Company Structure and Operations - Western Midstream Partners, LP owns a 98.0% limited partner interest in Western Midstream Operating, LP[27] - The company is engaged in gathering, compressing, treating, processing, and transporting natural gas, as well as gathering and disposing of produced water[29] - The company’s operations are organized into a single segment that engages in gathering, compressing, treating, processing, and transporting natural gas, crude oil, and produced water[37] - The company’s assets include both owned assets and ownership interests accounted for under the equity method[28] - The company’s operations include the sale of natural gas, NGLs, and condensate on behalf of itself and its customers[29] Financial Position and Credit Facilities - The company has a $2.0 billion senior unsecured revolving credit facility[24] - As of December 31, 2024, the company had approximately $2.0 billion in effective borrowing capacity under the revolving credit facility (RCF), providing liquidity for expansion and acquisition opportunities[47] - The company requires $341.0 million in available cash per quarter to maintain its announced distribution of $0.87500 per unit, totaling $1,364.0 million annually[163] - The company's cash flows, rather than profitability, primarily determine the cash available for distribution, which may fluctuate from quarter to quarter[162] - The company has a buyback program of $1.25 billion that ends on December 31, 2024[24] Acquisitions and Sales - The company sold its 15% interest in Cactus II Pipeline LLC in November 2022[24] - The company acquired Meritage Midstream Services II, LLC on October 13, 2023[24] - The acquisition of Meritage was completed in October 2023 for $885.0 million, funded by cash and proceeds from a $600.0 million senior note issuance[42] - The company closed the sale of its 33.75% interest in the Marcellus Interest systems for proceeds of $206.2 million, resulting in a net gain of $63.9 million recorded in the consolidated statement of operations[40] - In the first quarter of 2024, the company sold equity investments including a 25.00% interest in Mont Belvieu JV for combined proceeds of $588.6 million, resulting in a net gain of $239.7 million[41] Revenue Sources and Customer Dependence - For the year ended December 31, 2024, 60% of total revenues were attributable to production owned or controlled by Occidental, highlighting the company's reliance on this key partner[51] - Occidental accounts for over 50% of the company's revenues related to natural gas, crude oil, NGLs, and produced water, with 60% of total revenues and 91% of throughput for crude oil and NGLs attributable to Occidental's production[146] - A material reduction in Occidental's production could lead to a significant decline in the company's revenues and cash available for distribution[146] - The company reported that 95% of its wellhead natural-gas volume and 100% of its crude-oil and produced-water throughput were serviced under fee-based contracts, providing a stable revenue stream[47] Growth and Expansion Plans - The company plans to enhance growth through systematic acquisition activity while controlling operating, capital, and administrative costs to maintain sustainable distribution growth[45] - The Mentone Train III processing plant was completed, adding 300 MMcf/d of processing capacity to the West Texas complex[61] - The North Loving Plant is under construction with a capacity of 250 MMcf/d, expected to be completed in Q1 2025, bringing total processing capacity of the West Texas complex to 2,190 MMcf/d[63] - Three oil-treating facilities were brought online, adding 45 MBbls/d of treating capacity to the DBM oil system[64] - Several produced-water disposal wells were added, increasing disposal capacity by 210 MBbls/d[65] Regulatory and Compliance Risks - Proposed revisions to pipeline safety regulations by PHMSA could increase compliance costs and operational delays for the company[105] - The company is subject to civil penalties for violations of CFTC and FTC regulations, which can exceed $1.0 million per day per violation[112] - The company’s natural-gas gathering operations may face increased costs and capital expenditures due to potential changes in state or federal regulations[113] - The company is required to comply with ratable-take and common-purchaser statutes, which prohibit discrimination among natural gas producers[114] - FERC's anti-manipulation rules apply to non-jurisdictional entities in connection with gas sales, purchases, or transportation subject to FERC jurisdiction[116] Environmental and Climate Change Regulations - The company has incurred and will continue to incur significant operating and capital expenditures to comply with environmental regulations, which may materially affect its financial condition and results of operations[126] - The EPA's new regulations for ground-level ozone standards could require the installation of new emission controls, significantly increasing capital expenditures and operating costs[127] - Colorado's Senate Bill 24-229 mandates a 50% reduction in oil and gas NO emissions by 2030 relative to 2017 levels, potentially increasing compliance costs for the company[128] - The U.S. aims to reduce net GHG emissions by 50% - 52% below 2005 levels by 2030, which may impose additional costs and affect demand for oil and gas[128] - Increased regulation related to climate change and air emissions could raise operating costs and reduce demand for the company's services, impacting financial performance[187] Operational Risks and Challenges - The company faces various risks, including commodity-price risks and regulatory changes, which could materially affect its financial performance and ability to pay distributions[140] - The company is exposed to credit risk from third-party customers, and non-payment could reduce its ability to make distributions to unitholders[166] - Sustained low prices for natural gas, NGLs, or oil could adversely affect the company's business and cash distributions[155] - The company faces inflationary pressures on costs for labor, materials, and services, which could negatively impact profitability[161] - The company's limited geographic diversification means that adverse developments in key operational areas could disproportionately affect its financial results and cash distributions to unitholders[171] Governance and Partnership Structure - The general partner's liability is limited, which may affect the company's ability to manage obligations and could reduce cash available for distribution to unitholders[204] - The company may issue additional units without unitholder approval, potentially diluting existing ownership interests and affecting market prices[209] - Unitholders may be liable to repay distributions if they were wrongfully distributed, with a three-year liability period for those aware of the violation[211] - The general partner has limited liability for decisions made in good faith, protecting them from monetary damages unless proven otherwise[212] - The partnership's taxation as a flow-through entity is crucial; any change in status could significantly reduce cash available for distribution[215]

Financial Performance - Reported fourth-quarter 2024 net income attributable to limited partners of $325.9 million, generating fourth-quarter Adjusted EBITDA of $590.7 million[3] - Full-year 2024 net income attributable to limited partners totaled $1.537 billion, with full-year Adjusted EBITDA of $2.344 billion, exceeding the midpoint of the guidance range[3] - Total revenues for Q4 2024 reached $928.5 million, a 8.2% increase from $858.2 million in Q4 2023[18] - Net income attributable to Western Midstream Partners, LP for the year ended December 31, 2024, was $1.57 billion, up 54% from $1.02 billion in 2023[18] - Adjusted EBITDA for the year ended December 31, 2024, was not explicitly stated but is derived from net income and other adjustments, indicating strong operational performance[24] - Net income for Q4 2024 was $341.6 million, compared to $295.9 million in Q3 2024, and $1.6 billion for the year, up from $1.0 billion in 2023[29] - Adjusted EBITDA for Q4 2024 was $590.7 million, an increase from $566.9 million in Q3 2024, and $2.3 billion for the year, compared to $2.1 billion in 2023[29] Cash Flow and Liquidity - Fourth-quarter 2024 cash flows provided by operating activities were $554.4 million, resulting in fourth-quarter Free Cash Flow of $309.3 million[3] - Full-year 2024 cash flows provided by operating activities totaled $2.137 billion, generating Free Cash Flow of $1.324 billion, exceeding the high end of the guidance range[3] - The company reported a net cash increase of $817.7 million for the year, contrasting with a decrease of $13.9 million in 2023[21] - Cash flows from operating activities increased to $2.14 billion in 2024, compared to $1.66 billion in 2023, reflecting improved cash generation[21] - The company reported a net cash provided by operating activities of $554.4 million for Q4 2024, compared to $551.3 million in Q3 2024, and $2.1 billion for the year, up from $1.7 billion in 2023[30] Operational Performance - Achieved record annual natural-gas throughput of 5.1 Bcf/d, with a 16% year-over-year increase when adjusted for the sale of Marcellus assets[5] - Annual crude-oil and NGLs throughput averaged 530 MBbls/d, reflecting a 12% year-over-year increase when adjusted for divested assets[6] - Gathered record annual produced-water throughput of 1,124 MBbls/d, representing an 11% year-over-year increase[6] - Total throughput for natural-gas assets increased by 4% to 5,394 MMcf/d compared to the previous quarter[33] - Operated throughput for natural-gas assets in the Delaware Basin rose by 4% to 1,973 MMcf/d, while the DJ Basin saw a 6% increase to 1,502 MMcf/d[35] - Total throughput for crude-oil and NGLs assets increased by 5% to 544 MBbls/d, with operated throughput in the Delaware Basin up by 6% to 260 MBbls/d[35] - Total throughput for produced-water assets increased by 8% to 1,216 MBbls/d, reflecting strong operational performance[35] Capital Expenditures and Investments - Capital expenditures for Q4 2024 were $238.8 million, compared to $189.4 million in Q3 2024, and $833.9 million for the year, up from $735.1 million in 2023[30] - The company plans to continue focusing on capital expenditures and strategic investments to support future growth initiatives[21] Debt and Equity - Long-term debt decreased to $6.93 billion in 2024 from $7.28 billion in 2023, showing a reduction in leverage[20] - Weighted-average common units outstanding increased slightly to 380.6 million in 2024 from 379.5 million in 2023, indicating stable unit issuance[20] - The net income per common unit (diluted) for 2024 was $4.02, compared to $2.60 in 2023, reflecting improved profitability per unit[18] Distributions and Growth - Executed a 52% increase in the Base Distribution to $0.875 per unit, which is 41% higher than pre-pandemic levels[7] - Targeting a mid-to-low single-digit annual distribution growth rate supported by business growth and incremental Free Cash Flow generation[7]

Core Viewpoint - Western Midstream Partners, LP has announced the sanctioning of the Pathfinder pipeline, a significant investment aimed at enhancing produced-water transportation and disposal capabilities in the Delaware Basin, which is expected to support long-term growth and operational efficiency [1][2][3]. Infrastructure Development - The Pathfinder pipeline will be a 42-mile, 30-inch steel pipeline with the capacity to transport over 800 MBbls/d of produced water for disposal [5][6]. - The company plans to invest approximately $400 million to $450 million over the next 24 months to expand its produced-water gathering and disposal system [2][8]. - The new infrastructure is expected to be operational by January 1, 2027 [3]. Customer Agreements - A new long-term agreement with Occidental Petroleum includes minimum-volume commitments for gathering, transportation, and disposal, supporting the expansion of WES's services [2][5]. - The agreement provides up to 280 MBbls/d of firm gathering and transportation capacity and up to 220 MBbls/d of firm disposal capacity [5][6]. Financial Guidance - WES has provided 2025 Adjusted EBITDA guidance in the range of $2.350 billion to $2.550 billion, reflecting an approximate 5% increase at the mid-point compared to 2024 [5][11]. - Total capital expenditures for 2025 are projected to be between $625 million and $775 million, with Free Cash Flow estimated between $1.275 billion and $1.475 billion [5][11]. - The company plans to recommend a Base Distribution increase of $0.035 per unit to $0.910 per unit, representing a 4% increase over the previous quarter and a 13% increase year-over-year [5][8]. Strategic Focus - The company aims to prioritize organic growth projects and synergistic acquisitions to drive gradual distribution increases while maintaining a strong investment-grade balance sheet [9]. - Approximately 50% of the capital expenditures will be allocated to the Delaware Basin, focusing on expansion opportunities to accommodate future growth [8].

Core Insights - Western Midstream (WES) is expected to report quarterly earnings of $0.84 per share, reflecting a year-over-year increase of 13.5% [1] - Revenue projections stand at $906.72 million, which is a 5.7% increase from the same quarter last year [1] - The consensus EPS estimate has been adjusted upward by 0.9% over the past 30 days, indicating a positive reassessment by analysts [1][2] Earnings Estimates - Changes in earnings estimates are crucial for predicting investor reactions to stock performance [2] - Analysts emphasize the importance of understanding key metrics beyond consensus earnings and revenue estimates [3] Throughput Metrics - The consensus estimate for 'Throughput Attributable to Noncontrolling Interest for Natural Gas Assets per day' is 169.42 million cubic feet, compared to 172 million cubic feet reported in the same quarter last year [4] - Total throughput for natural-gas assets per day is projected to reach 5,064.38 million cubic feet, slightly up from 5,048 million cubic feet year-over-year [4] - Total throughput attributable to WES for natural-gas assets per day is estimated at 4,894.96 million cubic feet, an increase from 4,876 million cubic feet in the previous year [5] Specific Asset Throughput - 'Throughput for natural-gas assets per day - Equity Investment' is expected to be 512.04 million cubic feet, up from 489 million cubic feet last year [6] - 'Throughput for natural-gas assets per day - Delaware Basin' is projected at 1,970.88 million cubic feet, compared to 1,704 million cubic feet in the same quarter last year [6] - 'Throughput for natural-gas assets per day - DJ Basin' is anticipated to reach 1,428.82 million cubic feet, an increase from 1,341 million cubic feet reported last year [7] Produced Water and Crude Oil Throughput - 'Throughput for produced-water assets per day - Delaware Basin' is expected to be 1,203.98 million barrels of oil, up from 1,076 million barrels last year [7] - 'Throughput for crude-oil and NGLs assets per day - Delaware Basin' is projected at 256.34 million barrels of oil, compared to 225 million barrels in the same quarter last year [8] - 'Throughput for crude-oil and NGLs assets per day - DJ Basin' is expected to reach 89.57 million barrels of oil, up from 81 million barrels last year [9] Overall Market Performance - Shares of Western Midstream have decreased by 2.9% over the past month, contrasting with a -0.5% change in the Zacks S&P 500 composite [10] - WES holds a Zacks Rank 4 (Sell), indicating expectations of underperformance relative to the overall market in the near future [10]

Company Performance - Western Midstream (WES) closed at $41.36, down 0.62% from the previous trading session, underperforming the S&P 500's gain of 0.24% [1] - Over the past month, WES shares have decreased by 2.96%, which is better than the Oils-Energy sector's loss of 3.18% but lagging behind the S&P 500's gain of 2.37% [1] Upcoming Earnings Report - The company is set to release its earnings on February 26, 2025, with analysts expecting earnings of $0.84 per share, reflecting a year-over-year growth of 13.51% [2] - Revenue is projected to be $906.72 million, indicating a 5.65% increase compared to the same quarter of the previous year [2] Analyst Estimates - Recent changes to analyst estimates for Western Midstream suggest positive near-term business trends, which can be interpreted as a favorable sign for the company's outlook [3] - The Zacks Rank system indicates that estimate adjustments are correlated with stock price performance, providing actionable insights for investors [4] Zacks Rank and Valuation - Western Midstream currently holds a Zacks Rank of 4 (Sell), with the consensus EPS estimate moving 0.34% lower over the last 30 days [5] - The company is trading at a Forward P/E ratio of 12.01, which is a discount compared to the industry's average Forward P/E of 22.8 [6] PEG Ratio and Industry Context - WES has a PEG ratio of 1.4, compared to the industry average PEG ratio of 0.99, indicating a higher valuation relative to expected earnings growth [7] - The Oil and Gas - Refining and Marketing - Master Limited Partnerships industry, to which WES belongs, has a Zacks Industry Rank of 223, placing it in the bottom 12% of all industries [8]

Company Performance - Western Midstream (WES) ended the recent trading session at $40.57, showing a +0.47% change from the previous day's closing price, which lagged behind the S&P 500's daily gain of 0.67% [1] - The company's stock has increased by 1.71% over the past month, outperforming the Oils-Energy sector's decline of 0.76% but underperforming the S&P 500's gain of 2.07% [1] Upcoming Earnings - Western Midstream is set to disclose its earnings on February 26, 2025, with projected earnings of $0.84 per share, indicating a year-over-year growth of 13.51% [2] - The Zacks Consensus Estimate for revenue is $906.72 million, reflecting a 5.65% increase from the same period last year [2] Analyst Estimates - Recent changes to analyst estimates for Western Midstream are crucial as they reflect near-term business trends, with positive revisions indicating a favorable outlook on the company's health and profitability [3] - The Zacks Rank system, which incorporates these estimate changes, currently ranks Western Midstream at 4 (Sell), with a recent downward shift of 1.24% in the Consensus EPS estimate [5] Valuation Metrics - Western Midstream has a Forward P/E ratio of 11.65, which is a discount compared to the industry average Forward P/E of 23.92 [6] - The company has a PEG ratio of 1.36, while the average PEG ratio for the Oil and Gas - Refining and Marketing - Master Limited Partnerships industry is 0.98 [7] Industry Overview - The Oil and Gas - Refining and Marketing - Master Limited Partnerships industry is part of the Oils-Energy sector and currently holds a Zacks Industry Rank of 29, placing it in the top 12% of over 250 industries [8]

Core Points - Western Midstream Partners, LP (WES) announced a quarterly cash distribution of $0.8750 per unit for Q4 2024, maintaining the same level as the previous quarter, which translates to an annualized distribution of $3.50 [1] - The distribution is payable on February 14, 2025, to unitholders of record as of February 3, 2025 [1] Financial Reporting - The company plans to report its fourth-quarter and full-year 2024 results after market close on February 26, 2025 [2] - A conference call to discuss the results will be held on February 27, 2025, at 1:00 p.m. Central (2:00 p.m. Eastern) [3] Company Overview - Western Midstream Partners, LP is a master limited partnership focused on developing, acquiring, owning, and operating midstream assets across Texas, New Mexico, Colorado, Utah, and Wyoming [4] - The company engages in gathering, compressing, treating, processing, and transporting natural gas, as well as handling condensate, natural-gas liquids, crude oil, and produced water [4] - A significant portion of WES's cash flows are secured through fee-based contracts, reducing exposure to commodity price volatility [4]

In the latest market close, Western Midstream (WES) reached $41.19, with a +0.88% movement compared to the previous day. The stock's change was less than the S&P 500's daily gain of 1.83%. Meanwhile, the Dow gained 1.65%, and the Nasdaq, a tech-heavy index, added 2.45%.The oil and gas transportation and storage company's shares have seen an increase of 4.11% over the last month, surpassing the Oils-Energy sector's loss of 7.35% and the S&P 500's loss of 3.31%.Analysts and investors alike will be keeping a c ...

Western Midstream Partners (NYSE: WES ) is a diversified midstream investment that is seeing consistent growth in key financial metrics such as free cash flow and adjusted EBITDA. The midstream firm achieves a high degree of cash flow visibility due to itsI look for high-risk, high-reward situations, mainly in the technology markets. I am an early buyer of Bitcoin and my portfolio mainly focused on companies with asymmetric long-term upside. My top holdings include: Bitcoin, Tesla, Google, Amazon and Nvidia ...

Portfolio Rebalancing - The portfolio experienced a significant rally in the growth sector in 2024, prompting considerations for rebalancing towards safer investments [1] - The US midstream industry is favored due to its generous dividend yields [1] Investment Background and Strategy - The investor has a background in IT and has been managing a family portfolio in the US stock market for seven years [1] - Extensive experience in fundamental analysis of public companies has led to confidence in investment decisions [1] - The investor emphasizes a deep understanding of the balance between risk and reward [1] Investment Focus and Approach - The investor has a strong focus on technology stocks but also explores diverse sectors for promising investment opportunities [1] - The approach is to provide clear and precise analysis, accessible to investors of all experience levels [1] Disclosure and Independence - The investor has no current positions in the mentioned companies but may initiate a long position in WES within the next 72 hours [2] - The analysis is independent, with no compensation received other than from Seeking Alpha, and no business relationships with the mentioned companies [2]