Western Midstream Partners Renegotiates Contracts with Occidental Petroleum
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
Should l Buy WES?
Western Midstream Partners LP's stock fell by 3.20% as it reached a 20-day high, reflecting a challenging market environment.
The company has renegotiated its natural gas gathering and processing contracts with Occidental Petroleum, transitioning to a simplified fixed-fee structure that enhances contract transparency and predictability. Additionally, Western Midstream will redeem 15.3 million common units valued at approximately $610 million from Occidental, reducing its ownership stake from 42% to 40%. This strategic move is expected to optimize its capital structure and enhance revenue stability by diversifying its customer base.
These changes are anticipated to improve cash flow management and financial flexibility, allowing Western Midstream to maintain its distribution yields despite the current market volatility.
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Analyst Views on WES
Wall Street analysts forecast WES stock price to fall
4 Analyst Rating
0 Buy
4 Hold
0 Sell
Hold
Current: 43.300
Low
39.00
Averages
40.50
High
42.00
Current: 43.300
Low
39.00
Averages
40.50
High
42.00
About WES
Western Midstream Partners, LP acquires, owns, develops and operates midstream assets. It is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas, gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil, and gathering and disposing of produced water. Its core assets provide services for customers in the Delaware Basin in West Texas and New Mexico, and the DJ Basin in northeastern Colorado, and the Powder River Basin in Northeast Wyoming. Additional assets and investments are in South Texas, Utah, and Southwest Wyoming. In its capacity as a natural gas processor, the Company also buys and sells natural gas, NGLs, and condensate on its behalf and its customers under certain gas processing contracts. Its subsidiaries include Western Midstream Operating GP, LLC, Western Midstream Services, LLC, Western Midstream Services Holdings, LLC, Western Midstream Operating, LP, and Aris Water Solutions, Inc.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Western Midstream Partners Upgraded to Buy by Stifel with $46 Target
- Rating Upgrade: Stifel upgraded Western Midstream Partners from Hold to Buy with a price target increase from $42 to $46, reflecting optimism about the company's future performance following stronger-than-expected Q1 earnings.
- Earnings Outlook: While the company did not raise guidance, it is expected to achieve the high end of its adjusted EBITDA guidance range of $2.5B to $2.7B, demonstrating resilience and profitability in the current market environment.
- Acquisition Impact: The $1.6B Brazos acquisition is projected to contribute $100M to EBITDA in 2026 and at least $200M in 2027, further strengthening the company's financial performance and market position.
- Production Activity Discussions: The company is in discussions with producers about increasing activity, which is expected to positively impact performance in the second half of 2026 or more significantly in 2027, particularly with a producer in the Powder River Basin accelerating activity to bring on volumes in 2027.
See More
WESTERN MIDSTREAM PARTNERS LP: STIFEL UPGRADES TO BUY FROM HOLD; INCREASES TARGET PRICE TO $46 FROM $42
Stifel's Acquisition: Stifel has raised its target price for Western Midstream Partners to $46 from $42 as part of its strategy to buy from the company.
Market Response: The increase in target price reflects a positive outlook on Western Midstream Partners' performance and potential growth in the market.
See More
Western Midstream Partners Acquires Brazos Delaware II for $1.6 Billion
- Acquisition Scale: Western Midstream Partners announced the acquisition of Brazos Delaware II for approximately $1.6 billion, comprising about $800 million in cash and $800 million in common units, demonstrating the company's commitment to expansion in the Texas Delaware Basin.
- Asset Overview: Brazos boasts around 900 miles of pipeline and 460M cf/day of natural gas processing capacity, processing an average of 336M cf/day of natural gas and 25K bbl/day of crude oil in FY 2025, enhancing Western Midstream's asset portfolio and market competitiveness.
- EBITDA Expectations: It is anticipated that over 60% of Western Midstream's adjusted EBITDA will come from the Delaware Basin by 2026, with this proportion expected to grow further as the acquisition is completed and integrated, indicating significant future growth potential for the company.
- Strategic Growth Projects: The company also plans to launch the Pathfinder Pipeline and North Loving II projects in the first and second quarters of 2027, respectively, further driving revenue growth and solidifying its position in the midstream market.
See More
Western Midstream Partners Acquires Brazos for $1.6 Billion
- Acquisition Deal Size: Western Midstream Partners announced its acquisition of privately held Brazos Delaware II for $1.6 billion, comprising approximately $800 million in cash and $800 million in common units, with the deal expected to close in the second quarter, thereby strengthening its market position in the Permian Basin.
- Asset Integration Benefits: Brazos is one of the largest privately held gathering and processing platforms in the Texas Delaware Basin, boasting about 900 miles of pipeline and a nameplate natural gas processing capacity of 460 million cubic feet per day, which will significantly enhance Western Midstream's asset portfolio and operational capabilities.
- Market Expansion Potential: This acquisition allows Western Midstream to expand its gathering and processing network in the oil-rich Texas region, expected to increase its market share and competitiveness while meeting the growing energy demand in the area.
- Strategic Development Direction: The transaction not only supplements existing assets but also reflects Western Midstream's optimistic outlook on the future oil and gas market, aiming to achieve long-term growth through resource integration and operational efficiency improvements.
See More
Lazard Hires Former Western Midstream CEO as Senior Adviser
- Executive Appointment: Lazard has hired former Western Midstream CEO Michael Ure as a senior adviser in its power, energy, and infrastructure group, aiming to leverage his over 20 years of management experience to enhance the firm's strategic consulting capabilities in the global energy sector.
- Extensive Industry Experience: Ure served as CEO of Western Midstream, taking the helm in August 2019, where he successfully guided the company through strategic and organizational changes following Occidental's acquisition of Anadarko Petroleum, showcasing his unique perspective on complex capital allocation and acquisition activities.
- Strategic Impact: Ure's addition is expected to further strengthen Lazard's differentiated advice to clients, particularly in the global energy market, where his leadership experience will provide unique insights for client decision-making.
- Leadership Recognition: Both George Bilicic, Lazard's global head of power, energy & infrastructure, and CEO Peter Orszag emphasized that Ure's appointment will enhance the firm's consulting capabilities in critical decision-making, further solidifying Lazard's competitive edge in the industry.
See More
Western Midstream Partners Declares Quarterly Distribution
- Quarterly Distribution Announcement: Western Midstream Partners declared a cash distribution of $0.93 per unit for Q1 2026, annualizing to $3.72, reflecting a 2.2% increase over the previous quarter, indicating the company's stable cash flow and profitability.
- Distribution Payment Date: The distribution is set to be paid on May 15, 2026, to unitholders of record as of May 1, 2026, ensuring timely returns for investors and bolstering market confidence.
- Earnings Report Schedule: The company plans to release its Q1 2026 results after market close on May 6, 2026, followed by a conference call on May 7 to discuss quarterly performance, enhancing transparency and investor relations.
- Robust Business Model: Western Midstream operates through gathering, processing, and transporting natural gas and related products, utilizing fee-based contracts that protect a substantial majority of cash flows from commodity price volatility, thereby strengthening financial stability.
See More
Western Midstream Partners Upgraded to Buy by Stifel with $46 Target
- Rating Upgrade: Stifel upgraded Western Midstream Partners from Hold to Buy with a price target increase from $42 to $46, reflecting optimism about the company's future performance following stronger-than-expected Q1 earnings.
- Earnings Outlook: While the company did not raise guidance, it is expected to achieve the high end of its adjusted EBITDA guidance range of $2.5B to $2.7B, demonstrating resilience and profitability in the current market environment.
- Acquisition Impact: The $1.6B Brazos acquisition is projected to contribute $100M to EBITDA in 2026 and at least $200M in 2027, further strengthening the company's financial performance and market position.
- Production Activity Discussions: The company is in discussions with producers about increasing activity, which is expected to positively impact performance in the second half of 2026 or more significantly in 2027, particularly with a producer in the Powder River Basin accelerating activity to bring on volumes in 2027.
See More
WESTERN MIDSTREAM PARTNERS LP: STIFEL UPGRADES TO BUY FROM HOLD; INCREASES TARGET PRICE TO $46 FROM $42
Stifel's Acquisition: Stifel has raised its target price for Western Midstream Partners to $46 from $42 as part of its strategy to buy from the company.
Market Response: The increase in target price reflects a positive outlook on Western Midstream Partners' performance and potential growth in the market.
See More
Western Midstream Partners Acquires Brazos Delaware II for $1.6 Billion
- Acquisition Scale: Western Midstream Partners announced the acquisition of Brazos Delaware II for approximately $1.6 billion, comprising about $800 million in cash and $800 million in common units, demonstrating the company's commitment to expansion in the Texas Delaware Basin.
- Asset Overview: Brazos boasts around 900 miles of pipeline and 460M cf/day of natural gas processing capacity, processing an average of 336M cf/day of natural gas and 25K bbl/day of crude oil in FY 2025, enhancing Western Midstream's asset portfolio and market competitiveness.
- EBITDA Expectations: It is anticipated that over 60% of Western Midstream's adjusted EBITDA will come from the Delaware Basin by 2026, with this proportion expected to grow further as the acquisition is completed and integrated, indicating significant future growth potential for the company.
- Strategic Growth Projects: The company also plans to launch the Pathfinder Pipeline and North Loving II projects in the first and second quarters of 2027, respectively, further driving revenue growth and solidifying its position in the midstream market.
See More
Western Midstream Partners Acquires Brazos for $1.6 Billion
- Acquisition Deal Size: Western Midstream Partners announced its acquisition of privately held Brazos Delaware II for $1.6 billion, comprising approximately $800 million in cash and $800 million in common units, with the deal expected to close in the second quarter, thereby strengthening its market position in the Permian Basin.
- Asset Integration Benefits: Brazos is one of the largest privately held gathering and processing platforms in the Texas Delaware Basin, boasting about 900 miles of pipeline and a nameplate natural gas processing capacity of 460 million cubic feet per day, which will significantly enhance Western Midstream's asset portfolio and operational capabilities.
- Market Expansion Potential: This acquisition allows Western Midstream to expand its gathering and processing network in the oil-rich Texas region, expected to increase its market share and competitiveness while meeting the growing energy demand in the area.
- Strategic Development Direction: The transaction not only supplements existing assets but also reflects Western Midstream's optimistic outlook on the future oil and gas market, aiming to achieve long-term growth through resource integration and operational efficiency improvements.
See More
Lazard Hires Former Western Midstream CEO as Senior Adviser
- Executive Appointment: Lazard has hired former Western Midstream CEO Michael Ure as a senior adviser in its power, energy, and infrastructure group, aiming to leverage his over 20 years of management experience to enhance the firm's strategic consulting capabilities in the global energy sector.
- Extensive Industry Experience: Ure served as CEO of Western Midstream, taking the helm in August 2019, where he successfully guided the company through strategic and organizational changes following Occidental's acquisition of Anadarko Petroleum, showcasing his unique perspective on complex capital allocation and acquisition activities.
- Strategic Impact: Ure's addition is expected to further strengthen Lazard's differentiated advice to clients, particularly in the global energy market, where his leadership experience will provide unique insights for client decision-making.
- Leadership Recognition: Both George Bilicic, Lazard's global head of power, energy & infrastructure, and CEO Peter Orszag emphasized that Ure's appointment will enhance the firm's consulting capabilities in critical decision-making, further solidifying Lazard's competitive edge in the industry.
See More
Western Midstream Partners Declares Quarterly Distribution
- Quarterly Distribution Announcement: Western Midstream Partners declared a cash distribution of $0.93 per unit for Q1 2026, annualizing to $3.72, reflecting a 2.2% increase over the previous quarter, indicating the company's stable cash flow and profitability.
- Distribution Payment Date: The distribution is set to be paid on May 15, 2026, to unitholders of record as of May 1, 2026, ensuring timely returns for investors and bolstering market confidence.
- Earnings Report Schedule: The company plans to release its Q1 2026 results after market close on May 6, 2026, followed by a conference call on May 7 to discuss quarterly performance, enhancing transparency and investor relations.
- Robust Business Model: Western Midstream operates through gathering, processing, and transporting natural gas and related products, utilizing fee-based contracts that protect a substantial majority of cash flows from commodity price volatility, thereby strengthening financial stability.
See More
