Western Midstream Partners, LP 10-K Cybersecurity GRC - 2025-02-26

Page last updated on February 27, 2025

Western Midstream Partners, LP reported their cybersecurity risk management and governance process in a yearly 10-K filed on 2025-02-26 16:50:54 EST.

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10-K filed on 2025-02-26

Western Midstream Partners, LP filed a 10-K at 2025-02-26 16:50:54 EST
Accession Number: 0001423902-25-000033

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Item 1C. Cybersecurity.

Item 1C. Cybersecurity Our cybersecurity program is designed to promote actions that protect our computer systems and networks, delivering safe, secure, and reliable operations. Our digital technology group is led by a dedicated Chief Information Security Officer (“CISO”) . Our CISO has 16 years of experience as a chief information security officer, over four decades of experience in the energy industry, a degree in computer science, and manages a team at WES that is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, governance, and risk management. The CISO also leads WES’s Cybersecurity Council, which is a cross-functional internal team including members of WES senior management, that meets regularly to review current information-technology and cybersecurity issues and initiatives and to collaborate on key decisions. Additionally, the CISO provides quarterly reports to the Audit Committee of the Board of Directors. These reports include updates on WES’s cybersecurity risks and threats, the status of projects to strengthen our information security systems, assessments of the information security program, and the emerging threat landscape. Our cybersecurity program is regularly evaluated by internal and external experts with the results of those reviews reported to senior management and the Audit Committee. In addition, in our continuing commitment to cybersecurity education and preparedness, we also engage with industry peers, vendors, intelligence organizations, and law enforcement communities to evaluate and enhance the effectiveness of our information security policies and procedures. Our business strategy, results of operations, and financial condition have not been materially affected by risks from cybersecurity threats, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents. For more information on our cybersecurity related risks, see Risk Factors under Part I, Item 1A of this Form 10-K. Item 3. Legal Proceedings We have elected to use a $1.0 million threshold for disclosing certain proceedings arising under federal, state, or local environmental laws when a government authority is a party and potential monetary sanctions are involved. We believe proceedings under this threshold are not material to our business and financial proceedings. We are not a party to any legal, regulatory, or administrative proceedings other than proceedings arising in the ordinary course of business. Management believes that there are no such proceedings for which a final disposition could have a material adverse effect on results of operations, cash flows, or financial condition, or for which disclosure is otherwise required by Item 103 of Regulation S - K. Item 4. Mine Safety Disclosures Not applicable. PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities MARKET INFORMATION Our common units are listed on the NYSE under the symbol “WES.” As of February 21, 2025, there were 26 unitholders of record of our common units. This number does not include unitholders whose units are held in trust by other entities. The actual number of unitholders is greater than the number of holders of record. We also have 9,060,641 general partner units issued and outstanding; there is no established public trading market for any such general partner units. All general partner units are held by our general partner. OTHER SECURITIES MATTERS Securities authorized for issuance under equity compensation plans. Our general partner has the authority to grant equity compensation awards to our outside directors, executive officers, and employees under the Western Gas Partners, LP 2017 Long-Term Incentive Plan (the “2017 LTIP”) and the Western Midstream Partners, LP 2021 Long - Term Incentive Plan (the “2021 LTIP”). The 2017 LTIP and the 2021 LTIP permit the issuance of up to 3,431,251 and 9,500,000 units, respectively, of which 322,228 and 8,385,682 units, respectively, remained available for future issuance as of December 31, 2024. Read the information under Part III, Item 12 of this Form 10-K, which is incorporated by reference into this Item 5. See Note 15-Equity-Based Compensation in the Notes to Consolidated Financial Statements under Part II, Item 8 of this Form 10-K. Purchases of equity securities by the issuer and affiliated persons. The following table sets forth information with respect to repurchases made by WES of its common units in the open market or in privately negotiated transactions under the $1.25 billion Purchase Program during the fourth quarter of 2024: Period Total number of units purchased Average price paid per unit Total number of units purchased as part of publicly announced plans or programs (1) Approximate dollar value of units that may yet be purchased under the plans or programs (1) October 1-31, 2024 - $ - - $ 627,807,310 November 1-30, 2024 - - - 627,807,310 December 1-31, 2024 - - - 627,807,310 Total - - - ______________________________________________________________________________________ (1) In February 2022, WES announced a $1.0 billion buyback program, pursuant to which we may purchase up to $1.0 billion in aggregate value of our common units, through December 31, 2024. In November 2022, the Board authorized an increase in the program to $1.25 billion. The $1.25 billion Purchase Program expired as of December 31, 2024. See Note 5-Equity and Partners’ Capital in the Notes to Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for additional details. SELECTED INFORMATION FROM OUR PARTNERSHIP AGREEMENT Set forth below is a summary of the significant provisions of our partnership agreement that relate to cash distributions. Available cash. Under our partnership agreement, we distribute all of our available cash (beyond proper reserves as defined in our partnership agreement) to unitholders of record on the applicable record date within 55 days following each quarter’s end. The amount of available cash generally is all cash on hand at the end of the quarter, plus, at the discretion of the general partner, working capital borrowings made subsequent to the end of such quarter, less the amount of cash reserves established by the general partner to provide for the proper conduct of our business, including (i) reserves to fund future capital expenditures; (ii) to comply with applicable laws, debt instruments, or other agreements; or (iii) to provide funds for unitholder distributions for any one or more of the next four quarters. Working capital borrowings generally include borrowings made under a credit facility or similar financing arrangement and are intended to be repaid or refinanced within 12 months. In all cases, working capital borrowings are used solely for working capital purposes or to fund unitholder distributions. General partner interest. As of December 31, 2024, our general partner owned a 2.3% general partner interest in us, which entitles it to receive cash distributions. Our general partner may own our common units or other equity securities and would be entitled to receive cash distributions on any such interests. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion analyzes our financial condition and results of operations and should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements, wherein WES Operating is fully consolidated, and which are included under Part II, Item 8 of this Form 10-K, and the information set forth in Risk Factors under Part I, Item 1A of this Form 10-K. Discussion of 2022 items and comparison of the year ended December 31, 2023, to the year ended December 31, 2022, that are not included in this annual report on Form 10-K can be found under Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is included under Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 21, 2024, and is available via the SEC’s website at www.sec.gov and our website at www.westernmidstream.com. The Partnership’s assets include assets owned and ownership interests accounted for by us under the equity method of accounting, through our 98.0% partnership interest in WES Operating, as of December 31, 2024 (see Note 7-Equity Investments in the Notes to Consolidated Financial Statements under Part II, Item 8 of this Form 10-K). We also own and control the entire non-economic general partner interest in WES Operating GP, and our general partner is owned by Occidental. EXECUTIVE SUMMARY We are a midstream energy company organized as a publicly traded partnership, engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, NGLs, and crude oil; and gathering and disposing of produced water. In our capacity as a natural - gas processor, we also buy and sell natural gas, NGLs, and condensate on behalf of ourselves and our customers under certain contracts. To provide superior midstream service, we focus on ensuring the reliability and performance of our systems, creating sustainable cost efficiencies, enhancing our safety culture, and protecting the environment. We own or have investments in assets located in Texas, New Mexico, and the Rocky Mountains (Colorado, Utah, and Wyoming). As of December 31, 2024, our assets and investments consisted of the following: Wholly Owned and Operated Operated Interests Equity Interests Gathering systems (1) 18 2 1 Treating facilities 42 3 - Natural - gas processing plants/trains 26 3 1 NGLs pipelines 3 - 4 Natural - gas pipelines 6 - 1 Crude - oil pipelines 2 1 1 _________________________________________________________________________________________ (1) Includes the DBM water systems. Significant financial and operational events during the year ended December 31, 2024, included the following: - We closed on the sale of (i) our 33.75% interest in the Marcellus Interest systems for proceeds of $206.2 million and (ii) several equity investments to third parties for combined proceeds of $588.6 million, which included $5.9 million in pro-rata distributions through closing. See Acquisitions and Divestitures within this Item 7 for additional information. - WES Operating completed the public offering of $800.0 million in aggregate principal amount of 5.450% Senior Notes due 2034. Net proceeds from the offering will be used to repay a portion of certain senior notes due in 2025 and for general partnership purposes, including the funding of capital expenditures. See Liquidity and Capital Resources within this

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