Western Midstream Partners LP

Previous wording

Significant financial and operational events during the six months ended June 30, 2024, included the following:

Current wording

Significant financial and operational events during the nine months ended September 30, 2024, included the following:

Previous wording

•Our regular second-quarter 2024 per-unit distribution is unchanged from the first-quarter 2024 per-unit distribution of $0.875.

Current wording

•Our regular third-quarter 2024 per-unit distribution is unchanged from the second-quarter 2024 per-unit distribution of $0.875.

Previous wording

•Natural-gas throughput attributable to WES totaled 4,988 MMcf/d and 4,989 MMcf/d for the three and six months ended June 30, 2024, respectively, representing no change compared to the three months ended March 31, 2024, and a 19% increase compared to the six months ended June 30, 2023.

Current wording

•Natural-gas throughput attributable to WES totaled 5,016 MMcf/d and 4,998 MMcf/d for the three and nine months ended September 30, 2024, respectively, representing a 1% increase and a 17% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively.

Previous wording

•Crude-oil and NGLs throughput attributable to WES totaled 515 MBbls/d and 540 MBbls/d for the three and six months ended June 30, 2024, respectively, representing a 9% decrease and a 13% decrease compared to the three months ended March 31, 2024, and six months ended June 30, 2023, respectively.

Current wording

•Crude-oil and NGLs throughput attributable to WES totaled 506 MBbls/d and 529 MBbls/d for the three and nine months ended September 30, 2024, respectively, representing a 2% decrease and a 17% decrease compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively.

Previous wording

•Produced-water throughput attributable to WES totaled 1,080 MBbls/d and 1,103 MBbls/d for the three and six months ended June 30, 2024, respectively, representing a 4% decrease and a 16% increase compared to the three months ended March 31, 2024, and six months ended June 30, 2023, respectively.

Current wording

•Produced-water throughput attributable to WES totaled 1,099 MBbls/d and 1,102 MBbls/d for the three and nine months ended September 30, 2024, respectively, representing a 2% increase and an 11% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively.

Previous wording

•Gross margin was $688.2 million and $1.4 billion for the three and six months ended June 30, 2024, respectively, representing a 1% increase and a 26% increase compared to the three months ended March 31, 2024, and six months ended June 30, 2023, respectively. See Reconciliation of Non-GAAP Financial Measures within this Item 2.

Current wording

•Gross margin was $684.5 million and $2.1 billion for the three and nine months ended September 30, 2024, respectively, representing a 1% decrease and a 22% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively. See Reconciliation of Non-GAAP Financial Measures within this Item 2.

Previous wording

•Adjusted gross margin for natural-gas assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $1.33 per Mcf and $1.32 per Mcf for the three and six months ended June 30, 2024, respectively, representing a 1% increase and a 3% increase compared to the three months ended March 31, 2024, and six months ended June 30, 2023, respectively.

Current wording

•Adjusted gross margin for natural-gas assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $1.29 per Mcf and $1.31 per Mcf for the three and nine months ended September 30, 2024, respectively, representing a 3% decrease and a 3% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively.

Previous wording

•Adjusted gross margin for crude-oil and NGLs assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $2.96 per Bbl and $2.94 per Bbl for the three and six months ended June 30, 2024, respectively, representing a 1% increase and a 13% increase compared to the three months ended March 31, 2024, and six months ended June 30, 2023, respectively.

Current wording

•Adjusted gross margin for crude-oil and NGLs assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $2.88 per Bbl and $2.92 per Bbl for the three and nine months ended September 30, 2024, respectively, representing a 3% decrease and a 17% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively.

Previous wording

•Adjusted gross margin for produced-water assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $0.97 per Bbl and $0.96 per Bbl for the three and six months ended June 30, 2024, respectively, representing a 2% increase and a 17% increase compared to the three months ended March 31, 2024, and six months ended June 30, 2023, respectively.

Current wording

•Adjusted gross margin for produced-water assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $0.96 per Bbl for both the three and nine months ended September 30, 2024, representing a 1% decrease and a 16% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively.

Previous wording

Impact of producer activity. Our business is primarily driven by the level of production of crude oil and natural gas by producers in our areas of operation. This activity, however, can be impacted negatively by, among other things, commodity-price fluctuations and operational challenges. Fluctuating crude-oil, natural-gas, and NGLs prices can reduce the level of our customers’ activities and change the allocation of capital within their own asset portfolios. Such fluctuations can also impact us directly to the extent we take ownership of and sell certain volumes at the tailgate of our plants for our own account. During 2020, oil and natural-gas prices were negatively impacted by the worldwide macroeconomic downturn that followed the global outbreak of COVID-19. In 2021, prices began to increase and in the first quarter of 2022, commodity prices increased significantly in connection with the war in Ukraine. For example, the New York Mercantile Exchange (“NYMEX”) West Texas Intermediate crude-oil daily settlement prices during 2023 ranged from a low of $66.74 per barrel in March 2023 to a high of $93.68 per barrel in September 2023, and prices during the six months ended June 30, 2024, ranged from a low of $70.38 per barrel in January 2024 to a high of $86.91 per barrel in April 2024. Similar disruptions could occur as a consequence of the current conflict in the Middle East. The extent and duration of commodity-price volatility, and the associated direct and indirect impact on our business, cannot be predicted. To address the risks posed by fluctuating commodity prices, we intend to continue evaluating the relevant price environments and adjust our capital spending plans to reflect our customers’ anticipated activity levels, while maintaining appropriate liquidity and financial flexibility.

Current wording

Impact of producer activity. Our business is primarily driven by the level of production of crude oil and natural gas by producers in our areas of operation. This activity, however, can be impacted negatively by, among other things, commodity-price fluctuations and operational challenges. Fluctuating crude-oil, natural-gas, and NGLs prices can reduce the level of our customers’ activities and change the allocation of capital within their own asset portfolios. Such fluctuations can also impact us directly to the extent we take ownership of and sell certain volumes at the tailgate of our plants for our own account. The New York Mercantile Exchange (“NYMEX”) West Texas Intermediate crude-oil daily settlement prices during 2023 ranged from a low of $66.74 per barrel in March 2023 to a high of $93.68 per barrel in September 2023, and prices during the nine months ended September 30, 2024, ranged from a low of $65.75 per barrel in September 2024 to a high of $86.91 per barrel in April 2024. The Waha Hub natural gas price during 2023 ranged from a low of ($3.8400) per MMBtu in January 2023 to a high of $3.2750 per MMBtu in January 2023, and prices during the nine months ended September 30, 2024, ranged from a low of ($6.2250) per MMBtu in August 2024 to a high of $8.2650 per MMBtu in January 2024. The extent and duration of commodity-price volatility, and the associated direct and indirect impact on our business, cannot be predicted. To address the risks posed by fluctuating commodity prices, we intend to continue evaluating the relevant price environments and adjust our capital spending plans to reflect our customers’ anticipated activity levels, while maintaining appropriate liquidity and financial flexibility.

Previous wording

Impact of inflation and supply-chain disruptions. The U.S. economy has recently experienced significant inflation relative to historical precedent, from, among other things, supply-chain disruptions caused by, or governmental stimulus or fiscal policies adopted in response to, the COVID-19 crisis and in connection with the war in Ukraine. More specifically, the continued bottlenecks and disruptions have caused difficulties within the U.S. and global supply chains, creating logistical delays along with labor shortages. Continued inflation has raised our costs for steel products, automation components, power supply, labor, materials, fuel, and services, which has increased our operating costs and capital expenditures. Increases in inflationary pressure could materially and negatively impact our financial results. To the extent permitted by regulations and escalation provisions in certain of our existing agreements, we have the ability to recover a portion of increased costs in the form of higher fees.

Current wording

Impact of inflation and supply-chain disruptions. Although somewhat abated during 2024, the U.S. economy has recently experienced significant inflation relative to historical precedent. Inflation has raised our costs for steel products, automation components, power supply, labor, materials, fuel, and services, which has increased our operating costs and capital expenditures. Any increases in inflationary pressure could materially and negatively impact our financial results. To the extent permitted by regulations and escalation provisions in certain of our existing agreements, we have the ability to recover a portion of increased costs in the form of higher fees.

Previous wording

Impact of interest rates. Short- and long-term interest rates can be volatile, resulting in immediate changes to interest expense on RCF borrowings and commercial paper borrowings. Any future increases in interest rates likely will result in additional increases in financing costs. As with other yield-oriented securities, our unit price could be impacted by our implied distribution yield relative to market interest rates. Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our units, and a rising interest-rate environment could have an adverse impact on our unit price and our ability to issue additional equity, or increase the cost of issuing equity, to make acquisitions, to reduce debt, or for other purposes. However, we expect our cost of capital to remain competitive, as our competitors face similar interest-rate dynamics.

Current wording

Impact of interest rates. Short- and long-term interest rates can be volatile, resulting in immediate changes to interest expense on RCF borrowings and commercial paper borrowings. Any future increases in interest rates likely will result in additional increases in financing costs. As with other yield-oriented securities, our unit price could be impacted by our implied distribution yield relative to market interest rates. Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our units, and a rising interest-rate environment could have an adverse impact on our unit price and our ability to issue additional equity, or increase the cost of issuing equity, to make acquisitions, to reduce debt, or for other purposes. However, we expect our cost of capital to remain competitive, as our peers face similar interest-rate dynamics.