Western Midstream Partners Outperforms Market with 50% Increase since November

Western Midstream Partners, LP (WES) has demonstrated an impressive performance in the market, surpassing competition with a remarkable 50% increase since November. To enhance the overall value of its assets, the company has embarked on non-core divestitures, generating nearly $800 million from non-controlling stake sales. Focused on elevating returns, Western Midstream has consistently reduced leverage while avidly engaging in share buybacks. With a robust utilization of its asset portfolio and substantial capital returns throughout 2023, the company is poised for solid growth in 2024, projecting double-digit increases in adjusted EBITDA and free cash flow. However, the potential sale of Occidental Petroleum’s stake in Western Midstream poses both additional volatility and enticing growth opportunities, keeping the company’s outlook vibrant. Nevertheless, the main risk lies in its subsidiary status under Occidental Petroleum.

Western Midstream Partners’ Outperformance

Western Midstream Partners, LP (WES) has proven to be a standout performer in the market since November, surpassing expectations and delivering impressive results. With a remarkable increase of approximately 50%, Western Midstream Partners has demonstrated its ability to generate exceptional returns for its investors.

Non-Core Divestitures to Increase Asset Value

In a strategic move to enhance the overall value of its assets, Western Midstream Partners has embarked on a path of non-core divestitures. By divesting certain non-core assets, the company aims to streamline its operations and focus on its core strengths. This will not only optimize its resource allocation but also unlock potential value within its portfolio.

Raising $800 Million from Non-Controlling Stake Sales

Western Midstream Partners has successfully raised a substantial amount of capital through non-controlling stake sales. This strategic move allows the company to tap into external funding sources without diluting its existing ownership structure or relinquishing control. The infusion of $800 million will fortify the company’s financial position and enable it to pursue growth opportunities and value-enhancing initiatives with confidence.

Focus on Increasing Returns

Western Midstream Partners is dedicated to maximizing returns for its shareholders. To achieve this, the company has implemented a series of measures, including share buybacks, which provide an effective way to return surplus capital to investors. By repurchasing its own shares, Western Midstream Partners reduces the number of outstanding shares, effectively boosting the earnings per share and enhancing shareholder value.

Consistent Reduction of Leverage

In addition to implementing share buybacks, Western Midstream Partners has consistently focused on reducing its leverage. By reducing debt levels and improving its financial flexibility, the company is better positioned to weather economic uncertainties and capitalize on potential opportunities. This commitment to deleveraging highlights Western Midstream Partners’ prudent financial management and dedication to creating long-term value for its stakeholders.

Strong 2023 Performance

The year 2023 proved to be a remarkable period for Western Midstream Partners, as the company demonstrated robust performance across various fronts. The utilization of its asset portfolio was exceptionally strong, reflecting the company’s ability to effectively deploy its resources and generate substantial returns. Furthermore, Western Midstream Partners enjoyed significant capital returns, underscoring the efficacy of its strategic initiatives and prudent resource allocation.

Outlook for 2024

Looking ahead to 2024, Western Midstream Partners possesses a positive and promising outlook. The company is projected to achieve solid growth, as it continues to leverage its core strengths and capitalize on emerging opportunities. Shareholders can anticipate continued returns as Western Midstream Partners remains committed to delivering value. Notably, Western Midstream Partners expects to achieve double-digit increases in both adjusted EBITDA and free cash flow, further bolstering its financial performance and reinforcing its position as a leading player in the industry.

Potential Sale of Occidental Petroleum’s Stake

One significant development on the horizon is the potential sale of Occidental Petroleum’s stake in Western Midstream Partners. This event could introduce additional volatility and growth opportunities for Western Midstream Partners. Depending on the outcome of this potential sale, the company may experience fluctuations in its stock price and potentially access new avenues for expansion and diversification.

Main Risk: Subsidiary of Occidental Petroleum

As a subsidiary of Occidental Petroleum, Western Midstream Partners faces the inherent risks associated with its parent company’s operations. Occidental Petroleum’s performance and financial stability can directly impact Western Midstream Partners. It is crucial for investors to be mindful of this relationship and understand the potential implications it may have on Western Midstream Partners’ performance in the market.

In conclusion, Western Midstream Partners’ outstanding performance, non-core divestitures, and successful stake sales highlight its ability to generate significant value for its investors. The company’s focus on increasing returns through share buybacks and consistent reduction of leverage exemplifies its commitment to enhancing shareholder value. With a strong 2023 performance and a promising outlook for 2024, Western Midstream Partners continues to position itself as a frontrunner in the industry. However, investors should remain cautious of potential volatility and growth opportunities arising from Occidental Petroleum’s potential sale of its stake. Overall, Western Midstream Partners commands attention and demonstrates the potential for continued success in the evolving energy market.