Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

The following table presents the acquisitions completed by WES during 2016, 2015 and 2014, and identifies the funding sources for such acquisitions. See Note 14 for information regarding events occurring subsequent to December 31, 2016.



thousands except unit and percent amounts	Acquisition Date	Percentage Acquired		Deferred Purchase Price Obligation - Anadarko		Borrowings		Cash On Hand		WES Common Units Issued	WES Class C Units Issued to Anadarko	WES Series A Preferred Units Issued
TEFR Interests ⁽¹⁾	03/03/2014	Various ⁽¹⁾		$	—	$	350,000	$	6,250	308,490	—	—
DBM ⁽²⁾	11/25/2014	100	%	—		475,000		298,327		—	10,913,853	—
DBJV ⁽³⁾	03/02/2015	100	%	174,276		—		—		—	—	—
Springfield ⁽⁴⁾	03/14/2016	100	%	—		247,500		—		2,089,602	—	14,030,611

⁽¹⁾

WES acquired a 20% interest in each of TEG and TEP and a 33.33% interest in FRP from Anadarko. These assets gather and transport NGLs primarily from the Anadarko and Denver-Julesburg (“DJ”) Basins. The interests in these entities are accounted for under the equity method of accounting. In connection with the issuance of WES common units, WES issued 6,296 general partner units to WES GP in exchange for WES GP’s proportionate capital contribution of $0.4 million.

⁽²⁾

WES acquired Nuevo Midstream, LLC (“Nuevo”) from a third party. Following the acquisition, WES changed the name of Nuevo to Delaware Basin Midstream, LLC (“DBM”). The assets acquired include cryogenic processing plants, a gas gathering system, and related facilities and equipment, which are collectively referred to as the “DBM complex” and serve production from Reeves, Loving and Culberson Counties, Texas and Eddy and Lea Counties, New Mexico. See DBM acquisition below for further information, including the final allocation of the purchase price.

⁽³⁾

WES acquired Delaware Basin JV Gathering LLC (“DBJV”) from Anadarko. DBJV owns a 50% interest in a gathering system and related facilities. The DBJV gathering system and related facilities (the “DBJV system”) are located in the Delaware Basin in Loving, Ward, Winkler and Reeves Counties, Texas. WES will make a cash payment on March 31, 2020, to Anadarko as consideration for the acquisition of DBJV. At the acquisition date, WES estimated the future payment would be $282.8 million, the net present value of which was $174.3 million. For further information, including revisions to the estimated future payment, see DBJV acquisition—deferred purchase price obligation - Anadarko below.

⁽⁴⁾

WES acquired Springfield Pipeline LLC (“Springfield”) from Anadarko for $750.0 million, consisting of $712.5 million in cash and the issuance of 1,253,761 of WES common units. Springfield owns a 50.1% interest in an oil gathering system and a gas gathering system, such interest being referred to in this report as the “Springfield interest.” The Springfield oil and gas gathering systems (collectively, the “Springfield system”) are located in Dimmit, La Salle, Maverick and Webb Counties in South Texas. WES financed the cash portion of the acquisition through: (i) borrowings of $247.5 million on the WES RCF, (ii) the issuance of 835,841 of WES common units to WGP and (iii) the issuance of WES Series A Preferred units to private investors. See Note 4 for further information regarding WES’s Series A Preferred units. WGP financed the purchase of the WES common units by borrowing $25.0 million under the WGP RCF. See Note 12.

Impact of Deferred Purchase Price Obligation Table

The following table summarizes the financial statement impact of the Deferred purchase price obligation - Anadarko:



	Deferred purchase price obligation - Anadarko			Estimated future payment obligation
Balance at March 2, 2015 – Acquisition date	$	174,276		$	282,807
Accretion expense ⁽¹⁾	14,398
Balance at December 31, 2015	188,674			282,807
Accretion revision ⁽²⁾	(7,747		)
Revision to Deferred purchase price obligation – Anadarko ⁽³⁾	(139,487		)
Balance at December 31, 2016	$	41,440		$	56,455


⁽¹⁾	Accretion expense was recorded as a charge to Interest expense on the consolidated statements of operations.


⁽²⁾	Financing-related accretion revisions were recorded in Interest expense on the consolidated statements of operations.


⁽³⁾	Recorded as revisions within Common units on the consolidated balance sheets and consolidated statements of equity and partners’ capital.