Business Context and Reporting Period
This Form 8-K is a current report filed by Western Midstream Partners, LP on March 22, 2021. The filing addresses corporate governance actions taken by affiliates of Occidental Petroleum Corporation, which hold a majority of the Partnership's common units, and provides an update on the financial impact of recent severe weather events.
Key Financial Metrics and Material Changes
The filing does not report standard quarterly revenue, profit, or cash flow figures for a completed period. Instead, it provides a forward-looking estimate of the financial impact of weather disruptions on the quarter ending March 31, 2021.
- Estimated Net Income Reduction: Between $25 million and $30 million.
- Estimated Adjusted EBITDA Reduction: Between $25 million and $30 million.
- Cause of Impact: Winter Storm Uri (February 2021) and a historic blizzard in Colorado (March 2021) disrupted volumes and assets for approximately ten days.
Corporate Actions and Governance
On March 22, 2021, Occidental Petroleum Corporation affiliates approved the Western Midstream Partners, LP 2021 Long-Term Incentive Plan (LTIP) via written consent.
- Plan Purpose: To grant unit options, restricted units, phantom units, and other awards to employees and directors.
- Share Reserve: The plan authorizes the delivery of up to 9.5 million Common Units.
- Effective Date: The LTIP will become effective 20 calendar days after the mailing of the definitive Information Statement on Schedule 14C.
Risks, Contingencies, and Outlook
Management notes that the estimated financial impact of the weather events is subject to change and may be material. Additional risks cited include:
- Potential for future inclement weather or adverse conditions.
- Resolution of litigation and other legal disputes.
- Ongoing impacts of the COVID-19 pandemic and related mitigation factors.
Investor Verification Checklist
- Verify the final quantified impact of Winter Storm Uri and the Colorado blizzard in the upcoming Form 10-Q for the quarter ended March 31, 2021.
- Review the definitive Information Statement on Schedule 14C for detailed terms of the 2021 LTIP.
- Monitor updates regarding any litigation or legal disputes mentioned as potential adverse factors.
- Confirm the exact effective date of the LTIP once the 20-day mailing period concludes.