Western Midstream Partners (WES) 8 Aug 24 2024 Q2 Earnings call transcript

Key Themes and Trends

In the second quarter of 2024, Western Midstream Partners (WES) reported a strong operational quarter, with robust system operability leading to throughput records from natural gas and crude oil and NGLs in the Delaware Basin for the fifth consecutive quarter. This performance is expected to continue, with WES anticipating steady growth for the remainder of the year and being towards the high end of its adjusted EBITDA and free cash flow guidance ranges.

Commercial Successes and Future Outlook

The quarter was also successful from a commercial perspective, with WES executing numerous agreements with new and existing customers in several active basins. Notably, the company signed several new agreements in the Delaware Basin, which will positively benefit West starting in the third quarter and even more so in 2025. Additionally, WES executed a multiyear natural gas processing agreement with Kinder Morgan in support of their Altamont Green River pipeline project, further solidifying its position in the Uinta Basin.

Financial Performance and Distributions

WES reported net income attributable to limited partners of $370 million and adjusted EBITDA of $578 million for the second quarter. While adjusted gross margin decreased slightly, the company still expects to be towards the high end of its adjusted EBITDA and free cash flow guidance ranges for the year. The company also declared a base distribution of $0.875 per unit for the second quarter, unchanged from the previous announcement in April.

Looking Ahead

With a focus on growth and expansion, WES aims to allocate capital efficiently to generate the best returns for its unitholders. The company continues to evaluate strategic opportunities for accretive M&A, as well as increasing the base distribution in line with the overall growth in its business. With a strong operational performance and a positive outlook, WES is well-positioned to continue its growth trajectory in the midstream energy sector.