East Daley Analytics – Dissecting the Energy Value Chain
Energy Insights and News

WES Unloads Assets Amid Takeover Rumors

Comments: 0

Amid rumors that Occidental (OXY) may divest its company stake, Western Midstream (WES) has sold several non-core assets to buyers including Enterprise Products (EPD).

WES has sold its interests in Saddlehorn Pipeline, Whitethorn Pipeline, Panola Pipeline, a Marcellus gas gathering system, and the Enterprise Fractionators 7 and 8 in Mont Belvieu.

WES Asset Breakdown

Western announced the transactions ahead of its 4Q23 earnings release last Thursday (February 22). The midstream company is at the center of industry chatter following reports that OXY, WES’ general partner and 49% owner, is exploring a sale of its stake.

East Daley Analytics tracks the financials and performance for the assets sold by WES in Energy Data Studio and in the company Financial Blueprints. Enterprise was the buyer of the Panola, Whitethorn (aka Midland-to-ECHO 1), and Enterprise Fractionators 7 & 8 stakes. EPD was already a joint owner and will own 100% of these assets after the deal with WES.

Enterprise paid $375MM for the Whitethorn and Fractionators 7 & 8 interests, and $25MM for WES’ 15% share of Panola Pipeline. The acquisitions will provide EPD more supply chain integration as Panola feeds NGL volumes to the fractionation assets in Mont Belvieu.

Producer EQT (EQT) identified as the buyer of WES’ interest in the Marcellus gathering system. EQT said it acquired WES’ 34% stake in the system for a reported $205MM, representing a 12x EBITDA multiple based on modeled earnings by East Daley. Given the high EBITDA multiple, EDA most likely underestimated earnings on the system. 

The remaining $185MM of proceeds is allocated to WES’ Saddlehorn Pipeline interest. WES did not disclose the acquirer(s) of those assets; we have estimated the sales prices in the table.

WES reported a combined 9.6x multiple on the transactions based on 2023 EBITDA. Data from East Daley’s WES Financial Blueprint shows the company achieving an 8.6x multiple on the sales (see table). The difference could be due to our model overestimating earnings for the Marcellus gathering system and fractionator assets. – James Taylor Tickers: EPD, OXY, WES.


New Webinar: Big Picture and Bottom Line – Q1 Market Update

Join East Daley CCO Justin Carlson on Wednesday, March 10 for a new webinar reviewing market developments from 1Q24. In “Big Picture and Bottom Line – Q1 Market Update,” EDA will look at market trends in crude, gas and NGLs since our Dirty Little Secrets report. Topics include Permian growth or slowdown, the big picture on Louisiana and ripple effects on gas, the LNG pause, and midstream M&A. Join us March 10 for the 1Q23 Market Update.


New EDA Product: West Coast Supply & Demand

The West Coast Supply & Demand report is your go-to resource for mastering the energy market from the California coast to the western Colorado Rockies. This dynamic product offers extensive regional coverage, precise production forecasts for key basins, and in-depth pricing analysis, specifically examining the Colorado pricing spread from CIG Mainline to NW Pipeline Rockies.

Stay ahead of the competition with strategic insights, ensuring you make informed decisions and capitalize on emerging opportunities. Elevate your business with unparalleled market intelligence – invest in the West Coast Supply & Demand report today.


New EDA Product: Houston Ship Channel Supply & Demand

The Houston Ship Channel Supply & Demand report allows users to dive deep in understanding, and monitoring Houston Ship Channel natural gas dynamics. The product contains monthly updates of relevant price spreads, pipeline flows, production and demand estimates affecting the South Texas market, with forecasts extending 5 years into the future. Learn more about the Houston Ship Channel Supply & Demand report.


Energy Data Studio

East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.

Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.

Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact insight@eastdaley.com.

The Daley Note

Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.

About the AuthorEast Daley Analytics