Western Midstream Partners, LP

Good afternoon. My name is Joanna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Western Midstream Partners fourth quarter and four-year 2024 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, Please press star followed by the number two. 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 fourth quarter 2024 conference call. I'd like to remind you that today's call, the accompanying slide deck, and last night's earnings releases contain important disclosures regarding forward-looking statements and non-GAAP reconciliations. Please reference Western Midstream's most recent Form 10-K 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. I'm pleased to inform you that the Western Midstream Partners K1 will be available via our website beginning Friday, March 7th. Hard copies will be mailed out the following week. With me today are Oscar Brown, our Chief Executive Officer, Danny Holderman, our Chief Operating Officer, Kristen Schultz, our Chief Financial Officer, and John Vandenbrand, our SVP of Commercial. I will now turn the call over to Oscar.

Thank you, Daniel, and good afternoon, everyone. Before we discuss our fourth quarter and full year 2024 operational and financial results, I'm excited to announce a large expansion of our produced water gathering and disposal infrastructure in the Delaware Basin to support continued upstream development over the long term. West sanctioned the Pathfinder Pipeline, a 30-inch long-haul pipeline that will be able to transport over 800,000 barrels a day of produced water to our existing and soon-to-be constructed facilities in eastern Loving County. This midstream project is anchored by a new long-term produced water agreement with Occidental Petroleum to provide up to 280,000 barrels per day of firm gathering and transportation capacity and up to 220,000 barrels per day of firm disposal capacity supported by corresponding minimum volume commitments. I am also pleased to announce that we have executed amendments to our legacy produce water agreements with Oxy in the Delaware Basin. These new amendments retain the cost of service and fixed fee components of the original agreements and better support our customers' long-term development plans. We will continue to provide our largest customer with excellent customer service and firm flow assurance in exchange for a three and a half year extension to the original produced water gathering agreement in the Delaware Basin. These agreements demonstrate the continued strength of our relationship with Oxy and further provide support for sustainable distribution growth over the coming years. As operators within the Permian Basin are well aware, oil and gas production generates a tremendous amount of produced water and managing it presents significant challenges to the long-term development of the basin. Wes is excited to provide an innovative midstream solution via the Pathfinder pipeline that will facilitate the transportation of produced water away from areas experiencing high-intensity water disposal to more strategic areas with excess pore space that can handle responsible, gradable water disposal over the long term in eastern Loving County. This solution provides us with a platform asset that will enhance our customers' long-term flow assurance and create new optionality as the basin matures over time. Pathfinder will enhance our existing water assets, de-risk our crude oil and natural gas businesses, ensure we are attractively positioned to take on growth opportunities as produced water volumes continue to grow in line with all of our customers' development activities. Kristen and John will provide more details on our expansion plan shortly. However, I would like to stress that this project advances our strategy of prioritizing capital-efficient organic growth that ultimately generates strong returns for WES unit holders and is in line with our continued focus of sustaining and growing the base distribution over time. Now, turning to our 2024 operational and financial results, WES had another very successful and pivotal year, which includes the following achievements. Double digit and record throughput growth across all three product lines, the commencement of operations at Mentone Train 3 in March 2024, the successful integration of Meritage Midstream and the completion of several non-core asset sales for $795 million of total consideration, the announcement of numerous commercial agreements in our core operating basins, and annual adjusted EBITDA and free cash flow growth of 13% and 37%, respectively. We also continued to execute on our capital allocation framework, which included paying out a total of $1.246 billion in base distributions. This record distribution payout included a 52% increase to the base distribution that commenced in the first quarter of 2024 and is 41% higher than pre-COVID levels. West now has the highest distribution yield amongst midstream company peers and relative to investment-grade companies in the Russell 3000. Additionally, we will now be targeting a long-term annual distribution percentage growth rate of mid to low single digits, which excludes potential increases in conjunction with future large organic growth projects or acquisitions. Furthermore, we achieved our year-end 2024 leverage threshold of approximately three times earlier than initially anticipated. which puts our balance sheet in great position to continue pursuing organic growth opportunities and a creative bolt on acquisitions. And finally, we are increasing our focus on productivity and efficiency to further improve our cost structure, which will better serve our customers, improving our competitiveness, and thus increasing our chances of winning more commercial business and sanctioning more attractive organic growth projects such as Pathfinder. With that, I will turn the call over to our Chief Operating Officer, Danny Holderman, to discuss our operational performance in the fourth quarter.