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

Welcome to Western Midstream's First Quarter 2024 Post Earnings Call Fireside Chat with our Chief Financial Officer, Kristen Shults; and our SVP of Southern Operations, Danny Holderman.

歡迎參加西中游 2024 年第一季財報電話會議，與我們的財務長 Kristen Shults 進行爐邊談話；以及我們的南方營運高級副總裁丹尼·霍爾德曼 (Danny Holderman)。

Kristen, can you start off with an overview of WES' first quarter results? And what some of the key drivers were to our strong start to the year?

Kristen，您能否先概述一下 WES 第一季的業績？推動我們今年強勁開局的關鍵因素有哪些？

Sure. Thanks, Daniel. So for the quarter, our adjusted EBITDA was a record-breaking number. We had $608 million of adjusted EBITDA this quarter. We saw increase throughput in the gas side of the business, the Delaware Basin increased by 3%, DJ by 2% and the other assets also increased.

當然。謝謝，丹尼爾。因此，就本季而言，我們調整後的 EBITDA 創下了破紀錄的數字。本季調整後 EBITDA 為 6.08 億美元。我們看到天然氣業務的吞吐量增加，特拉華盆地增加了 3%，DJ 增加了 2%，其他資產也增加。

On the oil side, we were down 19% on a sequential quarter basis. However, a large part of that was just because of the divestiture of the JVs that we have. In fact, the DJ was up, again, 7% and the PRB was up 15%, too. So if you look at our operated asset base for oil and NGLs, we were actually up 2% quarter-over-quarter. Our water was up 7% quarter-over-quarter. So another really strong quarter for the water business.

在石油方面，我們環比下降了 19%。然而，這很大程度上是因為我們剝離了合資企業。事實上，DJ 再次上漲 7%，PRB 也上漲 15%。因此，如果你看看我們經營的石油和液化天然氣資產基礎，我們實際上比上一季成長了 2%。我們的用水量較上月增加了 7%。因此，水務業務又是一個強勁的季度。

All in all, just outperformance on the throughput side for the quarter. The cost of service rates also start on January 1 of every year, and so we saw an increase in the Delaware Basin REITs, which helped from an adjusted gross margin perspective. And right now, based on conversations with our producers, we're also having increased expectations for the remainder of the year as it relates to all the products.

總而言之，本季的吞吐量方面表現出色。服務成本費率也從每年 1 月 1 日開始計算，因此我們看到特拉華盆地 REIT 有所增加，這從調整後的毛利率角度來看有所幫助。目前，根據與生產商的對話，我們對今年剩餘時間的期望也有所提高，因為這與所有產品有關。

In fact, we increased our expectations oil, gas and water. We actually went from upper single digits on oil to low teens, low to mid-teens on gas to mid- to upper teens and on water from low to mid-teens to mid- to upper teens. And as of now, we're also expecting to be at the high end of our annual adjusted EBITDA guidance range, and that's going to increase our free cash flow, too.

事實上，我們提高了對石油、天然氣和水的預期。事實上，我們對石油的價格從高個位數到低十幾歲，對天然氣從低到中十幾歲到中十幾歲，對水從低到中十幾歲到中十幾歲。截至目前，我們也預計將達到年度調整後 EBITDA 指引範圍的高端，這也將增加我們的自由現金流。

What are our expectations for gross margin per unit for the remainder of the year?

我們對今年剩餘時間的單位毛利率的預期是多少？

So right now, our Q1 gross margin per unit for gas was $1.32. I expect that to be relatively constant as we're looking out over the remainder of the year. While Mentone III came online, and so we've got a little bit of a reduction in some of the offload fees that we were paying as we move those volumes into Mentone III, we're still utilizing those offloads as we're bridging to North Loving, and there's other components that obviously go into that gross margin per unit, whether that's commodity prices or contract mix, just overall basin mix. And -- so expect Q2 and forward to be relatively similar to Q1.

目前，我們第一季每單位天然氣的毛利率為 1.32 美元。我預計這一情況將相對穩定，因為我們正在展望今年剩餘時間。雖然 Mentone III 上線，所以我們在將這些卷轉移到 Mentone III 時支付的一些卸載費用有所減少，但我們仍在利用這些卸載，因為我們正在過渡到North Loving，還有其他因素顯然會影響單位毛利率，無論是大宗商品價格或合約組合，只是整體盆地組合。因此，預計第二季及以後的情況將與第一季相對相似。

On the oil side, you saw a very large jump in the gross margin per barrel from $2.43 in Q4 to $2.92 in Q1. I expect that $2.92 to be relatively constant over the remainder of the year as well. The biggest driver behind that increase was just the sale of the JVs. Those are lower margin per unit assets that were in the portfolio. And so now you're seeing an overall increase in the gross margin per barrel because they're no longer there.

在石油方面，每桶毛利率從第四季的 2.43 美元大幅躍升至第一季的 2.92 美元。我預計 2.92 美元在今年剩餘時間內也將保持相對穩定。這一成長背後的最大推動力就是合資企業的出售。這些是投資組合中單位資產的較低利潤。所以現在你會看到每桶毛利率的整體增加​​，因為它們不再存在了。

On the water side, there is also a large increase in the gross margin per barrel went from $0.86 in Q4 to $0.95 in Q1, predominantly driven by the increase in the cost of service because of the rate redetermination that's effective on January 1, 2024. So expect that that's also a good run rate as we're looking at Q2 and for the remainder of the year.

在水方面，每桶毛利率也大幅增加，從第四季度的 0.86 美元增加到第一季度的 0.95 美元，這主要是由於 2024 年 1 月 1 日生效的費率重新確定導致服務成本增加。 ，預計這也是一個不錯的運行率，因為我們正在考慮第二季和今年剩餘時間。

Danny, can you speak to our new Mentone Train III plant at the West Texas complex?

丹尼，您能談談我們位於西德克薩斯綜合體的新 Mentone Train III 工廠嗎？

Sure. We are very excited to bring on Mentone on Train III in early April. Our construction and operations teams did an outstanding job getting construction and commissioning completed safely and on budget with our original cost estimates. Our operations team was quickly able to ramp up the train to full capacity, adding 300 million cubic feet a day of nameplate processing capacity. This represents an 18% increase to our Delaware Basin complex, bringing total processing capacity in the complex to 1.9 billion cubic feet a day. The teams continue to debottleneck the Mentone complex and optimize operations of the gathering system to make full use of the new train.

當然。我們非常高興四月初在 Train III 上引入 Mentone。我們的施工和營運團隊表現出色，按照我們最初的成本估算安全且按預算完成了施工和調試。我們的營運團隊很快就能將列車滿載運轉，每天增加 3 億立方英尺的銘牌處理能力。這意味著我們特拉華盆地綜合設施的處理能力增加了 18%，使該綜合設施的總處理能力達到每天 19 億立方英尺。這些團隊繼續消除 Mentone 綜合設施的瓶頸，並優化集運系統的運營，以充分利用新列車。

In addition to the capacity add, Train III is also our most efficient train in terms of ethane recovery. It is able to recover 3% to 4% more ethane than the current 2 Mentone trains, which themselves are able to recover 10% more than the rest of the trains in the complex, allowing us more opportunity to maximize revenue relative to natural gas and NGL market pricing.

除了容量增加之外，III 號列車也是我們在乙烷回收方面最高效的列車。與目前的2 輛Mentone 列車相比，它能夠多回收3% 至4% 的乙烷，後者本身能夠比綜合設施中的其他列車多回收10%，這使我們有更多機會實現相對於天然氣和天然氣的收入最大化。

We continue to lower our use of offloads, but I want to remind everybody that we will continue to have offloads until we're able to bring on our North Loving plant in Q1 in '25.

我們繼續減少卸載的使用，但我想提醒大家，我們將繼續進行卸載，直到我們能夠在 25 年第一季啟用 North Loving 工廠。

Thanks, Danny. Kristen, in our recent earnings call, management highlighted the evolution of the MLP model and how MLPs are in a stronger position today than they were 5 to 10 years ago. Can you speak to how WES fits into the new MLP model?

謝謝，丹尼。克里斯汀，在我們最近的財報電話會議上，管理層強調了 MLP 模式的演變，以及 MLP 如何比 5 到 10 年前處於更有利的地位。能談談 WES 如何融入新的 MLP 模型嗎？

Sure. So we spent a little bit of time talking about this on the Q1 earnings call, specifically around the evolution of the MLP and how WES has really been a leader in the space to help optimize the MLP model. When you look back at MLPs and how they used to operate, there was a big focus on distributable cash flow, not free cash flow. In fact, there was really just free cash flow after distributions that was negative quarter after quarter. Whereas now, people have been targeting free cash flow after distributions, which is positive. And really some strong principles around capital allocation and returning those back to unitholders. You see buybacks now, and that was never something that happened in the past. You see strategic acquisitions, portfolio optimizations with asset divestitures, whereas in the past, that was just assets that were dropped down by the sponsor and to the partnership, and there was incentive distribution rights that existed with the sponsor.

當然。因此，我們在第一季財報電話會議上花了一點時間討論這個問題，特別是圍繞 MLP 的演變以及 WES 如何真正成為該領域的領導者來幫助優化 MLP 模型。當你回顧多層合夥企業及其過去的運作方式時，你會發現人們非常關注可分配現金流，而不是自由現金流。事實上，分配後的自由現金流實際上每季都是負值。而現在，人們一直把目標放在分配後的自由現金流上，這是正面的。還有一些關於資本配置和將資本返還給單位持有人的強有力的原則。現在你會看到回購，這在過去從未發生過。你會看到策略性收購、資產剝離的投資組合優化，而在過去，這只是贊助商和合作夥伴放棄的資產，而贊助商存在激勵分配權。

Now leverage is substantially lower than it has been in the past. In fact, for us, by the time this year is over, we'll be at or below 3x. The MLPs have come a really long way since the old MLP model into what we want to call the new MLP model today. There are healthier balance sheets, there are stronger cash returns, there are higher earnings and there's just more stability within the space. And so there's been a big paradigm shift that has occurred and it's helped lower the risk that you saw across the space.

現在槓桿比率大大低於過去。事實上，對我們來說，到今年結束時，我們的成長率將達到或低於 3 倍。從舊的 MLP 模型到我們今天所說的新的 MLP 模型，MLP 已經取得了巨大的進展。資產負債表更健康，現金回報更強，收益更高，而且該領域的穩定性更高。因此，已經發生了巨大的範式轉變，這有助於降低您在整個領域看到的風險。

And so 1 of the other things we touched on was that we believe that there's room for multiples to expand. When you look back over the time period of 2011 to 2016, the average multiple was 13.5, a little bit over that. And now MLPs are trading right around 8x. And so taking into account the paradigm shift that has occurred and the higher earnings, the increased cash flows, lower leverage, just more stability, less risk overall with MLPs, we really feel that there's room for these multiples to expand.

因此，我們談到的其他事情之一是，我們相信倍數還有擴大的空間。回顧 2011 年至 2016 年期間，平均倍數為 13.5，略高於這個數字。現在 MLP 的交易價格約為 8 倍。因此，考慮到已經發生的範式轉變以及MLP 帶來的更高的收益、增加的現金流、更低的槓桿、更高的穩定性、更低的風險，我們確實認為這些倍數還有擴大的空間。

That's what we want to talk about for a little while on the call and just get that conversation started and have people just take a second look at how MLPs really should be trading, especially in light of the fact that they are a really strong investment that provides tax deferred cash flows on top of that.

這就是我們想在電話會議上討論的內容，然後開始對話，讓人們重新審視 MLP 真正應該如何進行交易，特別是考慮到它們是一項非常強大的投資，除此之外還提供稅收遞延現金流。

Kristen, Danny, thank you both for joining us today. For our listeners, if you have any additional questions, please feel free to reach out to us. Our contact information is located in the Investor Relations section of our corporate website at westernmidstream.com.

克莉絲汀、丹尼，謝謝你們今天加入我們。對於我們的聽眾，如果您還有任何其他問題，請隨時與我們聯繫。我們的聯絡資訊位於我們公司網站westernmidstream.com 的投資者關係部分。