Western Midstream Partners LP

The following tables and discussion present a summary of our results of operations:

(1)Total revenues and other includes amounts earned from services provided to related parties and from the sale of natural gas, condensate, and NGLs to related parties. Total operating expenses includes amounts charged by related parties for services received. See Note 6—Related-Party Transactions in the Notes to Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.

(2)For reconciliations to comparable consolidated results of WES Operating, see Items Affecting the Comparability of Financial Results with WES Operating within this Item 7.

For purposes of the following discussion, any increases or decreases “for the year ended December 31, 2023” refer to the comparison of the year ended December 31, 2023, to the year ended December 31, 2022.

Discussion of 2021 items and comparison of the year ended December 31, 2022, to the year ended December 31, 2021, that are not included in this annual report on Form 10-K can be found under Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is included under Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2022, and is available via the SEC’s website atwww.sec.gov and our website atwww.westernmidstream.com.

Throughput

(1)Represents our share of average throughput for investments accounted for under the equity method of accounting.

(2)Includes (i) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary and (ii) for natural-gas assets, the 25% third-party interest in Chipeta, which collectively represent WES’s noncontrolling interests.

Natural-gas assets

Total throughput attributable to WES for natural-gas assets increased by 222 MMcf/d for the year ended December 31, 2023, primarily due to (i) higher volumes at the West Texas complex due to increased production in the area, (ii) higher volumes at the Powder River Basin complex as a result of the Meritage acquisition, (iii) higher volumes at the Springfield gas-gathering system due to new third-party production, (iv) higher volumes on the Red Bluff Express pipeline due to the addition of a new receipt point into the pipeline, and (v) higher volumes at the MIGC system. These increases were offset partially by (i) lower volumes at the Granger complex and Marcellus Interest systems due to production declines in the surrounding areas, (ii) decreased volumes at the Ranch Westex plant, which we acquired in the third quarter of 2022 and is included as part of the West Texas complex subsequent to the acquisition, and (iii) lower volumes at the Mi Vida plant.

Crude-oil and NGLs assets

Total throughput attributable to WES for crude-oil and NGLs assets decreased by 24 MBbls/d for the year ended December 31, 2023, primarily due to (i) lower volumes on the Cactus II pipeline, which was sold in the fourth quarter of 2022, and (ii) lower volumes at the DJ Basin oil system resulting from production declines in the area. These decreases were offset partially by (i) increased volumes on the Whitethorn and Saddlehorn pipelines, (ii) higher volumes at the DBM oil system resulting from increased production in the area, and (iii) higher volumes on the Thunder Creek NGL pipeline which was acquired as part of the Meritage acquisition.

Produced-water assets

Total throughput attributable to WES for produced-water assets increased by 173 MBbls/d for the year ended December 31, 2023, due to higher production and new third-party connections brought online during 2023.

Service Revenues

Service revenues – fee based

Service revenues – fee based increased by $166.7 million for the year ended December 31, 2023, primarily due to increases of (i) $114.1 million at the West Texas complex as a result of increased throughput and electricity-related rates billed to customers, (ii) $42.6 million at the Powder River Basin complex as a result of increased throughput attributable to the acquisition of Meritage (see Items Affecting the Comparability of Our Financial Results—Acquisitions and divestitures within this Item 7), (iii) $22.7 million at the DJ Basin complex due to increased deficiency fees on demand volumes and electricity-related rates billed to customers, (iv) $20.8 million and $12.1 million at the DBM water and DBM oil systems, respectively, due to increased throughput, partially offset by decreased deficiency fees, and (v) $5.6 million at the DJ Basin oil system primarily due to a higher cumulative catch-up adjustment for changes in estimated consideration in 2023 compared to 2022, partially offset by decreased throughput and deficiency fees. These increases were partially offset by decreases of (i) $17.5 million at the Springfield system primarily due to decreased demand-fee revenue and a lower cumulative catch-up adjustment for changes in estimated consideration in 2023 as compared to 2022, partially offset by increased throughput, (ii) $12.5 million at the Brasada complex due to a change in contract terms effective July 1, 2023, and (iii) $12.1 million at the Chipeta complex due to decreased deficiency fees.

Service revenues – product based

Service revenues – product based decreased by $58.0 million for the year ended December 31, 2023, primarily due to decreases of (i) $22.0 million at the West Texas complex due to decreased average prices and lower product-related electricity reimbursements from customers, (ii) $14.5 million and $6.1 million at the DJ Basin and Powder River Basin complexes, respectively, due to decreased average prices, and (iii) $9.2 million and $4.3 million at the Red Desert and Granger complexes, respectively, due to decreased average prices and volumes sold.

Product Sales

Natural-gas sales

Natural-gas sales decreased by $88.5 million for the year ended December 31, 2023, primarily due to decreases of (i) $72.8 million at the West Texas complex due to decreased average prices, partially offset by higher volumes sold and (ii) $17.8 million at the Red Desert complex due to decreased average prices. These decreases were partially offset by an increase of $7.7 million at the DJ Basin complex as a result of contract mix, partially offset by decreased volumes sold and average prices.

NGLs sales

NGLs sales decreased by $165.5 million for the year ended December 31, 2023, primarily due to decreases of (i) $94.7 million at the West Texas complex due to changes in contract mix and decreased average prices, (ii) $22.9 million, $10.0 million, and $3.6 million at the Chipeta, Granger, and Red Desert complexes, respectively, due to decreased average prices and volumes sold, (iii) $22.9 million at the DJ Basin complex due to decreased average prices, partially offset by increased volumes sold, and (iv) $7.5 million at the Brasada complex due to a contract expiration in the third quarter of 2022.

Equity Income, Net – Related Parties

Equity income, net – related parties decreased by $30.5 million for the year ended December 31, 2023, primarily due to decreases of (i) $11.7 million at Cactus II due to the divestiture of our interest in the fourth quarter of 2022 (see Items Affecting the Comparability of Our Financial Results—Acquisitions and divestitures within this Item 7) and (ii) $9.1 million, $6.0 million, and $3.5 million at TEP, Mont Belvieu JV, and Whitethorn, respectively.

Cost of Product and Operation and Maintenance Expenses

Residue purchases

Residue purchases decreased by $140.6 million for the year ended December 31, 2023, primarily due to decreases of (i) $84.1 million at the West Texas complex attributable to changes in contract mix during 2022 and lower average prices, (ii) $19.3 million at the Chipeta complex due to decreased volumes purchased and lower average prices, and (iii) $15.7 million and $8.2 million at the Red Desert and DJ Basin complexes, respectively, primarily due to lower average prices.

NGLs purchases

NGLs purchases decreased by $109.3 million for the year ended December 31, 2023, primarily due to decreases of (i) $61.5 million and $30.7 million at the West Texas and DJ Basin complexes, respectively, attributable to lower average prices and (ii) $7.7 million at the Brasada complex due to a contract expiration in the third quarter of 2022.

Other items

Other items decreased by $6.4 million for the year ended December 31, 2023, primarily due to decreases of (i) $11.5 million at the West Texas complex due to changes in imbalance positions, partially offset by higher offload costs, and (ii) $3.8 million and $2.9 million at the Red Desert complex and MIGC system, respectively, attributable to changes in imbalance positions. These decreases were partially offset by an increase of $16.9 million at the DJ Basin complex due to changes in imbalance positions.

Operation and maintenance expense

Operation and maintenance expense increased by $108.0 million for the year ended December 31, 2023, primarily due to increases of (i) $35.8 million for equipment maintenance and repair expense, (ii) $27.7 million for salaries and wages costs, (iii) $11.8 million in utility expense, (iv) $9.6 million in land-related costs, (v) $8.9 million in higher equipment rental costs, (vi) $8.0 million in water-disposal costs, and (vii) $5.6 million attributable to higher contract labor and consulting expense.

Other Operating Expenses

General and administrative expenses

General and administrative expenses increased by $38.6 million for the year ended December 31, 2023, primarily due to increases of (i) $16.2 million in personnel costs, including costs related to the acquisition of Meritage, (ii) $9.8 million in information technology costs, and (iii) $7.0 million in consulting and legal costs.

Property and other taxes

Property and other taxes decreased by $22.1 million for the year ended December 31, 2023, primarily due to decreases in the ad valorem property tax accrual during 2023 related to the finalization of 2022 assessments at the DJ Basin complex.

Depreciation and amortization expense

Depreciation and amortization expense increased by $18.3 million for the year ended December 31, 2023, primarily due to increases of (i) $10.1 million and $7.3 million at the West Texas complex and DBM water systems, respectively, primarily related to capital projects being placed into service, (ii) $9.9 million at the Powder River Basin complex associated with the acquisition of Meritage, and (iii) $7.2 million related to depreciation for capitalized information technology implementation costs. These increases were offset partially by a decrease of $13.0 million at the DJ Basin complex primarily due to acceleration of depreciation expense during 2022.

Long-lived asset and other impairment expense

Long-lived asset and other impairment expense for the year ended December 31, 2023, was primarily due to a $52.1 million impairment for assets located in the Rockies.

Long-lived asset and other impairment expense for the year ended December 31, 2022, was primarily due to a $19.9 million other-than-temporary impairment of our investment in White Cliffs.

For further information on Long-lived asset and other impairment expense, see Note 9—Property, Plant, and Equipment and Note 7—Equity Investmentsin the Notes to Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.

Interest Expense

Interest expense increased by $14.3 million for the year ended December 31, 2023, primarily due to increases of (i) $34.7 million of interest incurred on the 6.150% Senior Notes due 2033 that were issued during the second quarter of 2023, (ii) $10.0 million of interest incurred on the 6.350% Senior Notes due 2029 that were issued during the third quarter of 2023, and (iii) $3.0 million primarily due to borrowings on the commercial paper program that was established during the fourth quarter of 2023. These increases were offset partially by decreases of (i) $14.6 million due to credit-rating related interest rate changes and lower outstanding balances on certain senior notes, (ii) $8.0 million due to higher capitalized interest, (iii) $6.7 million due to the redemption of the total principal amount outstanding of the Floating-Rate Senior Notes due 2023 during the first quarter of 2023, and (iv) $5.1 million due to the redemption of the total principal amount outstanding of the 4.000% Senior Notes due 2022 during the second quarter of 2022. See Liquidity and Capital Resources—Debt and credit facilities within this Item 7.

Other Income (Expense), Net

Other income (expense), net increased by $4.1 million for the year ended December 31, 2023, primarily due to interest income earned resulting from higher interest rates and cash and cash equivalent balances throughout 2023, partially offset by interest recorded in 2023 related to a sales tax audit.

Income Tax Expense (Benefit)

We are not a taxable entity for U.S. federal income tax purposes; therefore, our federal statutory rate is zero percent. However, income apportionable to Texas is subject to Texas margin tax. See Note 8—Income Taxes in the Notes to Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.