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A Sneak Peek into Western Gas’s 3Q16 Throughput Volumes

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Western Gas’s natural gas volumes

Western Gas Partners’ (WES) natural gas volumes stood at 3.9 Bcfpd (billion cubic feet per day) in 3Q16, compared to $4.40 Bcfpd in 2Q15, a YoY (year-over-year) fall of 12.0%. At the same time, WES’s crude oil and NGLs (natural gas liquids) volumes rose 2% YoY.

The YoY fall in the partnership’s natural gas volumes in 2Q16 was due to lower drilling activity in some regions, including the Eagle Ford and Marcellus regions. However, the partnership saw a 2% sequential rise in natural gas volumes in the quarter, driven by strong throughput volume growth at its DJ and Delaware basins.

Western Gas is expecting a fall in its Springfield assets by the end of 2016. These recently acquired assets are focused in the Eagle Ford region. At the same time, strong Delaware volumes are expected to drive WES’s processing volumes.

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Eagle Ford and Marcellus productions

According to the monthly drilling productivity report released by the EIA (U.S. Energy Information Administration), Eagle Ford’s natural gas and crude oil productions have continued to fall. Average natural gas production in the Eagle Ford region fell 20.8% YoY in 3Q16 compared to 3Q15.

Western Gas Partners is protected to some extent from these production falls through MVCs (minimum volume commitments) contracts. However, these falls could still negatively affect the partnership’s 3Q16 results. EnLink Midstream Partners (ENLK) and NuStar Energy (NS) are among the midstream MLPs that are expected to experience similar negative effects.

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