In the first quarter of 2024, Western Midstream Partners, LP achieved record net income and adjusted EBITDA, totaling $559.5 million and $608.4 million, respectively.
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They also reported a significant increase in free cash flow, reaching $225.0 million, and announced a 52% rise in the base distribution compared to the prior quarter. Operational highlights included record natural gas throughput, completion of Mentone Train III start-up, and successful closure of non-core asset sales, totaling $794.8 million. CEO Michael Ure emphasized increased throughput expectations and the successful deleveraging process, expressing commitment to strong capital-return frameworks and prudent capital allocation strategies.
Basin Activity
Western Midstream Partners, LP highlighted achievements and trends in various basins in their first-quarter 2024 report. Specifically, they mentioned gathering record throughput in the Delaware Basin, with a 3% sequential-quarter increase in natural gas and a 7% increase in produced water. In the DJ Basin, they noted sequential-quarter throughput growth for both natural gas (2%) and crude oil/NGLs (7%). These statistics underscore the company’s operational strength and strategic positioning within these basins, suggesting a positive outlook for continued growth and performance in these regions.
Positive Trends
The trends indicated in Western Midstream Partners, LP’s first-quarter 2024 report include:
- Record Throughput: The company experienced record throughput across its asset base, particularly in natural gas and produced water in the Delaware Basin.
- Sequential Growth: Sequential-quarter throughput growth was observed in both natural gas and crude oil/NGLs in the DJ Basin, suggesting sustained operational momentum.
- Infrastructure Expansion: The completion of Mentone Train III reflects the company’s ongoing efforts to expand its infrastructure, enhancing natural gas processing capacity in the Delaware Basin.
- Asset Optimization: Successful closure of non-core asset sales indicates a strategic focus on optimizing asset portfolio and maximizing value for stakeholders.
- Deleveraging: The company’s commitment to deleveraging, as highlighted by the completion of non-core asset sales, signifies a proactive approach to strengthening financial health and resilience.
These trends collectively demonstrate Western Midstream Partners’ operational efficiency, strategic agility, and commitment to long-term growth and stability.
Projects
Western Midstream Partners, LP highlighted the completion of significant projects in their first-quarter 2024 report. Specifically, they mentioned the start-up of Mentone Train III at their West Texas complex in the Delaware Basin. This project increased their operated, nameplate natural gas processing capacity by 300 MMcf/d to approximately 1.9 Bcf/d. The successful completion of Mentone Train III underscores the company’s commitment to expanding its infrastructure and enhancing operational capabilities, particularly in key regions like the Delaware Basin.
Asset Optimization
The report highlights the successful closure of non-core asset sales, totaling $794.8 million, including pro-rata distributions. This indicates a strategic focus on asset optimization, where the company is streamlining its portfolio by divesting non-core assets to maximize value and focus on core operations. By completing these sales, Western Midstream Partners, LP accelerates its deleveraging process, strengthening its financial position and potentially enhancing its ability to invest in high-return projects or initiatives aligned with its strategic objectives. Overall, the emphasis on asset optimization reflects the company’s commitment to enhancing efficiency, maximizing returns, and creating value for its stakeholders.
Revenue Performance
The report highlights robust revenue performance for Western Midstream Partners, LP in the first quarter of 2024. Total revenues and other sources amounted to $887.7 million, indicating strong business activity and demand for the company’s services. Key revenue drivers include service revenues from fee-based and product-based sources, along with product sales. Additionally, equity income from related parties contributed to the revenue stream. The significant revenue generation underscores the company’s solid market position and the effectiveness of its business strategies in capturing value from its operations and assets.
Conclution
Western Midstream Partners, LP’s first-quarter 2024 report reflects a period of significant achievement and strategic advancement. The company demonstrated robust financial performance, marked by record net income, adjusted EBITDA, and strong cash flows. Operational highlights include record throughput across key basins, successful project completion such as Mentone Train III, and effective asset optimization through non-core asset sales. These accomplishments underscore the company’s commitment to operational excellence, portfolio optimization, and value creation for stakeholders. Looking ahead, Western Midstream Partners appears well-positioned to capitalize on growth opportunities while maintaining financial resilience and strategic focus.
