Western Midstream Partners LP (WES) 2024 Q4 法說會逐字稿

Welcome to Western Midstream's fourth-quarter 2024 post earnings call fireside chat with our Chief Financial Officer, Kristen Shults, and our Senior Vice President of Commercial, Jon VandenBrand.

歡迎參加 Western Midstream 2024 年第四季財報電話會議後爐邊談話，與我們的財務長 Kristen Shults 和我們的商業高級副總裁 Jon VandenBrand 一起。

Kristen, I'll start with you. Can you give us an overview of WES's fourth quarter and full year results?

克里斯汀，我先從你開始。您能否向我們概述一下 WES 第四季和全年的業績？

Sure, Daniel. Fourth quarter was a really strong quarter for WES, both from an operational standpoint and a financial standpoint. We had 4% growth on the gas side, 6% growth on the oil side, and 8% growth quarter over quarter on the water side.

當然，丹尼爾。無論從營運角度還是財務角度來看，第四季對 WES 來說都是非常強勁的一個季度。天然氣方面較上季成長 4%，石油方面較上季成長 6%，水運方面較上季成長 8%。

And so on the water side, it's been a little bit choppy throughout 2024, just as we've had producers take some water off of the system for recycling purposes. We saw that activity decrease them in the fourth quarter, and so, you saw those volumes come up a little bit more on the water side. And then both the gas and the oil side of the business did really well because of the DJ and the Delaware growing. So very nice performance by all of our assets in the basin.

因此，在水方面，2024 年全年都會有點波動，就像我們的生產商從系統中取出一些水用於回收一樣。我們發現第四季度的活動有所減少，因此，您會看到水方面的交易量略有增加。由於 DJ 和特拉華州的成長，天然氣和石油業務都表現良好。我們在該盆地的所有資產都表現得非常出色。

On the financial side, our Q4 adjusted EBITDA was $591 million. And we had strong free cash flow of $309 million for the fourth quarter as well. For the full year, we generated EBITDA of $2.34 billion which is above the midpoint of the range that we set. The range, if you remember, was $2.2 billion to $2.4 billion. CapEx was slightly above the midpoint, came in at $790 million. Spent the majority of that CapEx, obviously, on the North Loving plant, which is already up and running and starting to to move some product even as we're speaking. And then from a free cash flow perspective, we were above the high-end of the free cash flow range as well for 2024. It came out at $1.3 billion really showing just the strong throughput growth that we had throughout the year and a little bit lower CapEx than we were originally thinking.

從財務方面來看，我們在第四季度調整後的 EBITDA 為 5.91 億美元。我們的第四季自由現金流也非常強勁，達到 3.09 億美元。全年我們的 EBITDA 為 23.4 億美元，高於我們設定範圍的中點。如果你還記得的話，範圍是 22 億美元到 24 億美元。資本支出略高於中點，達到 7.9 億美元。顯然，大部分資本支出都花在了 North Loving 工廠上，該工廠目前已開始運作並開始生產一些產品。從自由現金流的角度來看，到 2024 年，我們的自由現金流也高於範圍的高端。13 億美元的數字確實顯示了我們全年的強勁吞吐量成長，而且資本支出比我們最初想像的要低一點。

What can we expect from WES in 2025?

我們對 2025 年的 WES 有何期待？

All in all, it's going to be another great year for WES. We expect strong throughput growth, mid-single digits for gas, mid-single digits for water, and then low-single digits for crude and NGLs.

總而言之，對於 WES 來說，這又將是偉大的一年。我們預計吞吐量將強勁成長，天然氣將成長中等個位數，水將成長中等個位數，原油和天然氣液體將成長低個位數。

The Delaware Basin is going to continue to grow this year. DJ Basin's going to hang in there. We expect it to be relatively flat. We'll see how the producers' actuals come in relative to the expectations we have, but I expect to just kind of teeter around that flat line, and then a little bit of growth in the PRB.

特拉華盆地今年將持續成長。DJ Basin 會堅持下去。我們預計它會相對平穩。我們將觀察生產商的實際產量與我們的預期相比如何，但我預計產量將在該平線附近波動，然後 PRB 會略有增長。

When you flip over to the financial side of it, expect adjusted EBITDA to increase 5% year over year at the midpoint, free cash flow to increase 4% year over year at the midpoint, and then we also said that we would be recommending to the Board a 4% quarter-over-quarter increase in the base distribution.

從財務角度來看，預計調整後的 EBITDA 中點將同比增長 5%，自由現金流中點將同比增長 4%，然後我們還表示，我們將向董事會建議基本分配比上一季增加 4%。

And so, if you look at the total amount that we actually paid in 2024, relative to what we expect to pay in 2025, inclusive of the recommendation to increase the base by 4%. That'd be a 13% year-over-year growth in our pay distributions.

因此，如果您查看我們在 2024 年實際支付的總金額，相對於我們預計在 2025 年支付的金額，其中包括將基數提高 4% 的建議。這意味著我們的薪酬分配將比去年同期成長 13%。

For CapEx, this is going to be a little bit lower than it was last year, but a few really exciting projects and items to mention in the CapEx budget. So our range for the year is $625 million to $775 million implies a $700 million midpoint. 50% of the CapEx is being spent in the Delaware, our major growth engine here at WES, and that includes $65 million that we're spending on the Pathfinder pipeline, which John will talk more about shortly.

對於資本支出來說，這將比去年​​略低，但資本支出預算中確實有一些令人興奮的項目和事項值得一提。因此，我們今年的預算範圍是 6.25 億美元至 7.75 億美元，中間值為 7 億美元。 50% 的資本支出都花在了特拉華州，這是 WES 的主要成長引擎，其中包括我們在 Pathfinder 管道上花費的 6500 萬美元，John 稍後將對此進行詳細介紹。

The PRB is taking about $200 million of our capital, about 30% of the budget. And through conversations with the various producers, we are going to be putting in additional gathering and compression facilities this year to prepare us for 2026 growth. On the call, we even mentioned that we're expecting average year-over-year throughput to grow in the PRB. So that's meaning that we're spending quite a bit of capital this year in order to make way for that growth.

PRB 佔用了我們約 2 億美元的資金，約佔預算的 30%。透過與各個生產商的對話，我們今年將投入額外的收集和壓縮設施，為 2026 年的成長做好準備。在電話會議中，我們甚至提到，我們預計 PRB 的平均吞吐量將比去年同期成長。這意味著我們今年要花費相當多的資金來實現這一成長。

When we get into 2026, few thoughts on that as well. Pathfinder. The majority of the spend for Pathfinder will be in 2026. And so then from a budgeting perspective, a capital budget perspective for 2026, the rest of it will really depend on incremental growth that we're seeing in the PRB and how well we do of bringing new customers onto the Pathfinder pipeline and what infrastructure do we need to build out to get those volumes on that pipeline as well.

當我們進入 2026 年時，我們對此也有一些思考。探路者。Pathfinder 的大部分支出將在 2026 年實現。因此，從預算角度、從 2026 年的資本預算角度來看，其餘部分實際上將取決於我們在 PRB 中看到的增量增長，以及我們在將新客戶引入 Pathfinder 管道方面做得如何，以及我們需要構建哪些基礎設施才能將這些數量也引入該管道。

Jon, congratulations on your new role in finalizing the Pathfinder and produced water system expansion opportunity. Can you tell us more about this project that WES is building out over the next 2 years? What does it mean when we say first of its kind, and why is this the right project for WES?

喬恩，恭喜你在完成探路者和生產水系統擴展機會中擔任新角色。您能否向我們詳細介紹一下 WES 在未來兩年內正在建造的這個計畫？當我們說這是首創時，這又意味著什麼？為什麼這對 WES 來說是正確的項目？

Thanks, Daniel. We're very excited for the announcement, and we're really excited for the opportunities that the Pathfinder pipeline will help to bring about for us as we go forward. I'd like to first start by talking about our existing assets and how they're very well positioned, but how Pathfinder will create additional optionality for us and increase our flow assurance that we can provide to our customers over time.

謝謝，丹尼爾。我們對這項公告感到非常興奮，我們對 Pathfinder 管道在未來的發展中將為我們帶來的機會感到非常興奮。首先，我想談談我們現有的資產以及它們如何處於非常有利的地位，但 Pathfinder 將如何為我們創造額外的可選性，並增加我們可以隨著時間的推移為客戶提供的流量保證。

We've got a great network of distributed disposal wells all over the Texas side of the Delaware Basin, and we've done a good job of focusing on shallow disposal away from issues and managing our subsurface risk in a way that's really created a robust redundant system for all of our customers in the Delaware Basin.

我們在德克薩斯州特拉華盆地的整個一側擁有龐大的分散式處置井網絡，並且我們很好地專注於淺層處置，避免了問題，並管理了地下風險，從而為特拉華盆地的所有客戶創建了一個強大的冗餘系統。

One of the challenges that's coming up with all the production growth in the Delaware Basin from both New Mexico and Texas, there's substantial amount of produced water growth alongside of that, and in some cases, that can be magnitudes more than the amount of oil that's being produced.

隨著新墨西哥州和德克薩斯州的特拉華盆地石油產量不斷增長，隨之而來的挑戰之一是產水量也大幅增加，在某些情況下，產水量可能比石油產量高出幾個數量級。

What's happening is it's creating additional strain in the subsurface where we are disposing water, and the Pathfinder project is going to allow us to responsibly take that water from areas where there's high-intensity disposal and move it to areas where there's lower-intensity water away from existing production and then make sure that we dispose of that water over time in a very responsible and ridable manner. And that really is the essence of what the project is about.

現在的情況是，它對我們處理水的地下水產生了額外的壓力，而 Pathfinder 計畫將使我們能夠負責任地將這些水從高強度處理的區域轉移到遠離現有生產的低強度水的區域，然後確保我們以非常負責任和可行的方式來處理這些水。這確實是該項目的本質。

The project would not have been possible if we didn't have strong relationships with strategic landowners and a lot of significant alignment with the regulatory agencies in terms of how we run this business and manage our risks. We've done a great job of aligning ourselves with landowners that will let us use their land both to transport and dispose of water over time in a responsible manner, and that's helped us unlock and provide access to our customers to responsible poor space over time.

如果我們沒有與戰略土地所有者建立牢固的關係，並且在如何經營這項業務和管理風險方面沒有與監管機構進行大量重要的協調，那麼這個計畫就不可能實現。我們與土地所有者達成了良好的合作，他們允許我們以負責任的方式使用他們的土地來運輸和處理水，這有助於我們逐步開拓並為我們的客戶提供進入負責任的貧瘠空間的機會。

Additionally, the way we manage the business, we're very much trying to be on the leading edge of responsible SWD and disposal practices, and we're really trying to work with the regulatory agencies on how we can continue to set that bar very high over time and work proactively and hand in hand with them to do things the right way.

此外，我們管理業務的方式是，我們非常努力地走在負責任的 SWD 和處置實踐的前沿，並且我們確實在努力與監管機構合作，研究如何隨著時間的推移繼續設定高標準，並積極主動地與他們攜手以正確的方式做事。

Additionally, this project highlights our ability to work with Oxy to come to new contractual arrangements that allow us to support their development over the long term. The corresponding NBCs that we signed support this project's development and ensure that Oxy will have reliable flow assurance for a long term 10-year period to backstop this project.

此外，該專案凸顯了我們與 Oxy 合作達成新合約安排的能力，使我們能夠長期支持他們的發展。我們簽署的相應NBC支持該項目的發展，並確保Oxy將在10年的長期內獲得可靠的流量保證來支持該項目。

What are the expected returns associated with the Pathfinder pipeline project? What is WES expecting from an adjusted EBITDA free cash flow and gross margin per unit impact to its produced water business over time?

Pathfinder 管道專案的預期回報是什麼？WES 預計調整後的 EBITDA 自由現金流量和單位毛利率將對其生產水業務產生何種長期影響？

It's a great question. We're really attacking this business like we do the rest of our midstream business, and we're targeting midstream appropriate returns over the life of the project. And the great thing about this is that we're making sure those returns are in place with the existing Oxy contract that we've just executed. But we've also strategically upsized the pipeline to ensure that it's placed in front of a massive market opportunity where we can accrete that return significantly higher over time as we fill up the pipeline with more water and align it with appropriate pore space on the the end of it.

這是一個很好的問題。我們對待這項業務就像對待其他中游業務一樣，我們的目標是在專案整個生命週期中獲得適當的中游回報。而這件事最棒的地方在於，我們確保這些回報與我們剛剛執行的現有 Oxy 合約相符。但我們也策略性地擴大了管道，以確保它處於巨大的市場機會面前，隨著時間的推移，隨著我們在管道中註入更多的水，並使其與管道末端的適當孔隙空間對齊，我們可以獲得更高的回報。

So we're really hoping to make sure that this highlights our commitment to deploying capital on appropriate risk-adjusted basis consistent with our gas and crude businesses that we already have, and we think that's a real differentiator from the solutions that are already in the market and how people are deploying capital into that space.

因此，我們真的希望確保這能凸顯我們致力於在與我們現有的天然氣和原油業務相一致的適當風險調整基礎上部署資本的承諾，我們認為這與市場上現有的解決方案以及人們如何將資本部署到該領域有著真正的區別。

Thanks Jon. Kristen, to close, could you give us an update on WESt's capital allocation framework priorities as we transition into 2025?

謝謝喬恩。克里斯汀，最後，您能否向我們介紹 2025 年 WESt 資本配置架構的優先事項？

Sure, Daniel. So for us, the first thing that we want to focus on and really spend our capital towards is organic growth projects. I think the activity that we've seen in the PRB, the continued strong activity we see in the Delaware Basin. And then as John just talked about Pathfinder pipeline in the Delaware Basin, these are great organic opportunities for us that provide us mid-teens type of returns that we're looking for as a midstream company. And so, if we have opportunities like that, we would pursue those all day long. From there, we look at the base distribution and how do we continue to grow that at a mid to low-single digit annual rate.

當然，丹尼爾。因此，對我們來說，我們首先要關注並真正投入資金的是有機成長項目。我認為我們在 PRB 看到的活動以及我們在特拉華盆地看到的持續強勁活動。然後，正如約翰剛才談到特拉華盆地的探路者管道一樣，這些對我們來說是很好的有機機會，為我們提供了我們作為中游公司所尋求的中等水平的回報。因此，如果我們有這樣的機會，我們會全力追求。從那裡，我們來看看基礎分佈，以及如何繼續以中低個位數的年增長率成長。

And then finally, one thing we are retiring that we talked about on the call is the enhanced distribution component of our capital return framework, because of the fact that we just feel like there's so much growth that we can pursue within the portfolio. There's other growth opportunities from an inorganic perspective, and there's more value that we can generate for WES through the base distribution than through any other means from returning value back to unit holders.

最後，我們在電話會議上談到的一件事是取消資本回報框架的增強分配部分，因為我們覺得我們可以在投資組合中追求很大的成長。從無機角度來看，還有其他成長機會，而且我們透過基礎分配為 WES 創造的價值比透過向單位持有人返還價值的任何其他方式創造的價值都要多。

Kristen, Jon, 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、喬恩，謝謝你們今天加入我們。對於我們的聽眾，如果您有任何其他問題，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。