Crude prices recovery drives Western Midstream Partners LP (NYSE: WES) stock

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Western Midstream Partners LP (NYSE: WES) stock rose over 10.6% on 9th April, 2020 (As of 12:19 pm GMT-4; Source: Google finance) due to recovery in the crude price. The company has closed the year 2019 as the company executed of several agreements with Occidental that established WES as a stand-alone midstream company. The company in 2019 had delivered more than $1.7 billion of adjusted EBITDA, distributed over $1.1 billion of cash to unit holders and efficiently executed the capital program coming in approximately $100 million below the 2019 guidance midpoint.

For the fiscal 2020, the company expects adjusted EBITDA to be in the range of $1.875 billion and $1.975 billion. Total capital expenditures is expected to be in the range of $875 million and $950 million, including costs associated with over 60,000 horsepower of compression, over 140 miles of gathering, the completion of the second Latham train during first-quarter 2020, and the addition of two 30 MBbl/d oil-stabilization trains and approximately 180 MBbl/d of saltwater disposal capacity in the Delaware Basin by year-end 2020. 2020 total maintenance capital expenditures is expected to be in the range of $125 million and $135 million. Coverage ratio to be of at least 1.25x with approximately 1-percent year-over-year distribution increase from full-year 2019 per-unit distributions of $2.47 per unit

In addition, WES expects meaningful throughput growth from the DJ and Delaware basins in 2020. Natural gas throughput is projected to grow about 7% to 4.5 billion cubic feet per day, supported by OXY’s Delaware Basin development plan and the mid-2020 commencement of DCP’s delivery into our Latham plant in the DJ Basin. Oil throughput is projected to grow about 18% to more than 765,000 barrels a day, mainly due to new OXY development wells in the Delaware Basin and full-year crude oil shipments on the Cactus II pipeline, where the company own a 15% equity interest. The 2020 Delaware Basin capital program is focused on continued build-out of the oil, gas and water infrastructure, mainly focused on gathering facility capacity expansions, including expected expansion work at eight operating CTFs, and new facilities on the gas system.

 

Water throughput is projected to increase by more than 20% to about 678,000 barrels a day, mainly attributable to new OXY and third-party connections. The total increased throughput volumes across all products are anticipated to drive adjusted EBITDA growth of approximately 13% across the WES portfolio.

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