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Related-Party Transactions
 12 Months Ended
Dec. 31, 2023
Related Party Fees and Other Arrangements, Limited Liability Company (LLC) or Limited Partnership (LP) [Abstract]  
Related-Party Transactions
6. RELATED-PARTY TRANSACTIONS

Summary of related-party transactions. The following tables summarize material related-party transactions included in the Partnership’s consolidated financial statements:
Consolidated statements of operations
Year Ended December 31,
thousands202320222021
Revenues and other
Service revenues – fee based$1,773,914 $1,674,959 $1,589,367 
Service revenues – product based16,497 56,907 11,888 
Product sales43,683 63,367 31,103 
Total revenues and other1,834,094 1,795,233 1,632,358 
Equity income, net – related parties (1)
152,959 183,483 204,645 
Operating expenses
Cost of product (2)
(72,903)(25,447)42,805 
Operation and maintenance4,618 5,081 27,805 
General and administrative (3)
284 2,338 15,613 
Total operating expenses(68,001)(18,028)86,223 
Gain (loss) on divestiture and other, net— (1,756)420 
_________________________________________________________________________________________
(1)See Note 7.
(2)Includes related-party natural-gas and NGLs imbalances.
(3)Balances for the years ended December 31, 2022 and 2021, include equity-based compensation expense allocated to the Partnership by Occidental, which is not reimbursed to Occidental and is reflected as a contribution to partners’ capital in the consolidated statements of equity and partners’ capital (see Incentive Plans within this Note 6). The balance for the year ended December 31, 2021, also includes amounts charged by Occidental pursuant to the shared services agreement (see Services Agreement within this Note 6).
6. RELATED-PARTY TRANSACTIONS

Consolidated balance sheets
December 31,
thousands20232022
Assets
Accounts receivable, net$358,141 $313,937 
Other current assets1,260 1,578 
Equity investments (1)
904,535 944,696 
Other assets43,216 29,058 
Total assets1,307,152 1,289,269 
Liabilities
Accounts and imbalance payables38,541 32,150 
Accrued liabilities4,979 11,756 
Other liabilities (2)
335,320 268,399 
Total liabilities378,840 312,305 
_________________________________________________________________________________________
(1)See Note 7.
(2)Includes contract liabilities from contracts with customers. See Note 2.

Consolidated statements of cash flows
Year Ended December 31,
thousands202320222021
Distributions from equity-investment earnings – related parties
$155,169 $186,153 $213,516 
Capital expenditures— (470)(2,000)
Proceeds from the sale of assets to related parties— 200 — 
Contributions to equity investments – related parties(1,153)(9,632)(4,435)
Distributions from equity investments in excess of cumulative earnings – related parties39,104 63,897 41,385 
Distributions to Partnership unitholders (1)
(494,127)(372,468)(272,192)
Distributions to WES Operating unitholders (2)
(22,850)(24,898)(14,984)
Net contributions from (distributions to) related parties— 1,423 8,533 
Unit repurchases from Occidental (3)
(127,500)(252,500)(50,225)
_________________________________________________________________________________________
(1)Represents common and general partner unit distributions paid to Occidental pursuant to the partnership agreement of the Partnership (see Note 4 and Note 5).
(2)Represents distributions paid to Occidental, through its ownership of WGRAH, pursuant to WES Operating’s partnership agreement (see Note 4 and Note 5).
(3)Represents common units repurchased from Occidental (see Note 5).
6. RELATED-PARTY TRANSACTIONS

The following tables summarize material related-party transactions for WES Operating (which are included in the Partnership’s consolidated financial statements) to the extent the amounts differ materially from the Partnership’s consolidated financial statements:
Consolidated statements of operations
Year Ended December 31,
thousands202320222021
General and administrative (1)
$3,554 $5,373 $18,365 
_________________________________________________________________________________________
(1)Includes an intercompany service fee between the Partnership and WES Operating. Balances for the years ended December 31, 2022 and 2021, include equity-based compensation expense allocated to WES Operating by Occidental, which is not reimbursed to Occidental and is reflected as a contribution to partners’ capital in the consolidated statements of equity and partners’ capital (see Incentive Plans within this Note 6). The balance for the year ended December 31, 2021, also includes amounts charged by Occidental pursuant to the shared services agreement (see Services Agreement within this Note 6).

Consolidated balance sheets
December 31,
thousands20232022
Other current assets$1,235 $1,487 
Other assets41,405 28,459 
Accounts and imbalance payables (1)
69,472 76,131 
Accrued liabilities4,662 11,439 
_________________________________________________________________________________________
(1)Includes balances related to transactions between the Partnership and WES Operating.

Consolidated statements of cash flows
Year Ended December 31,
thousands202320222021
Distributions to WES Operating unitholders (1)
$(1,142,217)$(1,244,533)$(749,018)
_________________________________________________________________________________________
(1)Represents distributions paid to the Partnership and Occidental, through its ownership of WGRAH, pursuant to WES Operating’s partnership agreement. Includes distributions made from WES Operating to the Partnership that were used by the Partnership to repurchase common units. See Note 4 and Note 5.    

Related-party revenues. Related-party revenues include amounts earned by the Partnership from services provided to Occidental and from the sale of natural gas, condensate, and NGLs to Occidental.

Gathering and processing agreements. The Partnership has significant gathering, processing, and produced-water disposal arrangements with affiliates of Occidental on most of its systems. While Occidental is the contracting counterparty of the Partnership, these arrangements with Occidental include not just Occidental-produced volumes, but also, in some instances, the volumes of other working-interest owners of Occidental who rely on the Partnership’s facilities and infrastructure to bring their volumes to market. Natural-gas throughput (excluding equity-investment throughput) attributable to production owned or controlled by Occidental was 34%, 35%, and 36% for the years ended December 31, 2023, 2022, and 2021, respectively. Crude-oil and NGLs throughput (excluding equity-investment throughput) attributable to production owned or controlled by Occidental was 86%, 89%, and 89% for the years ended December 31, 2023, 2022, and 2021, respectively. Produced-water throughput attributable to production owned or controlled by Occidental was 78%, 80%, and 87% for the years ended December 31, 2023, 2022, and 2021, respectively.
6. RELATED-PARTY TRANSACTIONS

The Partnership is currently discussing varying interpretations of certain contractual provisions with Occidental regarding the calculation of the cost-of-service rates under an oil-gathering contract related to the Partnership’s DJ Basin oil-gathering system. If such discussions are resolved in a manner adverse to the Partnership, such resolution could have a negative impact on the Partnership’s financial condition and results of operations, including a reduction in rates and a non-cash charge to earnings.
In connection with the sale of its Eagle Ford assets in 2017, Anadarko remained the primary counterparty to the Partnership’s Brasada gas processing agreement and entered into an agency relationship with Sanchez Energy Corporation (“Sanchez”), now Mesquite Energy, Inc. (“Mesquite”), that allowed Mesquite to process gas under such agreement. In December 2021, the Brasada gas processing agreement was assigned from Anadarko to Mesquite effective July 1, 2023. For this reason, Anadarko is not liable for any obligations under the Brasada gas processing agreement after June 30, 2023. For all periods presented, Mesquite performed Anadarko’s obligations under the Brasada gas processing agreement pursuant to its agency arrangement with Anadarko.
Further, in connection with the sale of its Uinta Basin assets in 2020, Kerr McGee Oil & Gas Onshore LP, a subsidiary of Occidental, retained the deficiency payment obligations under a gas processing agreement at the Chipeta plant. This contingent payment obligation ended as of September 30, 2022.

Marketing Transition Services Agreement. During the year ended December 31, 2020, Occidental provided marketing-related services to certain of the Partnership’s subsidiaries (the “Marketing Transition Services Agreement”). While the Partnership still has some marketing agreements with affiliates of Occidental, on January 1, 2021, the Partnership began marketing and selling substantially all of its crude oil and residue gas, and a majority of its NGLs, directly to third parties.

Operating leases. Certain surface-use and salt-water disposal agreements between an affiliate of Occidental and certain wholly owned subsidiaries of the Partnership are classified as operating leases (see Related-party commercial agreement below). In addition, the Partnership has entered into operating leases for corporate and shared field offices with Occidental as the lessor.
Effective December 31, 2019, an affiliate of Occidental and a wholly owned subsidiary of the Partnership, the lessor, entered into an operating and maintenance agreement pursuant to which Occidental provided operational and maintenance services with respect to a crude-oil gathering system and associated treating facilities owned by the Partnership through December 31, 2021. In April 2021, the Partnership exercised its option to terminate the operating and maintenance agreement with Occidental effective December 31, 2021. See Note 14.

Related-party expenses. Operation and maintenance expense includes amounts accrued for or paid to related parties for field-related costs, shared field offices, and easements (see Related-party commercial agreement below) supporting the Partnership’s operations at certain assets. A portion of general and administrative expense is paid by Occidental, which results in related-party transactions pursuant to the reimbursement provisions of the Partnership’s and WES Operating’s agreements with Occidental. Cost of product expense includes amounts related to certain continuing marketing arrangements with affiliates of Occidental, related-party imbalances, and transactions with affiliates accounted for under the equity method of accounting. See Marketing Transition Services Agreement in the section above. Related-party expenses bear no direct relationship to related-party revenues, and third-party expenses bear no direct relationship to third-party revenues.

Services Agreement. Occidental performed certain centralized corporate functions for the Partnership and WES Operating pursuant to the agreement dated as of December 31, 2019, by and among Occidental, Anadarko, and WES Operating GP (“Services Agreement”). Most of the administrative and operational services previously provided by Occidental fully transitioned to the Partnership by December 31, 2021, with certain limited transition services remaining in place pursuant to the terms of the Services Agreement.
6. RELATED-PARTY TRANSACTIONS

Incentive Plans. General and administrative expense for the years ended December 31, 2022 and 2021, includes non-cash equity-based compensation expense allocated to the Partnership by Occidental for awards granted to the executive officers of the general partner and to other employees prior to their employment with the Partnership under (i) the Anadarko Petroleum Corporation 2012 Omnibus Incentive Compensation Plan, as amended and restated, (ii) Occidental’s 2015 Long-Term Incentive Plan, and (iii) Occidental’s Phantom Share Unit Award Plan (collectively referred to as the “Incentive Plans”). General and administrative expense includes costs related to the Incentive Plans of $2.3 million and $10.1 million for the years ended December 31, 2022 and 2021, respectively. These amounts are reflected as contributions to partners’ capital in the consolidated statements of equity and partners’ capital.

Construction reimbursement agreements and purchases and sales with related parties. From time to time, the Partnership enters into construction reimbursement agreements with Occidental providing that the Partnership will manage the construction of certain midstream infrastructure for Occidental in the Partnership’s areas of operation. Such arrangements generally provide for a reimbursement of costs incurred by the Partnership on a cost or cost-plus basis.
Additionally, from time to time, in support of the Partnership’s business, the Partnership purchases and sells equipment, inventory, and other miscellaneous assets from or to Occidental or its affiliates.

Related-party commercial agreement. During the first quarter of 2021, an affiliate of Occidental and certain wholly owned subsidiaries of the Partnership entered into a Commercial Understanding Agreement (“CUA”). Under the CUA, certain West Texas surface-use and salt-water disposal agreements were amended to reduce usage fees owed by the Partnership in exchange for the forgiveness of certain deficiency fees owed by Occidental and other unrelated contractual amendments. The present value of the reduced usage fees under the CUA was $30.0 million at the time the agreement was executed. Also, as a result of the amendments under the CUA, these agreements are classified as operating leases and a $30.0 million right-of-use (“ROU”) asset, included in Other assets on the consolidated balance sheets, was recognized during the first quarter of 2021. The ROU asset is being amortized to Operation and maintenance expense through 2038, the remaining term of the agreements.

Customer concentration. Occidental was the only customer from which revenues exceeded 10% of consolidated revenues for all periods presented in the consolidated statements of operations.