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HOUSTON - Western Midstream Partners, LP (NYSE:WES), a master limited partnership involved in the midstream energy sector, has initiated a secondary public offering of 19 million common units, as announced today. The offering is being conducted by affiliates of Occidental Petroleum Corporation (NYSE:NYSE:OXY), referred to as the Selling Unitholders, and does not involve the sale of any units by WES itself, nor will WES receive proceeds from the offering.
Barclays is serving as the sole book-running manager for this offering, with the Selling Unitholders also providing Barclays a 30-day option to purchase up to an additional 2.85 million units. The success of the offering is contingent upon market conditions, and there is no guarantee of its completion.
The common units are being offered through a prospectus supplement and accompanying base prospectus, part of a shelf registration statement effective as of March 30, 2023. Interested parties can obtain these documents from Barclays Capital Inc. or the U.S. Securities and Exchange Commission's website.
Western Midstream Partners operates midstream assets across several states, including Texas, New Mexico, Colorado, Utah, and Wyoming. The partnership's operations focus on the gathering, compressing, treating, processing, and transporting natural gas, as well as handling other related hydrocarbons and byproducts.
In other recent news, Occidental has had a series of notable developments. The energy company has terminated its planned exchange offer for certain senior notes issued by CrownRock L.P. and CrownRock Finance, Inc. This cancellation involved a potential exchange of up to $376 million in aggregate principal amount of 5.000% Senior Notes due 2029. The proposal, which also included a solicitation of consents to adopt proposed amendments to the governing indenture for the CrownRock Notes, will not proceed.
In addition, Occidental's negotiations with Colombia's state-owned oil company Ecopetrol for the purchase of a stake in CrownRock have ended without a deal. Ecopetrol had been considering a 30% stake in the company, which would have been valued at approximately $3.6 billion. This development follows Occidental's previous acquisition of CrownRock for $12 billion in a mix of cash and stock.
Continuing the trend, Occidental has agreed to sell a portion of its assets in the Delaware Basin to Permian Resources for approximately $818 million. This transaction is part of Occidental's broader plan to divest around $152 million in additional assets, which would bring its total divestments for the year to $970 million.
Lastly, the U.S. Federal Trade Commission (FTC) is currently investigating executives from Occidental regarding their communications with officials from the Organization of the Petroleum Exporting Countries (OPEC). This probe seeks to uncover any evidence of potential collusion on oil market dynamics.
InvestingPro Insights
As Western Midstream Partners, LP (WES) embarks on a secondary public offering of common units, market participants are closely monitoring the performance and financial health of Occidental Petroleum Corporation (NYSE:OXY), the Selling Unitholders in this transaction. According to InvestingPro data, Occidental Petroleum has a market capitalization of approximately $53.32 billion and trades with a Price/Earnings (P/E) ratio of 13.49, which suggests a reasonable valuation relative to its earnings. Additionally, the company's Price to Book value as of the last twelve months ending Q2 2024 stands at 2.25, indicating how investors are valuing the net assets of the company.
An InvestingPro Tip highlights that Occidental Petroleum has maintained dividend payments for an impressive 51 consecutive years, signaling a commitment to returning value to shareholders consistently over time. This is particularly relevant for income-focused investors considering the stability of cash flows from investments amid market fluctuations. Moreover, analysts predict that OXY will be profitable this year, as the company has been profitable over the last twelve months, which may offer a positive outlook for the company's financial performance despite recent market volatility.
For those interested in further insights, InvestingPro offers additional tips on Occidental Petroleum that may prove valuable for making informed investment decisions. The platform lists several more tips, which can be accessed by visiting https://www.investing.com/pro/OXY. These tips could provide a deeper understanding of the company's financial health, future earnings potential, and stock performance expectations, thereby enriching investors' perspectives in light of the current offering by Western Midstream Partners.
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