Western Midstream Partners, Lp · NYSE:WES
Western Midstream Partners, Lp — FY2022 Earnings Presentation
41 slides from Western Midstream Partners, Lp's earnings presentation, Feb 23, 2023
Slide 1: Fourth-Quarter and Full-Year 2022 Review
Fourth-Quarter and Full-Year 2022 Review February 23, 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: Full-Year 2022 Highlights
Western Midstream’ Full-Year 2022 Highlights
Slide 4: 2022 Highlights
2022 Highlights Operational Executed additional, long-term amendments with Occidental Executed agreements with new and existing customers in Delaware and Maverick Basins Commenced construction of Mentone Train III Signed letter of intent with Occidental to explore CCUS opportunities1 Divested equity
Slide 5: 2022 Highlights (continued)
2022 Highlights (continued) Financial Paid $736 million in Base Distributions 1 Retired $504 million of Senior Notes 2 Repurchased $488 million of common units 3 Expect to announce $140 million Enhanced Distribution 4 1) Represents aggregate cash distributions paid during 2022. 2) Represents total d
Slide 6: Enhanced Distribution
Enhanced Distribution Full-Year 2022 Expected Distribution Calculation • Subject to Board review and approval Trailing Twelve-Month Expected Enhanced Distribution Calculation • Fulfilled all conditions for potential As of $ in millions 12/31/22 Enhanced Distribution payment: Free Cash Flow2 $1,268 L
Slide 7: Fourth-Quarter Performance
Fourth-Quarter Performance
Slide 8: Fourth-Quarter Operational Performance
Fourth-Quarter Operational Performance 3Q 2022 4Q 2022 Actuals Actuals Natural-Gas Throughput (MMcf/d) 4,274 4,231 Adjusted Gross Margin for Natural-Gas Assets ($/Mcf) $1.33 $1.27 Crude-Oil and NGLs Throughput (MBbls/d)1 627 622 Adjusted Gross Margin for Crude-Oil and NGLs Assets ($/Bbl)1 $2.58 $2.4
Slide 9: Fourth-Quarter Financial Performance
Fourth-Quarter Financial Performance 3Q 2022 4Q 2022 FY 2022 ($ in millions) Actuals Actuals Actuals $329 Operating Cash Flow $468.8 $489.2 $1,701.4 million 4Q'22 Net Income5 Cash Capital Investments1 $138.4 $123.6 $433.0 Free Cash Flow $330.4 $365.6 $1,268.5 $516 Cash Distributions Paid $197.72 $19
Slide 10: Full-Year Performance
Western Midstream’ Full-Year Performance
Slide 11: Full-Year Operational Performance
Full-Year Operational Performance FY 2021 FY 2022 Actuals Actuals Natural-Gas Throughput (MMcf/d) 4,148 4,210 Adjusted Gross Margin for Natural-Gas Assets ($/Mcf) $1.24 $1.32 Crude-Oil and NGLs Throughput (MBbls/d)1 583 611 Adjusted Gross Margin for Crude-Oil and NGLs Assets ($/Bbl)1 $2.46 $2.59 Pro
Slide 12: 2022 Financial Scorecard
2022 Financial Scorecard PAID $736 2022 2022 ($ in millions, except where otherwise noted) Expected Actuals million Distributions4 Adjusted EBITDA1 $2,125 – $2,225 $2,128 RETIRED Total Capital Expenditures2 $550 – $600 $538 $504 Free Cash Flow3 $1,250 – $1,350 $1,268 million Senior Notes5 Per-Unit C
Slide 13: 2023 Guidance
Western Midstream’ 2023 Guidance
Slide 14: 2023 Financial & Operational Outlook
2023 Financial & Operational Outlook 2023 Financial Guidance 2023 Estimated Throughput Growth Rates5 Crude Oil Low-Single Digits6 ($ in millions) Natural Gas Mid-Single Digits Adjusted EBITDA1 $2,050 – $2,150 Produced Water Mid-20s 2023 Commodity Price Sensitivities7 Total Capital Expenditures2 $575
Slide 15: 2023 Adjusted EBITDA Guidance
2023 Adjusted EBITDA Guidance EXPECTED ASSET-LEVEL EBITDA CONTRIBUTION1 29% DJ Basin 55% Delaware Basin 86% Gas $2,050 Million 65% Gas 14% Oil to 19% Oil $2,150 Million 16% Water 8% Equity Investments 8% Other2 1) Excludes G&A. Represents asset-level cash contribution to EBITDA. 15 2) Marcellus, Sou
Slide 16: 2023 Capital Guidance
2023 Capital Guidance 1% Equity Investments 6% Other 11% Well Connect 1% Equity Investments 11% DJ Basin 73% Gas 13% Maintenance 27% Oil 3% Other $575 Million to $675 Million 82% Delaware Basin 72% Expansion 63% Gas 18% Oil 19% Water Note: Accrual-based, includes equity investments, excludes capital
Slide 17: Summary
h Western Midstream’ my = Summary
Slide 18: Enhancing Unitholder Value
Enhancing Unitholder Value Since Issuance of January 2020 Senior Notes $1.65 Senior Notes $993 Of Units Repurchased $1.97 Distributions Paid $11.73 Value Returned billion1 Retired million2 billion3 per unit4,5 ~27% OF ENTERPRISE VALUE RETURNED5 1) Since January 2020 bond issuance. 2) Includes 27.86
Slide 19: 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 Relative to midstream companies, major energy indices and the S&P 500, WES continues to generate the strongest Free cash
Slide 20: 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 the leader in total capital return yield relative to major energy indices, t
Slide 21: 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 22: WES's Value Creation Progression
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 23: 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 24: Q&A
Western Midstream’ Q&A
Slide 25: Appendix
7 Western Midstream’ Appendix
Slide 26: 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 $2.00 Base Annual YE’22 Distribution1 Free Cash + Flow Base Distributions1 3.2x
Slide 27: WES Liquidity Profile
WES Liquidity Profile Liquidity ($ in millions) RCF Capacity $1,620 Cash $287 Senior Note Maturities ($ in millions) RCF $375MM 1 2023 $213 2025 – 2026 $1,604 2028+ $4,650 1 2 Note: As of December 31, 2022. 1) Retired in January of 2023. 27 2) Includes revolving credit facility that matures in Febru
Slide 28: 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 29: 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 30: 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 ~8 Years Oil ~ 10 Years Water ~10 Years 1) Percentage of production from Occidental as o
Slide 31: 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. 31 Under 5% of t
Slide 32: 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 32 Note: Capacity as of year-end 2022.
Slide 33: 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 33 Note: Capacity as of year-end 2022.
Slide 34: 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. 34 2) Weighted-average remai
Slide 35: 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 35 Note: Capacities as of year-end 2022.
Slide 36: 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 36
Slide 37: 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 38: 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 39: 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 40: 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 Year Ended Dec
Slide 41: 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
Western Midstream Partners — FY2022 Earnings Presentation on 6ix