Western Midstream Partners, LP (WES): Marketing Mix Analysis [11-2024 Updated]
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Western Midstream Partners, LP (WES) Bundle
In the dynamic landscape of the energy sector, understanding the Marketing Mix of Western Midstream Partners, LP (WES) is essential for grasping how the company navigates the complexities of the market. This analysis delves into the four P's—Product, Place, Promotion, and Price—to uncover how WES effectively gathers, processes, and transports natural gas and related products while maintaining a competitive edge. Discover how these elements work in synergy to position WES strategically within the industry.
Western Midstream Partners, LP (WES) - Marketing Mix: Product
Engages in gathering, compressing, treating, processing, and transporting natural gas
Western Midstream Partners, LP (WES) operates an extensive network for the gathering, compressing, treating, processing, and transporting of natural gas. As of September 30, 2024, the total throughput for natural-gas assets was recorded at 5,016 MMcf/d, reflecting a 1% increase from the previous quarter and a 17% increase year-over-year.
Provides services for gathering, stabilizing, and transporting condensate, NGLs, and crude oil
WES provides comprehensive services for the gathering, stabilizing, and transporting of condensate and natural gas liquids (NGLs). The throughput for crude-oil and NGLs assets totaled 506 MBbls/d for the three months ending September 30, 2024, which is a 2% decrease from the previous quarter but reflects a 17% decrease year-over-year.
Offers produced water gathering and disposal services
The company also operates in the produced water sector, gathering and disposing of produced water. The throughput for produced-water assets was 1,099 MBbls/d for the three months ended September 30, 2024, indicating a 2% increase from the previous quarter and an 11% increase year-over-year.
Processes and sells natural gas, NGLs, and condensate for itself and customers
WES processes and sells natural gas, NGLs, and condensate both for its own account and on behalf of customers. The total product sales for the nine months ended September 30, 2024, reached $109.1 million, showing a 9% increase compared to $100.3 million for the same period in 2023.
Operates assets across Texas, New Mexico, and the Rocky Mountains
WES's operational footprint spans across key regions including Texas, New Mexico, and the Rocky Mountains. This geographic diversity enables the company to effectively leverage regional production variances and optimize its service offerings.
| Service Type | Throughput (MMcf/d or MBbls/d) | Year-over-Year Change | Quarter-over-Quarter Change |
|---|---|---|---|
| Natural Gas | 5,016 MMcf/d | +17% | +1% |
| Crude Oil and NGLs | 506 MBbls/d | -17% | -2% |
| Produced Water | 1,099 MBbls/d | +11% | +2% |
In summary, WES remains dedicated to enhancing its product offerings through strategic operations and services. The company's ability to adapt and grow in various segments of the energy market positions it as a competitive player in the midstream sector.
Western Midstream Partners, LP (WES) - Marketing Mix: Place
Geographic Operations
Western Midstream Partners, LP operates primarily in the states of Texas, New Mexico, Colorado, Utah, and Wyoming.
Infrastructure Assets
The company has established a robust infrastructure comprising 18 gathering systems, 39 treating facilities, and 26 natural-gas processing plants. This extensive network enables efficient collection, processing, and transportation of natural gas and crude oil.
Service Focus
Western Midstream's services target regions with high production activity from major oil and gas producers, ensuring that they are well-positioned to meet demand in these critical areas.
Market Accessibility
The infrastructure developed by Western Midstream supports direct access to essential markets for natural gas and crude oil. This strategic positioning enhances the company's ability to optimize logistics and distribution, ultimately benefiting customer satisfaction and operational efficiency.
| Asset Type | Count |
|---|---|
| Gathering Systems | 18 |
| Treating Facilities | 39 |
| Natural-Gas Processing Plants | 26 |
Throughput Statistics
As of September 30, 2024, the natural-gas throughput attributable to Western Midstream was 5,016 MMcf/d, with crude-oil and NGLs throughput at 506 MBbls/d. The produced-water throughput was reported at 1,099 MBbls/d.
| Throughput Type | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 |
|---|---|---|
| Natural Gas (MMcf/d) | 5,016 | 4,998 |
| Crude Oil and NGLs (MBbls/d) | 506 | 529 |
| Produced Water (MBbls/d) | 1,099 | 1,102 |
Western Midstream Partners, LP (WES) - Marketing Mix: Promotion
Focuses on building relationships with major producers like Occidental
Western Midstream Partners, LP (WES) maintains a strong focus on establishing and nurturing relationships with key industry players, notably Occidental Petroleum. As of September 30, 2024, Occidental held approximately 42.5% of the limited partner interests in WES, along with a 2.3% general partner interest. This strategic partnership enhances WES's market position and facilitates the integration of services across their operational footprint.
Utilizes performance reliability and cost efficiencies as key selling points
WES emphasizes performance reliability and cost efficiencies in its promotional strategies. The company reported total revenues of $883.4 million for the three months ended September 30, 2024, reflecting a significant operational scale. WES's ability to provide efficient midstream services is critical in attracting and retaining clients in a competitive market.
Engages in strategic partnerships to enhance service offerings and market reach
Strategic partnerships play a vital role in expanding WES's service offerings. The acquisition of Meritage contributed $3.6 million in service revenues for the nine months ended September 30, 2024. By leveraging partnerships, WES enhances its service capabilities and market reach, positioning itself as a reliable provider of midstream services.
Markets services directly to producers and through contracts to ensure consistent throughput
WES markets its services directly to producers, ensuring a steady demand for its offerings. The total throughput for natural gas assets was reported at 5,189 MMcf/d for the three months ended September 30, 2024. This throughput illustrates WES's effectiveness in securing contracts that guarantee consistent service delivery and revenue generation.
| Metric | Value (Q3 2024) | Value (Q3 2023) | Change (%) |
|---|---|---|---|
| Total Revenues | $883.4 million | $776.0 million | 13.8% |
| Natural Gas Throughput | 5,189 MMcf/d | 4,439 MMcf/d | 16.8% |
| Service Revenues – Fee Based | $814.3 million | $695.5 million | 17.0% |
| Service Revenues – Product Based | $49.1 million | $48.4 million | 1.5% |
| Product Sales | $19.7 million | $31.7 million | -37.8% |
Western Midstream Partners, LP (WES) - Marketing Mix: Price
Pricing strategies are influenced by commodity market fluctuations.
Western Midstream Partners, LP (WES) operates in a highly volatile commodity market, which significantly impacts its pricing strategies. The company adjusts its pricing in response to fluctuations in the prices of natural gas and natural gas liquids (NGLs). For instance, the average sales price for natural gas saw a drastic decline, recorded at $(0.63) per Mcf in Q3 2024 compared to $1.67 per Mcf in Q3 2023, indicating an 78% decrease year-over-year.
Revenue from service fees was approximately $814 million for Q3 2024.
For the third quarter of 2024, WES reported service revenues amounting to approximately $814 million, reflecting a significant increase from $695 million in Q3 2023. This growth is primarily attributed to enhanced operational efficiencies and increased throughput in various complex systems.
Natural gas sales experienced a significant decline in average prices.
Natural gas sales significantly decreased, with total sales dropping to $(4.5 million) in Q3 2024 from $26.5 million in Q3 2023. This decline was primarily due to reduced average prices and volumes sold, particularly in the West Texas complex.
NGL sales saw a mixed performance, with some increases in volumes sold.
NGL sales exhibited a mixed performance with total sales reaching $24.2 million in Q3 2024, despite a decrease of 41% in average sales price compared to the previous quarter. However, volumes sold increased, contributing positively to overall revenue.
Maintains competitive pricing to attract and retain customers amidst market volatility.
WES employs competitive pricing strategies to attract and retain customers. This involves offering flexible pricing options and discounts to navigate the volatile market landscape. The company also focuses on maintaining strong relationships with its clients, ensuring that its pricing reflects the perceived value of its services.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Service Revenue | $814 million | $695 million | +17.1% |
| Natural Gas Sales | $(4.5 million) | $26.5 million | -116.9% |
| NGL Sales | $24.2 million | $41.2 million | -41.0% |
| Average Price Natural Gas | $(0.63) per Mcf | $1.67 per Mcf | -78.0% |
| Average Price NGL | $26.76 per Bbl | $28.06 per Bbl | -5.0% |
In conclusion, Western Midstream Partners, LP (WES) exemplifies a robust marketing mix that positions it strategically within the natural gas and oil sector. By focusing on comprehensive service offerings and maintaining a strong presence in key regions such as Texas and New Mexico, WES effectively meets the demands of major producers. Their emphasis on reliable performance and cost efficiency in promotion, coupled with competitive pricing strategies amidst market fluctuations, ensures they remain a significant player in the industry, even as they navigate the challenges of commodity price volatility.
Updated on 16 Nov 2024
Resources:
- Western Midstream Partners, LP (WES) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Western Midstream Partners, LP (WES)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Western Midstream Partners, LP (WES)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.