WESTERN GAS PARTNERS, LP (NYSE:WES) 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) 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).
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 Western
Gas Equity Partners, LP (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.
Gas Equity Partners, LP (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.
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 appointed Jaime R. Casas as Senior
Vice President, Chief Financial Officer and Treasurer of WESs
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 WGP and as a Vice President,
Finance for Anadarko. Prior to joining WES, 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.
Vice President, Chief Financial Officer and Treasurer of WESs
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 WGP and as a Vice President,
Finance for Anadarko. Prior to joining WES, 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 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 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
WESs and Anadarkos compensation programs, as described under the
heading Executive Compensation Compensation Discussion and
Analysis Elements of compensation in WESs 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.
WESs and Anadarkos compensation programs, as described under the
heading Executive Compensation Compensation Discussion and
Analysis Elements of compensation in WESs 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. |
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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. |
About WESTERN GAS PARTNERS, LP (NYSE:WES)
Western Gas Partners, LP is a master limited partnership (MLP) that acquires, owns, develops and operates midstream energy assets. 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), as well as third-party producers and customers. It operates in the segment of gathering, processing, compressing, treating and transporting Anadarko and third-party natural gas, condensate, NGLs and crude oil in the United States. Its operations and activities are managed by its general partner, which is indirectly controlled by Anadarko through Western Gas Equity Partners, LP (WGP). Anadarko is an independent oil and gas exploration and production company. The Company’s assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), the Mid-Continent (Kansas and Oklahoma), North-central Pennsylvania and Texas. WESTERN GAS PARTNERS, LP (NYSE:WES) Recent Trading Information
WESTERN GAS PARTNERS, LP (NYSE:WES) closed its last trading session up +0.43 at 56.54 with 375,809 shares trading hands.
