Western Midstream Partners, LP - 10-Q Summary (Q2 2026)
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, for Western Midstream Partners, LP ("WES") and its consolidated subsidiary, Western Midstream Operating, LP ("WES Operating"). WES is a master limited partnership engaged in gathering, compressing, treating, processing, and transporting natural gas, crude oil, NGLs, and produced water. The company operates primarily in Texas, New Mexico, and the Rocky Mountains. As of June 30, 2026, Occidental Petroleum Corporation owned approximately 35.6% of WES common units and the general partner interest.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | Value (in thousands) |
|---|---|
| Total Revenues | $2,348,298 |
| Net Income (WES) | $753,828 |
| Net Income per Unit (Diluted) | $1.84 |
| Adjusted EBITDA | $1,419,669 |
| Distributable Cash Flow | $1,033,742 |
| Free Cash Flow | $505,903 |
| Operating Cash Flow | $1,004,639 |
| Total Debt (Carrying Value) | $9,053,081 |
| Cash and Equivalents | $104,766 |
| Working Capital Deficit | ($110,600) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased by $488.9 million (26%) compared to the six months ended June 30, 2025. This was driven by the acquisition of Aris Water Solutions (closed Oct 2025) and Brazos Delaware (closed June 2026), as well as increased throughput and higher average prices in the DJ Basin and West Texas complexes.
- Profitability: Net income attributable to WES increased by $103.1 million (16%) year-over-year. Adjusted EBITDA rose by $208.2 million (17%), primarily due to revenue growth offset by higher operating expenses and interest costs.
- Throughput: Produced water throughput surged 140% year-over-year to 2,921 MBbls/d, largely due to the Aris acquisition. Natural gas throughput increased 2% to 5,456 MMcf/d.
- Capital Expenditures: Capital expenditures increased by $185.0 million to $506.1 million, driven by expansion projects at the DBM water systems (Pathfinder pipeline) and the West Texas complex (North Loving Train II).
Guidance, Outlook, and Risks
- Acquisitions: The company closed the $1.67 billion acquisition of Brazos Delaware on June 11, 2026, expanding its Delaware Basin footprint. The Aris acquisition ($2.0 billion) significantly expanded produced water capabilities.
- Distributions: The Board declared a quarterly distribution of $0.930 per unit for Q2 2026, payable August 14, 2026. This is unchanged from Q1 2026.
- Debt Management: WES Operating issued $700 million of 5.700% Senior Notes due 2036 and retired $440.5 million of 4.650% Senior Notes due 2026. The company maintains a $2.0 billion Revolving Credit Facility (RCF) with $1.8 billion in effective borrowing capacity and a $2.0 billion commercial paper program.
- Risks: Key risks include integration challenges with the Brazos Delaware acquisition, commodity price volatility affecting producer activity, inflation and tariffs increasing capital costs, and credit risk associated with Occidental, which accounts for a significant portion of revenues.
Investor Verification Checklist
- Acquisition Integration: Verify the realization of synergies and throughput targets from the Brazos Delaware and Aris acquisitions.
- Occidental Concentration: Monitor the volume and pricing stability of contracts with Occidental, the primary customer and related party.
- Debt Service: Assess the impact of rising interest rates on the $9.1 billion debt load and the company's ability to service debt while maintaining distributions.
- Capital Discipline: Review the trajectory of capital expenditures against Free Cash Flow generation to ensure distribution coverage remains sustainable.
- Regulatory Environment: Track potential regulatory changes regarding hydraulic fracturing, water disposal, and environmental liabilities in the Delaware Basin and other operating areas.