In a recent transaction, subsidiaries of Occidental Petroleum Corp (NYSE:OXY) have sold a significant number of common units in Western Midstream Partners, LP (NYSE:NYSE:WES), a move that has caught the attention of investors tracking insider activity. The sale, consisting of 19,500,000 common units representing limited partner interests, was executed at a price of $35.75 per unit, totaling approximately $697.1 million.
The transaction was carried out by WGR Asset Holding Company LLC and Anadarko USH1 Corporation, which sold 14,139,260 and 5,360,740 common units, respectively. This public offering took place on August 14, 2024, and was reported in a recent filing.
Following the sale, Western Gas Resources, Inc. now holds 156,219,520 Common Units, APC Midstream Holdings, LLC has 457,849, and Anadarko USH1 Corporation owns 9,004,209 units. These figures reflect the reshuffling of ownership stakes within the complex organizational structure of Occidental Petroleum and its subsidiaries.
The intricate web of ownership includes OXY USA Inc., which is a wholly-owned subsidiary of Occidental Petroleum, owning 100% of OXY Oil Partners, Inc. This, in turn, owns Baseball Merger Sub 2, Inc. completely. Furthermore, Anadarko Petroleum (NYSE:APC) Corporation, another wholly-owned subsidiary, owns Anadarko Holding Company and indirectly owns Western Gas Resources, Inc. and Kerr-McGee Corporation.
Investors and market analysts often scrutinize such transactions for insights into insider perspectives on the company's valuation and future prospects. The sale of Western Midstream units by Occidental's subsidiaries is a significant transaction within the energy sector and reflects ongoing strategic financial maneuvers by the involved entities.
In other recent news, Western Midstream Partners announced the pricing of an $800 million senior notes offering through its subsidiary, Western Midstream Operating. The offering, managed by TD Securities, BofA Securities, MUFG Securities Americas, and PNC Capital Markets, is expected to finalize by August 20, 2024. Proceeds will be used for the repayment of existing debt and general partnership needs, including capital expenditures.
In addition to this, Western Midstream reported strong Q2 2024 results, with a net income of $370 million and adjusted EBITDA of $578 million. The company has secured several new customer agreements expected to drive future performance. The sale of non-core assets has allowed the company to meet its net leverage ratio target ahead of schedule.
Looking forward, the company anticipates record operated throughput, adjusted EBITDA, and free cash flow for the year. There are no major projects planned for the Uinta basin due to sufficient capacity, and a decrease in capital expenditure is expected in 2025. These recent developments underscore the company's ongoing commitment to growth and financial stability.
InvestingPro Insights
The recent sale of Western Midstream Partners, LP (NYSE:WES) common units by subsidiaries of Occidental Petroleum Corp underscores the dynamic nature of insider transactions and their potential implications for investors. To complement our understanding of this event, let's consider some key metrics and insights from InvestingPro.
InvestingPro Data reveals that Western Midstream Partners has a market capitalization of $14.79 billion, reflecting its substantial presence in the market. The company's P/E Ratio stands at an attractive 10, indicating a potentially undervalued stock in relation to its earnings. Moreover, the company's solid financial health is highlighted by a PEG Ratio of 0.22 for the last twelve months as of Q2 2024, suggesting that its earnings growth rate is well-aligned with its valuation.
Among the InvestingPro Tips, it's noteworthy that Western Midstream Partners has maintained dividend payments for 12 consecutive years, which is a testament to its financial stability and commitment to returning value to shareholders. This is further supported by a significant dividend yield of 9.15% as of the end of August 2024, making it an attractive option for income-focused investors. Additionally, two analysts have recently revised their earnings estimates upwards for the upcoming period, signaling potential optimism about the company's financial prospects.
For those seeking a deeper dive into the company's performance and future outlook, InvestingPro offers a wealth of additional tips. Currently, there are 15 more InvestingPro Tips available that provide further analysis and context for Western Midstream Partners, accessible at https://www.investing.com/pro/WES. These insights can help investors make more informed decisions in the wake of significant insider transactions such as the one executed by Occidental Petroleum's subsidiaries.
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