W E S T E R N G A S I N V E S T O R R E L A T I O N S JON VANDENBRAND Director, Investor Relations (832) 636-1007 FOURTH QUARTER AND FULL YEAR 2016 REVIEW February 23, 2017 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P
Cautionary Language Regarding Forward Looking Statements This presentation contains forward-looking statements. Western Gas Partners, LP and Western Gas Equity Partners, LP believe that their expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation. These factors include the ability to meet financial guidance or distribution-growth expectations; the ability to safely and efficiently operate WES’s assets; the ability to obtain new sources of natural gas supplies; the effect of fluctuations in commodity prices and the demand for natural gas and related products; the ability to meet projected in-service dates for capital growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the “Risk Factors” section of WES’s and WGP’s most recent Forms 10 -K and Forms 10-Q filed with the Securities and Exchange Commission and in their other public filings and press releases. Western Gas Partners, LP and Western Gas Equity Partners, LP undertake no obligation to publicly update or revise any forward-looking statements. Please also see the attached Appendix and our earnings release, posted on our website at www.westerngas.com, for reconciliations of the differences between any non-GAAP financial measures used in this presentation and the most directly comparable GAAP financial measures. 2 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
Key Themes Achievement of Significant Scale Full-year 2016 Adjusted EBITDA of over $1 Billion Significant Delaware Basin Build-Out 2017 WES capital program will be largest in history Positioning for longer term performance Additional Financial Flexibility Full Conversion of Series A Preferred units in 2017 Deferral of Class C unit conversion date to March 1, 2020 Benefits of Increased Sponsor Focus APC’s Eagleford and Marcellus divestitures expected to result in increased activity behind those systems Additional APC capital focused on Delaware and DJ Basins 3 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
Strong 2016 Performance Original Updated 2016 Guidance 1 Guidance 2 ($ in Millions) Actual Adjusted EBITDA $860 - $950 $980 - $1,000 $1,028 Total Capex $450 - $490 $490 - $530 $486 Maintenance Capex as % of EBITDA 7% - 10% 6% - 8% 6% Coverage Ratio At least 1.1x NA 1.29x WES Distribution Growth 10% 10% 10% WGP Distribution Growth 20% 19% 19% 1) Provided during the fourth-quarter and full-year 2015 earnings conference call 2) Provided during the third-quarter 2016 earnings conference call 4 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
4Q16 vs 3Q16 Financial Performance ($ in Millions) 4Q16 3Q16 $278.2 1 Adjusted EBITDA $268.4 Total Capex $135.0 $93.0 Maintenance Capex $8.3 $15.3 Maintenance Capex as % of Adj. EBITDA 3% 6% $237.3 1 Distributable Cash Flow $223.8 Coverage Ratio 1.31x $1.42x 1) Includes Business Interruption insurance proceeds received during quarter of $13.7 million 5 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
4Q16 vs 3Q16 Operational Performance ($ in Millions) 4Q16 3Q16 Key Drivers Natural Gas Throughput Hugoton divestiture; DJ and DBM 4.04 4.07 Growth offset by Marcellus decline (Bcf/d) Crude & NGL Throughput Growth at MB Fracs offset by 181 185 Springfield decline (MBbl/d) Adjusted Gross Margin for $0.85 $0.82 DBM and DJ Basin growth Natural Gas Assets ($/Mcf) Adjusted Gross Margin for $2.15 $2.20 Normalized Mont Belvieu distribution Crude & NGL Assets ($/Bbl) 6 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
DBJV/Marcellus Asset Swap Acquisition of 50% interest in the assets of Delaware Basin JV Gathering System Asset swap with Williams Partners L.P. for: 33.75% Non-Operated Marcellus Interest and $155 million cash WES retains interest in system currently operated by Anadarko Expected to close in March 2017 Strategic highlights: Consolidates ownership of DBJV and enables creation of integrated gathering and processing footprint Positions WES to aggressively support rapidly accelerating activity from Anadarko and other producers Attractive cost-of-service contract through 2025 DBJV owns 577 miles of gathering lines supporting Tier 1 DBJV Ramsey Processing Plant acreage in the Delaware Basin DBM Complex Mentone Processing Plant (Q3 2018) Haley 7 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
2016 vs. 2017 Reconciliation ($ in Millions) $32 $97 $1,050 $26 $1,028 $9 $9 2016 Adjusted DBJV/Marcellus Reclassification DBJV Hugoton Overall 2017 Adjusted 1 1 EBITDA Asset Swap of Mountain Gas Rate Reset Divestiture Portfolio EBITDA Midpoint Fixed Price Growth Agreements 1 1) Projected 2017 Adjusted EBITDA impact 8 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
2017 Major Projects & Capital Budget 2017E Capital: $900 Million to $1 Billion Focused on Delaware and DJ Basins Sanctioning of Mentone Trains I & II in Delaware Basin Delaware Basin Mentone I: 200 MMcf/d in-service in Q318 84% Mentone II: 200 MMcf/d in-service in Q418 Other Assumes DBJV transaction closing March 2017 2% DJ Basin 14% Completion of two produced water gathering and disposal systems 9 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
High-Quality Dropdown Inventory Extremely attractive locations Current Inventory Over 80% of cash flow from Delaware and DJ Basin DJ Basin assets DJ Basin Oil Gathering Significant anticipated growth Wattenberg $150 to $200 million of run-rate EBITDA same as Plant Natural Buttes Gathering 2016, despite APC Marcellus divestiture (~$40 Saddlehorn Pipeline 1 million EBITDA) Substantial Anadarko investment 2017E APC midstream capital expenditures of $600 to $700 million Delaware Basin Panola Pipeline 1 ~60% directed towards crude oil gathering in Crude Oil Delaware Basin Gathering Water Delaware and DJ Basins Bone Spring ~40% directed towards Delaware Basin produced MiVida Plant 1 Plant 1 water infrastructure 1) Anadarko owns a non-operated interest 10 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
2017 Outlook ($ in Millions) Full-Year 2017 WES Adjusted EBITDA $1,000 - $1,100 WES Total Capital Expenditures $900 - $1,000 WES Maintenance Capital Expenditures $60 - $80 WES 2017 & 2018 Annual Distribution Growth 7% - 9% WGP 2017 & 2018 Annual Distribution Growth 12% - 18% Increased financial flexibility: Full conversion of 8.5% Series A Preferred units in 2017 Deferral of Class C unit conversion date to March 1, 2020 11 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S W E S T E R N G A S
Appendix 12 w w w . w e s t e r n g a s . c o m | N Y S E : W E S , W G P W E S T E R N G A S
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