Western Midstream Partners, Lp · NYSE:WES
Western Midstream Partners, Lp — Q1 2023 Earnings Presentation
32 slides from Western Midstream Partners, Lp's earnings presentation, May 4, 2023
Slide 1: First-Quarter 2023 Review
First-Quarter 2023 Review May 4, 2023
Slide 2: Forward-Looking Statements and Ownership Structure
Forward-Looking Statements and Ownership Structure WES OWNERSHIP STRUCTURE This presentation contains forward-looking statements. Western Midstream Partners, LP Occidental Public Unitholders (“WES”) believes that its expectations are based on reasonable assumptions. No assurance, NYSE: OXY however,
Slide 3: Recent Highlights
Western Midstream’ Recent Highlights
Slide 4: Recent Highlights
Recent Highlights Operational & Financial Accomplishments Delaware Basin Delaware Basin Increased Delaware Basin throughput Natural-Gas Throughput Produced-Water Throughput across all three products 1.57 Bcf/d 977 MBbls/d Record breaking natural-gas and produced- water throughput in the Delaware Bas
Slide 5: First-Quarter Performance
Western Midstream’ First-Quarter Performance
Slide 6: First-Quarter Operational Performance
First-Quarter Operational Performance 4Q 2022 1Q 2023 Actuals Actuals Natural-Gas Throughput (MMcf/d) 4,231 4,107 Adjusted Gross Margin for Natural-Gas Assets ($/Mcf) $1.27 $1.30 Crude-Oil and NGLs Throughput (MBbls/d)1 622 611 Adjusted Gross Margin for Crude-Oil and NGLs Assets ($/Bbl)1 $2.43 $2.65
Slide 7: First-Quarter Financial Performance
First-Quarter Financial Performance 4Q 2022 1Q 2023 ($ in millions) Actuals Actuals $199 Operating Cash Flow $489.2 $302.4 million Cash Capital Investments1 $123.6 $160.8 1Q'23 Net Income4 Free Cash Flow $365.6 $141.6 $499 Cash Distributions Paid $197.1 2 $196.6 3 million Free Cash Flow After Distri
Slide 8: Summary
h Western Midstream’ my = Summary
Slide 9: Comparative Valuation Metrics
Comparative Valuation Metrics Highlighting WES's compelling investment opportunity Free Cash Flow Yield Price / Earnings Ratio (Trailing Twelve Months)1 (Trailing Twelve Months)2 WES generates the highest Free cash flow yield and trades at the lowest valuation relative to other sectors of the S&P 50
Slide 10: Comparative Valuation Metrics (continued)
Comparative Valuation Metrics (continued) Strong track-record of returning capital to unitholders Total Capital Return Yield Total Capital Return Yield (Trailing Twelve Months)1 (Trailing Twelve Months)1 WES continues to be a market leader in total capital return yield relative to major energy indic
Slide 11: Comparative Valuation Metrics (continued)
Comparative Valuation Metrics (continued) Leading returns on capital and redeployment of capital to stakeholders Total Capital Return as a Percentage of Return on Capital Employed (Trailing Twelve Months)2 Enterprise Value since 20201 WES continues to be a market leader in returning capital to stake
Slide 12: Comparative Valuation Metrics (continued)
Comparative Valuation Metrics (continued) WES's Value Creation Progression Adjusted EBITDA per unit Debt / Adjusted EBITDA vs. Return on Assets (Trailing Twelve Months)2 (Trailing Twelve Months)1 WES has increased Adjusted EBITDA per unit and materially reduced debt while generating leading returns
Slide 13: Well Positioned for Growth and Capital Return
Well Positioned for Growth and Capital Return Well-Positioned Asset Base Situated within core of most attractive basins Operations Operational Excellence Increased efficiencies and competitive cost structure Increasing Producer Volumes Supporting domestic energy growth Customers Three-Stream Service
Slide 14: Q&A
Western Midstream’ Q&A
Slide 15: Appendix
7 Western Midstream’ Appendix
Slide 16: Returning Excess Free Cash Flow to Unitholders
Returning Excess Free Cash Flow to Unitholders Enhanced Distribution Framework Positive Capital Allocation Annual Net Annual Distribution Cash Flow Outlook Priorities Leverage Threshold3 Framework Debt Optimization 3.4x $2.00 Base Annual YE’22 Distribution1 Free Cash + Flow Base Distributions1 3.2x
Slide 17: Enhanced Distribution Mechanics
Enhanced Distribution Mechanics Illustrative Calculation using TTM Financial Information • 2023 Enhanced Distribution would be Trailing Twelve-Month payable with first-quarter 2024 Base Enhanced Distribution Calculation Distribution $ in millions As of 3/31/23 Free Cash Flow1 $1,210 • Dependent upon
Slide 18: WES Liquidity Profile
WES Liquidity Profile Liquidity ($ in millions) RCF Capacity1 $1,995 Cash $361 Senior Note Maturities ($ in millions) 2025 – 2026 $1,604 2028 $800 2029+ $4,600 Note: As of March 31, 2023, proforma $750 million senior note issuance and credit facility amendment, both closed in April of 2023. 18 1) In
Slide 19: Premier Asset Portfolio
Premier Asset Portfolio Value-Focused Portfolio1 Revenue: 52% Delaware Basin, 32% DJ Basin GATHERING 23 SYSTEMS Total Capital: 82% Delaware Basin, 7% DJ Basin PROCESSING & 71 TREATING FACILITIES Direct Commodity Exposure Protection2 93% Fee-Based Gas Contracts NATURAL-GAS 7 PIPELINES 100% Fee-Based
Slide 20: A Leading Provider in the Delaware Basin
A Leading Provider in the Delaware Basin New Mexico Premier Delaware Location Texas Only Low-Emission Oil Gatherer Only Three-Stream Midstream Provider Top 2 in Water Gathering & Disposal1 Gas-Processing Plant Regional-Oil-Treating Facility Gas-Gathering Lines Top 5 in Gas Processing Capacity2 Water
Slide 21: Delaware Basin: Expansive Multi-Product Infrastructure
Delaware Basin: Expansive Multi-Product Infrastructure Customer Base Percentage of Related-Party Product Volumes1 Gas 44% Oil 98% Water 80% Long-Term Contract Support Weighted-Average Product Remaining Life2 Gas ~10 Years Oil ~ 10 Years Water ~10 Years 1) Percentage of production from Occidental as
Slide 22: Delaware Basin: Gas Infrastructure
Delaware Basin: Gas Infrastructure EDDY LEA NEW MEXICO TEXAS RAMSEY LOVING WES Gas Processing CULBERSON West Texas Complex 1.540 Bcf/d MENTONE WINKLER Equity-Interest Gas Processing Mi Vida 200 MMcf/d 5 MILES REEVES WARD MI VIDA RANCH WESTEX Note: Capacities as of December 31, 2022. 22 Under 5% of t
Slide 23: Delaware Basin: Oil Infrastructure
Delaware Basin: Oil Infrastructure EDDY LEA NEW MEXICO TEXAS NORTH LOVING LOVING REEVES CULBERSON WINKLER Oil Treating 292 MBbls/d Capacity REEVES 5 MILES WARD 23 Note: Capacity as of year-end 2022.
Slide 24: Delaware Basin: Water Infrastructure
Delaware Basin: Water Infrastructure EDDY LEA NEW MEXICO TEXAS LOVING CULBERSON WINKLER Salt-Water Disposal 1,390 MBbls/d Capacity REEVES 5 MILES WARD 24 Note: Capacity as of year-end 2022.
Slide 25: DJ Basin
DJ Basin Customer Base Percentage of Related-Party Product Volumes1 Gas 54% Oil 100% Long-Term Contract Support Weighted-Average Product Remaining Life2 Gas ~88% = ~6 Years ~12% = Life of Lease Oil ~6 Years 1) Percentage of production from Occidental as of year-end 2022. 25 2) Weighted-average remai
Slide 26: DJ Basin
DJ Basin COLORADO LATHAM LARIMER WELD PLATTE VALLEY COSF FT. LUPTON Gas Processing LANCASTER BOULDER 1,750 MMcf/d Oil Stabilization 155 MBbls/d 5 MILES ADAMS WATTENBERG 26 Note: Capacities as of year-end 2022.
Slide 27: Additional Portfolio Assets
Additional Portfolio Assets South Texas Wyoming Utah Pennsylvania Hilight Complex Springfield Gathering Chipeta Marcellus Gas Gathering Granger Complex Brasada Gas Plant Red Desert Complex 27
Slide 28: Equity Investment Overview
Equity Investment Overview WES Equity Investment Ownership Location Description Operator Mi Vida 50% Ward County, TX 200 MMcf/d gas-processing plant Energy Transfer Red Bluff Express 30% Reeves County, TX to Waha, TX 1.5 Bcf/d natural-gas pipeline Energy Transfer Whitethorn LLC 20% Midland, TX to Ho
Slide 29: WES Non-GAAP Reconciliation
WES Non-GAAP Reconciliation “Adjusted EBITDA” WES defines Adjusted EBITDA attributable to Western Midstream Partners, LP (“Adjusted EBITDA”) as net income (loss), plus (i) distributions from equity investments, (ii) non-cash equity-based compensation expense, (iii) interest expense, (iv) income tax
Slide 30: WES Non-GAAP Reconciliation
WES Non-GAAP Reconciliation “Adjusted EBITDA” WES defines Adjusted EBITDA attributable to Western Midstream Partners, LP (“Adjusted EBITDA”) as net income (loss), plus (i) distributions from equity investments, (ii) non-cash equity-based compensation expense, (iii) interest expense, (iv) income tax
Slide 31: WES Non-GAAP Reconciliation
WES Non-GAAP Reconciliation “Free Cash Flow” WES defines Free cash flow as net cash provided by operating activities less total capital expenditures and contributions to equity investments, plus distributions from equity investments in excess of cumulative earnings. Three Months Ended March 31, Dece
Slide 32: WES Non-GAAP Reconciliation
WES Non-GAAP Reconciliation “Adjusted Gross Margin” WES defines Adjusted gross margin attributable to Western Midstream Partners, LP (“Adjusted gross margin”) as total revenues and other (less reimbursements for electricity-related expenses recorded as revenue), less cost of product, plus distributi
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