Western Midstream Partners (WES) Q3 2024 earnings summary

Executive summary

• Achieved record natural gas and crude oil/NGLs throughput in the Delaware and Powder River Basins, with system operability above 98% and sequential growth despite plant turnarounds and asset sales.

• Issued $800 million of 5.45% senior notes due 2034 to refinance 2025 maturities and fund capital expenditures, achieving the best 10-year credit spread in company history.

• Divested over $1 billion in non-core assets, including $790 million in 1H'24, and became the largest Powder River Basin G&P provider after the Meritage acquisition.

• Maintained a $0.875 per-unit distribution for Q3 2024, annualized at $3.50, consistent with the prior quarter.

• Returned to investment grade, repurchased 15% of unaffected unit count since 2020, and increased annual distribution by 41% versus pre-pandemic levels.

Financial highlights

• Q3 2024 net income attributable to limited partners was $282 million; Adjusted EBITDA was $566.9 million; free cash flow was $365.1 million; and cash flow from operating activities was $551.3 million.

• Q3 2024 revenue was $883.4 million, down 2% sequentially; nine-month revenue was $2.68 billion, up 19% year-over-year.

• Adjusted gross margin for Q3 2024 was $827.5 million; per-Mcf for natural gas: $1.29; per-Bbl for crude oil/NGLs: $2.88; per-Bbl for produced water: $0.96.

• Free cash flow after distributions for Q3 2024 was $24.3 million.

• Adjusted EBITDA margin for nine months was approximately 65%.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA is expected at the high end of the $2.2–$2.4 billion guidance range, with free cash flow of $1.05–$1.25 billion.

• Capital expenditures for 2024 are projected at $700–$850 million, with most spending in the Delaware Basin and increasing allocation to Powder River and Uinta Basins.

• Throughput growth rates for all products are expected to moderate in 2025 due to asset sales and steady activity levels, with more detailed guidance to be provided in February.

• Q4 2024 Adjusted EBITDA is expected to increase, driven by steady throughput growth and lower O&M expense.

• 2024 base distribution is estimated at ≥$3.20 per unit, subject to board approval.