Western Midstream Partnership (WES) recently entered into a definitive agreement with Occidental Petroleum Corporation (OXY) to acquire OXY’s minority interest in WES for $1.5 billion. The announcement was made on June 3, 2021, and the transaction is expected to close in the third quarter of 2021.
The Western Midstream Partnership is considered one of the leading midstream companies in North America. It is a publicly traded master limited partnership (MLP) that owns and operates a diversified portfolio of midstream energy assets.
This acquisition will enable WES to simplify its corporate structure and enhance its financial flexibility. The company believes that this transaction will create long-term value for its shareholders, as it will result in a more efficient and focused organization.
The president and CEO of WES, Michael Ure, stated that ”The consolidation of Occidental`s ownership in Western simplifies our partnership structure and improves our financial flexibility. We remain committed to prudently managing our balance sheet and capitalizing on strategic opportunities.”
The acquisition will result in WES becoming a fully owned subsidiary of Occidental. However, WES will continue to operate as a standalone entity, and its business operations will continue as usual.
WES is engaged in the gathering, processing, and transportation of natural gas, oil, and natural gas liquids. It operates in some of the most prolific oil and gas producing regions in North America, including the Permian Basin, Delaware Basin, and DJ Basin.
This acquisition comes at a time when the oil and gas industry is facing a significant transition towards cleaner energy alternatives. However, WES believes that there will continue to be a strong demand for oil and gas in the foreseeable future.
In conclusion, the Western Midstream Partnership`s acquisition of Occidental`s minority interest is expected to be a positive development for the company`s shareholders. The transaction will simplify the company`s corporate structure and enhance its financial flexibility, allowing it to focus on its business operations and create long-term value for its stakeholders.
