Western Midstream Partners LP
NYSE:WES
Western Midstream Partners LP
Western Midstream Partners LP is a master limited partnership with roots deeply embedded in the midstream energy sector. It emerged onto the scene in 2008, initially as a subsidiary of the oil giant Anadarko Petroleum, with a focus on providing essential infrastructure services that connect energy producers with end-users. Western Midstream's main business revolves around gathering, processing, and transporting natural gas, natural gas liquids (NGLs), and crude oil, largely gathered from prolific producing regions like the Permian and Delaware Basins. Its operations are crucial for the smooth transit and transformation of energy resources from the point of production to the market, handling everything from reliable transportation through pipelines to the necessary processing that brings raw energy to a usable state.
The company's financial engine is fueled by long-term, fee-based contracts that provide a steady and predictable revenue stream. This business model is resilient to the often-volatile swings in commodity prices, as Western Midstream primarily earns by charging for the services associated with moving and processing energy products rather than selling the commodities themselves. Additionally, through strategic investments and asset acquisitions, Western Midstream has expanded its capabilities and geographical footprint, ensuring its infrastructure remains integral to the energy supply chain. These moves not only enhance its service portfolio but also help in cementing long-term relationships with key producers, further entrenching Western Midstream's role as a pivotal player in the North American energy landscape.
Western Midstream Partners LP is a master limited partnership with roots deeply embedded in the midstream energy sector. It emerged onto the scene in 2008, initially as a subsidiary of the oil giant Anadarko Petroleum, with a focus on providing essential infrastructure services that connect energy producers with end-users. Western Midstream's main business revolves around gathering, processing, and transporting natural gas, natural gas liquids (NGLs), and crude oil, largely gathered from prolific producing regions like the Permian and Delaware Basins. Its operations are crucial for the smooth transit and transformation of energy resources from the point of production to the market, handling everything from reliable transportation through pipelines to the necessary processing that brings raw energy to a usable state.
The company's financial engine is fueled by long-term, fee-based contracts that provide a steady and predictable revenue stream. This business model is resilient to the often-volatile swings in commodity prices, as Western Midstream primarily earns by charging for the services associated with moving and processing energy products rather than selling the commodities themselves. Additionally, through strategic investments and asset acquisitions, Western Midstream has expanded its capabilities and geographical footprint, ensuring its infrastructure remains integral to the energy supply chain. These moves not only enhance its service portfolio but also help in cementing long-term relationships with key producers, further entrenching Western Midstream's role as a pivotal player in the North American energy landscape.
Record 2025 Results: Western Midstream achieved record adjusted EBITDA and free cash flow in 2025, driven by throughput growth and successful cost controls.
Aris Acquisition: The late-2025 Aris acquisition expanded water solutions capabilities, delivered cost synergies, and will meaningfully contribute to 2026 EBITDA.
Moderate 2026 Growth: Management expects more moderate throughput and adjusted EBITDA growth in 2026 due to reduced customer activity and weaker commodity prices.
Lower Capex: 2026 capital expenditures are guided down sharply to $925 million midpoint, from over $1.1 billion previously.
Distribution Increase: The partnership plans to raise its 2026 distribution to at least $3.70 per unit, a 3% year-over-year increase.
Cost Reductions: Multi-year cost reduction initiatives have led to declining operations and maintenance expenses, supporting margins and flexibility.
Waha Pricing Pressure: Management expects Waha Hub natural gas pricing volatility to persist into mid-2026, but new egress capacity should help in the second half.
Stable Strategy: Management reiterated its disciplined capital allocation and M&A approach, emphasizing bolt-on opportunities and no change to long-term growth strategy.
