37 slides from Western Midstream Partners, Lp's earnings presentation, Nov 2, 2023
Slide 1: Third-Quarter 2023 Review
Third-Quarter 2023 Review November 2, 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 Total Total Natural-Gas Crude-Oil and NGLs Increased total throughput across all three Throughput Throughput products on a sequential-quarter basis 4.65 Bcf/d 681 MBbls/d Record throughput across all three products in the Delaware Basin 5% Q-
Slide 5: Meritage Midstream Acquisition Strategic Rationale
Meritage Midstream Acquisition Strategic Rationale Synergies with WES's existing Powder WES & Meritage Pro Forma Asset Map River Basin footprint Enhances processing capacity with newer plants, including 200 MMcf/d of cryogenic processing capacity Strong contract portfolio with long-term acreage dedi
Slide 6: Third-Quarter Performance
Western Midstream’ Third-Quarter Performance
Slide 7: Third-Quarter Operational Performance
Third-Quarter Operational Performance 2Q 2023 3Q 2023 Actuals Actuals Natural-Gas Throughput (MMcf/d) 4,254 4,484 Adjusted Gross Margin for Natural-Gas Assets ($/Mcf) $1.26 $1.26 Crude-Oil and NGLs Throughput (MBbls/d) 626 667 Adjusted Gross Margin for Crude-Oil and NGLs Assets ($/Bbl) $2.58 $2.27 P
Slide 8: Third-Quarter Financial Performance
Third-Quarter Financial Performance 2Q 2023 3Q 2023 ($ in millions) Actuals Actuals $271 Operating Cash Flow $490.8 $394.8 million Cash Capital Investments1 $150.7 $194.3 3Q'23 Net Income4 Free Cash Flow $340.1 $200.4 $511 Cash Distributions Paid $337.0 2 $221.4 3 million Free Cash Flow After Distri
Slide 9: 2023 Financial & Operational Outlook
2023 Financial & Operational Outlook 2023 Financial Guidance 2023 Estimated Throughput Growth Rates5 Crude Oil & NGLs Low-Single Digits6 ($ in millions) Natural Gas Mid-Single Digits Adjusted EBITDA1 $1,950 – $2,050 Produced Water Upper-Teens 2023 Commodity Price Sensitivities7 Total Capital Expendi
Slide 10: Summary
iN Western Midstream’ ay = Summary MMi a 1 Basi! \ i i Ain hi a» i | HN | lias J ~\
Slide 11: Comparative Valuation Metrics
Comparative Valuation Metrics Highlighting midstream’s compelling investment opportunity Russell 3000 and Midstream Investment Grade Russell 3000 Companies Companies with ≥ 7.0% yield1 Company Rating Yield Industry Credit Profile with ≥ 7.0% yield2 Piedmont Office Realty Trust BBB 15.82% REIT Pionee
Slide 12: Comparative Valuation Metrics (continued)
Comparative Valuation Metrics (continued) Highlighting WES's compelling investment opportunity Free Cash Flow Yield Price / Earnings Ratio (Trailing Twelve Months)1 (Trailing Twelve Months)2 33x WES continues to generate the highest Free cash flow yield and trades at the lowest valuation relative to
Slide 13: 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 14: 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 15: 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 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: Appendix
, Western Midstream’ Appendix
Slide 18: 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 $2.1875 Base Annual YE’22 Distribution1 Free Cash Flow Base Distributions1 3.2x
Slide 19: 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 9/30/23 Free Cash Flow1 $1,048 • Dependent upon
Slide 20: 2023 Adjusted EBITDA Guidance
2023 Adjusted EBITDA Guidance EXPECTED ASSET-LEVEL EBITDA CONTRIBUTION1 48% Delaware Basin 33% DJ Basin 86% Gas $1,950 Million 67% Gas 18% Oil 14% Oil to 15% Water $2,050 Million 9% Equity Investments 10% Other2 1) Excludes G&A. Represents asset-level cash contribution to EBITDA. 20 2) Marcellus, So
Slide 21: 2023 Capital Expenditures Guidance
2023 Capital Expenditures Guidance < 1% Equity Investments 10% Well Connect 9% Other 8% DJ Basin < 1% Equity Investments 78% Gas 9% Maintenance 22% Oil 6% Other $700 Million to $800 Million 82% Delaware Basin 74% Expansion 63% Gas 12% Oil 25% Water Note: Accrual-based, includes equity investments, e
Slide 22: WES Liquidity Profile
WES Liquidity Profile Liquidity ($ in millions) RCF Capacity1 $1,995 Cash $489 Senior Note Maturities ($ in millions) 2025 – 2026 $1,483 2028 $740 2029+ $5,105 Note: As of 9/30/2023. Does not include Meritage acquisition which closed on October 13, 2023 and was funded with cash, amounts received fro
Slide 23: Diversified Asset Portfolio in Active Producing Basins
Diversified Asset Portfolio in Active Producing Basins Value-Focused Portfolio2 GATHERING Revenue: 52% Delaware Basin, 32% DJ Basin 24 SYSTEMS1 Total Capital: 82% Delaware Basin, 7% DJ Basin PROCESSING & 75 TREATING FACILITIES1 Direct Commodity Exposure Protection3 93% Fee-Based Gas Contracts NATURA
Slide 24: A Leading Midstream Provider in the Delaware Basin
A Leading Midstream 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 Capac
Slide 25: 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 26: Delaware Basin: Gas Infrastructure
Delaware Basin: Gas Infrastructure EDDY LEA NEW MEXICO TEXAS NORTH LOVING (in-service 1Q'25) 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 Dec
Slide 27: 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 27 Note: Capacity as of year-end 2022.
Slide 28: 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 28 Note: Capacity as of year-end 2022.
Slide 29: 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. 29 2) Weighted-average remai
Slide 30: A Core Position in the Heart of the DJ Basin
A Core Position in the Heart of the DJ Basin COLORADO LATHAM LARIMER WELD PLATTE VALLEY COSF Gas Processing FT. LUPTON LANCASTER 1,750 MMcf/d BOULDER Oil Stabilization 155 MBbls/d 5 MILES ADAMS WATTENBERG 30 Note: Capacities as of year-end 2022.
Slide 31: Largest G&P Provider in the Powder River Basin
Largest G&P Provider in the Powder River Basin Gas Processing 440 MMcf/d NGL Transportation 38 MBbls/d 31 Note: Capacities as of year-end 2022.
Slide 32: Additional Portfolio Assets
Additional Portfolio Assets Utah Pennsylvania South Texas Southwest Wyoming Springfield Gathering Granger Complex Chipeta Marcellus Gas Gathering 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