Business Context and Reporting Period
This Form 8-K, dated December 17, 2018, is filed by Western Gas Equity Partners, LP ("WGP") regarding a proposed merger with Western Gas Partners, LP ("WES"). On November 7, 2018, WGP, WES, and Anadarko Petroleum Corporation ("Anadarko") entered into a Merger Agreement. Under the terms, WES will acquire substantially all of Anadarko's remaining midstream assets (the "Anadarko Midstream Assets") associated with the Delaware and DJ Basins. Immediately following this acquisition, WES will merge with a subsidiary of WGP, becoming a wholly-owned subsidiary of WGP.
Key Financial Metrics
This filing does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity for WGP or WES. Instead, it discloses the inclusion of the following financial exhibits prepared in connection with the transaction:
- Audited Historical Statements: Consolidated Financial Statements of the Anadarko Midstream Assets for the years ended December 31, 2017 and 2016 (Exhibit 99.1).
- Unaudited Historical Statements: Consolidated Financial Statements of the Anadarko Midstream Assets for the nine months ended September 30, 2018, and the year ended December 31, 2017 (Exhibit 99.2).
- Pro Forma Statements: Unaudited Pro Forma Condensed Consolidated Financial Statements of WGP as of September 30, 2018, and for the three-year period ended December 31, 2017 (Exhibit 99.3).
Specific financial metrics for the combined entity or the assets are contained within these exhibits and are not summarized in the text of this report.
Material Changes
The primary material change disclosed is the execution of the Merger Agreement, which will result in:
- The acquisition of Anadarko's midstream assets by WES.
- The subsequent merger of WES into WGP's structure.
- A significant expansion of WGP's asset base into the Delaware and DJ Basins.
No other material changes to historical financial performance are detailed in this specific filing text.
Guidance, Outlook, and Risks
Outlook and Next Steps: WGP and WES plan to file a registration statement on Form S-4, which will include a proxy statement/prospectus for WES unitholders to vote on the transaction. The filing urges investors to read the definitive proxy statement/prospectus when available.
Risks and Contingencies: The filing includes a cautionary statement regarding forward-looking statements. Key risks identified include:
- Failure of WES unitholders to approve the merger.
- Failure to satisfy closing conditions or obtain required regulatory approvals.
- Adverse reactions to business relationships or competitive responses.
- Uncertainties regarding the timing of the transaction and unexpected costs.
- Potential litigation outcomes and inability to retain key personnel.
- Uncertainty of the pro forma partnership's financial performance.
Investor Verification Checklist
- Verify the specific financial details of the Anadarko Midstream Assets in Exhibits 99.1 and 99.2.
- Review the Unaudited Pro Forma Condensed Consolidated Financial Statements (Exhibit 99.3) to understand the projected financial impact on WGP.
- Monitor the upcoming Form S-4 filing for the definitive proxy statement/prospectus required for unitholder voting.
- Assess the status of regulatory approvals and closing conditions mentioned in the risk factors.
- Confirm the timeline for the merger consummation, noting that no specific closing date is provided in this report.