Western Midstream Partners, LP

Good day and welcome to the first quarter of 2020 Western Midstream Partners earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Abby Dempsey, Investor Relations. Please go ahead, ma'am.

Thank you. I'm glad you could join us today for Western Midstream's first quarter 2020 conference call. I'd like to remind you that today's call, the accompanying slide deck, and last night's earnings release contain important disclosures regarding forward-looking statements and non-gap reconciliations. Please reference Western Midstream's form 10Q, and other public filings for description of risk factors that could cause actual results to differ materially from what we discussed today. Relevant reference materials are posted on our website. With me today are Michael Ure, our chief executive officer, Craig Collins, our chief operating officer, and Mike Pearl, our chief financial officer. I now would like to turn the call over to Michael Ure.

Thank you, Abby, and good afternoon, everyone. I hope this call finds you and your family safe and healthy during these unprecedented times. I'd like to begin this call by thanking our employees for their continued focus, diligence, and adaptability, all of which directly contributed to our truly outstanding first quarter results. Our first quarter results are indicative of the operational and financial outperformance that our employees and assets are capable of delivering in a normalized environment. Our first quarter results not only show the capabilities that exist within our best-in-class assets that we expect will deliver repeatable future successes when we reach the other side of this ongoing pandemic, but these results also improve our debt metrics and demonstrate our ability to generate meaningful, positive free cash flow. In light of the pandemic's effect on commodity prices and producer activity, We recently announced capital and other planned cost reductions that we fully expect to realize in 2020, accompanied by a 50% reduction to our quarterly distribution. We believe these announced measures ensure our near term financial health and allow us to emerge from the currently dislocated market opportunistically positioned with financial flexibility. The current market environment has forced us to re-examine every aspect of our operations to identify incremental cost-saving opportunities and pursue efficiencies that will improve our profitability as the sector and overall economy improves. In short, we are focused and committed to delivering improved results with fewer resources by adopting an entrepreneurial mentality that emphasizes broadening employee skill sets and areas of responsibility. As anticipated, Establishing West as a standalone midstream company has furthered cost efficiency realizations and we have embraced the current environment to challenge our legacy corporate organizational structure and functions. The realizable value attributable to past activities investments and the overall reliance on the talent and creativity of our focused employee base to continue identifying efficiencies and cost savings. The current environment is far from ideal. but opportunistic for WES in the sense that it allows and forces us to focus on improving every aspect of our operations and related corporate functions. This has elicited actionable plans that are imminently capable of delivering incremental cost efficiencies for years to come. Notwithstanding our unbridled enthusiasm for our first quarter results and anticipated cost savings initiatives, we recognize the pandemic's adverse effect on worldwide economic activity and the related disruption to the energy sector. We were in early, proactive and constructive contact with all of our customers, most of which communicated deferrals and cancellations of expected drilling campaigns. Our customers continued to revise drilling and completion activities and curtailment plans, which is prompting us to take steps to protect and strengthen our financial wherewithal. We recently announced a 45% or more than a $400 million reduction to our current year capital guidance, a $75 million reduction to current year G&A and operating and maintenance costs, and a 50% reduction to our quarterly per unit distribution. As a result of these actions and up-to-date producer communications, we anticipate 2020 adjusted EBITDA between $1.725 to $1.825 billion. which we expect to result in meaningful 2020 free cash flow after distributions. This guidance reflects the best and current information we have at this time. We will continue monitoring producer activity levels and may adjust our 2020 guidance and future distribution levels based on incremental information that may be communicated to us by our customers in the upcoming months. Today, we believe the strength of our first quarter results and the most recent customer provided activity level information support our revised 2020 guidance. Our revised guidance announced cost savings initiatives and reduced quarterly distributions position us to generate free cash flow after distributions so that we can prioritize leverage reduction and assume a financially offensive stance once the current market dislocation abates. With that, I'll turn the call over to Craig, who will discuss our first quarter operations and forecasted 2020 in-basin activity and capital plans.