Western Midstream Reports Adjusted Earnings of $708.3 Million in Third Quarter
Key Facts
Western Midstream said on November 4 that adjusted earnings before interest, taxes, depreciation and amortization were $708.3 million in the third quarter of 2026, up 12% from the same period a year earlier. The results coincided with record natural gas throughput volumes, bolstering the company’s operating activity. But adjusted earnings fell from the record level set in the second quarter, when they reached $736.5 million. Chief Executive Officer Oscar Brown said the record volumes resulted from increased throughput across existing assets, along with a full quarter’s contribution from the Brazos Delaware acquisition. The acquisition closed in June, and the company attributed the year-over-year earnings increase to broader activity, rather than improved operating efficiency.
Combined natural gas throughput volumes reached 5.9 billion cubic feet per day, up 8% from the previous quarter. In the Delaware Basin alone, throughput was 2.6 billion cubic feet per day, up 20% quarter over quarter. The company attributed most of the basin’s increase to the Brazos Delaware acquisition, completed in June 2026. A full quarter’s contribution from the acquired assets gives a clearer picture of the deal’s impact on third-quarter results than the period that included only part of its contribution. Brown also linked the record figures to increased throughput from existing assets, saying growth came from both sources.
Net income attributable to limited partners was $324.8 million, or $0.78 per diluted common unit. Cash flow from operating activities was $567.5 million, while distributable cash flow was $512.3 million. Free cash flow was $244.2 million during the quarter. Despite the growth in adjusted earnings from a year earlier, the figure fell from $736.5 million in the second quarter. The company attributed the quarter-over-quarter decline mainly to lower crude oil and natural gas liquids prices, reduced throughput in the DJ Basin, and a slight increase in operating and maintenance expenses.
Capital expenditures in the third quarter were $303.4 million, while free cash flow after distributions was negative $148.5 million. The company said the deficit resulted from capital expenditures allocated to organic growth. This highlights the gap between free cash flow before distributions, which was $244.2 million, and cash flow after distributions and investment in growth projects. Western Midstream announced a quarterly distribution of $0.930 per unit, unchanged from the previous quarter. The distribution is scheduled to be paid on November 13, 2026, according to the company’s announcement.
The company reaffirmed its 2026 guidance range, with adjusted earnings of $2.750 billion to $2.950 billion and distributable cash flow of $2.050 billion to $2.250 billion. It also maintained its free cash flow range of $1.100 billion to $1.300 billion. The company said it expects full-year adjusted earnings to exceed the midpoint of guidance by more than $250 million, compared with the original guidance midpoint of $2.600 billion. By contrast, the company expects 2026 capital expenditures to slightly exceed the top end of its range, set at $850 million to $1 billion. It attributed this to producers’ capital needs as their activity accelerates and to its investment in the Solitude pipeline system.
Western Midstream expects 2027 capital expenditures to be close to 2026 levels, with about 80% directed to the Delaware Basin. Brown said the company expects to connect Brazos assets to its West Texas complex by mid-December. He added that the connection would enable reduced flaring and greater value for unitholders. The company expects throughput volumes across its three product lines to continue growing in 2027, supported by a full year’s contribution from Brazos, the start-up of the Pathfinder pipeline, and the commissioning of the second North Loving expansion. It also cited new gathering and processing agreements in the Powder River Basin and scheduled a call to discuss third-quarter results for November 5 at 9 a.m. Central Time.
The company’s units, listed under the ticker “WES,” fell 6.32% in the November 5 session, closing at $39.85. The stock reached a session high of $42.67 and a low of $39.75, according to Investing.com data. The move came in the session after the results announcement, which combined year-over-year earnings growth and higher gas volumes with a decline in adjusted earnings from the previous quarter. The figures also showed capital spending weighing on cash flow after distributions, alongside the company’s reaffirmation of its annual guidance ranges. Expansion projects and the connection of Brazos assets remain among the key operational steps the company outlined for the period ahead.