Western Midstream Partners, LP (NYSE:WES) Q3 2023 Earnings Call Transcript

Page 3 of 3

Gabriel Moreen: Got it. Okay and then maybe if I can ask, it’s been a couple quarters here when you talked about South Texas volumes being up. I know you don’t talk about that very much considering the other basins that you’ve got, but can you just talk a little bit about what’s going on there WES’s competitive position, are you spending any capital out there? That’d be helpful.

Michael Ure: Yes. So actually that’s frankly a reflection of the incredible job the team is doing down there and establishing new relationships and with those new relationships garnering increased confidence in those counterparties actually bringing more volumes onto our system. So actually not a meaningful amount of capital. It’s really more of a reflection of the team’s excellent job and gaining confidence from new customers coming into the area. So we believe we’re definitely competitively positioned there, but as much as anything speaks to the strong customer service element of the way that we think about the business and the high touch nature with our customers that is resulting in increased volumes coming under our system.

Gabriel Moreen: Thanks, Michael. And maybe if I can just stay in that third party customer vein. You know earlier you mentioned the milestone that you kind of crossed in third party volumes overall. But as it pertains to getting more third party volumes, particularly in the Delaware Basin, can you just talk about WES’s positioning in terms of being a little bit less integrated than peers in terms of your downstream assets? Are you viewing that as a hindrance because you don’t have that integration that you might need it or is it really the shoe is on the other foot because everyone’s looking to add downstream capacity to your third party producer customers can kind of pick and choose between different options?

Michael Ure: Yes, it’s a great question. Actually the way that we look at it is, obviously we can provide an integrated solution for our customers by combining all of the marketing needs and then creating flow assurance through the marketing process that we do at no cost to us. It’s all passed back. But we actually view it as a as a positive that we can then differentiate ourselves through the high touch nature of our customer service operations. And through our ability to be so concentrated on making sure that those volumes that are coming from their customers are cared for properly and that we are focusing exclusively on making sure that they’re optimizing their throughput coming through the system overall as opposed to necessarily providing some arbitrage through the system down to the water.

And so for us it’s inherent in making sure that we provide a superior customer service product, making sure that our operability which incidentally has increased every quarter this year, that our operability is high and sustained such that our customer base knows that we’re going to be strong stewards of the relationship that we have overall with them. So frankly we view it as a great opportunity for us to differentiate ourselves. And what you’re seeing by virtue of that third party growth as well as those increased commitments from our customers is that it’s ringing true in terms of our new customer acquisition and retention.

Gabriel Moreen: Got it. Thanks, Michael.

Operator: And your next question comes from the line of Ned Baramov with Wells Fargo. Your line is open.

Ned Baramov: Hi, good afternoon. Thanks for taking the question. You’ve had the Meritage asset for several weeks now. Could you maybe talk about the integration progress and any early findings on the magnitude of potential synergies?

Michael Ure: Yes. So thanks for the question. Actually what we found is a great excitement. Overall between the two companies we’ve as far as an integration perspective, it’s literally like hand in glove at the field level. The teams are working very well together overall. The team was very excited about being a part of a franchise like a Western Midstream and we’re obviously very excited to have them into our organization. So it’s still a little early to be able to determine what our expectations might be from a synergies perspective because we’re trying to make sure that we’re diligent and finding all opportunities that we can potentially drive greater EBITDA growth out there. But I would say overall that the integration is going very positively and the teams are really excited to work well together.

Ned Baramov: Thanks for that Mike. And then on the new customer contract are the economics of the extended agreement comparable to what you had in place with this customer before the amendment?

Michael Ure: So it’s — it is an extension from this existing customer that we would say are done at very competitive rates overall. So it’s an addition of incremental acres into the system and an extension of an existing agreement and at competitive rates. So it’s a customer that we have had a long standing relationship with an incredible rapport. We have the highest amount of respect for them and obviously it appears as if they’d do the same for us. So we’re really excited about being able to continue that relationship long into the future.

Ned Baramov: Thanks. That’s all I had.

Operator: And I will now turn the call back over to Michael Ure.

Michael Ure: Thank you everyone for joining for the third quarter call. I would like to wish everyone an early happy holidays and look forward to speaking again in the first quarter of next year.

Operator: And this concludes today’s conference call. You may now disconnect.

Follow Western Midstream Partners Lp (NYSE:WES)

Page 3 of 3