Western Midstream prices $800 million senior notes offering

HOUSTON - Western Midstream Partners, LP (NYSE:WES) disclosed the pricing of a substantial debt offering through its subsidiary, Western Midstream Operating, LP. The company has priced $800 million in senior notes at 5.45% due 2034, which will be offered to the public at slightly below face value. The transaction is expected to be finalized by August 20, 2024, subject to standard closing conditions.

The proceeds from this offering are earmarked for the repayment of existing debt, specifically a portion of WES Operating's maturing 3.100% Senior Notes and 3.950% Senior Notes, both due in 2025. Remaining funds will serve general partnership needs, including capital expenditures.

Joint book-running managers for this offering include TD Securities (USA) LLC, BofA Securities, Inc., MUFG Securities Americas Inc., and PNC Capital Markets LLC. The offering is contingent on a prospectus and related prospectus supplement, which are available through the managers and on the Securities and Exchange Commission's website.

This announcement follows the effective date of a shelf registration statement on March 30, 2023, and does not constitute an offer to sell or a solicitation of an offer to buy in any state where such an offer would be illegal without proper registration or qualification under the securities laws of that jurisdiction.

Western Midstream Partners is a master limited partnership with a focus on midstream energy assets across several key energy-producing states. The partnership is primarily involved in the natural gas sector, with services ranging from processing to transportation. It operates under fee-based contracts to mitigate exposure to commodity price fluctuations.

The news release includes forward-looking statements, which are based on current assumptions and subject to risks that could cause actual results to differ, including the successful closure of the senior notes offering and the intended use of proceeds. The company has issued cautionary notes in its public filings, indicating potential risk factors that investors should consider.

This article is based on a press release statement from Western Midstream Partners, LP.

In other recent news, Western Midstream Partners, LP reported strong Q2 2024 results, with a net income of $370 million and adjusted EBITDA of $578 million. The company's operational strength was highlighted by CEO Michael Ure, alongside the anticipation of continued throughput growth. Western Midstream secured several new customer agreements, expected to drive future performance.

The company also marked its success in achieving its 2023 sustainability goals and expects record adjusted EBITDA and free cash flow for the year. Analysts noted the sale of non-core assets, allowing Western Midstream to meet its net leverage ratio target ahead of schedule. The company's capital allocation towards organic growth, mergers, acquisitions, and distribution increases was also mentioned.

Western Midstream anticipates record operated throughput, adjusted EBITDA, and free cash flow for the year. The company's focus is on asset acquisitions in current operational areas and operational enhancements. However, there are no major projects planned for the Uinta basin due to sufficient capacity. Lastly, the company plans a decrease in capital expenditure in 2025.

InvestingPro Insights

Western Midstream Partners, LP (NYSE:WES) has demonstrated a robust financial performance, as reflected in the latest InvestingPro data. With a market capitalization of approximately $14.55 billion and a P/E ratio of 9.89, the company presents an attractive valuation relative to its near-term earnings growth. This is further supported by the company's PEG ratio of 0.22, suggesting that WES's stock price may not fully reflect its earnings growth potential.

InvestingPro Tips highlight the company's strong financial health and investor appeal. WES has maintained a perfect Piotroski Score of 9, indicating top-tier financial stability. Additionally, two analysts have revised their earnings projections upwards for the upcoming period, signaling optimism in the company's financial prospects. Notably, WES has upheld its commitment to returning value to shareholders, maintaining dividend payments for 12 consecutive years with a high dividend yield of 9.27% as of the latest data.

For investors seeking more comprehensive analysis, there are additional InvestingPro Tips available, which provide deeper insights into the company's performance and potential investment opportunities. Access to these additional tips can be found at InvestingPro's dedicated WES page.

These financial metrics and expert insights from InvestingPro may be particularly relevant to investors considering the recent announcement of Western Midstream Partners' debt offering and its implications for the company's capital structure and future growth.

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