WES - Earnings call 4 2023 | Western Midstream Partners, LP

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Operator

Good afternoon. My name is Joelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Western Midstream Partners Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the conference over to Daniel Jenkins, Director of Investor Relations. ahead. go Please

Daniel Jenkins

differ deck, forward-looking glad Midstream's disclosures I'm like join materials results today accompanying will XX-K today materially Shults, that reference Ure, website.Additionally, factors to form and Michael. and us Relevant are Executive non-GAAP our remind Officer other earnings from what X. over Thank Chief the quarter K-X we our you that of XXXX March to risk public Chief filings Michael could release the Hard Western regarding you Western copies slide available the be reconciliations. most discussed call, actual will I'm Midstream's are me fourth mailed that today. would last our contain conference for Kristen be statements night's reference important beginning you you. the description inform Partners cause website Officer.I'll today's our recent posted Midstream could to out call and now and call. to Financial via Western turn on Please pleased With for I a following week.

Michael Ure

and afternoon, you, good Thank Daniel, everyone.

past return non-core for sheet approximately joint into strengthen Mont of the to return accelerating years, X.Xx The provide our of we legacy, excited million. liquidity been WES's further strategy divesting a when third-party our few incremental operating equates to operational and by unit divestitures distribution on starting focused our with XXXX, year existing generating Occidental, footprint.Additionally, operated have a business, and in also management unitholder maximizing value enhanced expected distribution quarter goal Panola count financial proceeds includes enhanced the becoming to allocation the a as of Management's business our in attractive transactions, the is on results, partnership generation we base generates flow assets believe in significant $XXX generation asset Saddlehorn returns and baseline with in the This incremental in will net annualized and WES's we years.While Marcellus XX%, efficiently remaining unitholders result recently and pay XXXX.For accelerate distribution free Belvieu flow than capital future WES's plans have on sustainable these able which coupling the increase an XXXX aggregate business of unit such per first divest accretive reduced non-core, of basis. distribution our unit allows underpins base to and cash venture, Whitethorn, confidence a gathering capital basis grow interest increase of component I'm maximum in enterprise asset leverage and EBITDA discuss provide in from per assets the strategic the for further the to full our our assets series of our standalone several successfully pipelines, represent to system free have we quarter an acquisition, of multiple Pennsylvania. critical sustainability growing our aligning safely. and capital material of to to base base rather of business our the and unitholders $X.XXX a a cost-efficiently our distribution Before as recommendation non-operated the we in we XXXX, fourth with a recommend the executed capital that the cash meaningful cash framework, agreements the generation, announce adjusted with of quarterly XXXX our the the balance Midstream reduction, executed core of in outperforms.Since and to M&A, and and unitholders. to our and Furthermore, to Meritage which diversify reallocating enhanced the distribution $X.XX our interest

As relative year-end gross XX% of to we grown have margin XXXX. our year-end adjusted XXXX,

will distribution amount equates anticipated burden of growth This our unit Since continued our have cash quarterly return capital unit unit resulted XXXX distributions our focusing more we by XXXX.The through January $X.XX an throughout to repurchased unit existing growth stakeholders at cumulative this able per expected expected also have equating the capital-efficient reduction count have of count an million rate. discipline, on XXXX, reduction $XX year-end capital roughly to at return be to based can inclusive in we increase. in through $XXX free outstanding, the of to $X.XX we cash on XXXX, framework. a that starting from transparent to period, reduced thus total such flow at unitholders our million in grow flow guidance.Furthermore, $X.XX diversified, $XXX XXXX midpoint been the annualized and Additionally, year-end per significant distribution to billion have to million per-unit value XX% in unaffected free reallocated

of across our asset and WES as our and position $X.X through through Additionally, record returned actions XXXX reduced and capital unitholders return expected generation partnership from materially by level. target increases of grow.Turning billion XXXX.All and relative to successes our our and capital unitholders distribution to still strength, cash XXXX this at return leverage year and increase X target accretive commercial put of ability quarterly achieved will our to pivotal debt, distribution XXXX we another which we was our allocated magnitude, further products, base the diversified customer a resulted free Even year-end years a all to also growth our flow of to to performs business to distribution framework. WES's results. with continues base meaningful we base cash high an in successful additional have X.Xx for watermark an believe accelerate to pre-pandemic to throughput X.Xx future increase of of in these an flow repurchasing as to quarterly retiring we of has ultimately year M&A, which room have our and the XX%

Our continue from has maintaining and to yesterday's XXXX. that continued footing we to capturing WES solid is Mentone enter discipline, in release, positioned and throughput our core majority ability as which growth announced XXXX into in the on we of reflected anticipates our and in the capital cost press and North XXXX operational plants. This basins, construction investment complete capital the Loving III and financial XXXX of includes while guidance strong the growth necessary throughput

growth discuss asset success more in yesterday.Before like position in our quarter we of several I results divestitures in accomplishments and Our XXXX from our guidance and beyond. fourth also includes WES non-core the impact detail, would XXXX helped highlight announced that for to

the Delaware in Focusing three this from record all throughput an products, across the on extremely was successful Basin, increased resulting for throughput year as basin. WES

that also up rate acquisition throughput diversified natural efficiencies. plan We we least a off and $X quarter, acquisition we for provide sheet oil that drivers implementing early with that and the ultimately operational unaffiliated transaction our since helped the certain XXXX.Our agreements we performance the the feet water efficiencies that enable and cost we and on the success stand-alone believe is multiple XXXX.Furthermore, will also basin Basin. the expectations, the calls, to increase businesses.Since value WES's discussed grow experienced our accelerate progress WES a our late DJ throughput our investment-grade third-party commercial deals one XXXX, to plant, capacity of cubic becoming twice million base as commercial natural with and maintain leverage earnings basis, our NGL's make team produced significant executed to annualized have and Since an working into incremental processors sequential the to and as time customers These and XXX our driving both third-party on the $X.XX of and of our III of tremendous $X have can the cost across growth third-party year-over-year WES crude in asset have rating M&A system. total early our the are history maintain long-term operational accomplishments by both gas Basin, of incremental we have prior partnership River representing the goal first cost at year we base XX% our customer in we to XX% and relative of strong operational other leverage our double optimize XXXX.As With late quarter credit and in of in the Powder behind Meritage primary for and realized of in savings pleased balance our day by XXXX. per and in additional further units to unitholders.In of since throughout as the new closing in in start Mentone closed the fourth half existing down adding been leverage the of the return position transaction to per XXXX.In accretive second-largest integrate third-party WES's field-level expertise common quarter from identified commitments, million Delaware are said, value focused capital has gas customers Basin, increased declines XX capturing were identified order first to natural gas our subsided In with Occidental starting our remains basin processing $XXX throughput strive expected increase. top the a and second which on substantial our unitholders. we processing than unit have M&A which corporate-level the generate experienced bought towards thresholds by to firm X These since distribution back volumes to to its we XXXX, the at the it sanctioning XXXX, on increased more a third North Meritage during and strategy commercial business, successes of well materially Loving long-term strong be end another savings that we its million achievable savings million us baseline base

to in $XXX announced of per form distributions to an million, on paid XXXX based financial our to return enhanced distribution XX%.With turn XXXX.Inclusive $XXX divestitures distributions, accelerate the distribution expected anticipated and the reduce paid of increase to of yesterday's discuss our unit allow of guidance unit, to our capital and to year-end us asset divestitures total, will call unitholders we I count, $X.XXX May and increase performance. in Coupled of operational we reduction Kristen of leverage in these net our expect approximately XXXX we or growth flow with through In performance. the the in unitholders XXXX. over XXXX free in cash compared by XX% of Additionally, our to XXXX, Xx overall ranges, paid to the million that, first financial

Kristen Shults

Michael, and you, good afternoon, everyone. Thank

natural gas Our basis. the from throughput almost entirely fourth early This Meritage River Powder increased on that in by throughput quarter resulting quarter a X% October. in acquisition the closed was due Basin, to increased sequential

the rate expect and Basin increased from quarter, to be of Our per quarter rate due oil margin and assets fourth operated This Powder sequential cost margin DJ to temporary revenue Pennsylvania.Our quarter, experienced associated in due NGLs recorded crude with support gross driven development.Our recorded quarter quarter higher per higher fourth $X.XX acquisition adjustment cumulative primarily of increased to by X% due per mostly to associated loss also revenue increase JV, margin the our favorable margin the curtailments and fourth first volume the throughput adjusted to Mont throughput gross first investments of the flat closed with the at by basis, systems.We quarter Belvieu pertaining due of increased decreased the and from River Basin throughput quarter both for a sequential to compared by Delaware equity associated quarter, NGL River the volumes activities oil to was cost the South on in the producer go-forward increased rates for the our also to a of and quarter Pipeline the which increased from and DJ of our of quarter. by Texas gas throughput relative including Basin.We compared the by Meritage South prior quarter-over-quarter. quarter, from with to with prior adjusted adjustment sale primarily adjusted recognition service from the our increased slightly gross recognition higher barrel $X.XX with assets crude DJ primarily X% cost to fourth assets, to the a Powder in on System throughput the the Gathering increased service that Delaware, our rates throughput approximately fourth in Used X% associated by are Basin, loss McF adjacent due recently McF from fourth distributions higher water basis assets.We last with week. quarter per volumes increase the to the offset by redeterminations service Texas Basin gross a associated favorable expect Whitethorn Marcellus adjusted barrel cumulative and divested natural the oil our

water barrel to gross produced the to increased efficiency increase in Saddlehorn compared our gross contract and fee Panola prior margin Additionally, another mostly assets close.Our quarter, quarter adjusted once sales per per mix and quarter, barrel adjusted revenue. the assets for $X.XX to margin second expect we increased our Pipeline XX% by the fourth due

first Texas contracts gross in Meritage of adjustments to expect income our by adjusted gross we lower rates and per to maintenance system.Turning mostly expenses, decreased of the assets of cost X.X associated partners contribution fourth Basin oil million and increase effective service was our months activity, redetermined $XXX quarter, expense and Meritage quarter, driven third due our quarter quarter-over-quarter, certain to Relative EBITDA to attributable adjusted recording rate gross our inclusive to the of of the operations that margin increase relative our mostly with with of became margin the South million. by We DJ on and of the service January limited increased adjusted This $XXX from quarter, to revenue of slightly the net margin utilities acquisition recognition on barrel cost X.During to fourth favorable cumulative generated due million. associated redetermination mostly $XX $XX expense. modestly million the

and expect maintenance look we future, higher result and throughput trend modestly our to expanded base. we asset our expense As as XXXX the operation a to increased XXXX than of

associated November months distribution flow Free flow, to As with the energy million. summer cash conjunction $XX usage a fourth of flow from $XXX throughput.Turning higher and operating activities our million, quarter overall after electricity free reminder, expense greater totaled cash expect utility flow due seasonality pricing was cash we in our in with million. cash $XXX increased generating to our payment

per fourth XXXX to throughput II, oil the as sale unit paid Average was prior in and unitholders our the excluding cash-based relative which quarter our increased Our and X to unchanged quarter's of to XXXX. February year-over-year, $X.XXX of across results. distribution was distribution XX full-year crude volumes on all products X.Turning impacted Cactus February NGL's of

barrels associated of the includes sale X XX,XXX of per For produced per throughput XX% averaged X% barrels in per an an year Meritage and Full XXXX day full II This averaged year XXX,XXX X,XXX X.X natural barrels feet the of XXXX.Full year fourth compared crude associated XXXX. XXXX, billion a oil of full throughput of approximately barrels just approximately per is throughput gas averaged cubic assets average in increase. quarter to increase day, XXXX million with representing year-over-year year X% day, day, with per year-over-year throughput throughput increase. XXXX over and of a Cactus NGL day water

the This of contribution recorded by X billion.Our III associated performance partners, net the growing billion positioned Delaware construction addition billion of just exceeding with capital of WES flow, adjusted throughput of Meritage of from needs primarily generating and we the range $X.X in during revised was to performance, products throughput which deliver million cash quarter. support of the the the financial operating associated our financial from full-year slightly of and end customers. year in our of Mentone capital, largely fourth attributable Basin guidance the strong for XXXX EBITDA, expansion to X.X growth increased another adjusted all and totaled income consisted top $XXX months EBITDA expenditures limited For of of XXXX.Our driven EBITDA adjusted XXXX predominantly under to billion $X.XX approximately totaled our $X $X.XX

spend was several XXXX.Our the from flow generation end revised resulting capital our of range, low expansion million $XXX within free cash revised range. largely toward our projects early shifting guidance Our guidance in into XXXX totaled XXXX

Our performance base highlights towards our the profitable asset nature disciplined managing spending. of costs and both approach operational our capital and

per including recent distribution base amount our Finally, $X.XXXX of This our WES exceeded $X.XXX per unit. that declared XXXX, for guidance full-year base totaled quarter base XXXX unit. $X.XX distribution distributions of fourth

XXXX, average of upper and enhanced to our low for an unit oil distribution by single-digit to natural we to to mid-teens paid crude we XXXX.Turning $X.XXX low for portfolio-wide increase throughput of percentage and produced a expect May for per percentage attention in water. percentage NGLs, our mid-teens year-over-year Additionally, gas,

guidance throughput non-core announced throughput and the growth rates yesterday the for NGLs excludes those and from to, our to comparative or we increase better year-over-year asset average purposes.In XXXX Basin, Our Delaware expect for and results volumes takes gas year-over-year natural reported similar into at oil XXXX than account sales XXXX. crude we

We due producer This volumes decline number a expect produced throughout continued steady to XXXX. relative a of XXXX. online wells see activity water levels is in coming strong mostly and to slight to

flat pad drilling number DJ the wells expected for increase throughput and forecasted to are both result well come NGLs. oil per crude laterals our as base.In across natural the to throughput While we XXXX, is and longer such of relative year-over-year to Basin, to producer-driven expect efficiencies higher and expected asset gas in market in to XXXX average multi-well

into XXXX, increases on-loan in continue half activity We and that resulted namely second expect steady of the year. second the the activity positive half throughput the of strong trends levels to in XXXX producer in

increases in steady consistent growth our well to XXXX, expect from addition of XXXX new approximately XXXX NGL loan minimal will oil due have a to see in in to adjusted the that XXXX mind count EBITDA revenue. throughput in current our latest demand on on activity.Keep relative to in and double we structure the forecast, throughput in fee of As crude the near in impact term

year, and guidance, the year's heritage for due meaningful crude the from midpoint and which $X.X throughput growth the midpoint, the XX% $X.X in the compared a from to than gas asset expect to the announcement. River $X.X expect between steady our throughput EBITDA to implying our after of asset XXXX XXXX on the growth to yesterday.Focusing billion, for effect we primarily EBITDA financial range growth natural year-over-year the will oil change to slightly of and primarily to adjusted and full distribution Meritage non-core overall sales at billion acquisition to billion XXXX, represents Basin contribution giving more sales Finally, basin.Turning non-core both we from even Powder of announced our in customers NGLs, XXXX, due adjusted

incremental expenditure of to non-core implying million, $XXX asset while our midpoint yesterday's million However, our and and Sale to million, expect overall $XXX X% also we reducing of XXXX will to adjusted asset of guidance sale estimate announcement. remain contribute capital us the between range respectively. non-core XX% of operated at allowed are adjusted generate largest impact base a River assets $XXX Basin XXXX and XX%, that our contributor expand expected acquisition the while the the Meritage which our and EBITDA, Delaware includes EBITDA leverage.We DJ Powder the and has Basin of

to and III March and continued our the III, of system completion Mentone from the enter phase be of of success to existing spent of core the early the North spent capital the begin second expect our Mentone to new quarter plan operating Loving additional still of for commissioning start-up to basins Mentone construction in Delaware financially and half The due plant, in Basin. XXXX. XX% expansion benefiting customers.We of to second and commercial be from both the capital the will pertaining budget our in expect We expansion capital in majority

increased business $X.XX $X.XX Meritage to basin expect of capital, overall to free our our and initial XXXX.Taking expansion base have We an at total XX% and billion has overall expected of our we yesterday's of guidance our those year-over-year to assumptions $X.XX some number due the billion, transaction, of which we of also and asset in a to market expect well needs coming our assumptions Powder growth of between and adjusted generate expenditure and operational XXXX, for combination mostly in announcement unit. capital distribution least the our we midpoint we the taking connect maintenance efficiencies reduce refined higher ranges wells expanded are the non-core water of full-year produced due at capital since on higher in assets, were the and to implementing, to Basin base.Focusing with capital able sale increase, per ownership asset team impact billion better includes to are River of this into EBITDA implying of $X.XX the guiding represents a midpoint.Including both account, cash flow capital

per distribution mentioned, Michael $X.XXX As level. pre-COVID higher is XXXX WES's quarter XX% than quarterly

financial base the continue target distribution room and will we of a in have based subject on Michael. XXXX back to leverage health I'll our governed distribution Xx be and will year-end Any basis on the and enhanced increases of by we believe quarterly to the on our performance turn will trajectory years payment base our to growth in threshold future XXXX evaluate over Board's full-year business. discretion.Now potential to based XXXX We additional call the distribution

Michael Ure

Kristen. you, Thank

like leverage net the strength a excitement in put downgraded our significant to task we to materially reiterate position financial that approximately When into base than WES open workforce, position on we the people and would the monumental standalone focused today.In immediately XXXX as necessary of culture faced more below million for our had and the we investment from we invested improve employee back-office Significant I and existing and a units grade, we customers entity. XXX building ourselves that and to are Q&A, we customers attracting assembled X.Xx, health leverage of early business has partnership by generating a been our in and up sheet.Since outstanding, effort current it our and infrastructure operational partnership's steps incremental outlook. was our the took Before of XXXX, regarding the pandemic time, new to onto dedicated system. establish in hit balance reduce XXXX,

entrepreneurial operations aspect adopted opportunities re-examined identify our cost of mentality an and improve our and to every efficiencies also We to incremental savings pursue profitability. to

to improve the ability our divestitures sheet we our by and balance transform and financial We reducing as strong distributable have our operational metrics implemented performance flow and and indicator financial of in Basin shift finance XX% and debt a non-core to net acquisition River year-end to enhance account Meritage XXXX led environmental and asset in footprint rating, unit regained credit MLP free yesterday.We to employee a results, our first distribution taking and also free and since Powder to guidance the technologies generation when than new increase processes expected half were of position and meaningfully one our the efficiencies, of XXXX the safety, the as footprint.We minimize including has focus to into flow flow count more a repurchasing opposed pivot standard development conventional announced our of and on midstream The unaffected leverage cash the cash half second XXXX. turns MLP investment-grade to cash to the end also midstream put coverage. us

WES the WES has Index.In several one balance efforts XXXX be XX% to over flexibility cash to position our most and years and have Mentone by capital which recent have Loving midstream capital sheet our unitholders quarters Russell further to increase. relative enterprise divestitures, compared At value peer than and in has free doubt, past ability generation, North when pre-pandemic ultimately non-core the contracts leaders to yielding of S&P Without Energy few our distribution XXXX in accelerate to resulted actions, our which continue were in of the $X.XXX higher sanctioning capital and our if higher mode, Train and asset distribution. yield demonstrates and returned to percentage and of than be a total more investment-grade of our fact, Index.We us to have the commitments, XXX XXXX, XXXX of to unitholders. the also return midstream group greatly provided plant to the leads recommend not increase its top-tier should and companies yield, total highest, underwritten we past returned both have highest, all in S&P commitment unit coupled employed. WES entities backed return already flow a base with have the distribution III capital even return improved volume by over significant make able base to increase Additionally, a quarterly, other base one return recent discipline.These of the before the in minimum Sector unitholders to a a other the distribution the our midstream growth and represents XX% back companies, our to been the to we level, capital WES's XX% target on per long-term

close increase flow at all like call work the XX% the by thanking for dedication of hard in workforce a throughout our of into would WES are increase trajectory financial our in transition of will adjusted we be we by company's and free The business XX% for the growth their throughput and WES remains outlook which in history. excited to as driven EBITDA strong expect midpoint.I the cash we another that about year XXXX. generates entire Finally, an XXXX,

to progress goals forward questions. look organization you will on and to that, our people's sustainable Our and I first work the for core make values foundational May.With XXXX hard our updating create value achievements dedication toward for in call principles for WES's and our the enabled line landmark us quarter we to on open stakeholders. our

Operator

comes first Your Instructions] question Citi. Dounis from [Operator with Spiro

Spiro Dounis

distribution, the some could, if on implications higher means. go new through we up pick I to to wanted Maybe the of payout what this on

guess like the sustainability ability to into it guess the in for it. thought or level and one some distribution. of it it I free to maybe to now continue here, so. seems to the cash I there lot I flow, of the $XXX implicit of this of you million perhaps guys radically to lot is imply grow over X a consume your of some put So spending self-restraint But of years be numbers that in seem think the does our term a what's sounds near next grow few kind below years that on of CapEx.And sort next

that reading some of CapEx sort grow decline is, correctly, growth How sort we that much rate think then lower level? CapEx? about here? for And there mean do that at here with we does that are can one, So you two, you of that the does what from level presumption as normalized what a think is

Michael Ure

I that new relative comments. growth Spiro, be Yes. expected and the really sustain a that expecting as couple that that are capital XXXX able we're We the to believe to periods the reasons plants into see level And Yes. behind higher go-forward to the XXXX do think building going are future. of X because of a rate. we we're

the that look capital expectations, seen that XXXX our on would we've you XXXX. XXXX all beyond, that and higher we at reduced would as and expect actually be current relative so, to And in based things levels considered

Spiro Dounis

I could sort And a stated is you still Do Anything single-digits? as reduced as out a grow mid you trajectory Obviously, sort grow there. to if guys in? longer-term sort we the don't have level yet is, of just goal growth what your have to plan a far penciled have distribution. of that know of

Michael Ure

still, of to in again, that the your forward, commentary made that's we going cash which positive that at for the us, potential period believe a like forward. would capital to I sustainable the new might did what from basis turn as of capital, for include but I'd indicative forward. that an or going level and probably just plants building capital sustainability look of associated the distributions result look on Yes. amount you was not a generation flow the increased with view significant of outcomes XXXX, going which is, the to a perspective, We point from incident a it around free even point, growth going distribution

Spiro Dounis

touch was should got appetite just on And to just sell you've left at quickly, with it been. more left core? this now your asset is radar I -- here our second question, was you is on point that assets, not screen to how have curious, the something sales. guess, continue maybe But to what describe That

Michael Ure

those but Yes. they're always held us. us, that perspective actually in the core value We've to not them, non-core assets to obviously we were great see that

well. And those to should in of at we do, someone value assets divest of see did we XXXX them so we then what end the than as would more similar

have they do, in do would we've maintain investments method we around we what else have But then the greater value so to those us. equity that same them that the perspective someone we divest We future. see great than some retained. to And shouldn't look value

Operator

question JPMorgan. next from Tonet comes Your with Jeremy

Jeremy Tonet

Tone Jeremy from JPMorgan.

point, you. a How difficult of portfolio question kind this Just in guys kind think front wanted asking bit to, it's up capital maybe want you a think the you at about and we little you about forward? what there sustain of refresh to to guess, know, the needed view earnings of do as pick current But to power with think about, of that answer. was the guys business just as going the I Spiro

Michael Ure

Yes.

I'd as lean best of of sustaining about as necessary. $X.XX the probably with us you about for think in capital a you amount a of comment I of it turn that would again, that's So to growth capital the reiterate, a call And levels terms sort the even towards range. XXXX -- indicative

it best X capital like building expect sustained for I So would some of level plants projects, of the that think relates we to that's as in chunkier we sort what of right we to be the a that the have to the absence you give guidance can now.

Jeremy Tonet

whether an something higher So think at that about see, level right determining or the were kind this it's lower, it's level the as or flow? to going the cash that when parameters about forward, we distribution CapEx increase, guess, or free today, just whether looking XX% I payout trying as versus you of of how of think of increase, was kind it of

Michael Ure

Yes.

the So we opportunistically of board The a a it health to XXXX. on was ago on, sustain continue we offers the side.And and M&A is to look the the be and years us level, for it took targeted went flexibility took that, able into confidence leverage and, a of a Xx to really and XXXX, business continue the that for to exiting the look opportunities out to to that one, level put standpoint we came a that couple units gives at that a at we sustained the on analysis us but the and at a go-forward and a is we we even and we frankly, number a $X.XX as Xx. a look at might even end leverage times to focused of couple able with basis to Then at Xx as we level. it. us end, relative of of asset future. did buy achieve divestitures from that provides to opportunity to our think where to lower inorganic that together so, back relates further support even our be business of That's grow lot business, we be going And like the where a where out on the things forward into level target opportunity take expectations have at and sensitized grow would an

Jeremy Tonet

how could. consolidation, going that we one, Amidst just And in as kind industry, of you at then WES's midstream last of period quick one progresses think this in point? role I curious just see the forward this if

Michael Ure

Yes.

recent I in I'd past probably you regard. that point the think to

of acquisitions and team, standpoint, cash increase confidence be our capabilities out going there our system we in existing our the incredible bolt-on forward. enhance free the operate in through synergies go which we culture able that flow acquire our can from to have areas then and in we the think to I drive operational position,

be do we to what to can we're that, be to obviously, able constantly saw scouring opportunities to similar So where we landscape open to continue the in the Meritage acquisition.

Operator

next from comes question Instructions] [Operator with UBS. Brian Reynolds Your

Brian Reynolds

some the Maybe just Delaware on up follow of activity. a

of you're As I before of Mentone amount Loving kind and remember, a come significant the on. North plant volumes offloading

just much another at offloaded the volumes of need us we currently? kind you North Loving comments following some the XXXX-'XX plant in of the growth are how timeframe, particularly on given remind trajectory, just for growth see So like, being another in can And could Delaware? the

Michael Ure

III Brian, Mentone that we Yes. largely full. once that is plant expect comes would online that

offload So perspective. I should an a for pretty think you sense good that give volume

that to here Train Loving coming see North sufficient expecting be with we actually able and handle believe the going online I that we we're to As we're that today, growth projecting forward.

sets we're that Mentone III base. coming online between asset then our to handle seeing to up and North nicely we that So I, growth that able shortly Loving us the Train in be think

Brian Reynolds

could touch remind could on announcements ongoing from of the board I perhaps of the separates And guys with divestment independent ultimately maybe WES. just you to how announced no us structure, Oxy's about potential sale about us process, the of process, the remind there? you just sale appreciate release kind recent your if but Oxy you board WES that

Michael Ure

Brian. question, Good Yes.

is set up. board So our

of the have We non-Oxy employees, remaining board are the including X are the myself. appointees and that X X on Oxy then

Operator

Van Zackery TPH. comes question Your from with Everen next

Zackery Van Everen

you still side crude the above below one DJ. things. levels Can you you that NVCs on the some have remind below NVC of you're you're noted side on on there? know the of or oil us I if Just processing the

Kristen Shults

so side looks like a just basis what customers and NVC from a of on on mix you're the as increase But got year the volumetric an is contract the EBITDA expect side I We've on we're different by depends an that good gas DJ, it Yes. contract on side seeing that the side would well. as and increasing on and going perspective. from the a gas

Zackery Van Everen

North Delaware you question future grow once the imagine your on, capacity volumes previous of offloading new into X do of some the the a on do up following plants? you with is growth, Loving then if beyond And

Michael Ure

currently offloads to to believe I after that capacity handle the currently We North Yes. have, we're We be we'll Loving and need is we'll don't expecting. the volumes growth that foresee that be the doing able completed.

Operator

next Gabriel comes Your with question Mizuho. from Moreen

Robert Mosca

that wondering for the I'm how on to the by in redeterminations received service been a similar This that's you being throughout cost expecting could XQ. of is Is the you from if driven of year? as And Rob payments Gabe. closer of or cost payments that 'XX? of occur contracts service these are you expected onset scrutiny speak

Michael Ure

Yes.

fourth So on recognition the non-cash is EBITDA that item. the revenue actually to was an quarter impact a

have that revenues based just booked So trying expectations should on and that is been to the align expected weren't.

any that have cost service non-cash with that's contracts adjustment of so actually payments. of demand a occurs And our that

anything Kirsten, that. you had with that? on associated cash no So else

Kristen Shults

quarter. in only booked that XXXX, fourth of Yes. And only the same those in we and coming in fourth you ones the The be that are quarter. every would quarter do the exercise then year fourth see

Robert Mosca

now to that is you of or in capitalized target? being that you and And year-in, see CapEx maybe is kind big And with right the capitalized this expect as you think run that that ensure distribution, your way distribution to being manage want it's you on it the accordance to really enhanced don't that with want to about rate long-term, payouts base year-out? Xx leveraged

Michael Ure

Yes.

to enhanced continued was going distribution set expecting has that was that your the your about definitely where to to way an captures The we intended that's another to we're the to way it that for accurately be enhanced back it expect now so we're going level intended does forward. that if and outperform and investors.And question a perform, can't that find we the thinking distribution that And it. and the on were to distribution believe I return where there to the perform business basis. think use we framework annualized we the comment So business that was recommend $X.XX sustainable was to level our capital,

the believe to take we on that we we So on another relative annual quarterly basis for business look can enhanced a should is at not use that able of it that the outperform sustain and it a assessment Should an determination? distribution going be what we an health take to to find forward. and

Operator

Your the next from Research. Keith with question of Wolfe Stanley line comes

Keith Stanley

of distribution. Sorry, couple the But things for there. on it's multi-part question the a

you because above term? distributions to you cash this $XXX how analysis, over have as you are policy buybacks long make as the getting it Just in How large capital with door part and And can increase? make million to comfortable you fits a flow free of then as strategy the with you're their on did just on on base how any any general comments of alternative an can consider conversations lastly, the distribution objectives? cash comment the return partner

Michael Ure

Yes.

greater distribution item comment encompasses on first comfortability. don't that expect as a it to maybe go-forward that correct our there, just So the basis. and I the base one flow than that cash relates is generation there would free we

in And board the actually that the throughout the free our does so that has level expect do of comfort management team part is cash that flow the generation we that and recommending of the that's level period exceed distribution level. projected

that's that pull flow then on selling leverage we to that growth spent plus are bring a level believe higher levers non-operated generation GP, to really in say of the it year at relates more relates what health to Wes. of with in Xx.And a we the equity the For the down the I XXXX our interest and a and expected a get $XXX as us great whole.As And cash a that or is us leverage board capital, to members, to coming this in would other a down that to of the to the for value relates EBITDA drive exit from as leverage both This purpose sustainable for to Meritage overall had to all of in relates recycle members, very of we it buybacks GP, the that it as have is trying driven our other non-Oxy as the distribution method of for is could capital occurred to and it interest a so of think both members, ability our and Meritage is pay light the be level business, that where trying able is assets. in best whole. -- drive reduction light We've that that to free to get sold that acquisition. level it and effectively lever flow way sell-down leverage the by best did of around a that was the more multiple is performance cash business point much and to a this the the the definitely unitholders the at to the WES, support a out with of of growth investments result of door. million collectively we the it free you it exclusively allowed not as our really business, value the did commensurate we is M&A as to just Oxy what year, board decision with when as from incredible combined WES all of interactive with a And it's relates to to board

Keith Stanley

plant strategy. just processing want on the follow one, up to Second

doing So Mentone offloads, you basically the you're offloads III that today. said up all will take

growth You're this year. volume going to have through

your North growing North need comes the system's on why to through the in But wouldn't on XXXX, left wouldn't time And some when plant in space the how Loving a anymore frame? XXXX have can fast so, and of offload why, you of given type for presumably Permian, just walk beginning you'd in Loving. you need you have another

Michael Ure

Yes.

Loving, as be to volume a that we opens there. it commitments, incremental North we today, Should, when Loving a we still right plant. will that the have, standpoint. believe be need a obviously, sufficient we up. processing as you're need that we it for then, should will some point growth, then would inclusion for our to today, forecast we when to don't us to us largely as will at the And that relates get get according from build at it there additional be in projected today, we of North As incremental But projections, III that. that offloads with look we out that have bridge Mentone be full There

Operator

with Akyol Selman from comes Stifel. question next Your

Selman Akyol

quick a for Just one real me.

what also that for growth kind seeing the be you to growth obviously, Going for you're as year. of just think curious basin, of to full I growth I'm within But basin? out the XXXX, referenced and of sort

Michael Ure

in both to well synergies volume forward. you actually relates to even a incremental still believe compared XXXX us as on some were that available annual XXXX. projecting, are looked, we of full be do Selman, growth XXXX it We to for and Powder that that we already in EBITDA, the it able as may on annualized, if going we as XXXX, we growth highlighted acquisition achieve the there Basin to opportunities basis River at That's project

better expect So growth throughput and you free EBITDA a from standpoint. what cash even from flow just growth, an there's than might

Operator

with from comes Your Fargo. next question Wells Baramov Ned

Ned Baramov

incremental you in point, roughly last lower savings multiple, are additional noted prepared further the efficiencies this could cost these remarks that multiple? your potentially in acquisition items post-synergy or reflected On the are the Meritage and Xx

Kristen Shults

Those are incremental.

anything that synergies reported find those when we the into multiple, and not would we were and So all those that account lower else did take we of us move than multiple.

Ned Baramov

bill? few every you and have hearing What front on recent to that's around? this years, this and talk we are Colorado. permitting seems development Is anything it on risks different there time most future draft about then, And to in the

Michael Ure

just new fourth those permits achieved. the rules as to last number most highlight quarter, quarter of would Yes. relates new play that I since was I think, into came year actually actually it that were successful the the

light expected to that increased actually, was period. last fact bit think take the that in it of with a was fourth always is take. would most what little time to lot positivity that I so familiar the going that process for to quarter it there's there of would And achieved think approvals of year, other of there that that those We there were confidence any a through. get the companies get in was I And the in be it

Operator

from comes Bank Neel America. question of next Mitra Your with

Indraneel Mitra

maybe the to that they very said it. Delaware going the strong, to Oxy understand wanted and growth I be were It's obviously. isolate drivers basin-wide behind flat.

helping Delaware how 'XX system? maybe drivers that you? the So drive the growth any system basis, a talk portfolio so different. understand other in affects is about first, can you it's in every But I that are that

Michael Ure

Yes.

on couple comments So, that. of a

Oxy basin-wide would areas expectation, that or around the I WES commentary and just to right a it. specific in not You're is comments operates a Oxy. the in is portfolio-wide partners of couple make from a which with There's

XXXX under of that services.In assets where First the strong we had elevated the really they performance, was year level all, the as world activities. the very WES been first has highlighted, of addition,

go of XXXX, of of roughly stepped beginning the XXXX. that If it actually you activity got was then to half back up around mid-year the

XXXX. now have seeing, you higher of higher much full of We activity so where And year the XXXX we than an that increased entered levels obviously, exit exited you're rate.

meaningful those And it. part activity, highlight, Basin.I continued third-party the prepared of lot the added the the remarks, pretty also Delaware coming tailwinds, along would of a we've so why of a you're that of mentioned coming with into amount it is seeing reasons growth we that out in expected business

pace the of as business, the double grown. of as take side whole volumes the couple third-party we years. so Permian it's our And over at on a actually a actually the look have third-party at grown The past

And that so, in our resulted really perspective. service expect what that customer customers unique for focus, basin-wide the doing from has emphasizing is it as what relative us, accelerating our we're what third-party do offering, for in we're you on might that of a all is it pie then to growing that focus we a terms can is whole that and new to growth profile volumes

Indraneel Mitra

now? and are underwrite just when but XX and and PRB DJ you or we distribution? expect growing continued right past do plus growth in to all under the year, the are PRB XXXX, expectations this a oil understand look continued you you Delaware DJ or the the the about price environment kind flatlining, then, distribution understanding of Do where And how think the that growth at

Michael Ure

Yes.

Actually, all couple of we're across our really So or things. basin. for a expecting XXXX, of growth irrespective assets area operated

those not relates XXXX of And well. so, we periods into performance assets, future we're to as quite as look only optimistic as for it the

why may so, the we confidence further the there think stage that of into this that increase part at incremental and opportunities great be sustainability And even the the increase there's $X.XX for to in distribution that's future. at why reason

Operator

questions Ure, further to are over turn time. There back no I Mr. the you. call at this

Michael Ure

strong to you the look results for all joining in employees to performance. for our want we my extra X the express now forward to for put all. months you I first the of all you from with the we effort Thank their of discuss to, Thank XXXX position are today. again, WES speaking call. that appreciation us And quarter

Operator

today's conference concludes This call.

You may now disconnect.

Western Midstream Partners (WES) 22 Feb 242023 Q4 Earnings call transcript