WESTERN MIDSTREAM ANNOUNCES PRICING OF SECONDARY PUBLIC OFFERING OF COMMON UNITS

Rhea-AI Summary

Western Midstream Partners, LP (NYSE: WES) has announced the pricing of a secondary public offering of 19,000,000 common units by affiliates of Occidental (NYSE: OXY). The offering is expected to raise $685.9 million in gross proceeds and close on August 14, 2024. Barclays, the sole book-running manager, has been granted a 30-day option to purchase up to 2,850,000 additional units. WES will not receive any proceeds from the sale as it is not selling any units in this offering. The offering is being made through a prospectus supplement and base prospectus, part of a shelf registration statement that became effective on March 30, 2023.

Positive

• Secondary offering expected to raise $685.9 million in gross proceeds
• Potential for additional $102.9 million if underwriter's option is exercised

Negative

• Dilution of existing shareholders' ownership
• WES will not receive any proceeds from the offering

Insights

Financial Analyst

The secondary offering of 19 million common units by Occidental's affiliates is a significant move, raising $685.9 million. This transaction highlights OXY's strategy to monetize its WES stake, potentially to strengthen its balance sheet or fund other initiatives. For WES, while not directly benefiting from the proceeds, this offering increases its public float and could enhance liquidity for existing unitholders.

The pricing at $36.10 per unit represents a slight discount to recent trading levels, which is typical for large block sales. The additional 30-day option for 2.85 million units provides flexibility to meet excess demand. Investors should monitor how this increased float impacts WES's trading dynamics and whether it affects the partnership's strategic direction or distribution policy going forward.

Market Research Analyst

This offering marks a notable shift in WES's ownership structure, with Occidental reducing its stake. The market's reaction will be important to watch, as it may indicate investor sentiment towards both WES's standalone prospects and the midstream sector overall. The single underwriter structure with Barclays is interesting, potentially suggesting confidence in demand or a desire for a streamlined process.

Investors should consider the implications of this move on WES's governance and strategic alignment with Occidental. While the immediate impact on WES's operations is likely minimal, the long-term effects on capital allocation, growth strategies and potential M&A activity could be significant. This transaction also reflects broader trends in the energy sector, where upstream companies are reevaluating their midstream holdings.

HOUSTON, Aug. 12, 2024 /PRNewswire/ -- Western Midstream Partners, LP (NYSE: WES) ("WES") announced today the pricing of the previously announced underwritten secondary public offering of 19,000,000 common units representing limited partner interests in WES ("Common Units") by affiliates of Occidental (NYSE: OXY) (the "Selling Unitholders"), for gross proceeds of $685.9 million. The offering is expected to close on August 14, 2024, subject to customary closing conditions.

The Selling Unitholders have granted Barclays, as the underwriter, a 30-day option to purchase up to 2,850,000 additional Common Units from the Selling Unitholders at the public offering price less underwriting discounts and commissions. WES is not selling any Common Units in the offering and will not receive any proceeds from the sale of Common Units in the offering.

Barclays is acting as the sole book-running manager for the offering. The offering is being made only by means of the prospectus supplement and accompanying base prospectus, which is part of a shelf registration statement that became effective on March 30, 2023, copies of which may be obtained from Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by phone at 1-888-603-5847 or by email at barclaysprospectus@broadridge.com‎. An electronic copy of the prospectus supplement and accompanying base prospectus is available from the U.S. Securities and Exchange Commission's website at www.sec.gov.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

ABOUT WESTERN MIDSTREAM

Western Midstream Partners, LP ("WES") is a master limited partnership formed to develop, acquire, own, and operate midstream assets. With midstream assets located in Texas, New Mexico, Colorado, Utah, and Wyoming, WES is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural-gas liquids, and crude oil; and gathering and disposing of produced water for its customers. In its capacity as a natural-gas processor, WES also buys and sells natural gas, natural-gas liquids, and condensate on behalf of itself and its customers under certain gas processing contracts. A substantial majority of WES's cash flows are protected from direct exposure to commodity price volatility through fee-based contracts.

This news release contains forward-looking statements. WES and its general partner believe that their expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release, including the Selling Unitholders' ability to close successfully on the offering. See "Risk Factors" in WES's Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, and June 30, 2024, and other public filings and press releases. Except as required by law, WES does not undertake the obligation to publicly update or revise any forward-looking statements.

WESTERN MIDSTREAM CONTACTS

Daniel Jenkins
Director, Investor Relations                   
Investors@westernmidstream.com
866-512-3523

Rhianna Disch
Manager, Investor Relations
Investors@westernmidstream.com
866-512-3523

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SOURCE Western Midstream Partners, LP

FAQ

How many common units of WES are being offered in the secondary public offering?

The secondary public offering includes 19,000,000 common units of Western Midstream Partners, LP (WES), with an additional 30-day option for the underwriter to purchase up to 2,850,000 more units.

What is the expected gross proceeds from WES's secondary offering?

The secondary offering of WES common units is expected to raise gross proceeds of $685.9 million.

When is the closing date for WES's secondary public offering?

The secondary public offering of WES common units is expected to close on August 14, 2024, subject to customary closing conditions.

Who are the selling unitholders in the WES secondary offering?

The selling unitholders in the WES secondary offering are affiliates of Occidental (NYSE: OXY).

Will WES receive any proceeds from this secondary offering?

No, Western Midstream Partners, LP (WES) is not selling any common units in this offering and will not receive any proceeds from the sale of common units.