Western Midstream(US:WES)2025-11-04 21:23Operational Performance - As of September 30, 2025, the company operates 18 wholly owned gathering systems, 43 treating facilities, and 27 processing plants, with total gas processing capacity increased to 2,190 MMcf/d after the North Loving plant start-up[120] - Total throughput for natural-gas assets increased by 2% from the previous quarter to 5,549 MMcf/d, with a 12% year-over-year increase from 5,170 MMcf/d[121] - The Delaware Basin's natural gas throughput was 2,113 MMcf/d, showing no significant change from the previous quarter and a 12% increase year-over-year[121] - Total throughput for natural-gas assets increased by 107 MMcf/d for the three months ended September 30, 2025, primarily due to higher volumes at the Brasada complex and Springfield gas-gathering system[135] - Total throughput attributable to WES for crude-oil and NGLs assets decreased by 22 MBbls/d for the three months ended September 30, 2025, primarily due to lower volumes at the DBM oil system[138] - Total throughput attributable to WES for produced-water assets increased by 99 MBbls/d for the nine months ended September 30, 2025, due to higher production[140] - 98% of wellhead natural-gas volume and 100% of crude-oil and produced-water throughput were serviced under fee-based contracts for the nine months ended September 30, 2025[216] Financial Performance - Total revenues for the three months ended September 30, 2025, were $952,484 thousand, a 1.2% increase from $942,322 thousand for the previous quarter, and a 5.0% increase from $2,676,720 thousand for the nine months ended September 30, 2024[132] - Operating income for the three months ended September 30, 2025, was $441,560 thousand, a slight decrease of 0.2% from $444,479 thousand in the previous quarter, and a decrease of 9.4% from $1,544,989 thousand for the nine months ended September 30, 2024[132] - Net income attributable to Western Midstream for the three months ended September 30, 2025, was $339,615 thousand, a decrease from $341,680 thousand in the previous quarter[132] - Net income for the nine months ended September 30, 2025, decreased by $253,500 thousand to $1,016,186 thousand, primarily due to a $307,500 thousand decrease in gain on divestiture[173] - Total revenues and other for the nine months ended September 30, 2025, were $2,811.9 million, an increase from $2,676.7 million in the prior year[166] - Adjusted Gross Margin for the nine months ended September 30, 2025, was $2,614.8 million, compared to $2,508.4 million for the same period in 2024[166] - Adjusted EBITDA for the nine months ended September 30, 2025, was $1,845,200 thousand, up 5% from $1,753,339 thousand in the same period of 2024[176] - Free Cash Flow for the nine months ended September 30, 2025, was $1,185,197 thousand, representing a 17% increase from $1,014,887 thousand in the prior year[176] Expenses and Costs - Total cost of product and operation and maintenance expenses for the three months ended September 30, 2025, was $263,572 thousand, a 1% decrease from $267,310 thousand in the previous quarter[148] - Natural-gas purchases increased by 39% to $7,210 thousand for the three months ended September 30, 2025, compared to $5,180 thousand in the previous quarter[148] - Operation and maintenance expense increased by $14.2 million for the nine months ended September 30, 2025, driven by a $15.5 million increase in utility expenses[154] - Depreciation and amortization expense increased by $25.5 million for the nine months ended September 30, 2025, due to capital projects being placed into service at the West Texas complex[156] - Interest expense increased by $5.6 million for the nine months ended September 30, 2025, primarily due to $28.2 million of interest incurred on the 5.450% Senior Notes issued during the third quarter of 2024[159] - Income tax expense decreased by $9.9 million for the nine months ended September 30, 2025, primarily due to a revaluation increasing the deferred tax liability balance in 2024[160] - Other operating expenses increased by 6% for the nine months ended September 30, 2025, totaling $773.6 million compared to $733.1 million in the prior year[155] Capital and Financing - The company retired the total principal amount of 3.100% and 3.950% Senior Notes due 2025 at par value during the first and second quarters of 2025, respectively[120] - The company retired $1 billion in Senior Notes due 2025 during the nine months ended September 30, 2025[201] - The carrying value of outstanding debt as of September 30, 2025, was $6.9 billion, with $440.5 million classified as long-term debt[200] - As of September 30, 2025, the company had a working capital surplus of $276.6 million and $2.0 billion in effective borrowing capacity under the RCF[192] - WES net cash used in financing activities was $(2,101,864) thousand for the nine months ended September 30, 2025, compared to $(921,617) thousand in 2024, indicating a significant increase in cash outflows[208] Market Conditions and Expectations - The average price of West Texas Intermediate crude oil ranged from a low of $57.13 per barrel to a high of $80.04 per barrel during the nine months ended September 30, 2025[124] - The company expects to adjust capital spending plans in response to fluctuating commodity prices and maintain financial flexibility[124] - High inflation has raised operating costs, impacting steel products, labor, and materials, which could negatively affect financial results[126] - A 10% change in commodity prices is not expected to materially impact operating income or cash flows for the next 12 months[216] - Future increases in the federal funds rate may lead to higher financing costs for WES Operating[217] - A 10% change in the applicable benchmark interest rate would not materially impact interest expense on outstanding borrowings as of September 30, 2025[217] - Additional short-term or variable-rate debt may be issued in the future under the RCF or other financing sources[218] Distributions - The company maintained a per-unit distribution of $0.910 for the third quarter of 2025, unchanged from the second quarter[120] - The Board declared a cash distribution to unitholders for Q3 2025 of $0.910 per unit, totaling $379.5 million[189] - Distributions to WES unitholders amounted to $1,051,503 thousand for the nine months ended September 30, 2025, up from $905,155 thousand in 2024, marking an increase of 16.1%[208]