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Edited Transcript of WGP earnings conference call or presentation 28-Feb-20 7:00pm GMT

Q4 2019 Western Midstream Partners LP Earnings Call

The Woodlands Mar 21, 2020 (Thomson StreetEvents) -- Edited Transcript of Western Midstream Partners LP earnings conference call or presentation Friday, February 28, 2020 at 7:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Abby Dempsey

Western Midstream Operating, LP - IR Officer

* Craig W. Collins

Western Midstream Partners, LP - Senior VP & COO

* Michael C. Pearl

Western Midstream Partners, LP - Senior VP & CFO

* Michael P. Ure

Western Midstream Partners, LP - President, CEO & Director

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Conference Call Participants

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* Colton Westbrooke Bean

Tudor, Pickering, Holt & Co. Securities, Inc., Research Division - Director of Midstream Research

* Derek Bryant Walker

BofA Merrill Lynch, Research Division - VP

* Jeremy Bryan Tonet

JP Morgan Chase & Co, Research Division - Senior Analyst

* Shneur Z. Gershuni

UBS Investment Bank, Research Division - Executive Director in the Energy Group and Analyst

* Spiro Michael Dounis

Crédit Suisse AG, Research Division - Director

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Presentation

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Operator [1]

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Good day and welcome to the Western Midstream Partners Fourth Quarter 2019 Earnings Conference Call. (Operator Instructions) Please note, today's event is being recorded. I'd now like to turn the conference over to Abby Dempsey, Investor Relations. Please go ahead.

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Abby Dempsey, Western Midstream Operating, LP - IR Officer [2]

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Thank you. I'm glad you could join us today for Western Midstream's Fourth Quarter 2019 Conference Call. I'd like to remind you that today's call, the accompanying slide deck and last night's earnings release contain important disclosures regarding forward-looking statements and non-GAAP reconciliations.

Please reference Western Midstream's Form 10-K and other public filings for a description of risk factors that could cause actual results to differ materially from what we discuss today. Those materials are all posted on our website at www.westernmidstream.com.

Additionally, I am pleased to inform you that the Western Gas Partners' and Western Midstream Partners' K-1s will be available on our website in mid-March. Hard copies will be mailed out several days later.

With me today are Michael Ure, our Chief Executive Officer; Mike Pearl, our Chief Financial Officer; and Craig Collins, our Chief Operating Officer.

I would now like to turn the call over to Michael Ure.

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [3]

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Thank you, Abby, and good afternoon, everyone. 2019 was a historic year for WES. The partnership completed the simplification transaction and related asset acquisitions from Anadarko Petroleum, who was acquired by Occidental in August.

We closed the year with the execution of several agreements with Occidental that established WES as a stand-alone midstream company. We generated over $1.7 billion of adjusted EBITDA, distributed over $1.1 billion of cash to unitholders and efficiently executed our capital program coming in approximately $100 million below the 2019 guidance midpoint. Comparing full year 2018 to full year 2019, we saw a 9% increase in natural gas throughput and a 57% increase in liquids throughput.

We high-graded and expanded our asset portfolio in February 2019 with the acquisition of Delaware and DJ Basin assets that complemented our existing asset portfolio. We also placed the second Mentone train and first Latham train into service and acquired a 30% interest in Red Bluff Express, which transports residue gas from the Delaware Basin to the WAHA hub. I'm extremely proud of the performance that we delivered in 2019 considering the significant transformation that has taken place during the year.

Our February 2019 acquisition and simplification transactions provided additional scale to our backbone infrastructure in our key basins of operation and created capital structure alignment with the elimination of general partner incentive distribution rights. The value of these transactions was further enhanced by our entry into new service, operating and governance agreements with Occidental, which positioned WES as a stand-alone midstream operation and provided our unaffiliated unitholders with improved governance rights.

These unitholder-friendly actions were accomplished with steadfast support from Occidental as our largest unitholder and customer and recognizing the pressure facing midstream MLPs. Our primary objective of creating long-term value for our unitholders hasn't changed since our IPO. And as we enter 2020, our unitholders remain a top priority, along with sustaining our investment-grade credit profile.

Our forecasted 30% to 35% decline in capital expenditures is accompanied by a 13% increase to adjusted EBITDA, which demonstrates our commitment to capital-efficient organic growth. All of our stakeholders are well positioned to benefit from WES' ability to operate as a stand-alone investment-grade midstream enterprise.

With that, I'll turn the call over to Mike, who will discuss our 2019 financial results.

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Michael C. Pearl, Western Midstream Partners, LP - Senior VP & CFO [4]

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Thanks, Michael. Yesterday afternoon, we reported an outperforming quarter with adjusted EBITDA of $447 million, distributable cash flow of $345 million and a coverage ratio of 1.23x. The 9% sequential quarter increase in adjusted EBITDA resulted from increased throughput across all products in the Delaware and DJ Basin.

For full year 2019, we generated adjusted EBITDA of $1.72 billion, distributable cash flow of $1.33 billion and an annual coverage of 1.18x. Our adjusted EBITDA increased 17% from full year 2018, and our full year 2019 coverage ratio was above guidance.

Total 2019 capital expenditures were $1.25 billion, which was approximately $100 million below our 2019 guidance midpoint of $1.35 billion. Optimized planning and continued focus on capital discipline during the second half of 2019 allowed us to deliver total year capital expenditures well below our initial expectation.

In January, we priced a $3.5 billion 4-tranche senior notes offering. The issuance was 6.2x oversubscribed on an upsized and tightly priced offering with more than $21 billion of demand. This unequivocally successful offering, which included an investor-requested 30-year debt tranche, demonstrates the market's long term and fundamental support for WES, reduces WES' average cost of long-term debt and extends the average maturity of the same.

I now will turn the call over to Craig to discuss fourth quarter operations.

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Craig W. Collins, Western Midstream Partners, LP - Senior VP & COO [5]

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Thanks, Mike. Operationally, gas throughput increased by approximately 120 million cubic feet per day quarter-on-quarter. This increase was primarily driven by higher throughput from our DJ Basin complex as a result of third quarter downstream constraint that did not impact fourth quarter operations. Excluding the effects of this downstream constraint from third quarter results, our DJ Basin complex throughput increased by approximately 60 million cubic feet per day quarter-on-quarter.

Full year 2019 total natural gas throughput averaged 4.2 billion cubic feet per day representing a 9% increase from full year 2018. We added approximately 450 million cubic feet per day of compression capacity for the year and increase our processing capacity by 400 million cubic feet per day.

Turning to liquids. Our quarter-on-quarter throughput increased by approximately 187,000 barrels per day. This growth was driven by a 5% throughput increase from our DBM water assets where we brought 2 additional saltwater disposal facilities online and saw an aggregate 8% throughput increase from our Delaware and DJ Basin crude oil gathering and treating asset.

Full year 2019 total liquids throughput averaged 1.2 million barrels per day representing a 57% increase from full year 2018. For 2019, we added over 230,000 barrels a day of produced water capacity from the addition of 8 saltwater disposal facilities and continued strong liquids throughput from many of our equity investments.

As expected, our liquids gross margin declined to $1.69 per barrel for the quarter and $1.77 per barrel for 2019. As a reminder, as our water business continues to grow, we expect our overall liquids margin to track lower. However, compared to crude, the water business generates higher returns, notwithstanding the associated lower per barrel margins.

Our quarter-over-quarter gas gross margin increased to $1.08 per Mcf and increased $0.06 per Mcf on a year-over-year basis. In the DJ Basin, our first Latham gas processing train was placed into service during the fourth quarter of 2019. The second Latham train came online earlier this month. Additionally, Loving ROTF Train III was completed in the fourth quarter of 2019 and started up in January. Loving ROTF Train IV is expected to be completed in the fourth quarter of 2020. In the first half of 2020, we expect the Front Range and Texas Express pipeline expansions to be placed into service. We also will experience a full year of contributions from Cactus II.

I will now turn the call back over to Michael for 2020 guidance discussion and concluding remarks.

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [6]

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Thanks, Craig. Our previously communicated 2020 outlook of adjusted EBITDA between $1.875 billion and $1.975 billion and capital expenditures between $875 million and $950 million remains unchanged. We expect meaningful throughput growth from the DJ and Delaware Basins in 2020.

Natural gas throughput is expected to grow approximately 7% to 4.5 billion cubic feet per day underpinned by Oxy's Delaware Basin development plan and the mid-2020 commencement of DCP's delivery into our Latham plant in the DJ Basin. Oil throughput is expected to grow approximately 18% to more than 765,000 barrels a day primarily driven by new Oxy development wells in the Delaware Basin and full year crude oil shipments on the Cactus II pipeline, where we own a 15% equity interest.

Water throughput is expected to increase by more than 20% to approximately 678,000 barrels a day, largely attributable to new Oxy and third-party connections. Aggregate increased throughput volumes across all products is expected to drive adjusted EBITDA growth of approximately 13% across the WES portfolio.

We strongly believe that a WES-dedicated workforce enhances employee focus, which, in turn, positions and empowers employees to deliver improved customer service, establishes heightened accountability and supports the realization of operational efficiencies that previously were more difficult to achieve with a dual-purpose workforce that split time, tending to shared midstream and upstream responsibilities. We expect increased expenses associated with operating as a stand-alone business, and our 2020 guidance fully reflects the impact of these additional costs.

We also expect that anticipated cost savings from realized operational and capital efficiencies will meaningfully exceed the incremental expense attributable to operating as a stand-alone midstream enterprise. Total capital expenditures plus equity investment contributions are expected to decrease by approximately 30% from 2019 aggregate capital spending of $1.25 billion. We expect to invest approximately 64% of our total capital spend in the Delaware Basin, 26% in the DJ Basin and the remaining 10% on equity investments and other assets within WES' portfolio.

Total maintenance capital is expected to be between $125 million and $135 million, in line with previous years as approximately 7% of adjusted EBITDA. The 2020 Delaware Basin capital program is focused on continued build-out of the oil, gas and water infrastructure, predominantly focused on gathering facility capacity expansions including anticipated expansion work at 8 operating CTFs and new facilities on the gas system, the start-up of a third train and the completion of a fourth train at the North Loving ROTF providing an additional 60,000 barrels a day of additional throughput capacity and the addition of approximately 180,000 barrels a day of additional saltwater disposal capacity in the Delaware Basin. The capital program in the DJ Basin focuses on infill expansion of compression capacity, gathering pipelines and the completion of a second 200 million cubic feet per day processing train at the Latham plant.

For the past 28 quarters, WES has increased its distribution. We intend to continue quarterly distribution growth, however, at a significantly more modest rate of approximately 1% year-over-year. This remains consistent with our goals of lowering leverage and increasing distribution coverage to at least 1.25x.

Before I conclude my prepared remarks, I would like to thank all of the WES dedicated employees and contractors for their contributions, dedication and continued focus on safety. We look forward to 2020 and delivering the results that our stakeholders expect. With that, I would like to open the line for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Today's first question comes from Colton Bean at Tudor, Pickering, Holt.

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Colton Westbrooke Bean, Tudor, Pickering, Holt & Co. Securities, Inc., Research Division - Director of Midstream Research [2]

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So just listening to the Oxy call earlier, there are some references potentially letting production roll over, if we were to remain at current crude prices. So one, I guess, could you just confirm that the earnings guidance is predicated on the existing upstream guide? And then two, kind of how you're thinking about the potential to mitigate any activity cuts.

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [3]

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Thanks, Colton. Yes, the current guidance that has been put out is reflective of the budget and the guidance that is reflected in Oxy's current expectations. I would note that while they do talk about a decline in production, I would just reference Vicki's commentary as it relates to the capital cuts and where those would likely come, first in nonproductive capital and then secondarily in productive capital.

We, as a whole, feel very good about the position that WES has and the assets that underlie the position. We think it's underlying the best basins in North America. And so definitely expect that even in light of the current commodity prices, as temporary as it has been in nature, that there will be continued production going through it.

When you look at our capital budget, the majority of that is with regards to servicing immediate production that would go through our system. And so in the event that there is a reduction overall in the expectation of that production, then obviously, that capital would decline.

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Colton Westbrooke Bean, Tudor, Pickering, Holt & Co. Securities, Inc., Research Division - Director of Midstream Research [4]

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Understood. And just any order of magnitude sense as to what you could do on the capital front to balance any downside here on the earnings side?

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [5]

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Again, it's hard to answer that question in a vacuum, not knowing exactly what the resultant reduction in production or capital would be.

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Colton Westbrooke Bean, Tudor, Pickering, Holt & Co. Securities, Inc., Research Division - Director of Midstream Research [6]

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Got it. And just a final one, just on the dividend increase, I mean, understanding that it's 1% year-over-year. But just wanted to understand a little bit better the mindset in terms of continuing with growth at these levels?

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [7]

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So WES has continued -- has had an increase in its distribution for 28 straight quarters. We feel very good about that track record and the result that our unitholders have been able to count on over that period. We feel very good about the business as we sit here today. And so what we are balancing there is a continued effort towards the success of that distribution growth coupled with a renewed focus around reducing overall leverage and increasing coverage.

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Operator [8]

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And our next question today comes from Jeremy Tonet of JPMorgan.

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Jeremy Bryan Tonet, JP Morgan Chase & Co, Research Division - Senior Analyst [9]

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Just want to lead off here with regards to your efforts as transitioning to a stand-alone midstream company. And just wondering if you could provide a bit more color on where you are in that process and I guess what changes you've seen in the organization as a result of these efforts.

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [10]

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Jeremy, it's a great question. So at the end of 2019, we entered into agreements with Oxy that would provide for the leadership team of WES to move over as employees of WES. Prior to that period, there were no actual employees of WES. So that is the top line leadership team that is now currently employed and receiving their paychecks from WES.

During 2020 and ideally, the early part of 2020, the remainder of the WES-dedicated stand-alone employees will come over to be employed by WES. As it sits today, those employees, their affairs, their -- the hiring and firing decisions are all made by the WES employees. However, at -- the point in time when they do come over as employees, they will get their paychecks directly from WES.

The impact on that, frankly, I think you've seen it a little bit in the fourth quarter results as we were able to reduce overall capital and improve operations as it relates to the revisions from an outlook perspective from third quarter to today, are an expectation that as a stand-alone enterprise, we're able to motivate, provide accountability and focus the operations to achieve greater synergies and greater efficiencies overall through the system. So we believe it's an excellent step in the efficiencies overall of WES.

As it relates to third-party customers, it's also an increased awareness and focus to them to indicate that, obviously, their business is very important to us. Clearly, Oxy is still our #1 customer and important to the overall health of WES. But the third-party business profile is able to be enhanced so that employee base is exclusively focused on WES and its success.

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Michael C. Pearl, Western Midstream Partners, LP - Senior VP & CFO [11]

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And Jeremy, if I could. This is Mike Pearl. One other thing I'd add to that, we've heard loud and clear throughout the years about the mismatch between incentive compensation not only just for management, but for what we call now WES-identified employees, and we've made the change where all WES-dedicated employees and management are now receiving equity compensation in WES that actually tracks midstream targets and we're no longer tied to the target of the E&P. And so we feel like that fundamental shift in focus will drive efficiencies through our business and have employees focused where they need to be in terms of making WES' operations more efficient.

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [12]

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Aligning compensation with accountability and ultimate results of WES, absolutely.

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Jeremy Bryan Tonet, JP Morgan Chase & Co, Research Division - Senior Analyst [13]

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That's good to see. And maybe just kind of turning to, I guess, how the agencies have viewed these changes with kind of the agreements with Oxy overall. It looks like Moody's, I think, might have placed you on positive watch recently. Any update you can provide us there?

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Michael C. Pearl, Western Midstream Partners, LP - Senior VP & CFO [14]

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You nailed it. They did put us on positive watch. We just recently visited all 3 agencies. I'd characterize the discussions as extremely productive as we look at the new stand-alone WES and talk about our plans into the future. I think all of the agencies are looking for us to lower our leverage, which we are keen to do.

In my mind, that's job 1, is to get our leverage metrics back to what has been traditionally the sweet spot for WES of 3.5 to 4x. As we exited 2019, we're roughly 4.5x through organic growth of EBITDA and also debt reduction. By the end of the year, we expect to be much closer to 4 and then below 4 thereafter.

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Operator [15]

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And our next question today comes from Derek Walker at Bank of America.

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Derek Bryant Walker, BofA Merrill Lynch, Research Division - VP [16]

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Appreciate the time and congrats on the quarter. Maybe I could just follow-up on the last question on the leverage front. As far as getting down to 4 by the end of this year and below 4 in '21, is it mostly just from an -- actually doing it through an EBITDA growth? Or are you looking to do potentially asset sales to help accelerate that process? If so, sort of how are you looking at the noncore asset side of things?

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Michael C. Pearl, Western Midstream Partners, LP - Senior VP & CFO [17]

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Yes, thanks for the question. It's going to be both. And I know your attention's immediately going to turn to what is a noncore asset. And that will depend on a few things. But I guess the threshold is, "Are you in DJ or Delaware?" And if the answer is yes, then it's likely core.

Aside from that, determining what's noncore will also depend on the price discovery associated with whatever we might be looking at divesting it. But the goal is to look at the portfolio and rationalize to the extent it makes sense, taking into account what we can get in terms of proceeds and then dedicating those proceeds to restoring the balance sheet.

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Derek Bryant Walker, BofA Merrill Lynch, Research Division - VP [18]

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Got it. And then maybe just a follow-up on Jeremy's question on the stand-alone piece. Are there any updated thoughts on deepwater conversion at this point? Are you guys still kind of working through some of the latest agreements here in shifting employees over?

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Michael C. Pearl, Western Midstream Partners, LP - Senior VP & CFO [19]

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Yes. We actually looked at that back in February when we did the simplification transaction and sort of shelved that to see what WES looked like and how it performed coming out of simplification and the acquisition from Anadarko. It's still something that we're definitely analyzing.

One thing about going to a C-corp is once you do it, you can't go back. And so we need a firm understanding of what we look like from a taxation perspective because once you become a C-corp, you become taxable, there went 21% of your distributable cash flow. So it's something we're going to be very thoughtful and mindful of, but we are definitely analyzing it.

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Operator [20]

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And our next question today comes from Spiro Dounis of Crédit Suisse.

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Spiro Michael Dounis, Crédit Suisse AG, Research Division - Director [21]

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Just want to go back to the third-party business as well. Just trying to figure out how we should think about the -- maybe the CapEx impact of those efforts. I guess some of your peers right now retrenching a bit, maybe moving towards maintenance CapEx mode. And so with your efforts, that sort of increased that third-party revenue line. Do you feel like you can do both, capture that third-party business and then keep CapEx on the lighter side?

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Craig W. Collins, Western Midstream Partners, LP - Senior VP & COO [22]

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Yes. Spiro, this is Craig. And I'd like to try and answer that for you. I mean when we look at the extensive infrastructure footprints that we have in the Delaware and the DJ Basins specifically and with the aerial extent of our systems, we are very close to several producers in and around our existing infrastructure. And so we're actually seeing very good progress and discussions that we're having with those producers in terms of getting incremental business brought online, and we think we can do that with pretty minimal capital going forward.

And so I think that really provides us a competitive advantage as we continue to engage with these producers. And in this environment, I think the competition also has capital constraints as well. And so we are looking forward to continuing some of the recent successes that we've had in this regard.

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Spiro Michael Dounis, Crédit Suisse AG, Research Division - Director [23]

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Understood. And then, Mike, just trying to reconcile some of your comments around the successful refinancing and obviously, the positive momentum from the ratings agencies. But at the same time, as it just came up, you have a 20% yield on the equity. And so just trying to put those 2 together. And I guess to the extent that you believe that there is a large dislocation here in the equity, do buybacks have any space in your capital allocation framework even if you were to sort of buy back from Oxy on a go-forward basis?

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Michael C. Pearl, Western Midstream Partners, LP - Senior VP & CFO [24]

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Yes, that's a very good question. I don't -- the units are yielding as if there's some problem with being able to pay the distribution, which we firmly do not believe to be the case. So at the same time, I don't view this decision point any different than exercising capital discipline with respect to -- on the upstream side, if prices go up, you dramatically change what you're planning to do. I don't think that screams capital discipline.

And the same thought process is going on here. I would tell you that in order for WES to be nimble in terms of being opportunistic, whether it's on an acquisition side or anything else we might be looking at, the balance sheet needs to be rightsized to be able to be nimble, right?

So again, I reiterate that the balance sheet metrics are -- first and foremost, we're committed to being investment grade. That's why we had such a successful bond offering coming out of the marketing related to that offering, and it's something that we're absolutely dedicated to being an investment-grade company.

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Operator [25]

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And our next question comes from Shneur Gershuni of UBS.

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Shneur Z. Gershuni, UBS Investment Bank, Research Division - Executive Director in the Energy Group and Analyst [26]

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Maybe I can start off with sort of the combination of some of the questions that have been asked already. When I think about Western Gas and I think about the broad midstream sector in general, I mean, you've been growing very quickly over the years and so forth. And you're kind of at this interesting point where you're bringing all these employees on from Oxy onto WES and so forth.

How much effort has been made -- has been done to make sure that you're bringing on the right number of employees? Or can you use this as an opportunity to reduce costs in a pretty significant amount? Or do you need 1,100 to -- or do you really need 900? Can you walk us through how you're thinking about that process to ensure that you're rightsizing the cost structure for the environment that we're actually in?

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [27]

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Sure. It's Michael. It's a great question. We actually went through a very extensive process coming up to the point at the end of the year in order to rightsize the overall business, choose the right employees overall for the company on a go-forward basis in light of the trends of the Oxy Anadarko acquisition. There was a significant amount of work that was done to select the right employees that fit best on the Oxy side, that fit best on the WES side. And in that process, find the optimal structure overall for WES.

So leading up to the deconsolidation at the end of -- or the entering into those agreements with Oxy at the end of the year, there was months and months of work in order to get the business in the right place going forward from where we sit.

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Shneur Z. Gershuni, UBS Investment Bank, Research Division - Executive Director in the Energy Group and Analyst [28]

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Okay. And then tying together, I think, your comment, I think maybe it was to Spiro's question about balance sheet comes first. And I think you got asked questions about the distribution growth rate earlier and that you're proud of the history of the distribution increases. But when I sort of look at where you're trading today, and even not just this last week, but the week before that, it's clear that -- or it seems that the market is not valuing the distribution at this point right now.

Is that track record more of a nice to have versus why not accelerate down your leverage further or buy back units? Is that something that you've discussed with the Board? Or does the desire for cash flow from some of your constituents sort of overwhelm what could be a great buyback opportunity?

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Michael C. Pearl, Western Midstream Partners, LP - Senior VP & CFO [29]

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Yes, I understand. And again, the distribution policy is something obviously that we sound and socialized with the Board. I think that the recent dislocation we've seen in the broader market and in our own security, it will have us thinking about exactly what you're alluding to, where I think I can just talk about a unit buyback.

But at the same time, we need to get the balance sheet right. Is it a nice to have in terms of a 1% year-over-year distribution? I think that's exactly how I would characterize it.

But again, I don't -- I also don't believe that, that distribution increase of 1% is meaningful in terms of what we have from a balance sheet leverage perspective as well as from any perspective or theoretical unit buyback. So it is character -- it is a nice to have. I would actually agree with that.

But then again, if we come out and we say, "Okay, well, 0% distribution increase," then the immediate question comes, "Well, are you looking at a distribution cut," right? And I don't think we're prepared to say anything close to that. And so we're comfortable with the 1% year-over-year.

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Shneur Z. Gershuni, UBS Investment Bank, Research Division - Executive Director in the Energy Group and Analyst [30]

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Okay. Final question. Just when I think about your production forecast versus Oxy's forecast, should I also be thinking about the JV and that could create some differences to how I think about what Oxy's saying about what it's expecting versus what you're expecting because you get all the volume from the JV with Shell versus -- and that can create some sort of the differences in trying to understand what Oxy is saying versus your guidance? Is that a fair way to look at it?

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [31]

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Yes, Shneur. Sorry to -- I thought you were done there. My apologies. The Shell that -- Anadarko had with Shell has actually expired. It's no longer in place. And so when you do think about volumetric growth as it relates to WES' system, you do need to take into consideration that Oxy's guidance are on a corporate level as opposed to the specific asset level where WES is. And then, yes, you do need to think about it in terms of working interest percentages versus gross volumes that would be flowing through our system. Does that answer your question?

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Shneur Z. Gershuni, UBS Investment Bank, Research Division - Executive Director in the Energy Group and Analyst [32]

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No, that definitely does. Really appreciate it.

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Operator [33]

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And ladies and gentlemen, this concludes the question-and-answer session. I'd like to turn the conference back over to Michael Ure for any closing remarks.

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Michael P. Ure, Western Midstream Partners, LP - President, CEO & Director [34]

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Thank you all for your participation on the call. I want to really thank the WES employees on delivering an excellent quarter in the fourth quarter. And we, as a whole, are incredibly excited about the future of WES as a stand-alone enterprise. Thank you, everyone, for your participation and everyone, please be safe.

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Operator [35]

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Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.