Western Midstream Partners Lp's Comment on Supply Chain
The company’s operations depend on suppliers and customers, with business performance tied to the volumes of natural gas and oil gathered, processed, treated, and transported. These volumes are affected by production levels from wells connected to the company’s systems, which naturally decline over time. To sustain or increase throughput, the company must secure new sources of oil and natural gas, relying on drilling activity near its systems, competition for volumes from new wells, and capturing volumes processed by third parties. The company faces competition from similar firms and customers, including Occidental, which may develop its own midstream systems. Occidental and other producers have dedicated production to the company; however, the company does not control drilling activity, production decisions, or factors influencing these, such as capital availability, commodity prices, regulations, and costs. Reduced exploration or production activity could decrease asset utilization and revenue, affecting cash distributions to unitholders.
Western Midstream Partners Lp's Comment on Supply Chain
The company’s operations depend on suppliers and customers, with business performance tied to the volumes of natural gas and oil gathered, processed, treated, and transported. These volumes are affected by production levels from wells connected to the company’s systems, which naturally decline over time. To sustain or increase throughput, the company must secure new sources of oil and natural gas, relying on drilling activity near its systems, competition for volumes from new wells, and capturing volumes processed by third parties. The company faces competition from similar firms and customers, including Occidental, which may develop its own midstream systems. Occidental and other producers have dedicated production to the company; however, the company does not control drilling activity, production decisions, or factors influencing these, such as capital availability, commodity prices, regulations, and costs. Reduced exploration or production activity could decrease asset utilization and revenue, affecting cash distributions to unitholders.
Sources:
Western Midstream Partners Lp's official press releases and regulatory filings; CSIMarket.com's supply-chain research; and the financial filings and press releases of other companies cited in this report.
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