On February 21, 2024, Western Midstream Partners LP (WES, Financial) released its 8-K filing, announcing robust financial results for the fourth quarter and full year of 2023. WES, a leading midstream service provider involved in the gathering, processing, and transporting of natural gas, NGLs, and crude oil, has reported a net income attributable to limited partners of $998.5 million for the full year, with the fourth quarter contributing $281.6 million. This performance underscores the company's operational efficiency and strategic growth initiatives.
Financial Performance and Operational Highlights
WES's financial achievements for the year include an Adjusted EBITDA of $2.069 billion, surpassing the revised full-year guidance range of $1.950 billion to $2.050 billion. The company also reported a strong Free cash flow of $964.2 million for the full year, which fell within the projected range of $900.0 million to $1.000 billion. These results reflect WES's ability to generate significant cash flows, a critical factor for sustaining operations and funding future growth in the competitive Oil & Gas industry.
Operational highlights for the year featured record annual throughput volumes across all product lines. Natural-gas throughput reached 4.4 Bcf/d, a 5-percent year-over-year increase, while crude-oil and NGLs throughput saw a 7-percent increase to 652 MBbls/d. Produced-water throughput also experienced a significant 21-percent year-over-year increase. These record volumes are indicative of WES's strong operational capabilities and its strategic positioning within the industry.
Strategic Growth and Capital Discipline
Throughout 2023, WES sanctioned new processing plants and expanded its asset base through the acquisition of Meritage Midstream Services II, LLC, becoming the largest operator in the Powder River Basin. The company's capital expenditures for the year amounted to $739.1 million, directed towards growth-oriented projects and maintaining existing infrastructure.
WES's commitment to returning value to its unitholders was evident through the distribution of $978.4 million, including Base Distribution increases and the payment of its first Enhanced Distribution. Additionally, the company executed $134.6 million in unit repurchases, demonstrating confidence in its financial health and commitment to shareholder value.
Financial Statements Overview
The company's balance sheet as of December 31, 2023, shows total assets of $12.47 billion, with a significant portion invested in property, plant, and equipment. The total liabilities stood at $9.44 billion, with long-term debt accounting for a substantial portion. The equity and partners' capital amounted to $2.89 billion for common units and $3.19 million for general partner units.
WES's income statement for the year ended December 31, 2023, highlights a gross margin of $2.34 billion, with service revenues—both fee-based and product-based—contributing to the majority of the total revenues of $3.11 billion. The operating income for the year was reported at $1.38 billion.
The cash flow statement reflects a healthy cash flow from operating activities totaling $1.66 billion for the year. The investing activities, primarily capital expenditures and acquisitions, resulted in a net cash use of $1.61 billion, while financing activities, including debt transactions and distributions to unitholders, showed a net cash use of $67.9 million.
Conclusion and Forward-Looking Statements
Michael Ure, President and CEO of WES, expressed satisfaction with the company's performance in 2023, highlighting the operational growth, asset diversification, and capital return to unitholders. Looking ahead, WES is positioned to enter 2024 with a solid financial foundation and operational tailwinds.
For detailed financial information and operational statistics, investors and interested parties are encouraged to review the full 8-K filing and the accompanying earnings slides and investor presentation available on the Western Midstream website.
Explore the complete 8-K earnings release (here) from Western Midstream Partners LP for further details.
