UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 18, 2017
WESTERN GAS PARTNERS, LP
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction
of incorporation or organization)
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001-34046
(Commission
File Number)
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26-1075808
(IRS Employer
Identification No.)
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1201 Lake Robbins Drive
The Woodlands, Texas 77380-1046
(Address of principal executive office) (Zip Code)
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(832) 636-6000
(Registrant’s telephone number, including area code)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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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 WES’s 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 pursuant 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.
Pursuant 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 pursuant 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.
Relationships
The terms of the Amendment were approved by the board of directors (the “Board”) of WES’s general partner. The terms of the Amendment were also approved by the Board’s independent special committee.
Anadarko indirectly owns 100% of the general partner of Western Gas Equity Partners, LP (“WGP”) and 81.6% of WGP’s limited partner interests. WGP owns WES’s 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 WES’s general partner to specified increasing percentages of cash distributions as WES’s 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.
On May 18, 2017, the Board appointed Jaime R. Casas as Senior Vice President, Chief Financial Officer and Treasurer of WES’s 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 company’s 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. Casas’s 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 Anadarko’s 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 Anadarko’s 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 WES’s and Anadarko’s compensation programs, as described under the heading “Executive Compensation — Compensation Discussion and Analysis — Elements of compensation” in WES’s 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 Anadarko’s 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.
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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99.1
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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WESTERN GAS PARTNERS, LP
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By:
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Western Gas Holdings, LLC, its general partner
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Dated:
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May 23, 2017
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By:
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/s/ Philip H. Peacock
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Philip H. Peacock
Senior Vice President, General Counsel
and Corporate Secretary
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EXHIBIT INDEX
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Exhibit Number
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Description
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2.1
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99.1
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EXHIBIT 2.1
AMENDMENT NO. 1 TO
PURCHASE AND SALE AGREEMENT
THIS AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT (this “
Amendment
”) is made and entered into as of the 22
nd
day of May, 2017, by and between WGR Asset Holding Company LLC, a Delaware limited liability company (the “
Seller
”), and Delaware Basin Midstream, LLC, a Delaware limited liability company (the “
Buyer
”).
RECITALS
A. The Buyer entered into a Purchase and Sale Agreement, dated as of March 2, 2015 (the “
Purchase and Sale Agreement
”), by and among the Seller, the Buyer, and for the limited purposes set forth therein, Western Gas Partners, LP and Anadarko Petroleum Corporation, pursuant to which the Buyer acquired the limited liability company interests of Delaware Basin JV Gathering LLC. Capitalized terms used but not defined herein are used as defined in the Purchase and Sale Agreement.
B. The Parties wish to amend the Purchase and Sale Agreement to provide for a new definition of Consideration.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
AGREEMENT
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1.
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Section 1.1
. Section 1.1 of the Purchase and Sale Agreement is hereby amended to remove the existing definition of Consideration and replace such definition in full as follows:
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“‘
Consideration
’ means an amount equal to $37.346 million.”
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2.
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Section 2.2
. Section 2.2 of the Purchase and Sale Agreement is hereby amended and restated in its entirety as follows:
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“Section 2.2.
Consideration
. In consideration for the sale of the DBJV Interest, the Seller shall receive the Consideration as follows: The Partnership shall, on or subsequent to May 22, 2017, deliver (or cause to be delivered) to the Seller such Consideration by wire transfer to an account specified by the Seller.”
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3.
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Schedule 1.1.
Schedule 1.1 of the Purchase and Sale Agreement is hereby deleted in its entirety.
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4.
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Ratification
. Except as expressly amended hereby, the Purchase and Sale Agreement is hereby ratified and confirmed, and shall continue in full force and effect.
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5.
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Governing Law
. This Amendment shall be construed and enforced in accordance with and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.
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[Signature page follows]
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first above written.
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BUYER:
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DELAWARE BASIN MIDSTREAM, LLC
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By:
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/s/ Benjamin M. Fink
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Name:
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Benjamin M. Fink
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Title:
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President and Chief Executive Officer
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SELLER:
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WGR ASSET HOLDING COMPANY LLC
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By:
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/s/ Robert K. Reeves
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Name:
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Robert K. Reeves
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Title:
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Executive Vice President
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ANADARKO PETROLEUM CORPORATION
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By:
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/s/ Robert K. Reeves
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Name:
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Robert K. Reeves
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Title:
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Executive Vice President, Law and Chief Administrative Officer
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WESTERN GAS PARTNERS, LP
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By:
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Western Gas Holdings, LLC, its general partner
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By:
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/s/ Benjamin M. Fink
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Name:
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Benjamin M. Fink
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Title:
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President and Chief Executive Officer
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EXHIBIT 99.1
WESTERN GAS NAMES NEW
CHIEF FINANCIAL OFFICER
HOUSTON
–(PRNEWSWIRE)– May 22, 2017 – Western Gas Partners, LP (NYSE: WES) and Western Gas Equity Partners, LP (NYSE: WGP) (collectively the “Partnerships”) announced that the boards of directors of their general partners have appointed Jaime R. Casas as Senior Vice President, Chief Financial Officer and Treasurer of the Partnerships effective immediately. He will succeed Benjamin M. Fink, who was recently named President and Chief Executive Officer of the Partnerships.
“We are delighted to have added such a seasoned energy executive to our executive team. Jaime brings a long and successful track record of financial leadership in the energy industry, and has managed both corporate and master limited partnership publicly traded entities,” said Fink. “His experience and expertise are a great fit for Western Gas as it continues to deliver sustainable growth as a large-cap MLP.”
Prior to joining Western Gas, Mr. Casas served as Senior Vice President and Chief Financial Officer of Clayton Williams Energy, Inc. 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 until its sale in 2015, and as Vice President and Chief Financial Officer of Laredo Energy, a privately held oil and gas company, from 2009 to 2011.
Western Gas Partners, LP (“WES”) is a growth-oriented Delaware master limited partnership formed by Anadarko Petroleum Corporation to acquire, own, develop and operate midstream energy assets. With midstream assets located in the Rocky Mountains, North-central Pennsylvania and Texas, WES is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas, and gathering, stabilizing and transporting condensate, natural gas liquids and crude oil for Anadarko, as well as for other producers and customers.
Western Gas Equity Partners, LP (“WGP”) is a Delaware master limited partnership formed by Anadarko to own the following types of interests in WES: (i) the general partner interest and all of the incentive distribution rights in WES, both owned through WGP’s 100% ownership of WES’s general partner, and (ii) a significant limited partner interest in WES.
For more information about Western Gas Partners, LP, Western Gas Equity Partners, LP, and Western Gas Flash Feed updates, please visit www.westerngas.com.
# # #
Western Gas Contact
Jonathon E. VandenBrand
Director, Investor Relations
jon.vandenbrand@anadarko.com
832.636.6000
