Western Midstream's Q1 2025: Navigating Contradictions in Capital Allocation and Growth Strategy

Capital allocation priorities, organic growth and M&A strategy, volume growth expectations, capital allocation strategy, and Permian production and



Strong Financial Performance:
- Western Midstream Partners reported net income attributable to limited partners of $302 million and adjusted EBITDA of $594 million for Q1 2025.
- The growth was driven by strong financial performance and increased natural gas processing capacity.

North Loving Plant and Natural Gas Processing Capacity:
- The company completed and commissioned the North Loving plant in the Delaware Basin, increasing natural gas processing capacity by 13% or 250 million cubic feet per day.
- This expansion contributed to financial benefits and reduced the need for offloads.

Capital Allocation and Financial Flexibility:
- Western Midstream Partners retired $664 million of senior notes in Q1 and plans to retire the remaining tranche in early June.
- This demonstrates strong financial flexibility, allowing for strategic investments and debt reduction.

Contract Stability and Market Resilience:
- The company maintains a strong balance sheet with net leverage below three times and approximately $2.4 billion in liquidity.
- This is supported by stable long-term contract structures and proactive customer engagement, contributing to financial resilience.