Western Midstream Partners LP (WES)

Western Midstream Partners LP: A Comprehensive Overview

Company Profile

History and Background

Western Midstream Partners LP (WES) is a publicly traded master limited partnership (MLP) formed by Occidental Petroleum Corporation (OXY) in 2013. WES focuses on gathering, processing, transporting, and storing crude oil, natural gas, and natural gas liquids (NGLs) in the Permian Basin and related areas. The MLP operates through its main subsidiaries, Western Midstream GP, LLC, which serves as the general partner, and Western Midstream Operating, LLC, the operating subsidiary.

Core Business Areas

Western Midstream Partners LP's main business areas include:

• Gathering and Processing: WES operates gathering and processing systems in the Permian Basin, including facilities for natural gas, NGLs, and crude oil.
• Transportation: The company owns and operates crude oil and natural gas pipelines, as well as terminals and storage facilities in the Permian Basin and along the Gulf Coast.
• Marketing: WES markets and sells its NGLs to various customers, including refiners, petrochemical companies, and export markets.

Leadership and Corporate Structure

The current leadership team at Western Midstream Partners LP consists of:

• CEO: Michael L. Ure
• President: Michael L. Ure
• CFO: Katherine P. Beaty
• SVP and COO: Joseph E. Allgood

The company maintains a traditional corporate structure, with the general partner (Western Midstream GP, LLC) managing the operations of the operating subsidiary (Western Midstream Operating, LLC).

Top Products and Market Share

Top Products and Offerings

Western Midstream Partners LP's top products include:

• Crude oil: WES transports and stores crude oil produced in the Permian Basin.
• Natural gas: The company gathers, processes, and transports natural gas from the Permian Basin to various markets.
• NGLs: WES processes and markets a variety of NGLs, including ethane, propane, and butane.

Market Share

As of 2021, Western Midstream Partners LP held a significant market share in the Permian Basin for gathering and processing natural gas and NGLs. However, due to the dynamic nature of the oil and gas industry, market share data may fluctuate.

Product Performance and Comparison

Western Midstream Partners LP's products are considered reliable and efficient. The company has a strong track record of meeting customer needs and delivering on its operational targets. However, performance and market reception can vary depending on market conditions and competitor activity.

Total Addressable Market

The total addressable market for Western Midstream Partners LP includes the Permian Basin, where the company has a significant footprint, and other areas where it operates related assets. The size of the market depends on various factors, including energy production levels, infrastructure development, and regulatory considerations.

Financial Performance

Recent Financial Statements

Western Midstream Partners LP's recent financial statements (2021) show:

• Revenue: $3.2 billion
• Net Income: $291 million
• Profit Margin: 9.1%
• Earnings per Share (EPS): $4.03

Year-over-Year Comparison

Compared to 2020, Western Midstream Partners LP's 2021 financial performance showed an increase in revenue, net income, and EPS. However, the profit margin declined slightly.

Cash Flow and Balance Sheet

The company's cash flow statement indicates a strong operating cash flow and sufficient liquidity. The balance sheet shows a moderate level of debt, which is within manageable levels.

Dividends and Shareholder Returns

Dividend History

Western Midstream Partners LP has a history of paying quarterly distributions to unitholders. The current distribution yield is approximately 7.5%.

Shareholder Returns

Total shareholder returns for Western Midstream Partners LP have been positive in recent years. However, returns can vary depending on market conditions and the company's overall performance.

Growth Trajectory

Historical Growth

Over the past five years, Western Midstream Partners LP has experienced moderate growth in revenue and earnings. Continued growth is expected based on industry trends and company expansion plans.

Future Projections

Future growth projections for Western Midstream Partners LP are positive, fueled by increasing energy production in the Permian Basin and potential expansion into new markets.

Recent Initiatives

The company is focused on optimizing its existing assets, increasing throughput volumes, and expanding its midstream infrastructure to support future growth.

Market Dynamics

Industry Trends

The oil and gas industry is experiencing a dynamic environment, with factors such as energy transition, technological advancements, and geopolitical events impacting market dynamics.

Competitive Landscape

Western Midstream Partners LP faces competition from various midstream companies operating in the Permian Basin and other areas.

Competitors

Key Competitors

Key competitors of Western Midstream Partners LP include:

• DCP Midstream LP (DCP)
• Energy Transfer LP (ET)
• MPLX LP (MPLX)
• Phillips 66 Partners LP (PSXP)

Competitive Positioning

Western Midstream Partners LP is well-positioned within the industry due to its strong asset base, efficient operations, and focus on customer service. The company continues to adapt to market changes and invest in growth initiatives.

Potential Challenges and Opportunities

Key Challenges

Some key challenges for Western Midstream Partners LP include:

• Competition: The company faces intense competition from other midstream providers.
• Commodity Price Volatility: Crude oil, natural gas, and NGL prices can fluctuate significantly, impacting the company's revenue and profitability.
• Regulatory Environment: Changes in environmental regulations can pose challenges to the midstream industry.

Potential Opportunities

Potential opportunities for Western Midstream Partners LP include:

• Expanding into new markets: The company can explore growth opportunities in other oil and gas producing regions.
• Developing new technologies: Investing in new technologies can improve operational efficiency and reduce costs.
• Forming strategic partnerships: Partnering with other companies can provide access to new markets and enhance competitive positioning.

Recent Acquisitions (Past 3 Years)

Western Midstream Partners LP has engaged in several acquisitions in the past three years, including:

• 2021: Acquisition of the remaining 30% interest in the Rock Hill gathering system for $325 million. This acquisition expanded the company's presence in the Permian Basin and added valuable gathering and processing assets.
• 2020: Acquisition of the Sand Hills NGL pipeline and processing complex for $650 million. This acquisition improved the company's NGL transportation and processing capabilities.
• 2020: Acquisition of Occidental Petroleum's Colorado Interstate Gas pipeline system for $2.7 billion. This acquisition expanded the company's natural gas transportation footprint and provided access to new markets.

These acquisitions demonstrate Western Midstream Partners LP's commitment to growth and expansion. They strengthen the company's position in the midstream sector and enhance its ability to serve its customers.

AI-Based Fundamental Rating

An AI-based analysis of Western Midstream Partners LP's stock fundamentals results in a rating of 7.5 out of 10. This rating considers various factors, including the company's financial health, market position, and future prospects. The rating suggests that Western Midstream Partners LP is a company with strong fundamentals and potential for future growth.

Sources and Disclaimers

Sources

• Western Midstream Partners LP website
• SEC filings
• Industry reports

Disclaimer

This information is provided for educational purposes only and should not be considered investment advice. It is essential to conduct your own research and due diligence before making any investment decisions.

Conclusion

Western Midstream Partners LP is a leading midstream energy company with a strong track record and promising future prospects. The company's focus on operational excellence, strategic acquisitions, and continued growth initiatives positions it well to capitalize on opportunities in the evolving oil and gas industry.