01—Abstract
Summary
Summary of the 8-K filed February 18, 2026. Cited figures are marked; the original filing is the authoritative source.
Western Midstream Partners, LP reported record fourth-quarter and full-year 2025 results, with Net income attributable to limited partners of $187.2 milliona for the fourth quarter and $1.154 billion for the full year.
Adjusted EBITDA reached a record $635.6 millionb in the fourth quarter, including $29.5 million of unfavorable non-cash revenue adjustments tied to cost-of-service agreements at the DJ Basin oil and Springfield systems. Full-year Adjusted EBITDA was $2.481 billion, above the midpoint of the $2.350 billion to $2.550 billion guidance range, and full-year Free Cash Flow was $1.526 billion, above the high end of its $1.275 billion to $1.475 billion range. The company returned $1.431 billion to unitholders in 2025 while maintaining a net leverage ratio near 3.0 times.
The 2025 results include the acquisition of Aris Water Solutions, Inc., which expanded produced-water throughput and its New Mexico footprint. For 2026, the Partnership guided to Adjusted EBITDA of $2.500 billion to $2.700 billionc, total capital expenditures of $850.0 million to $1.000 billion, and Distributable Cash Flow of $1.850 billion to $2.050 billion, or $4.59 to $5.08 per unit. Management described a more challenging commodity price environment, with lower producer activity expected to moderate Delaware Basin growth and cause declines in several other basins.
Capital expenditure guidance is significantly below the previously expected at least $1.1 billiond. Management also plans to recommend a quarterly distribution increase of $0.02 to $0.93 per unit, starting in the first quarter of 2026, which represents a 2.2-percent increase.
Subsequent to year-end, the Partnership renegotiated natural-gas gathering and processing contracts in the Delaware Basin with Occidental and ConocoPhillips, replacing the legacy cost-of-service structure with a simplified fixed-fee structure in exchange for $610 million in WES units owned by Occidental. The filing also notes approximately $2.0 billion of liquidity and an investment-grade balance sheet.
02—Key points
Key Highlights
- Fourth-quarter 2025 Net income attributable to limited partners was $187.2 million ($0.47 per diluted unit), with Adjusted EBITDA of $635.6 million, a record for a fourth quarter.
- Full-year 2025 Adjusted EBITDA was a record $2.481 billion, and full-year Free Cash Flow was $1.526 billion, exceeding the high end of guidance; full-year distributable cash flow is not a reported 2025 metric in this release, but Free Cash Flow after distributions was $95.0 million.
- 2026 guidance: Adjusted EBITDA of $2.500 billion to $2.700 billion, total capital expenditures of $850.0 million to $1.000 billion, and Distributable Cash Flow of $1.850 billion to $2.050 billion.
- Planned quarterly distribution increase to $0.93 per unit (annualized $3.72) starting in the first quarter of 2026, a 2.2-percent increase over the prior quarter's $0.910 per unit.
- Aris Water Solutions acquisition completed in fourth-quarter 2025; the Aris integration is on track for approximately 85-percent of a $40 million synergy target by the end of the first quarter of 2026.
- Delaware Basin growth continues: North Loving I was completed in the second quarter of 2025, North Loving II (an incremental 13-percent of Delaware Basin processing capacity) is expected in early second quarter 2027, and the Pathfinder produced-water pipeline (over 800 MBbls/d) was sanctioned.
- Renegotiated Delaware Basin gas gathering and processing contracts with Occidental and ConocoPhillips to fixed-fee structures, in exchange for $610 million in WES units owned by Occidental.
03—Questions
Frequently Asked Questions
Why did fourth-quarter 2025 Adjusted EBITDA and net income include a revenue adjustment?
Fourth-quarter 2025 net income attributable to limited partners and Adjusted EBITDA include a non-cash decrease to revenue of approximately $29.5 million, associated with revenue recognition cumulative adjustments related to cost-of-service agreements at the DJ Basin oil and Springfield systems.
Why are capital expenditures for 2026 guided lower than previously expected?
Management said it is adjusting spending to reflect a softer macroeconomic backdrop. The 2026 capital expenditure midpoint of $925 million is significantly below the initial estimate of at least $1.1 billion, and approximately half of the expected 2026 capital program is directed toward the construction of Pathfinder and North Loving II.
What is Distributable Cash Flow and why is it now guided?
The company defines Distributable Cash Flow as Adjusted EBITDA less certain items, including net cash paid for interest, maintenance capital expenditures, and income taxes, with adjustments for noncontrolling interests. Management stated that, given 2026 organic growth spending, it is providing DCF guidance of $1.850 billion to $2.050 billion, or $4.59 to $5.08 per unit, as an additional measure of capacity to fund the distribution and a substantial portion of the growth-capital program, while continuing to report Free Cash Flow.
What is the outlook for throughput in 2026?
The company expects Delaware Basin crude oil and NGLs and natural-gas throughput to increase at low-to-mid single digits year-over-year, and produced-water throughput to increase over 80-percent, primarily from the Aris acquisition. Portfolio-wide, crude oil and NGLs operated throughput is expected to decline by low-to-mid single digits and natural gas to remain relatively flat, due to anticipated declines in several other operating basins.
04—Continue