Western Midstream Partners, LP

Good afternoon. My name is Rex, and I will be your conference operator today. At this time, I would like to welcome everyone to the 2Q22 Western Midstream Partners Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one once again. Thank you. I would now like to turn the conference over to Daniel Jenkins, Director of Investor Relations. Please go ahead.

Thank you. I'm glad you could join us today for Western Midstream's second quarter 2022 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-GAAP reconciliations. Please reference Western Midstream's most recent form 10-Q and and other public filings for a 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, Kristen Schultz, our Chief Financial Officer, and Craig Collins, our Chief Operating Officer. I'll now turn the call over to Michael.

Thank you, Daniel, and good afternoon, everyone. Yesterday, we reported another quarter of strong operational and financial performance at Western Midstream. Our second quarter financial success was primarily driven by increased throughput across all three products in the Delaware Basin and higher distributions from equity investments, partially offset by higher operation and maintenance expense. We also achieved several records in the quarter, including record natural gas throughput in the Delaware Basin, processing 1.5 BCF of gas per day, record produced water throughput in the Delaware Basin, gathering 864,000 barrels per day, and record adjusted EBITDA for the second straight quarter, generating substantial free cash flow. We have also delivered on our plan to accelerate the return of capital to our stakeholders. Specifically, through July 29th, we have repurchased approximately 7.1 million units in the open market and 10 million units from Occidental under our $1 billion unit buyback program. Since announcing this program in February, we have repurchased $425 million of units at an average price of approximately $24.85 per unit. Additionally, through our unit buyback programs and including the Anadarko Note Exchange, we have now retired 59 million units or approximately 13.2% of the unaffected common unit count since becoming a standalone organization at the beginning of 2020. We also retired $504 million of senior notes during the quarter. Inclusive of the previously mentioned unit repurchases, we've reduced our debt to trailing 12 month adjusted EBITDA ratio below our year end leverage threshold of 3.4 times. And we have now retired just over $1.65 billion of senior notes or 20% of the aggregate debt balance since our January, 2020 senior notes issuance. As of July 29th on a per unit basis, We have now returned $6.53 through debt retirement and unit repurchases and $3.97 in distributions for a total of $10.50 returned to unit holders since our January 2020 senior notes issuance, which excludes any market-driven appreciation in our current unit price. We are very pleased with our recent efforts to accelerate the return of capital to our stakeholders through debt retirement, unit repurchases, and maintaining a strong base distribution Considering our debt to EBITDA leverage ratio is already below our year-end net leverage threshold of 3.4 times, gives us financial flexibility to evaluate other opportunities to return additional capital to our unit holders, whether through additional buybacks or an enhanced distribution. The decision to pay an enhanced distribution will partially depend on our financial performance in the second half of 2022. Additionally, to the extent we fund unit repurchases with revolver borrowings, or if we refinance those borrowings with more permanent debt capital, Those transactions would be excluded from the computation to potentially pay an enhanced distribution. Said differently, we only intend for permanent reductions in outstanding debt and equity in the aggregate to be considered in the enhanced distribution calculation. Turning to ESG, we released our annual sustainability report this week. The report details how we are working to support sustainable environments, focus on people, and operate responsibly. We are very proud of the unique culture we have built at West. Our people have worked tirelessly to focus on minimizing our environmental footprint and to work with others to find creative solutions to some of today's energy and climate challenges. This approach to advancing energy and our expertise in handling and transporting natural gas are reasons why we feel we are playing a key role in the energy transition. We will talk more about our ESG efforts later in the call. The work of our people, health of our balance sheet, and our strong operational execution all give us confidence that West is well positioned for continued success, even in light of the recent market volatility and economic concerns. Over the past few years, the midstream sector has been focused on utilizing existing capacity, prudent capital allocation, and improving the health of its respective balance sheets. This discipline has made our sector increasingly more attractive to investors. West has been a leader amongst our peers by being the first in the industry to focus on free cash flow. meaningfully de-risking the enterprise and creating value for our unit holders through the return of capital. The actions we have taken have increased our financial flexibility, and we are well positioned to capitalize on these market dynamics and to continue returning capital to our stakeholders. With that, I will now turn the call over to Kristen to discuss our second quarter financial performance. Kristen?