Western Midstream Partners Achieves Record Growth with Pathfinder Pipeline Expansion
Western Midstream Partners, a leading midstream company, recently announced its fourth-quarter and full-year 2024 earnings results, showcasing remarkable growth across various product lines. In a conference call on February 27, the company's CEO, Oscar Brown, highlighted key achievements, including double-digit throughput growth, record adjusted EBITDA and free cash flow, and a significant increase in base distributions.
One of the most exciting developments was the announcement of the Pathfinder pipeline project, a 30-inch long-haul pipeline that will transport over 800,000 barrels per day of produced water from the Delaware Basin to existing facilities in Eastern Loving County. This strategic expansion is anchored by a new agreement with Occidental Petroleum (Oxy), providing 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.
CEO Oscar Brown emphasized the importance of managing produced water in the Permian Basin, where oil and gas production generates a significant amount of waste. The Pathfinder pipeline offers an innovative solution by transporting produced water away from areas experiencing high-intensity water disposal to more strategic locations with excess port space for responsible, ratable water disposal.
By investing in this project, Western Midstream Partners demonstrates its commitment to prioritizing capital-efficient organic growth and generating strong returns for unitholders. The Pathfinder pipeline will enhance the company's existing water assets, derisk its crude oil and natural gas businesses, and position it attractively to take on growth opportunities as produced water volumes continue to grow in line with customers' development activities.
During the conference call, CEO Oscar Brown also highlighted other significant achievements from 2024, including record throughput growth across all three product lines, the commencement of operations at Mentone Train III in March, and the successful integration of Meritage Midstream. The company completed several noncore asset sales for a total consideration of $795 million and announced numerous commercial agreements in its core operating basins.
Western Midstream Partners continued to execute on its capital allocation framework, paying out a record-breaking $1.246 billion in base distributions. This included a 52% increase to the base distribution that commenced in the first quarter of 2024 and is 41% higher than pre-COVID levels.
The company's focus on sustaining and growing the base distribution over time has led to impressive results, with adjusted EBITDA and free cash flow growth of 13% and 37%, respectively. Western Midstream Partners' commitment to delivering strong returns for unitholders and executing on its capital allocation framework sets a solid foundation for future growth and success.
