EX-99.1 2 wes2021q28-kxerxex991.htm EX-99.1 Document

EXHIBIT 99.1
wesprlogoa.jpg

WESTERN MIDSTREAM ANNOUNCES
SECOND-QUARTER 2021 RESULTS

HOUSTON—(PRNEWSWIRE)—August 9, 2021 – Today Western Midstream Partners, LP (NYSE: WES) (“WES” or the “Partnership”) announced second-quarter 2021 financial and operating results. Net income (loss) available to limited partners for the second quarter of 2021 totaled $226.3 million, or $0.55 per common unit (diluted), with second-quarter 2021 Adjusted EBITDA(1) totaling $491.1 million, second-quarter 2021 Cash flows provided by operating activities totaling $452.1 million, and second-quarter 2021 Free cash flow(1) totaling $379.8 million.
RECENT HIGHLIGHTS
•Achieved record DJ Basin gas throughput of 1.4 Bcf/d for the second quarter, representing a 5-percent sequential-quarter increase.
•Executed a long-term gas gathering and processing agreement with Crestone Peak Resources (“Crestone”), whereby Crestone dedicated all of its existing Watkins acreage, totaling approximately 74,000 acres, to the Partnership. As part of the agreement, Crestone will also dedicate to WES up to 148,000 additional acres that may be acquired and connected to Crestone’s gas gathering system in the future.









______________________________________________________________________________________________
(1)Please see the definitions of the Partnership’s non-GAAP measures at the end of this release and reconciliation of GAAP to non-GAAP measures.


On August 13, 2021, WES will pay its second-quarter 2021 per-unit distribution of $0.319, which represents a 1.3-percent increase over the prior quarter’s distribution and is consistent with an annualized distribution growth of 5-percent. Second-quarter 2021 Free cash flow after distributions totaled $246.8 million. Second-quarter 2021 and year-to-date capital expenditures(1) totaled $84.0 million and $142.3 million, respectively.
“Our strong second-quarter Adjusted EBITDA and free cash flow was a result of increased throughput across all product lines in the Delaware and DJ Basins,” said Michael Ure, President and Chief Executive Officer. “Higher commodity prices continue to provide support for sustained increased producer activity, specifically in the Delaware Basin, and we’ve been successful in attracting incremental third-party business. With the hard work of our operations, engineering, and commercial teams, we’ve been able to fully leverage our expansive infrastructure to bring these additional volumes on the system.”
Mr. Ure continued “As we prepare for increased throughput, which will largely materialize in 2022, we expect to deploy additional capital-efficient dollars and be at or above the high end of our 2021 capital expenditures range of $275 million to $375 million. We’ve reduced our cost structure and enhanced our operational efficiencies, and we expect increased capital spend to be dedicated to gathering these incremental volumes. Furthermore, as a result of this activity coupled with our second-quarter outperformance, we now expect to be near the high end of our 2021 Adjusted EBITDA range of $1.825 billion to $1.925 billion.”
Second-quarter 2021 total natural-gas throughput(2) averaged 4.3 Bcf/d, representing a 5-percent sequential-quarter increase. Second-quarter 2021 total throughput for crude-oil and NGLs assets(2) averaged 687 MBbls/d, representing a 14-percent sequential-quarter increase. Second-quarter 2021 total throughput for produced-water assets(2) averaged 688 MBbls/d, representing a 16-percent sequential-quarter increase.





______________________________________________________________________________________________
(1)Accrual-based, includes equity investments, excludes capitalized interest, and excludes capital expenditures associated with the 25% third-party interest in Chipeta.
(2)Represents total throughput attributable to WES, which excludes (i) the 2.0% Occidental subsidiary-owned limited partner interest in WES Operating and (ii) for natural-gas throughput, the 25% third-party interest in Chipeta, which collectively represent WES’s noncontrolling interests.



2

CONFERENCE CALL TOMORROW AT 1:00 P.M. CDT
WES will host a conference call on Tuesday, August 10, 2021, at 1:00 p.m. Central Daylight Time (2:00 p.m. Eastern Daylight Time) to discuss second-quarter 2021 results. To participate, individuals should dial 877-883-0383 (Domestic) or 412-902-6506 (International) 15 minutes before the scheduled conference call time and enter participant access code 7589922. To access the live audio webcast of the conference call, please visit the investor relations section of the Partnership’s website at www.westernmidstream.com. A replay of the conference call also will be available on the website following the call.
For additional details on WES’s financial and operational performance, please refer to the earnings slides and updated investor presentation available at www.westernmidstream.com.
ABOUT WESTERN MIDSTREAM
Western Midstream Partners, LP (“WES”) is a Delaware master limited partnership formed to acquire, own, develop, and operate midstream assets. With midstream assets located in Texas, New Mexico, Colorado, Utah, Wyoming, and Pennsylvania, WES is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural-gas liquids, and crude oil; and gathering and disposing of produced water for its customers. In its capacity as a natural-gas processor, WES also buys and sells natural gas, natural-gas liquids, and condensate on behalf of itself and as an agent for its customers under certain contracts.
For more information about Western Midstream Partners, LP, please visit www.westernmidstream.com.

This news release contains forward-looking statements. WES’s management believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this news release. These factors include our ability to meet financial guidance or distribution expectations; the ultimate impact of efforts to fight COVID-19 on the global economy and the timeline for a recovery in commodity demand and prices; our ability to safely and efficiently operate WES’s assets; the supply of, demand for, and price of oil, natural gas, NGLs, and related products or services; our ability to meet projected in-service dates for capital-growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the “Risk Factors” section of WES’s most-recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission and other public filings and press releases. WES undertakes no obligation to publicly update or revise any forward-looking statements.
# # #


3

WESTERN MIDSTREAM CONTACT

Kristen Shults
Senior Vice President, Finance and Communications
Kristen.Shults@westernmidstream.com
832.636.6000

4

Western Midstream Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months Ended 
June 30,		Six Months Ended 
June 30,
thousands except per-unit amounts2021202020212020
Revenues and other
Service revenues – fee based
$618,985 $642,628 $1,191,260 $1,344,024 
Service revenues – product based
27,803 7,000 59,455 22,921 
Product sales72,256 21,736 143,061 78,385 
Other87 391 329 738 
Total revenues and other719,131 671,755 1,394,105 1,446,068 
Equity income, net – related parties58,666 54,415 110,831 115,762 
Operating expenses
Cost of product78,044 18,602 167,013 121,872 
Operation and maintenance153,028 145,186 293,360 304,377 
General and administrative44,448 36,423 89,564 76,888 
Property and other taxes17,967 19,395 32,351 37,871 
Depreciation and amortization137,849 119,805 268,402 252,124 
Long-lived asset and other impairments12,738 10,150 27,604 165,935 
Goodwill impairment— — — 441,017 
Total operating expenses444,074 349,561 878,294 1,400,084 
Gain (loss) on divestiture and other, net1,225 (2,843)642 (2,883)
Operating income (loss)334,948 373,766 627,284 158,863 
Interest income – Anadarko note receivable— 4,225 — 8,450 
Interest expense(95,290)(94,654)(193,783)(183,240)
Gain (loss) on early extinguishment of debt— 1,395 (289)8,740 
Other income (expense), net84 1,653 (1,123)(108)
Income (loss) before income taxes239,742 286,385 432,089 (7,295)
Income tax expense (benefit)1,465 5,044 2,577 764 
Net income (loss)238,277 281,341 429,512 (8,059)
Net income (loss) attributable to noncontrolling interests7,018 8,304 12,462 (24,569)
Net income (loss) attributable to Western Midstream Partners, LP
$231,259 $273,037 $417,050 $16,510 
Limited partners’ interest in net income (loss):
Net income (loss) attributable to Western Midstream Partners, LP
$231,259 $273,037 $417,050 $16,510 
General partner interest in net (income) loss(4,964)(5,461)(8,957)(330)
Limited partners’ interest in net income (loss)$226,295 $267,576 $408,093 $16,180 
Net income (loss) per common unit – basic and diluted$0.55 $0.60 $0.99 $0.04 
Weighted-average common units outstanding – basic and diluted
413,070 443,973 413,087 443,972 


5

Western Midstream Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
thousands except number of unitsJune 30,
2021		December 31, 2020
Total current assets$886,251 $943,064 
Net property, plant, and equipment8,589,965 8,709,945 
Other assets2,150,083 2,177,018 
Total assets$11,626,299 $11,830,027 
Total current liabilities$1,126,671 $960,935 
Long-term debt6,835,838 7,415,832 
Asset retirement obligations267,624 260,283 
Other liabilities343,293 297,765 
Total liabilities8,573,426 8,934,815 
Equity and partners’ capital
Common units (413,076,351 and 413,839,863 units issued and outstanding at June 30, 2021, and December 31, 2020, respectively)2,927,066 2,778,339 
General partner units (9,060,641 units issued and outstanding at June 30, 2021, and December 31, 2020)(13,923)(17,208)
Noncontrolling interests139,730 134,081 
Total liabilities, equity, and partners’ capital$11,626,299 $11,830,027 

6

Western Midstream Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Six Months Ended 
June 30,
thousands20212020
Cash flows from operating activities
Net income (loss)$429,512 $(8,059)
Adjustments to reconcile net income (loss) to net cash provided by operating activities and changes in assets and liabilities:
Depreciation and amortization268,402 252,124 
Long-lived asset and other impairments27,604 165,935 
Goodwill impairment— 441,017 
(Gain) loss on divestiture and other, net(642)2,883 
(Gain) loss on early extinguishment of debt289 (8,740)
Cash paid to settle interest-rate swaps— (12,763)
Change in other items, net(11,504)(93,398)
Net cash provided by operating activities$713,661 $738,999 
Cash flows from investing activities
Capital expenditures$(137,928)$(313,065)
Acquisitions from related parties(2,000)— 
Contributions to equity investments - related parties(3,508)(16,064)
Distributions from equity investments in excess of cumulative earnings – related parties21,373 13,340 
Proceeds from the sale of assets to third parties8,003 — 
(Increase) decrease in materials and supplies inventory and other7,656 (39,212)
Net cash used in investing activities$(106,404)$(355,001)
Cash flows from financing activities
Borrowings, net of debt issuance costs$100,000 $3,586,173 
Repayments of debt(531,085)(3,583,149)
Increase (decrease) in outstanding checks(29,102)(4,686)
Distributions to Partnership unitholders(264,234)(422,679)
Distributions to Chipeta noncontrolling interest owner(1,521)(2,775)
Distributions to noncontrolling interest owner of WES Operating(5,292)(8,676)
Net contributions from (distributions to) related parties4,508 21,832 
Finance lease payments(3,639)(10,262)
Unit repurchases(16,241)— 
Net cash provided by (used in) financing activities$(746,606)$(424,222)
Net increase (decrease) in cash and cash equivalents$(139,349)$(40,224)
Cash and cash equivalents at beginning of period444,922 99,962 
Cash and cash equivalents at end of period$305,573 $59,738 
7

Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES

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 distributions from equity investments, and excluding the noncontrolling interest owners’ proportionate share of revenues and cost of product.
WES defines 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 expense, (v) depreciation and amortization, (vi) impairments, and (vii) other expense (including lower of cost or market inventory adjustments recorded in cost of product), less (i) gain (loss) on divestiture and other, net, (ii) gain (loss) on early extinguishment of debt, (iii) income from equity investments, (iv) interest income, (v) income tax benefit, (vi) other income, and (vii) the noncontrolling interest owners’ proportionate share of revenues and expenses.
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. Management considers Free cash flow an appropriate metric for assessing capital discipline, cost efficiency, and balance-sheet strength. Although Free cash flow is the metric used to assess WES’s ability to make distributions to unitholders, this measure should not be viewed as indicative of the actual amount of cash that is available for distributions or planned for distributions for a given period. Instead, Free cash flow should be considered indicative of the amount of cash that is available for distributions, debt repayments, and other general partnership purposes.
Below are reconciliations of (i) gross margin (GAAP) to Adjusted gross margin (non-GAAP), (ii) net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDA (non-GAAP), and (iii) net cash provided by operating activities (GAAP) to Free cash flow (non-GAAP), as required under Regulation G of the Securities Exchange Act of 1934. Management believes that Adjusted gross margin, Adjusted EBITDA, and Free cash flow are widely accepted financial indicators of WES’s financial performance compared to other publicly traded partnerships and are useful in assessing WES’s ability to incur and service debt, fund capital expenditures, and make distributions. Adjusted gross margin, Adjusted EBITDA, and Free cash flow as defined by WES, may not be comparable to similarly titled measures used by other companies. Therefore, WES’s Adjusted gross margin, Adjusted EBITDA, and Free cash flow should be considered in conjunction with net income (loss) attributable to Western Midstream Partners, LP and other applicable performance measures, such as gross margin or cash flows provided by operating activities.
8

Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)

Adjusted Gross Margin
Three Months Ended
thousandsJune 30,
2021		March 31,
2021
Reconciliation of Gross margin to Adjusted gross margin
Total revenues and other$719,131 $674,974 
Less:
Cost of product78,044 88,969 
Depreciation and amortization
137,849 130,553 
Gross margin503,238 455,452 
Add:
Distributions from equity investments70,947 61,189 
Depreciation and amortization
137,849 130,553 
Less:
Reimbursed electricity-related charges recorded as revenues17,585 17,312 
Adjusted gross margin attributable to noncontrolling interests (1)
17,213 15,258 
Adjusted gross margin
$677,236 $614,624 
Adjusted gross margin for natural-gas assets
$469,409 $432,389 
Adjusted gross margin for crude-oil and NGLs assets
150,317 133,145 
Adjusted gross margin for produced-water assets57,510 49,090 
(1)For all periods presented, includes (i) the 25% third-party interest in Chipeta and (ii) the 2.0% Occidental subsidiary-owned limited partner interest in WES Operating, which collectively represent WES’s noncontrolling interests.

9

Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)

Adjusted EBITDA
Three Months Ended
thousandsJune 30,
2021		March 31,
2021
Reconciliation of Net income (loss) to Adjusted EBITDA
Net income (loss)$238,277 $191,235 
Add:
Distributions from equity investments70,947 61,189 
Non-cash equity-based compensation expense7,121 6,734 
Interest expense95,290 98,493 
Income tax expense1,465 1,112 
Depreciation and amortization137,849 130,553 
Impairments12,738 14,866 
Other expense30 1,218 
Less:
Gain (loss) on divestiture and other, net1,225 (583)
Gain (loss) on early extinguishment of debt— (289)
Equity income, net – related parties58,666 52,165 
Other income84 — 
Adjusted EBITDA attributable to noncontrolling interests (1)
12,616 10,997 
Adjusted EBITDA$491,126 $443,110 
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA
Net cash provided by operating activities$452,111 $261,550 
Interest (income) expense, net95,290 98,493 
Accretion and amortization of long-term obligations, net(1,914)(2,088)
Current income tax expense (benefit)749 555 
Other (income) expense, net(84)1,207 
Distributions from equity investments in excess of cumulative earnings – related parties
9,232 12,141 
Changes in assets and liabilities:
Accounts receivable, net38,982 30,182 
Accounts and imbalance payables and accrued liabilities, net
(55,758)16,467 
Other items, net(34,866)35,600 
Adjusted EBITDA attributable to noncontrolling interests (1)
(12,616)(10,997)
Adjusted EBITDA$491,126 $443,110 
Cash flow information
Net cash provided by operating activities$452,111 $261,550 
Net cash used in investing activities(59,932)(46,472)
Net cash provided by (used in) financing activities(142,982)(603,624)
(1)For all periods presented, includes (i) the 25% third-party interest in Chipeta and (ii) the 2.0% Occidental subsidiary-owned limited partner interest in WES Operating, which collectively represent WES’s noncontrolling interests.

10

Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)

Free Cash Flow
Three Months Ended
thousandsJune 30,
2021		March 31,
2021
Reconciliation of Net cash provided by operating activities to Free cash flow
Net cash provided by operating activities$452,111 $261,550 
Less:
Capital expenditures78,145 59,783 
Contributions to equity investments – related parties3,422 86 
Add:
Distributions from equity investments in excess of cumulative earnings – related parties9,232 12,141 
Free cash flow$379,776 $213,822 
Cash flow information
Net cash provided by operating activities$452,111 $261,550 
Net cash used in investing activities(59,932)(46,472)
Net cash provided by (used in) financing activities(142,982)(603,624)

11

Western Midstream Partners, LP
OPERATING STATISTICS
(Unaudited)
 Three Months Ended
June 30,
2021		March 31,
2021
Throughput for natural-gas assets (MMcf/d)
Gathering, treating, and transportation534 519 
Processing3,433 3,237 
Equity investments (1)
457 439 
Total throughput4,424 4,195 
Throughput attributable to noncontrolling interests (2)
159 150 
Total throughput attributable to WES for natural-gas assets
4,265 4,045 
Throughput for crude-oil and NGLs assets (MBbls/d)
Gathering, treating, and transportation
315 279 
Equity investments (3)
386 337 
Total throughput701 616 
Throughput attributable to noncontrolling interests (2)
14 12 
Total throughput attributable to WES for crude-oil and NGLs assets
687 604 
Throughput for produced-water assets (MBbls/d)
Gathering and disposal
702 607 
Throughput attributable to noncontrolling interests (2)
14 12 
Total throughput attributable to WES for produced-water assets
688 595 
Per-Mcf Adjusted gross margin for natural-gas assets (4)
$1.21 $1.19 
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (5)
2.40 2.45 
Per-Bbl Adjusted gross margin for produced-water assets (6)
0.92 0.92 
(1)Represents the 22% share of average Rendezvous throughput, 50% share of average Mi Vida and Ranch Westex throughput, and 30% share of average Red Bluff Express throughput.
(2)For all periods presented, includes (i) the 2.0% Occidental subsidiary-owned limited partner interest in WES Operating and (ii) for natural-gas assets, the 25% third-party interest in Chipeta, which collectively represent WES’s noncontrolling interests.
(3)Represents the 10% share of average White Cliffs throughput; 25% share of average Mont Belvieu JV throughput; 20% share of average TEG, TEP, Whitethorn, and Saddlehorn throughput; 33.33% share of average FRP throughput; and 15% share of average Panola and Cactus II throughput.
(4)Average for period. Calculated as Adjusted gross margin for natural-gas assets, divided by total throughput (MMcf/d) attributable to WES for natural-gas assets.
(5)Average for period. Calculated as Adjusted gross margin for crude-oil and NGLs assets, divided by total throughput (MBbls/d) attributable to WES for crude-oil and NGLs assets.
(6)Average for period. Calculated as Adjusted gross margin for produced-water assets, divided by total throughput (MBbls/d) attributable to WES for produced-water assets.

12

Western Midstream Partners, LP
OPERATING STATISTICS (CONTINUED)
(Unaudited)

Three Months Ended
June 30,
2021		March 31,
2021
Throughput for natural-gas assets (MMcf/d)
Delaware Basin1,244 1,133 
DJ Basin1,413 1,344 
Equity investments457 439 
Other1,310 1,279 
Total throughput for natural-gas assets 4,424 4,195 
Throughput for crude-oil and NGLs assets (MBbls/d)
Delaware Basin184 162 
DJ Basin98 82 
Equity investments386 337 
Other33 35 
Total throughput for crude-oil and NGLs assets701 616 
Throughput for produced-water assets (MBbls/d)
Delaware Basin702 607 
Total throughput for produced-water assets702 607 
13