Western Midstream Partners Q2 Earnings Call Highlights

Western Midstream Partners NYSE: WES reported record second-quarter adjusted EBITDA as Delaware Basin natural gas and produced-water volumes rose, the recently acquired Brazos Delaware II assets began contributing, and higher commodity prices supported results under fixed-recovery processing contracts. Chief Executive Officer Oscar Brown said adjusted EBITDA reached $737 million, up 8% sequentially and 19% from the prior-year period. The partnership also generated net income attributable to limited partners of $395 million and distributable cash flow of $537 million, according to Chief Financial Officer Kristen Shults. Western Midstream raised the midpoint of its 2026 adjusted EBITDA outlook by $250 million to $2.85 billion, within a new range of $2.75 billion to $2.95 billion. The company also increased its distributable cash flow guidance to $2.05 billion to $2.25 billion and free cash flow guidance to $1.1 billion to $1.3 billion, raising the midpoint of each range by $200 million. The revised outlook reflects the mid-June closing of the $1.6 billion acquisition of Brazos Delaware II, stronger commodity pricing during the first half, a higher second-half commodity-price forecast, and increased customer activity expected in the Delaware and Powder River basins. Western Midstream funded the Brazos transaction with about $800 million in cash and $800 million in common units. Brown said the acquisition is accretive to per-unit metrics and expands the partnership’s Delaware Basin gathering and processing position while diversifying its customer base and ownership. The company expects Brazos to contribute approximately $100 million of adjusted EBITDA during the second half of 2026. It also expects to capture $15 million to $20 million of cost synergies in coming quarters, primarily from reductions in general and administrative costs and supply-chain-related operating efficiencies. Brown said the company expects to complete the connection between the legacy Brazos and Western Midstream systems by year-end. The connection is expected to allow more volumes to be directed to Brazos processing plants with available capacity, reducing offloaded volumes and increasing internal processing. Second-quarter natural gas throughput rose 3% sequentially, supported by roughly two and a half weeks of Brazos contributions and another quarter of record natural gas throughput in the DJ Basin, Chief Operating Officer Danny Holderman said. Crude oil and NGL throughput increased slightly, while produced-water throughput increased about 5% from the prior quarter. For the full year, Western Midstream now expects portfolio-wide natural gas throughput to i...