Western Midstream Partners Renegotiates Contracts with Occidental Petroleum, Redeems $610M Units
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
Source: seekingalpha
- Contract Renegotiation: Western Midstream has renegotiated contracts with Occidental Petroleum regarding its Delaware Basin assets, replacing the legacy cost-of-service structure with a simplified fixed-fee structure, enhancing contract transparency and predictability.
- Unit Redemption: Western Midstream will redeem 15.3 million common units valued at approximately $610 million from Occidental, reducing its ownership stake from 42% to 40%, which will help optimize its capital structure.
- Revenue Diversification: The new natural gas gathering and processing agreement with ConocoPhillips is expected to reduce related-party revenue by over 10%, thereby decreasing reliance on a single customer and enhancing revenue stability.
- Cash Flow Management: Western Midstream anticipates that ongoing distribution savings from the unit redemption, combined with previously announced cost reduction initiatives, will fully offset the reduction in free cash flow resulting from the transactions and the transition to a fixed-fee structure, ensuring continued distribution yields.
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Analyst Views on COP
Wall Street analysts forecast COP stock price to rise
18 Analyst Rating
15 Buy
3 Hold
0 Sell
Strong Buy
Current: 110.830
Low
98.00
Averages
113.39
High
132.00
Current: 110.830
Low
98.00
Averages
113.39
High
132.00
About COP
ConocoPhillips is an exploration and production company. Its Alaska segment primarily explores for, produces, transports and markets crude oil, natural gas and NGLs. The Lower 48 segment consists of operations located in the 48 contiguous states in the United States and the Gulf of Mexico. Canadian operations consist of the Surmont oil sands development in Alberta, the liquids-rich Montney unconventional play in British Columbia and commercial operations. The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea, the Norwegian Sea, Qatar, Libya, Equatorial Guinea and commercial and terminalling operations in the United Kingdom. Asia Pacific segment has exploration and production operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. Other International segment includes interests in Colombia as well as contingencies associated with prior operations in other countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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