Western Midstream Partners LP (WES) 2024 Q1 法說會逐字稿

This time, I would like to welcome everyone to the Western Midstream Partners First Quarter 2024 Earnings Conference Call. (Operator Instructions) I would now like to turn the conference over to Daniel Jenkins, Director of Investor Relations. Please go ahead.

這次，我歡迎大家參加西部中游夥伴2024年第一季財報電話會議。 （操作員指示）我現在想將會議轉交給投資者關係總監 Daniel Jenkins。請繼續。

Thank you. I'm glad you could join us today for Western Midstream's First Quarter 2024 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 most recent Form 10-Q and other public filings for a description of risk factors that could cause actual results to differ materially from what we discuss today.

謝謝。我很高興您今天能參加我們 Western Midstream 的 2024 年第一季電話會議。我想提醒您，今天的電話會議、隨附的幻燈片和昨晚的收益發布包含有關前瞻性陳述和非公認會計準則調節表的重要披露。請參考 Western Midstream 最新的 10-Q 表格和其他公開文件，以了解可能導致實際結果與我們今天討論的結果大不相同的風險因素的描述。

Relevant reference materials are posted on our website. With me today are Michael Ure, our Chief Executive Officer; and Kristen Shults, our Chief Financial Officer. I'll now turn the call over to Michael.

相關參考資料已發佈在我們的網站上。今天與我在一起的有我們的執行長 Michael Ure；以及我們的財務長 Kristen Shults。我現在將電話轉給邁克爾。

Thank you, Daniel, and good afternoon, everyone. I'm excited to announce that the first quarter exceeded our expectations as strong producer activity levels higher rates associated with the cost of service rate redeterminations that became effective on January 1, and our continued focus on maintaining high levels of system operability all contributed to better-than-expected throughput increases and higher overall profitability.

謝謝丹尼爾，大家下午好。我很高興地宣布，第一季超出了我們的預期，因為生產者活動強勁，與1 月1 日生效的服務費率重新確定成本相關的費率更高，而且我們持續關注維持高水準的系統可操作性，所有這些都有助於更好的結果。

Also, based on the latest producer forecasts, we expect these throughput trends to continue throughout the year. Thus, we now expect higher average year-over-year throughput growth rates for all products, and we expect to end up near the high end of our previously disclosed adjusted EBITDA and free cash flow guidance ranges.

此外，根據最新的生產商預測，我們預計這些吞吐量趨勢將在全年持續。因此，我們現在預計所有產品的平均吞吐量成長率將更高，並且我們預計最終將接近我們先前揭露的調整後 EBITDA 和自由現金流指導範圍的高端。

Kristen will provide more detail on our updated guidance expectations shortly. Before we get into the specifics of the first quarter, I am pleased to announce that Mentone Train III completed the commissioning phase and became operational in early April.

克里斯汀很快就會提供有關我們更新的指導預期的更多詳細資訊。在我們討論第一季的具體情況之前，我很高興地宣布 Mentone Train III 已完成調試階段並於 4 月初投入營運。

This is our first major construction project since becoming a stand-alone enterprise, and I would like to thank and congratulate all the teams that worked so diligently to bring Mentone III to completion. This achievement increases our natural gas processing capacity at our West Texas complex in the Delaware Basin by approximately 18%, which will benefit WES financially due to our fixed fee processing agreements and reduced reliance on offloads going forward.

這是我們成為獨立企業以來的第一個重大建設項目，我要感謝並祝賀所有為 Mentone III 的竣工而辛勤工作的團隊。這項成就將我們位於特拉華盆地的西德克薩斯綜合設施的天然氣處理能力提高了約18%，由於我們的固定費用處理協議和減少了對未來卸載的依賴，這將使WES 獲得財務上的好處。

Again, many thanks to all of our employees and contractors have played a critical role in bringing Mentone III online safely and in line with our initial cost estimates. Focusing on our first quarter performance, continued strong producer activity levels resulted in increased throughput across all our core operated assets. Specifically, in the Delaware Basin, we benefited from additional wells coming online sequentially, which resulted in another quarter of record-breaking natural gas and produced water throughput from the basin.

再次感謝我們所有的員工和承包商在讓 Mentone III 安全上線並符合我們最初的成本估算方面發揮了關鍵作用。專注於我們第一季的業績，持續強勁的生產者活動水準導致我們所有核心營運資產的吞吐量增加。具體而言，在特拉華盆地，我們受惠於陸續上線的更多油井，這導致該盆地的天然氣和產出水吞吐量又創下四分之一的紀錄。

In the DJ Basin, both natural gas and crude oil and NGL throughput increased quarter-over-quarter, a trend we expect to result in annual average year-over-year growth. And in the Powder River Basin, throughput also increased primarily due to a full quarter's contribution for Meritage and volume growth from those assets, a trend we expect will gradually increase throughout 2024, especially for natural gas volumes.

在 DJ 盆地，天然氣、原油和液化天然氣吞吐量均較上季成長，我們預計這一趨勢將導致年均較去年同期成長。在保德河盆地，吞吐量也有所增加，主要是由於這些資產對整個季度的績效和銷售成長的貢獻，我們預計這一趨勢將在 2024 年全年逐漸增加，尤其是天然氣產量。

This increased throughput and higher cost of service rates were the main drivers behind the $26 million increase in our adjusted gross margin compared to the fourth quarter. Additionally, certain operating costs were lower than anticipated, resulting in higher-than-expected adjusted EBITDA. Finally, I am pleased to announce that we officially closed all of our non-core asset sales that we highlighted on last quarter's earnings call.

吞吐量的增加和服務成本的提高是我們調整後毛利率較第四季增加 2,600 萬美元的主要推動力。此外，某些營運成本低於預期，導致調整後 EBITDA 高於預期。最後，我很高興地宣布，我們正式結束了我們在上個季度財報電話會議上強調的所有非核心資產銷售。

At quarter end, WES' net leverage ratio on a trailing 12-month basis was approximately 3.3x, which incorporates 5.5 months of contribution for Meritage as well as the proceeds received from the non-core asset sales that closed throughout the first quarter, and we now expect to exit 2024 at or below our 3x leverage threshold.

截至季末，WES 過去 12 個月的淨槓桿率約為 3.3 倍，其中包括對 Meritage 的 5.5 個月的貢獻以及整個第一季完成的非核心資產出售所收到的收益，以及我們現在預計2024年退出時的槓桿率將達到或低於3 倍門檻。

With that, I will turn the call over to Kristen to discuss our operational and financial performance.

接下來，我將把電話轉給克里斯汀，討論我們的營運和財務表現。

Thank you, Michael, and good afternoon, everyone. Our first quarter natural gas throughput increased by 2% on a sequential quarter basis. This was primarily driven by increased throughput in the Delaware and DJ Basin and a full quarter of Meritage throughput, which closed in mid-October of last year. We also saw increased throughput from our natural gas equity investments during the quarter.

謝謝邁克爾，大家下午好。第一季天然氣吞吐量季增 2%。這主要是由於特拉華州和 DJ 盆地的吞吐量增加以及去年 10 月中旬關閉的 Meritage 整個季度的吞吐量推動的。本季我們也看到天然氣股權投資的吞吐量有所增加。

Going forward, we expect the sale of the Marcellus gathering system early in April to impact our second quarter natural gas volumes by approximately 140 million cubic feet per day. Looking at crude oil and NGLs as a reminder, the divestitures of both the Whitethorn pipeline and the Mont Belvieu joint venture closed simultaneously with the signing of their respective sales agreement in mid-February.

展望未來，我們預計 4 月初 Marcellus 收集系統的銷售將對我們第二季的天然氣產量產生約 1.4 億立方英尺/日的影響。以原油和液化天然氣為例，Whitethorn 管線和 Mont Belvieu 合資企業的剝離與 2 月中旬各自銷售協議的簽署同時完成。

Additionally, both the Saddlehorn and Panola Pipeline divestitures closed in late March. These non-core asset sales were the primary driver behind the 20% sequential quarter throughput reduction on a reported basis. On an operated basis, our crude oil and NGL throughput increased by 2% on a sequential quarter basis.

此外，Saddlehorn 和 Panola Pipeline 的資產剝離工作已於 3 月底結束。據報告，這些非核心資產銷售是季度吞吐量下降 20% 的主要推動因素。在營運基礎上，我們的原油和液化天然氣吞吐量較上季增加了 2%。

Throughput increased sequentially from both the DJ and Powder River Basins. However, volumes were unchanged in the Delaware Basin due to producer level disruptions caused by winter storm Jerry in mid-January. Produced water throughput increased by 7% on a sequential quarter basis due to increased completion activity. Our first quarter per Mcf adjusted gross margin for natural gas assets increased by $0.03 compared to the prior quarter.

DJ 和保德河流域的吞吐量依序增加。然而，由於 1 月中旬冬季風暴傑瑞造成生產商水平中斷，特拉華盆地的產量並沒有變化。由於完井活動增加，採出水吞吐量較上季成長 7%。我們第一季天然氣資產的每 MCF 調整後毛利率與上一季相比增加了 0.03 美元。

This increase was primarily driven by increased throughput at the West Texas complex, which has a higher than MCS margin as compared to our other natural gas assets. In addition to higher rates associated with the cost of service rate redetermination that became effective January 1 and increased efficiency revenue from certain contracts.

這一增長主要是由於西德克薩斯綜合設施的吞吐量增加所致，與我們的其他天然氣資產相比，該綜合設施的利潤率高於 MCS。除了與 1 月 1 日生效的服務費率重新確定相關的更高費率外，某些合約的效率收入也有所增加。

This increase was partially offset by the favorable revenue recognition cumulative adjustment associated with our South Texas assets that was recorded in the fourth quarter and did not reoccur in the first quarter. We expect our second quarter per Mcf adjusted gross margin to be in line with the first quarter.

這一增長被與我們南德克薩斯州資產相關的有利收入確認累積調整部分抵消，該調整在第四季度記錄，但在第一季度沒有再次發生。我們預計第二季每 McF 調整後毛利率將與第一季保持一致。

Our first quarter per barrel adjusted gross margin for crude oil and NGL assets increased by $0.49 compared to the prior quarter due to the sale of our interest in Whitethorn, Saddlehorn, and Panola Pipeline and the Mont Belvieu joint venture, all of which have lower than average per unit margins as compared to our other NGL assets.

由於出售了我們在Whitethorn、Saddlehorn 和Panola Pipeline 以及Mont Belvieu 合資企業的權益，我們第一季原油和NGL 資產的每桶調整後毛利率比上一季增加了0.49 美元，所有這些公司的毛利率都低於與我們的其他 NGL 資產相比，平均每單位利潤率。

We expect our second quarter per barrel adjusted gross margin to be in line with the first quarter. Our first quarter per barrel adjusted gross margin for our produced water assets increased by $0.09 compared to the prior quarter primarily due to increased throughput and higher rates associated with the cost of service rate redeterminations that became effective on January 1.

我們預計第二季每桶調整後毛利率將與第一季持平。我們第一季採出水資產的每桶調整後毛利率與上一季相比增加了0.09 美元，這主要是由於吞吐量增加以及與1 月1 日生效的服務費率重新確定成本相關的費率上升。

We expect our second quarter per barrel adjusted gross margin to be in line with the first quarter. During the first quarter, we generated record net income attributable to limited partners of $560 million, which included a $240 million gain pertaining to the sale of non-core assets and record quarterly adjusted EBITDA of $608 million. Relative to the fourth quarter of 2023, our adjusted gross margin increased by $26 million.

我們預計第二季每桶調整後毛利率將與第一季持平。第一季度，我們歸屬於有限合夥人的淨利潤為創紀錄的 5.6 億美元，其中包括與非核心資產出售相關的 2.4 億美元收益，以及創紀錄的季度調整後 EBITDA 6.08 億美元。與 2023 年第四季相比，我們調整後的毛利率增加了 2,600 萬美元。

This increase was mostly driven by increased throughput and higher rates associated with the cost of service rate redeterminations that became effective on January 1 in the Delaware Basin. These increases were partially offset by the favorable revenue recognition cumulative adjustments associated with our South Texas and our DJ Basin oil system that occurred in the fourth quarter and did not occur in the first quarter of this year.

這一增長主要是由於吞吐量的增加以及與 1 月 1 日在特拉華盆地生效的服務費率重新確定成本相關的費率上升所致。這些增長被與南德克薩斯州和 DJ 盆地石油系統相關的有利收入確認累積調整部分抵消，這些調整發生在第四季度，但今年第一季沒有發生。

Additionally, our adjusted EBITDA benefited from lower operation and maintenance expense and slightly lower G&A and property and other taxes on a sequential quarter basis. Going forward, we expect our operation and maintenance expense to trend modestly higher in both the second and third quarters, primarily driven by increased throughput, higher utility costs and our expanded asset base.

此外，我們調整後的 EBITDA 受益於較低的營運和維護費用以及環比較低的一般管理費用、財產稅和其他稅費。展望未來，我們預計第二季和第三季的營運和維護費用將小幅上升，這主要是由於吞吐量增加、公用事業成本上升和資產基礎擴大所致。

As a reminder, we expect seasonality associated with our utility expense in the summer months due to the higher estimated electricity pricing and greater energy usage in conjunction with increased throughput. We also expect our property and other taxes to normalize in the second quarter and revert back to levels similar to the fourth quarter of last year.

提醒一下，由於預計電價較高、能源使用量增加以及吞吐量增加，我們預計夏季的公用事業費用將出現季節性變化。我們也預計我們的財產稅和其他稅收將在第二季正常化，並恢復到與去年第四季類似的水平。

Turning to cash flow. Our first quarter cash flow from operating activities totaled $400 million, generating free cash flow of $225 million. Free cash flow after our fourth quarter 2023 distribution payment in February was $1.5 million. From a capital markets perspective, in the first quarter, we opportunistically repurchased $15.1 million of senior notes through open market transactions.

轉向現金流。我們第一季經營活動產生的現金流量總計 4 億美元，產生的自由現金流量為 2.25 億美元。 2 月 2023 年第四季分配付款後的自由現金流量為 150 萬美元。從資本市場角度來看，第一季我們透過公開市場交易機會性回購了1,510萬美元的優先票據。

And subsequent to quarter end, we had repurchased an additional $134.9 million of various maturities of senior notes, all at approximately 96% of par. We will continue to be prudent allocators of capital and seek to capitalize on opportunities that generate the best possible return for our unitholders. Finally, in April, we declared a base distribution of $0.875 per unit, which is in line with our previous announcement in February, an increase of 52% compared to the prior quarter's distribution and is payable on May 15 to unitholders as of May 1.

季度末後，我們額外回購了 1.349 億美元的各種期限的優先票據，回購價格約為票面價值的 96%。我們將繼續成為審慎的資本配置者，並尋求利用為我們的單位持有人帶來最佳回報的機會。最後，我們在4 月宣布了每單位0.875 美元的基本分配，這與我們先前在2 月宣布的情況一致，與上一季的分配相比增加了52%，並於5 月15 日向截至5 月1 日的單位持有人支付。

Based on our throughput performance to date, we now expect our portfolio-wide average year-over-year throughput to increase by mid- to upper teens percentage for natural gas, low teens percentage for crude oil and NGLs a mid- to upper teens percentage for produced water.

根據我們迄今為止的吞吐量表現，我們現在預計我們的整個投資組合的平均同比吞吐量將增加百分之中到百分之十幾的天然氣，低百分之十幾的原油和液化石油氣百分之中到百分之十幾的成長用於產出水。

It's important to remember that our 2024 throughput expectations account for the non-core asset sales we announced in February and exclude those volumes from our 2023 reported results for year-over-year comparative purposes. In the Delaware Basin, we now expect stronger year-over-year average growth rates for 2024 relative to 2023 for all 3 products: natural gas, crude oil and NGLs and produced water.

重要的是要記住，我們的 2024 年吞吐量預期考慮了我們 2 月宣布的非核心資產銷售量，並從我們的 2023 年報告結果中排除了這些數量，以便進行同比比較。在德拉瓦盆地，我們現在預計 2024 年所有 3 種產品（天然氣、原油、液化天然氣和採出水）的平均成長率將高於 2023 年。

This will mostly be driven by strong produce in a steady number of wells coming online '24, which has increased slightly relative to our initial expectations in February. We also signed an agreement to add one of our first third-party customers for crude oil and NGLs gathering and treating services in the Delaware Basin, which we expect to begin yielding benefits from late in the second quarter.

這主要是由於 24 年上線的穩定數量的油井產量強勁，相對於我們 2 月的最初預期略有增加。我們還簽署了一項協議，增加了我們在特拉華盆地提供原油和液化天然氣收集和處理服務的首批第三方客戶之一，我們預計該服務將從第二季末開始產生效益。

In the DJ Basin, we continue to expect average year-over-year throughput to increase for both natural gas and crude oil and NGLs. This increase will be driven by throughput growth from approximately double the new well count in 2024 relative to 2023. As a reminder, increases in crude oil and NGL throughput in 2024 will have a minimal impact on our adjusted EBITDA in the near term due to the current structure of demand fee revenue.

在 DJ 盆地，我們繼續預期天然氣、原油和液化天然氣的平均年比吞吐量都會增加。這一增長將由 2024 年新井數相對 2023 年約兩倍的吞吐量增長推動。收入結構。

Finally, we continue to expect meaningful throughput growth from the Powder River Basin in 2024. And especially for natural gas, primarily due to the full year's contribution from Meritage and steady throughput growth from customers in the basin. As customers continue to refine their drilling programs in the basin, we will continue to work together and allocate the necessary capital to help them accelerate their development plans in the Powder River Basin.

最後，我們繼續預期 2024 年保德河流域的吞吐量將出現有意義的成長。隨著客戶不斷完善其在該盆地的鑽探計劃，我們將繼續共同努力並分配必要的資金，幫助他們加快在保德河流域的開發計劃。

Given first quarter's outperformance and our updated throughput expectations, we now expect to be towards the high end of our previously announced adjusted EBITDA range of $2.2 billion to $2.4 billion for the year. However, we expect our adjusted gross margin to be flat in the second quarter, primarily due to lower distributions from equity investments from the closing of the non-core asset sales.

鑑於第一季的優異表現和我們更新的吞吐量預期，我們現在預計今年的調整後 EBITDA 範圍將達到 22 億美元至 24 億美元的上限。然而，我們預計第二季調整後的毛利率將持平，這主要是由於非核心資產銷售結束後股權投資的分配減少。

Additionally, we expect higher operation and maintenance expense in the second quarter mostly due to higher expected utility costs and increased asset maintenance and repair expense to result in slightly lower adjusted EBITDA on a sequential quarter basis.

此外，我們預計第二季營運和維護費用將增加，主要是由於預期公用事業成本增加以及資產維護和維修費用增加，導致調整後 EBITDA 環比略有下降。

We continue to expect our 2024 capital expenditure guidance to range between $700 million and $850 million, implying a midpoint of $775 million. We still expect just over 80% of our capital budget to be spent in the Delaware Basin, the majority of which has expansion capital for the North Loving plant construction and additional core operating facilitate continued throughput growth.

我們仍預期 2024 年資本支出指引範圍在 7 億美元至 8.5 億美元之間，這意味著中點為 7.75 億美元。我們仍然預計超過 80% 的資本預算將用於特拉華盆地，其中大部分用於 North Loving 工廠建設的擴張資本和額外的核心運營促進了吞吐量的持續增長。

Taking into account the high end of our adjusted EBITDA and our unchanged capital expenditure guidance ranges, we now expect to be towards the high end of our previously announced free cash flow guidance range of $1.05 billion to $1.25 billion. Our full year base distribution guidance of at least $3.20 per unit remains unchanged. We will continue to evaluate the base distribution on a quarterly basis, influenced by the health and growth trajectory of our business.

考慮到我們調整後的 EBITDA 的上限和不變的資本支出指導範圍，我們現在預計將接近先前宣布的自由現金流量指導範圍的上限，即 10.5 億美元至 12.5 億美元。我們的全年基本分配指引為每單位至少 3.20 美元，保持不變。我們將繼續按季度評估基礎分佈，並受到業務健康狀況和成長軌蹟的影響。

If performance materializes in line with current expectations, we would expect greater opportunity to evaluate increased returns of capital. As a reminder, any potential enhanced distribution payment in 2025 will be based on our full year 2024 financial performance governed by our 2024 year-end leverage threshold of 3x and subject to the board's discretion.

如果業績符合當前預期，我們預計將有更多機會評估資本回報率的增加。提醒一下，2025 年任何潛在的增強分配付款都將基於我們 2024 年全年的財務業績，受 2024 年年終槓桿閾值 3 倍的約束，並由董事會酌情決定。

Finally, we expect to be free cash flow positive after distributions in 2024. When taking into account the high end of our free cash flow guidance range and our unchanged base distribution guidance. I'll now turn the call back over to Michael.

最後，我們預計 2024 年分配後自由現金流將為正值。我現在將把電話轉回給邁克爾。

Thank you, Kristen. Before we open it up for Q&A, I would like to highlight a few key points and reiterate why WES presents such a compelling investment opportunity. First, I think it is important to reflect on the actions we have taken to optimize the MLP model and position WES as a leader amongst our peers in the midstream space.

謝謝你，克里斯汀。在我們開始問答之前，我想強調幾個關鍵點，並重申為什麼 WES 提供瞭如此引人注目的投資機會。首先，我認為重要的是要反思我們為優化 MLP 模型所採取的行動，並將 WES 定位為中游領域同儕中的領導者。

Since becoming a stand-alone enterprise in 2020, we have taken significant steps to optimize our asset portfolio, reduce operational costs and focus on generating substantial free cash flow. In fact, we were the first midstream MLP to focus on free cash flow as a financial performance indicator versus the conventional MLP metrics of distributable cash flow and distribution coverage.

自2020年成為獨立企業以來，我們採取了重大措施來優化資產組合、降低營運成本並專注於產生大量自由現金流。事實上，我們是第一個將自由現金流作為財務績效指標的中游 MLP，而不是可分配現金流量和分配覆蓋範圍的傳統 MLP 指標。

This shift resulted in the creation of our robust capital return framework that has included substantial debt reduction, opportunistic unit buybacks and the implementation of our enhanced distribution framework designed to return excess cash to unitholders.

這項轉變導致我們建立了穩健的資本回報框架，其中包括大幅削減債務、機會性單位回購以及實施旨在將多餘現金返還給單位持有人的強化分配框架。

Additionally, we were one of the first midstream MLPs to enhance our liquidity and greatly strengthen our balance sheet by selling non-core assets, prudently investing expansion capital in line with producer minimum volume commitments and aligning our distribution policy with a general growth trajectory of our business. This strategy, along with our strong capital return framework has optimized the MLP model and transformed WES into a leader within the midstream space.

此外，我們是首批透過出售非核心資產、根據生產商最低產量承諾謹慎投資擴張資本以及根據我們的總體成長軌跡調整我們的分配政策來增強流動性並大大強化我們的資產負債表的中游多層合夥企業之一。這項策略以及我們強大的資本回報框架優化了 MLP 模型，並將 WES 轉變為中游領域的領導者。

With that said, the current average MLP valuation trades at approximately 8x, a discount of 5.5x compared to the average MLP valuation from 2011 through 2016. Furthermore, despite stronger balance sheets, plentiful liquidity and strong future business prospects, the average current distribution yield is just over 9% compared to the average MLP distribution yield of 7% from 2011 through 2016, a time when midstream MLPs generated negative free cash flow and leverage was increasing.

儘管如此，目前MLP 的平均估值約為8 倍，與2011 年至2016 年MLP 的平均估值相比，折扣了5.5 倍。 ，但目前平均分配收益率與 2011 年至 2016 年 7% 的平均 MLP 分配收益率相比，該收益率略高於 9%，當時中游 MLP 產生負自由現金流，槓桿率不斷增加。

Over the last few years, the operating model of many midstream MLPs has changed. And while both models provide the same tax deferred benefits the new MLP model has made great strides in addressing the deficiencies of the old MLP model, improving the health and sustainability of the partnerships, and enhancing LP unitholder benefits by removing incentive distribution rights, for example, the new MLP model is deserving of a valuation rerate and at current valuations presents a very compelling investment opportunity, taking into account historical valuation multiples for the midstream space.

過去幾年，許多中游多層合夥企業的營運模式發生了變化。雖然兩種模式都提供相同的遞延稅款福利，但新的MLP 模式在解決舊MLP 模式的缺陷、改善合夥企業的健康和可持續性以及通過取消激勵分配權來提高LP 單位持有人的福利等方面取得了巨大進步考慮到中游領域的歷史估值倍數，新的 MLP 模型值得重新估值，並且以當前估值提供了非常引人注目的投資機會。

Furthermore, when you take into account WES' recent annualized distribution increase our partnership now provides the highest distribution yield compared to the average yield of other midstream peers and of all subsectors within the S&P 500 Index. WES now provides one of the strongest tax deferred investment opportunities, not only within the midstream space, but relative to all subsectors of the S&P 500.

此外，當您考慮到 WES 最近的年化分配增加時，與其他中游同行以及標準普爾 500 指數內所有子行業的平均收益率相比，我們的合作夥伴關係現在提供了最高的分配收益率。 WES 現在提供最強的遞延稅投資機會之一，不僅在中游領域，而且相對於標準普爾 500 指數的所有子行業而言。

Additionally, while we don't endorse the accuracy or completeness of consensus estimates, we note that multiyear consensus for WES shows free cash flow generation increasing over the coming years. If achieved, this growth should result in leading free cash flow yields relative to our midstream peers and potentially allow for incremental opportunities to return capital back to stakeholders. In 2025, for example, many of our peers would need to generate substantially more free cash flow than their current 2025 consensus estimates to match WES' approximate 11% estimated free cash flow yield.

此外，雖然我們不認可共識估計的準確性或完整性，但我們注意到 WES 的多年共識表明未來幾年自由現金流的產生將會增加。如果實現的話，這種成長應該會導致相對於我們的中游同行領先的自由現金流收益率，並可能提供更多機會將資本回饋給利害關係人。例如，到 2025 年，我們的許多同行將需要產生比目前 2025 年一致估計更多的自由現金流，以符合 WES 約 11% 的估計自由現金流收益率。

This endorses the fact that even in the longer term, WES remains comparatively undervalued relative to peers within an MLP valuation paradigm that itself feels undervalued. Furthermore, as an MLP, we are not subject to the incremental cash flow burden associated with income taxes, thereby creating incremental opportunities to allocate capital back into growing the business or to stakeholders.

這證實了這樣一個事實：即使從長遠來看，在 MLP 估值範式中，與同行相比，WES 仍然被相對低估，而 MLP 估值範式本身也被低估。此外，作為 MLP，我們不受與所得稅相關的增量現金流負擔的影響，從而創造了將資本重新分配給業務成長或利害關係人的增量機會。

The adoption of strong operating philosophies in combination with our strong diversified asset base, low leverage and robust free cash flow have all resulted in a more sustainable, financially secure partnership WES has clearly transformed into a leader within the midstream space and is much better positioned to navigate obstacles and capitalize on future opportunities.

採用強有力的經營理念，結合我們強大的多元化資產基礎、低槓桿率和強勁的自由現金流，所有這些都帶來了更可持續、財務更安全的合作夥伴關係，WES 顯然已經轉變為中游領域的領導者，並且更有能力克服障礙並利用未來的機會。

To close, I would like to thank the entire WES workforce for all of their hard work and dedication. Our strong first quarter performance provides a great start to the year, and our teams are focused on making substantial progress towards achieving our 2024 goals. With that, we will open the line for questions.

最後，我要感謝 WES 全體員工的辛勤工作和奉獻精神。我們強勁的第一季業績為今年提供了良好的開端，我們的團隊致力於在實現 2024 年目標方面取得實質進展。至此，我們將開通提問專線。

(Operator Instructions) Your first question comes from the line of Keith Stanley from Wolfe Research.

（操作員說明）您的第一個問題來自 Wolfe Research 的 Keith Stanley。

Just wanted to start and ask how much progress has been made on securing new firm contracts that would support another plant beyond North Loving. Are you far along in getting more contracts for that? Or is there still a lot of work to do before you can move forward with another plant?

只是想開始詢問在獲得新的公司合約方面取得了多少進展，這些合約將支持北愛之外的另一家工廠。你們在獲得更多合約方面進展順利嗎？或者在繼續建造另一座工廠之前是否還有很多工作要做？

Yes, Keith. At this stage, we're not actually seeing the need to have -- to add another plant at North Loving. Again, a reminder, we're expecting to have North Loving One come online Q1 to 2025. And as it sits right now, we're not actually seeing the need to add incremental plant capacity after that.

是的，基斯。在現階段，我們實際上並不認為有必要在 North Loving 增設另一座工廠。再次提醒大家，我們預計 North Loving One 將於 2025 年第一季上線。

Great. Second one, just Occidental slides, the other day, they showed an uplift for them from -- over the next few years from midstream contract expirations. I want to just confirm that's with other midstream providers and you don't see any meaningful amount exposed on the west side, given your contracts generally run longer duration?

偉大的。第二個，只是西方石油公司的幻燈片，前幾天，他們顯示出未來幾年中游合約到期後的業績提升。我想確認其他中游供應商的情況，考慮到你們的合約通常期限較長，你們沒有看到西側有任何有意義的暴露量？

Yes. None of those figures are actually relative to contracts with WES.

是的。這些數字其實都與 WES 的合約無關。

Your next question comes from the line of Spiro Dounis from Citi.

您的下一個問題來自花旗銀行的 Spiro Dounis。

Maybe just go back to Keith's initial question, just thinking about the processing needs going forward. Maybe just give us a sense for Mentone coming online, how quickly that fills up. And then with North Loving, how quickly that builds up as well? And just maybe how you're planning to utilize offloads from here, which have been pretty effective in defraying some of the cost of capital here?

也許只是回到基斯最初的問題，只是考慮未來的處理需求。也許只是讓我們了解 Mentone 上線後的速度有多快。那麼《North Loving》的發展速度有多快呢？也許您計劃如何利用這裡的卸載，這在支付這裡的一些資本成本方面非常有效？

Yes. So Spiro, thanks for the question. So we are operating at full capacity for Mentone III. We do still have some offloads that will continue up until we bring North Loving I online in Q1 in 2025. So again, they'll continue to bridge us until we get that online at that time.

是的。 Spiro，謝謝你的提問。因此，我們正全力以赴進行 Mentone III。我們仍然有一些卸載工作，直到我們在 2025 年第一季將《North Loving I》上線為止。

Okay. Understood. And then maybe just thinking about the commercial side of things, Kristen, I think you had mentioned a new third-party customer on the NGL side. And I guess, let me just take a step back at one point in time when you were sort of spinning out to more of an independent company, there was this broader push to bring in more third-party business. Just kind of curious to get an update on where that stands and where it stacks up on the priority list for you.

好的。明白了。然後也許只是考慮商業方面的事情，克里斯汀，我想你提到了 NGL 方面的一個新的第三方客戶。我想，讓我退後一步，當你被分拆為一家更多的獨立公司時，有更廣泛的推動力引入更多的第三方業務。只是有點好奇，想了解它的最新情況以及它在您的優先事項清單中的位置。

Yes. That's still a huge priority for our team. They've brought in, and we've covered this kind of in last year's year-end call as well just numerous customers in the Delaware Basin as well as new business with existing customers. So in fact, if you look at our Delaware Basin and third-party growth, it's double what the Permian growth has been over the last few years as well. And that's really a testament to the hard work that our commercial operations, engineering teams have been doing our ability to get our cost down and really go after that business.

是的。這仍然是我們團隊的首要任務。他們已經引進了，我們在去年的年終電話會議中也介紹了這種情況，以及特拉華盆地的眾多客戶以及與現有客戶的新業務。事實上，如果你看看我們的特拉華盆地和第三方成長，你會發現它也是過去幾年二疊紀成長的兩倍。這確實證明了我們的商業營運和工程團隊一直在努力降低成本並真正追求業務。

Great. I'll leave it there.

偉大的。我會把它留在那裡。

Your next question comes from the line of Jeremy Tonet from JP Morgan.

您的下一個問題來自摩根大通的 Jeremy Tonet。

This is Noah Katz on for Jeremy. First, I wanted to touch on the timing of the non-core asset sales you guys closed on in the quarter. Previously, we expected a step down in the crude and NGL volumes within equity interest in the first quarter with 2 in the sales in the first quarter and 3 in the second quarter.

這是傑里米的諾亞·卡茨。首先，我想談談你們在本季完成的非核心資產出售的時間安排。此前，我們預計第一季原油和液化天然氣銷量將下降，第一季銷量將下降 2 倍，第二季銷量將下降 3 倍。

Can you speak to how the difference in timing impacted results for the quarter and the cadence of the step down in equity investment volumes? Like what should we expect throughout the remainder of '24?

您能否談談時間上的差異如何影響本季的業績以及股權投資量下降的節奏？就像我們在 24 年剩下的時間裡應該期待什麼？

Yes. So we closed on 4 of the 5 asset sales in Q1. So you did see a volume step down from Q4 of '23 to Q1 of 24. I still expect there to be because of the lost sale that we closed in Q4 and just the timing within Q1, you'll see another a little bit of a step down from Q1 to Q2. And overall, with all of the APA divestitures, the oil volume should be decreasing relative to last year, about 2/3 by the time you're all said and done.

是的。因此，我們在第一季完成了 5 項資產出售中的 4 項。因此，您確實看到銷量從23 年第4 季下降到24 年第1 季。會看到另外一點從 Q1 下降到 Q2。總體而言，隨著 APA 的所有資產剝離，石油產量相對於去年應該會減少，到您全部說完時大約減少了 2/3。

That's helpful. And as a follow-up, can you speak to your expectation for CapEx cadence throughout '24? I mean you guys reported about $205 million in the quarter, and I think you have guidance for the full year at $775 million at the midpoint. So just trying to think through how the rest of the year should shake out now that Mentone III is in service.

這很有幫助。作為後續行動，您能否談談您對整個 24 年資本支出節奏的期望？我的意思是，你們報告的本季收入約為 2.05 億美元，我認為你們對全年的指導為中點 7.75 億美元。既然 Mentone III 已經投入使用，那麼我只想思考今年剩下的時間該如何​​度過。

Yes. So Q1 strong capital for the quarter. I would expect to see that for second quarter and third quarter as well. We've got -- we are full steam ahead and building on North Loving there as we get towards maybe the latter part of the year, we might see a little bit of a step down in Q4, but pretty strong as we're looking through the summer months and into the fall.

是的。因此，第一季該季度的資本強勁。我預計第二季和第三季也會出現這種情況。我們已經全速前進，並在 North Loving 的基礎上繼續發展，因為我們可能會在今年下半年，我們可能會在第四季度看到一點下降，但正如我們所看到的那樣，相當強勁從夏季一直到秋季。

(Operator Instructions) Your next question comes from the line of Zach Van Everen from TPH & Company.

（操作員說明）您的下一個問題來自 TPH & Company 的 Zach Van Everen。

Just on the free cash flow continuing to increase. Do you guys have a preference between buybacks and just letting the enhanced distribution kick in if it meets all those metrics?

只是自由現金流繼續增加。如果滿足所有這些指標，你們在回購和增強分配之間有偏好嗎？

Yes. I think what you've seen, Zach, as time has gone on, after we've repurchased 15% of the company using the buybacks, we obviously still believe that that's a strong tool for us. But it's intended to be utilized when we see sort of disconnections from a market perspective. We've seen a much more healthy market as of late, which is why we've focused more on the distribution as a whole.

是的。我想你已經看到了，扎克，隨著時間的推移，在我們利用回購回購了公司 15% 的股份之後，我們顯然仍然相信這對我們來說是一個強大的工具。但當我們從市場角度看到某種脫節時，就會使用它。最近我們看到了一個更健康的市場，這就是為什麼我們更專注於整個發行版。

You did see that at -- in the middle of the quarter and then subsequent to quarter end, we actually repurchased a fair amount on the debt side to again make sure that we achieve the leverage threshold that we're focused on for year-end 2024 as well as to see some arbitrage opportunities relative to the rate on that debt relative to the cash rate that we're able to receive.

您確實看到，在季度中期和季度末之後，我們實際上在債務方面回購了相當數量的資金，以再次確保我們達到我們在年底關注的槓桿閾值2024 年，以及看到一些相對於債務利率相對於我們能夠獲得的現金利率的套利機會。

And so if things continue as has occurred, we would intend to continue to focus on those areas, continued distribution growth to unitholders and then leverage opportunities that might exist as we progress and continue to achieve the free cash flow targets that we've talked about.

因此，如果事情繼續發生，我們將打算繼續關注這些領域，繼續向單位持有人分配成長，然後利用隨著我們的進展並繼續實現我們談到的自由現金流目標而可能存在的機會。

Perfect. That makes sense. And then maybe just one, I think you guys touched on this last quarter, but you do still have some -- maybe what would be considered non-core assets, whether that's in Utah or Southwest Wyoming. Are you still looking at holding on to those? Or how do you see the M&A markets for some of those kind of non-core assets you guys still have.

完美的。這就說得通了。然後也許只是一個，我想你們在上個季度談到了這一點，但你們仍然擁有一些——也許會被視為非核心資產，無論是在猶他州還是懷俄明州西南部。您還在考慮保留這些嗎？或者您如何看待您仍然擁有的一些非核心資產的併購市場。

Yes. So I would remove you to opt from that. I think that we very much see our operations there with [Capita] has been core to us. The equity method investments have, however, we definitely continue to look at opportunities that we can optimize around those assets.

是的。所以我會刪除你的選擇。我認為我們非常清楚我們在那裡的運作與[Capita]一直是我們的核心。然而，對於權益法投資，我們肯定會繼續尋找可以圍繞這些資產進行最佳化的機會。

They obviously have value to us however, if someone is willing to pay a value that's greater to them than what it is that we value them at and we'll continue to divest over time.

然而，它們顯然對我們有價值，如果有人願意支付比我們對它們更高的價值，我們將隨著時間的推移繼續剝離。

Our posture around those have been pretty consistent over the past 4 to 5 years and would expect that, that would continue as long as we hold them.

在過去的四到五年裡，我們對這些問題的態度一直相當一致，並且預計，只要我們堅持這些觀點，這種情況就會持續下去。

Your next question comes from the line of Manav Gupta from UBS.

您的下一個問題來自瑞銀集團 (UBS) 的 Manav Gupta。

Just on the CapEx front. Once you do get the North Loving plant up and running, then what would be a good CapEx cadence for maybe on a run rate basis for 2025 months North Loving does come online?

就在資本支出方面。一旦 North Loving 工廠啟動並運行，那麼對於 2025 個月 North Loving 上線的運行率來說，什麼是一個好的資本支出節奏？

Yes. So the direction that we would give is that if the current activity levels sort of remain where we're at, we'd probably look to 2022 as a pretty good guide in terms of what expected capital should be? Should we not have those kind of larger projects, i.e., building out a plant. And that was, give or take, in the $0.5 billion range from a capital perspective.

是的。因此，我們給出的方向是，如果當前的活動水平保持在我們目前的水平，我們可能會將 2022 年視為預期資本應該是多少的一個很好的指導？我們不應該有那種更大的項目，就是建造一座工廠嗎？從資本角度來看，無論給予或接受，都在 5 億美元範圍內。

Perfect. And a quick follow-up. And as I understand company should be conservative. You did beat strong and you're guiding towards the top end of the range. What can be the blue sky scenario here, which could get you above the top end of the range as the year progresses?

完美的。並快速跟進。據我了解，公司應該保守。您確實擊敗了對手，並且正在引導您走向範圍的頂端。隨著時間的推移，這裡的藍天情景會是什麼，它可以讓您超越該範圍的上限？

We have continued outperformance from a volume perspective, if we're able to continue to see the operational efficiencies on the cost side that we've been able to drive through really for many years now, but really continue to reap the benefits altogether. That in addition to adding new opportunities out there throughout the year is where we would expect that, that could potentially drive us above the high end of the range.

如果我們能夠繼續看到成本方面的營運效率，那麼從銷售的角度來看，我們將繼續表現出色，而我們多年來一直在努力實現這一目標，而且確實繼續獲得整體收益。除了全年增加新的機會之外，我們預計這可能會推動我們超越該範圍的高端。

There are no further questions at this time. Mr. Ure I turn the call back over to you.

目前沒有其他問題。烏爾先生，我將電話轉回給您。

Thank you. Thank you, everyone, for joining. We look forward to speaking to you in 3 months' time.

謝謝。謝謝大家的加入。我們期待 3 個月後與您交談。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。