Western Midstream Partners Renegotiates Contracts with Occidental Petroleum
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
Should l Buy WES?
Western Midstream Partners LP's stock fell by 3.20% as it reached a 20-day high, reflecting a challenging market environment.
The company has renegotiated its natural gas gathering and processing contracts with Occidental Petroleum, transitioning to a simplified fixed-fee structure that enhances contract transparency and predictability. Additionally, Western Midstream will redeem 15.3 million common units valued at approximately $610 million from Occidental, reducing its ownership stake from 42% to 40%. This strategic move is expected to optimize its capital structure and enhance revenue stability by diversifying its customer base.
These changes are anticipated to improve cash flow management and financial flexibility, allowing Western Midstream to maintain its distribution yields despite the current market volatility.
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Analyst Views on WES
Wall Street analysts forecast WES stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for WES is 40.50 USD with a low forecast of 39.00 USD and a high forecast of 42.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
4 Analyst Rating
0 Buy
4 Hold
0 Sell
Hold
Current: 41.260
Low
39.00
Averages
40.50
High
42.00
Current: 41.260
Low
39.00
Averages
40.50
High
42.00
About WES
Western Midstream Partners, LP acquires, owns, develops and operates midstream assets. It is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas, gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil, and gathering and disposing of produced water. Its core assets provide services for customers in the Delaware Basin in West Texas and New Mexico, and the DJ Basin in northeastern Colorado, and the Powder River Basin in Northeast Wyoming. Additional assets and investments are in South Texas, Utah, and Southwest Wyoming. In its capacity as a natural gas processor, the Company also buys and sells natural gas, NGLs, and condensate on its behalf and its customers under certain gas processing contracts. Its subsidiaries include Western Midstream Operating GP, LLC, Western Midstream Services, LLC, Western Midstream Services Holdings, LLC, Western Midstream Operating, LP, and Aris Water Solutions, Inc.
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.
Occidental Petroleum Starts 2026 Strong with 10.4% Share Surge
- Oil Price Rebound: In January 2026, Occidental Petroleum's shares surged 10.4%, significantly outperforming the S&P 500's 1.4% increase, primarily driven by a 16% rise in Brent crude and a 14% increase in WTI, showcasing the company's strong performance amid recovering oil prices.
- Asset Sale Boosts Cash Flow: Occidental sold its chemicals business, OxyChem, to Berkshire Hathaway for $9.7 billion in early January, with plans to use $6.5 billion of that cash to reduce debt, thereby lowering its debt level below $15 billion and enhancing financial flexibility.
- Contract Structure Optimization: The company amended its Delaware Basin natural gas gathering contract with Western Midstream Partners, transitioning from a cost-of-service agreement to a fixed-fee structure, which is expected to save costs and improve flexibility in developing oil and gas assets while reducing its ownership stake from 42% to 40%.
- Improved Financial Position: With rising oil prices and reduced debt, Occidental is poised to generate more cash flow in 2026, further strengthening its balance sheet and enhancing long-term investment appeal, even after last month's significant share price rally.
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- Dividend Declaration: Western Midstream Partners has declared a quarterly dividend of $0.91 per share, consistent with previous distributions, indicating the company's stable cash flow and shareholder return strategy.
- Yield Highlight: The forward yield of 8.92% not only attracts income-seeking investors but also reflects the company's competitiveness in the current market environment.
- Payment Schedule: The dividend will be payable on February 13, with a record date of February 2 and an ex-dividend date also set for February 2, ensuring shareholders receive their returns promptly.
- Contract Renegotiation: Western Midstream has reached an agreement with Occidental to renegotiate Delaware Basin contracts, securing $610 million in unit transfers, which further enhances the company's financial flexibility and market position.
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Western Midstream Partners Declares $0.910 Quarterly Cash Distribution for Q4 2025
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- Distribution Payment Date: The distribution is set to be paid on February 13, 2026, to unitholders of record as of February 2, 2026, ensuring timely returns for investors and bolstering market confidence.
- Earnings Report Schedule: The company plans to release its Q4 2025 results after market close on February 18, 2026, followed by a conference call on February 19, enhancing transparency and investor relations through detailed financial analysis.
- Operational Overview: As a master limited partnership, Western Midstream focuses on developing and operating midstream assets, with a significant portion of cash flows protected from commodity price volatility through fee-based contracts, ensuring long-term financial stability.
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- Oil Price Rebound: In January 2026, Occidental Petroleum's shares surged 10.4%, significantly outperforming the S&P 500's 1.4% increase, primarily driven by a 16% rise in Brent crude and a 14% increase in WTI, showcasing the company's strong performance amid recovering oil prices.
- Asset Sale Boosts Cash Flow: Occidental sold its chemicals business, OxyChem, to Berkshire Hathaway for $9.7 billion in early January, with plans to use $6.5 billion of that cash to reduce debt, thereby lowering its debt level below $15 billion and enhancing financial flexibility.
- Contract Structure Optimization: The company amended its Delaware Basin natural gas gathering contract with Western Midstream Partners, transitioning from a cost-of-service agreement to a fixed-fee structure, which is expected to save costs and improve flexibility in developing oil and gas assets while reducing its ownership stake from 42% to 40%.
- Improved Financial Position: With rising oil prices and reduced debt, Occidental is poised to generate more cash flow in 2026, further strengthening its balance sheet and enhancing long-term investment appeal, even after last month's significant share price rally.
See More
Dividend Stocks Gain Favor Amid Market Turbulence
- Investor Preference: During turbulent and uncertain market conditions, many investors are turning to dividend-yielding stocks, which typically have high free cash flows and reward shareholders with substantial dividends, indicating a strong demand for stable income.
- Analyst Ratings: Benzinga provides the latest analyst ratings for three high-yielding energy stocks, including Nordic American Tankers Ltd (NYSE:NAT), Kimbell Royalty Partners LP (NYSE:KRP), and Western Midstream Partners LP (NYSE:WES), offering decision-making support for investors.
- Market Trends: As market volatility increases, the appeal of dividend stocks rises, with investors seeking to mitigate investment risks through stable cash flows, potentially driving demand and prices for these stocks higher.
- Analyst Accuracy: Benzinga's analyst ratings page allows traders to sort ratings by analyst accuracy, helping investors identify the most promising high-yield stocks and enhancing the scientific basis of their investment decisions.
See More
Top High-Yield Stocks: Ares Capital and More
- Ares Capital Stability: Ares Capital currently boasts a 9.5% dividend yield, and as a registered investment company, it must distribute at least 90% of its taxable income, ensuring its stability and attractiveness in middle-market financing.
- Starwood Property Trust Success: Leading with a 10.7% dividend yield, Starwood Property Trust has maintained its dividend without cuts for over a decade, successfully diversifying its portfolio to enhance its competitive edge in the real estate market.
- Western Midstream Partners Growth Potential: With a distribution yield of 9%, Western Midstream Partners has rebounded its payout to pre-pandemic levels after a reset during the pandemic, and it plans to further increase distributions through acquisitions and infrastructure investments.
- Attracting Passive Income Investors: Ares Capital, Starwood Property Trust, and Western Midstream Partners all offer yields up to 10.7%, appealing to investors seeking stable passive income and demonstrating strong future distribution potential.
See More
Western Midstream Partners (WES) Declares $0.91 Quarterly Dividend with 8.92% Yield
- Dividend Declaration: Western Midstream Partners has declared a quarterly dividend of $0.91 per share, consistent with previous distributions, indicating the company's stable cash flow and shareholder return strategy.
- Yield Highlight: The forward yield of 8.92% not only attracts income-seeking investors but also reflects the company's competitiveness in the current market environment.
- Payment Schedule: The dividend will be payable on February 13, with a record date of February 2 and an ex-dividend date also set for February 2, ensuring shareholders receive their returns promptly.
- Contract Renegotiation: Western Midstream has reached an agreement with Occidental to renegotiate Delaware Basin contracts, securing $610 million in unit transfers, which further enhances the company's financial flexibility and market position.
See More
Western Midstream Partners Declares $0.910 Quarterly Cash Distribution for Q4 2025
- Cash Distribution Announcement: Western Midstream Partners declared a quarterly cash distribution of $0.910 per unit for Q4 2025, maintaining an annualized distribution of $3.64, reflecting the company's stable cash flow and dividend policy.
- Distribution Payment Date: The distribution is set to be paid on February 13, 2026, to unitholders of record as of February 2, 2026, ensuring timely returns for investors and bolstering market confidence.
- Earnings Report Schedule: The company plans to release its Q4 2025 results after market close on February 18, 2026, followed by a conference call on February 19, enhancing transparency and investor relations through detailed financial analysis.
- Operational Overview: As a master limited partnership, Western Midstream focuses on developing and operating midstream assets, with a significant portion of cash flows protected from commodity price volatility through fee-based contracts, ensuring long-term financial stability.
See More
Alerian MLP ETF Maintains 61 Quarters of Distributions with 8.1% Yield
- Consistent Distribution Record: The Alerian MLP ETF has paid distributions for 61 consecutive quarters, demonstrating its ability to provide attractive yields without leverage, which enhances investor confidence.
- High Yield: The ETF boasts a 30-day SEC yield of 8.1%, with a distribution yield just below 8% over the past 12 months, making it a favored choice among income investors, particularly in the midstream energy sector.
- Growth Drivers: The boom in data center construction is a key growth driver for the MLP stocks in the ETF, with Energy Transfer LP signing agreements to supply natural gas to multiple data centers, further solidifying its market position.
- Capital Project Investments: Enterprise Products Partners LP has $5.1 billion in capital projects under construction, indicating that investments in liquefied natural gas and artificial intelligence will significantly boost U.S. natural gas demand over the next five years.
See More
