What changed in this filing

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Item 1. Financial Statements

2021-08-09 compared with 2021-05-10 · 181 added, 112 removed, 862 unchanged (25% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

thousands except per-unit amounts 2021 2020 2021 2020

39 unchanged sentences

_________________________________________________________________________________________

(1) Total revenues and other includes related - party amounts of $ 378.3 million and $ 482.4 million for the three months ended March 31, 2021 and 2020, respectively.

(2) Total operating expenses includes related - party amounts of $ 39.9 million and $ 132.6 million for the three months ended March 31, 2021 and 2020, respectively.

(1) Total revenues and other includes related - party amounts of $ 415.4 million and $ 793.7 million for the three and six months ended June 30, 2021, respectively, and $ 473.4 million and $ 955.8 million for the three and six months ended June 30, 2020, respectively.

(2) Total operating expenses includes related - party amounts of $ 29.0 million and $ 68.8 million for the three and six months ended June 30, 2021, respectively, and $ 18.5 million and $ 151.1 million for the three and six months ended June 30, 2020, respectively.

(3) See Note 5.

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

thousands except number of units March 31,

thousands except number of units June 30,

2021 December 31,

34 unchanged sentences

Equity and partners’ capital

Common units ( 413,062,133 and 413,839,863 units issued and outstanding at March 31, 2021, and December 31, 2020, respectively)

Common units ( 413,076,351 and 413,839,863 units issued and outstanding at June 30, 2021, and December 31, 2020, respectively)

2,927,066 2,778,339

General partner units ( 9,060,641 units issued and outstanding at March 31, 2021, and December 31, 2020)

General partner units ( 9,060,641 units issued and outstanding at June 30, 2021, and December 31, 2020)

( 13,923 ) ( 17,208 )

4 unchanged sentences

________________________________________________________________________________________

(1) Other assets includes $ 8.9 million and $ 4.2 million of NGLs line - fill inventory as of March 31, 2021, and December 31, 2020, respectively.

Other assets also includes $ 68.5 million and $ 71.9 million of materials and supplies inventory as of March 31, 2021, and December 31, 2020, respectively.

(2) Total assets includes related - party amounts of $ 1.5 billion and $ 1.6 billion as of March 31, 2021, and December 31, 2020, respectively, which includes related - party Accounts receivable, net of $ 253.6 million and $ 291.3 million as of March 31, 2021, and December 31, 2020, respectively.

(3) Total liabilities includes related - party amounts of $ 215.5 million and $ 164.7 million as of March 31, 2021, and December 31, 2020, respectively.

(1) Other assets includes $ 7.7 million and $ 4.2 million of NGLs line - fill inventory as of June 30, 2021, and December 31, 2020, respectively.

Other assets also includes $ 60.3 million and $ 71.9 million of materials and supplies inventory as of June 30, 2021, and December 31, 2020, respectively.

(2) Total assets includes related - party amounts of $ 1.6 billion as of June 30, 2021, and December 31, 2020, which includes related - party Accounts receivable, net of $ 278.9 million and $ 291.3 million as of June 30, 2021, and December 31, 2020, respectively.

(3) Total liabilities includes related - party amounts of $ 222.8 million and $ 164.7 million as of June 30, 2021, and December 31, 2020, respectively.

See accompanying Notes to Consolidated Financial Statements.

9 unchanged sentences

Distributions to Chipeta noncontrolling interest owner — — ( 276 ) ( 276 )

Distributions to noncontrolling interest owners of WES Operating — — ( 2,551 ) ( 2,551 )

Distributions to noncontrolling interest owner of WES Operating — — ( 2,551 ) ( 2,551 )

Distributions to Partnership unitholders ( 128,447 ) ( 2,818 ) — ( 131,265 )

8 unchanged sentences

Balance at March 31, 2021 $ 2,821,455 $ ( 16,033 ) $ 136,698 $ 2,942,120

Net income (loss) 226,295 4,964 7,018 238,277

Distributions to Chipeta noncontrolling interest owner — — ( 1,245 ) ( 1,245 )

Distributions to noncontrolling interest owner of WES Operating — — ( 2,741 ) ( 2,741 )

Distributions to Partnership unitholders ( 130,115 ) ( 2,854 ) — ( 132,969 )

Contributions of equity - based compensation from Occidental

2,375 — — 2,375

Equity - based compensation expense

4,746 — — 4,746

Net contributions from (distributions to) related parties 2,881 — — 2,881

Other ( 571 ) — — ( 571 )

Balance at June 30, 2021 $ 2,927,066 $ ( 13,923 ) $ 139,730 $ 3,052,873

_________________________________________________________________________________________

(1) See Note 5 .

17 unchanged sentences

Balance at March 31, 2020 $ 2,684,136 $ ( 24,990 ) $ 133,139 $ 2,792,285

Net income (loss) 267,576 5,461 8,304 281,341

Distributions to Chipeta noncontrolling interest owner — — ( 1,037 ) ( 1,037 )

Distributions to noncontrolling interest owner of WES Operating — — ( 2,869 ) ( 2,869 )

Distributions to Partnership unitholders ( 138,075 ) ( 2,818 ) — ( 140,893 )

Contributions of equity-based compensation from Occidental 3,562 — — 3,562

Equity-based compensation expense 2,115 — — 2,115

Net contributions from (distributions to) related parties 1,343 — — 1,343

Other ( 330 ) — — ( 330 )

Balance at June 30, 2020 $ 2,820,327 $ ( 22,347 ) $ 137,537 $ 2,935,517

_________________________________________________________________________________________

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

thousands 2021 2020

7 unchanged sentences

Non - cash equity - based compensation expense

13,855 10,911

Deferred income taxes 1,273 799

5 unchanged sentences

(Gain) loss on early extinguishment of debt 289 ( 8,740 )

Other 11 2,287

Cash paid to settle interest-rate swaps — ( 12,763 )

Changes in assets and liabilities:

8 unchanged sentences

Distributions from equity investments in excess of cumulative earnings – related parties 21,373 13,340

Decreases to materials and supplies inventory and other 3,256 —

Proceeds from the sale of assets to third parties 8,003 —

(Increase) decrease in materials and supplies inventory and other 7,656 ( 39,212 )

Net cash used in investing activities ( 106,404 ) ( 355,001 )

6 unchanged sentences

Distributions to Chipeta noncontrolling interest owner ( 1,521 ) ( 2,775 )

Distributions to noncontrolling interest owners of WES Operating ( 2,551 ) ( 5,807 )

Distributions to noncontrolling interest owner of WES Operating ( 5,292 ) ( 8,676 )

Net contributions from (distributions to) related parties 4,508 21,832

Finance lease payments (2)

( 3,639 ) ( 10,262 )

Unit repurchases ( 16,241 ) —

9 unchanged sentences

(1) See Note 6 .

(2) For the six months ended June 30, 2020, includes related-party payments of $ 6.4 million.

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

thousands 2021 2020 2021 2020

30 unchanged sentences

________________________________________________________________________________________

(1) Total revenues and other includes related - party amounts of $ 378.3 million and $ 482.4 million for the three months ended March 31, 2021 and 2020, respectively.

(2) Total operating expenses includes related - party amounts of $ 40.4 million and $ 132.5 million for the three months ended March 31, 2021 and 2020, respectively.

(2) Total operating expenses includes related - party amounts of $ 29.6 million and $ 69.9 million for the three and six months ended June 30, 2021, respectively, and $ 18.7 million and $ 151.1 million for the three and six months ended June 30, 2020, respectively.

See accompanying Notes to Consolidated Financial Statements.

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

thousands except number of units March 31,

thousands except number of units June 30,

2021 December 31,

34 unchanged sentences

Equity and partners’ capital

Common units ( 318,675,578 units issued and outstanding at March 31, 2021, and December 31, 2020)

Common units ( 318,675,578 units issued and outstanding at June 30, 2021, and December 31, 2020)

3,020,327 2,831,199

4 unchanged sentences

_________________________________________________________________________________________

(1) Other assets includes $ 8.9 million and $ 4.2 million of NGLs line - fill inventory as of March 31, 2021, and December 31, 2020, respectively.

Other assets also includes $ 68.5 million and $ 71.9 million of materials and supplies inventory as of March 31, 2021, and December 31, 2020, respectively.

(2) Total assets includes related - party amounts of $ 1.5 billion as of March 31, 2021, and December 31, 2020, which includes related - party Accounts receivable, net of $ 231.3 million and $ 246.1 million as of March 31, 2021, and December 31, 2020, respectively.

(3) Total liabilities includes related - party amounts of $ 215.2 million and $ 164.3 million as of March 31, 2021, and December 31, 2020, respectively.

(1) Other assets includes $ 7.7 million and $ 4.2 million of NGLs line - fill inventory as of June 30, 2021, and December 31, 2020, respectively.

Other assets also includes $ 60.3 million and $ 71.9 million of materials and supplies inventory as of June 30, 2021, and December 31, 2020, respectively.

(2) Total assets includes related - party amounts of $ 1.6 billion and $ 1.5 billion as of June 30, 2021, and December 31, 2020, respectively, which includes related - party Accounts receivable, net of $ 278.9 million and $ 246.1 million as of June 30, 2021, and December 31, 2020, respectively.

(3) Total liabilities includes related - party amounts of $ 251.0 million and $ 164.3 million as of June 30, 2021, and December 31, 2020, respectively.

See accompanying Notes to Consolidated Financial Statements.

3 unchanged sentences

Units Noncontrolling

Interests Total

Interest Total

Balance at December 31, 2020 $ 2,831,199 $ 29,552 $ 2,860,751

8 unchanged sentences

Balance at March 31, 2021 $ 2,909,877 $ 30,909 $ 2,940,786

Net income (loss) 237,611 2,264 239,875

Distributions to Chipeta noncontrolling interest owner — ( 1,245 ) ( 1,245 )

Distributions to WES Operating unitholders ( 137,030 ) — ( 137,030 )

Contributions of equity - based compensation from Occidental

2,375 — 2,375

Contributions of equity - based compensation from WES

4,613 — 4,613

Net contributions from (distributions to) related parties 2,881 — 2,881

Balance at June 30, 2021 $ 3,020,327 $ 31,928 $ 3,052,255

thousands Common

11 unchanged sentences

Balance at March 31, 2020 $ 2,756,583 $ 29,783 $ 2,786,366

Net income (loss) 279,814 2,706 282,520

Distributions to Chipeta noncontrolling interest owner — ( 1,037 ) ( 1,037 )

Distributions to WES Operating unitholders ( 143,404 ) — ( 143,404 )

Contributions of equity-based compensation from Occidental 3,562 — 3,562

Net contributions from (distributions to) related parties 1,343 — 1,343

Balance at June 30, 2020 $ 2,897,898 $ 31,452 $ 2,929,350

_______________________________________________________________________________________

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

thousands 2021 2020

14 unchanged sentences

(Gain) loss on early extinguishment of debt 289 ( 8,740 )

Other 11 2,287

Cash paid to settle interest-rate swaps — ( 12,763 )

Changes in assets and liabilities:

8 unchanged sentences

Distributions from equity investments in excess of cumulative earnings – related parties 21,373 13,340

Decreases to materials and supplies inventory and other 3,256 —

Proceeds from the sale of assets to third parties 8,003 —

(Increase) decrease in materials and supplies inventory and other 7,656 ( 39,212 )

Net cash used in investing activities ( 106,404 ) ( 355,001 )

8 unchanged sentences

Finance lease payments (2)

( 3,639 ) ( 10,262 )

Net cash provided by (used in) financing activities ( 725,347 ) ( 426,589 )

8 unchanged sentences

(1) See Note 6.

(2) For the six months ended June 30, 2020, includes related-party payments of $ 6.4 million.

See accompanying Notes to Consolidated Financial Statements.

10 unchanged sentences

“Anadarko” refers to Anadarko Petroleum Corporation and its subsidiaries, excluding Western Midstream Holdings, LLC.

Anadarko became a wholly owned subsidiary of Occidental Petroleum Corporation as a result of Occidental Petroleum Corporation’s acquisition by merger of Anadarko on August 8, 2019.

“Related parties” refers to Occidental (see Note 6 ) and the Partnership’s investments accounted for under the equity method of accounting (see Note 7 ).

Anadarko became a wholly owned subsidiary of Occidental as a result of Occidental’s acquisition by merger of Anadarko on August 8, 2019.

“Related parties” refers to Occidental (see Note 6 ), the Partnership’s investments accounted for under the equity method of accounting (see Note 7 ), and the Partnership and WES Operating for transactions that eliminate upon consolidation (see Note 6 ).

The Partnership is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas;

2 unchanged sentences

In its capacity as a natural - gas processor, the Partnership also buys and sells natural gas, NGLs, and condensate on behalf of itself and as an agent for its customers under certain contracts.

As of March 31, 2021, the Partnership’s assets and investments consisted of the following:

As of June 30, 2021, the Partnership’s assets and investments consisted of the following:

Operated Operated

50 unchanged sentences

Throughout these notes to consolidated financial statements, and to the extent material, any differences between the consolidated financial results of the Partnership and WES Operating are discussed separately.

The Partnership’s consolidated financial statements differ from those of WES Operating primarily as a result of (i) the presentation of noncontrolling interest ownership (see Noncontrolling interests below), (ii) the elimination of WES Operating GP’s investment in WES Operating with WES Operating GP’s underlying capital account, (iii) the general and administrative expenses incurred by the Partnership, which are separate from, and in addition to, those incurred by WES Operating, and (iv) the inclusion of the impact of Partnership equity balances and Partnership distributions.

The Partnership’s consolidated financial statements differ from those of WES Operating primarily as a result of (i) the presentation of noncontrolling interest ownership (see Noncontrolling interests below), (ii) the elimination of WES Operating GP’s investment in WES Operating with WES Operating GP’s underlying capital account, (iii) the general and administrative expenses incurred by the Partnership, which are separate from, and in addition to, those incurred by WES Operating, (iv) the inclusion of the impact of Partnership equity balances and Partnership distributions, and (v) transactions between the Partnership and WES Operating that eliminate upon consolidation.

Presentation of the Partnership’s assets.

The Partnership’s assets include assets owned and ownership interests accounted for by the Partnership under the equity method of accounting, through its 98.0 % partnership interest in WES Operating, as of March 31, 2021 (see Note 7 ).

The Partnership also owns and controls the entire non - economic general partner interest in WES Operating GP, and the Partnership’s general partner is owned by Occidental.

12 unchanged sentences

Equity-based compensation.

During the three months ended March 31, 2021, the Partnership issued 338,078 common units under the Western Gas Equity Partners, LP 2012 Long - Term Incentive Plan (“WES LTIP”).

Compensation expense for the WES LTIP was $ 3.5 million and $ 1.1 million for the three months ended March 31, 2021 and 2020, respectively.

During the six months ended June 30, 2021, the Partnership issued 352,296 common units under the Western Gas Equity Partners, LP 2012 Long - Term Incentive Plan (“WES LTIP”).

Compensation expense for the WES LTIP was $ 4.7 million and $ 8.3 million for the three and six months ended June 30, 2021, respectively, and $ 2.1 million and $ 3.2 million for the three and six months ended June 30, 2020, respectively.

On March 22, 2021, the Board of Directors approved the Western Midstream Partners, LP 2021 Long - Term Incentive Plan, which authorized the issuance of up to 9.5 million of the Partnership’s common units.

10 unchanged sentences

The Partnership also makes other contributions based on plan guidelines.

The Partnership recognized expense related to the plan of $ 6.9 million and $ 0.4 million for the three months ended March 31, 2021 and 2020, respectively.

The Partnership recognized expense related to the plan of $ 6.1 million and $ 13.0 million for the three and six months ended June 30, 2021, respectively, and $ 4.0 million and $ 4.4 million for the three and six months ended June 30, 2020, respectively.

REVENUE FROM CONTRACTS WITH CUSTOMERS

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

thousands 2021 2020 2021 2020

13 unchanged sentences

Certain of the Partnership’s midstream services contracts have minimum - volume commitment demand fees and fees that require periodic rate redeterminations based on the related facility cost - of - service rate provisions.

During the year ended December 31, 2020, and the quarter ended March 31, 2021, the Partnership constrained revenue on certain cost-of-service agreements based on the status of commercial negotiations relating to a legal dispute with one of our contract counterparties.

During the year ended December 31, 2020, and the six months ended June 30, 2021, the Partnership constrained revenue on certain cost-of-service agreements based on the status of commercial negotiations relating to a legal dispute with one of our contract counterparties.

Future revenue reversals could occur to the extent the outcome of the legal proceedings and commercial negotiations differ from our current assumptions.

3 unchanged sentences

Contract balances.

Receivables from customers, which are included in Accounts receivable, net on the consolidated balance sheets were $ 469.3 million and $ 428.2 million as of March 31, 2021, and December 31, 2020, respectively.

Receivables from customers, which are included in Accounts receivable, net on the consolidated balance sheets were $ 509.8 million and $ 428.2 million as of June 30, 2021, and December 31, 2020, respectively.

Contract assets primarily relate to (i) revenue accrued but not yet billed under cost - of - service contracts with fixed and variable fees and (ii) accrued deficiency fees the Partnership expects to charge customers once the related performance periods are completed.

2 unchanged sentences

Additional estimated revenues recognized (1)

Contract assets balance at March 31, 2021 $ 60,915

Contract assets at March 31, 2021

Contract assets balance at June 30, 2021 $ 64,880

Contract assets at June 30, 2021

Other current assets $ 18,700

1 unchanged sentence

Total contract assets from contracts with customers $ 64,880

_________________________________________________________________________________________

(1) Includes $ 4.0 million for the three months ended June 30, 2021.

Contract liabilities primarily relate to (i) aid - in - construction payments received from customers that must be recognized over the expected period of customer benefit, (ii) fixed and variable fees under cost - of - service contracts that are received from customers for which revenue recognition is deferred, and (iii) fees that are charged to customers for only a portion of the contract term and must be recognized as revenues over the expected period of customer benefit.

3 unchanged sentences

Revenues recognized that were included in the contract liability balance at the beginning of the period (2)

Contract liabilities balance at March 31, 2021 $ 280,130

Contract liabilities at March 31, 2021

Contract liabilities balance at June 30, 2021 $ 292,928

Contract liabilities at June 30, 2021

Accrued liabilities $ 16,261

1 unchanged sentence

Total contract liabilities from contracts with customers $ 292,928

_________________________________________________________________________________________

(1) Includes $ 18.8 million for the three months ended June 30, 2021.

(2) Includes $( 6.0 ) million for the three months ended June 30, 2021.

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

2 unchanged sentences

Transaction price allocated to remaining performance obligations.

Revenues expected to be recognized from certain performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2021, are presented in the following table.

Revenues expected to be recognized from certain performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2021, are presented in the following table.

The Partnership applies the optional exemptions in Revenue from Contracts with Customers (Topic 606) and does not disclose consideration for remaining performance obligations with an original expected duration of one year or less or for variable consideration related to unsatisfied (or partially unsatisfied) performance obligations.

7 unchanged sentences

Fort Union and Bison facilities.

In October 2020, the Partnership (i) sold its 14.81 % interest in Fort Union Gas Gathering, LLC (“Fort Union”), which was accounted for under the equity method of accounting, and (ii) entered into an option agreement to sell the Bison treating facility, located in Northeast Wyoming, to a third party, initially exercisable during the first quarter of 2021 and subsequently extended to May 9, 2021.

The Partnership received combined proceeds of $ 27.0 million, resulting in a net gain on sale of $ 21.0 million related to the Fort Union interest that was recorded in the fourth quarter of 2020 as Gain (loss) on divestiture and other, net in the consolidated statements of operations.

During the second quarter of 2021, the third party exercised its option to purchase the Bison treating facility and it satisfied the held - for - sale criteria.

The sale is expected to close in the second quarter of 2021.

During the second quarter of 2021, the third party exercised its option to purchase the Bison treating facility and the sale closed.

The Partnership received total proceeds of $ 8.0 million, $ 7.0 million in the fourth quarter of 2020 and $ 1.0 million when the sale closed in the second quarter of 2021, resulting in a net gain on sale of $ 5.4 million that was recorded as Gain (loss) on divestiture and other, net in the consolidated statements of operations.

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

13 unchanged sentences

December 31 0.31100 131,265 February 2021

$ 0.31500 $ 132,969 May 2021

March 31 $ 0.31500 $ 132,969 May 2021

0.31900 134,662 August 2021

_________________________________________________________________________________________

(1) The Board of Directors declared a cash distribution to the Partnership’s unitholders for the first quarter of 2021 of $ 0.31500 per unit, or $ 133.0 million in aggregate.

The cash distribution is payable on May 14, 2021 to unitholders of record at the close of business on April 30, 2021, including the general partner units.

(1) The Board of Directors declared a cash distribution to the Partnership’s unitholders for the second quarter of 2021 of $ 0.31900 per unit, or $ 134.7 million in aggregate.

The cash distribution is payable on August 13, 2021, to unitholders of record at the close of business on July 30, 2021, including the general partner units.

Available cash.

15 unchanged sentences

March 31 $ 137,030

June 30 140,217

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

2 unchanged sentences

Holdings of Partnership equity.

The Partnership’s common units are listed on the New York Stock Exchange under the ticker symbol “WES.” As of March 31, 2021, Occidental held 202,781,578 common units, representing a 48.0 % limited partner interest in the Partnership, and through its ownership of the general partner, Occidental indirectly held 9,060,641 general partner units, representing a 2.2 % general partner interest in the Partnership.

The Partnership’s common units are listed on the New York Stock Exchange under the ticker symbol “WES.” As of June 30, 2021, Occidental held 202,781,578 common units, representing a 48.0 % limited partner interest in the Partnership, and through its ownership of the general partner, Occidental indirectly held 9,060,641 general partner units, representing a 2.1 % general partner interest in the Partnership.

The public held 210,294,773 common units, representing a 49.9 % limited partner interest in the Partnership.

6 unchanged sentences

The common units may be purchased from time to time in the open market at prevailing market prices or in privately negotiated transactions.

During the quarter ended March 31, 2021, the Partnership repurchased 1,115,808 common units on the open market for an aggregate purchase price of $ 16.2 million.

During the six months ended June 30, 2021, the Partnership repurchased 1,115,808 common units on the open market for an aggregate purchase price of $ 16.2 million.

The units were canceled by the Partnership immediately upon receipt.

As of March 31, 2021, the Partnership had an authorized amount of $ 201.2 million remaining under the Purchase Program.

As of June 30, 2021, the Partnership had an authorized amount of $ 201.2 million remaining under the Purchase Program.

Holdings of WES Operating equity.

As of March 31, 2021, (i) the Partnership, directly and indirectly through its ownership of WES Operating GP, owned a 98.0 % limited partner interest and the entire non - economic general partner interest in WES Operating and (ii) Occidental, through its ownership of WGRAH, owned a 2.0 % limited partner interest in WES Operating, which is reflected as a noncontrolling interest within the consolidated financial statements of the Partnership (see Note 1 ).

As of June 30, 2021, (i) the Partnership, directly and indirectly through its ownership of WES Operating GP, owned a 98.0 % limited partner interest and the entire non - economic general partner interest in WES Operating and (ii) Occidental, through its ownership of WGRAH, owned a 2.0 % limited partner interest in WES Operating, which is reflected as a noncontrolling interest within the consolidated financial statements of the Partnership (see Note 1 ).

Partnership’s net income (loss) per common unit.

The common and general partner unitholders’ allocation of net income (loss) attributable to the Partnership was equal to their cash distributions plus their respective allocations of undistributed earnings or losses using the two - class method.

Specifically, net income equal to the amount of available cash (beyond proper reserves as defined by the partnership agreement) was allocated to the common and general partner unitholders consistent with actual cash distributions and capital account allocations.

Undistributed earnings (net income in excess of distributions) or undistributed losses (available cash in excess of net income (loss)) were then allocated to the common and general partner unitholders in accordance with their weighted - average ownership percentage during each period.

The Partnership’s basic net income (loss) per common unit is calculated by dividing the limited partners’ interest in net income (loss) by the weighted - average number of common units outstanding during the period.

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

thousands 2021 2020 2021 2020

10 unchanged sentences

General and administrative (2)

7,102 10,994 11,195 32,849

Total operating expenses 28,954 18,477 68,816 151,076

Interest income – Anadarko note receivable — 4,225 — 8,450

Interest expense — ( 43 )

_________________________________________________________________________________________

1 unchanged sentence

(2) Includes (i) amounts charged by Occidental pursuant to the shared services agreement (see Services Agreement within this Note 6 ) and (ii) equity - based compensation expense allocated to the Partnership by Occidental, which is not reimbursed to Occidental and is reflected as a contribution to partners’ capital in the consolidated statements of equity and partners’ capital (see Incentive Plans within this Note 6 ).

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS

Consolidated balance sheets

thousands March 31,

thousands June 30,

2021 December 31,

4 unchanged sentences

Other assets 77,130 50,967

46,124 50,967

Total assets 1,584,304 1,572,526

5 unchanged sentences

(1) See Note 7 .

(2) For the three months ended March 31, 2021, includes the addition of a $ 30.0 million right - of - use (“ROU”) asset recognized in connection with related - party operating leases (see Operating lease within this Note 6) .

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS

Consolidated statements of cash flows

Three Months Ended

Six Months Ended

thousands 2021 2020

13 unchanged sentences

(2) Represents distributions paid to a certain subsidiary of Occidental pursuant to WES Operating’s partnership agreement (see Note 4 and Note 5 ).

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS

The following tables summarize material related - party transactions for WES Operating (which are included in the Partnership’s consolidated financial statements) to the extent the amounts differ from the Partnership’s consolidated financial statements:

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

thousands 2021 2020 2021 2020

2 unchanged sentences

_________________________________________________________________________________________

(1) Includes (i) amounts charged by Occidental pursuant to the shared services agreement (see Services Agreement within this Note 6 ) and (ii) equity - based compensation expense allocated to WES Operating by Occidental, which is not reimbursed to Occidental and is reflected as a contribution to partners’ capital in the consolidated statements of equity and partners’ capital (see Incentive Plans within this Note 6 ).

(1) Includes (i) amounts charged by Occidental pursuant to the shared services agreement (see Services Agreement within this Note 6 ), (ii) equity - based compensation expense allocated to WES Operating by Occidental, which is not reimbursed to Occidental and is reflected as a contribution to partners’ capital in the consolidated statements of equity and partners’ capital (see Incentive Plans within this Note 6 ), and (iii) an intercompany service fee between the Partnership and WES Operating.

Consolidated balance sheets

thousands March 31,

thousands June 30,

2021 December 31,

Accounts receivable, net $ 278,913 $ 246,083

Accounts and imbalance payables (1)

_________________________________________________________________________________________

(1) As of June 30, 2021, includes balances related to transactions between the Partnership and WES Operating.

Consolidated statements of cash flows

Three Months Ended

Six Months Ended

thousands 2021 2020

3 unchanged sentences

(1) Represents distributions paid to the Partnership and a certain subsidiary of Occidental pursuant to WES Operating’s partnership agreement (see Note 4 and Note 5 ).

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS

Related-party revenues.

Related - party revenues include (i) income from the Partnership’s investments accounted for under the equity method of accounting (see Note 7 ) and (ii) amounts earned by the Partnership from services provided to Occidental and from the sale of natural gas, condensate, and NGLs to Occidental.

Related - party revenues include (i) amounts earned by the Partnership from services provided to Occidental and from the sale of natural gas, condensate, and NGLs to Occidental and (ii) income from the Partnership’s investments accounted for under the equity method of accounting (see Note 7 ).

Gathering and processing agreements.

1 unchanged sentence

While Occidental is the contracting counterparty of the Partnership, these arrangements with Occidental include not just Occidental - produced volumes, but also, in some instances, the volumes of other working - interest owners of Occidental who rely on the Partnership’s facilities and infrastructure to bring their volumes to market.

Natural - gas throughput (excluding equity - investment throughput) attributable to production owned or controlled by Occidental was 35 % and 42 % for the three months ended March 31, 2021 and 2020, respectively.

Crude - oil and NGLs throughput (excluding equity - investment throughput) attributable to production owned or controlled by Occidental was 88 % and 89 % for the three months ended March 31, 2021 and 2020, respectively.

Produced - water throughput attributable to production owned or controlled by Occidental was 86 % and 89 % for the three months ended March 31, 2021 and 2020, respectively.

Natural - gas throughput (excluding equity - investment throughput) attributable to production owned or controlled by Occidental was 36 % and 35 % for the three and six months ended June 30, 2021, respectively, and 43 % and 42 % for the three and six months ended June 30, 2020, respectively.

Crude - oil and NGLs throughput (excluding equity - investment throughput) attributable to production owned or controlled by Occidental was 90 % and 89 % for the three and six months ended June 30, 2021, respectively, and 88 % for the three and six months ended June 30, 2020.

Produced - water throughput attributable to production owned or controlled by Occidental was 86 % for the three and six months ended June 30, 2021, and 87 % and 88 % for the three and six months ended June 30, 2020, respectively.

The Partnership is currently involved in a dispute with Occidental regarding the calculation of the cost - of - service rates under an oil - gathering contract related to the Partnership’s DJ Basin oil - gathering system.

If such dispute is resolved in a manner adverse to the Partnership, such resolution could have a negative impact on our financial condition and results of operations, including a reduction in rates and a non - cash charge to earnings.

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS

In connection with the sale of its Eagle Ford assets in 2017, Anadarko remained the primary counterparty to the Partnership’s Brasada gas processing agreement and entered into an agency relationship with Sanchez Energy Corporation (“Sanchez”), now Mesquite Energy, Inc.

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Commodity purchase and sale agreements.

Through December 31, 2020, the Partnership purchased and sold a significant amount of natural gas and NGLs from and to Anadarko Energy Services Company (“AESC”), Occidental’s marketing affiliate.

Through December 31, 2020, the Partnership purchased and sold a significant amount of natural gas and NGLs from and to Anadarko Energy Services Company (“AESC”), a marketing affiliate of Occidental.

Prior to April 1, 2020, AESC acted as an agent on behalf of either the Partnership or the Partnership’s customers for third - party sales.

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This change has no impact to Operating income (loss), Net income (loss), the balance sheets, cash flows, or any non - GAAP metric used to evaluate the Partnership’s operations (see Key Performance Metrics under Part I, Item 2 of this Form 10-Q).

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS

Marketing Transition Services Agreement.

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Operating lease.

As a result of the surface - use and salt - water disposal agreements being amended under the CUA (see Related-party Commercial Agreement below), these agreements are now classified as operating leases and a $ 30.0 million ROU asset was recognized during the first quarter of 2021.

As a result of the surface - use and salt - water disposal agreements being amended under the CUA (see Related-party Commercial Agreement below), these agreements are now classified as operating leases and a $ 30.0 million right-of-use (“ROU”) asset, included in Other assets on the consolidated balance sheets, was recognized during the first quarter of 2021.

The ROU asset will be amortized to Operation and maintenance expense over the remaining term of the agreements.

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In April 2021, the Partnership exercised its option to terminate the operating and maintenance agreement with Occidental effective December 31, 2021.

For each of the three months ended March 31, 2021 and 2020, the Partnership recognized fixed - lease revenues of $ 43.9 million and variable - lease revenue of $( 1.1 ) million and $ 15.6 million, respectively, related to these agreements, with such amounts included in Service revenues – fee based in the consolidated statements of operations.

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS

For the three and six months ended June 30, 2021, the Partnership recognized fixed - lease revenue of $ 44.0 million and $ 87.9 million, respectively, and variable - lease revenue of $ 2.4 million and $ 1.3 million, respectively, related to these agreements.

For the three and six months ended June 30, 2020, the Partnership recognized fixed-lease revenue of $ 44.0 million and $ 87.9 million, respectively, and variable-lease revenue of $ 17.2 million and $ 32.8 million, respectively, related to these agreements, with such amounts included in Service revenues – fee based in the consolidated statements of operations.

Related-party expenses.

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Services Agreement.

General and administrative expense includes costs incurred pursuant to the Services Agreement, under which Occidental has performed certain centralized corporate functions for the Partnership and WES Operating.

General and administrative expense includes costs incurred pursuant to the agreement dated as of December 31, 2019, by and among Occidental, Anadarko, and WES Operating GP, under which Occidental has performed certain centralized corporate functions for the Partnership and WES Operating (“Services Agreement”).

Pursuant to the Services Agreement, which was amended and restated on December 31, 2019, specified employees of Occidental were seconded to WES Operating GP to provide, under the direction, supervision, and control of the general partner, (i) operating and routine maintenance service and (ii) corporate, administrative, and other services, with respect to the assets owned and operated by the Partnership.

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Occidental continues to provide certain limited administrative and operational services to the Partnership, with most services expected to be fully transitioned to the Partnership by December 31, 2021.

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS

Incentive Plans.

General and administrative expense includes non - cash equity - based compensation expense allocated to the Partnership by Occidental for awards granted to the executive officers of the general partner and to other employees prior to their employment with the Partnership under (i) the Anadarko Petroleum Corporation 2012 Omnibus Incentive Compensation Plan, as amended and restated, (ii) Occidental’s 2015 Long - Term Incentive Plan, and (iii) Occidental’s Phantom Share Unit Award Plan (collectively referred to as the “Incentive Plans”).

General and administrative expense includes allocated expense related to the Incentive Plans of $ 3.2 million and $ 4.1 million for the three months ended March 31, 2021 and 2020, respectively.

General and administrative expense includes allocated expense related to the Incentive Plans of $ 2.4 million and $ 5.6 million for the three and six months ended June 30, 2021, respectively, and $ 3.6 million and $ 7.7 million for the three and six months ended June 30, 2020, respectively.

These amounts are reflected as contributions to partners’ capital in the consolidated statements of equity and partners’ capital.

Construction Reimbursement Agreements .

From time to time, the Partnership enters into construction reimbursement agreements with Occidental providing that the Partnership will manage the construction of certain midstream infrastructure for Occidental in the Partnership’s areas of operation.

Such arrangements generally provide for a reimbursement of costs incurred by the Partnership on a cost or cost-plus basis.

Related-party Commercial Agreement.

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EQUITY INVESTMENTS

The following table presents the financial statement impact of the Partnership’s equity investments for the three months ended March 31, 2021:

thousands Balance at December 31, 2020 Equity

The following table presents the financial statement impact of the Partnership’s equity investments for the six months ended June 30, 2021:

thousands Balance at December 31, 2020 Other-than-temporary

income, net Contributions Distributions Distributions

Balance at March 31, 2021

Balance at June 30, 2021

White Cliffs $ 45,623 $ — $ 626 $ — $ ( 336 ) $ ( 3,551 ) $ 42,362

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_________________________________________________________________________________________

(1) Recorded in Long-lived asset and other impairments in the consolidated statements of operations.

(2) Distributions in excess of cumulative earnings, classified as investing cash flows in the consolidated statements of cash flows, are calculated on an individual - investment basis.

The investment balance in Ranch Westex at June 30, 2021, was $ 37.1 million less than the Partnership’s underlying equity in Ranch Westex’s net assets.

During the second quarter of 2021, the Partnership recognized an impairment loss of $ 11.6 million that resulted from a decline in value below the carrying value, which was determined to be other than temporary in nature.

This investment was impaired to its estimated fair value of $ 2.9 million, using the income approach and Level-3 fair value inputs, due to a reduction in estimated future cash flows resulting from lower forecasted producer throughput.

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

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A summary of the historical cost of property, plant, and equipment is as follows:

thousands Estimated Useful Life March 31,

thousands Estimated Useful Life June 30,

2021 December 31,

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Long-lived asset and other impairments.

During the three months ended March 31, 2021, the Partnership recognized impairments of $ 14.9 million, primarily attributable to $ 13.5 million of impairments at the DJ Basin complex due to cancellation of projects.

During the three months ended March 31, 2020, the Partnership recognized impairments of $ 155.8 million, primarily due to $ 145.1 million of impairments for assets located in Wyoming and Utah.

These assets were impaired to estimated fair values of $ 91.0 million and estimated salvage value of $ 6.7 million.

During the six months ended June 30, 2021, the Partnership recognized impairments of $ 27.6 million, primarily attributable to (i) $ 14.0 million of impairments at the DJ Basin complex due to cancellation of projects and (ii) an $ 11.6 million other-than-temporary impairment of the Partnership’s investment in Ranch Westex (see Note 7 ).

During the six months ended June 30, 2020, the Partnership recognized impairments of $ 165.9 million, primarily due to $ 149.4 million of impairments for assets located in Wyoming and Utah.

These assets were impaired to estimated fair values of $ 112.2 million.

The Partnership assesses whether events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The fair value of assets with impairment triggers were measured using the income approach and Level - 3 fair value inputs.

The income approach was based on the Partnership’s projected future EBITDA and free cash flows, which requires significant assumptions including, among others, future throughput volumes based on current expectations of producer activity and operating costs.

The income approach was based on the Partnership’s projected future earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and free cash flows, which requires significant assumptions including, among others, future throughput volumes based on current expectations of producer activity and operating costs.

These impairments were primarily triggered by reductions in estimated future cash flows resulting from lower forecasted producer throughput and lower commodity prices.

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Potential future long-lived asset impairments.

As of March 31, 2021, it is reasonably possible that future commodity - price declines, prolonged depression of commodity prices, changes to producers’ drilling plans in response to lower prices, and potential producer bankruptcies could result in future long - lived asset impairments.

As of June 30, 2021, it is reasonably possible that future commodity - price declines, prolonged depression of commodity prices, changes to producers’ drilling plans in response to lower prices, and potential producer bankruptcies could result in future long - lived asset impairments.

For example, on April 29, 2020, the Partnership received notice that Sanchez, in its bankruptcy, is attempting to reject a number of midstream and downstream agreements with commercial counterparties, including Sanchez’s Springfield gathering agreements and agreements obligating Sanchez to deliver the gas volumes gathered by the Springfield system to our Brasada processing plant.

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The Partnership WES Operating

thousands March 31,

thousands June 30,

2021 December 31,

2020 March 31,

2020 June 30,

2021 December 31,

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The Partnership WES Operating

thousands March 31,

thousands June 30,

2021 December 31,

2020 March 31,

2020 June 30,

2021 December 31,

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The Partnership WES Operating

thousands March 31,

thousands June 30,

2021 December 31,

2020 March 31,

2020 June 30,

2021 December 31,

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Contract liabilities 16,261 31,477 16,261 31,477

81,840 74,599 55,818 35,485

Other 75,278 74,599 41,521 35,485

Total accrued liabilities $ 255,938 $ 269,947 $ 222,181 $ 230,833

_________________________________________________________________________________________

(1) As of March 31, 2021, includes $ 29.1 million of field - related accruals owed to related parties, portions of which include the weather - related impacts caused by winter storm Uri.

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

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The following table presents the outstanding debt:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

thousands Principal Carrying

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$ 580,917 $ 580,671 $ 590,880 $ — $ — $ —

5.375 % Senior Notes due 2021

— — — 431,081 430,606 436,241

Finance lease liabilities 7,702 7,702 7,702 8,264 8,264 8,264

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Debt activity.

The following table presents the debt activity for the three months ended March 31, 2021:

The following table presents the debt activity for the six months ended June 30, 2021:

thousands Carrying Value

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Finance lease liabilities ( 3,109 )

Balance at March 31, 2021 $ 7,423,753

Balance at June 30, 2021 $ 7,424,211

WES Operating Senior Notes.

In mid - January 2020, WES Operating issued the Fixed - Rate 3.100 % Senior Notes due 2025, 4.050 % Senior Notes due 2030, and 5.250 % Senior Notes due 2050 (collectively referred to as the “Fixed - Rate Senior Notes”) and the Floating - Rate Senior Notes due 2023 (the “Floating - Rate Senior Notes”).

Including the effects of the issuance prices, underwriting discounts, and interest - rate adjustments, the effective interest rates of the Senior Notes due 2025, 2030, and 2050, were 4.542 %, 5.424 %, and 6.629 %, respectively, at March 31, 2021, and were 3.287 %, 4.168 %, and 5.362 %, respectively, at March 31, 2020.

The interest rate on the Floating - Rate Senior Notes was 2.33 % and 2.69 % at March 31, 2021 and 2020, respectively.

Including the effects of the issuance prices, underwriting discounts, and interest - rate adjustments, the effective interest rates of the Senior Notes due 2025, 2030, and 2050, were 4.542 %, 5.424 %, and 6.629 %, respectively, at June 30, 2021, and were 3.287 %, 4.168 %, and 5.362 %, respectively, at June 30, 2020.

The interest rate on the Floating - Rate Senior Notes was 2.29 % and 2.66 % at June 30, 2021 and 2020, respectively.

The effective interest rate of these notes is subject to adjustment from time to time due to a change in credit rating.

During the first quarter of 2021, WES Operating redeemed the total principal amount outstanding of the 5.375 % Senior Notes due 2021 at par value, pursuant to the optional redemption terms in WES Operating’s indenture.

At March 31, 2021, WES Operating was in compliance with all covenants under the relevant governing indentures.

As of June 30, 2021, the 4.000 % Senior Notes due 2022 were classified as short-term debt on the consolidated balance sheet due to management’s intent to retire the notes within the next twelve months.

At June 30, 2021, WES Operating was in compliance with all covenants under the relevant governing indentures.

Revolving credit facility.

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The non - extending lender’s commitments mature in February 2024 and represent $ 100.0 million out of $ 2.0 billion of total commitments from all lenders.

As of March 31, 2021, there were no outstanding borrowings and $ 5.1 million of outstanding letters of credit, resulting in $ 2.0 billion of available borrowing capacity under the RCF.

As of March 31, 2021 and 2020, the interest rate on any outstanding RCF borrowings was 1.61 % and 2.13 %, respectively.

The facility - fee rate was 0.25 % and 0.20 % at March 31, 2021 and 2020, respectively.

At March 31, 2021, WES Operating was in compliance with all covenants under the RCF.

As of June 30, 2021, there were no outstanding borrowings and $ 5.1 million of outstanding letters of credit, resulting in $ 2.0 billion of available borrowing capacity under the RCF.

As of June 30, 2021 and 2020, the interest rate on any outstanding RCF borrowings was 1.60 % and 1.66 %, respectively.

The facility - fee rate was 0.25 % at June 30, 2021 and 2020.

At June 30, 2021, WES Operating was in compliance with all covenants under the RCF.

Term loan facility.

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The Partnership subleased equipment from Occidental via finance leases through April 2020.

During the first quarter of 2020, the Partnership entered into finance leases with third parties for equipment and vehicles extending through 2029, with future lease payments of $ 34.5 million as of March 31, 2021.

WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP

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Three Months Ended

June 30, Six Months Ended

thousands 2021 2020 2021 2020

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COMMITMENTS AND CONTINGENCIES

Environmental obligations.

The Partnership is subject to various environmental-remediation obligations arising from federal, state, and local regulations regarding air and water quality, hazardous and solid waste disposal, and other environmental matters.

As of June 30, 2021, and December 31, 2020, the consolidated balance sheets included $ 11.3 million and $ 8.2 million, respectively, of liabilities for remediation and reclamation obligations.

The current portion of these amounts is included in Accrued liabilities, and the long-term portion of these amounts is included in Other liabilities.

The recorded obligations do not include any anticipated insurance recoveries.

The majority of payments related to these obligations are expected to be made over the next five years.

Litigation and legal proceedings.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements