Western Midstream Partners, Lp · NYSE:WES
Western Midstream Partners, Lp — Q1 2022 Earnings Presentation
35 slides from Western Midstream Partners, Lp's earnings presentation, May 11, 2022
Slide 1: First-Quarter 2022 Review
First-Quarter 2022 Review May 11, 2022
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: Financial Performance
Western Midstream Financial Performance
Slide 4: Financial Performance 1Q 2022
Financial Performance 1Q 2022 ($ in millions) Actuals Operating Cash Flow $276.5 $302 million Cash Capital Investments1 $76.2 Net Income3 Free Cash Flow $200.3 $539 Cash Distributions Paid $134.72 million Free Cash Flow After Distributions $65.6 Adjusted EBITDA 1) Includes net investing distribution
Slide 5: 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 3 in Gas Processing Capacity2 Water
Slide 6: Enhancing Unitholder Value
Enhancing Unitholder Value Since Issuance of January 2020 Senior Notes $1.65 Senior Notes $510 Of Units Repurchased $1.4 Distributions Paid $8.55 Value Returned billion1 Retired million2 billion3 per unit4,5 ~21% OF ENTERPRISE VALUE RETURNED 5 1) Since January 2020 bond issuance. Includes the retire
Slide 7: Revised 2022 Adjusted EBITDA Guidance
Revised 2022 Adjusted EBITDA Guidance EXPECTED ASSET-LEVEL EBITDA CONTRIBUTION1 31% DJ Basin 50% Delaware Basin 84% Gas $2,125 Million 66% Gas 16% Oil to 18% Oil $2,225 Million 16% Water 9% Equity Investments 10% Other2 1) Excludes G&A. Represents asset-level cash contribution to EBITDA. 7 2) Marcel
Slide 8: Revised 2022 Capital Guidance
Revised 2022 Capital Guidance 1% Equity Investments 14% Well Connect 5% Other 6% DJ Basin 8% IT Transformation 1% Equity Investments 94% Gas 6% Oil 11% Maintenance 8% IT Transformation $550 Million to $600 Million 80% Delaware Basin 66% Expansion 65% Gas 12% Oil 23% Water 8 Note: Accrual-based, incl
Slide 9: Revised 2022 Guidance
Revised 2022 Guidance Original Revised 2022 2022 ($ in millions) Guidance Guidance Variance4 Adjusted EBITDA1 $1,925 – $2,025 $2,125 – $2,225 $200 Total Capital Expenditures2 $375 – $475 $550 – $600 $150 Free Cash Flow1 $1,200 – $1,300 $1,250 – $1,350 $50 Per-Unit Cash Distribution3 ≥ $2.00 ≥ $2.00
Slide 10: Operational Update
Western Midstream Operational Update
Slide 11: Operational Performance
Operational Performance 1Q 2022 Actuals Natural-Gas Throughput (MMcf/d) 4,058 Adjusted Gross Margin for Natural-Gas Assets ($/Mcf) $1.34 Crude-Oil and NGLs Throughput (MBbls/d) 675 Adjusted Gross Margin for Crude-Oil and NGLs Assets ($/Bbl) $2.44 Produced-Water Throughput (MBbls/d) 751 Adjusted Gros
Slide 12: First Quarter Commercial Success
First Quarter Commercial Success Delaware Basin DJ Basin Revised 2022 Growth Rates Mid- Low O P E R AT Low- Single 20’s 250 E 150 60 Single Digits Digits MMcf/d 1 MMcf/d MMcf/d2 Existing Firm Processing Firm Gathering & Firm Processing Business Capacity Processing Capacity Capacity OIL GAS WATER Add
Slide 13: WES Delaware Basin Gas Processing
WES Delaware Basin Gas Processing West Texas Complex Mentone Plant New Mexico Mentone Train III 300 MMcf/d Ramsey Mentone Texas 13
Slide 14: Summary
Western Midstream Summary
Slide 15: Well Positioned for Growth and Capital Return
Well Positioned for Growth and Capital Return Well-Positioned Asset Base Situated within core of most attractive basins Operations Operational Excellence Increased efficiencies and competitive cost structure Increasing Producer Volumes Supporting domestic energy growth Customers Three-Stream Service
Slide 16: Return of Capital: Debt Reduction
Return of Capital: Debt Reduction Creating substantial equity value through debt reduction Proportionate Debt Reduction Debt / EBITDA Ratio2 Since 20201 WES’s leverage reduction efforts have resulted in the lowest leverage ratio2 amongst various publicly-traded midstream companies. Note: Per FactSet
Slide 17: Return of Capital: Buybacks and Distributions
Return of Capital: Buybacks and Distributions Since January 2020 Aggregate Distributions Unit Repurchases 1 as Percentage of Enterprise Value2 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -15% -36% -70% -10% WES leads in unit repurchases while the distribution has remained a core component of its capital retu
Slide 18: Western Midstream Q&A
Western Midstream Q&A
Slide 19: Appendix
Western Midstream Appendix
Slide 20: WES Liquidity Profile
WES Liquidity Profile Near-Term Maturity Profile ($ in millions) 2,500 Liquidity ($ in millions) 2,000 RCF Capacity $1,995 Cash $248 1,500 1,000 Maturities ($ in millions) 2022 – 20241,2 $715 500 2025 $1,131 2026+ $5,125 0 Liquidity 2022 2023 2024 2025 Note: As of March 31, 2022. 1) Maturities range
Slide 21: Returning Excess Free Cash Flow to Unitholders
Returning Excess Free Cash Flow to Unitholders Through Enhanced Distribution Framework Positive Capital Allocation Annual Net Annual Distribution Cash Flow Outlook Priorities Leverage Threshold4 Framework Debt Repayment1 $715 million 3.4x $2.00 Base Annual YE’22 Distribution2 Free Cash Flow Base Dis
Slide 22: Enhanced Distribution Mechanics
Enhanced Distribution Mechanics Illustrative Potential Payout using 2021 Financial Information • Enhanced distribution would be Test YE’21 Enhanced Distribution Calculation payable with first-quarter base $ in millions distribution (starting 1Q’23) $1,490 Free cash flow1 • Dependent upon fulfillment
Slide 23: Premier Asset Portfolio
Premier Asset Portfolio Value-Focused Portfolio1 Revenue: 47% Delaware Basin, 35% DJ Basin 23 GATHERING SYSTEMS Total Capital: 74% Delaware Basin, 14% DJ Basin 72 PROCESSING & TREATING Direct Commodity Exposure Protection2 FACILITIES 93% Fee-Based Gas Contracts 6 NATURAL-GAS PIPELINES 100% Fee-Based
Slide 24: Delaware Basin: Expansive Multi-Product Infrastructure
Delaware Basin: Expansive Multi-Product Infrastructure Gas 1500 1,389 1,309 1,370 1,326 1,294 Customer Base 1,196 1,133 1,244 1,274 1000 MMcf/d Percentage of Related-Party Product Volumes1 500 Gas 48% 0 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Oil 97% Oil Water 87% 192
Slide 25: Delaware Basin: Gas Infrastructure
Delaware Basin: Gas Infrastructure EDDY LEA NEW MEXICO TEXAS RAMSEY LOVING WES Gas Processing West Texas Complex CULBERSON 1.370 Bcf/d MENTONE WINKLER Equity-Interest Gas Processing Mi Vida 200 MMcf/d 5 MILES Ranch Westex REEVES 125 MMcf/d WARD Gas-Processing Plant MI VIDA RANCH Gas-Gathering Lines
Slide 26: 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 5 MILES REEVES WARD Regional-Oil-Treating Facility Oil Pipelines Federal Land (Surface and Mineral) State Land (Surface and Mineral) 26 Note: Capacity as of yea
Slide 27: Delaware Basin: Water Infrastructure
Delaware Basin: Water Infrastructure EDDY LEA NEW MEXICO TEXAS LOVING CULBERSON WINKLER Salt-Water Disposal 1,300 MBbls/d Capacity 5 MILES REEVES WARD Salt-Water Disposal Wells Water-Gathering Lines Federal Land (Surface and Mineral) State Land (Surface and Mineral) 27 Note: Capacity as of year-end
Slide 28: DJ Basin Customer Base
DJ Basin Customer Base Gas Percentage of Related-Party Product 1,407 1,329 1,344 1,413 1,368 1,349 Volumes1 1500 1,290 1,321 1,197 Gas 57% 1000 MMcf/d 500 Oil 100% 0 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Long-Term Contract Support Oil Weighted-Average Product 150 12
Slide 29: DJ Basin
DJ Basin COLORADO LATHAM CRYO LARIMER WELD COSF LANCASTER COMPLEX LANCASTER COMPLEX Gas Processing BOULDER 1,730 MMcf/d Oil Stabilization 155 MBbls/d 5 MILES ADAMS Gas-Processing Plant Oil-Treating Facilities Gas-Processing Plant Pipelines (Oil and Gas) WATTENBERG PLANT Oil-Treating Facilities Feder
Slide 30: Additional Portfolio Assets
Additional Portfolio Assets South Texas Wyoming Utah Pennsylvania Springfield Gathering Hilight Complex Chipeta Marcellus Gas Gathering Granger Complex Brasada Gas Plant Red Desert Complex 30
Slide 31: Equity Investment Overview
Equity Investment Overview WES Equity Investment Ownership Location Description Operator Ranch Westex 50% Ward County, TX 125 MMcf/d gas-processing plant Energy Transfer 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.
Slide 32: 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 33: 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 34: 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 35: 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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