Acquisitions and Divestitures

6 Months Ended

Jun. 30, 2026

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions and Divestitures

3. ACQUISITIONS AND DIVESTITURES

Brazos Delaware. On June 11, 2026, the Partnership closed on the acquisition of Brazos Delaware for an aggregate purchase price of approximately $1.67 billion, subject to certain customary post-closing adjustments, consisting of (i) $820.3 million in cash, funded with borrowings on the commercial paper program and revolving credit facility (the “RCF”) (see Note 9), and (ii) $852.0 million of Partnership common units (see Note 5).

The Partnership acquired Brazos Delaware to expand its gathering and processing footprint in the Delaware Basin and access additional customers in the area. Brazos Delaware owns a gathering and processing system in the Delaware Basin (the “Comanche complex”), with natural-gas and crude-oil assets spanning Reeves, Ward, Pecos, Winkler, Culberson, and Loving counties. The Comanche complex includes approximately 900 miles of pipeline, 460 MMcf/d of nameplate natural-gas processing capacity, and approximately 470,000 dedicated acres under long-term, fixed-fee contracts.

The acquisition has been accounted for under the acquisition method of accounting. The assets acquired and liabilities assumed were recorded in the consolidated balance sheet at their estimated fair values as of the acquisition date. Results of operations attributable to the acquisition were included in the Partnership’s consolidated statements of operations beginning on the acquisition date in the second quarter of 2026. For the six months ended June 30, 2026, acquisition-related transaction costs of $6.6 million, consisting primarily of third-party consulting and legal fees, are included in General and administrative expenses in the consolidated statements of operations.

The following is the preliminary acquisition-date fair value for the assets acquired and liabilities assumed in the acquisition. The preliminary fair values are subject to change within the measurement period (up to one year from the acquisition date), pending a final determination of the values assigned to tangible and identifiable intangible assets and certain customary post-closing working capital adjustments.


thousands
Assets acquired:
Cash and cash equivalents	$	3,991
Accounts receivable, net	79,065
Other current assets	1,284
Property, plant, and equipment	1,126,838
Goodwill	35,889
Other intangible assets	495,000
Other assets	19,220
Total assets acquired	1,761,287
Liabilities assumed:
Accounts payable and accrued liabilities	43,139
Other current liabilities	7,777
Asset retirement obligation	20,313
Other liabilities	17,813
Total liabilities assumed	89,042
Net assets acquired	$	1,672,245

3. ACQUISITIONS AND DIVESTITURES

Goodwill recognized in the Brazos acquisition relates primarily to enhancing and diversifying the Partnership’s asset position, as well as delivering operational synergies, including increasing volumes on its existing processing facilities and increasing revenues on its natural-gas and crude-oil gathering systems.

Other intangible assets recognized in the Brazos Delaware acquisition are related to customer contracts. The basis for determining the value of these intangible assets is estimated future net cash flows to be derived from acquired customer contracts and relationships, offset with appropriate charges for the use of contributory assets and discounted using a risk-adjusted discount rate. These intangible assets are being amortized on a straight-line basis over an initial period of 30 years, which represents the estimated term over which the customer contracts are expected to contribute to the Partnership’s cash flows.

The acquisition-date fair values are based on an assessment of the fair value of the assets acquired and liabilities assumed in the acquisition using inputs that are not observable in the market and thus represent Level 3 inputs. The fair values of the processing plants, gathering systems, and related facilities and equipment are based on market and cost approaches.

The following table presents the pro forma condensed financial information of the Partnership as if the acquisition had occurred on January 1, 2025:



	Three Months Ended June 30,				Six Months Ended June 30,
thousands	2026		2025		2026		2025
Revenues and other	$	1,281,810	$	1,022,156	$	2,491,214	$	2,016,972
Net income (loss)	413,623		361,206		790,277		686,262

The following table presents the pro forma condensed financial information of WES Operating (which is included in the Partnership’s pro forma condensed financial information) as if the acquisition had occurred on January 1, 2025:



	Three Months Ended June 30,				Six Months Ended June 30,
thousands	2026		2025		2026		2025
Revenues and other	$	1,281,810	$	1,022,156	$	2,491,214	$	2,016,972
Net income (loss)	416,174		361,458		796,458		686,280

3. ACQUISITIONS AND DIVESTITURES

The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred had the acquisition been completed at the assumed date, nor is it necessarily indicative of future operating results of the combined entity. The pro forma adjustments reflect pre-acquisition results of the acquisition including (i) net increases to revenues of $19.0 million and $27.4 million for the three and six months ended June 30, 2026, respectively, and net decreases to revenues of $6.7 million and $26.0 million for the three and six months ended June 30, 2025, respectively, with corresponding adjustments to cost of product, to adjust revenues and cost of product to conform to the Partnership’s accounting policies, including presenting certain product purchases under processing arrangements on a net basis within revenues rather than on a gross basis within cost of product, (ii) adjustments of $5.4 million and $12.2 million for the three and six months ended June 30, 2026, respectively, and $6.4 million and $12.8 million for the three and six months ended June 30, 2025, respectively, to decrease depreciation and amortization expense based on the acquisition-date fair value and estimated useful lives of property, plant, and equipment, and intangible assets, (iii) net decreases to interest expense of $2.0 million and $4.1 million for the three and six months ended June 30, 2026, respectively, and $4.3 million and $8.8 million for the three and six months ended June 30, 2025, respectively, reflecting the interest expense on the commercial paper program and RCF borrowing used to finance the cash-funded portion of the acquisition, net of the elimination of Brazos’s historical interest expense on higher-rate debt that was repaid at closing and not assumed by the Partnership, (iv) the exclusion of $9.6 million of loss on the early extinguishment of debt for the three and six months ended June 30, 2026, which related to Brazos's historical debt that was repaid at closing and not assumed by the Partnership, and (v) the exclusion of Brazos’s historical net gains of $1.0 million and $5.6 million on the interest rate derivatives for the three and six months ended June 30, 2026, respectively, and net losses of $4.3 million and $10.9 million for the three and six months ended June 30, 2025, respectively, as the related derivatives were settled prior to closing and the underlying debt was not assumed.

The pro forma adjustments include estimates and assumptions based on currently available information. Management believes the estimates and assumptions are reasonable, and the relative effects of the transaction are properly reflected. The pro forma information reflects recurring adjustments, but does not reflect any cost savings or other synergies anticipated as a result of the acquisition, nor any future acquisition-related expenses.

The pro forma information in the table above includes $16.2 million of revenues and $12.1 million of expenses for the three and six months ended June 30, 2026, respectively, attributable to the assets acquired as part of the acquisition that are included in the Partnership’s and WES Operating’s consolidated statements of operations.

Aris. On October 15, 2025, the Partnership closed on the acquisition of Aris by merger in a transaction valued at $2.0 billion, including the cash and equity merger consideration, Aris’s outstanding debt of $80.0 million in revolving credit facility borrowings that were repaid at closing, and $500.0 million in principal amount of senior notes (see Note 9). Based on Aris shareholder consideration elections, the Partnership issued 26.6 million common units and paid $415.0 million in cash, funded with borrowings under the commercial paper program, in exchange for all issued and outstanding shares of Aris common stock. The cash paid to Aris shareholders (net of cash acquired as presented in the table below) was $368.6 million for the year ended December 31, 2025.

The Partnership acquired Aris to expand its existing produced-water infrastructure and access additional customers in the area. The assets acquired, located in Lea and Eddy Counties, New Mexico, and West Texas, include approximately 830 miles of produced-water pipeline, 1,812 MBbls/d of produced-water handling capacity, 1,560 MBbls/d of water recycling capacity, and 625,000 dedicated acres.

The Aris acquisition has been accounted for under the acquisition method of accounting. The assets acquired and liabilities assumed in the Aris acquisition were recorded in the consolidated balance sheet at their estimated fair values as of the acquisition date. Results of operations attributable to the Aris acquisition were included in the Partnership’s consolidated statements of operations beginning on the acquisition date in the fourth quarter of 2025. For the six months ended June 30, 2026, general and administrative expenses in the consolidated statements of operations include acquisition-related transaction costs of $0.2 million.

3. ACQUISITIONS AND DIVESTITURES

The following is the final acquisition-date fair value for the assets acquired and liabilities assumed in the Aris acquisition. Measurement period adjustments recorded during the six months ended June 30, 2026, resulted in a $2.3 million increase to goodwill.


thousands
Assets acquired:
Cash and cash equivalents	$	46,362
Accounts receivable, net	90,717
Other current assets	7,651
Property, plant, and equipment	1,459,508
Goodwill	350,807
Other intangible assets	298,844
Other assets	16,706
Total assets acquired	2,270,595
Liabilities assumed:
Accounts payable and accrued liabilities	11,474
Other current liabilities	153,590
Long-term debt	531,675
Asset retirement obligation	52,020
Other liabilities	94,651
Total liabilities assumed	843,410
Net assets acquired	$	1,427,185

Goodwill recognized in the Aris acquisition relates primarily to enhancing and diversifying the Partnership’s water-asset position, as well as delivering operational synergies, including increasing volumes on its existing processing facilities and increasing revenues on its produced-water systems.

Other intangible assets recognized in the Aris acquisition are related to customer contracts. The basis for determining the value of these intangible assets is estimated future net cash flows to be derived from acquired customer contracts and relationships, offset with appropriate charges for the use of contributory assets and discounted using a risk-adjusted discount rate. These intangible assets are being amortized on a straight-line basis over an initial period of 19 years, which represents the estimated term over which the customer contracts are expected to contribute to the Partnership’s cash flows.

The acquisition-date fair values are based on an assessment of the fair value of the assets acquired and liabilities assumed in the Aris acquisition using inputs that are not observable in the market and thus represent Level 3 inputs. The fair values of the produced-water disposal and recycling systems and related facilities and equipment are based on market and cost approaches.