Western Gas Partners LP Earnings Call Nuggets: Brasada I & II, Anadarko

Western Gas Partners (NYSE:WES) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Brasada I & II

Brett Reilly – Credit Suisse: So with Brasada coming online this quarter, any updated thoughts on looking forward to Brasada II?

Donald R. Sinclair – President and CEO: Brett, as you know, Anadarko has got a very aggressive development program and you’ll hear them talk about it next Tuesday on their earnings call. I think as our model of operation has been, we’ll fill up one plant and then start to work on another. So our objective is to get Brasada I up and running, and then I’m sure our focus will turn to the next train.

Brett Reilly – Credit Suisse: Just maybe to follow-up. How long generally would it take to construct the second plant there?

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Donald R. Sinclair – President and CEO: The historical cycle has always been 15 to 18 months for construction of the new cryo.

Brett Reilly – Credit Suisse: Maybe one for you, Ben. G&A running pretty low in relative to this quarter of last year; is that something we can look forward to continuing around this run rate moving forward?

Benjamin M. Fink – SVP, CFO and Treasurer: It’s tough to compare G&A quarter-over-quarter when you’re looking at assets pre and post-dropdown, because how you allocate the G&A before dropdown is just different. So that comparison is always a little messy. The other thing you got to do is take out the non-cash piece, because you had a lot more non-cash G&A last year due to that EIP bonus plan that we’ve talked about that you won’t see going forward.

Anadarko

Abdulla Merdi – CDP Capital: Couple of things. One, I know you’ve indicated in the past that there would be likely another monetization of WGP to improve the liquidity after, I think – after the six months following the IPO. If I’m not mistaken, I think right now there is about 8% or 9% of the GP is out in the public float. I’m wondering if – what conceptually you’re thinking about in terms of how much the public float would increase and how which will still be retained by Anadarko after the next liquidation?

Benjamin M. Fink – SVP, CFO and Treasurer: The information I can give you is somewhat limited, because it’s Anadarko that owns 91% of those units and any sales they make there are up to them. They did indicate during the roadshow that they would be amenable to periodic transactions, but there’s been no indication of any type of size or timing. I think they’re quite pleased with how their holdings have performed.

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Abdulla Merdi – CDP Capital: Secondarily, more conceptually, as we look over the next 18 to 24 months or so, when we think about the organic growth opportunities outside of dropdowns or acquisitions, how should we think about the balance between third-party organic opportunities versus those that are specifically tied to Anadarko?

Donald R. Sinclair – President and CEO: That’s hard to forecast, because you think about where the organic opportunities are going to come, they’ll come obviously from the liquid-rich areas. Our biggest contributor in liquid-rich area, as you all know, is Wattenberg. The biggest producer behind there is Anadarko, but obviously we provide services for Noble, Encana and others. So it’s hard to really give you a split, but it will be significant – tilted towards Anadarko because of the DJ Basin. But you’ll see a lot of third-party activity behind Red Desert and Hilight as well, as well as Chipeta.

Benjamin M. Fink – SVP, CFO and Treasurer: Obviously, we’re also going to be spending a lot of money in the Marcellus, and that’s four party gas there; Anadarko, Chesapeake, Statoil and Mitsui.

A Closer Look: Western Gas Partners Earnings Cheat Sheet>>