UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2023~~March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


WESTERN MIDSTREAM PARTNERS, LP
WESTERN MIDSTREAM OPERATING, LP
(Exact name of registrant as specified in its charter)


	Commission file number:	State or other jurisdiction of incorporation or organization:	I.R.S. Employer Identification No.:
Western Midstream Partners, LP	001-35753	Delaware	46-0967367
Western Midstream Operating, LP	001-34046	Delaware	26-1075808

Address of principal executive offices:

Zip Code:

Registrant’s telephone number, including area code:

Western Midstream Partners, LP

9950 Woodloch Forest Drive, Suite 2800

The Woodlands,

Texas

77380

(346)

786-5000

Western Midstream Operating, LP

9950 Woodloch Forest Drive, Suite 2800

The Woodlands,

Texas

77380

(346)

786-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of exchange
on which registered

Common units outstanding as of ~~August~~May 3, ~~2023:~~2024:

Western Midstream Partners, LP

Common units

WES

New York Stock Exchange

~~384,614,611~~380,490,963

Western Midstream Operating, LP

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Western Midstream Partners, LP

Yes

Western Midstream Operating, LP

Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Western Midstream Partners, LP

Yes

Western Midstream Operating, LP

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Western Midstream Partners, LP

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company

☐

Western Midstream Operating, LP

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Western Midstream Partners, LP			¨
Western Midstream Operating, LP			¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Western Midstream Partners, LP

Yes

☐

Western Midstream Operating, LP

Yes

☐

FILING FORMAT

This quarterly report on Form 10-Q is a combined report being filed by two separate registrants: Western Midstream Partners, LP and Western Midstream Operating, LP. Western Midstream Operating, LP is a consolidated subsidiary of Western Midstream Partners, LP that has publicly traded debt, but does not have any publicly traded equity securities. Information contained herein related to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrant.

Part I, Item 1 of this quarterly report includes separate financial statements (i.e., consolidated statements of operations, consolidated balance sheets, consolidated statements of equity and partners’ capital, and consolidated statements of cash flows) for Western Midstream Partners, LP and Western Midstream Operating, LP. The accompanying Notes to Consolidated Financial Statements, which are included under Part I, Item 1 of this quarterly report, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is included under Part I, Item 2 of this quarterly report, are presented on a combined basis for each registrant, with any material differences between the registrants disclosed separately.


TABLE OF CONTENTS
		PAGE
PART I		FINANCIAL INFORMATION (UNAUDITED)
	Item 1.	Financial Statements
		Western Midstream Partners, LP
		Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30~~March 31 , ~~2023~~202 4 and ~~2022~~2023	6
		Consolidated Balance Sheets as of ~~June 30~~M arch 3 1 , ~~2023,~~202 4 , and December 31, ~~2022~~202 3	7
		~~Consolidated Statements of Equity and Partners’ Capital for the~~ ~~three~~ ~~and six~~ ~~months ended~~ ~~June 30, 2023 and 2022~~	8
		~~Consolidated Statements of Cash Flows for thesix~~ ~~months ended~~ ~~June~~ 3 0 ~~, 2023 and 2022~~	9
		~~Western Midstream Operating, LP~~
		~~Consolidated Statements of Operations for the three~~ ~~and six~~ ~~months ended~~ ~~June 30, 2023 and 202~~2	10
		~~Consolidated Balance Sheets as of~~ ~~June 30, 2023, and December 31, 2022~~	11
		Consolidated Statements of Equity and Partners’ Capital for the three ~~and~~ ~~six~~months ended ~~June 30~~March 3 1 , ~~2023~~202 4 and ~~2022~~202 3	8
		Consolidated Statements of Cash Flows for three months ended March 31, 2024 and 2023	9
		Western Midstream Operating, LP
		Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023	10
		Consolidated Balance Sheets as of M arch 3 1 , 2024, and December 31, 2023	11
		Consolidated Statements of Equity and Partners’ Capital for the three months ended March 3 1 , 202 4 and 202 3	12
		Consolidated Statements of Cash Flows for the ~~six~~ three months ended ~~June 30, 2023~~March 31 , 202 4 and ~~2022~~202 3	13
		Notes to Consolidated Financial Statements	14
		Note 1. Description of Business and Basis of Presentation	14
		Note 2. Revenue from Contracts with Customers	17

		Note 3. ~~Partnership Distributions~~Acquisitions and Divestitures	19
		Note 4. Partnership Distributions	20
		Note 5. Equity and Partners’ Capital	2122
		Note 5.6. Related-Party Transactions	2223
		Note 6.7. Equity Investments	26
		Note 7.8. Property, Plant, and Equipment	27

		Note 8.9. Selected Components of Working Capital	28
		Note 9.10. Debt and Interest Expense	29
		Note ~~10.~~11. Commitments and Contingencies	31

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
		Cautionary Note Regarding Forward-Looking Statements	32
		Executive Summary	34
		Outlook	36
		Acquisitions and Divestitures	37

		Results of Operations	3738
		Operating Results	3738
		Reconciliation of Non-GAAP Financial Measures	4445
		Key Performance Metrics	4950
		Liquidity and Capital Resources	5052
		Items Affecting the Comparability of Financial Results with WES Operating	5556
		Critical Accounting Estimates	5657
		Recent Accounting Developments		57
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5657
	Item 4.	Controls and Procedures	57
	~~Item 5.~~	~~Other Information~~	5958
PART II		OTHER INFORMATION
	Item 1.	Legal Proceedings	58
	Item 1A.	Risk Factors	5958
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
	Item 5.	Other Information	59
	Item 6.	Exhibits	60

COMMONLY USED ABBREVIATIONS AND TERMS

References to “we,” “us,” “our,” “WES,” “the Partnership,” or “Western Midstream Partners, LP” refer to Western Midstream Partners, LP (formerly Western Gas Equity Partners, LP) and its subsidiaries. The following list of abbreviations and terms are used in this document:


	Defined Term		Definition
	Anadarko		Anadarko Petroleum Corporation and its subsidiaries, excluding our general partner, which became a wholly owned subsidiary of Occidental upon closing of the Occidental Merger on August 8, 2019.
	Barrel, Bbl, Bbls/d, MBbls/d		42 U.S. gallons measured at 60 degrees Fahrenheit, barrels per day, thousand barrels per day.
	Board		The board of directors of WES’s general partner.

	~~Cactus II~~Chipeta		~~Cactus II Pipeline~~Chipeta Processing, LLC, in which we ~~held~~are the managing member of and own a ~~15% interest that we sold in November 2022.~~75% interest.
~~Chipeta~~		~~Chipeta Processing, LLC.~~
	Condensate		A natural-gas liquid with a low vapor pressure compared to drip condensate, mainly composed of propane, butane, pentane, and heavier hydrocarbon fractions.
~~DBM~~		~~Delaware Basin Midstream, LLC.~~
DBM water systems		~~DBM’s produced-water~~Produced-water gathering and disposal systems in West Texas.

	DJ Basin complex		The Platte Valley, ~~system,~~Fort Lupton, Wattenberg, ~~system,~~ Lancaster, ~~plant,~~and Latham ~~plant,~~processing plants, and the Wattenberg ~~processing plant.~~gathering system.
	EBITDA		Earnings before interest, taxes, depreciation, and amortization. For a definition of “Adjusted EBITDA,” see Reconciliation of Non-GAAP Financial Measures under Part I, Item 2 of this Form 10-Q.

	Exchange Act		The Securities Exchange Act of 1934, as amended.


	FRP		Front Range Pipeline LLC, in which we own a 33.33% interest.
	GAAP		Generally accepted accounting principles in the United States.
	General partner		Western Midstream Holdings, LLC, the general partner of the Partnership.
	Imbalance		Imbalances result from (i) differences between gas and NGLs volumes nominated by customers and gas and NGLs volumes received from those customers and (ii) differences between gas and NGLs volumes received from customers and gas and NGLs volumes delivered to those customers.
	Marcellus Interest		The 33.75% interest in the Larry’s Creek, Seely, and Warrensville gas-gathering systems and related facilities located in northern ~~Pennsylvania.~~Pennsylvania that we sold in April 2024 (see Note 3—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q).
	~~MGR~~Mcf, MMcf, MMcf/d		~~Mountain Gas Resources, LLC, includes the Red Desert complex and the Granger straddle plant.~~Thousand cubic feet, million cubic feet, million cubic feet per day.
	Meritage		Meritage Midstream Services II, LLC, which was acquired by the Partnership on October 13, 2023.

	Mi Vida		Mi Vida JV LLC, in which we own a 50% interest.
	MLP		Master limited partnership.
~~Mcf, MMcf, MMcf/d~~		~~Thousand cubic feet, million cubic feet, million cubic feet per day.~~
Mont Belvieu JV		Enterprise EF78 LLC, in which we ~~own~~owned a 25% ~~interest.~~interest that we sold in February 2024 (see Note 3—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q).
	Natural-gas liquid(s) or NGL(s)		The combination of ethane, propane, normal butane, isobutane, and natural gasolines that, when removed from natural gas, become liquid under various levels of pressure and temperature.

	Occidental		Occidental Petroleum Corporation and, as the context requires, its subsidiaries, excluding our general partner.


	Panola		Panola Pipeline Company, LLC, in which we ~~own~~owned a 15% ~~interest.~~interest that we sold in March 2024 (see Note 3—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q).
	Powder River Basin complex		The Hilight system and assets acquired from Meritage, which includes a gathering system, processing plants, and the Thunder Creek NGL pipeline (see Note 3—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q).
	Produced water		Byproduct associated with the production of crude oil and natural gas that often contains a number of dissolved solids and other materials found in oil and gas reservoirs.
~~Ranch Westex~~		~~Ranch Westex JV LLC, in which we owned a 50% interest through August 2022, and a 100% interest thereafter.~~
	RCF		WES Operating’s $2.0 billion senior unsecured revolving credit facility.
	Red Bluff Express		Red Bluff Express Pipeline, LLC, in which we own a 30% interest.

	Related parties		Occidental, the Partnership’s equity interests (see Note 6—7—Equity Investments in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q), and the Partnership and WES Operating for transactions that eliminate upon consolidation.
	Rendezvous		Rendezvous Gas Services, LLC, in which we own a 22% interest.


			Defined Term						Definition
			Residue						The natural gas remaining after the unprocessed natural-gas stream has been processed or treated.
			Saddlehorn						Saddlehorn Pipeline Company, LLC, in which we ~~own~~owned a 20% ~~interest.~~

interest that we sold in March 2024 (see Note 3—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q).


~~Defined Term~~		~~Definition~~
SEC		U.S. Securities and Exchange Commission.
	Services Agreement		That certain amended and restated Services, Secondment, and Employee Transfer Agreement, dated as of December 31, 2019, by and among Occidental, Anadarko, and WES Operating GP.
	Skim oil		A crude-oil byproduct that is recovered during the produced-water gathering and disposal process.
	Springfield system		The Springfield gas-gathering system and Springfield oil-gathering system.
~~TEFR Interests~~		~~The interests in TEP, TEG, and FRP.~~

	TEG		Texas Express Gathering LLC, in which we own a 20% interest.
	TEP		Texas Express Pipeline LLC, in which we own a 20% interest.
	WES Operating		Western Midstream Operating, LP, formerly known as Western Gas Partners, LP, and its subsidiaries.
	WES Operating GP		Western Midstream Operating GP, LLC, the general partner of WES Operating.
	West Texas complex		The ~~DBM~~Delaware Basin Midstream complex and DBJV and Haley systems.
	WGRAH		WGR Asset Holding Company ~~LLC.~~LLC, a subsidiary of Occidental.
	White Cliffs		White Cliffs Pipeline, LLC, in which we own a 10% interest.
	Whitethorn LLC		Whitethorn Pipeline Company LLC, in which we ~~own~~owned a 20% ~~interest.~~interest that we sold in February 2024 (see Note 3—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q).
	Whitethorn		A crude-oil and condensate pipeline, and related storage facilities, owned by Whitethorn LLC.
	$1.25 billion Purchase Program		The $1.25 billion buyback program ending December 31, 2024. The common units may be purchased from time to time in the open market at prevailing market prices or in privately negotiated transactions.

Table of Contents

PART I. FINANCIAL INFORMATION (UNAUDITED)

Item 1. Financial Statements

WESTERN MIDSTREAM PARTNERS, LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


		Three Months Ended March 31,
		Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,

		Three Months Ended March 31,
thousands except per-unit amounts
thousands except per-unit amounts
thousands except per-unit amounts	thousands except per-unit amounts	2023		2022		2023		2022
Revenues and other	Revenues and other
Revenues and other
Revenues and other
Service revenues – fee based
Service revenues – fee based
Service revenues – fee based	Service revenues – fee based	$	661,506	$	655,952	$	1,309,373	$	1,287,550
Service revenues – product based	Service revenues – product based	46,956		70,498		93,766		111,365
Service revenues – product based
Service revenues – product based
Product sales
Product sales
Product sales	Product sales	29,659		149,736		68,684		235,325
Other	Other	152		233		432		476
Other
Other
Total revenues and other (1)
Total revenues and other (1)
Total revenues and other (1)	Total revenues and other (1)	738,273		876,419		1,472,255		1,634,716
Equity income, net – related parties	Equity income, net – related parties	42,324		48,464		81,345		98,071
Equity income, net – related parties
Equity income, net – related parties
Operating expenses
Operating expenses
Operating expenses	Operating expenses
Cost of product	Cost of product	44,746		148,556		96,205		221,404
Cost of product
Cost of product
Operation and maintenance
Operation and maintenance
Operation and maintenance	Operation and maintenance	183,431		168,153		357,670		297,129
General and administrative	General and administrative	53,405		47,848		104,522		96,450
General and administrative
General and administrative
Property and other taxes
Property and other taxes
Property and other taxes	Property and other taxes	18,547		22,662		25,378		41,104
Depreciation and amortization	Depreciation and amortization	143,492		139,036		288,118		273,618
Depreciation and amortization
Depreciation and amortization
Long-lived asset and other impairments (2)
Long-lived asset and other impairments (2)
Long-lived asset and other impairments (2)	Long-lived asset and other impairments (2)	234		90		52,635		90

Total operating expenses (3)	Total operating expenses (3)	443,855		526,345		924,528		929,795

Total operating expenses (3)

Total operating expenses (3)
Gain (loss) on divestiture and other, net	Gain (loss) on divestiture and other, net	(70)		(1,150)		(2,188)		(780)
Gain (loss) on divestiture and other, net
Gain (loss) on divestiture and other, net
Operating income (loss)
Operating income (loss)
Operating income (loss)	Operating income (loss)	336,672		397,388		626,884		802,212

Interest expense	Interest expense	(86,182)		(80,772)		(167,852)		(166,227)

Interest expense

Interest expense
Gain (loss) on early extinguishment of debt
Gain (loss) on early extinguishment of debt
Gain (loss) on early extinguishment of debt	Gain (loss) on early extinguishment of debt	6,813		91		6,813		91
Other income (expense), net	Other income (expense), net	2,872		(45)		4,087		61
Other income (expense), net
Other income (expense), net
Income (loss) before income taxes
Income (loss) before income taxes
Income (loss) before income taxes	Income (loss) before income taxes	260,175		316,662		469,932		636,137
Income tax expense (benefit)	Income tax expense (benefit)	659		1,491		2,075		3,296
Income tax expense (benefit)
Income tax expense (benefit)
Net income (loss)
Net income (loss)
Net income (loss)	Net income (loss)	259,516		315,171		467,857		632,841
Net income (loss) attributable to noncontrolling interests	Net income (loss) attributable to noncontrolling interests	6,595		8,854		11,291		17,807
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to Western Midstream Partners, LP
Net income (loss) attributable to Western Midstream Partners, LP
Net income (loss) attributable to Western Midstream Partners, LP	Net income (loss) attributable to Western Midstream Partners, LP	$	252,921	$	306,317	$	456,566	$	615,034
Limited partners’ interest in net income (loss):	Limited partners’ interest in net income (loss):
Limited partners’ interest in net income (loss):
Limited partners’ interest in net income (loss):
Net income (loss) attributable to Western Midstream Partners, LP
Net income (loss) attributable to Western Midstream Partners, LP
Net income (loss) attributable to Western Midstream Partners, LP	Net income (loss) attributable to Western Midstream Partners, LP	$	252,921	$	306,317	$	456,566	$	615,034

General partner interest in net (income) loss	General partner interest in net (income) loss	(5,821)		(6,767)		(10,507)		(13,550)

General partner interest in net (income) loss

General partner interest in net (income) loss
Limited partners’ interest in net income (loss) (4)
Limited partners’ interest in net income (loss) (4)
Limited partners’ interest in net income (loss) (4)	Limited partners’ interest in net income (loss) (4)	247,100		299,550		446,059		601,484
Net income (loss) per common unit – basic (4)	Net income (loss) per common unit – basic (4)	$	0.64	$	0.74	$	1.16	$	1.49
Net income (loss) per common unit – basic (4)
Net income (loss) per common unit – basic (4)
Net income (loss) per common unit – diluted (4)
Net income (loss) per common unit – diluted (4)
Net income (loss) per common unit – diluted (4)	Net income (loss) per common unit – diluted (4)	$	0.64	$	0.74	$	1.16	$	1.49
Weighted-average common units outstanding – basic (4)	Weighted-average common units outstanding – basic (4)	384,614		403,027		384,542		403,140
Weighted-average common units outstanding – basic (4)
Weighted-average common units outstanding – basic (4)
Weighted-average common units outstanding – diluted (4)	Weighted-average common units outstanding – diluted (4)	385,510		404,162		385,665		404,280
Weighted-average common units outstanding – diluted (4)
Weighted-average common units outstanding – diluted (4)

(1)Total revenues and other includes related-party amounts of ~~$441.6~~$499.8 million and ~~$890.4~~$448.8 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and $456.8 million and $885.5 million for the three and six months ended June 30, 2022,~~ respectively. See Note 56.

(2)See Note 78.

(3)Total operating expenses includes related-party amounts of ~~$(14.1)~~$(26.0) million and ~~$(17.2)~~$(3.1) million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and $(11.2) million and $(28.8) million for the three and six months ended June 30, 2022,~~ respectively, all primarily related to changes in imbalance positions. See Note 56.

(4)See Note 4.5.

~~See accompanying Notes to Consolidated Financial Statements.~~

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


thousands except number of units	thousands except number of units	June 30, 2023		December 31, 2022

thousands except number of units

thousands except number of units						March 31, 2024	December 31, 2023
ASSETS	ASSETS
Current assets	Current assets
Current assets
Current assets
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	213,953	$	286,656
Accounts receivable, net	Accounts receivable, net	554,222		554,263
Other current assets	Other current assets	29,028		59,506
Total current assets	Total current assets	797,203		900,425
Property, plant, and equipment	Property, plant, and equipment
Cost
Cost
Cost	Cost	13,740,911		13,365,593
Less accumulated depreciation	Less accumulated depreciation	5,139,941		4,823,993
Net property, plant, and equipment	Net property, plant, and equipment	8,600,970		8,541,600
Goodwill	Goodwill	4,783		4,783
Other intangible assets	Other intangible assets	697,241		713,075
Equity investments	Equity investments	920,123		944,696
Other assets (1)	Other assets (1)	198,630		167,049
Total assets (2)	Total assets (2)	$	11,218,950	$	11,271,628
LIABILITIES, EQUITY, AND PARTNERS’ CAPITAL	LIABILITIES, EQUITY, AND PARTNERS’ CAPITAL
Current liabilities	Current liabilities
Current liabilities
Current liabilities
Accounts and imbalance payables
Accounts and imbalance payables
Accounts and imbalance payables	Accounts and imbalance payables	$	359,298	$	360,562
Short-term debt	Short-term debt	2,532		215,780
Accrued ad valorem taxes	Accrued ad valorem taxes	35,827		72,875
Accrued liabilities	Accrued liabilities	223,887		254,640
Total current liabilities	Total current liabilities	621,544		903,857
Long-term liabilities	Long-term liabilities
Long-term debt	Long-term debt	6,824,214		6,569,582
Long-term debt
Long-term debt
Deferred income taxes	Deferred income taxes	15,279		14,424
Asset retirement obligations	Asset retirement obligations	301,975		290,021
Other liabilities	Other liabilities	433,775		385,629
Total long-term liabilities	Total long-term liabilities	7,575,243		7,259,656
Total liabilities (3)	Total liabilities (3)	8,196,787		8,163,513
Equity and partners’ capital	Equity and partners’ capital
Common units (384,613,934 and 384,070,984 units issued and outstanding at June 30, 2023, and December 31, 2022, respectively)		2,888,745		2,969,604
General partner units (9,060,641 units issued and outstanding at June 30, 2023, and December 31, 2022)		322		2,105
Common units (380,490,138 and 379,519,983 units issued and outstanding at March 31, 2024, and December 31, 2023, respectively)
Common units (380,490,138 and 379,519,983 units issued and outstanding at March 31, 2024, and December 31, 2023, respectively)
Common units (380,490,138 and 379,519,983 units issued and outstanding at March 31, 2024, and December 31, 2023, respectively)
General partner units (9,060,641 units issued and outstanding at March 31, 2024, and December 31, 2023)
Total partners’ capital	Total partners’ capital	2,889,067		2,971,709
Noncontrolling interests	Noncontrolling interests	133,096		136,406
Total equity and partners’ capital	Total equity and partners’ capital	3,022,163		3,108,115
Total liabilities, equity, and partners’ capital	Total liabilities, equity, and partners’ capital	$	11,218,950	$	11,271,628

(1)Other assets includes ~~$3.7~~$5.5 million and ~~$6.5~~$5.7 million of NGLs line-fill inventory as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively. Other assets also includes ~~$78.4~~$107.1 million and ~~$60.4~~$96.3 million of materials and supplies inventory as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively.

(2)Total assets includes related-party amounts of $982.6 million and $1.3 billion as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively, which includes related-party Accounts receivable, net of ~~$346.7~~$389.7 million and ~~$313.9~~$358.1 million as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively. See Note 56.

(3)Total liabilities includes related-party amounts of ~~$346.1~~$406.4 million and ~~$312.3~~$378.8 million as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively. See Note 56.

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP

CONSOLIDATED STATEMENTS OF EQUITY AND PARTNERS’ CAPITAL

(UNAUDITED)


			Partners’ Capital
		Partners’ Capital
thousands
thousands
thousands	thousands		Common Units		General Partner Units		Noncontrolling Interests		Total		Common Units	General Partner Units	Noncontrolling Interests	Total

Balance at December 31, 2022			$	2,969,604	$	2,105	$	136,406	$	3,108,115
Net income (loss)			198,959		4,686		4,696		208,341
Distributions to Chipeta noncontrolling interest owner			—		—		(2,240)		(2,240)
Distributions to noncontrolling interest owner of WES Operating			—		—		(4,271)		(4,271)
Distributions to Partnership unitholders			(192,039)		(4,530)		—		(196,569)
Unit repurchases (1)			(7,061)		—		—		(7,061)

Equity-based compensation expense			7,199		—		—		7,199

Other			(11,950)		—		—		(11,950)
Balance at March 31, 2023			$	2,964,712	$	2,261	$	134,591	$	3,101,564
Net income (loss)			247,100		5,821		6,595		259,516
Distributions to Chipeta noncontrolling interest owner			—		—		(1,230)		(1,230)
Distributions to noncontrolling interest owner of WES Operating			—		—		(6,860)		(6,860)
Distributions to Partnership unitholders			(329,227)		(7,760)		—		(336,987)
Unit repurchases (1)			(41)		—		—		(41)

Equity-based compensation expense			7,665		—		—		7,665

Other			(1,464)		—		—		(1,464)
Balance at June 30, 2023			$	2,888,745	$	322	$	133,096	$	3,022,163

Balance at December 31, 2023

Balance at December 31, 2023

Balance at December 31, 2023
Net income (loss)
Distributions to Chipeta noncontrolling interest owner
Distributions to noncontrolling interest owner of WES Operating
Distributions to Partnership unitholders

Equity-based compensation expense

Equity-based compensation expense

Equity-based compensation expense

Other
Other
Other
Balance at March 31, 2024


	Partners’ Capital
thousands	Common Units		General Partner Units		Noncontrolling Interests		Total
Balance at December 31, 2022	$	2,969,604	$	2,105	$	136,406	$	3,108,115
Net income (loss)	198,959		4,686		4,696		208,341
Distributions to Chipeta noncontrolling interest owner	—		—		(2,240)		(2,240)
Distributions to noncontrolling interest owner of WES Operating	—		—		(4,271)		(4,271)
Distributions to Partnership unitholders	(192,039)		(4,530)		—		(196,569)
Unit repurchases (1)	(7,061)		—		—		(7,061)

Equity-based compensation expense	7,199		—		—		7,199

Other	(11,950)		—		—		(11,950)
Balance at March 31, 2023	$	2,964,712	$	2,261	$	134,591	$	3,101,564

(1)See Note 45.

Partners’ Capital
thousands Common
Units General Partner
Units Noncontrolling
Interests Total
Balance at December 31, 2021 $ 2,966,955 $ (8,882) $ 137,687 $ 3,095,760
Net income (loss) 301,934 6,783 8,953 317,670
Distributions to Chipeta noncontrolling interest owner — — (1,984) (1,984)
Distributions to noncontrolling interest owner of WES Operating — — (2,805) (2,805)
Distributions to Partnership unitholders (131,786) (2,963) — (134,749)
Unit repurchases (1)
(5,149) — — (5,149)
Contributions of equity-based compensation from Occidental
1,949 — — 1,949
Equity-based compensation expense
5,794 — — 5,794
Net contributions from (distributions to) related parties 409 — — 409
Other (6,088) — — (6,088)
Balance at March 31, 2022 $ 3,134,018 $ (5,062) $ 141,851 $ 3,270,807
Net income (loss) 299,550 6,767 8,854 315,171
Distributions to Chipeta noncontrolling interest owner — — (1,198) (1,198)
Distributions to noncontrolling interest owner of WES Operating — — (6,007) (6,007)
Distributions to Partnership unitholders (201,667) (4,530) — (206,197)
Unit repurchases (1)
(74,068) — — (74,068)
Contributions of equity-based compensation from Occidental
241 — — 241
Equity-based compensation expense
6,797 — — 6,797
Net contributions from (distributions to) related parties 375 — — 375
Other (918) — — (918)
Balance at June 30, 2022 $ 3,164,328 $ (2,825) $ 143,500 $ 3,305,003

~~(1)See~~ ~~Note 4~~.

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended
June 30,

thousands

2023

2022

thousands

Cash flows from operating activities

Net income (loss)

467,857

632,841

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

288,118

273,618

Depreciation and amortization

Long-lived asset and other impairments

52,635

Non-cash equity-based compensation expense

14,864

14,781

Non-cash equity-based compensation expense

Deferred income taxes

855

1,920

Accretion and amortization of long-term obligations, net

4,095

3,586

Accretion and amortization of long-term obligations, net

Equity income, net – related parties

(81,345)

(98,071)

Distributions from equity-investment earnings – related parties

82,871

96,404

Distributions from equity-investment earnings – related parties

(Gain) loss on divestiture and other, net

2,188

780

(Gain) loss on divestiture and other, net

(Gain) loss on early extinguishment of debt

(6,813)

(91)

Other

399

136

Other

Changes in assets and liabilities:

(Increase) decrease in accounts receivable, net

(279,830)

(Increase) decrease in accounts receivable, net

Increase (decrease) in accounts and imbalance payables and accrued liabilities, net

(99,575)

82,909

Change in other items, net

67,057

14,366

Change in other items, net

Net cash provided by operating activities

793,247

743,439

Cash flows from investing activities

Capital expenditures

(334,570)

(191,357)

Acquisitions from third parties

Contributions to equity investments – related parties

(132)

(5,040)

Contributions to equity investments – related parties

Distributions from equity investments in excess of cumulative earnings – related parties

23,179

25,407

Proceeds from the sale of assets to third parties

—

1,096

Proceeds from the sale of assets to third parties

(Increase) decrease in materials and supplies inventory and other

(19,145)

(1,053)

Net cash used in investing activities

(330,668)

(170,947)

(Increase) decrease in materials and supplies inventory and other

Net cash provided by (used in) investing activities

Cash flows from financing activities

Borrowings, net of debt issuance costs

956,225

634,010

Borrowings, net of debt issuance costs

Repayments of debt

(918,332)

(883,548)

Repayments of debt

Commercial paper borrowings (repayments), net

Increase (decrease) in outstanding checks

(2,951)

13,038

Distributions to Partnership unitholders (1)

(533,556)

(340,946)

Distributions to Partnership unitholders (1)

Distributions to Chipeta noncontrolling interest owner

(3,470)

(3,182)

Distributions to noncontrolling interest owner of WES Operating

(11,131)

(8,812)

Net contributions from (distributions to) related parties

—

784

Distributions to noncontrolling interest owner of WES Operating

Unit repurchases

(7,102)

(79,217)

Other

(14,965)

(9,184)

Other

Net cash provided by (used in) financing activities

(535,282)

(677,057)

Net increase (decrease) in cash and cash equivalents

(72,703)

(104,565)

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

286,656

201,999

Cash and cash equivalents at end of period

213,953

97,434

Cash and cash equivalents at end of period

Supplemental disclosures

Interest paid, net of capitalized interest

158,376

181,790

Interest paid, net of capitalized interest

Income taxes paid (reimbursements received)

1,271

905

Accrued capital expenditures

116,466

51,878

Accrued capital expenditures

(1)Includes related-party amounts. See Note 56.

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

WESTERN MIDSTREAM OPERATING, LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)




		Three Months Ended June 30,				Six Months Ended June 30,
thousands	thousands	2023		2022		2023		2022
thousands
thousands
Revenues and other
Revenues and other
Revenues and other	Revenues and other
Service revenues – fee based	Service revenues – fee based	$	661,506	$	655,952	$	1,309,373	$	1,287,550
Service revenues – fee based
Service revenues – fee based
Service revenues – product based
Service revenues – product based
Service revenues – product based	Service revenues – product based	46,956		70,498		93,766		111,365
Product sales	Product sales	29,659		149,736		68,684		235,325
Product sales
Product sales
Other
Other
Other	Other	152		233		432		476
Total revenues and other (1)	Total revenues and other (1)	738,273		876,419		1,472,255		1,634,716
Total revenues and other (1)
Total revenues and other (1)
Equity income, net – related parties
Equity income, net – related parties
Equity income, net – related parties	Equity income, net – related parties	42,324		48,464		81,345		98,071
Operating expenses	Operating expenses
Operating expenses
Operating expenses
Cost of product
Cost of product
Cost of product	Cost of product	44,746		148,556		96,205		221,404
Operation and maintenance	Operation and maintenance	183,431		168,153		357,670		297,129
Operation and maintenance
Operation and maintenance
General and administrative
General and administrative
General and administrative	General and administrative	52,219		47,227		103,104		95,088
Property and other taxes	Property and other taxes	18,547		22,662		25,378		41,104
Property and other taxes
Property and other taxes
Depreciation and amortization	Depreciation and amortization	143,492		139,036		288,118		273,618
Depreciation and amortization
Depreciation and amortization
Long-lived asset and other impairments (2)
Long-lived asset and other impairments (2)
Long-lived asset and other impairments (2)	Long-lived asset and other impairments (2)	234		90		52,635		90

Total operating expenses (3)	Total operating expenses (3)	442,669		525,724		923,110		928,433

Total operating expenses (3)

Total operating expenses (3)
Gain (loss) on divestiture and other, net	Gain (loss) on divestiture and other, net	(70)		(1,150)		(2,188)		(780)
Gain (loss) on divestiture and other, net
Gain (loss) on divestiture and other, net
Operating income (loss)
Operating income (loss)
Operating income (loss)	Operating income (loss)	337,858		398,009		628,302		803,574

Interest expense	Interest expense	(86,182)		(80,772)		(167,852)		(166,227)

Interest expense

Interest expense
Gain (loss) on early extinguishment of debt
Gain (loss) on early extinguishment of debt
Gain (loss) on early extinguishment of debt	Gain (loss) on early extinguishment of debt	6,813		91		6,813		91
Other income (expense), net	Other income (expense), net	2,743		(49)		3,933		54
Other income (expense), net
Other income (expense), net
Income (loss) before income taxes
Income (loss) before income taxes
Income (loss) before income taxes	Income (loss) before income taxes	261,232		317,279		471,196		637,492
Income tax expense (benefit)	Income tax expense (benefit)	659		1,491		2,075		3,296
Income tax expense (benefit)
Income tax expense (benefit)
Net income (loss)
Net income (loss)
Net income (loss)	Net income (loss)	260,573		315,788		469,121		634,196
Net income (loss) attributable to noncontrolling interest	Net income (loss) attributable to noncontrolling interest	1,410		2,587		1,945		5,223
Net income (loss) attributable to noncontrolling interest
Net income (loss) attributable to noncontrolling interest
Net income (loss) attributable to Western Midstream Operating, LP	Net income (loss) attributable to Western Midstream Operating, LP	$	259,163	$	313,201	$	467,176	$	628,973
Net income (loss) attributable to Western Midstream Operating, LP
Net income (loss) attributable to Western Midstream Operating, LP

(2)See Note 78.

(3)Total operating expenses includes related-party amounts of ~~$(13.4)~~$(24.7) million and ~~$(15.3)~~$(1.9) million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and $(10.5) million and $(27.2) million for the three and six months ended June 30, 2022,~~ respectively, all primarily related to changes in imbalance positions. See Note 56.

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

WESTERN MIDSTREAM OPERATING, LP

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


thousands except number of units	thousands except number of units	June 30, 2023		December 31, 2022

thousands except number of units

thousands except number of units						March 31, 2024	December 31, 2023
ASSETS	ASSETS
Current assets	Current assets
Current assets
Current assets
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	208,844	$	286,101
Accounts receivable, net	Accounts receivable, net	554,202		554,263
Other current assets	Other current assets	27,696		57,291
Total current assets	Total current assets	790,742		897,655
Property, plant, and equipment	Property, plant, and equipment
Cost
Cost
Cost	Cost	13,740,911		13,365,593
Less accumulated depreciation	Less accumulated depreciation	5,139,941		4,823,993
Net property, plant, and equipment	Net property, plant, and equipment	8,600,970		8,541,600
Goodwill	Goodwill	4,783		4,783
Other intangible assets	Other intangible assets	697,241		713,075
Equity investments	Equity investments	920,123		944,696
Other assets (1)	Other assets (1)	196,875		166,450
Total assets (2)	Total assets (2)	$	11,210,734	$	11,268,259
LIABILITIES, EQUITY, AND PARTNERS’ CAPITAL	LIABILITIES, EQUITY, AND PARTNERS’ CAPITAL
Current liabilities	Current liabilities
Current liabilities
Current liabilities
Accounts and imbalance payables
Accounts and imbalance payables
Accounts and imbalance payables	Accounts and imbalance payables	$	367,132	$	404,468
Short-term debt	Short-term debt	2,532		215,780
Accrued ad valorem taxes	Accrued ad valorem taxes	35,827		72,875
Accrued liabilities	Accrued liabilities	187,828		197,289

Total current liabilities	Total current liabilities	593,319		890,412
Total current liabilities
Total current liabilities
Long-term liabilities	Long-term liabilities
Long-term debt
Long-term debt
Long-term debt	Long-term debt	6,824,214		6,569,582
Deferred income taxes	Deferred income taxes	15,279		14,424
Asset retirement obligations	Asset retirement obligations	301,975		290,021
Other liabilities	Other liabilities	432,020		383,713
Total long-term liabilities	Total long-term liabilities	7,573,488		7,257,740
Total liabilities (3)	Total liabilities (3)	8,166,807		8,148,152
Equity and partners’ capital	Equity and partners’ capital
Common units (318,675,578 units issued and outstanding at June 30, 2023, and December 31, 2022)		3,017,357		3,092,012
Common units (318,675,578 units issued and outstanding at March 31, 2024, and December 31, 2023)
Common units (318,675,578 units issued and outstanding at March 31, 2024, and December 31, 2023)
Common units (318,675,578 units issued and outstanding at March 31, 2024, and December 31, 2023)

Total partners’ capital

Total partners’ capital

Total partners’ capital	Total partners’ capital	3,017,357		3,092,012
Noncontrolling interest	Noncontrolling interest	26,570		28,095
Total equity and partners’ capital	Total equity and partners’ capital	3,043,927		3,120,107
Total liabilities, equity, and partners’ capital	Total liabilities, equity, and partners’ capital	$	11,210,734	$	11,268,259

(2)Total assets includes related-party amounts of $997.3 million and $1.3 billion as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively, which includes related-party Accounts receivable, net of ~~$346.7~~$407.9 million and ~~$313.9~~$358.1 million as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively. See Note 56.

(3)Total liabilities includes related-party amounts of ~~$353.8~~$406.0 million and ~~$356.0~~$409.5 million as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively. See Note 56.

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

WESTERN MIDSTREAM OPERATING, LP

CONSOLIDATED STATEMENTS OF EQUITY AND PARTNERS’ CAPITAL

(UNAUDITED)


thousands	thousands	Common Units		Noncontrolling Interest		Total		thousands	Common Units	Noncontrolling Interest	Total

Balance at December 31, 2022		$	3,092,012	$	28,095	$	3,120,107
Net income (loss)		208,013		535		208,548
Distributions to Chipeta noncontrolling interest owner		—		(2,240)		(2,240)
Distributions to WES Operating unitholders		(213,513)		—		(213,513)

Contributions of equity-based compensation from WES		7,058		—		7,058

Balance at March 31, 2023		$	3,093,570	$	26,390	$	3,119,960
Net income (loss)		259,163		1,410		260,573
Distributions to Chipeta noncontrolling interest owner		—		(1,230)		(1,230)
Distributions to WES Operating unitholders		(342,895)		—		(342,895)

Contributions of equity-based compensation from WES		7,519		—		7,519

Balance at June 30, 2023		$	3,017,357	$	26,570	$	3,043,927

Balance at December 31, 2023

Balance at December 31, 2023

Balance at December 31, 2023
Net income (loss)
Distributions to Chipeta noncontrolling interest owner
Distributions to WES Operating unitholders
Contributions of equity-based compensation from WES

Balance at March 31, 2024

Balance at March 31, 2024

Balance at March 31, 2024


thousands	thousands	Common Units		Noncontrolling Interest		Total		thousands	Common Units	Noncontrolling Interest	Total

Balance at December 31, 2021		$	3,063,289	$	29,377	$	3,092,666
Net income (loss)		315,772		2,636		318,408
Distributions to Chipeta noncontrolling interest owner		—		(1,984)		(1,984)
Distributions to WES Operating unitholders		(140,217)		—		(140,217)
Contributions of equity-based compensation from Occidental		1,949		—		1,949
Contributions of equity-based compensation from WES		5,663		—		5,663
Net contributions from (distributions to) related parties		409		—		409

Balance at March 31, 2022		$	3,246,865	$	30,029	$	3,276,894
Net income (loss)		313,201		2,587		315,788
Distributions to Chipeta noncontrolling interest owner		—		(1,198)		(1,198)
Distributions to WES Operating unitholders		(300,248)		—		(300,248)
Contributions of equity-based compensation from Occidental		241		—		241
Contributions of equity-based compensation from WES		6,652		—		6,652
Net contributions from (distributions to) related parties		375		—		375

Balance at June 30, 2022		$	3,267,086	$	31,418	$	3,298,504
Balance at December 31, 2022

Balance at December 31, 2022

Balance at December 31, 2022
Net income (loss)
Distributions to Chipeta noncontrolling interest owner
Distributions to WES Operating unitholders

Contributions of equity-based compensation from WES
Contributions of equity-based compensation from WES
Contributions of equity-based compensation from WES

Balance at March 31, 2023

Balance at March 31, 2023

Balance at March 31, 2023

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

WESTERN MIDSTREAM OPERATING, LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended
June 30,

thousands

2023

2022

thousands

Cash flows from operating activities

Net income (loss)

469,121

634,196

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

288,118

273,618

Depreciation and amortization

Long-lived asset and other impairments

52,635

Non-cash equity-based compensation expense

14,577

14,505

Non-cash equity-based compensation expense

Deferred income taxes

855

1,920

Accretion and amortization of long-term obligations, net

4,095

3,586

Accretion and amortization of long-term obligations, net

Equity income, net – related parties

(81,345)

(98,071)

Distributions from equity-investment earnings – related parties

82,871

96,404

Distributions from equity-investment earnings – related parties

(Gain) loss on divestiture and other, net

2,188

780

(Gain) loss on early extinguishment of debt

(6,813)

(91)

(Gain) loss on early extinguishment of debt

Other

399

136

Changes in assets and liabilities:

(Increase) decrease in accounts receivable, net

(279,830)

Increase (decrease) in accounts and imbalance payables and accrued liabilities, net

(114,355)

74,551

Increase (decrease) in accounts and imbalance payables and accrued liabilities, net

Change in other items, net

67,490

14,889

Net cash provided by operating activities

779,897

736,683

Net cash provided by operating activities

Cash flows from investing activities

Capital expenditures

(334,570)

(191,357)

Capital expenditures

Acquisitions from third parties

Contributions to equity investments – related parties

(132)

(5,040)

Contributions to equity investments – related parties

Distributions from equity investments in excess of cumulative earnings – related parties

23,179

25,407

Proceeds from the sale of assets to third parties

—

1,096

Proceeds from the sale of assets to third parties

(Increase) decrease in materials and supplies inventory and other

(19,145)

(1,053)

Net cash used in investing activities

(330,668)

(170,947)

(Increase) decrease in materials and supplies inventory and other

Net cash provided by (used in) investing activities

Cash flows from financing activities

Borrowings, net of debt issuance costs

956,225

634,010

Borrowings, net of debt issuance costs

Repayments of debt

(918,332)

(883,548)

Repayments of debt

Commercial paper borrowings (repayments), net

Increase (decrease) in outstanding checks

(2,951)

13,142

Distributions to WES Operating unitholders (1)

(556,408)

(440,465)

Distributions to WES Operating unitholders (1)

Distributions to Chipeta noncontrolling interest owner

(3,470)

(3,182)

Net contributions from (distributions to) related parties

—

784

Distributions to Chipeta noncontrolling interest owner

Other

(1,550)

(2,177)

Net cash provided by (used in) financing activities

(526,486)

(681,436)

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

(77,257)

(115,700)

Cash and cash equivalents at beginning of period

286,101

195,598

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

208,844

79,898

Cash and cash equivalents at end of period

Supplemental disclosures

Interest paid, net of capitalized interest

158,376

181,790

Interest paid, net of capitalized interest

Income taxes paid (reimbursements received)

1,271

905

Accrued capital expenditures

116,466

51,878

Accrued capital expenditures

(1)Includes related-party amounts. See Note 5.6.

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

General. Western Midstream Partners, LP is a Delaware master limited partnership formed in September 2012. Western Midstream Operating, LP (together with its subsidiaries, “WES Operating”) is a Delaware limited partnership formed in 2007 to acquire, own, develop, and operate midstream assets. Western Midstream Partners, LP owns, directly and indirectly, a 98.0% limited partner interest in WES Operating, and directly owns all of the outstanding equity interests of Western Midstream Operating GP, LLC, which holds the entire non-economic general partner interest in WES Operating.

For purposes of these consolidated financial statements, the “Partnership” refers to Western Midstream Partners, LP in its individual capacity or to Western Midstream Partners, LP and its subsidiaries, including Western Midstream Operating GP, LLC and WES Operating, as the context requires. “WES Operating GP” refers to Western Midstream Operating GP, LLC, individually as the general partner of WES Operating. The Partnership’s general partner, Western Midstream Holdings, LLC (the “general partner”), is a wholly owned subsidiary of Occidental Petroleum Corporation. “Occidental” refers to Occidental Petroleum Corporation, as the context requires, and its subsidiaries, excluding the general partner. “Anadarko” refers to Anadarko Petroleum Corporation and its subsidiaries, excluding Western Midstream Holdings, LLC. Anadarko became a wholly owned subsidiary of Occidental as a result of Occidental’s acquisition by merger of Anadarko on August 8, 2019. “Related parties” refers to Occidental (see Note 56), the Partnership’s investments accounted for under the equity method of accounting (see Note 67), and the Partnership and WES Operating for transactions that eliminate upon consolidation (see Note 56).

The Partnership is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural-gas liquids (“NGLs”), and crude oil; and gathering and disposing of produced water. In its capacity as a natural-gas processor, the Partnership also buys and sells natural gas, NGLs, and condensate on behalf of itself and ~~as an agent for~~ its customers under certain contracts. As of ~~June 30, 2023,~~March 31, 2024, the Partnership’s assets and investments consisted of the following:


		Wholly Owned and Operated	Operated Interests	Non-Operated Interests	Equity Interests
		Wholly Owned and Operated
		Wholly Owned and Operated
		Wholly Owned and Operated
Gathering systems (1)
Gathering systems (1)
Gathering systems (1)	Gathering systems (1)	17	2	3	1
Treating facilities	Treating facilities	37	3	—	—
Treating facilities
Treating facilities
Natural-gas processing plants/trains
Natural-gas processing plants/trains
Natural-gas processing plants/trains	Natural-gas processing plants/trains	25	3	—	3
NGLs pipelines	NGLs pipelines	2	—	—	5
NGLs pipelines
NGLs pipelines
Natural-gas pipelines
Natural-gas pipelines
Natural-gas pipelines	Natural-gas pipelines	6	—	—	1
Crude-oil pipelines	Crude-oil pipelines	3	1	—	3
Crude-oil pipelines
Crude-oil pipelines

(1)Includes the DBM water systems.

These assets and investments are located in Texas, New Mexico, the Rocky Mountains (Colorado, Utah, and Wyoming), and North-central Pennsylvania.

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Basis of presentation. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Partnership and entities in which it holds a controlling financial interest, including WES Operating, WES Operating GP, proportionately consolidated interests, and equity investments (see table below). All significant intercompany transactions have been eliminated.

The following table outlines the ownership interests and the accounting method of consolidation used in the consolidated financial statements for entities not wholly owned (see Note 6)7):


	Percentage Interest
Full consolidation
Chipeta (1)	75.00	%
Proportionate consolidation (2)
Springfield system	50.10	%
Marcellus Interest systems	33.75	%
Equity investments (3)
Mi Vida JV LLC (“Mi Vida”)	50.00	%
Front Range Pipeline LLC (“FRP”)	33.33	%
Red Bluff Express Pipeline, LLC (“Red Bluff Express”)	30.00	%
~~Enterprise EF78 LLC (“Mont Belvieu JV”)~~	~~25.00~~	%
Rendezvous Gas Services, LLC (“Rendezvous”)	22.00	%
Texas Express Pipeline LLC (“TEP”)	20.00	%
Texas Express Gathering LLC (“TEG”)	20.00	%
~~Whitethorn Pipeline Company LLC (“Whitethorn LLC”)~~	~~20.00~~	%
~~Saddlehorn Pipeline Company, LLC (“Saddlehorn”)~~	~~20.00~~	%
~~Panola Pipeline Company, LLC (“Panola”)~~	~~15.00~~	%
White Cliffs Pipeline, LLC (“White Cliffs”)	10.00	%

(1)The 25% third-party interest in Chipeta Processing LLC (“Chipeta”) is reflected within noncontrolling interests in the consolidated financial statements. See Noncontrolling interests below.

(2)The Partnership proportionately consolidates its associated share of the assets, liabilities, revenues, and expenses attributable to these assets.

(3)Investments in non-controlled entities over which the Partnership exercises significant influence are accounted for under the equity method of accounting. “Equity-investment throughput” refers to the Partnership’s share of average throughput for these investments.

Certain information and note disclosures commonly included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the accompanying consolidated financial statements and notes should be read in conjunction with the Partnership’s ~~2022~~2023 Form 10-K, as filed with the SEC on February ~~22, 2023.~~21, 2024. Management believes that the disclosures made are adequate to make the information not misleading.

The consolidated financial results of WES Operating are included in the Partnership’s consolidated financial statements. Throughout these notes to consolidated financial statements, and to the extent material, any differences between the consolidated financial results of the Partnership and WES Operating are discussed separately. The Partnership’s consolidated financial statements differ from those of WES Operating primarily as a result of (i) the presentation of noncontrolling interest ownership (see Noncontrolling interests below), (ii) the elimination of WES Operating GP’s investment in WES Operating with WES Operating GP’s underlying capital account, (iii) the general and administrative expenses incurred by the Partnership, which are separate from, and in addition to, those incurred by WES Operating, (iv) the inclusion of the impact of Partnership equity balances and Partnership distributions, and (v) transactions between the Partnership and WES Operating that eliminate upon consolidation.

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Presentation of the Partnership’s assets. The Partnership’s assets include assets owned and ownership interests accounted for by the Partnership under the equity method of accounting, through its 98.0% partnership interest in WES Operating, as of ~~June 30, 2023~~March 31, 2024 (see Note 67). The Partnership also owns and controls the entire non-economic general partner interest in WES Operating GP, and the Partnership’s general partner is owned by Occidental.

Use of estimates. In preparing financial statements in accordance with GAAP, management makes informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. Management evaluates its estimates and related assumptions regularly, using historical experience and other reasonable methods. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates. Effects on the business, financial condition, and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revisions become known. The information included herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the consolidated financial statements.

Noncontrolling interests. The Partnership’s noncontrolling interests in the consolidated financial statements consist of (i) the 25% third-party interest in Chipeta and (ii) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary. WES Operating’s noncontrolling interest in the consolidated financial statements consists of the 25% third-party interest in Chipeta. See Note 4.5.

Segments. The Partnership’s operations continue to be organized into a single operating segment, the assets of which gather, compress, treat, process, and transport natural gas; gather, stabilize, and transport condensate, NGLs, and crude oil; and gather and dispose of produced water in the United States.

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The standard improves reportable segment disclosure requirements for public business entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit (referred to as the “significant expense principle”). The standard will become effective for the Partnership for the fiscal year 2024 annual financial statements and interim financial statements thereafter and will be applied retrospectively for all prior periods presented in the financial statements, with early adoption permitted. The Partnership plans to adopt the standard when it becomes effective beginning with the fiscal year 2024 annual financial statements. The Partnership is currently evaluating the impact this guidance will have on disclosures in the Notes to Consolidated Financial Statements. This standard will have no impact to the Partnership’s financial statements, but will result in additional disclosure.

Equity-based compensation. During the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, the Partnership issued ~~830,272~~970,155 common units under its long-term incentive plans. Compensation expense was ~~$7.7~~$9.4 million and ~~$14.9~~$7.2 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and $6.8 million and $12.6 million for the three and six months ended June 30, 2022,~~ respectively.

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2. REVENUE FROM CONTRACTS WITH CUSTOMERS

The following table summarizes revenue from contracts with customers:




		Three Months Ended June 30,				Six Months Ended June 30,
thousands	thousands	2023		2022		2023		2022
thousands
thousands
Revenue from customers
Revenue from customers
Revenue from customers	Revenue from customers
Service revenues – fee based	Service revenues – fee based	$	661,506	$	655,952	$	1,309,373	$	1,287,550
Service revenues – fee based
Service revenues – fee based
Service revenues – product based
Service revenues – product based
Service revenues – product based	Service revenues – product based	46,956		70,498		93,766		111,365
Product sales	Product sales	29,659		149,736		68,684		235,325
Product sales
Product sales
Total revenue from customers	Total revenue from customers	738,121		876,186		1,471,823		1,634,240
Total revenue from customers
Total revenue from customers
Revenue from other than customers
Revenue from other than customers
Revenue from other than customers	Revenue from other than customers

Other	Other	152		233		432		476

Other

Other
Total revenues and other	Total revenues and other	$	738,273	$	876,419	$	1,472,255	$	1,634,716
Total revenues and other
Total revenues and other

Contract balances. Receivables from customers, which are included in Accounts receivable, net on the consolidated balance sheets were ~~$551.9~~$711.0 million and ~~$545.0~~$661.6 million as of ~~June 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, respectively.

Contract assets primarily relate to (i) revenue accrued but not yet billed under cost-of-service contracts with fixed and variable fees and (ii) accrued deficiency fees the Partnership expects to charge customers once the related performance periods are completed. The following table summarizes activity related to contract assets from contracts with customers:

thousands

Contract assets balance at December 31, ~~2022~~2023

~~22,561~~39,292

Amounts transferred to Accounts receivable, net that were included in the contract assets balance at the beginning of the period~~(1)~~

~~(2,688)~~

(1,928)

Additional estimated revenues recognized~~(2)~~

~~7,344~~1,974

Contract assets balance at ~~June 30, 2023~~March 31, 2024

~~27,217~~39,338

Contract assets at ~~June 30, 2023~~March 31, 2024

Other current assets

~~9,390~~8,708

Other assets

~~17,827~~30,630

Total contract assets from contracts with customers

~~27,217~~39,338

~~(1)Includes $(1.4) million for the three months ended June 30, 2023.~~

~~(2)Includes $2.1 million for the three months ended June 30, 2023.~~

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2. REVENUE FROM CONTRACTS WITH CUSTOMERS

Contract liabilities primarily relate to (i) fixed and variable fees under cost-of-service contracts that are received from customers for which revenue recognition is deferred, (ii) aid-in-construction payments received from customers that must be recognized over the expected period of customer benefit, and (iii) fees that are charged to customers for only a portion of the contract term and must be recognized as revenues over the expected period of customer benefit. The following table summarizes activity related to contract liabilities from contracts with customers:

thousands

Contract liabilities balance at December 31, ~~2022~~2023

~~369,285~~445,499

Cash received or receivable, excluding revenues recognized during the period~~(1)~~

~~41,226~~36,960

Revenues recognized that were included in the contract liability balance at the beginning of the period~~(2)~~

~~(13,818)~~

(11,715)

Contract liabilities balance at ~~June 30, 2023~~March 31, 2024

~~396,693~~470,744

Contract liabilities at ~~June 30, 2023~~March 31, 2024

Accrued liabilities

~~14,905~~11,875

Other liabilities

~~381,788~~458,869

Total contract liabilities from contracts with customers

~~396,693~~470,744

~~(1)Includes $17.5 million for the three months ended June 30, 2023.~~

~~(2)Includes $(3.6) million for the three months ended June 30, 2023.~~

Transaction price allocated to remaining performance obligations. Revenues expected to be recognized from certain performance obligations that are unsatisfied (or partially unsatisfied) as of ~~June 30, 2023,~~March 31, 2024, are presented in the ~~following table.~~table below. The Partnership applies the optional exemptions in Revenue from Contracts with Customers (Topic 606) and does not disclose consideration for remaining performance obligations with an original expected duration of one year or less or for variable consideration related to unsatisfied (or partially unsatisfied) performance obligations. Therefore, the following table represents only a portion of expected future revenues from existing contracts as most future revenues from customers are dependent on future variable customer volumes and, in some cases, variable commodity prices for those volumes.


thousands	thousands
Remainder of 2023		$	550,406
2024		1,144,937
Remainder of 2024
Remainder of 2024
Remainder of 2024
2025	2025	1,097,142
2026	2026	992,822
2027	2027	903,367
2028
Thereafter	Thereafter	2,513,102
Total	Total	$	7,201,776

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. ACQUISITIONS AND DIVESTITURES

Mont Belvieu JV, Whitethorn LLC, Panola, and Saddlehorn. During the first quarter of 2024, the Partnership closed on the sale of the following equity investments to third parties: (i) the 25.00% interest in Enterprise EF78 LLC (the “Mont Belvieu JV”), (ii) the 20.00% interest in Whitethorn Pipeline Company LLC (“Whitethorn LLC”), (iii) the 15.00% interest in Panola Pipeline Company, LLC (“Panola”), and (iv) the 20.00% interest in Saddlehorn Pipeline Company, LLC (“Saddlehorn”). The combined proceeds received in the first quarter of 2024 of $588.6 million includes $5.9 million in pro-rata distributions through closing, resulting in a net gain on sale of $239.7 million that was recorded as Gain (loss) on divestiture and other, net in the consolidated statement of operations. The sale of the interests in the Mont Belvieu JV and Whitethorn LLC also resolved outstanding legal proceedings associated with those assets.

Marcellus Interest systems. In April 2024, the Partnership closed on the sale of its 33.75% interest in the Marcellus Interest systems for proceeds of $206.2 million, resulting in an estimated net gain on sale of approximately $65.0 million that will be recorded as Gain (loss) on divestiture and other, net in the consolidated statement of operations during the second quarter of 2024. As of March 31, 2024, the Marcellus Interest systems satisfied criteria to be considered held for sale. At March 31, 2024, the consolidated balance sheet included current assets of $6.6 million, long-term assets of $142.7 million, current liabilities of $5.9 million, and long-term liabilities of $2.1 million associated with assets held for sale.

Meritage. On October 13, 2023, the Partnership closed on the acquisition of Meritage Midstream Services II, LLC (“Meritage”) for $885.0 million (subject to certain customary post-closing adjustments) funded with cash, including proceeds from the Partnership’s $600.0 million senior note issuance in September 2023 (see Note 10) and borrowings on the senior unsecured revolving credit facility (“RCF”). The cash purchase price, adjusted for working capital and certain customary post-closing adjustments and reduced by the $38.4 million of cash acquired (as presented in the table below), was $878.2 million.

The assets acquired, located in Converse, Campbell, and Johnson counties, Wyoming, include approximately 1,500 miles of high- and low-pressure natural-gas gathering pipelines, approximately 380 MMcf/d of natural-gas processing capacity, and the Thunder Creek NGL pipeline, which is a 120 mile, 38 MBbls/d FERC-regulated NGL pipeline that connects to the processing facility. The acquisition expands the Partnership’s existing Powder River Basin asset base, increasing total natural-gas processing capacity in that region to 440 MMcf/d.

The Meritage acquisition has been accounted for under the acquisition method of accounting. The assets acquired and liabilities assumed in the Meritage acquisition were recorded in the consolidated balance sheet at their estimated fair values as of the acquisition date. Results of operations attributable to the Meritage acquisition were included in the Partnership’s consolidated statements of operations beginning on the acquisition date in the fourth quarter of 2023.

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. ACQUISITIONS AND DIVESTITURES

The following is the final acquisition-date fair value for the assets acquired and liabilities assumed in the Meritage acquisition on October 13, 2023.


thousands
Assets acquired:
Cash and cash equivalents	$	38,412
Accounts receivable, net	34,060
Other current assets	1,980
Property, plant, and equipment	926,347
Other assets	6,498
Total assets acquired	1,007,297
Liabilities assumed:
Accounts payable and accrued liabilities	34,733
Other current liabilities	5,451
Asset retirement obligation	22,156
Other liabilities	28,356
Total liabilities assumed	90,696
Net assets acquired	$	916,601

The acquisition-date fair values are based on an assessment of the fair value of the assets acquired and liabilities assumed in the Meritage acquisition using inputs that are not observable in the market and thus represent Level 3 inputs. The fair values of the processing plants, gathering system, and related facilities and equipment are based on market and cost approaches.

4. PARTNERSHIP DISTRIBUTIONS

Partnership distributions. Under its partnership agreement, the Partnership distributes all of its available cash to unitholders of record on the applicable record date within 55 days following each quarter’s end. The amount of available cash (beyond proper reserves as defined in the partnership agreement) generally is all cash on hand at the end of the quarter, plus, at the discretion of the general partner, working capital borrowings made subsequent to the end of such quarter, less the amount of cash reserves established by the general partner to provide for the proper conduct of the Partnership’s business, including (i) to fund future capital expenditures; (ii) to comply with applicable laws, debt instruments, or other agreements; or (iii) to provide funds for unitholder distributions for any one or more of the next four quarters. Working capital borrowings generally include borrowings made under a credit facility or similar financing arrangement and are intended to be repaid or refinanced within 12 months. In all cases, working capital borrowings are used solely for working capital purposes or to fund unitholder distributions.

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. PARTNERSHIP DISTRIBUTIONS

The Board of Directors of the general partner (the “Board”) declared the following cash distributions to the Partnership’s unitholders for the periods presented:


thousands except per-unit amounts Quarters Ended	thousands except per-unit amounts Quarters Ended	Total Quarterly Per-unit Distribution		Total Quarterly Cash Distribution		Distribution Date	Record Date	thousands except per-unit amounts Quarters Ended	Total Quarterly Per-unit Distribution			Total Quarterly Cash Distribution			Distribution Date		Record Date

2022
March 31		$	0.500	$	206,197	May 13, 2022	May 2, 2022
2023

2023

2023
March 31 (1)
March 31 (1)
March 31 (1)									$	0.856		$	336,987		May 15, 2023		May 1, 2023
June 30	June 30	0.500		197,744		August 12, 2022	August 1, 2022	June 30	0.5625		221,442		221,442	August 14, 2023		August 14, 2023		July 31, 2023
September 30	September 30	0.500		197,065		November 14, 2022	October 31, 2022	September 30	0.575		223,432		223,432	November 13, 2023		November 13, 2023		November 1, 2023
December 31	December 31	0.500		196,569		February 13, 2023	February 1, 2023	December 31	0.575		223,438		223,438	February 13, 2024		February 13, 2024		February 1, 2024
2023
March 31 (1)		$	0.856	$	336,987	May 15, 2023	May 1, 2023
June 30		0.5625		221,442		August 14, 2023	July 31, 2023
2024
March 31
March 31
March 31									$	0.875		$	340,858		May 15, 2024		May 1, 2024

(1)Includes the regular quarterly distribution of $0.500 per unit, or $196.8 million, as well as the Enhanced Distribution of $0.356 per unit discussed below.

To facilitate the distribution of available cash, during 2022 the Partnership adopted a financial policy that provided for an additional distribution (“Enhanced Distribution”) to be paid in conjunction with the regular first-quarter distribution of the following year (beginning in 2023), in a target amount equal to Free cash flow generated in the prior year after subtracting Free cash flow used for the prior year’s debt repayments, regular-quarter distributions, and unit repurchases. This Enhanced Distribution is subject to Board discretion, the establishment of cash reserves for the proper conduct of the Partnership’s business and is also contingent on the attainment of prior year-end net leverage thresholds (the ratio of total principal debt outstanding less total cash on hand as of the end of such period, as compared to trailing-twelve-months Adjusted EBITDA), after taking the Enhanced Distribution for such prior year into effect. Free cash flow and Adjusted EBITDA are defined under the caption ~~Reconciliation of Non-GAAP Financial Measures~~ ~~within Part I, Item 2 of this Form 10-Q.~~ In April 2023, the Board approved an Enhanced Distribution of $0.356 per unit, or $140.1 million, related to the Partnership’s 2022 performance, which was paid in conjunction with the regular first-quarter 2023 distribution on May 15, 2023.

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~~WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~3. PARTNERSHIP DISTRIBUTIONS~~

WES Operating partnership distributions. WES Operating makes quarterly cash distributions to the Partnership and WGR Asset Holding Company LLC (“WGRAH”), a subsidiary of Occidental, in proportion to their share of limited partner interests in WES Operating. See Note 45. WES Operating made and/or declared the following cash distributions to its limited partners for the periods presented:

thousands

Quarters Ended

Total Quarterly
Cash Distribution

Distribution
Date

~~2022~~

~~March 31~~

~~213,513~~

~~May 2022~~

~~June 30~~

~~213,513~~

~~August 2022~~

~~September 30~~

~~213,513~~

~~November 2022~~

~~December 31~~

~~213,513~~

~~February 2023~~

2023

March 31 (1)

342,895

May 2023

June 30

226,260

August 2023

September 30

229,446

November 2023

December 31

229,446

February 2024

2024

March 31

347,675

May 2024

(1)Includes amounts related to the Enhanced Distribution discussed above.

In addition to the distributions above, during the three months ended June 30, 2022, WES Operating made distributions of $86.7 million to the Partnership and WGRAH. The Partnership used its portion of the distribution to repurchase common units. See ~~Note 4~~.

2021

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4.5. EQUITY AND PARTNERS’ CAPITAL

Holdings of Partnership equity. The Partnership’s common units are listed on the New York Stock Exchange under the ticker symbol “WES.” As of ~~June 30, 2023,~~March 31, 2024, Occidental held ~~190,281,578~~185,181,578 common units, representing a ~~48.3%~~47.6% limited partner interest in the Partnership, and through its ownership of the general partner, Occidental indirectly held 9,060,641 general partner units, representing a 2.3% general partner interest in the Partnership. The public held ~~194,332,356~~195,308,560 common units, representing a ~~49.4%~~50.1% limited partner interest in the Partnership.

Partnership equity repurchases. In 2022, the Board authorized the Partnership to buy back up to $1.25 billion of the Partnership’s common units through December 31, 2024 (the “$1.25 billion Purchase Program”). The common units may be purchased from time to time in the open market at prevailing market prices or in privately negotiated transactions. During the ~~six~~three months ended ~~June 30,~~March 31, 2024, there were no common units repurchased. During the three months ended March 31, 2023, the Partnership repurchased ~~287,322~~285,688 common units for an aggregate purchase price of $7.1 million. ~~During the six months ended June 30, 2022, the Partnership repurchased 3,314,562 common units on the open market for an aggregate purchase price of $79.2 million.~~ The units were canceled immediately upon receipt. As of ~~June 30, 2023,~~March 31, 2024, the Partnership had an authorized amount of ~~$755.3~~$627.8 million remaining under the program.

Holdings of WES Operating equity. As of ~~June 30, 2023,~~March 31, 2024, (i) the Partnership, directly and indirectly through its ownership of WES Operating GP, owned a 98.0% limited partner interest and the entire non-economic general partner interest in WES Operating and (ii) Occidental, through its ownership of WGRAH, owned a 2.0% limited partner interest in WES Operating, which is reflected as a noncontrolling interest within the consolidated financial statements of the Partnership (see Note 1).

Partnership’s net income (loss) per common unit. The common and general partner unitholders’ allocation of net income (loss) attributable to the Partnership was equal to their cash distributions plus their respective allocations of undistributed earnings or losses in accordance with their weighted-average ownership percentage during each period using the two-class method.

The Partnership’s basic net income (loss) per common unit is calculated by dividing the limited partners’ interest in net income (loss) by the weighted-average number of common units outstanding during the period. Diluted net income (loss) per common unit includes the effect of outstanding units issued under the Partnership’s long-term incentive plans.

The following table provides a reconciliation between basic and diluted net income (loss) per common unit:






		Three Months Ended June 30,				Six Months Ended June 30,
thousands except per-unit amounts	thousands except per-unit amounts	2023		2022		2023		2022
thousands except per-unit amounts
thousands except per-unit amounts
Net income (loss)
Net income (loss)
Net income (loss)	Net income (loss)
Limited partners’ interest in net income (loss)	Limited partners’ interest in net income (loss)	$	247,100	$	299,550	$	446,059	$	601,484
Limited partners’ interest in net income (loss)
Limited partners’ interest in net income (loss)
Weighted-average common units outstanding
Weighted-average common units outstanding
Weighted-average common units outstanding	Weighted-average common units outstanding
Basic	Basic	384,614		403,027		384,542		403,140
Basic
Basic
Dilutive effect of non-vested phantom units
Dilutive effect of non-vested phantom units
Dilutive effect of non-vested phantom units	Dilutive effect of non-vested phantom units	896		1,135		1,123		1,140
Diluted	Diluted	385,510		404,162		385,665		404,280
Diluted
Diluted
Excluded due to anti-dilutive effect
Excluded due to anti-dilutive effect
Excluded due to anti-dilutive effect	Excluded due to anti-dilutive effect	1,159		618		873		731
Net income (loss) per common unit	Net income (loss) per common unit
Net income (loss) per common unit
Net income (loss) per common unit
Basic
Basic
Basic	Basic	$	0.64	$	0.74	$	1.16	$	1.49
Diluted	Diluted	$	0.64	$	0.74	$	1.16	$	1.49
Diluted
Diluted

WES Operating’s net income (loss) per common unit. Net income (loss) per common unit for WES Operating is not calculated because it has no publicly traded units.

2122

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.6. 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
Consolidated statements of operations
Consolidated statements of operations	Consolidated statements of operations

		Three Months Ended June 30,				Six Months Ended June 30,




thousands
thousands
thousands	thousands	2023		2022		2023		2022
Revenues and other	Revenues and other
Revenues and other
Revenues and other
Service revenues – fee based
Service revenues – fee based
Service revenues – fee based	Service revenues – fee based	$	423,330	$	428,631	$	846,831	$	843,530
Service revenues – product based	Service revenues – product based	6,642		21,808		14,758		24,051
Service revenues – product based
Service revenues – product based
Product sales
Product sales
Product sales	Product sales	11,611		6,342		28,779		17,909
Total revenues and other	Total revenues and other	441,583		456,781		890,368		885,490
Total revenues and other
Total revenues and other
Equity income, net – related parties (1)
Equity income, net – related parties (1)
Equity income, net – related parties (1)	Equity income, net – related parties (1)	42,324		48,464		81,345		98,071
Operating expenses	Operating expenses
Operating expenses
Operating expenses
Cost of product (2)
Cost of product (2)
Cost of product (2)	Cost of product (2)	(15,184)		(12,148)		(19,131)		(31,691)
Operation and maintenance	Operation and maintenance	903		702		1,650		643
General and administrative (3)		217		233		284		2,208
Operation and maintenance
Operation and maintenance
General and administrative
General and administrative
General and administrative
Total operating expenses
Total operating expenses
Total operating expenses	Total operating expenses	(14,064)		(11,213)		(17,197)		(28,840)

(1)See Note 67.

(2)Includes related-party natural-gas and NGLs imbalances.

~~(3)Balances for the three and six months ended June 30, 2022, 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.

Consolidated balance sheets

thousands

June 30,
2023

December 31,
2022

March 31,
2024

December 31,
2023

Assets

Accounts receivable, net

346,688

313,937

Other current assets

3,755

1,578

Equity investments (1)

920,123

944,696

Other assets

38,623

29,058

Total assets

1,309,189

1,289,269

Liabilities

Accounts and imbalance payables

33,632

32,150

Accounts and imbalance payables

Accrued liabilities

2,350

11,756

Other liabilities (2)

310,131

268,399

Total liabilities

346,113

312,305

(1)See Note 67.

(2)Includes contract liabilities from contracts with customers. See Note 2.

2223

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.6. RELATED-PARTY TRANSACTIONS

Consolidated statements of cash flows

Three Months Ended
March 31,

thousands

Distributions from equity-investment earnings – related parties

Six Months Ended
June 30,

thousands

2023

2022

Distributions from equity-investment earnings – related parties

82,871

96,404

Contributions to equity investments – related parties

(132)

(5,040)

Distributions from equity investments in excess of cumulative earnings – related parties

23,179

25,407

Distributions from equity investments in excess of cumulative earnings – related parties

Distributions to Partnership unitholders (1)

(270,308)

(173,126)

Distributions to WES Operating unitholders (2)

(11,131)

(8,812)

Net contributions from (distributions to) related parties

—

784

Distributions to WES Operating unitholders (2)

(1)Represents common and general partner unit distributions paid to Occidental pursuant to the partnership agreement of the Partnership (see Note 34 and Note 45).

(2)Represents distributions paid to Occidental, through its ownership of WGRAH, pursuant to WES Operating’s partnership agreement (see Note 34 and Note 45).

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
Consolidated statements of operations
Consolidated statements of operations	Consolidated statements of operations

		Three Months Ended June 30,				Six Months Ended June 30,




thousands
thousands
thousands	thousands	2023		2022		2023		2022
General and administrative (1)	General and administrative (1)	$	853	$	919	$	2,134	$	3,867
General and administrative (1)
General and administrative (1)

(1)Includes ~~(i)~~ an intercompany service fee between the Partnership and WES ~~Operating and (ii) 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.Operating.

Consolidated balance sheets

thousands

June 30,
2023

December 31,
2022

thousands

March 31,
2024

December 31,
2023

Accounts receivable, net (1)

Other current assets

3,540

1,487

Other assets

36,868

28,459

Accounts and imbalance payables (1)

41,623

76,131

Accounts and imbalance payables

Accrued liabilities

2,033

11,439

(1)Includes balances related to transactions between the Partnership and WES Operating.


Consolidated statements of cash flows

	Three Months Ended March 31,
thousands		2024		2023
Distributions to WES Operating unitholders (1)		$	(229,446)	$	(213,513)

(1)Represents distributions paid to the Partnership and Occidental, through its ownership of WGRAH, pursuant to WES Operating’s partnership agreement. See Note 4 and Note 5.

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.6. RELATED-PARTY TRANSACTIONS

Consolidated statements of cash flows
Six Months Ended
June 30,
thousands 2023 2022
Distributions to WES Operating unitholders (1)
$ (556,408) $ (440,465)

~~(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 3~~ ~~and~~ ~~Note 4~~.

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%~~31% and 35% for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and 35% and 36% for the three and six months ended June 30, 2022,~~ respectively. Crude-oil and NGLs throughput (excluding equity-investment throughput) attributable to production owned or controlled by Occidental was ~~87%~~89% and 88% for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and 88% and 89% for the three and six months ended June 30, 2022,~~ respectively. Produced-water throughput attributable to production owned or controlled by Occidental was ~~76%~~77% and ~~78%~~80% for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and 81% and 82% for the three and six months ended June 30, 2022,~~ respectively.

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~~subsequently 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, either Mesquite or its successor, a subsidiary of Javelin Energy Partners, 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.

~~Table of Contents~~

~~WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~5. RELATED-PARTY TRANSACTIONS~~

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 (seeRelated-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.

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6. RELATED-PARTY TRANSACTIONS

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.

~~Table of Contents~~

~~WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

6.7. EQUITY INVESTMENTS

The following ~~table presents~~tables present the financial statement impact of the Partnership’s equity investments for the ~~six~~three months ended ~~June 30, 2023:~~March 31, 2024:


thousands
thousands
thousands	thousands	Balance at December 31, 2022		Equity income, net		Contributions		Distributions		Distributions in excess of cumulative earnings (1)		Balance at June 30, 2023		Balance at December 31, 2023	Equity income, net	Distributions	Distributions in excess of cumulative earnings (1)	Acquisitions and Divestitures (2)	Balance at March 31, 2024
White Cliffs	White Cliffs	$	16,095	$	985	$	—	$	(611)	$	(1,631)	$	14,838
Rendezvous	Rendezvous	16,114		(1,286)		—		(344)		(1,062)		13,422
Mont Belvieu JV	Mont Belvieu JV	91,310		14,103		—		(14,122)		(903)		90,388
TEG	TEG	15,856		3,462		—		(3,375)		(75)		15,868
TEP	TEP	184,687		19,939		—		(20,065)		(6,755)		177,806
FRP	FRP	192,716		22,090		—		(22,177)		(4,163)		188,466
Whitethorn LLC	Whitethorn LLC	146,595		(1,614)		132		1,753		(1,083)		145,783
Saddlehorn	Saddlehorn	104,191		11,286		—		(11,057)		(1,875)		102,545
Panola	Panola	19,311		1,186		—		(1,318)		(169)		19,010
Mi Vida	Mi Vida	48,862		3,973		—		(4,334)		(4,358)		44,143
Red Bluff Express	Red Bluff Express	108,959		7,221		—		(7,221)		(1,105)		107,854
Total	Total	$	944,696	$	81,345	$	132	$	(82,871)	$	(23,179)	$	920,123

(1)Distributions in excess of cumulative earnings, classified as investing cash flows in the consolidated statements of cash flows, are calculated on an individual-investment basis.

(2)See Note 3.

During the first quarter of 2024, the Partnership closed on the sale of the following equity investments to third parties: (i) the 25.00% interest in Mont Belvieu JV, (ii) the 20.00% interest in Whitethorn LLC, (iii) the 15.00% interest in Panola, and (iv) the 20.00% interest in Saddlehorn. See Note 3.

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.8. PROPERTY, PLANT, AND EQUIPMENT

A summary of the historical cost of property, plant, and equipment is as follows:

thousands

Estimated Useful Life

June 30,
2023

December 31,
2022

Estimated Useful Life

March 31,
2024

December 31,
2023

Land

N/A

10,982

Gathering systems – pipelines

30 years

5,558,416

5,519,592

Gathering systems – compressors

15 years

2,361,002

2,266,410

Processing complexes and treating facilities

25 years

3,452,005

3,419,201

Transportation pipeline and equipment

3 to 48 years

192,126

174,241

Produced-water disposal systems

20 years

1,031,623

932,627

Assets under construction

N/A

318,171

263,353

Other

3 to 40 years

816,586

779,187

Total property, plant, and equipment

13,740,911

13,365,593

Less accumulated depreciation

5,139,941

4,823,993

Net property, plant, and equipment

8,600,970

8,541,600

“Assets under construction” represents property that is not yet placed into productive service as of the respective balance sheet date and is excluded from capitalized costs being depreciated.

Long-lived asset impairments. During the ~~six~~three months ended ~~June 30,~~March 31, 2023, the Partnership recognized a long-lived asset impairment of $52.1 million for assets located in the Rockies due to a reduction in estimated future cash flows resulting from a contract termination notice received in the first quarter of 2023. This asset was impaired to its estimated fair value of $22.8 million. The fair value was measured using the income approach and Level-3 fair value inputs. The income approach was based on the Partnership’s projected future ~~earnings before interest, taxes, depreciation, and amortization (“EBITDA”)~~EBITDA and free cash flows, which requires significant assumptions including, among others, future throughput volumes based on current expectations of producer activity and operating costs.

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8.9. SELECTED COMPONENTS OF WORKING CAPITAL

A summary of accounts receivable, net is as follows:


		The Partnership											The Partnership			WES Operating

			The Partnership				WES Operating
thousands

thousands

thousands	thousands		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		March 31, 2024	December 31, 2023		March 31, 2024	December 31, 2023
Trade receivables, net	Trade receivables, net		$	553,461	$	548,859	$	553,461	$	548,859
Other receivables, net	Other receivables, net		761		5,404		741		5,404
Total accounts receivable, net	Total accounts receivable, net		$	554,222	$	554,263	$	554,202	$	554,263

A summary of other current assets is as follows:


		The Partnership											The Partnership			WES Operating

			The Partnership				WES Operating
thousands

thousands

thousands	thousands		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		March 31, 2024	December 31, 2023		March 31, 2024	December 31, 2023
NGLs inventory	NGLs inventory		$	1,904	$	3,797	$	1,904	$	3,797
Imbalance receivables	Imbalance receivables		2,158		32,658		2,158		32,658
Prepaid insurance	Prepaid insurance		1,289		13,262		172		11,139
Contract assets	Contract assets		9,390		3,381		9,390		3,381
Other	Other		14,287		6,408		14,072		6,316
Total other current assets	Total other current assets		$	29,028	$	59,506	$	27,696	$	57,291

A summary of accrued liabilities is as follows:


		The Partnership											The Partnership			WES Operating

			The Partnership				WES Operating
thousands

thousands

thousands	thousands		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		March 31, 2024	December 31, 2023		March 31, 2024	December 31, 2023
Accrued interest expense	Accrued interest expense		$	117,188	$	110,486	$	117,188	$	110,486
Short-term asset retirement obligations	Short-term asset retirement obligations		4,716		10,493		4,716		10,493
Short-term remediation and reclamation obligations	Short-term remediation and reclamation obligations		8,226		5,383		8,226		5,383
Income taxes payable	Income taxes payable		3,647		2,428		3,647		2,428
Contract liabilities	Contract liabilities		14,905		20,903		14,905		20,903
Accrued payroll and benefits	Accrued payroll and benefits		35,889		44,855		—		—
Other	Other		39,316		60,092		39,146		47,596
Total accrued liabilities	Total accrued liabilities		$	223,887	$	254,640	$	187,828	$	197,289

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9.10. DEBT AND INTEREST EXPENSE

WES Operating is the borrower for all outstanding debt and is expected to be the borrower for all future debt issuances. The following table presents the outstanding debt:


		June 30, 2023						December 31, 2022							March 31, 2024			December 31, 2023
thousands	thousands	Principal		Carrying Value		Fair Value (1)		Principal		Carrying Value		Fair Value (1)		thousands	Principal	Carrying Value	Fair Value (1)		Principal	Carrying Value	Fair Value (1)
Short-term debt	Short-term debt
Floating-Rate Senior Notes due 2023		$	—	$	—	$	—	$	213,138	$	213,121	$	214,823

Commercial paper

Commercial paper

Commercial paper
Finance lease liabilities	Finance lease liabilities	2,532		2,532		2,532		2,659		2,659		2,659
Total short-term debt	Total short-term debt	$	2,532	$	2,532	$	2,532	$	215,797	$	215,780	$	217,482

Long-term debt	Long-term debt
Long-term debt
Long-term debt
3.100% Senior Notes due 2025
3.100% Senior Notes due 2025
3.100% Senior Notes due 2025	3.100% Senior Notes due 2025	$	677,859	$	675,888	$	648,908	$	730,706	$	727,953	$	692,491
3.950% Senior Notes due 2025	3.950% Senior Notes due 2025	399,163		397,288		383,780		399,163		396,825		379,107
4.650% Senior Notes due 2026	4.650% Senior Notes due 2026	468,970		467,186		451,768		474,242		472,161		452,201
4.500% Senior Notes due 2028	4.500% Senior Notes due 2028	397,182		394,188		375,297		400,000		396,698		368,346
4.750% Senior Notes due 2028	4.750% Senior Notes due 2028	382,888		380,541		364,054		400,000		397,340		368,141
6.350% Senior Notes due 2029
4.050% Senior Notes due 2030	4.050% Senior Notes due 2030	1,160,471		1,152,608		1,045,828		1,200,000		1,191,345		1,053,038
6.150% Senior Notes due 2033	6.150% Senior Notes due 2033	750,000		741,039		755,873		—		—		—
5.450% Senior Notes due 2044	5.450% Senior Notes due 2044	600,000		593,954		511,260		600,000		593,878		503,742
5.300% Senior Notes due 2048	5.300% Senior Notes due 2048	700,000		687,613		587,440		700,000		687,494		580,570
5.500% Senior Notes due 2048	5.500% Senior Notes due 2048	350,000		342,847		294,126		350,000		342,783		291,194
5.250% Senior Notes due 2050	5.250% Senior Notes due 2050	1,000,000		984,069		833,880		1,000,000		983,945		829,804
RCF		—		—		—		375,000		375,000		375,000

Finance lease liabilities
Finance lease liabilities
Finance lease liabilities	Finance lease liabilities	6,993		6,993		6,993		4,160		4,160		4,160
Total long-term debt	Total long-term debt	$	6,893,526	$	6,824,214	$	6,259,207	$	6,633,271	$	6,569,582	$	5,897,794

(1)Fair value is measured using the market approach and Level-2 fair value inputs.

~~Debt activity.~~ ~~The following table presents the debt activity for the six months ended June 30, 2023:~~


~~thousands~~	~~Carrying Value~~







~~Balance at December 31, 2022~~	$	~~6,785,362~~
~~RCF borrowings~~	~~220,000~~
~~Repayments of RCF borrowings~~	~~(595,000)~~
~~Issuance of 6.150% Senior Notes due 2033~~	~~750,000~~
~~Repayment of Floating-Rate Senior Notes due 2023~~	~~(213,138)~~
~~Repayment of 3.100% Senior Notes due 2025~~	~~(52,847)~~
~~Repayment of 4.650% Senior Notes due 2026~~	~~(5,272)~~
~~Repayment of 4.500% Senior Notes due 2028~~	~~(2,818)~~
~~Repayment of 4.750% Senior Notes due 2028~~	~~(17,112)~~
~~Repayment of 4.050% Senior Notes due 2030~~	~~(39,529)~~
~~Finance lease liabilities~~	~~2,706~~
~~Other~~	~~(5,606)~~
~~Balance at June 30, 2023~~	$	~~6,826,746~~

Table of Contents

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9.10. DEBT AND INTEREST EXPENSE

Debt activity. The following table presents the debt activity for the three months ended March 31, 2024:


thousands	Carrying Value















Balance at December 31, 2023	$	7,901,304

Commercial paper borrowings (repayments), net (1)	(510,379)




Repayment of 3.100% Senior Notes due 2025	(2,650)
Repayment of 3.950% Senior Notes due 2025	(518)

Repayment of 4.500% Senior Notes due 2028	(6,919)
Repayment of 4.750% Senior Notes due 2028	(1,040)
Repayment of 4.050% Senior Notes due 2030	(3,981)
Finance lease liabilities	2,751
Other	1,905
Balance at March 31, 2024	$	7,380,473

(1)Net of borrowings and repayments related to commercial paper notes with original maturities of 90 days or less.

WES Operating Senior Notes. WES Operating issued the Fixed-Rate 3.100% Senior Notes due 2025, 4.050% Senior Notes due 2030, 5.250% Senior Notes due 2050, and the Floating-Rate Senior Notes due 2023 in January 2020. Including the effects of the issuance prices, underwriting discounts, and interest-rate adjustments, the effective interest rates of the Senior Notes due 2025, 2030, and 2050, were ~~3.791%~~3.290%, ~~4.671%~~4.169%, and ~~5.869%~~5.363%, respectively, at ~~June 30, 2023,~~March 31, 2024, and were 3.790%, 4.671%, and 5.869%, respectively, at ~~June 30, 2022.~~March 31, 2023. The effective interest rate of these notes is subject to adjustment from time to time due to a change in credit rating.

During the three months ended March 31, 2024, WES Operating purchased and retired $15.1 million of certain of its senior notes via open-market repurchases with cash from operations (see Debt activity above) and a gain of $0.5 million was recognized for the early retirement of portions of these notes. As of March 31, 2024, the 3.100% Senior Notes due 2025 were classified as long-term debt on the consolidated balance sheet as WES Operating has the ability and intent to refinance these obligations using long-term debt. Subsequent to March 31, 2024, WES Operating purchased and retired $134.9 million of certain of its senior notes via open-market repurchases.

During the third quarter of 2023, WES Operating completed the public offering of $600.0 million in aggregate principal amount of 6.350% Senior Notes due 2029. Net proceeds from the offering were used to fund a portion of the aggregate purchase price for the Meritage acquisition (see Note 3), to pay related costs and expenses, and for general partnership purposes. During the second quarter of 2023, WES Operating completed the public offering of $750.0 million in aggregate principal amount of 6.150% Senior Notes due 2033. ~~Interest is payable semi-annually on April 1st and October 1st of each year, with the initial interest payment being due on October 1, 2023.~~ Net proceeds from the offering were used to repay borrowings under the RCF and for general partnership purposes.

~~Also~~ In addition, during ~~the second quarter of~~ 2023, WES Operating purchased and retired ~~$117.6~~$276.7 million of certain of its senior notes via open-market repurchases ~~(see~~ ~~Debt activity~~ ~~above). For the three months ended June 30, 2023, a gain of $6.8 million was recognized for the early retirement of portions of these notes. Subsequent to June 30, 2023, WES Operating purchased~~ and ~~retired $159.1 million of certain of its senior notes via open-market repurchases. During the first quarter of 2023, WES Operating~~ redeemed the total principal amount outstanding on the Floating-Rate Senior Notes due 2023 at par value with cash on hand.

During the second quarter of 2022, WES Operating (i) redeemed the total principal amount outstanding of the 4.000% Senior Notes due 2022 at par value and (ii) purchased and retired $1.4 million of the 3.100% Senior Notes due 2025 via open-market repurchases.

As of ~~June 30, 2023,~~March 31, 2024, WES Operating was in compliance with all covenants under the relevant governing indentures.

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WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10. DEBT AND INTEREST EXPENSE

Revolving credit facility. In April 2023, WES Operating (i) repaid all then-outstanding borrowings under its ~~senior unsecured revolving credit facility (“RCF”)~~RCF with proceeds from the 6.150% Senior Notes due 2033 offering, and (ii) entered into an amendment to its RCF to, among other things, extend the maturity date to April 2028 and provide for a maximum borrowing capacity up to $2.0 billion, expandable to a maximum of $2.5 billion, through the maturity date.

As of ~~June 30, 2023,~~March 31, 2024, there were no outstanding borrowings and ~~$5.1~~$0.5 million of outstanding letters of credit, resulting in ~~$2.0~~$1.9 billion ~~of available~~in effective borrowing capacity under the ~~RCF.~~RCF, after taking into account the $100.0 million of outstanding commercial paper borrowings (see below), for which we maintain availability under the RCF as support for WES Operating’s commercial paper program. As of ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the interest rate on any outstanding RCF borrowings was ~~6.44%~~6.63% and ~~3.12%~~6.21%, respectively. The facility-fee rate was 0.20% at March 31, 2024 and ~~0.25% at June 30, 2023 and 2022, respectively.~~2023. As of ~~June 30, 2023,~~March 31, 2024, WES Operating was in compliance with all covenants under the RCF.

Commercial paper program. In November 2023, WES operating entered into an unsecured commercial paper program under which it may issue (and have outstanding at any one time) an aggregate principal amount up to $2.0 billion. WES Operating intends to maintain a minimum aggregate available borrowing capacity under the RCF equal to the aggregate amount of outstanding commercial paper borrowings. The maturities of the notes may vary, but may not exceed 397 days. As of March 31, 2024, there were $100.0 million aggregate principal amount of short-term notes outstanding under the commercial paper program at a weighted-average interest rate of 6.00% and weighted-average maturity of four days.

Interest expense. The following table summarizes the amounts included in interest expense:




		Three Months Ended June 30,				Six Months Ended June 30,
thousands	thousands	2023		2022		2023		2022
thousands
thousands

Long-term and short-term debt

Long-term and short-term debt

Long-term and short-term debt	Long-term and short-term debt	$	(85,088)	$	(78,577)	$	(166,239)	$	(162,005)
Finance lease liabilities	Finance lease liabilities	(230)		(31)		(393)		(73)
Finance lease liabilities
Finance lease liabilities
Commitment fees and amortization of debt-related costs	Commitment fees and amortization of debt-related costs	(3,414)		(3,068)		(6,295)		(6,100)
Commitment fees and amortization of debt-related costs
Commitment fees and amortization of debt-related costs
Capitalized interest
Capitalized interest
Capitalized interest	Capitalized interest	2,550		904		5,075		1,951

Interest expense	Interest expense	$	(86,182)	$	(80,772)	$	(167,852)	$	(166,227)

Interest expense

Interest expense

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~~WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~10.~~11. COMMITMENTS AND CONTINGENCIES

Environmental obligations. The Partnership is subject to various environmental-remediation obligations arising from federal, state, and local regulations regarding air and water quality, hazardous and solid waste disposal, and other environmental matters. As of ~~June 30, 2023,~~March 31, 2024 and December 31, ~~2022,~~2023, the consolidated balance sheets included ~~$12.1~~$3.5 million and ~~$7.4~~$7.3 million, respectively, of liabilities for remediation and reclamation obligations. The current portion of these amounts is included in Accrued liabilities, and the long-term portion of these amounts is included in Other liabilities. ~~The majority of payments related to these obligations are expected to be made over the next year. See~~ ~~Note 8~~.

Litigation and legal proceedings. From time to time, the Partnership is involved in legal, tax, regulatory, and other proceedings in various forums regarding performance, contracts, and other matters that arise in the ordinary course of business. Management is not aware of any such proceeding for which the final disposition could have a material adverse effect on the Partnership’s financial condition, results of operations, or cash flows.

Other commitments. The Partnership has payment obligations, or commitments, that include, among other things, a revolving credit facility, other third-party long-term debt, obligations related to the Partnership’s capital spending programs, pipeline and offload commitments, and various operating and finance leases. The payment obligations related to the Partnership’s capital spending programs, the majority of which is expected to be paid in the next 12 months, primarily relate to expansion, construction, and asset-integrity projects at the West Texas complex, DBM water systems, DJ Basin complex, Powder River Basin complex, and DBM oil ~~system, and DJ Basin complex.~~

system.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion analyzes our financial condition and results of operations and should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements, wherein WES Operating is fully consolidated, and which are included under Part I, Item 1 of this quarterly report, and the historical consolidated financial statements, and the notes thereto, which are included under Part II, Item 8 of the ~~2022~~2023 Form 10-K as filed with the SEC on February ~~22, 2023.~~21, 2024.

The Partnership’s assets include assets owned and ownership interests accounted for by us under the equity method of accounting, through our 98.0% partnership interest in WES Operating, as of ~~June 30, 2023~~March 31, 2024 (see Note 6—7—Equity Investments in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q). We also own and control the entire non-economic general partner interest in WES Operating GP, and our general partner is owned by Occidental.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made in this Form 10-Q, and may make in other public filings, press releases, and statements by management, forward-looking statements concerning our operations, economic performance, and financial condition. These forward-looking statements include statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “target,” “goal,” “plans,” “objective,” “should,” or similar expressions or variations on such expressions. These statements discuss future expectations, contain projections of results of operations or financial condition, or include other “forward-looking” information.

Although we and our general partner believe that the expectations reflected in our forward-looking statements are reasonable, neither we nor our general partner can provide any assurance that such expectations will prove correct. These forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from expectations include, but are not limited to, the following:

•our ability to pay distributions to our ~~unitholders;~~unitholders and the amount of such distributions;

•our assumptions about the energy market;

•future throughput (including Occidental production) that is gathered or processed by, or transported through, our assets;

•our operating results;

•competitive conditions;

•technology;

•the availability of capital resources to fund acquisitions, capital expenditures, and other contractual obligations, and our ability to access financing through the debt or equity capital markets;

•the supply of, demand for, and price of oil, natural gas, NGLs, and related products or services;

•commodity-price risks inherent in percent-of-proceeds, percent-of-product, keep-whole, and fixed-recovery processing contracts;

•weather and natural disasters;

•inflation;

•the availability of goods and services;

•general economic conditions, internationally, domestically, or in the jurisdictions in which we are doing business;

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•federal, state, and local laws and state-approved voter ballot initiatives, including those laws or ballot initiatives that limit producers’ hydraulic-fracturing activities or other oil and natural-gas development or operations;

•environmental liabilities;

•legislative or regulatory changes, including changes affecting our status as a partnership for federal income tax purposes;

•changes in the financial or operational condition of Occidental;

•the creditworthiness of Occidental or our other counterparties, including financial institutions, operating partners, and other parties;

•changes in Occidental’s capital program, corporate strategy, or other desired areas of focus;

•our commitments to capital projects;

•our ability to access liquidity under the ~~RCF;~~RCF and commercial paper program;

•our ability to repay debt;

•the resolution of litigation or other disputes;

•conflicts of interest among us and our general partner and its related parties, including Occidental, with respect to, among other things, the allocation of capital and operational and administrative costs, and our future business opportunities;

•our ability to maintain and/or obtain rights to operate our assets on land owned by third parties;

•our ability to acquire assets on acceptable terms from third parties;

•non-payment or non-performance of significant customers, including under gathering, processing, transportation, and disposal agreements;

•the timing, amount, and terms of future issuances of equity and debt securities;

•the outcome of pending and future regulatory, legislative, or other proceedings or investigations, and continued or additional disruptions in operations that may occur as we and our customers comply with any regulatory orders or other state or local changes in laws or regulations;

•~~cyber attacks~~cyber-attacks or security breaches; and

•other factors discussed below, in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” included in the ~~2022~~2023 Form 10-K, in our quarterly reports on Form 10-Q, and in our other public filings and press releases.

Risk factors and other factors noted throughout or incorporated by reference in this Form 10-Q could cause actual results to differ materially from those contained in any forward-looking statement. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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EXECUTIVE SUMMARY

We are a midstream energy company organized as a publicly traded partnership, engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, NGLs, and crude oil; and gathering and disposing of produced water. In our capacity as a natural-gas processor, we also buy and sell natural gas, NGLs, and condensate on behalf of ourselves and ~~as an agent for~~ our customers under certain contracts. To provide superior midstream service, we focus on ensuring the reliability and performance of our systems, creating sustainable cost efficiencies, enhancing our safety culture, and protecting the environment. We own or have investments in assets located in Texas, New Mexico, the Rocky Mountains (Colorado, Utah, and Wyoming), and North-central Pennsylvania. As of ~~June 30, 2023,~~March 31, 2024, our assets and investments consisted of the following:


			Wholly Owned and Operated	Operated Interests	Non-Operated Interests	Equity Interests
		Wholly Owned and Operated					Wholly Owned and Operated	Operated Interests	Non-Operated Interests	Equity Interests
Gathering systems (1)	Gathering systems (1)		17	2	3	1
Treating facilities	Treating facilities		37	3	—	—
Natural-gas processing plants/trains	Natural-gas processing plants/trains		25	3	—	3
NGLs pipelines	NGLs pipelines		2	—	—	5
Natural-gas pipelines	Natural-gas pipelines		6	—	—	1
Crude-oil pipelines	Crude-oil pipelines		3	1	—	3

(1)Includes the DBM water systems.

Significant financial and operational events during the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, included the following:

•~~WES Operating completed~~During the ~~public offering~~first quarter of ~~$750.0~~2024, we (i) closed on the sale of several equity investments to third parties for combined proceeds of $588.6 million, which included $5.9 million in ~~aggregate principal amount~~pro-rata distributions through closing, and (ii) entered into a definitive agreement for the divestment of ~~6.150% Senior Notes due 2033. Net proceeds from this offering were used to repay borrowings under~~our 33.75% interest in the ~~RCF and for general partnership purposes.~~Marcellus Interest systems, which closed in April 2024. See ~~Liquidity~~Acquisitions and ~~Capital Resources~~Divestitures within this Item 2 for additional information.

•WES Operating ~~redeemed the $213.1 million total principal amount outstanding of the Floating-Rate Senior Notes due 2023 at par value with cash on hand.~~

•~~WES Operating~~ purchased and retired ~~$117.6~~$15.1 million of certain of its senior notes via open-market repurchases.

•Our ~~second~~first-quarter ~~2023~~2024 per-unit distribution of ~~$0.5625~~$0.875 increased ~~$0.0625~~$0.300 from the ~~regular first-quarter~~fourth-quarter 2023 per-unit distribution of ~~$0.500.~~

•The Board approved an Enhanced Distribution of $0.356 per unit, or $140.1 million, related to our 2022 performance. This Enhanced Distribution was paid, along with our regular first-quarter 2023 distribution, on May 15, 2023, to our unitholders of record at the close of business on May 1, 2023.

•~~We repurchased 287,322 common units for an aggregate purchase price of $7.1 million.~~$0.575.

•Natural-gas throughput attributable to WES totaled ~~4,254 MMcf/d and 4,181~~4,990 MMcf/d for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024, representing a 4%2% increase and a 21% increase compared to the three months ended ~~March~~December 31, 2023, and ~~no change compared to the six months ended June 30, 2022,~~March 31, 2023, respectively.

•Crude-oil and NGLs throughput attributable to WES totaled ~~626 MBbls/d and 619~~565 MBbls/d for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024, representing a ~~2% increase~~20% decrease and an 8% decrease compared to the three months ended ~~March~~December 31, 2023, and ~~six months ended June 30, 2022,~~March 31, 2023, respectively.

•Produced-water throughput attributable to WES totaled ~~943 MBbls/d and 950~~1,126 MBbls/d for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024, representing a ~~1% decrease~~7% increase and an 18% increase compared to the three months ended December 31, 2023, and March 31, 2023, ~~and six months ended June 30, 2022,~~ respectively.

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•Gross margin was ~~$550.0 million and $1,087.9~~$683.7 million for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024, representing a 2%5% increase and a ~~5% decrease~~27% increase compared to the three months ended ~~March~~December 31, 2023, and ~~six months ended June 30, 2022,~~March 31, 2023, respectively. See Reconciliation of Non-GAAP Financial Measures within this Item 2.

•Adjusted gross margin for natural-gas assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged ~~$1.26 per Mcf and $1.28~~$1.32 per Mcf for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024, representing a ~~3% decrease and a 5% decrease~~2% increase compared to the three months ended ~~March~~December 31, 2023, and ~~six months ended June 30, 2022, respectively.~~March 31, 2023.

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•Adjusted gross margin for crude-oil and NGLs assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged ~~$2.58 per Bbl and $2.61~~$2.92 per Bbl for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024, representing a ~~3% decrease~~20% increase and a 4%10% increase compared to the three months ended ~~March~~December 31, 2023, and ~~six months ended June 30, 2022,~~March 31, 2023, respectively.

•Adjusted gross margin for produced-water assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged ~~$0.83 per Bbl and $0.82~~$0.95 per Bbl for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024, representing a 2%10% increase and a ~~14% decrease~~17% increase compared to the three months ended ~~March~~December 31, 2023, and ~~six months ended June 30, 2022,~~March 31, 2023, respectively.

The following table provides additional information on throughput for the periods presented below:


		Three Months Ended
		Three Months Ended
		Three Months Ended

		March 31, 2024
		Three Months Ended				Six Months Ended

		March 31, 2024
		June 30, 2023	March 31, 2023	Inc/ (Dec)		June 30, 2023	June 30, 2022	Inc/ (Dec)

		March 31, 2024
Throughput for natural-gas assets (MMcf/d)
Throughput for natural-gas assets (MMcf/d)
Throughput for natural-gas assets (MMcf/d)
Delaware Basin	Delaware Basin	1,592	1,569	1	%	1,581	1,410	12	%
DJ Basin	DJ Basin	1,309	1,306	—	%	1,308	1,329	(2)	%
DJ Basin
DJ Basin
Powder River Basin
Powder River Basin
Powder River Basin
Equity investments
Equity investments
Equity investments	Equity investments	454	423	7	%	438	498	(12)	%
Other	Other	1,061	948	12	%	1,004	1,082	(7)	%
Other
Other
Total throughput for natural-gas assets	Total throughput for natural-gas assets	4,416	4,246	4	%	4,331	4,319	—	%
Total throughput for natural-gas assets
Total throughput for natural-gas assets
Throughput for crude-oil and NGLs assets (MBbls/d)
Throughput for crude-oil and NGLs assets (MBbls/d)
Throughput for crude-oil and NGLs assets (MBbls/d)
Delaware Basin	Delaware Basin	208	205	1	%	206	195	6	%
DJ Basin	DJ Basin	66	69	(4)	%	67	85	(21)	%
DJ Basin
DJ Basin
Powder River Basin
Powder River Basin
Powder River Basin
Equity investments
Equity investments
Equity investments	Equity investments	323	314	3	%	319	367	(13)	%
Other	Other	42	35	20	%	40	37	8	%
Other
Other
Total throughput for crude-oil and NGLs assets	Total throughput for crude-oil and NGLs assets	639	623	3	%	632	684	(8)	%
Total throughput for crude-oil and NGLs assets
Total throughput for crude-oil and NGLs assets
Throughput for produced-water assets (MBbls/d)
Throughput for produced-water assets (MBbls/d)
Throughput for produced-water assets (MBbls/d)
Delaware Basin	Delaware Basin	963	977	(1)	%	970	824	18	%

Total throughput for produced-water assets	Total throughput for produced-water assets	963	977	(1)	%	970	824	18	%

Total throughput for produced-water assets

Total throughput for produced-water assets

NM—Not meaningful

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OUTLOOK

We expect our business to be affected by the below-described key trends and uncertainties. Our expectations are based on assumptions made by us and information currently available to us. To the extent our underlying assumptions about, or interpretations of, available information prove incorrect, our actual results may vary materially from expected results.

Impact of producer activity. Our business is primarily driven by the level of production of ~~crude-oil~~crude oil and natural gas by producers in our areas of operation. This activity, however, can be impacted negatively by, among other things, commodity-price fluctuations and operational challenges. Fluctuating crude-oil, natural-gas, and NGLs prices can reduce the level of our customers’ activities and change the allocation of capital within their own asset portfolios. Such fluctuations can also impact us directly to the extent we take ownership of and sell certain volumes at the tailgate of our plants for our own account. During 2020, oil and natural-gas prices were negatively impacted by the worldwide macroeconomic downturn that followed the global outbreak of COVID-19. In 2021, prices began to increase and in the first quarter of 2022, commodity prices increased significantly in connection with the war in Ukraine. For example, the New York Mercantile Exchange (“NYMEX”) West Texas Intermediate crude-oil daily settlement prices during ~~2022 ranged from a high of $123.70 per barrel in March 2022 to a low of $71.02 per barrel in December 2022, and prices during the six months ended June 30,~~ 2023 ranged from ~~a high of $83.26 per barrel in April 2023 to~~ a low of $66.74 per barrel in March ~~2023.~~2023 to a high of $93.68 per barrel in September 2023, and prices during the three months ended March 31, 2024, ranged from a low of $70.38 per barrel in January 2024 to a high of $83.47 per barrel in March 2024. Similar disruptions could occur as a consequence of the current conflict in the Middle East. The extent and duration of commodity-price volatility, and the associated direct and indirect impact on our business, cannot be predicted. To address the risks posed by fluctuating commodity prices, we intend to continue evaluating the relevant price environments and adjust our capital spending plans to reflect our customers’ anticipated activity levels, while maintaining appropriate liquidity and financial flexibility.

Additionally, even when the commodity-price environments are favorable, our customers must manage numerous operational challenges, including severe weather disruptions, downstream and produced-water takeaway constraints, seismicity concerns, new regulatory requirements, and the ability to optimize the efficiency and results of large, complex drilling programs. Our producers’ ability to mitigate or manage such challenges can have a significant impact on the volumes available for us to service in the short term. For this reason, we strive to work proactively with our customers whenever possible to provide high levels of reliability on our systems and help them meet these operational challenges as they arise.

Impact of inflation and supply-chain disruptions. The U.S. economy has recently experienced significant inflation relative to historical precedent, from, among other things, supply-chain disruptions caused by, or governmental stimulus or fiscal policies adopted in response to, the COVID-19 crisis and in connection with the war in Ukraine. More specifically, the continued bottlenecks and disruptions ~~from the lingering effects of the COVID-19 crisis~~ have caused difficulties within the U.S. and global supply chains, creating logistical delays along with labor shortages. Continued inflation has raised our costs for steel products, automation components, power supply, labor, materials, fuel, and services, which has increased our operating costs and capital expenditures. Increases in inflationary pressure could materially and negatively impact our financial results. To the extent permitted by regulations and escalation provisions in certain of our existing agreements, we have the ability to recover a portion of increased costs in the form of higher fees.

Impact of interest rates. Short- and long-term interest rates ~~increased during 2022, and have continued to increase during 2023,~~can be volatile, resulting in ~~increased~~immediate changes to interest expense on RCF borrowings and commercial paper borrowings. Any future increases in interest rates likely will result in additional increases in financing costs. As with other yield-oriented securities, our unit price could be impacted by our implied distribution yield relative to market interest rates. Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our units, and a rising interest-rate environment could have an adverse impact on our unit price and our ability to issue additional equity, or increase the cost of issuing equity, to make acquisitions, to reduce debt, or for other purposes. However, we expect our cost of capital to remain competitive, as our competitors face similar interest-rate dynamics.

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ACQUISITIONS AND DIVESTITURES

~~Cactus II.~~Mont Belvieu JV, Whitethorn LLC, Panola, and Saddlehorn. ~~In November 2022,~~During the first quarter of 2024, we ~~sold our~~closed on the sale of the following equity investments to third parties: (i) the 25.00% interest in Mont Belvieu JV, (ii) the 20.00% interest in Whitethorn LLC, (iii) the 15.00% interest in ~~Cactus II to two third parties for $264.8 million, which includes a $1.8 million pro-rata distribution through closing. Total~~Panola, and (iv) the 20.00% interest in Saddlehorn. The combined proceeds ~~were~~ received ~~during~~in the ~~fourth~~first quarter of ~~2022,~~2024 of $588.6 million includes $5.9 million in pro-rata distributions through closing, resulting in a net gain on sale of ~~$109.9~~$239.7 million that was recorded as Gain (loss) on divestiture and other, net in the consolidated ~~statements~~statement of operations. The sale of the interests in the Mont Belvieu JV and Whitethorn LLC also resolved outstanding legal proceedings associated with those assets.

~~Ranch Westex.~~ Marcellus Interest systems.In ~~September 2022,~~April 2024, we ~~acquired~~closed on the ~~remaining 50%~~sale of our 33.75% interest in ~~Ranch Westex from a third party~~the Marcellus Interest systems for ~~$40.1 million. Subsequent~~proceeds of $206.2 million, resulting in an estimated net gain on sale of approximately $65.0 million that will be recorded as Gain (loss) on divestiture and other, net in the consolidated statement of operations during the second quarter of 2024. As of March 31, 2024, the Marcellus Interest systems satisfied criteria to be considered held for sale. At March 31, 2024, the ~~acquisition, (i) we are the sole owner~~consolidated balance sheet included current assets of $6.6 million, long-term assets of $142.7 million, current liabilities of $5.9 million, and ~~operator~~long-term liabilities of ~~the asset, (ii) Ranch Westex is no longer accounted~~$2.1 million associated with assets held for ~~under the equity method of accounting, and (iii) the Ranch Westex processing plant is included as part of the operations of the West Texas complex.~~sale.

Meritage. In October 2023, we closed on the acquisition of Meritage for $885.0 million (subject to certain customary post-closing adjustments) funded with cash, including proceeds from our $600.0 million senior note issuance in September 2023and borrowings on the RCF.

See Note 3—Acquisitions and Divestitures and Note 10—Debt and Interest Expense under Part I, Item 1 of this Form 10-Q.

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RESULTS OF OPERATIONS

OPERATING RESULTS

The following tables and discussion present a summary of our results of operations:


		Three Months Ended
		Three Months Ended
		Three Months Ended
		Three Months Ended				Six Months Ended

thousands	thousands	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022

thousands

thousands
Total revenues and other (1)
Total revenues and other (1)
Total revenues and other (1)	Total revenues and other (1)	$	738,273	$	733,982	$	1,472,255	$	1,634,716
Equity income, net – related parties	Equity income, net – related parties	42,324		39,021		81,345		98,071
Equity income, net – related parties
Equity income, net – related parties
Total operating expenses (1)
Total operating expenses (1)
Total operating expenses (1)	Total operating expenses (1)	443,855		480,673		924,528		929,795
Gain (loss) on divestiture and other, net	Gain (loss) on divestiture and other, net	(70)		(2,118)		(2,188)		(780)
Gain (loss) on divestiture and other, net
Gain (loss) on divestiture and other, net
Operating income (loss)
Operating income (loss)
Operating income (loss)	Operating income (loss)	336,672		290,212		626,884		802,212
Interest expense	Interest expense	(86,182)		(81,670)		(167,852)		(166,227)
Interest expense
Interest expense
Gain (loss) on early extinguishment of debt
Gain (loss) on early extinguishment of debt
Gain (loss) on early extinguishment of debt	Gain (loss) on early extinguishment of debt	6,813		—		6,813		91
Other income (expense), net	Other income (expense), net	2,872		1,215		4,087		61
Other income (expense), net
Other income (expense), net
Income (loss) before income taxes
Income (loss) before income taxes
Income (loss) before income taxes	Income (loss) before income taxes	260,175		209,757		469,932		636,137
Income tax expense (benefit)	Income tax expense (benefit)	659		1,416		2,075		3,296
Income tax expense (benefit)
Income tax expense (benefit)
Net income (loss)
Net income (loss)
Net income (loss)	Net income (loss)	259,516		208,341		467,857		632,841
Net income (loss) attributable to noncontrolling interests	Net income (loss) attributable to noncontrolling interests	6,595		4,696		11,291		17,807
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to Western Midstream Partners, LP (2)	Net income (loss) attributable to Western Midstream Partners, LP (2)	$	252,921	$	203,645	$	456,566	$	615,034
Net income (loss) attributable to Western Midstream Partners, LP (2)
Net income (loss) attributable to Western Midstream Partners, LP (2)

(1)Total revenues and other includes amounts earned from services provided to related parties and from the sale of natural gas, condensate, and NGLs to related parties. Total operating expenses includes amounts charged by related parties for services received. See Note 5—6—Related-Party Transactions in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

(2)For reconciliations to comparable consolidated results of WES Operating, see Items Affecting the Comparability of Financial Results with WES Operating within this Item 2.

For purposes of the following discussion, any increases or decreases ~~“for the three months ended June 30, 2023”~~ refer to the comparison of the three months ended ~~June 30,~~March 31, 2024, to the three months ended December 31, 2023, or to the three months ended March 31, ~~2023; and any increases or decreases “for the six months ended June 30, 2023” refer to the comparison of the six months ended June 30,~~ 2023, ~~to the six months ended June 30, 2022.~~

as applicable.

3738

Table of Contents

Throughput


		Three Months Ended
		Three Months Ended
		Three Months Ended

		March 31, 2024
		Three Months Ended				Six Months Ended
		March 31, 2024

		June 30, 2023	March 31, 2023	Inc/ (Dec)		June 30, 2023	June 30, 2022	Inc/ (Dec)
		March 31, 2024
Throughput for natural-gas assets (MMcf/d)
Throughput for natural-gas assets (MMcf/d)
Throughput for natural-gas assets (MMcf/d)
Gathering, treating, and transportation	Gathering, treating, and transportation	395	369	7	%	382	408	(6)	%
Processing	Processing	3,567	3,454	3	%	3,511	3,413	3	%
Processing
Processing
Equity investments (1)
Equity investments (1)
Equity investments (1)	Equity investments (1)	454	423	7	%	438	498	(12)	%
Total throughput	Total throughput	4,416	4,246	4	%	4,331	4,319	—	%
Total throughput
Total throughput
Throughput attributable to noncontrolling interests (2)
Throughput attributable to noncontrolling interests (2)
Throughput attributable to noncontrolling interests (2)	Throughput attributable to noncontrolling interests (2)	162	139	17	%	150	154	(3)	%
Total throughput attributable to WES for natural-gas assets	Total throughput attributable to WES for natural-gas assets	4,254	4,107	4	%	4,181	4,165	—	%
Total throughput attributable to WES for natural-gas assets
Total throughput attributable to WES for natural-gas assets
Throughput for crude-oil and NGLs assets (MBbls/d)
Throughput for crude-oil and NGLs assets (MBbls/d)
Throughput for crude-oil and NGLs assets (MBbls/d)
Gathering, treating, and transportation	Gathering, treating, and transportation	316	309	2	%	313	317	(1)	%
Equity investments (1)	Equity investments (1)	323	314	3	%	319	367	(13)	%
Equity investments (1)
Equity investments (1)
Total throughput
Total throughput
Total throughput	Total throughput	639	623	3	%	632	684	(8)	%
Throughput attributable to noncontrolling interests (2)	Throughput attributable to noncontrolling interests (2)	13	12	8	%	13	14	(7)	%
Throughput attributable to noncontrolling interests (2)
Throughput attributable to noncontrolling interests (2)
Total throughput attributable to WES for crude-oil and NGLs assets	Total throughput attributable to WES for crude-oil and NGLs assets	626	611	2	%	619	670	(8)	%
Total throughput attributable to WES for crude-oil and NGLs assets
Total throughput attributable to WES for crude-oil and NGLs assets
Throughput for produced-water assets (MBbls/d)
Throughput for produced-water assets (MBbls/d)
Throughput for produced-water assets (MBbls/d)
Gathering and disposal	Gathering and disposal	963	977	(1)	%	970	824	18	%
Throughput attributable to noncontrolling interests (2)	Throughput attributable to noncontrolling interests (2)	20	20	—	%	20	16	25	%
Throughput attributable to noncontrolling interests (2)
Throughput attributable to noncontrolling interests (2)
Total throughput attributable to WES for produced-water assets	Total throughput attributable to WES for produced-water assets	943	957	(1)	%	950	808	18	%
Total throughput attributable to WES for produced-water assets
Total throughput attributable to WES for produced-water assets

(1)Represents our share of average throughput for investments accounted for under the equity method of accounting.

(2)~~For all periods presented, includes~~Includes (i) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary and (ii) for natural-gas assets, the 25% third-party interest in Chipeta, which collectively represent WES’s noncontrolling interests.

Natural-gas assets

Total throughput attributable to WES for natural-gas assets increased by 114 MMcf/d compared to the three months ended December 31, 2023, primarily due to (i) higher volumes at the West Texas and DJ Basin complexes due to increased production in the areas, (ii) higher volumes at the Powder River Basin complex due to the Meritage acquisition, and (iii) higher volumes on the Red Bluff Express pipeline due to the addition of a new receipt point into the pipeline. These increases were offset partially by lower volumes at the Granger complex due to a contract expiration in the fourth quarter of 2023.

Total throughput attributable to WES for natural-gas assets increased by ~~147~~883 MMcf/d ~~for~~compared to the three months ended ~~June 30,~~March 31, 2023, primarily due to (i) higher volumes at the ~~Chipeta~~Powder River Basin complex due to ~~volumes being diverted away from~~ the ~~plant for part of December 2022 through February 2023,~~Meritage acquisition, (ii) higher volumes at the West Texas ~~complex~~and DJ Basin complexes due to increased production in the ~~area,~~areas, (iii) higher volumes at the MIGC and Marcellus Interest systems and the Chipeta and Brasada complexes, (iv) higher volumes on the Red Bluff Express ~~(iv) higher volumes around the Granger complex~~pipeline due to ~~production declines and extended winter weather conditions during~~ the ~~first quarter~~addition of ~~2023,~~a new receipt point into the pipeline, and (v) higher volumes at the ~~MIGC system.~~

~~Total throughput attributable to WES for natural~~-~~gas assets increased by 16 MMcf/d for the six months ended June 30, 2023, primarily~~Springfield gas-gathering system due to ~~higher volumes at the West Texas complex due to increased production in the area. This increase was~~new third-party production. These increases were offset partially by (i) lower volumes due to production declines in the areas around the Marcellus Interest systems and DJ Basin complex, (ii) decreased volumes at the Ranch Westex plant, which we acquired in the third quarter of 2022 and is included as part of the West Texas complex subsequent to the acquisition, (iii) lower volumes due to production declines and extended winter weather conditions during the first quarter of 2023 in areas around the Granger and Red Desert complexes, (iv) lower volumes at the ~~Brasada~~Granger complex due to ~~downstream issues causing volumes to be diverted away from~~a contract expiration in the ~~plant and maintenance activities, (v) lower volumes at the Chipeta complex due to volumes being diverted away from the plant for part~~fourth quarter of ~~December 2022 through February 2023, and (vi) lower volumes at the Mi Vida plant.~~2023.

~~Table of Contents~~

Crude-oil and NGLs assets

~~Total throughput attributable to WES for crude~~-oil and NGLs assets increased by 15 MBbls/d for the three months ended June 30, 2023, primarily due to (i) higher volumes on the GNB NGL pipeline due to higher volumes received from the Chipeta complex compared to the first quarter of 2023 along with increased producer activity and (ii) higher volumes on the Saddlehorn pipeline.

Total throughput attributable to WES for crude-oil and NGLs assets decreased by 51137 MBbls/d ~~for~~compared to the ~~six~~three months ended ~~June 30,~~December 31, 2023, primarily due to ~~(i) lower volumes on~~ the ~~Cactus II pipeline, which was sold~~divestiture of Whitethorn LLC, Mont Belvieu JV, Saddlehorn, and Panola in the ~~fourth~~first quarter of ~~2022,~~2024.

Table of Contents

Total throughput attributable to WES for crude-oil and ~~(ii) lower volumes at~~NGLs assets decreased by 46 MBbls/d compared to the ~~DJ Basin oil system resulting from production declines~~three months ended March 31, 2023, primarily due to the divestiture of Whitethorn LLC, Mont Belvieu JV, Saddlehorn, and Panola in the ~~area.~~first quarter of 2024. These decreases were offset partially by (i) ~~increased~~higher volumes on the ~~Whitethorn~~Thunder Creek NGL pipeline which was acquired as part of the Meritage acquisition and (ii) higher volumes at the DBM and DJ Basin oil ~~system~~systems resulting from increased production in the ~~area.~~areas.

Produced-water assets

Total throughput attributable to WES for produced-water assets increased by ~~142~~72 MBbls/d ~~for~~and 169 MBbls/d compared to the ~~six~~three months ended ~~June 30,~~December 31, 2023, and March 31, 2023, respectively, due to higher ~~production and new third-party connections brought online during the first half of 2023.~~production.

Service Revenues


		Three Months Ended
		Three Months Ended
		Three Months Ended
		Three Months Ended						Six Months Ended

thousands except percentages	thousands except percentages	June 30, 2023		March 31, 2023		Inc/ (Dec)		June 30, 2023		June 30, 2022		Inc/ (Dec)

thousands except percentages

thousands except percentages
Service revenues – fee based
Service revenues – fee based
Service revenues – fee based	Service revenues – fee based	$	661,506	$	647,867	2	%	$	1,309,373	$	1,287,550	2	%
Service revenues – product based	Service revenues – product based	46,956		46,810		—	%	93,766		111,365		(16)	%
Service revenues – product based
Service revenues – product based
Total service revenues	Total service revenues	$	708,462	$	694,677	2	%	$	1,403,139	$	1,398,915	—	%
Total service revenues
Total service revenues

Service revenues – fee based

Service revenues – fee based increased by ~~$13.6~~$17.4 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to increases of (i) ~~$8.1~~$16.5 million at the West Texas complex as a result of a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, increased throughput, and increased deficiency fees on certain contracts with increasing throughput minimums, (ii) ~~$5.4~~$13.4 million at the DBM water systems due to a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and increased throughput, (iii) $6.3 million at the Powder River Basin complex as a result of increased throughput attributable to the acquisition of Meritage, and (iv) $5.9 million at the DJ Basin complex due to increased ~~throughput and deficiency fees.~~throughput. These increases were offset partially ~~offset~~ by ~~a decrease~~decreases of ~~$2.8~~(i) $12.6 million at the Springfield system primarily due to an annual cost-of-service rate adjustment that increased revenue during the fourth quarter of 2023, (ii) $7.4 million at the DJ Basin oil system primarily due to ~~decreased throughput.~~an annual cost-of-service rate adjustment that increased revenue during the fourth quarter of 2023, partially offset by increased throughput, and (iii) $2.3 million at the Granger complex primarily due to a contract expiration in the fourth quarter of 2023.

Service revenues – fee based increased by ~~$21.8~~$133.4 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to increases of (i) ~~$45.7~~$48.9 million at the Powder River Basin complex attributable to the acquisition of Meritage, (ii) $45.8 million at the West Texas complex as a result of increased throughput, ~~(ii) $4.3 million at the DBM oil system due to increased throughput, partially offset by~~ a ~~lower~~higher average fee resulting from a cost-of-service rate redetermination effective January 1, ~~2023,~~2024, and increased deficiency fees on certain contracts with increasing throughput minimums, (iii) ~~$3.0~~$26.0 million at the DBM water systems ~~due to~~as a result of increased throughput ~~partially offset by decreased deficiency fees~~ and a ~~lower~~higher average fee resulting from a cost-of-service rate redetermination effective January 1, ~~2023.~~2024, (iv) $20.4 million at the DJ Basin complex due to increased throughput, and (v) $6.7 million at the DBM oil system as a result of increased throughput and a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024. These increases were offset partially ~~offset~~ by decreases of (i) ~~$10.3~~$6.6 million at the ~~Chipeta~~Brasada complex due to ~~decreased deficiency fees and throughput,~~a change in contract terms effective July 1, 2023, (ii) ~~$8.4~~$2.8 million at the DJ Basin oil system primarily due to decreased ~~throughput,~~deficiency fees on demand volumes, partially offset by increased ~~deficiency fees,~~throughput, and (iii) ~~$6.1~~$2.3 million at the ~~Springfield system~~Granger complex primarily due to ~~decreased demand-fee revenue, and (iv) $4.5 million at~~a contract expiration in the ~~Marcellus Interest systems due to decreased throughput.~~fourth quarter of 2023.

Service revenues – product based

Service revenues – product based increased by $17.2 million compared to the three months ended December 31, 2023, primarily due to increases of $12.4 million at the West Texas complex as a result of increased volumes sold and $2.4 million at the DJ Basin complex due to increased average prices.

Service revenues – product based ~~decreased~~increased by ~~$17.6~~$19.9 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to ~~decreases~~increases of (i) $5.1 million at the Red Desert complex due to decreased average prices and volumes sold, (ii) $4.3 million, $4.1 million, and $3.5 million at the Granger complex, Hilight system, and DJ Basin complex, respectively, due to decreased average prices, and (iii) $3.6 million at the Chipeta complex due to decreased volumes sold. These decreases were partially offset by an increase of $4.0$14.8 million at the West Texas complex primarily due to increased volumes sold and $2.4 million at the DBM water systems due to increased ~~electricity-related rates billed to customers.~~

volumes sold and average prices.

3940

Table of Contents

Product Sales


		Three Months Ended
		Three Months Ended
		Three Months Ended
		Three Months Ended						Six Months Ended

thousands except percentages and per-unit amounts	thousands except percentages and per-unit amounts	June 30, 2023		March 31, 2023		Inc/ (Dec)		June 30, 2023		June 30, 2022		Inc/ (Dec)

thousands except percentages and per-unit amounts

thousands except percentages and per-unit amounts
Natural-gas sales
Natural-gas sales
Natural-gas sales	Natural-gas sales	$	7,237	$	2,775	161	%	$	10,012	$	66,363	(85)	%
NGLs sales	NGLs sales	22,422		36,250		(38)	%	58,672		168,962		(65)	%
NGLs sales
NGLs sales
Total Product sales
Total Product sales
Total Product sales	Total Product sales	$	29,659	$	39,025	(24)	%	$	68,684	$	235,325	(71)	%
Per-unit gross average sales price:	Per-unit gross average sales price:
Per-unit gross average sales price:
Per-unit gross average sales price:
Natural gas (per Mcf)
Natural gas (per Mcf)
Natural gas (per Mcf)	Natural gas (per Mcf)	$	1.33	$	1.75	(24)	%	$	1.53	$	5.76	(73)	%
NGLs (per Bbl)	NGLs (per Bbl)	23.65		28.78		(18)	%	26.17		46.53		(44)	%
NGLs (per Bbl)
NGLs (per Bbl)

Natural-gas sales

Natural-gas sales decreased by $11.0 million compared to the three months ended December 31, 2023, primarily due to decreases of (i) $8.3 million at the West Texas complex as a result of decreased volumes sold and average prices and (ii) $2.8 million at the DJ Basin complex as a result of decreased volumes sold.

Natural-gas sales increased by ~~$4.5~~$0.4 million ~~for~~compared to the three months ended ~~June 30,~~March 31, 2023, primarily due to an increase of $2.7 million at the DJ Basin complex as a result of increased ~~volumes sold,~~average prices, partially offset by decreased ~~average prices at the DJ Basin complex.~~

~~Natural~~-~~gas sales decreased~~volumes sold. This increase was offset partially by ~~$56.4 million for the six months ended June 30, 2023, primarily due to decreases~~a decrease of ~~(i) $53.4~~$2.2 million at the West Texas complex due to decreased average prices, partially offset by ~~higher volumes sold, and (ii) $8.2 million at the Red Desert complex due to decreased average prices and~~increased volumes sold.

NGLs sales

NGLs sales ~~decreased~~increased by ~~$13.8~~$5.6 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to increases of (i) $3.7 million and $1.6 million at the DJ Basin and Chipeta complexes, respectively, due to increased average prices and (ii) $2.4 million at the Powder River Basin complex as a result of increased volumes sold attributable to the acquisition of Meritage. These increases were offset partially by a decrease of $8.2 million at the West Texas complex due to a mix in contract structures, partially offset by increased average prices.

NGLs sales decreased by $0.2 million compared to the three months ended March 31, 2023, primarily due to decreases of ~~$7.1~~$7.7 million and ~~$6.6~~$5.8 million at the DJ Basin and West Texas complexes, respectively, due to decreased average ~~prices.~~prices, partially offset by increased volumes sold. These decreases were offset partially ~~offset~~ by ~~an increase~~increases of (i) $6.4 million at the Powder River Basin complex attributable to the acquisition of Meritage, (ii) $2.5 million at the DBM water systems due to increased skim-oil volumes sold and average prices, and (iii) $2.4 million at the Chipeta complex due to ~~higher~~increased volumes sold.

NGLs sales decreased by $110.3 million for the six months ended June 30, 2023, primarily due to decreases of (i) $75.3 million and $7.1 million at the West Texas and Granger complexes, respectively, due to decreased volumes sold and average prices, (ii) $16.0 million at the Chipeta complex due to decreased average prices, and (iii) $6.7 million at the Brasada complex due to a contract expiration in the third quarter of 2022.

Equity Income, Net – Related Parties

Three Months Ended

Six Months Ended

thousands except percentages

June 30, 2023

March 31, 2023

Inc/
(Dec)

June 30, 2023

June 30, 2022

Inc/
(Dec)

thousands except percentages

Equity income, net – related parties

42,324

39,021

81,345

98,071

(17)

Equity income, net – related parties

Equity income, net – related parties ~~increased~~decreased by $3.3 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to ~~increases~~decreases of ~~(i)~~$6.9 million at Mont Belvieu JV and $2.2 million at ~~FRP and (ii) $1.0~~Saddlehorn due to the divestment of our interests in the first quarter of 2024. These decreases were partially offset by an increase of $4.8 million at ~~Mi Vida.~~Whitethorn LLC due to commercial activities prior to the divestment of our interest in the first quarter of 2024.

Equity income, net – related parties decreased by ~~$16.7~~$6.2 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to decreases of ~~(i) $7.3~~$6.8 million at ~~Cactus II~~Mont Belvieu JV due to the ~~divestiture~~divestment of our interest in the ~~fourth~~first quarter of ~~2022 (see~~ ~~Acquisitions~~2024 and ~~Divestitures~~ ~~within this Item 2), (ii) $4.7~~$2.9 million at ~~Ranch Westex, which we acquired in the third quarter~~TEP. These decreases were partially offset by increases of ~~2022~~$1.9 million and ~~is included as part of the West Texas complex subsequent to the acquisition (see~~ ~~Acquisitions and Divestitures~~ ~~within this Item 2), and (iii) $3.1~~$1.8 million at ~~Mi Vida due to a decrease in gross margin.~~Red Bluff Express and FRP, respectively.

4041

Table of Contents

Cost of Product and Operation and Maintenance Expenses


		Three Months Ended
		Three Months Ended
		Three Months Ended
		Three Months Ended						Six Months Ended

thousands except percentages	thousands except percentages	June 30, 2023		March 31, 2023		Inc/ (Dec)		June 30, 2023		June 30, 2022		Inc/ (Dec)

thousands except percentages

thousands except percentages
Residue purchases
Residue purchases
Residue purchases	Residue purchases	$	6,066	$	15,638	(61)	%	$	21,704	$	100,160	(78)	%
NGLs purchases	NGLs purchases	48,942		51,829		(6)	%	100,771		173,054		(42)	%
NGLs purchases
NGLs purchases
Other
Other
Other	Other	(10,262)		(16,008)		36	%	(26,270)		(51,810)		49	%
Cost of product	Cost of product	44,746		51,459		(13)	%	96,205		221,404		(57)	%
Cost of product
Cost of product
Operation and maintenance
Operation and maintenance
Operation and maintenance	Operation and maintenance	183,431		174,239		5	%	357,670		297,129		20	%
Total Cost of product and Operation and maintenance expenses	Total Cost of product and Operation and maintenance expenses	$	228,177	$	225,698	1	%	$	453,875	$	518,533	(12)	%
Total Cost of product and Operation and maintenance expenses
Total Cost of product and Operation and maintenance expenses

Residue purchases

Residue purchases decreased by ~~$9.6~~$6.4 million ~~for~~compared to the three months ended ~~June 30,~~March 31, 2023, primarily due to decreases of (i) ~~$5.6~~$5.1 million at the Granger complex due to ~~decreased volumes purchased~~a contract expiration in the fourth quarter of 2023 and (ii) ~~$1.4 million at the Red Desert complex due to lower average prices.~~

~~Residue purchases decreased by $78.5 million for the six months ended June 30, 2023, primarily due to decreases of (i) $54.7~~$1.9 million at the West Texas complex attributable to changes in contract mix during 2022 and lower average prices, (ii) $9.4 million and $6.7 million at the Chipeta and Red Desert complexes, respectively, due to decreased volumes purchased and lower average prices, and (iii) $5.4 million at the DJ Basin complex primarily due to lower average prices.

NGLs purchases

NGLs purchases ~~decreased~~increased by ~~$2.9~~$10.1 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to increased volumes purchased at the West Texas complex.

NGLs purchases increased by $18.6 million compared to the three months ended March 31, 2023, primarily due to increases of (i) $16.7 million at the West Texas complex attributable to increased volumes purchased, (ii) $2.4 million at the Powder River Basin complex attributable to the acquisition of Meritage, and (iii) $2.3 million at the DBM water systems due to increased skim-oil volumes and average prices. These increases were offset partially by a decrease of $5.2 million at the DJ Basin complex primarily due to a change in contract mix during the first quarter of 2024.

Other items

Other items decreased by $6.1 million compared to the three months ended December 31, 2023, primarily due to a decrease of ~~$2.8~~$10.3 million at the DJWest Texas complex due to changes in imbalance positions, partially offset by an increase of $4.2 million at the Powder River Basin complex due to ~~lower average prices.~~changes in imbalance positions.

~~NGLs purchases~~Other items decreased by ~~$72.3~~$17.6 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to decreases of (i) ~~$42.6 million, $9.2 million, and $4.6~~$13.7 million at the West Texas ~~DJ Basin, and Granger complexes, respectively, primarily due to lower average prices, (ii) $6.8 million at the Brasada~~ complex ~~due to a contract expiration in the third quarter of 2022, and (iii) $5.6 million at the Chipeta complex due to decreased volumes purchased and lower average prices.~~

~~Other items~~

~~Other items increased by $5.7 million for the three months ended June 30, 2023, primarily~~ due to changes in imbalance positions, ~~across several systems.~~

~~Other items increased~~partially offset by ~~$25.5~~higher offload costs, and (ii) $2.7 million ~~for the six months ended June 30, 2023, primarily due to an increase of $29.6~~and $2.6 million at the Chipeta and DJ Basin ~~complex, partially offset by a decrease of $2.8 million at the Red Desert complex,~~complexes, respectively, attributable to changes in imbalance positions.

Operation and maintenance expense

Operation and maintenance expense ~~increased~~decreased by ~~$9.2~~$5.5 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to ~~increases~~decreases of (i) ~~$6.6~~$2.4 million in equipment rental costs, (ii) $2.0 million in each of utility expense and ~~(ii) $3.2~~equipment maintenance and repair expense, (iii) $1.8 million ~~for~~in mechanical-integrity costs, and (iv) $1.7 million in land-related costs. These decreases were offset partially by an increase of $5.9 million in salaries and wages costs.

Operation and maintenance expense increased by ~~$60.5~~$20.7 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to increases of (i) ~~$19.7~~$11.4 million ~~for maintenance and repair expense, (ii) $12.4 million for~~in salaries and wages costs, ~~(iii) $5.4 million in regulatory and environmental expense, (iv) $4.9 million in mechanical-integrity costs, (v)~~(ii) $4.6 million in utility expense, ~~(vi) $3.9~~(iii) $2.9 million in ~~land-related costs,~~chemical and ~~(vii) $3.3~~treating services, and (iv) $2.9 million in ~~water-disposal~~land-related costs.

4142

Table of Contents

Other Operating Expenses

Three Months Ended Six Months Ended
thousands except percentages June 30, 2023 March 31, 2023 Inc/
(Dec) June 30, 2023 June 30, 2022 Inc/
(Dec)
General and administrative $ 53,405 $ 51,117 4 % $ 104,522 $ 96,450 8 %
Property and other taxes 18,547 6,831 172 % 25,378 41,104 (38) %
Depreciation and amortization 143,492 144,626 (1) % 288,118 273,618 5 %
Long-lived asset and other impairments
234 52,401 (100) % 52,635 90 NM
Total other operating expenses $ 215,678 $ 254,975 (15) % $ 470,653 $ 411,262 14 %

NM—~~Not meaningful~~


	Three Months Ended


thousands except percentages	March 31, 2024		December 31, 2023		Inc/ (Dec)		March 31, 2023		Inc/ (Dec)
General and administrative	$	67,839	$	73,060	(7)	%	$	51,117	33	%
Property and other taxes	13,920		16,497		(16)	%	6,831		104	%
Depreciation and amortization	157,991		165,187		(4)	%	144,626		9	%
Long-lived asset and other impairments	23		4		NM		52,401		(100)	%

Total other operating expenses	$	239,773	$	254,748	(6)	%	$	254,975	(6)	%

General and administrative expenses

General and administrative expenses ~~increased~~decreased by ~~$2.3~~$5.2 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to ~~increases~~a decrease of ~~(i) $3.9 million in corporate-related costs, primarily related to information technology costs, and (ii) $2.9~~$6.2 million in contract labor and consulting ~~costs. These increases were~~costs, partially offset by ~~a decrease~~an increase of ~~$4.4~~$1.1 million in personnel costs.

General and administrative expenses increased by ~~$8.1~~$16.7 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to increases of (i) ~~$3.1 million in corporate-related costs, primarily related to information technology costs, (ii) $2.5~~$7.1 million in personnel costs, (ii) $5.5 million in information technology costs, and (iii) ~~$2.5~~$1.6 million in contract labor and consulting ~~costs.~~expense.

Property and other taxes

Property and other taxes ~~increased~~decreased by ~~$11.7~~$2.6 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to ~~decreases~~a decrease in the ad valorem property tax accrual ~~during the first quarter of 2023~~ related to the finalization of ~~2022~~2023 assessments at the DJ Basin complex.

Property and other taxes ~~decreased~~increased by ~~$15.7~~$7.1 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to ~~decreases in the~~a lower ad valorem property tax accrual recorded during the first quarter of 2023 related to the finalization of 2022 assessments at the DJ Basin complex.

Depreciation and amortization expense

Depreciation and amortization expense decreased by ~~$1.1~~$7.2 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to ~~a decrease~~decreases of ~~$5.1~~(i) $2.9 million at the DJ Basin complex due to acceleration of depreciation expense during the first quarter of 2023, partially offset by increases of (i) $2.3 million related to depreciation for capitalized information technology implementation costsupdated salvage values and (ii) ~~$2.3~~$1.7 million and $1.2 million at the ~~West Texas complex as a result of accretion adjustments~~Red Desert and Powder River Basin complexes, respectively, due to ~~our~~ asset retirement obligation ~~during the first quarter of 2023.~~revisions.

Depreciation and amortization expense increased by ~~$14.5~~$13.4 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to increases of (i) ~~$4.5~~$15.1 million at the Powder River Basin complex attributable to the acquisition of Meritage and (ii) $4.8 million and ~~$2.5~~$3.1 million at the West Texas complex and DBM water systems, respectively, primarily related to capital projects being placed into service. These increases were offset partially by a decrease of $7.9 million at the DJ Basin ~~and Red Desert complexes, respectively,~~complex primarily due to acceleration of depreciation expense ~~as well as accretion adjustments to our asset retirement obligation~~ during 2023 ~~(ii) $3.5 million at the West Texas complex primarily resulting from capital projects being placed into service,~~ and ~~(iii) $2.5 million related to depreciation for capitalized information technology implementation costs.~~updated salvage values.

Long-lived asset and other impairment expense

~~Long~~-~~lived~~Long-lived asset and other impairment expense for the three months ended March 31, 2023, was primarily due to a $52.1 million impairment for assets located in the Rockies.

For further information on Long-lived asset and other impairment expense, see Note 7—8—Property, Plant, and Equipment in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

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Interest Expense

Three Months Ended Six Months Ended
thousands except percentages June 30, 2023 March 31, 2023 Inc/
(Dec) June 30, 2023 June 30, 2022 Inc/
(Dec)
Long-term and short-term debt
$ (85,088) $ (81,151) 5 % $ (166,239) $ (162,005) 3 %
Finance lease liabilities (230) (163) 41 % (393) (73) NM
Commitment fees and amortization of debt-related costs (3,414) (2,881) 19 % (6,295) (6,100) 3 %
Capitalized interest 2,550 2,525 1 % 5,075 1,951 160 %
Interest expense $ (86,182) $ (81,670) 6 % $ (167,852) $ (166,227) 1 %

~~Interest expense~~


	Three Months Ended


thousands except percentages	March 31, 2024		December 31, 2023		Inc/ (Dec)		March 31, 2023		Inc/ (Dec)
Long-term and short-term debt	$	(95,956)	$	(98,977)	(3)	%	$	(81,151)	18	%
Finance lease liabilities	(677)		(467)		45	%	(163)		NM
Commitment fees and amortization of debt-related costs	(3,200)		(3,196)		—	%	(2,881)		11	%
Capitalized interest	5,327		5,018		6	%	2,525		111	%

Interest expense	$	(94,506)	$	(97,622)	(3)	%	$	(81,670)	16	%

Interest expense ~~increased~~decreased by ~~$4.5~~$3.1 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to a decrease of $5.7 million resulting from no outstanding borrowings under the RCF during the first quarter of 2024, partially offset by an increase of ~~$11.3~~$2.7 million due to borrowings on the commercial paper program that was established during the fourth quarter of 2023.

Interest expense increased by $12.8 million compared to the three months ended March 31, 2023, primarily due to increases of (i) $11.7 million of interest incurred on the 6.150% Senior Notes due 2033 that were issued during the second quarter of 2023, ~~partially offset by a decrease of $6.3 million due to lower outstanding borrowings under the RCF during the second quarter of 2023.~~

~~Interest expense increased by $1.6 million for the six months ended June 30, 2023, primarily due to increases of (i) $11.3~~(ii) $9.8 million of interest incurred on the ~~6.150%~~6.350% Senior Notes due ~~2033~~2029 that were issued during the ~~second~~third quarter of 2023, and ~~(ii) $5.8~~(iii) $5.7 million ~~primarily~~ due to ~~higher outstanding~~ borrowings ~~and average interest rates under~~on the ~~RCF~~commercial paper program that was established during the ~~first~~fourth quarter of 2023. These increases were offset partially by decreases of (i) ~~$5.1 million due to the redemption of the total principal amount outstanding of the 4.000% Senior Notes due 2022 during the second quarter of 2022, (ii) $3.7~~$4.5 million due to credit-rating related interest rate changes and a lower outstanding ~~balance~~balances on certain senior notes, (ii) $7.0 million due to no outstanding borrowings under the ~~4.050% Senior Notes due 2030~~RCF during the first quarter of 2024, and ~~3.100% Senior Notes due 2025,~~ (iii) ~~$3.1~~$2.8 million due to higher capitalized interest, (iv) $2.0 million due to the redemption of the total principal amount outstanding of the Floating-Rate Senior Notes due 2023 during the first quarter of 2023, and (v) $1.9 million due to credit-rating related interest rate changes on the 5.250% Senior Notes due 2050.

interest. See Liquidity and Capital Resources—Debt and credit facilities within this Item 2.

~~Other Income (Expense), Net~~

Three Months Ended Six Months Ended
thousands except percentages June 30, 2023 March 31, 2023 Inc/
(Dec) June 30, 2023 June 30, 2022 Inc/
(Dec)
Other income (expense), net $ 2,872 $ 1,215 136% $ 4,087 $ 61 NM

Other income (expense), net increased by $1.7 million and $4.0 million for the three and six months ended June 30, 2023, respectively, primarily due to interest income earned resulting from higher interest rates and cash and cash equivalent balances throughout 2023.

Income Tax Expense (Benefit)

We are not a taxable entity for U.S. federal income tax purposes; therefore, our federal statutory rate is zero percent. However, income apportionable to Texas is subject to Texas margin tax.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Adjusted gross margin. We define 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. We believe Adjusted gross margin is an important performance measure of our operations’ profitability and performance as compared to other companies in the midstream industry. Cost of product expenses include (i) costs associated with the purchase of natural gas and NGLs pursuant to our percent-of-proceeds, percent-of-product, and keep-whole contracts, (ii) costs associated with the valuation of gas and NGLs imbalances, (iii) costs associated with our obligations under certain contracts to redeliver a volume of natural gas to shippers, which is thermally equivalent to condensate retained by us and sold to third parties, and (iv) costs associated with our offload commitments with third parties providing firm-processing capacity. The electricity-related expenses included in our Adjusted gross margin definition relate to pass-through expenses that are ~~reimbursed by certain customers (recorded~~recorded as ~~revenue~~Operation and maintenance expense with an offset recorded as ~~Operation and maintenance expense).~~revenue for the reimbursement by certain customers.

Adjusted EBITDA. We define 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 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. We believe the presentation of Adjusted EBITDA provides information useful to investors in assessing our financial condition and results of operations and that Adjusted EBITDA is a widely accepted financial indicator of a company’s ability to incur and service debt, fund capital expenditures, and make distributions. Adjusted EBITDA is a supplemental financial measure that management and external users of our consolidated financial statements, such as industry analysts, investors, commercial banks, and rating agencies, use, among other measures, to assess the following:

•our operating performance as compared to other publicly traded partnerships in the midstream industry, without regard to financing methods, capital structure, or historical cost basis;

•the ability of our assets to generate cash flow to make distributions; and

•the viability of acquisitions and capital expenditures and the returns on investment of various investment opportunities.

Free cash flow. We define “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~~represents the amount of cash that is available in aggregate for distributions, debt repayments, and other general partnership purposes.

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Adjusted gross margin, Adjusted EBITDA, and Free cash flow are not defined in GAAP. The GAAP measure that is most directly comparable to Adjusted gross margin is gross margin. Net income (loss) and net cash provided by operating activities are the GAAP measures that are most directly comparable to Adjusted EBITDA. The GAAP measure that is most directly comparable to Free cash flow is net cash provided by operating activities. Our non-GAAP financial measures of Adjusted gross margin, Adjusted EBITDA, and Free cash flow should not be considered as alternatives to the GAAP measures of gross margin, net income (loss), net cash provided by operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted gross margin, Adjusted EBITDA, and Free cash flow have important limitations as analytical tools because they exclude some, but not all, items that affect gross margin, net income (loss), and net cash provided by operating activities. Adjusted gross margin, Adjusted EBITDA, and Free cash flow should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our definitions of Adjusted gross margin, Adjusted EBITDA, and Free cash flow may not be comparable to similarly titled measures of other companies in our industry, thereby diminishing their utility as comparative measures.

Management compensates for the limitations of Adjusted gross margin, Adjusted EBITDA, and Free cash flow as analytical tools by reviewing the comparable GAAP measures, understanding the differences between Adjusted gross margin, Adjusted EBITDA, and Free cash flow compared to (as applicable) gross margin, net income (loss), and net cash provided by operating activities, and incorporating this knowledge into its decision-making processes. We believe that investors benefit from having access to the same financial measures that our management considers in evaluating our operating results.

The following tables present (i) a reconciliation of the GAAP financial measure of gross margin to the non-GAAP financial measure of Adjusted gross margin, (ii) a reconciliation of the GAAP financial measures of net income (loss) and net cash provided by operating activities to the non-GAAP financial measure of Adjusted EBITDA, and (iii) a reconciliation of the GAAP financial measure of net cash provided by operating activities to the non-GAAP financial measure of Free cash flow:


		Three Months Ended
		Three Months Ended
		Three Months Ended

thousands

thousands
		Three Months Ended				Six Months Ended

thousands	thousands	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Reconciliation of Gross margin to Adjusted gross margin	Reconciliation of Gross margin to Adjusted gross margin
Reconciliation of Gross margin to Adjusted gross margin
Reconciliation of Gross margin to Adjusted gross margin
Total revenues and other
Total revenues and other
Total revenues and other	Total revenues and other	$	738,273	$	733,982	$	1,472,255	$	1,634,716
Less:	Less:
Less:
Less:
Cost of product
Cost of product
Cost of product	Cost of product	44,746		51,459		96,205		221,404
Depreciation and amortization	Depreciation and amortization	143,492		144,626		288,118		273,618
Depreciation and amortization
Depreciation and amortization
Gross margin
Gross margin
Gross margin	Gross margin	550,035		537,897		1,087,932		1,139,694
Add:	Add:
Add:
Add:
Distributions from equity investments
Distributions from equity investments
Distributions from equity investments	Distributions from equity investments	54,075		51,975		106,050		121,811
Depreciation and amortization	Depreciation and amortization	143,492		144,626		288,118		273,618
Depreciation and amortization
Depreciation and amortization
Less:
Less:
Less:	Less:
Reimbursed electricity-related charges recorded as revenues	Reimbursed electricity-related charges recorded as revenues	23,286		23,569		46,855		37,446
Reimbursed electricity-related charges recorded as revenues
Reimbursed electricity-related charges recorded as revenues
Adjusted gross margin attributable to noncontrolling interests (1)
Adjusted gross margin attributable to noncontrolling interests (1)
Adjusted gross margin attributable to noncontrolling interests (1)	Adjusted gross margin attributable to noncontrolling interests (1)	16,914		15,774		32,688		37,256
Adjusted gross margin	Adjusted gross margin	$	707,402	$	695,155	$	1,402,557	$	1,460,421
Adjusted gross margin
Adjusted gross margin

(1)~~For all periods presented, includes~~Includes (i) the 25% third-party interest in Chipeta and (ii) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary, which collectively represent WES’s noncontrolling interests.

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To facilitate investor and industry analysis, we also disclose per-Mcf Adjusted gross margin for natural-gas assets, per-Bbl Adjusted gross margin for crude-oil and NGLs assets, and per-Bbl Adjusted gross margin for produced-water assets.


		Three Months Ended
		Three Months Ended
		Three Months Ended

thousands except per-unit amounts

thousands except per-unit amounts
		Three Months Ended				Six Months Ended

thousands except per-unit amounts	thousands except per-unit amounts	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Gross margin	Gross margin
Gross margin
Gross margin
Gross margin for natural-gas assets (1)
Gross margin for natural-gas assets (1)
Gross margin for natural-gas assets (1)	Gross margin for natural-gas assets (1)	$	409,634	$	393,673	$	803,307	$	850,980
Gross margin for crude-oil and NGLs assets (1)	Gross margin for crude-oil and NGLs assets (1)	88,024		89,281		177,305		180,135
Gross margin for crude-oil and NGLs assets (1)
Gross margin for crude-oil and NGLs assets (1)
Gross margin for produced-water assets (1)
Gross margin for produced-water assets (1)
Gross margin for produced-water assets (1)	Gross margin for produced-water assets (1)	59,130		59,549		118,679		118,646
Per-Mcf Gross margin for natural-gas assets (2)	Per-Mcf Gross margin for natural-gas assets (2)	1.02		1.03		1.02		1.09
Per-Mcf Gross margin for natural-gas assets (2)
Per-Mcf Gross margin for natural-gas assets (2)
Per-Bbl Gross margin for crude-oil and NGLs assets (2)
Per-Bbl Gross margin for crude-oil and NGLs assets (2)
Per-Bbl Gross margin for crude-oil and NGLs assets (2)	Per-Bbl Gross margin for crude-oil and NGLs assets (2)	1.51		1.59		1.55		1.45
Per-Bbl Gross margin for produced-water assets (2)	Per-Bbl Gross margin for produced-water assets (2)	0.68		0.68		0.68		0.80
Per-Bbl Gross margin for produced-water assets (2)
Per-Bbl Gross margin for produced-water assets (2)
Adjusted gross margin
Adjusted gross margin
Adjusted gross margin	Adjusted gross margin
Adjusted gross margin for natural-gas assets	Adjusted gross margin for natural-gas assets	$	489,476	$	480,009	$	969,485	$	1,017,892
Adjusted gross margin for natural-gas assets
Adjusted gross margin for natural-gas assets
Adjusted gross margin for crude-oil and NGLs assets
Adjusted gross margin for crude-oil and NGLs assets
Adjusted gross margin for crude-oil and NGLs assets	Adjusted gross margin for crude-oil and NGLs assets	147,036		145,577		292,613		303,933
Adjusted gross margin for produced-water assets	Adjusted gross margin for produced-water assets	70,890		69,569		140,459		138,596
Adjusted gross margin for produced-water assets
Adjusted gross margin for produced-water assets
Per-Mcf Adjusted gross margin for natural-gas assets (3)
Per-Mcf Adjusted gross margin for natural-gas assets (3)
Per-Mcf Adjusted gross margin for natural-gas assets (3)	Per-Mcf Adjusted gross margin for natural-gas assets (3)	1.26		1.30		1.28		1.35
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (3)	Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (3)	2.58		2.65		2.61		2.50
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (3)
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (3)
Per-Bbl Adjusted gross margin for produced-water assets (3)	Per-Bbl Adjusted gross margin for produced-water assets (3)	0.83		0.81		0.82		0.95
Per-Bbl Adjusted gross margin for produced-water assets (3)
Per-Bbl Adjusted gross margin for produced-water assets (3)

(1)Excludes corporate-level depreciation and amortization.

(2)Average for period. Calculated as Gross margin for natural-gas assets, crude-oil and NGLs assets, or produced-water assets, divided by the respective total throughput (MMcf or MBbls) for natural-gas assets, crude-oil and NGLs assets, or produced-water assets.

(3)Average for period. Calculated as Adjusted gross margin for natural-gas assets, crude-oil and NGLs assets, or produced-water assets, divided by the respective total throughput (MMcf or MBbls) attributable to WES for natural-gas assets, crude-oil and NGLs assets, or produced-water assets.

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		Three Months Ended
		Three Months Ended
		Three Months Ended

thousands

thousands
		Three Months Ended				Six Months Ended

thousands	thousands	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Reconciliation of Net income (loss) to Adjusted EBITDA
Reconciliation of Net income (loss) to Adjusted EBITDA
Reconciliation of Net income (loss) to Adjusted EBITDA
Net income (loss)	Net income (loss)	$	259,516	$	208,341	$	467,857	$	632,841
Add:	Add:
Add:
Add:
Distributions from equity investments
Distributions from equity investments
Distributions from equity investments	Distributions from equity investments	54,075		51,975		106,050		121,811
Non-cash equity-based compensation expense	Non-cash equity-based compensation expense	7,665		7,199		14,864		14,781
Non-cash equity-based compensation expense
Non-cash equity-based compensation expense
Interest expense
Interest expense
Interest expense	Interest expense	86,182		81,670		167,852		166,227
Income tax expense	Income tax expense	659		1,416		2,075		3,296
Income tax expense
Income tax expense
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization	Depreciation and amortization	143,492		144,626		288,118		273,618
Impairments	Impairments	234		52,401		52,635		90
Impairments
Impairments
Other expense
Other expense
Other expense	Other expense	199		200		399		181
Less:	Less:
Less:
Less:
Gain (loss) on divestiture and other, net
Gain (loss) on divestiture and other, net
Gain (loss) on divestiture and other, net	Gain (loss) on divestiture and other, net	(70)		(2,118)		(2,188)		(780)
Gain (loss) on early extinguishment of debt	Gain (loss) on early extinguishment of debt	6,813		—		6,813		91
Gain (loss) on early extinguishment of debt
Gain (loss) on early extinguishment of debt
Equity income, net – related parties
Equity income, net – related parties
Equity income, net – related parties	Equity income, net – related parties	42,324		39,021		81,345		98,071

Other income	Other income	2,872		1,215		4,087		106

Other income

Other income

Adjusted EBITDA attributable to noncontrolling interests (1)

Adjusted EBITDA attributable to noncontrolling interests (1)

Adjusted EBITDA attributable to noncontrolling interests (1)	Adjusted EBITDA attributable to noncontrolling interests (1)	11,737		11,015		22,752		27,989
Adjusted EBITDA	Adjusted EBITDA	$	488,346	$	498,695	$	987,041	$	1,087,368
Adjusted EBITDA
Adjusted EBITDA
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA
Net cash provided by operating activities	Net cash provided by operating activities	$	490,823	$	302,424	$	793,247	$	743,439
Interest (income) expense, net	Interest (income) expense, net	86,182		81,670		167,852		166,227
Interest (income) expense, net
Interest (income) expense, net
Accretion and amortization of long-term obligations, net
Accretion and amortization of long-term obligations, net
Accretion and amortization of long-term obligations, net	Accretion and amortization of long-term obligations, net	(2,403)		(1,692)		(4,095)		(3,586)
Current income tax expense (benefit)	Current income tax expense (benefit)	728		492		1,220		1,376
Current income tax expense (benefit)
Current income tax expense (benefit)
Other (income) expense, net
Other (income) expense, net
Other (income) expense, net	Other (income) expense, net	(2,872)		(1,215)		(4,087)		(61)

Distributions from equity investments in excess of cumulative earnings – related parties	Distributions from equity investments in excess of cumulative earnings – related parties	10,813		12,366		23,179		25,407

Distributions from equity investments in excess of cumulative earnings – related parties

Distributions from equity investments in excess of cumulative earnings – related parties
Changes in assets and liabilities:
Changes in assets and liabilities:
Changes in assets and liabilities:	Changes in assets and liabilities:
Accounts receivable, net	Accounts receivable, net	(4,078)		4,037		(41)		279,830
Accounts receivable, net
Accounts receivable, net
Accounts and imbalance payables and accrued liabilities, net
Accounts and imbalance payables and accrued liabilities, net
Accounts and imbalance payables and accrued liabilities, net	Accounts and imbalance payables and accrued liabilities, net	(36,885)		136,460		99,575		(82,909)
Other items, net	Other items, net	(42,225)		(24,832)		(67,057)		(14,366)
Other items, net
Other items, net
Adjusted EBITDA attributable to noncontrolling interests (1)
Adjusted EBITDA attributable to noncontrolling interests (1)
Adjusted EBITDA attributable to noncontrolling interests (1)	Adjusted EBITDA attributable to noncontrolling interests (1)	(11,737)		(11,015)		(22,752)		(27,989)
Adjusted EBITDA	Adjusted EBITDA	$	488,346	$	498,695	$	987,041	$	1,087,368
Adjusted EBITDA
Adjusted EBITDA
Cash flow information
Cash flow information
Cash flow information
Net cash provided by operating activities	Net cash provided by operating activities	$	490,823	$	302,424	$	793,247	$	743,439
Net cash used in investing activities		(151,490)		(179,178)		(330,668)		(170,947)
Net cash provided by (used in) investing activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(238,025)		(297,257)		(535,282)		(677,057)
Net cash provided by (used in) financing activities
Net cash provided by (used in) financing activities

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		Three Months Ended
		Three Months Ended
		Three Months Ended

thousands

thousands
		Three Months Ended				Six Months Ended

thousands	thousands	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Reconciliation of Net cash provided by operating activities to Free cash flow
Reconciliation of Net cash provided by operating activities to Free cash flow
Reconciliation of Net cash provided by operating activities to Free cash flow
Net cash provided by operating activities	Net cash provided by operating activities	$	490,823	$	302,424	$	793,247	$	743,439
Less:	Less:
Less:
Less:
Capital expenditures
Capital expenditures
Capital expenditures	Capital expenditures	161,482		173,088		334,570		191,357
Contributions to equity investments – related parties	Contributions to equity investments – related parties	22		110		132		5,040
Contributions to equity investments – related parties
Contributions to equity investments – related parties
Add:
Add:
Add:	Add:
Distributions from equity investments in excess of cumulative earnings – related parties	Distributions from equity investments in excess of cumulative earnings – related parties	10,813		12,366		23,179		25,407
Distributions from equity investments in excess of cumulative earnings – related parties
Distributions from equity investments in excess of cumulative earnings – related parties
Free cash flow
Free cash flow
Free cash flow	Free cash flow	$	340,132	$	141,592	$	481,724	$	572,449
Cash flow information	Cash flow information
Cash flow information
Cash flow information
Net cash provided by operating activities	Net cash provided by operating activities	$	490,823	$	302,424	$	793,247	$	743,439
Net cash used in investing activities		(151,490)		(179,178)		(330,668)		(170,947)
Net cash provided by operating activities
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net cash provided by (used in) financing activities
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(238,025)		(297,257)		(535,282)		(677,057)

Gross margin. Refer to Operating Results within this Item 2 for a discussion of the components of Gross margin as compared to the prior periods, including Service Revenues, Product Sales, Cost of Product (Residue purchases, NGLs purchases, and Other items), and Other Operating Expenses (Depreciation and amortization expense).

Gross margin increased by ~~$12.1~~$31.4 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, due to (i) a ~~$6.7~~$29.5 million ~~decrease in cost of product and (ii) a $4.3 million~~ increase ~~in total revenues and other.~~

~~Gross margin decreased by $51.8 million for the six months ended June 30, 2023, due to (i) a $162.5 million decrease~~ in total revenues and other and (ii) a ~~$14.5~~$7.2 million ~~increase~~decrease in depreciation and amortization. These amounts were offset partially by a ~~$125.2~~$5.3 million increase in cost of product.

Gross margin increased by $145.8 million compared to the three months ended March 31, 2023, due to (i) a $153.7 million increase in total revenues and other and (ii) a $5.4 million decrease in cost of product. These amounts were offset partially by a $13.4 million increase in depreciation and amortization.

Net income (loss). Refer to Operating Results within this Item 2 for a discussion of the primary components of Net income (loss) as compared to the prior periods.

Net income (loss) increased by ~~$51.2~~$290.5 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to (i) a ~~$36.8 million decrease in total operating expenses, (ii) a $6.8~~$246.1 million increase in gain (loss) on ~~early extinguishment of debt,~~divestiture and ~~(iii)~~other, net, (ii) a ~~$4.3~~$29.5 million increase in total revenues and ~~other.~~other, and (iii) a $15.2 million decrease in total operating expenses.

Net income (loss) ~~decreased~~increased by ~~$165.0~~$377.9 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to (i) a ~~$162.5~~$241.7 million ~~decrease~~increase in gain (loss) on divestiture and other, net and (ii) a $153.7 million increase in total revenues and ~~other~~other. These amounts were offset partially by (i) a $12.8 million increase in interest expense and (ii) a ~~$16.7~~$6.2 million decrease in equity income, net – related parties. ~~These amounts were offset partially by (i) a $6.7 million increase in gain (loss) on early extinguishment of debt and (ii) a $5.3 million decrease in total operating expenses.~~

Net cash provided by operating activities. Refer to Historical cash flow within this Item 2 for a discussion of the primary components of Net cash provided by operating activities as compared to the prior periods.

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KEY PERFORMANCE METRICS


		Three Months Ended
		Three Months Ended
		Three Months Ended

thousands except percentages and per-unit amounts
		Three Months Ended						Six Months Ended
thousands except percentages and per-unit amounts

thousands except percentages and per-unit amounts	thousands except percentages and per-unit amounts	June 30, 2023		March 31, 2023		Inc/ (Dec)		June 30, 2023		June 30, 2022		Inc/ (Dec)

Adjusted gross margin	Adjusted gross margin	$	707,402	$	695,155	2	%	$	1,402,557	$	1,460,421	(4)	%

Adjusted gross margin

Adjusted gross margin
Per-Mcf Adjusted gross margin for natural-gas assets (1)
Per-Mcf Adjusted gross margin for natural-gas assets (1)
Per-Mcf Adjusted gross margin for natural-gas assets (1)	Per-Mcf Adjusted gross margin for natural-gas assets (1)	1.26		1.30		(3)	%	1.28		1.35		(5)	%
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (1)	Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (1)	2.58		2.65		(3)	%	2.61		2.50		4	%
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (1)
Per-Bbl Adjusted gross margin for crude-oil and NGLs assets (1)
Per-Bbl Adjusted gross margin for produced-water assets (1)
Per-Bbl Adjusted gross margin for produced-water assets (1)
Per-Bbl Adjusted gross margin for produced-water assets (1)	Per-Bbl Adjusted gross margin for produced-water assets (1)	0.83		0.81		2	%	0.82		0.95		(14)	%
Adjusted EBITDA	Adjusted EBITDA	488,346		498,695		(2)	%	987,041		1,087,368		(9)	%
Adjusted EBITDA
Adjusted EBITDA
Free cash flow	Free cash flow	340,132		141,592		140	%	481,724		572,449		(16)	%
Free cash flow
Free cash flow

(1)Average for period. Calculated as Adjusted gross margin for natural-gas assets, crude-oil and NGLs assets, or produced-water assets, divided by the respective total throughput (MMcf or MBbls) attributable to WES for natural-gas assets, crude-oil and NGLs assets, or produced-water assets.

Adjusted gross margin. Adjusted gross margin increased by ~~$12.2~~$25.7 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to (i) a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, increased throughput, and increased deficiency fees on certain contracts with increasing throughput minimums at the West Texas complex, (ii) a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and increased throughput at the DBM water systems, (iii) increased throughput at the DJ Basin complex, (iv) commercial activities prior to the divestment of our interest in the first quarter of 2024 at Whitethorn LLC, and (v) increased throughput and a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, at the DBM oil system. These increases were offset partially by decreases due to annual cost-of-service rate adjustments that increased revenue during the fourth quarter of 2023 at the Springfield and DJ Basin oil systems.

Adjusted gross margin increased by $149.9 million compared to the three months ended March 31, 2023, primarily due to (i) increased throughput, a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and increased deficiency fees on certain contracts with increasing throughput minimums at the ~~Chipeta,~~West Texas complex, (ii) increased throughput at the Powder River Basin complex attributable to the acquisition of Meritage, (iii) a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and increased throughput at the DBM water systems, and (iv) increased throughput at the DJ Basin ~~and Granger complexes,~~complex. These increases were offset partially by (i) decreased processing fees at the Brasada complex resulting from a change in contract terms effective July 1, 2023, and (ii) ~~an increase in distributions from Saddlehorn.~~

~~Adjusted gross margin decreased by $57.9 million for the six months ended June 30, 2023, primarily due to (i)~~ a decrease in distributions from Cactus II, which was sold in the fourth quarter of 2022, (ii) decreased deficiency fees and throughput at the Chipeta complex, (iii) decreased throughput at the DJ Basin complex, DJ Basin oil system, and Granger complex, and (iv) a decrease in distributions from Ranch Westex, which was acquired in the third quarter of 2022 and is included in the West Texas complex subsequent to the acquisition. These decreases were partially offset by increased throughput at the West Texas complex.TEP.

Per-Mcf Adjusted gross margin for natural-gas assets ~~decreased~~increased by ~~$0.04 for~~$0.03 compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to ~~higher~~increased throughput ~~across several assets that have lower-than average~~at the West Texas complex, which has a higher-than-average per-Mcf ~~margins~~margin as compared to our other natural-gas ~~assets.~~assets, in addition to a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and increased deficiency fees on certain contracts with increasing throughput minimums. This increase was offset partially by a decrease resulting from an annual cost-of-service rate adjustment that increased revenue during the fourth quarter of 2023 at the Springfield system.

Per-Mcf Adjusted gross margin for natural-gas assets ~~decreased~~increased by ~~$0.07 for~~$0.02 compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to ~~contract mix and lower commodity prices, partially offset by~~(i) increased throughput at the West Texas ~~complex.~~complex, which has a higher-than-average per-Mcf margin as compared to our other natural-gas assets, in addition to a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and increased deficiency fees on certain contracts with increasing throughput minimums, and (ii) increased throughput at the DJ Basin complex, which has a higher-than-average per-Mcf margin as compared to our other natural-gas assets. These increases were offset partially by decreased processing fees at the Brasada complex resulting from a change in contract terms effective July 1, 2023.

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Per-Bbl Adjusted gross margin for crude-oil and NGLs assets ~~decreased~~increased by ~~$0.07 for~~$0.49 compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to the sale of our interests in Whitethorn LLC, Saddlehorn, Panola, and Mont Belvieu JV in the first quarter of 2024, all of which had lower-than-average per-Bbl margins as compared to our other crude-oil and NGLs assets. These increases were offset partially by decreases ~~in demand-fee~~related to (i) an annual cost-of-service rate adjustment that increased revenue ~~and~~during the fourth quarter of 2023, partially offset by increased throughput, at the DJ Basin oil system, which has a higher-than-average per-Bbl margin as compared to our other crude-oil and NGLs ~~assets.~~assets, and (ii) an annual cost-of-service rate adjustment that increased revenue during the fourth quarter of 2023 at the Springfield system.

Per-Bbl Adjusted gross margin for crude-oil and NGLs assets increased by ~~$0.11 for~~$0.27 compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to (i) ~~decreases~~the sale of our interests in ~~throughput~~Whitethorn LLC, Saddlehorn, Panola, and ~~distributions from Cactus II, which was sold~~Mont Belvieu JV in the ~~fourth~~first quarter of ~~2022, and~~2024, all of which had lower-than-average per-Bbl ~~margin~~margins as compared to our other crude-oil and NGLs assets, and (ii) increased throughput and a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, at the DBM oil system, which has a higher-than-average per-Bbl margin as compared to our other crude-oil and NGLs assets. These increases were offset partially by (i) decreased deficiency fees on demand volumes at the DJ Basin oil system and (ii) a decrease in distributions from ~~FRP and~~ TEP.

Per-Bbl Adjusted gross margin for produced-water assets increased by ~~$0.02 for~~$0.09 and $0.14 compared to the three months ended ~~June 30,~~December 31, 2023, and March 31, 2023, respectively, primarily due to increased throughput ~~on certain fee-based contracts.~~

~~Per~~-~~Bbl Adjusted gross margin for produced~~-~~water assets decreased by $0.13 for the six months ended June 30, 2023, primarily due to~~and a ~~lower~~higher average fee resulting from a cost-of-service rate redetermination effective January 1, ~~2023, and lower deficiency fee revenues.~~2024.

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Adjusted EBITDA. Adjusted EBITDA ~~decreased~~increased by ~~$10.3~~$37.7 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to (i) ~~an $11.7~~a $29.5 million increase in ~~property~~total revenues and other, ~~taxes and~~ (ii) a ~~$9.2~~$5.5 million ~~increase~~decrease in operation and maintenance ~~expenses.~~expenses, (iii) a $4.7 million decrease in general and administrative expenses excluding non-cash equity-based compensation expense, and (iv) a $2.6 million decrease in property taxes. These amounts were offset partially by a $5.2 million increase in cost of product (net of lower of cost or market inventory adjustments).

Adjusted EBITDA increased by $109.7 million compared to the three months ended March 31, 2023, primarily due to (i) a ~~$6.7~~$153.7 million increase in total revenues and other and (ii) a $5.3 million decrease in cost of product (net of lower of cost or market inventory adjustments)~~, (ii) a $4.3 million increase in total revenues and other, and (iii) a $2.1 million increase in distributions from equity investments.~~

~~Adjusted EBITDA decreased~~. These amounts were offset partially by ~~$100.3 million for the six months ended June 30, 2023, primarily due to~~ (i) a ~~$162.5 million decrease in total revenues and other, (ii) a $60.5~~$20.7 million increase in operation and maintenance expenses, ~~(iii)~~(ii) a ~~$15.8 million decrease in distributions from equity investments, and (iv) an $8.0~~$14.5 million increase in general and administrative expenses excluding non-cash equity-based compensation ~~expense. These amounts were offset partially by (i)~~expense, (iii) a ~~$125.5~~$7.1 million ~~decrease in cost of product (net of lower of cost or market inventory adjustments) and (ii) a $15.7 million decrease~~increase in property and other ~~taxes.~~taxes, and (iv) a $3.6 million decrease in distributions from equity investments.

Free cash flow. Free cash flow ~~increased~~decreased by ~~$198.5~~$57.1 million ~~for~~compared to the three months ended ~~June 30,~~December 31, 2023, primarily due to ~~(i)~~ a ~~$188.4~~$73.6 million ~~increase~~decrease in net cash provided by operating activities, partially offset by (i) an $11.6 million increase in distributions from equity investments in excess of cumulative earnings and (ii) ~~an $11.6~~a $4.9 million decrease in capital expenditures.

Free cash flow ~~decreased~~increased by ~~$90.7~~$83.4 million ~~for~~compared to the ~~six~~three months ended ~~June 30,~~March 31, 2023, primarily due to ~~a $143.2 million increase in capital expenditures, offset partially by~~ (i) a ~~$49.8~~$97.3 million increase in net cash provided by operating activities and (ii) a ~~$4.9~~$6.7 million ~~decrease~~increase in ~~contributions to~~distributions from equity ~~investments.~~investments in excess of cumulative earnings. These amounts were offset partially by a $20.7 million increase in capital expenditures.

See Capital Expenditures and Historical Cash Flow within this Item 2 for further information.

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LIQUIDITY AND CAPITAL RESOURCES

Our primary cash uses include equity and debt service, operating expenses, and capital expenditures. Our sources of liquidity, as of ~~June 30, 2023,~~March 31, 2024, included cash and cash equivalents, cash flows generated from operations, ~~available~~effective borrowing capacity under the RCF, our commercial paper program, and potential issuances of additional equity or debt securities. We believe that cash flows generated from these sources will be sufficient to satisfy our short-term working capital requirements and long-term capital-expenditure and debt-service requirements.

The amount of future distributions to unitholders will be determined by the Board on a quarterly basis. Under our partnership agreement, we distribute all of our available cash (beyond proper reserves as defined in our partnership agreement) within 55 days following each quarter’s end. Our cash flow and resulting ability to make cash distributions are dependent on our ability to generate cash flow from operations. Generally, our available cash is our cash on hand at the end of a quarter after the payment of our expenses and the establishment of cash reserves and cash on hand resulting from working capital borrowings made after the end of the quarter. The general partner establishes cash reserves to provide for the proper conduct of our business, including (i) to fund future capital expenditures, (ii) to comply with applicable laws, debt instruments, or other agreements, or (iii) to provide funds for unitholder distributions for any one or more of the next four quarters. The Board declared a cash distribution to unitholders for the ~~second~~first quarter of ~~2023~~2024 of ~~$0.5625~~$0.875 per unit, ~~a 12.5% increase from the prior quarter,~~ or ~~$221.4~~$340.9 million in the aggregate. The cash distribution is payable on ~~August 14, 2023,~~May 15, 2024, to our unitholders of record at the close of business on ~~July 31, 2023.~~May 1, 2024.

To facilitate the distribution of available cash, during 2022 we adopted a financial policy that provided for an additional distribution (“Enhanced Distribution”) to be paid in conjunction with the regular first-quarter distribution of the following year (beginning in 2023), in a target amount equal to Free cash flow generated in the prior year after subtracting Free cash flow used for the prior year’s debt repayments, regular-quarter distributions, and unit repurchases. This Enhanced Distribution is subject to Board discretion, the establishment of cash reserves for the proper conduct of our business, and is also contingent on the attainment of prior year-end net leverage thresholds (the ratio of our total principal debt outstanding less total cash on hand as of the end of such period, as compared to our trailing-twelve-months Adjusted EBITDA), after taking the Enhanced Distribution for such prior year into effect. Free cash flow and Adjusted EBITDA are defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2. In April 2023, the Board approved an Enhanced Distribution of $0.356 per unit, or $140.1 million, related to our 2022 performance, which was paid in conjunction with our regular first-quarter 2023 distribution on May 15, 2023.

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In 2022, we announced a common-unit buyback program of up to $1.25 billion through December 31, 2024. The common units may be purchased from time to time in the open market at prevailing market prices or in privately negotiated transactions. The timing and amount of purchases under the program will be determined based on ongoing assessments of capital needs, our financial performance, the market price of our common units, and other factors, including organic growth and acquisition opportunities and general market conditions. The program does not obligate us to purchase any specific dollar amount or number of units and may be suspended or discontinued at any time. During the ~~six~~three months ended ~~June 30,~~March 31, 2024, there were no common units repurchased. During the three months ended March 31, 2023, we repurchased ~~287,322~~285,688 common units for an aggregate purchase price of $7.1 million. The units were canceled immediately upon receipt. As of ~~June 30, 2023,~~March 31, 2024, we had an authorized amount of ~~$755.3~~$627.8 million remaining under the program.

For the year ended December 31, 2023, capital expenditures are expected to range between $700.0 million to $800.0 million (accrual-based, includes equity investments, excludes capitalized interest, and excludes capital expenditures associated with the 25% third-party interest in Chipeta), representing a $125.0 million increase to the midpoint of our previously announced guidance in February 2023. Total-year capital expenditures guidance includes capital expenditures attributable to (i) a portion of Mentone Train III, (ii) a portion of the North Loving plant, a new 250 MMcf/d cryogenic processing plant in the North Loving area of our West Texas complex that was sanctioned in May 2023, and (iii) additional expansion capital needed to support new commercial activity.

Management continuously monitors our leverage position and other financial projections to manage the capital structure according to long-term objectives. We may, from time to time, seek to retire, rearrange, or amend some or all of our outstanding debt or financing agreements through cash purchases, exchanges, open-market repurchases, privately negotiated transactions, tender offers, or otherwise. Such transactions, if any, will depend on prevailing market conditions, our liquidity position and requirements, contractual restrictions, and other factors, and the amounts involved may be material. Our ability to generate cash flows is subject to a number of factors, some of which are beyond our control. Read Risk Factors under Part II, Item 1A of this Form 10-Q.

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Working capital. Working capital is an indication of liquidity and potential needs for short-term funding. Working capital requirements are driven by changes in accounts receivable and accounts payable and other factors such as credit extended to, and the timing of collections from, our customers, and the level and timing of our spending for acquisitions, maintenance, and other capital activities. As of ~~June 30, 2023,~~March 31, 2024, we had a ~~$175.7~~$358.2 million working capital surplus, which we define as the amount by which current assets exceed current liabilities. As of ~~June 30, 2023,~~March 31, 2024, there was ~~$2.0~~$1.9 billion ~~available for~~in effective borrowing capacity under the ~~RCF.~~RCF, after taking into account the $100.0 million of outstanding commercial paper borrowings, for which we maintain availability under the RCF as support for our commercial paper program. See Note 8—9—Selected Components of Working Capital and Note 9—10—Debt and Interest Expense in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

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Capital expenditures. Our business is capital intensive, requiring significant investment to maintain and improve existing facilities or to develop new midstream infrastructure. Capital expenditures include maintenance capital expenditures, which include those expenditures required to maintain existing operating capacity and service capability of our assets, and expansion capital expenditures, which include expenditures to construct new midstream infrastructure and expenditures incurred to reduce costs, increase revenues, or increase system throughput or capacity from current levels.

Capital expenditures in the consolidated statements of cash flows reflect capital expenditures on a cash basis, when payments are made. Capital incurred is presented on an accrual basis. ~~Capital~~Acquisitions and capital expenditures as presented in the consolidated statements of cash flows and capital incurred were as follows:

Six Months Ended
June 30,

Three Months Ended
March 31,

thousands

2023

2022

thousands

Acquisitions

Capital expenditures (1)

334,570

191,357

Capital incurred (1)

368,683

207,996

Capital incurred (1)

(1)For the ~~six~~three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ included ~~$5.1~~$5.3 million and ~~$2.0~~$2.5 million, respectively, of capitalized interest.

Capital expenditures increased by ~~$143.2~~$20.7 million for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, primarily due to increases of (i) ~~$66.5~~$12.4 million at the West Texas complex, primarily attributable to ~~facility expansion, including ongoing construction~~engineering and equipment milestone payments for the North Loving Plant, (ii) $10.9 million related to the acquisition of ~~Mentone Train III,~~Meritage, (iii) $6.2 million at the DJ Basin complex due to the purchase of a field office in the first quarter of 2024 and an increase in well connection and pipeline projects, ~~(ii) $54.3~~and (iv) $5.4 million in corporate-level capital expenditures. These increases were offset partially by a decrease of $13.3 million at the DBM water systems due to reduced construction of ~~additional~~ water-disposal wells and facilities and ~~pipeline projects, and (iii) $17.1 million at the DBM oil system, primarily related to an increase in pipeline, oil treating, and oil pumping~~well-connect projects.

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Historical cash flow. The following table and discussion present a summary of our net cash flows provided by (used in) operating, investing, and financing activities:

Three Months Ended
March 31,

Six Months Ended
June 30,

thousands

2023

2022

Net cash provided by (used in):

Operating activities

793,247

743,439

Investing activities

(330,668)

(170,947)

Investing activities

Financing activities

(535,282)

(677,057)

Net increase (decrease) in cash and cash equivalents

(72,703)

(104,565)

Net increase (decrease) in cash and cash equivalents

Operating activities. Net cash provided by operating activities increased for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, primarily due to ~~the impact of changes in assets and liabilities. This increase was~~higher cash operating income, partially offset by ~~(i) lower cash operating income, (ii)~~ lower distributions from equity investments and ~~(iii)~~ higher interest expense. Refer to Operating Results within this Item 2 for a discussion of our results of operations as compared to the prior periods.

Investing activities. Net cash ~~used in~~provided by investing activities for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, primarily included the following:

•$~~334.6~~582.7 million of proceeds related to the sale of several equity investments to third parties;

•$19.0 million of distributions received from equity investments in excess of cumulative earnings;

•$193.8 million of capital expenditures, primarily related to expansion, construction, and asset-integrity projects at the West Texas complex, DBM water systems, DJ Basin complex, Powder River Basin complex, and DBM oil system; and

•$10.7 million of increases to materials and supplies inventory.

Net cash used in investing activities for the three months ended March 31, 2023, primarily included the following:

•$173.1 million of capital expenditures, primarily related to construction, expansion, and asset-integrity projects at the West Texas complex, DBM water systems, DBM oil system, and DJ Basin complex;

•$~~19.1~~18.3 million of increases to materials and supplies inventory; and

•$~~23.2 million of distributions received from equity investments in excess of cumulative earnings.~~

~~Net cash used in investing activities for the six months ended June 30, 2022, primarily included the following:~~

•~~$191.4 million of capital expenditures, primarily related to construction, expansion, and asset~~-~~integrity projects at the West Texas complex, DBM water systems, DJ Basin complex, and DBM oil system;~~

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•~~$5.0 million of capital contributions primarily paid to Red Bluff Express; and~~

•~~$25.4~~12.4 million of distributions received from equity investments in excess of cumulative earnings.

Financing activities. Net cash used in financing activities for the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, primarily included the following:

•$~~595.0~~510.4 million of net repayments ~~of outstanding borrowings~~ under the ~~RCF;~~commercial paper program;

•$~~548.2~~229.1 million of distributions paid to WES unitholders and noncontrolling interest owners; and

•$14.5 million to purchase and retire portions of certain of WES Operating’s senior notes via open-market repurchases.

Net cash used in financing activities for the three months ended March 31, 2023, primarily included the following:

•$213.1 million to redeem the total principal amount outstanding on the Floating-Rate Senior Notes due 2023 at par value;

•$~~110.2~~203.1 million of distributions paid to ~~purchase~~WES unitholders and ~~retire portions~~noncontrolling interest owners;

•$100.0 million of ~~certain~~repayments of ~~WES Operating’s senior notes via open-market repurchases;~~outstanding borrowings under the RCF;

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•$7.1 million of unit repurchases;

•~~$740.9 million of net proceeds from the 6.150% Senior Notes due 2033 issued in April 2023, which were used to repay borrowings under the RCF and for general partnership purposes;~~ and

•$220.0 million of borrowings under the RCF, which were used for general partnership purposes.

~~Net cash used in financing activities for the six months ended June 30, 2022, primarily included the following:~~

•~~$883.5 million to redeem the total principal amount outstanding of WES Operating’s 4.000% Senior Notes due 2022 and repay borrowings under the RCF;~~

•~~$340.9 million of distributions paid to WES unitholders;~~

•~~$79.2 million of unit repurchases;~~

•~~$8.8 million of distributions paid to the noncontrolling interest owner of WES Operating;~~

•~~$3.2 million of distributions paid to the noncontrolling interest owner of Chipeta;~~

•~~$634.0 million of borrowings under the RCF, which were used for general partnership purposes and to redeem portions of certain of WES Operating’s senior notes; and~~

•~~$13.0 million of increases in outstanding checks.~~

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Debt and credit facilities. As of ~~June 30, 2023,~~March 31, 2024, the carrying value of outstanding debt was ~~$6.8~~$7.4 billion and we have ~~no borrowings due within the next year, and have $2.0~~$1.9 billion ~~of available~~in effective borrowing capacity under WES Operating’s $2.0 billion ~~RCF.~~RCF, after taking into account the $100.0 million of outstanding commercial paper borrowings, for which we maintain availability under the RCF as support for WES Operating’s commercial paper program.

During the ~~second quarter of 2023,~~three months ended March 31, 2024, WES Operating (i) completed the public offering of $750.0 million in aggregate principal amount of 6.150% Senior Notes due 2033, (ii) entered into an amendment to our RCF to, among other things, extend the maturity date to April 2028 and provide for a maximum borrowing capacity up to $2.0 billion through the maturity date, and (iii) purchased and retired ~~$117.6~~$15.1 million of certain of its senior notes via open-market ~~repurchases.~~

~~In May 2023, Fitch Ratings upgraded WES Operating’s~~repurchases with cash from operations and a gain of $0.5 million was recognized for the early retirement of portions of these notes. As of March 31, 2024, the 3.100% Senior Notes due 2025 were classified as long-term debt ~~from “BB+”~~on the consolidated balance sheet as WES Operating has ability and intent to “BBB-.” WES Operating’s senior unsecured debt ratings is now investment grade at Standard and Poor’s, Moody’s Investors Services, and Fitch Ratings. As a result of the upgrade, annualized borrowing costs will decrease by $6.9 million on WES Operating’s senior notes that are subject to effective interest-rate adjustments from a change in credit rating.

refinance these obligations using long-term debt. Subsequent to ~~June 30, 2023,~~March 31, 2024, WES Operating purchased and retired ~~$159.1~~$134.9 million of certain of its senior notes via open-market repurchases.

For additional information on our senior notes, RCF, and ~~the RCF,~~commercial paper program, see Note 9—10—Debt and Interest Expense in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

~~Offload commitments.~~ We have entered into offload agreements with third parties providing firm-processing capacity through 2025. As of June 30, 2023, we have future minimum payments under offload agreements totaling $9.2 million for the remainder of 2023 and a total of $11.7 million in years thereafter.

~~Pipeline commitments.~~ We have entered into transportation contracts with volume commitments on multiple pipelines through 2033. As of June 30, 2023, we have estimated future minimum-volume-commitment fees totaling $3.1 million for the remainder of 2023, and a total of $51.7 million in years thereafter.

Credit risk. We bear credit risk through exposure to non-payment or non-performance by our counterparties, including Occidental, financial institutions, customers, and other parties. Generally, non-payment or non-performance results from a customer’s inability to satisfy payables to us for services rendered, minimum-volume-commitment deficiency payments owed, or volumes owed pursuant to gas- or NGLs-imbalance agreements. We examine and monitor the creditworthiness of customers and may establish credit limits for customers. We are subject to the risk of non-payment or late payment by producers for gathering, processing, transportation, and disposal fees. Additionally, we continue to evaluate counterparty credit risk and, in certain circumstances, are exercising our contractual rights to request adequate ~~assurance.~~assurance of performance.

We expect our exposure to the concentrated risk of non-payment or non-performance to continue for as long as our commercial relationships with Occidental generate a significant portion of our revenues. While Occidental is our contracting counterparty, gathering and processing arrangements with affiliates of Occidental on most of our systems include not just Occidental-produced volumes, but also, in some instances, the volumes of other working-interest owners of Occidental who rely on our facilities and infrastructure to bring their volumes to market. See Note 5—6—Related-Party Transactions in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

Our ability to make cash distributions to our unitholders may be adversely impacted if Occidental becomes unable to perform under the terms of gathering, processing, transportation, and disposal agreements.

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ITEMS AFFECTING THE COMPARABILITY OF FINANCIAL RESULTS WITH WES OPERATING

Our consolidated financial statements include the consolidated financial results of WES Operating. Our results of operations do not differ materially from the results of operations and cash flows of WES Operating, which are reconciled below.

Reconciliation of net income (loss). The differences between net income (loss) attributable to WES and WES Operating are reconciled as follows:


		Three Months Ended
		Three Months Ended
		Three Months Ended
		Three Months Ended				Six Months Ended

thousands	thousands	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022

thousands

thousands
Net income (loss) attributable to WES
Net income (loss) attributable to WES
Net income (loss) attributable to WES	Net income (loss) attributable to WES	$	252,921	$	203,645	$	456,566	$	615,034
Limited partner interest in WES Operating not held by WES (1)	Limited partner interest in WES Operating not held by WES (1)	5,185		4,161		9,346		12,584
Limited partner interest in WES Operating not held by WES (1)
Limited partner interest in WES Operating not held by WES (1)
General and administrative expenses (2)
General and administrative expenses (2)
General and administrative expenses (2)	General and administrative expenses (2)	1,186		232		1,418		1,362
Other income (expense), net	Other income (expense), net	(129)		(25)		(154)		(7)
Other income (expense), net
Other income (expense), net

Income taxes

Income taxes

Income taxes
Net income (loss) attributable to WES Operating	Net income (loss) attributable to WES Operating	$	259,163	$	208,013	$	467,176	$	628,973
Net income (loss) attributable to WES Operating
Net income (loss) attributable to WES Operating

(1)Represents the portion of net income (loss) allocated to the limited partner interest in WES Operating not held by WES. A subsidiary of Occidental held a 2.0% limited partner interest in WES Operating for all periods presented.

(2)Represents general and administrative expenses incurred by WES separate from, and in addition to, those incurred by WES Operating.

Reconciliation of net cash provided by (used in) operating and financing activities. The differences between net cash provided by (used in) operating and financing activities for WES and WES Operating are reconciled as follows:

Three Months Ended
March 31,

Six Months Ended
June 30,

Three Months Ended
March 31,

thousands

2023

2022

WES net cash provided by operating activities

793,247

743,439

WES net cash provided by operating activities

General and administrative expenses (1)

1,418

1,362

Non-cash equity-based compensation expense

(287)

(276)

Non-cash equity-based compensation expense

Changes in working capital

(14,327)

(7,835)

Changes in working capital

Other income (expense), net

(154)

(7)

WES Operating net cash provided by operating activities

779,897

736,683

WES Operating net cash provided by operating activities

WES net cash provided by (used in) financing activities

(535,282)

(677,057)

Distributions to WES unitholders (2)

533,556

340,946

Distributions to WES unitholders (2)

Distributions to WES from WES Operating (3)

(545,277)

(431,653)

Increase (decrease) in outstanding checks

—

104

Increase (decrease) in outstanding checks

Unit repurchases

7,102

79,217

Other

13,415

7,007

Other

WES Operating net cash provided by (used in) financing activities

(526,486)

(681,436)

WES Operating net cash provided by (used in) financing activities

(1)Represents general and administrative expenses incurred by WES separate from, and in addition to, those incurred by WES Operating.

(2)Represents distributions to WES common unitholders paid under WES’s partnership agreement. See Note 3—4—Partnership Distributions and Note 4—5—Equity and Partners’ Capital in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

(3)Difference attributable to elimination in consolidation of WES Operating’s distributions on partnership interests owned by WES. See Note 3—4—Partnership Distributions and Note 4—5—Equity and Partners’ Capital in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

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Noncontrolling interest. WES Operating’s noncontrolling interest consists of the 25% third-party interest in Chipeta. See Note 1—Description of Business and Basis of Presentation in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

WES Operating distributions. WES Operating distributes all of its available cash on a quarterly basis to WES Operating unitholders in proportion to their share of limited partner interests in WES Operating. See Note 3—4—Partnership Distributions in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

CRITICAL ACCOUNTING ESTIMATES

The preparation of consolidated financial statements in accordance with GAAP requires management to make informed judgments and estimates that affect the amounts of assets and liabilities as of the date of the financial statements and the amounts of revenues and expenses recognized during the periods reported. There have been no significant changes to our critical accounting estimates from those disclosed in our annual report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023.

RECENT ACCOUNTING DEVELOPMENTS

See Note 1—Description of Business and Basis of Presentation in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity-price risk. There have been no significant changes to our commodity-price risk discussion from the disclosure set forth under Part II, Item 7A in our Form 10-K for the year ended December 31, ~~2022,~~2023, except as noted below and in Outlook under Part I, Item 2 of this Form 10-Q.

For the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, 95% of our wellhead natural-gas volume (excluding equity investments) and 100% of our crude-oil and produced-water throughput (excluding equity investments) were serviced under fee-based contracts. A 10% increase or decrease in commodity prices would not have a material impact on our operating income (loss), financial condition, or cash flows for the next 12 months, excluding the effect of imbalances.

Interest-rate risk. The Federal Open Market Committee increased its target range ~~seven~~four times for the federal funds rate in ~~2022~~2023 and ~~increased~~has made no changes to its target range ~~three times~~ during the ~~six~~three months ended ~~June 30, 2023.~~March 31, 2024. Any future increases in the federal funds rate likely will result in an increase in financing costs. As of ~~June 30, 2023,~~March 31, 2024, WES Operating had (i) no outstanding borrowings under the RCF that bear interest at a rate based on the Secured Overnight Financing Rate (“SOFR”) or an alternative base rate at WES Operating’s ~~option.~~option and (ii) $100.0 million of outstanding commercial paper borrowings. While a 10% change in the applicable benchmark interest rate would not materially impact interest expense on our outstanding borrowings at ~~June 30, 2023,~~March 31, 2024, it would impact the fair value of the senior notes.

Additional short-term or variable-rate debt may be issued in the future, either under the RCF or other financing sources, including commercial paper borrowings or debt issuances.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. The Chief Executive Officer and Chief Financial Officer of WES’s general partner and WES Operating GP (for purposes of this Item 4, “Management”) performed an evaluation of WES’s and WES Operating’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. WES’s and WES Operating’s disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed in the reports that are filed or submitted under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, Management concluded that WES’s and WES Operating’s disclosure controls and procedures were effective as of ~~June 30, 2023.~~March 31, 2024.

Changes in Internal Control Over Financial Reporting. On April 1, 2023, WES and WES Operating implemented a new Enterprise Resource Planning (“ERP”) system. As a result of this implementation, certain internal controls over financial reporting have been automated, modified, or implemented to address the new environment associated with the implementation of this type of system. While WES and WES Operating believe that this system will strengthen the internal control system, there are inherent risks in implementing any new system and WES and WES Operating will continue to evaluate these control changes as part of their assessments of internal control over financial reporting. Other than the ERP implementation, there have beenThere were no changes in ~~WES or WES Operating’s internal control over financial reporting that occurred during the quarter ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, WES~~WES’s or WES Operating’s internal control over financial reporting during the ~~most recent fiscal quarter.~~quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, WES’s or WES Operating’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In 2020, the U.S. Department of Justice, on behalf of the U.S. Environmental Protection Agency (the “EPA”), and the State of Colorado, on behalf of the Colorado Department of Public Health and the Environment (the “CDPHE”) commenced an enforcement action in the United States District Court for the District of Colorado against Kerr-~~McGee Gathering LLC (“KMG”), a wholly owned subsidiary of WES, for alleged non~~-compliance with the leak detection and repair requirements of the federal Clean Air Act and the Colorado Air Pollution Prevention and Control Act at its Fort Lupton, Platte Valley, and Lancaster facilities in the DJ Basin complex. We reached an agreement to resolve these allegations with the EPA and the CDPHE pursuant to a consent decree that became effective on June 15, 2023. While such resolution includes an injunctive relief component and payment of a civil penalty, which exceeds the disclosure threshold amount required by Item 103 of Regulation S-K, the resolution of these claims did not have a material impact on WES’s results of operations, cash flows, or financial condition.

On October 29, 2020, WGR Operating, LP (“WGR”), on behalf of itself and derivatively on behalf of Mont Belvieu JV, filed suit against Enterprise Products Operating, LLC (“Enterprise”) and Mont Belvieu JV (as a nominal defendant) in the District Court of Harris County, Texas. Our lawsuit seeks a declaratory judgment regarding proper revenue allocation as set forth in the Operating Agreement between Mont Belvieu JV (of which WGR is a 25% owner) and Enterprise (the “Operating Agreement”) related to fractionation trains at the Mont Belvieu complex in Chambers County, Texas. Specifically, the Operating Agreement sets forth a revenue allocation structure, whereby revenue would be allocated to the various fracs at the Mont Belvieu complex in sequential order, with Fracs VII and VIII (which are owned by Mont Belvieu JV) following Fracs I through VI, but preceding any “Later Frac Facilities.” Subsequent to the construction of Fracs VII and VIII, Enterprise built Fracs IX, X, and XI, which it wholly owns, and has treated such subsequent fracs as outside the Mont Belvieu revenue allocation. We do not believe Enterprise’s attempt to bypass the agreed-to revenue allocation is proper under the parties’ agreements and now seek judicial determination. We currently sue only for declaratory judgment to avoid potential future damages. We cannot make any assurances regarding the ultimate outcome of this proceeding and its resulting impact on WGR or WES.

On November 22, 2022, WGR filed suit against Enterprise Crude Oil LLC (“ECO”) in the District Court of Harris County, Texas. Our lawsuit alleges that ECO breached a contract related to the Whitethorn joint venture pursuant to which ECO must share with WGR certain of the profits and losses generated by ECO’s hydrocarbon trading activity conducted utilizing the Whitethorn pipeline. Specifically, we claim that ECO has engaged in trades knowing that the revenue to be realized would be less than the minimum floor set under the contract and has failed to allocate revenues and expenses as prescribed by the contract, resulting in improper losses to WGR. Enterprise has filed a counterclaim to our lawsuit, alleging that, between 2017 and 2019, it had mistakenly overpaid WGR approximately $12.0 million in trading profits and seeking recovery of such amount. We cannot make any assurances regarding the ultimate outcome of this proceeding and its resulting impact on WGR or WES.

~~Except as discussed above, we~~ are not a party to any legal, regulatory, or administrative proceedings other than proceedings arising in the ordinary course of business. Management believes that there are no such proceedings for which a final disposition could have a material adverse effect on results of operations, cash flows, or financial condition, or for which disclosure is otherwise required by Item 103 of Regulation S-K.

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Item 1A. Risk Factors

Security holders and potential investors in our securities should carefully consider the risk factors set forth under Part I, Item 1A in our Form 10-K for the year ended December 31, ~~2022,~~2023, together with all of the other information included in this document, and in our other public filings, press releases, and public discussions with management.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information with respect to repurchases made by WES of its common units in the open market or in privately negotiated transactions under the $1.25 billion Purchase Program during the ~~second~~first quarter of ~~2023:~~2024:

Period Total number of units purchased Average price paid per unit
Total number of units purchased as part of publicly announced plans or programs (1)
Approximate dollar value of units that may yet be purchased under the plans or programs (1)
April 1-30, 2023 — $ — — $ 755,348,136
May 1-31, 2023 1,634 24.99 1,634 755,307,310
June 1-30, 2023 — — — 755,307,310
Total 1,634 24.99 1,634


Period	Total number of units purchased	Average price paid per unit		Total number of units purchased as part of publicly announced plans or programs (1)	Approximate dollar value of units that may yet be purchased under the plans or programs(1)
January 1-31, 2024	—	$	—	—	$	627,807,310
February 1-29, 2024	—	—		—	627,807,310
March 1-31, 2024	—	—		—	627,807,310
Total	—	—		—

______________________________________________________________________________________

(1)In 2022, the Board authorized WES to buy back up to $1.25 billion of our common units through December 31, 2024. See Note 4—5—Equity and Partners’ Capital in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for additional details.

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Item 5. Other Information

Insider Trading Arrangements

Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information. Our Insider Trading Policy permits our directors and executive officers to enter into trading plans designed to comply with Rule 10b5-1. During the three months ended ~~June 30, 2023,~~March 31, 2024, none of our executive officers or directors adopted or terminated a Rule 10b5-1 trading ~~plan~~arrangement (as defined in Item 408(a)(1)(i) of Regulation S-K) or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

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Item 6. Exhibits

Exhibits designated by an asterisk (*) are filed herewith and those designated with asterisks (**) are furnished herewith; all exhibits not so designated are incorporated herein by reference to a prior filing as indicated.

Exhibit Index


Exhibit Number			Description
#	2.	1	Contribution Agreement and Agreement and Plan of Merger, dated as of November 7, 2018, by and among Anadarko Petroleum Corporation, Anadarko E&P Onshore LLC, APC Midstream Holdings, LLC, Western Gas Equity Partners, LP, Western Gas Equity Holdings, LLC, Western Gas Partners, LP, Western Gas Holdings, LLC, Clarity Merger Sub, LLC, WGR Asset Holding Company LLC, WGR Operating, LP, Kerr-McGee Gathering LLC, Kerr-McGee Worldwide Corporation and Delaware Basin Midstream, LLC (incorporated by reference to Exhibit 2.1 to Western Gas Equity Partners, LP’s Current Report on Form 8-K filed on November 8, 2018, File No. 001-35753).
	3.	1	Certificate of Limited Partnership of Western Gas Equity Partners, LP (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of Western Gas Equity Partners, LP filed on November 5, 2012, File No. 333-184763).
	3.	2	Certificate of Amendment to Certificate of Limited Partnership of Western Gas Equity Partners, LP, effective as of February 28, 2019 (incorporated by reference to Exhibit 3.1 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on February 28, 2019, File No. 001-35753).
	3.	3	Second Amended and Restated Agreement of Limited Partnership of Western Midstream Partners, LP, dated as of December 31, 2019 (incorporated by reference to Exhibit 3.1 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on January 6, 2020, File No. 001-35753).
	3.	4	Certificate of Formation of Western Gas Equity Holdings, LLC (incorporated by reference to Exhibit 3.3 to Western Gas Equity Partners, LP’s Registration Statement on Form S-1 filed on November 5, 2012, File No. 333-184763).
	3.	5	Certificate of Amendment to Certificate of Formation of Western Gas Equity Holdings, LLC, effective as of February 28, 2019 (incorporated by reference to Exhibit 3.2 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on February 28, 2019, File No. 001-35753).
	3.	6	Second Amended and Restated Limited Liability Company Agreement of Western Midstream Holdings, LLC, dated as of February 28, 2019 (incorporated by reference to Exhibit 3.7 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on February 28, 2019, File No. 001-35753).
	3.	7	Amendment No. 1 to Second Amended and Restated Limited Liability Company Agreement of Western Midstream Holdings, LLC, dated February 28, 2019 (incorporated by reference to Exhibit 3.1 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on March 26, 2019, File No. 001-35753).
	3.	8	Certificate of Limited Partnership of Western Gas Partners, LP (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Registration Statement on Form S-1 filed on October 15, 2007, File No. 333-146700).
	3.	9	Third Amended and Restated Agreement of Limited Partnership of Western Midstream Operating, LP, dated as of February 28, 2019 (incorporated by reference to Exhibit 3.5 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on February 28, 2019, File No. 001-35753).
	3.	10	Certificate of Formation of Western Gas Holdings, LLC (incorporated by reference to Exhibit 3.3 to Western Gas Partners, LP’s Registration Statement on Form S-1 filed on October 15, 2007, File No. 333-146700).
	3.	11	Certificate of Amendment to Certificate of Formation of Western Gas Holdings, LLC, effective as of February 28, 2019 (incorporated by reference to Exhibit 3.4 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on February 28, 2019, File No. 001-35753).
	3.	12	Third Amended and Restated Limited Liability Company Agreement of Western Midstream Operating GP, LLC, dated as of February 28, 2019 (incorporated by reference to Exhibit 3.8 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on February 28, 2019, File No. 001-35753).
	3.	13	Certificate of Merger of Clarity Merger Sub, LLC with and into Western Gas Partners, LP, effective as of February 28, 2019 (incorporated by reference to Exhibit 3.3 to Western Midstream Partners, LP’s Current Report on Form 8-K filed on February 28, 2019, File No. 001-35753).

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Exhibit
Number Description
4. 1
Specimen Unit Certificate for the Common Units (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Quarterly Report on Form 10-Q filed on June 13, 2008, File No. 001-34046).
4. 2
Indenture, dated as of May 18, 2011, among Western Gas Partners, LP, as Issuer, the Subsidiary Guarantors named therein, as Guarantors, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 18, 2011, File No. 001-34046).
4. 3
First Supplemental Indenture, dated as of May 18, 2011, among Western Gas Partners, LP, as Issuer, the Subsidiary Guarantors named therein, as Guarantors, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 18, 2011, File No. 001-34046).
4. 4
Fourth Supplemental Indenture, dated as of June 28, 2012, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 28, 2012, File No. 001-34046).
4. 5
Form of 4.000% Senior Notes due 2022 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 28, 2012, File No. 001-34046).
4. 6
Sixth Supplemental Indenture, dated as of March 20, 2014, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 20, 2014, File No. 001-34046).
4. 7
Form of 5.450% Senior Notes due 2044 (incorporated by reference to Exhibit 4.4, which is included as Exhibit A to Exhibit 4.2, to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 20, 2014, File No. 001-34046).
4. 8
Seventh Supplemental Indenture, dated as of June 4, 2015, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 4, 2015, File No. 001-34046).
4. 9
Form of 3.950% Senior Notes due 2025 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 4, 2015, File No. 001-34046).
4. 10
Eighth Supplemental Indenture, dated as of July 12, 2016, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on July 12, 2016, File No. 001-34046).
4. 11
Form of 4.650% Senior Notes due 2026 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on July 12, 2016, File No. 001-34046).
4. 12
Ninth Supplemental Indenture, dated as of March 2, 2018, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 2, 2018, File No. 001-34046).
4. 13
Form of 4.500% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A-1 to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 2, 2018, File No. 001-34046).
4. 14
Form of 5.300% Senior Notes due 2048 (incorporated by reference to Exhibit 4.3, which is included as Exhibit A-2 to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 2, 2018, File No. 001-34046).
4. 15
Tenth Supplemental Indenture, dated as of August 9, 2018, by and between Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 9, 2018, File No. 001-34046).
4. 16
Form of 4.750% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A-1 to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 9, 2018, File No. 001-34046).
4. 17
Form of 5.500% Senior Notes due 2048 (incorporated by reference to Exhibit 4.3, which is included as Exhibit A-2 to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 9, 2018, File No. 001-34046).
4. 18
Eleventh Supplemental Indenture, dated as of January 13, 2020, by and between Western Midstream Operating, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).


Exhibit Number			Description
	4.	1	Specimen Unit Certificate for the Common Units (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Quarterly Report on Form 10-Q filed on June 13, 2008, File No. 001-34046).
	4.	2	Indenture, dated as of May 18, 2011, among Western Gas Partners, LP, as Issuer, the Subsidiary Guarantors named therein, as Guarantors, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 18, 2011, File No. 001-34046).
	4.	3	First Supplemental Indenture, dated as of May 18, 2011, among Western Gas Partners, LP, as Issuer, the Subsidiary Guarantors named therein, as Guarantors, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 18, 2011, File No. 001-34046).
	4.	4	Fourth Supplemental Indenture, dated as of June 28, 2012, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 28, 2012, File No. 001-34046).
	4.	5	Form of 4.000% Senior Notes due 2022 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 28, 2012, File No. 001-34046).
	4.	6	Sixth Supplemental Indenture, dated as of March 20, 2014, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 20, 2014, File No. 001-34046).
	4.	7	Form of 5.450% Senior Notes due 2044 (incorporated by reference to Exhibit 4.4, which is included as Exhibit A to Exhibit 4.2, to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 20, 2014, File No. 001-34046).
	4.	8	Seventh Supplemental Indenture, dated as of June 4, 2015, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 4, 2015, File No. 001-34046).
	4.	9	Form of 3.950% Senior Notes due 2025 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 4, 2015, File No. 001-34046).
	4.	10	Eighth Supplemental Indenture, dated as of July 12, 2016, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on July 12, 2016, File No. 001-34046).
	4.	11	Form of 4.650% Senior Notes due 2026 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on July 12, 2016, File No. 001-34046).
	4.	12	Ninth Supplemental Indenture, dated as of March 2, 2018, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 2, 2018, File No. 001-34046).
	4.	13	Form of 4.500% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A-1 to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 2, 2018, File No. 001-34046).
	4.	14	Form of 5.300% Senior Notes due 2048 (incorporated by reference to Exhibit 4.3, which is included as Exhibit A-2 to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 2, 2018, File No. 001-34046).
	4.	15	Tenth Supplemental Indenture, dated as of August 9, 2018, by and between Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 9, 2018, File No. 001-34046).
	4.	16	Form of 4.750% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A-1 to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 9, 2018, File No. 001-34046).

Table of Contents


Exhibit Number	Exhibit Number			Description
		4.	19	Form of Floating Rate Senior Notes due 2023 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A-1 to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
		4.	20	Form of 3.100% Senior Notes due 2025 (incorporated by reference to Exhibit 4.3, which is included as Exhibit A-2 to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
		4.	21	Form of 4.050% Senior Notes due 2030 (incorporated by reference to Exhibit 4.4, which is included as Exhibit A-3 to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
		4.	22	Form of 5.250% Senior Notes due 2050 (incorporated by reference to Exhibit 4.5, which is included as Exhibit A-4 to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
		4.	23	Twelfth Supplemental Indenture, dated as of April 4, 2023, by and between Western Midstream Operating, LP, as Issuer, and Computershare Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on April 5, 2023, File No. 001-34046).
		4.	24	Form of 6.150% Senior Notes due 2033 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on April 5, 2023, File No. 001-34046).
†		10.	1	Second Amendment to Gas Gathering Agreement by and between Delaware Basin Midstream LLC and Anadarko E&P Onshore LLC, effective as of the May 1, 2023.
Exhibit Number
Exhibit Number												Description
	4.								4.	17			Form of 5.500% Senior Notes due 2048 (incorporated by reference to Exhibit 4.3, which is included as Exhibit A-2 to Exhibit 4.1, to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 9, 2018, File No. 001-34046).
	4.								4.	18			Eleventh Supplemental Indenture, dated as of January 13, 2020, by and between Western Midstream Operating, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
	4.								4.	19			Form of Floating Rate Senior Notes due 2023 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A-1 to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
	4.								4.	20			Form of 3.100% Senior Notes due 2025 (incorporated by reference to Exhibit 4.3, which is included as Exhibit A-2 to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
	4.								4.	21			Form of 4.050% Senior Notes due 2030 (incorporated by reference to Exhibit 4.4, which is included as Exhibit A-3 to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
	4.								4.	22			Form of 5.250% Senior Notes due 2050 (incorporated by reference to Exhibit 4.5, which is included as Exhibit A-4 to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on January 13, 2020, File No. 001-34046).
	4.								4.	23			Twelfth Supplemental Indenture, dated as of April 4, 2023, by and between Western Midstream Operating, LP, as Issuer, and Computershare Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on April 5, 2023, File No. 001-34046).
	4.								4.	24			Form of 6.150% Senior Notes due 2033 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on April 5, 2023, File No. 001-34046).
	4.								4.	25			Thirteenth Supplemental Indenture, dated as of September 29, 2023, by and between Western Midstream Operating, LP, as Issuer, and Computershare Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on September 29, 2023, File No. 001-34046).
	4.								4.	26			Form of 6.350% Senior Notes due 2029 (incorporated by reference to Exhibit 4.2, which is included as Exhibit A to Exhibit 4.1 to Western Midstream Operating, LP’s Current Report on Form 8-K filed on September 29, 2023, File No. 001-34046).
*					*	10.		1				Form of 2024 Phantom Unit Award Agreement (Time-Based Awards).
*					*	10.		2				Form of 2024 Phantom Unit Award Agreement (TUR Awards).
*					*	10.		3				Form of 2024 Phantom Unit Award Agreement (ROA Awards).

*

*

*	*	31.	1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Western Midstream Partners, LP.	31.		1				Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Western Midstream Partners, LP.
*	*	31.	2	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Western Midstream Partners, LP.	*	31.		2				Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Western Midstream Partners, LP.
*	*	31.	3	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Western Midstream Operating, LP.	*	31.		3				Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Western Midstream Operating, LP.
*	*	31.	4	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Western Midstream Operating, LP.	*	31.		4				Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Western Midstream Operating, LP.
**	**	32.	1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Western Midstream Partners, LP.	**	32.		1				Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Western Midstream Partners, LP.
**	**	32.	2	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Western Midstream Operating, LP.	**	32.		2				Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Western Midstream Operating, LP.
*		101.	INS	XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
*		101.	SCH	Inline XBRL Schema Document
*		101.	CAL	Inline XBRL Calculation Linkbase Document
*		101.	DEF	Inline XBRL Definition Linkbase Document
*		101.	LAB	Inline XBRL Label Linkbase Document
*		101.	PRE	Inline XBRL Presentation Linkbase Document
*		104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Table of Contents

Exhibit
Number

Description

101.

INS

XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.

SCH

Inline XBRL Schema Document

101.

CAL

Inline XBRL Calculation Linkbase Document

101.

DEF

Inline XBRL Definition Linkbase Document

101.

LAB

Inline XBRL Label Linkbase Document

101.

PRE

Inline XBRL Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)




#			Pursuant to Item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.
†			~~Portions of this exhibit have been omitted as confidential pursuant to Item 601(b)(10) of Regulation S-K or a request for confidential treatment.~~
‡			~~Management contracts or compensatory plans or arrangements required to be filed pursuant to Item 15.~~

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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


			WESTERN MIDSTREAM PARTNERS, LP

~~August~~May 8, ~~2023~~2024
			/s/ Michael P. Ure
			Michael P. Ure President and Chief Executive Officer Western Midstream Holdings, LLC (as general partner of Western Midstream Partners, LP)

~~August~~May 8, ~~2023~~2024
			/s/ Kristen S. Shults
			Kristen S. Shults Senior Vice President and Chief Financial Officer Western Midstream Holdings, LLC (as general partner of Western Midstream Partners, LP)


			WESTERN MIDSTREAM OPERATING, LP

~~August~~May 8, ~~2023~~2024
			/s/ Michael P. Ure
			Michael P. Ure President and Chief Executive Officer Western Midstream Operating GP, LLC (as general partner of Western Midstream Operating, LP)

~~August~~May 8, ~~2023~~2024
			/s/ Kristen S. Shults
			Kristen S. Shults Senior Vice President and Chief Financial Officer Western Midstream Operating GP, LLC (as general partner of Western Midstream Operating, LP)

6364