WESTERN GAS EQUITY PARTNERS, LP (NYSE:WGP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On May 22, 2017, Western Gas Partners, LP (WES), which is
controlled by Western Gas Equity Partners, LP (WGP) through WGPs
ownership of WESs general partner, and Anadarko Petroleum
Corporation (Anadarko) agreed to settle WESs deferred purchase
price obligation for Delaware Basin JV Gathering LLC (DBJV) for
$37.3 million (the Accelerated Payment).
controlled by Western Gas Equity Partners, LP (WGP) through WGPs
ownership of WESs general partner, and Anadarko Petroleum
Corporation (Anadarko) agreed to settle WESs deferred purchase
price obligation for Delaware Basin JV Gathering LLC (DBJV) for
$37.3 million (the Accelerated Payment).
Delaware Basin Midstream, LLC, a wholly owned subsidiary of WES
(DBM), acquired DBJV in March 2015 to that certain Purchase and
Sale Agreement, dated March 2, 2015 (the PSA), by and among WES,
Anadarko, WGR Asset Holding Company LLC, and DBM. At that time,
DBJV held a 50% interest in a 403-mile gathering system and
related facilities (the DBJV Gathering System) located in the
Delaware Basin in Loving, Ward, Winkler and Reeves Counties,
Texas.
(DBM), acquired DBJV in March 2015 to that certain Purchase and
Sale Agreement, dated March 2, 2015 (the PSA), by and among WES,
Anadarko, WGR Asset Holding Company LLC, and DBM. At that time,
DBJV held a 50% interest in a 403-mile gathering system and
related facilities (the DBJV Gathering System) located in the
Delaware Basin in Loving, Ward, Winkler and Reeves Counties,
Texas.
to the PSA, the consideration to be paid by WES for DBJV (the
Deferred Payment) consisted of a one-time cash payment on March
31, 2020, equal to (a) eight (8) multiplied by the average of a
50% share in the Net Earnings (as defined in the PSA) of the DBJV
Gathering System for the calendar years 2018 and 2019, less (b)
50% of all capital expenditures incurred for the DBJV Gathering
System between March 1, 2015, and February 29, 2020. The parties
to the PSA agreed to replace the Deferred Payment with the
Accelerated Payment to Amendment No. 1 to the PSA, dated May 22,
2017 (the Amendment).
Deferred Payment) consisted of a one-time cash payment on March
31, 2020, equal to (a) eight (8) multiplied by the average of a
50% share in the Net Earnings (as defined in the PSA) of the DBJV
Gathering System for the calendar years 2018 and 2019, less (b)
50% of all capital expenditures incurred for the DBJV Gathering
System between March 1, 2015, and February 29, 2020. The parties
to the PSA agreed to replace the Deferred Payment with the
Accelerated Payment to Amendment No. 1 to the PSA, dated May 22,
2017 (the Amendment).
The above summary is qualified in its entirety by reference to
the Amendment, a copy of which is filed as Exhibit 2.1 hereto.
the Amendment, a copy of which is filed as Exhibit 2.1 hereto.
Relationships
The terms of the Amendment were approved by the board of
directors (the Board) of WESs general partner. The terms of the
Amendment were also approved by the Boards independent special
committee.
directors (the Board) of WESs general partner. The terms of the
Amendment were also approved by the Boards independent special
committee.
Anadarko indirectly owns 50% of the general partner of WGP and
81.6% of WGPs limited partner interests. WGP owns WESs general
partner, which holds (x) all of the outstanding general partner
units of WES, representing a 1.5% general partner interest in
WES, and (y) all of the incentive distribution rights in WES,
which entitle WESs general partner to specified increasing
percentages of cash distributions as WESs per-unit cash
distributions increase. WGP and other Anadarko subsidiaries, in
aggregate, own 52,143,426 WES common units, representing an
aggregate 31.1% limited partner interest in WES, and 12,743,318
WES Class C units, representing an aggregate 7.6% limited partner
interest in WES, based on the number of common, general partner
and Class C units outstanding as of May 22, 2017.
81.6% of WGPs limited partner interests. WGP owns WESs general
partner, which holds (x) all of the outstanding general partner
units of WES, representing a 1.5% general partner interest in
WES, and (y) all of the incentive distribution rights in WES,
which entitle WESs general partner to specified increasing
percentages of cash distributions as WESs per-unit cash
distributions increase. WGP and other Anadarko subsidiaries, in
aggregate, own 52,143,426 WES common units, representing an
aggregate 31.1% limited partner interest in WES, and 12,743,318
WES Class C units, representing an aggregate 7.6% limited partner
interest in WES, based on the number of common, general partner
and Class C units outstanding as of May 22, 2017.
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On May 18, 2017, the board of directors of WGPs general partner
appointed Jaime R. Casas as Senior Vice President, Chief
Financial Officer and Treasurer of WGPs general partner,
effective May 22, 2017. Mr. Casas will also serve as Senior Vice
President, Chief Financial Officer and Treasurer of the general
partner of WES and as a Vice President, Finance for Anadarko.
Prior to joining WGP, Mr. Casas, age 47, served as Senior Vice
President and Chief Financial Officer of Clayton Williams Energy,
Inc. from October 2016 until the companys sale in April 2017.
Previously, he served as Vice President and Chief Financial
Officer of the general partner of LRR Energy, L.P., a publicly
traded exploration and production master limited partnership,
from 2011 to October 2015, and as Vice President and Chief
Financial Officer of Laredo Energy, a privately held oil and gas
company, from 2009 to 2011.
appointed Jaime R. Casas as Senior Vice President, Chief
Financial Officer and Treasurer of WGPs general partner,
effective May 22, 2017. Mr. Casas will also serve as Senior Vice
President, Chief Financial Officer and Treasurer of the general
partner of WES and as a Vice President, Finance for Anadarko.
Prior to joining WGP, Mr. Casas, age 47, served as Senior Vice
President and Chief Financial Officer of Clayton Williams Energy,
Inc. from October 2016 until the companys sale in April 2017.
Previously, he served as Vice President and Chief Financial
Officer of the general partner of LRR Energy, L.P., a publicly
traded exploration and production master limited partnership,
from 2011 to October 2015, and as Vice President and Chief
Financial Officer of Laredo Energy, a privately held oil and gas
company, from 2009 to 2011.
The estimated portion of Mr. Casass compensation that will be
allocable to WES by Anadarko (and ultimately consolidated into
WGPs financial results) includes: (i) an annual base salary of
approximately $337,500; and (ii) a bonus target opportunity under
Anadarkos 2012 Omnibus Incentive Compensation Plan (the Omnibus
Plan) equal to 65% of his base salary allocated to WES. Mr. Casas
will also receive (i) a $45,000 cash bonus and (ii) a $990,000
equity award under the Omnibus Plan based on Anadarkos closing
stock price on May 22, 2017, with such value delivered 50% in
stock options and 50% in restricted stock units. Half of such
restricted stock units and options will vest on May 22, 2019, and
the remainder will vest on May 22, 2021. In addition, in
connection with his appointment as Vice President, Finance of
Anadarko, Mr. Casas will enter into a key employee change of
control agreement with Anadarko that is standard for similarly
situated officers at Anadarko.
allocable to WES by Anadarko (and ultimately consolidated into
WGPs financial results) includes: (i) an annual base salary of
approximately $337,500; and (ii) a bonus target opportunity under
Anadarkos 2012 Omnibus Incentive Compensation Plan (the Omnibus
Plan) equal to 65% of his base salary allocated to WES. Mr. Casas
will also receive (i) a $45,000 cash bonus and (ii) a $990,000
equity award under the Omnibus Plan based on Anadarkos closing
stock price on May 22, 2017, with such value delivered 50% in
stock options and 50% in restricted stock units. Half of such
restricted stock units and options will vest on May 22, 2019, and
the remainder will vest on May 22, 2021. In addition, in
connection with his appointment as Vice President, Finance of
Anadarko, Mr. Casas will enter into a key employee change of
control agreement with Anadarko that is standard for similarly
situated officers at Anadarko.
Mr. Casas will be eligible to receive future equity awards under
WGPs and Anadarkos compensation programs, as described under the
heading Executive Compensation Compensation Discussion and
Analysis Elements of compensation in WGPs Form 10-K for the year
ended December 31, 2016, as filed with the Securities and
Exchange Commission on February 23, 2017. Mr. Casas is also
eligible to participate in Anadarkos other benefits, including
welfare and retirement benefits, severance benefits and change of
control benefits, compensation programs, and other benefits on
the same basis as other eligible Anadarko employees, and WES will
bear the expenses related to the portion of such benefits
allocable to it.
WGPs and Anadarkos compensation programs, as described under the
heading Executive Compensation Compensation Discussion and
Analysis Elements of compensation in WGPs Form 10-K for the year
ended December 31, 2016, as filed with the Securities and
Exchange Commission on February 23, 2017. Mr. Casas is also
eligible to participate in Anadarkos other benefits, including
welfare and retirement benefits, severance benefits and change of
control benefits, compensation programs, and other benefits on
the same basis as other eligible Anadarko employees, and WES will
bear the expenses related to the portion of such benefits
allocable to it.
Item 7.01 Regulation FD Disclosure.
On May 22, 2017, WES and WGP issued a press release regarding the
appointment of Mr. Casas. A copy of this release is attached
hereto as Exhibit 99.1.
appointment of Mr. Casas. A copy of this release is attached
hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number
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Description
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2.1
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Amendment No. 1 to Purchase and Sale Agreement, dated
May 22, 2017, by and among Western Gas Partners, LP, Anadarko Petroleum Corporation, WGR Asset Holding Company LLC, and Delaware Basin Midstream, LLC. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Western Gas Partners, LP filed on May 23, 2017, File No. 001-34046). |
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99.1
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Press Release of Western Gas Partners, LP and Western
Gas Equity Partners, LP issued May 22, 2017 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Western Gas Partners, LP filed on May 23, 2017, File No. 001-34046). |
About WESTERN GAS EQUITY PARTNERS, LP (NYSE:WGP)
Western Gas Equity Partners, LP (WGP) is a limited partnership formed in to own approximately three types of partnership interests in Western Gas Partners, LP (WES). WES owns, operates, acquires and develops midstream energy assets. Through its subsidiary WES, the Company is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, natural gas liquids (NGLs) and crude oil for Anadarko Petroleum Corporation (Anadarko). The types of partnership interests owned by WGP include the general partner interest in WES, held through Western Gas Holdings, LLC (WES GP); the incentive distribution rights (IDRs) in WES, which entitle WGP to receive increasing percentages, till approximately 48%, of any incremental cash distributed by WES as certain target distribution levels are reached in any quarter, and a limited partner interest in WES. WES’s assets are located in the Rocky Mountains, the Mid-Continent, North-central Pennsylvania and Texas. WESTERN GAS EQUITY PARTNERS, LP (NYSE:WGP) Recent Trading Information
WESTERN GAS EQUITY PARTNERS, LP (NYSE:WGP) closed its last trading session up +0.08 at 44.20 with 167,332 shares trading hands.
