Western Midstream Secures $610M Unit Redemption, Maintains $0.91 Distribution
RBC Capital maintained its Hold rating on Western Midstream with a $42 price target while Morgan Stanley retained a Sell rating and a $41 target. The partnership declared a $0.91 quarterly distribution and closed a deal with Occidental transferring 15.3 million units valued at $610 million for fixed-fee contracts through the late 2030s.
1. Analyst Ratings and Price Targets
RBC Capital’s Elvira Scotto reiterated a Hold rating on Western Midstream and held the price target at $42 as of January 28, 2026. Morgan Stanley continued its Sell rating with a $41 target, signaling mixed analyst sentiment on the stock’s near-term upside.
2. Quarterly Distribution Announcement
Western Midstream declared a fourth-quarter 2025 cash distribution of $0.91 per unit, matching the previous quarter’s payout. Shareholders of record as of February 2, 2026, will receive the distribution on February 13, 2026.
3. Delaware Basin Contract Renegotiations
The partnership renegotiated key natural gas gathering and processing contracts in the Delaware Basin, shifting from cost-of-service to fixed-fee arrangements. In exchange, Occidental transferred 15.3 million common units, valued at approximately $610 million, back to Western Midstream for redemption to secure long-term fee-based revenue.
4. Strategic Impact and Outlook
By simplifying fee structures and diversifying its customer base, Western Midstream aims to stabilize cash flows through the late 2030s. The asset-light, fee-based model could provide more predictable revenues but may limit upside from volume growth.