Western Midstream Partners LP (NYSE:WES) Q2 2020 Earnings Conference Call - Final Transcript

Aug 11, 2020 • 02:00 pm ET


Western Midstream Partners LP (NYSE:WES) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Western Midstream Partners Second Quarter 2020 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]

I would now like to turn the conference over to Kristen Shults, Vice President of Investor Relations and Communications. Please go ahead, ma'am.

Kristen Shults

Thank you. I'm glad you could join us today for Western Midstream's second 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-GAAP reconciliations. Please reference Western Midstream's Form 10-Q and other public filings for a description of risk factors that could cause actual results to differ materially from what we discuss 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.

Michael P. Ure

Thank you, Kristen and good afternoon, everyone. Our outstanding second quarter results evidenced our ability to deliver high quality service that is consistent with our customer's expectations and supportive of long-term enterprise value creation. Our expansive asset portfolio located in Premier US onshore basins are strong fee based contracts that are insulated from direct commodity price exposure and our ability to realize operational efficiencies and cost savings position us to generate meaningful returns even during challenging economic conditions.

This profile combined with the successful execution of creative commercial solutions improved commodity prices that supported higher than expected producer activity and Occidental's outperformance on its Delaware Basin legacy Anadarko acreage contributed to our strong second quarter results. Over the last year, our commercial team focused on securing new business by leveraging our expansive infrastructure and optimizing our existing contracts. In response to the recent economic downturn and pronounced energy demand shock, our commercial team worked diligently with producers and other midstream service providers to secure mutually beneficial commercial solutions.

For example, in the Delaware Basin, we avoided the curtailment of approximately 130 million cubic feet per day through creative commercial solutions that provided near-term incentives to producers and resulted in additional long-term value for WES. Similar successes continued to generate incremental capital advantage EBITDA for WES, while providing near-term relief to customers that have been affected adversely by lower energy demand. With the release of our first quarter 2020 results, we announced revised guidance, capital savings initiatives and a reduced quarterly distribution.

As a result of the second quarter, commodity price increases driving less than expected producer curtailments and current commodity prices supporting continued producer activity, we have increased our 2020 guidance to reflect anticipated adjusted EBITDA between $1.85 billion and $1.9 billion which represents a $100 million increase to the midpoint of our previously issued guidance. Additionally, we have continued to refine our capital discipline and investment plans and now anticipate full year 2020 capital expenditures between $400 million and $450 million reflective