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Related-Party Transactions
 12 Months Ended
Dec. 31, 2024
Related Party Fees and Other Arrangements, Limited Liability Company (LLC) or Limited Partnership (LP) [Abstract]  
Related-Party Transactions
6. RELATED-PARTY TRANSACTIONS

Summary of related-party transactions. The following tables summarize material related-party transactions included in the Partnership’s consolidated financial statements:
Statements of operations
Year Ended December 31,
thousands202420232022
Revenues and other
Service revenues – fee based$2,099,116 $1,773,914 $1,674,959 
Service revenues – product based56,688 16,497 56,907 
Product sales5,704 43,683 63,367 
Total revenues and other2,161,508 1,834,094 1,795,233 
Equity income, net – related parties (1)
112,385 152,959 183,483 
Operating expenses
Cost of product (2)
(67,414)(72,903)(25,447)
Operation and maintenance10,580 4,618 5,081 
General and administrative (3)
350 284 2,338 
Total operating expenses(56,484)(68,001)(18,028)
Gain (loss) on divestiture and other, net— — (1,756)
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(1)See Note 7.
(2)Includes related-party natural-gas and NGLs imbalances.
(3)The year ended December 31, 2022, includes equity-based compensation expense allocated to the Partnership by Occidental, which is not reimbursed to Occidental and is reflected as a contribution to partners’ capital in the consolidated statements of equity and partners’ capital (see Incentive Plans within this Note 6).

Balance sheets
December 31,
thousands20242023
Assets
Accounts receivable, net$401,315 $358,141 
Other current assets6,671 1,260 
Equity investments (1)
541,435 904,535 
Other assets41,641 43,216 
Total assets991,062 1,307,152 
Liabilities
Accounts and imbalance payables20,609 38,541 
Accrued liabilities4,717 4,979 
Other liabilities (2)
504,415 335,320 
Total liabilities529,741 378,840 
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(1)See Note 7.
(2)Includes contract liabilities from contracts with customers. See Note 2.
6. RELATED-PARTY TRANSACTIONS

Statements of cash flows
Year Ended December 31,
thousands202420232022
Distributions from equity-investment earnings – related parties
$111,386 $155,169 $186,153 
Capital expenditures— — (470)
Contributions to equity investments – related parties(9,690)(1,153)(9,632)
Distributions from equity investments in excess of cumulative earnings – related parties30,850 39,104 63,897 
Proceeds from the sale of assets to related parties— — 200 
Distributions to Partnership unitholders (1)
(604,512)(494,127)(372,468)
Distributions to WES Operating unitholders (2)
(25,450)(22,850)(24,898)
Net contributions from (distributions to) related parties— — 1,423 
Unit repurchases from Occidental (3)
— (127,500)(252,500)
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(1)Represents common and general partner unit distributions paid to Occidental pursuant to the partnership agreement of the Partnership. See Note 4 and Note 5.
(2)Represents distributions paid to Occidental, through its ownership of WGRAH, pursuant to WES Operating’s partnership agreement. See Note 4 and Note 5.
(3)Represents common units repurchased from Occidental. See Note 5.

The following tables summarize material related-party transactions for WES Operating (which are included in the Partnership’s consolidated financial statements) to the extent the amounts differ materially from the Partnership’s consolidated financial statements:
Statements of operations
Year Ended December 31,
thousands202420232022
General and administrative (1)
$4,130 $3,554 $5,373 
_________________________________________________________________________________________
(1)Includes an intercompany service fee between the Partnership and WES Operating. The year ended December 31, 2022, includes equity-based compensation expense allocated to WES Operating by Occidental, which is not reimbursed to Occidental and is reflected as a contribution to partners’ capital in the consolidated statements of equity and partners’ capital (see Incentive Plans within this Note 6).

Balance sheets
December 31,
thousands20242023
Other current assets$6,263 $1,235 
Other assets38,421 41,405 
Accounts and imbalance payables (1)
46,773 69,472 
Accrued liabilities4,717 4,662 
_________________________________________________________________________________________
(1)Includes balances related to transactions between the Partnership and WES Operating.
6. RELATED-PARTY TRANSACTIONS

Statements of cash flows
Year Ended December 31,
thousands202420232022
Distributions to WES Operating unitholders (1)
$(1,272,152)$(1,142,217)$(1,244,533)
_________________________________________________________________________________________
(1)Represents distributions paid to the Partnership and Occidental, through its ownership of WGRAH, pursuant to WES Operating’s partnership agreement. The years ended December 31, 2023 and 2022, include distributions made from WES Operating to the Partnership that were used to repurchase common units. See Note 4 and Note 5.

Related-party revenues. Related-party revenues include amounts earned by the Partnership from services provided to Occidental and from the sale of natural gas, condensate, and NGLs to Occidental.

Gathering and processing agreements. The Partnership has significant gathering, processing, and produced-water disposal arrangements with affiliates of Occidental on most of its systems. While Occidental is the contracting counterparty of the Partnership, these arrangements with Occidental include not just Occidental-produced volumes, but also, in some instances, the volumes of other working-interest owners of Occidental who rely on the Partnership’s facilities and infrastructure to bring their volumes to market. Natural-gas throughput (excluding equity-investment throughput) attributable to production owned or controlled by Occidental was 34%, 34%, and 35% for the years ended December 31, 2024, 2023, and 2022, respectively. Crude-oil and NGLs throughput (excluding equity-investment throughput) attributable to production owned or controlled by Occidental was 91%, 86%, and 89% for the years ended December 31, 2024, 2023, and 2022, respectively. Produced-water throughput attributable to production owned or controlled by Occidental was 78%, 78%, and 80% for the years ended December 31, 2024, 2023, and 2022, respectively.
The Partnership is currently discussing varying interpretations of certain contractual provisions with Occidental regarding the calculation of the cost-of-service rates under an oil-gathering contract related to the Partnership’s DJ Basin oil-gathering system. If such discussions are resolved in a manner adverse to the Partnership, such resolution could have a negative impact on the Partnership’s financial condition and results of operations, including a reduction in rates and a non-cash charge to earnings.
In October 2024, Kerr-McGee Oil and Gas Onshore LP (“KMOG”), a subsidiary of Occidental, and WES DJ Gathering LLC, a subsidiary of WES, executed an amendment (the “Amendment”) to the Gas Gathering Agreement, dated July 1, 2010, as amended (the “DJ Basin Gas Gathering Agreement”) to add four additional well pads under the agreement. The Amendment also provides for (i) the potential extension of the DJ Gas Gathering Agreement following the primary term through an annual evergreen feature and (ii) a provision that has the effect of extending the primary term of the DJ Basin Gas Gathering Agreement by up to four additional years (through 2033), depending upon when KMOG meets the minimum-volume commitments associated with the newly added well pads.

Marketing Services. Prior to January 1, 2021, Occidental provided marketing-related services to certain of the Partnership’s subsidiaries. While the Partnership now markets and sells substantially all of its crude oil, residue gas, and NGLs directly to third parties, it does still have some marketing agreements with affiliates of Occidental, the activity for which is reflected in the related-party statements of operations above.

Operating leases. Certain surface-use and salt-water disposal agreements between an affiliate of Occidental and certain wholly owned subsidiaries of the Partnership are classified as operating leases (see Related-party commercial agreement below). In addition, the Partnership has operating leases for field offices with Occidental as the lessor.
6. RELATED-PARTY TRANSACTIONS

Related-party expenses. Operation and maintenance expense includes amounts accrued for or paid to related parties for field-related costs, field offices, and easements (see Related-party commercial agreement below) supporting the Partnership’s operations at certain assets. General and administrative expense includes amounts accrued for or paid to Occidental for certain reimbursed expenses pursuant to the provisions of the Partnership’s and WES Operating’s agreements with Occidental. Cost of product expense includes amounts related to certain continuing marketing arrangements with affiliates of Occidental, related-party imbalances, and transactions with affiliates accounted for under the equity method of accounting. See Marketing Services in the section above. Related-party expenses bear no direct relationship to related-party revenues, and third-party expenses bear no direct relationship to third-party revenues.

Services Agreement. Occidental performed certain centralized corporate functions for the Partnership and WES Operating pursuant to the agreement dated as of December 31, 2019, by and among Occidental, Anadarko, and WES Operating GP (“Services Agreement”). Most of the administrative and operational services previously provided by Occidental fully transitioned to the Partnership by December 31, 2021, with certain limited transition services remaining in place pursuant to the terms of the Services Agreement.

Incentive Plans. General and administrative expense for the year ended December 31, 2022 includes non-cash equity-based compensation expense allocated to the Partnership by Occidental for awards granted to the executive officers of the general partner and to other employees prior to their employment with the Partnership under (i) the Anadarko Petroleum Corporation 2012 Omnibus Incentive Compensation Plan, as amended and restated, (ii) Occidental’s 2015 Long-Term Incentive Plan, and (iii) Occidental’s Phantom Share Unit Award Plan (collectively referred to as the “Incentive Plans”). General and administrative expense includes costs related to the Incentive Plans of $2.3 million for the year ended December 31, 2022. This amount is reflected as a contribution to partners’ capital in the consolidated statements of equity and partners’ capital.

Construction reimbursement agreements and purchases and sales with related parties. From time to time, the Partnership enters into construction reimbursement agreements with Occidental providing that the Partnership will manage the construction of certain midstream infrastructure for Occidental in the Partnership’s areas of operation. Such arrangements generally provide for a reimbursement of costs incurred by the Partnership on a cost or cost-plus basis.
Additionally, from time to time, in support of the Partnership’s business, the Partnership purchases and sells equipment, inventory, and other miscellaneous assets from or to Occidental or its affiliates.

Related-party commercial agreement. During the first quarter of 2021, an affiliate of Occidental and certain wholly owned subsidiaries of the Partnership entered into a Commercial Understanding Agreement (“CUA”). Under the CUA, certain West Texas surface-use and salt-water disposal agreements were amended to reduce usage fees owed by the Partnership in exchange for the forgiveness of certain deficiency fees owed by Occidental and other unrelated contractual amendments. The present value of the reduced usage fees under the CUA was $30.0 million at the time the agreement was executed. Also, as a result of the amendments under the CUA, these agreements are classified as operating leases and a $30.0 million right-of-use (“ROU”) asset, included in Other assets on the consolidated balance sheets, was recognized during the first quarter of 2021. The ROU asset is being amortized to Operation and maintenance expense through 2038, the remaining term of the agreements.

Customer concentration. Occidental was the only customer from which revenues exceeded 10% of consolidated revenues for all periods presented in the consolidated statements of operations.