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: 41.590
Low
39.00
Averages
40.50
High
42.00
Current: 41.590
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.
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- Investor Preference: During turbulent and uncertain market conditions, many investors are turning to dividend-yielding stocks, which typically have high free cash flows and reward shareholders with substantial dividends, indicating a strong desire for stable returns.
- Analyst Ratings: Benzinga provides the latest analyst ratings for three high-yielding energy stocks, including Kimbell Royalty Partners LP, Evolution Petroleum Corp, and Western Midstream Partners LP, assisting investors in making more informed decisions.
- Market Data: Benzinga's Analyst Ratings page allows traders to sort through a comprehensive database by analyst accuracy, enhancing investors' understanding and responsiveness to market dynamics.
- Dividend Appeal: High-dividend stocks become particularly attractive in uncertain market environments, as investors seek to secure stable cash flows through these selections, thereby protecting their portfolios amidst market volatility.
See More
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- AGNC Investment Returns: With a dividend yield of 12.6%, investing $1,000 in AGNC generates $125.80 in annual income, showcasing its strength in low-risk fixed-income investments, and it is expected to continue paying high dividends.
- Ares Capital Growth Potential: Ares Capital offers a 10% dividend yield, providing $100.30 in annual income from a $1,000 investment, and with a $29.5 billion portfolio and stable earnings, it is likely to maintain its 16-year record of stable dividend payments.
- Western Midstream Cash Flow: With an 8.9% dividend yield, a $1,000 investment in Western Midstream yields $88.60 annually, and last year, its cash flow was sufficient to cover distributions and capital expenditures, indicating future distribution increases.
- Market Appeal: The stable dividend payment records of these three high-yield stocks make them attractive options for investors looking to turn $3,000 into hundreds of dollars in annual passive income, especially in the current market environment.
See More
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- Ares Capital's Growth Potential: As the largest business development company, Ares Capital has delivered stable or increasing dividends for over 16 years, with a weighted average yield of 9.3%, and committed $5.8 billion in new investments last quarter, showcasing strong capital growth capabilities.
- Western Midstream's Cash Flow Advantage: Western Midstream Partners generated enough cash flow last year to cover its distributions and capital expenditures, with $95 million in excess free cash flow enhancing financial flexibility, and plans to achieve a 2.2% distribution increase by 2026 to support future payouts.
- Demand for High-Yield Stocks: With the S&P 500's dividend yield at a mere 1.1%, companies like AGNC, Ares, and Western Midstream offer yields above market averages, allowing investors to generate $314.7 in annual passive income from a $3,000 investment, appealing to those seeking high returns.
See More
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- Earnings Announcement: Western Midstream Partners will release its full-year and fourth-quarter 2025 earnings before market open, accompanied by a post-earnings interview with CFO Kristen Shults, aimed at providing deeper insights into the company's performance and 2026 outlook to aid investor understanding of future directions.
- Investor Conference Participation: The company plans to participate in several investor conferences during the first and second quarters of 2026, enhancing market transparency regarding its strategies and operations through direct engagement with investors, thereby boosting investor confidence and market recognition.
- Robust Business Model: Western Midstream focuses on developing and operating midstream assets, primarily protecting cash flows through fee-based contracts, which mitigates direct exposure to commodity price volatility and ensures financial stability in uncertain market conditions.
- Extensive Asset Base: The company boasts a wide array of midstream assets across Texas, New Mexico, Colorado, Utah, and Wyoming, covering various segments such as natural gas gathering, processing, and transportation, which strengthens its competitive position and market share in the energy sector.
See More
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- Post-Earnings Interview: Western Midstream Partners will release a post-earnings interview with CFO Kristen Shults on its website before market open, providing insights into its full-year and Q4 2025 results and 2026 outlook, aimed at boosting investor confidence in the company's future.
- Investor Conference Participation: The company plans to participate in several investor conferences in Q1 and Q2 2026, including the Morgan Stanley Energy & Power Conference on March 3 and the US Capital Advisors 15th Annual Midstream Corporate Access Day on April 1, showcasing its strategic positioning in the midstream asset sector.
- Midstream Asset Overview: Western Midstream focuses on developing, acquiring, and operating midstream assets across Texas, New Mexico, Colorado, Utah, and Wyoming, engaging in natural gas gathering, processing, and transportation, with a substantial majority of cash flows protected from commodity price volatility through fee-based contracts.
- Market Outlook: By participating in multiple investor conferences, Western Midstream not only demonstrates transparency in its operations but also aims to strengthen its competitive edge and market trust through enhanced interaction with investors.
See More
Western Midstream Partners Reports Record 2025 Earnings Amid Cautious 2026 Outlook
- Record Financial Performance: In Q4 2025, adjusted EBITDA reached $636 million, despite a $29.5 million negative non-cash revenue adjustment; excluding this, EBITDA would have been $665 million, reflecting a sequential increase of approximately 5%, showcasing the company's success in cost control and operational efficiency.
- Capital Expenditure Adjustment: Management has revised the 2026 capital expenditure forecast down from at least $1.1 billion to $925 million, indicating a swift alignment with customer activity levels and a more cautious investment strategy in response to market volatility.
- Cautious Future Outlook: The expected adjusted EBITDA for 2026 is projected to range between $2.5 billion and $2.7 billion, implying a year-over-year growth rate of about 5%, while natural gas and crude oil throughput are anticipated to decline by low to mid-single digits on average, reflecting uncertainty in market demand.
- Distribution Guidance Increase: Management intends to recommend a distribution increase to at least $3.70 per unit for 2026, with a planned $0.02 increase per unit starting with the first quarter distribution, demonstrating confidence in cash flow stability and distribution policy despite external market challenges.
See More
