Financial Data and Key Metrics Changes - The company generated net income attributable to Limited Partners of $326 million and adjusted EBITDA of $591 million in the fourth quarter [18] - For the full year 2024, net income attributable to limited partners was $1.54 billion, with adjusted EBITDA reaching $2.34 billion, exceeding the midpoint of the guidance range [19][20] - Free cash flow for 2024 totaled $1.32 billion, surpassing the high end of the guidance range [20] Business Line Data and Key Metrics Changes - Natural gas throughput increased by 4% sequentially in Q4, achieving record levels in the Delaware Basin [10] - Crude oil and NGLs throughput rose by 6% sequentially, driven by strong customer activity [10] - Produced water throughput saw an 8% sequential increase, attributed to strong producer activity [10] Market Data and Key Metrics Changes - Average throughput across all three products increased by double digits year over year, with natural gas throughput averaging 5.1 billion cubic feet per day, a 16% increase [13] - Crude oil and NGLs throughput averaged 530,000 barrels per day, representing a 12% year-over-year increase [14] - Produced water throughput averaged 1.1 million barrels per day, an 11% increase compared to the previous year [14] Company Strategy and Development Direction - The company announced a significant expansion of its produced water gathering and disposal infrastructure in the Delaware Basin, including the Pathfinder pipeline [4][5] - The strategy focuses on capital-efficient organic growth to generate strong returns for unitholders and sustain base distribution growth [7][8] - The company aims to target a long-term annual distribution growth rate of mid to low single digits, excluding potential increases from large organic growth projects [8][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth driven by strong operational performance and strategic positioning [29] - The company anticipates continued throughput growth in 2025, particularly in the Delaware Basin, supported by strong producer activity [15][31] - Management highlighted the importance of maintaining strong relationships with customers, particularly Occidental Petroleum, to support long-term development plans [30] Other Important Information - The company plans to retire the enhanced distribution concept to simplify its capital allocation framework and focus on sustainable base distribution growth [23] - A new long-term produced water agreement with Occidental Petroleum was executed, enhancing the company's service offerings [4][5] Q&A Session Summary Question: Growth outlook and capital allocation framework - Management explained that the mid to low single-digit distribution growth target was based on extensive forecasting and planning [36] Question: Pathfinder pipeline contract and filling capacity - Management indicated that the contract with Occidental Petroleum supports the pipeline's capacity and is expected to enhance returns over time [39] Question: Discussions with other customers for pipeline capacity - Management confirmed ongoing discussions with other producers to fill the pipeline and improve returns [43] Question: Competitors in the Permian produced water market - Management emphasized the unique long-term midstream solution offered by the company compared to shorter-term oilfield service solutions [45] Question: Future contract extensions with Occidental Petroleum - Management noted ongoing efforts to maintain and extend contracts with all customers, particularly in the Delaware Basin [50] Question: Capital expenditures for 2026 - Management indicated that capital expenditures for 2026 would be higher due to the Pathfinder project and ongoing growth initiatives [53] Question: Criteria for bolt-on acquisitions - Management outlined that acquisitions should complement existing operations and meet midstream return requirements [61] Question: Timing of buybacks given capital requirements - Management stated that while a buyback program was authorized, significant market dislocation would be needed to consider it in the near term [68]

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].