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Why Western Gas Partners Is Focused on Delaware Expansion

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Sep. 26 2016, Updated 9:05 a.m. ET

Western Gas’s Delaware focus

In the previous part of this series, we saw that Western Gas Partners (WES) increased its 2016 capital guidance due to increased activity by its sponsor, Anadarko Petroleum (APC), in the Delaware Basin. APC and other upstream producers are benefiting from falling DC&E (drilling, completion, & exploration) costs in the region. This scenario indirectly benefits WES.

Answering an analyst’s question in WES’s 2Q16 earnings call regarding competition in the Delaware Basin, Donald Sinclair, WES’s CEO (chief executive officer), replied, “We have over $3 billion invested, just ourselves, in West Texas [Delaware]. We are investment grade and they can see that we have a sustainable business model out there, and that really has helped us significantly in differentiating ourselves from some of the other competitors.”

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