution increase of $0.035 per unit to $0.910 per unit, starting with the first-quarter 2025 distribution payable in May, a 13 percent year-over-year increase in Base Distributions paid in 2025. It will not pay an Enhanced Distribution in 2025 and is targeting mid-to-low single-digit annual distribution growth. Board action on any increase is requested quarterly and subject to the Board's assessment.
What drove the 2025 capital expenditure guidance?
The $625.0 million to $775.0 million capital expenditure range includes initial Pathfinder construction costs, the produced-water gathering and disposal expansion, completion of the North Loving plant in the Delaware Basin, and additional gathering and compression facilities in the Powder River Basin. Approximately 50 percent of capital expenditures are expected to be spent in the Delaware Basin.
What does the Occidental agreement provide?
The new long-term produced-water agreement with Occidental provides up to 280 MBbls/d of firm gathering and transportation capacity and up to 220 MBbls/d of firm disposal capacity, supported by corresponding minimum-volume commitments. The filing also describes amendments to legacy produced-water agreements and an extension of DJ Basin natural-gas gathering arrangements by two years through mid-2035.

04—Continue

← View all 8-K filings