Western Midstream Partners Renegotiates Contracts with Occidental Petroleum
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
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: 43.390
Low
39.00
Averages
40.50
High
42.00
Current: 43.390
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.
Analysis of High-Yield Investment Opportunities
- Starwood Property Trust: With a dividend yield of 11.5%, Starwood Property Trust allows a $1,000 investment to generate $115 annually, having never cut its dividend since its 2010 IPO, showcasing strong financial stability and the advantages of a diversified investment portfolio.
- Main Street Capital: Main Street Capital boasts an annualized yield exceeding 8.5%, having increased its monthly dividend by 160% since its 2007 IPO and maintained this for 12 consecutive quarters, reflecting its successful strategy in small business loans and equity investments.
- Western Midstream Partners: With a dividend yield over 8.5%, Western Midstream Partners has increased its payout by 184% since 2021, supported by stable cash flows from long-term contracts, which underpins its future distribution growth plans.
- Low-Risk High-Yield Investments: Entities like REITs, BDCs, and MLPs typically offer higher dividend yields, making Starwood, Main Street, and Western Midstream ideal choices for investors seeking reliable passive income streams due to their solid track records of sustainable dividends.
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- Starwood's Stable Dividends: Starwood Property Trust has never cut its dividend since its 2010 IPO, currently yielding around 11.5%, meaning a $1,000 investment generates $115 annually, showcasing its strong financial stability and appeal.
- Main Street's Sustained Growth: Main Street Capital has increased its dividend by 160% since its 2007 IPO and has raised it for 12 consecutive months, with a current yield exceeding 8.5%, indicating successful investment strategies in the small business loan market.
- Western Midstream's Expansion Plans: Western Midstream Partners has increased its distribution by 184% since 2021 and plans to invest $850 million to $1 billion in 2023 to expand operations, demonstrating strong cash flow and growth potential in energy infrastructure.
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- Energy Transition Advantage: Energy Transfer (ET) boasts one of the largest integrated midstream systems in the U.S., with projected spending of $5.5 to $5.9 billion on organic growth projects this year, driving some of the best growth in the midstream sector in the coming years, particularly amid strong natural gas demand.
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- Diversification Strategy: Western Midstream is actively expanding its produced water business through the acquisition of Aris Water Solutions and the Pathfinder Pipeline project, with a new processing facility expected to come online in Q1 2027, further enhancing its competitive position in the market.
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Energy Transfer Shows Strong Growth Prospects in Midstream Sector
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Western Midstream Partners Prices $700M Senior Notes Offering
- Financing Size: Western Midstream Partners announced that its operating subsidiary priced a $700M offering of 5.7% senior notes at 99.705% of face value, expected to close on June 25, indicating strong market confidence in its financing capabilities.
- Use of Proceeds: The net proceeds from this offering will be utilized to repay outstanding borrowings under WES Operating's revolving credit facility and commercial paper program, as well as for general partnership purposes, enhancing the company's financial flexibility.
- Market Reaction: With increasing investor interest in midstream energy companies, Western Midstream's rating was upgraded by Morgan Stanley, reflecting confidence in its stable distributions and acquisition growth potential.
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See More
Western Midstream Partners Prices $700 Million Senior Notes Offering
- Note Offering Size: Western Midstream Partners has priced a $700 million offering of 5.7% senior notes at 99.705%, expected to close on June 25, 2026, which will enhance liquidity and support future investments.
- Clear Use of Proceeds: The net proceeds from this offering will be used to repay outstanding borrowings under WES Operating's revolving credit facility and commercial paper program, ensuring financial stability and optimizing capital structure.
- Strong Underwriter Team: TD Securities, Barclays Capital, Citigroup Global Markets, and MUFG Securities are acting as joint book-running managers for the offering, reflecting market confidence and demand for the notes, thereby enhancing the company's market image.
- Solid Business Background: Western Midstream Partners focuses on developing and operating midstream assets with diversified revenue sources, where a substantial majority of cash flows are protected through fee-based contracts, reducing direct exposure to commodity price volatility and boosting investor confidence.
See More
Analysis of High-Yield Investment Opportunities
- Starwood Property Trust: With a dividend yield of 11.5%, Starwood Property Trust allows a $1,000 investment to generate $115 annually, having never cut its dividend since its 2010 IPO, showcasing strong financial stability and the advantages of a diversified investment portfolio.
- Main Street Capital: Main Street Capital boasts an annualized yield exceeding 8.5%, having increased its monthly dividend by 160% since its 2007 IPO and maintained this for 12 consecutive quarters, reflecting its successful strategy in small business loans and equity investments.
- Western Midstream Partners: With a dividend yield over 8.5%, Western Midstream Partners has increased its payout by 184% since 2021, supported by stable cash flows from long-term contracts, which underpins its future distribution growth plans.
- Low-Risk High-Yield Investments: Entities like REITs, BDCs, and MLPs typically offer higher dividend yields, making Starwood, Main Street, and Western Midstream ideal choices for investors seeking reliable passive income streams due to their solid track records of sustainable dividends.
See More
Three High-Yield Stocks Attracting Investors
- Starwood's Stable Dividends: Starwood Property Trust has never cut its dividend since its 2010 IPO, currently yielding around 11.5%, meaning a $1,000 investment generates $115 annually, showcasing its strong financial stability and appeal.
- Main Street's Sustained Growth: Main Street Capital has increased its dividend by 160% since its 2007 IPO and has raised it for 12 consecutive months, with a current yield exceeding 8.5%, indicating successful investment strategies in the small business loan market.
- Western Midstream's Expansion Plans: Western Midstream Partners has increased its distribution by 184% since 2021 and plans to invest $850 million to $1 billion in 2023 to expand operations, demonstrating strong cash flow and growth potential in energy infrastructure.
- High-Yield Investment Opportunities: REITs, BDCs, and MLPs typically offer higher dividend yields, and the stable dividend records of Starwood, Main Street, and Western Midstream make them ideal choices for investors seeking long-term passive income.
See More
High-Yield Investment Options Amid Tech Stock Surge
- Energy Transition Advantage: Energy Transfer (ET) boasts one of the largest integrated midstream systems in the U.S., with projected spending of $5.5 to $5.9 billion on organic growth projects this year, driving some of the best growth in the midstream sector in the coming years, particularly amid strong natural gas demand.
- Robust Financial Performance: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, holds the highest credit rating with a low leverage of just 3.2x, and is expected to see strong double-digit growth in cash flow and EBITDA next year, despite cutting back on capital expenditures this year to focus on buybacks and debt reduction.
- High Yield Appeal: Western Midstream (WES) stands out with an 8.7% yield in the midstream space, maintaining a leverage of only 3x post-acquisition of Brazos Delaware assets, while targeting distribution growth at a mid-to-low single-digit pace, showcasing a solid growth outlook.
- Diversification Strategy: Western Midstream is actively expanding its produced water business through the acquisition of Aris Water Solutions and the Pathfinder Pipeline project, with a new processing facility expected to come online in Q1 2027, further enhancing its competitive position in the market.
See More
Energy Transfer Shows Strong Growth Prospects in Midstream Sector
- Growth Potential of Energy Transfer: Energy Transfer (ET) boasts one of the largest integrated midstream systems in the U.S., with projected spending of $5.5 to $5.9 billion on organic growth projects this year, driving robust growth in the coming years, particularly amid strong natural gas demand.
- Consistent Dividend Performance: Enterprise Products Partners (EPD) has increased its dividends for 27 consecutive years, currently offering a 6% yield and trading at a forward EV/EBITDA multiple of 10.5, reflecting its stability and attractiveness in the midstream sector.
- High Yield of Western Midstream: Western Midstream (WES) features an 8.7% yield and only 3x leverage, successfully repositioning itself through the acquisition of Brazos Delaware assets, with expected distribution growth in the mid-to-low single digits moving forward.
- Market Competitive Advantage: As tech stocks rise, investor interest in high-yield midstream stocks increases, with the solid performances of Energy Transfer, Enterprise Products, and Western Midstream providing relatively safe investment options, especially amid heightened market volatility.
See More
Western Midstream Partners Prices $700M Senior Notes Offering
- Financing Size: Western Midstream Partners announced that its operating subsidiary priced a $700M offering of 5.7% senior notes at 99.705% of face value, expected to close on June 25, indicating strong market confidence in its financing capabilities.
- Use of Proceeds: The net proceeds from this offering will be utilized to repay outstanding borrowings under WES Operating's revolving credit facility and commercial paper program, as well as for general partnership purposes, enhancing the company's financial flexibility.
- Market Reaction: With increasing investor interest in midstream energy companies, Western Midstream's rating was upgraded by Morgan Stanley, reflecting confidence in its stable distributions and acquisition growth potential.
- Industry Outlook: Among large-cap energy stocks, Western Midstream is considered to have one of the cheapest valuations in the market, which is expected to attract more investor attention towards its future growth opportunities.
See More
Western Midstream Partners Prices $700 Million Senior Notes Offering
- Note Offering Size: Western Midstream Partners has priced a $700 million offering of 5.7% senior notes at 99.705%, expected to close on June 25, 2026, which will enhance liquidity and support future investments.
- Clear Use of Proceeds: The net proceeds from this offering will be used to repay outstanding borrowings under WES Operating's revolving credit facility and commercial paper program, ensuring financial stability and optimizing capital structure.
- Strong Underwriter Team: TD Securities, Barclays Capital, Citigroup Global Markets, and MUFG Securities are acting as joint book-running managers for the offering, reflecting market confidence and demand for the notes, thereby enhancing the company's market image.
- Solid Business Background: Western Midstream Partners focuses on developing and operating midstream assets with diversified revenue sources, where a substantial majority of cash flows are protected through fee-based contracts, reducing direct exposure to commodity price volatility and boosting investor confidence.
See More
