HOUSTON, Sept. 14, 2020 /PRNewswire/ -- Today Western
Midstream Partners, LP (NYSE: WES) ("WES" or the "Partnership")
announced the exchange of its 98% interest in the $260 million 6.50% fixed-rate note receivable due
2038 from Occidental Petroleum Corporation (NYSE: OXY)
("Occidental") for 27.855 million WES common units owned by
Occidental (the "Exchange"). The units will be canceled following
the Exchange. The net effect of this transaction increases WES's
per-annum Free cash flow1 after distributions by
approximately $18.1 million based on
current per-unit annualized distributions.
"This transaction is accretive to free cash flow, which will
advance our leverage-reduction efforts," said WES Chief Executive
Officer, Michael Ure. "The Exchange also allows both parties
to avoid valuation discounts that typically apply to transactions
involving the purchase and sale of these types of securities."
"Occidental and WES continue to work together to maximize value
for our shareholders and unitholders," said Occidental President
and Chief Executive Officer, Vicki
Hollub. "This transaction represents a significant step
towards Occidental's intention to reduce its ownership interest in
WES to below 50%, while achieving advantageous pricing relative to
alternative divestiture options and strengthening WES's financial
profile, which in turn benefits Occidental as WES's largest
customer and unitholder."
The Exchange was reviewed and approved by the Partnership's
Special Committee, which includes only independent members of the
board of directors of WES's general partner. The Special Committee
was advised by Bracewell LLP as legal counsel, and by Lazard as
financial advisor.
ABOUT WESTERN MIDSTREAM
Western Midstream Partners, LP ("WES") is a Delaware master limited partnership formed to
acquire, own, develop, and operate midstream assets. With midstream
assets located in the Rocky Mountains, North-central Pennsylvania, Texas, and New
Mexico, WES is engaged in the business of gathering,
compressing, treating, processing, and transporting natural gas;
gathering, stabilizing, and transporting condensate, NGLs, and
crude oil; and gathering and disposing of produced water for its
customers. In addition, in its capacity as a processor of natural
gas, WES also buys and sells natural gas, NGLs, and condensate on
behalf of itself and as agent for its customers under certain of
its contracts.
For more information about Western Midstream Partners, LP and
Western Midstream Flash Feed updates, please visit
www.westernmidstream.com.
This news release contains forward-looking statements. WES's
management believes that its expectations are based on reasonable
assumptions. No assurance, however, can be given that such
expectations will prove correct. A number of factors could cause
actual results to differ materially from the projections,
anticipated results, or other expectations expressed in this news
release. These factors include the ultimate impact of efforts to
fight COVID-19 on the global economy and the timeline for a
recovery in commodity demand and prices; our ability to meet
financial guidance or distribution expectations; our ability to
safely and efficiently operate WES's assets; the supply of, demand
for, and price of oil, natural gas, NGLs, and related products or
services; our ability to meet projected in-service dates for
capital-growth projects; construction costs or capital expenditures
exceeding estimated or budgeted costs or expenditures; and the
other factors described in the "Risk Factors" section of WES's
most-recent Form 10-K and Form 10-Q filed with the Securities and
Exchange Commission and other public filings and press releases.
WES undertakes no obligation to publicly update or revise any
forward-looking statements.
WESTERN MIDSTREAM CONTACTS
Kristen Shults
Vice President, Investor Relations and Communications
Kristen.Shults@westernmidstream.com
832.636.6000
Abby Dempsey
Investor Relations Supervisor
Abby.Dempsey@westernmidstream.com
832.636.6000
1 WES defines "Free cash flow" as net cash provided
by operating activities less total capital expenditures and
contributions to equity investments, plus distributions from equity
investments in excess of cumulative earnings.
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SOURCE Western Midstream Partners, LP