Western Gas Partners’ natural gas volumes
In this part of the series, we’ll look at drilling activity in the regions where Western Gas Partners (WES) has exposure. Let’s start with a recap of WES’s 2Q17 throughput volumes.
WES’s natural gas volumes were 3.5 Bcf/d (billion cubic feet per day) in 2Q17 compared to 3.9 Bcf/d in 2Q16, a YoY fall of 10.3%. Its crude and NGL (natural gas liquids) volumes fell 2.7% YoY.
Western Gas Partners has a strong exposure to the D-J (Denver-Julesburg) Basin due to its sponsor’s active presence in the region. According to the EIA (U.S. Energy Information Administration), natural gas production in the Niobrara Region saw a 3.6% YoY growth in 3Q17 compared to 3Q16. The Niobrara Region includes the D-J Basin.
The Delaware Basin, which is part of the prolific Permian Basin, saw strong natural gas production growth during the second quarter. That’s expected to drive WES’s processing volumes. The Permian region led in natural gas production in 3Q17 compared to other regions. Average natural gas production in the region rose 17.5% YoY in 3Q17 compared to 3Q16. DCP Midstream (DCP) and Energy Transfer Partners (ETP) are among the midstream companies with strong exposure to the Delaware Basin.
Eagle Ford and Marcellus
WES’s sponsor, Anadarko Petroleum, wants to focus on the D-J Basin and the Delaware Basin and has thus reduced its exposure to the Marcellus and Eagle Ford regions through divestitures. These divestitures helped lower Western Gas Partners’ counterparty exposure. Natural gas production in the Eagle Ford fell 4.0% YoY in 3Q17 compared to 3Q16, while it rose 10.3% in the Marcellus region.