Anadarko’s offspring proves a high achiever
Service provider records high return to shareholders
WESTERN Gas was formed by Anadarko Petroleum Corp. primarily to handle midstream assets for the global oil and gas giant. Though it also works with thirdparty producers, its success is closely tied to Anadarko’s.
“Anadarko had a really good year in 2014; we were the beneficiary of that,” said Donald Sinclair, president and CEO of both Western Gas Equity Partners and Western Gas Partners, which together comprise Western Gas.
Western Gas Equity Partners ranks 11th on the annual Chronicle 100 list, with a total return to shareholders of 55.6 percent, fourth-highest among the public companies. The company reported earnings per share growth of 43.7 percent. Total revenue was $1.27 billion, up 23.7 percent.
“Anadarko drills the wells and basically handles everything subsurface,” Sinclair said. “We’re a service provider. We put in pipelines and gathering systems, we do processing, we move NGLs (natural gas liquids), we treat and move condensate.”
The year’s highlight for Western Gas was buying Nuevo Midstream, a gathering and processing company in West Texas’ Delaware Basin, for $1.5 billion, the company’s largest transaction ever.
“With this asset, Anadarko has roughly 600,000 acres to develop in this area,” Sinclair said. “On top of having a lot of really good third-party producer contracts, buying this asset allows us to have infrastructure in place to help Anadarko develop those resources.”
Western Gas is headquartered in The Woodlands. Officially it has no employees, and its approximately 420 workers, mostly in the field, are paid by Anadarko. Still, Sinclair sees a Houstonarea base as a major advantage because of the energy-centric atmosphere and the quality of energy talent here.
Sinclair said the company is meeting expectations this year, and executives will determine how to approach 2016 as conditions develop.
“In a downturn like this, we’re very fortunate in having a quality sponsor like Anadarko,” he said.