Western Midstream Partners, Lp · NYSE:WES
Western Midstream Partners, Lp — Q2 2022 Earnings Presentation
37 slides from Western Midstream Partners, Lp's earnings presentation, Aug 4, 2022
Slide 1: Second-Quarter 2022 Review
Second-Quarter 2022 Review August 4, 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: Second-Quarter Highlights
Western Midstream’ Second-Quarter Highlights
Slide 4: Second-Quarter Highlights
Second-Quarter Highlights Operational & Financial Accomplishments Delaware Basin Delaware Basin Natural-Gas Processing Produced-Water Throughput Increased Delaware Throughput 1.5 Bcf/d 864 MBbls/d Record-breaking Adjusted EBITDA 13% Q-o-Q 15% Q-o-Q Strong Financial Performance Unit Buyback Senior No
Slide 5: Enhancing Unitholder Value
Enhancing Unitholder Value Since Issuance of January 2020 Senior Notes $1.65 Senior Notes $930 Of Units Repurchased $1.6 Distributions Paid $10.50 Value Returned billion1 Retired million2 billion3 per unit4,5 ~24% OF ENTERPRISE VALUE RETURNED 5 1) Since January 2020 bond issuance. 2) Includes 27.86
Slide 6: Second-Quarter Financial Performance
Second-Quarter Financial Performance
Slide 7: Financial Performance
Financial Performance 2Q 2022 ($ in millions) Actuals Operating Cash Flow $467.0 $300 million Cash Capital Investments1 $94.9 Net Income3 Free Cash Flow $372.1 $548 Cash Distributions Paid $206.22 million Free Cash Flow After Distributions $165.9 Adjusted EBITDA 1) Includes net investing distributio
Slide 8: 2022 Guidance
2022 Guidance Maintaining prior financial guidance and expected volume growth rates 2022 Financial Guidance Estimated 2022 Growth Rates ($ in millions) Mid- Low Adjusted EBITDA1 $2,125 – $2,225 Single 20’s Low- Single Digits Digits Total Capital Expenditures2 $550 – $600 Free Cash Flow1 $1,250 – $1,
Slide 9: Second-Quarter Operational Performance
Second-Quarter Operational Performance
Slide 10: Operational Performance
Operational Performance 2Q 2022 Actuals Natural-Gas Throughput (MMcf/d) 4,270 Adjusted Gross Margin for Natural-Gas Assets ($/Mcf) $1.36 Crude-Oil and NGLs Throughput (MBbls/d) 666 Adjusted Gross Margin for Crude-Oil and NGLs Assets ($/Bbl) $2.57 Produced-Water Throughput (MBbls/d) 864 Adjusted Gros
Slide 11: Environmental, Social & Governance
Environmental, Social & Governance
Slide 12: 2021 – 2022 Sustainability Report Highlights
2021 – 2022 Sustainability Report Highlights Reduced Scope 1 & 2 Established Gross senior leadership GHG Emissions position to advance Diversity, Equity >38,400 & Inclusion hours of >10,500 efforts safety training volunteer hours for employees & to contractors causes in our communities 57% of sites
Slide 13: Summary
Western Midstream’ Summary : I i!
Slide 14: 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 15: 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 16: Return of Capital: Buybacks and Distributions
Return of Capital: Buybacks and Distributions Since January 2020 Percent Unit / Shares Aggregate Distributions Reduction1 as Percentage of Enterprise Value2 16% WES increases to 13.2% including 2Q’22 & July 12% unit buybacks. 8% 4% 0% -15% -36% -70% WES has now retired over 13% of the unaffected uni
Slide 17: Q&A
Western Midstream’ Q&A
Slide 18: Appendix
Western Midstream’ Appendix
Slide 19: 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 Threshold4 Framework Debt Optimization1 3.4x $2.00 Base Annual YE’22 Distribution2 Free Cash Flow Base Distributions2 3.2x +
Slide 20: Enhanced Distribution Mechanics
Enhanced Distribution Mechanics Illustrative Calculation using TTM Financial Information • Enhanced distribution would be Trailing Twelve-Month payable with first-quarter base Enhanced Distribution Calculation distribution (starting 1Q’23) As of 6/30/22 • Dependent upon fulfillment of two $ in milli
Slide 21: 2022 Adjusted EBITDA Guidance
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. 21 2) Marcellus, So
Slide 22: 2022 Capital Guidance
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 $600 Million 80% Delaware Basin 66% Expansion 65% Gas 12% Oil 23% Water 22 Note: Accrual-based, includes eq
Slide 23: WES Liquidity Profile
WES Liquidity Profile Near-Term Maturity Profile ($ in millions) 2,000 Liquidity ($ in millions) 1,500 RCF Capacity $1,740 Cash $97 1,000 Maturities ($ in millions) 500 2023 $213 2025 – 2026 $1,604 2028+ $4,650 0 Liquidity 2023 2024 2025 2026 23 Note: As of June 30, 2022.
Slide 24: 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 25: 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 26: Delaware Basin: Expansive Multi-Product Infrastructure
Delaware Basin: Expansive Multi-Product Infrastructure Gas 1,493 1500 1,309 1,294 1,370 1,326 Customer Base 1,196 1,133 1,244 1,274 1000 MMcf/d Percentage of Related-Party Product Volumes1 500 Gas 48% 0 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Oil 97% Oil Water 87% 202
Slide 27: 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 28: 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) 28 Note: Capacity as of yea
Slide 29: 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) 29 Note: Capacity as of year-end
Slide 30: DJ Basin
DJ Basin Customer Base Gas Percentage of Related-Party Product 1,329 1,344 1,413 1,368 1,349 1,336 Volumes1 1500 1,290 1,321 1,197 Gas 57% 1000 MMcf/d 500 Oil 100% 0 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Long-Term Contract Support Oil Weighted-Average 113 Product 12
Slide 31: 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 32: 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 32
Slide 33: 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 34: 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 35: 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 36: 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 June 30, March
Slide 37: 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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