Western Midstream Partners, Lp · NYSE:WES
Western Midstream Partners, Lp — Q3 2022 Earnings Presentation
37 slides from Western Midstream Partners, Lp's earnings presentation, Nov 3, 2022
Slide 1: Third-Quarter 2022 Review
Third-Quarter 2022 Review November 3, 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: Third-Quarter Highlights
Western Midstream’ Third-Quarter Highlights
Slide 4: Third-Quarter Highlights
Third-Quarter Highlights Operational & Financial Accomplishments Delaware Basin Delaware Basin Increased Delaware Basin throughput Natural-Gas Throughput Produced-Water Throughput across all three products 1.54 Bcf/d 895 MBbls/d Capital efficient growth with Ranch Westex JV acquisition 3% Q-o-Q 1% Q
Slide 5: Third-Quarter Financial Performance
Third-Quarter Financial Performance
Slide 6: Financial Performance
Financial Performance 3Q 2022 ($ in millions) Actuals Operating Cash Flow $468.8 $260 million Cash Capital Investments1 $138.4 Net Income3 Free Cash Flow $330.4 $525 Cash Distributions Paid $197.72 million Adjusted EBITDA Free Cash Flow After Distributions $132.7 1) Includes net investing distributi
Slide 7: 2022 Guidance
2022 Guidance Maintaining prior financial guidance Note: Based on current producer production-forecast information. 1) A reconciliation of the Adjusted EBITDA range to net cash provided by operating activities and net income (loss), and a reconciliation of the Free cash flow range to net cash provid
Slide 8: Third-Quarter Operational Performance
Third-Quarter Operational Performance
Slide 9: Operational Performance
Operational Performance 3Q 2022 Actuals Natural-Gas Throughput (MMcf/d) 4,274 Adjusted Gross Margin for Natural-Gas Assets ($/Mcf) $1.33 Crude-Oil and NGLs Throughput (MBbls/d) 715 Adjusted Gross Margin for Crude-Oil and NGLs Assets ($/Bbl) $2.33 Produced-Water Throughput (MBbls/d) 877 Adjusted Gros
Slide 10: Recent Commercial Success
Recent Commercial Success Expanded Relationship with Largest Customer in Delaware Basin 250 57 MMcf/d1 MBbls/d1 Peak Firm Natural-Gas Peak Firm Crude-Oil Processing Capacity Treating Capacity Executed Additional Long-Term Amendments with Minimum-Volume Commitments 10 1) Includes new firm commitments
Slide 11: Recent Acquisition and Divestiture Activity
Recent Acquisition and Divestiture Activity Ranch Westex Acquisition1 Cactus II Divestiture New Mexico November 2022 Cactus II crude-oil pipeline Ramsey Texas Mentone $265 Million2 Cash proceed from sale of Mi Vida 15% interest Ranch Westex Strategic divestiture at premium multiple that increases ca
Slide 12: Summary
h Western Midstream’ my = Summary
Slide 13: 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 generates the strongest free cash flow yield,
Slide 14: Comparative Valuation Metrics
Comparative Valuation Metrics 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 is the leader in total capital return yield relative to major energy indices, the S&P 500, and various p
Slide 15: Comparative Valuation Metrics
Comparative Valuation Metrics 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 is the market leader in returning capital to stakeholders through a balan
Slide 16: 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 17: Q&A
Western Midstream’ Q&A
Slide 18: Appendix
7 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 Trailing Twelve-Month • Enhanced distribution would be Enhanced Distribution Calculation payable with first-quarter base As of 9/30/22 $ in millions distribution (starting 1Q’23) Free Cash Flow1 $1,479 • Depende
Slide 21: 2022 Adjusted EBITDA Guidance
2022 Adjusted EBITDA Guidance EXPECTED ASSET-LEVEL EBITDA CONTRIBUTION1 32% DJ Basin 47% Delaware Basin 84% Gas $2,125 Million 65% Gas 16% Oil to 18% Oil $2,225 Million 17% Water 10% Equity Investments 11% Other2 1) Excludes G&A. Represents asset-level cash contribution to EBITDA. 21 2) Marcellus, S
Slide 22: 2022 Capital Guidance
2022 Capital Guidance 2% Equity Investments 5% Other 15% Well Connect 6% IT Transformation 2% Equity Investments 7% DJ Basin 93% Gas 12% Maintenance 7% Oil 6% IT Transformation $550 Million to $600 Million 80% Delaware Basin 65% Expansion 64% Gas 11% Oil 25% Water Note: Accrual-based, includes equit
Slide 23: WES Liquidity Profile
WES Liquidity Profile Liquidity ($ in millions) RCF Capacity $1,370 Cash $159 Senior Note Maturities ($ in millions) 2023 $213 2025 – 2026 $1,604 2028+ $4,650 Note: As of September 30, 2022. 23 1) Includes $625 million outstanding as of 9/30/2022 on revolving credit facility that matures in February
Slide 24: Premier Asset Portfolio
Premier Asset Portfolio Value-Focused Portfolio1 Revenue: 47% Delaware Basin, 35% DJ Basin GATHERING 23 SYSTEMS Total Capital: 74% Delaware Basin, 14% DJ Basin PROCESSING & 71 TREATING FACILITIES Direct Commodity Exposure Protection2 93% Fee-Based Gas Contracts NATURAL-GAS 7 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 Customer Base Percentage of Related-Party Product Volumes1 Gas 48% Oil 97% Water 87% Long-Term Contract Support Weighted-Average Product Remaining Life2 Gas ~7 Years Oil +10 Years Water ~10 Years 1) Percentage of production from Occidental as of
Slide 27: Delaware Basin: Gas Infrastructure
Delaware Basin: Gas Infrastructure EDDY LEA NEW MEXICO TEXAS RAMSEY LOVING WES Gas Processing CULBERSON West Texas Complex 1.495 Bcf/d MENTONE WINKLER Equity-Interest Gas Processing Mi Vida 5 MILES 200 MMcf/d REEVES WARD Gas-Processing Plant MI VIDA RANCH Gas-Gathering Lines WESTEX Federal Land (Sur
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 Percentage of Related-Party Product Volumes1 Gas 57% Oil 100% Long-Term Contract Support Weighted-Average Product Remaining Life2 Gas ~85% = ~7 Years ~15% = Life of Lease Oil ~7 Years 1) Percentage of production from Occidental as of year-end 2021. 30 2) Weighted-average remai
Slide 31: DJ Basin
DJ Basin COLORADO LATHAM LATHAM CRYO 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 Faci
Slide 32: 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 32
Slide 33: 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 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 September 30,
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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