8-K: Western Midstream Completes Aris Water Acquisition

Western Midstream Partners, LP has completed its acquisition of Aris Water Solutions, Inc., solidifying its position in the Delaware Basin.

Summary

• Western Midstream Partners, LP (WES) completed its previously announced acquisition of Aris Water Solutions, Inc. (Aris) on October 15, 2025.
• The transaction involved a series of mergers where Aris securityholders received a combination of WES common units and cash as consideration.
• Approximately 26.6 million WES Common Units were issued, and $415.0 million in cash was paid to Aris securityholders as part of the Merger Consideration.
• The total consideration paid was approximately 28% cash and 72% WES Common Units.
• Aris Class A Common Stock and Aris OpCo Stapled Units were converted into the right to receive, at the holder's election, either 0.625 Common Units, $25.00 in cash (subject to proration), or a mixed consideration of 0.450 Common Units and $7.00 in cash.
• Aris equity awards for continuing employees were assumed by WES and converted into phantom unit awards with respect to Common Units, while awards for non-continuing employees and non-employee directors were cancelled and converted into cash.
• Aris OpCo's 7.250% Senior Notes due 2030 will remain outstanding, and the indenture governing these notes will be assumed by Western Midstream Operating, LP (WES OpCo).
• The Third Amended and Restated Agreement of Limited Partnership of WES OpCo will be amended and restated to provide for the issuance of preferred units of WES OpCo.

Sentiment

Score: 8

Explanation: The completion of a strategic acquisition, particularly one that enhances market position and service offerings in a key basin, is generally positive. The integration of Aris Water Solutions is expected to create a stronger, more agile enterprise and expand WES's capabilities in water management, which is a growing area of focus in the energy sector. While integration risks exist, the overall strategic rationale is strong.

Positives

• Solidifies WES's position as one of the largest three-stream midstream, flow-assurance providers in the Delaware Basin.
• Aims to become the leading integrated water solutions provider in the Delaware Basin, expanding service offerings.
• Creates a stronger, more agile enterprise better positioned to meet producer customer challenges related to produced-water gathering, recycling, transportation, disposal, and beneficial reuse.
• Welcomes Aris employees to the WES team, indicating potential for talent integration and combined operational expertise.

Risks

• Ability to successfully integrate the businesses of WES and Aris.
• Disruption of management time from ongoing business operations due to the transaction.
• Potential adverse effects on the market price of WES's Common Units.
• Risk of adverse effects on WES's ability to retain customers and key personnel.
• Potential adverse effects on WES's relationships with its suppliers and customers.
• Risk that the transaction could distract management and result in substantial costs.
• Problems arising in successfully integrating the businesses, which may lead to the combined company not operating as effectively and efficiently as expected.
• Inability to achieve anticipated synergies or taking longer than expected to achieve those synergies.

Future Outlook

WES expects to grow the combined entity and become the leading integrated water solutions provider in the Delaware Basin. The acquisition is anticipated to create a stronger, more agile enterprise well-positioned to meet challenges facing producer customers in Texas and New Mexico regarding produced-water gathering, recycling, transportation, disposal, and beneficial reuse.

Management Comments

• "I am pleased to announce the completion of WES’s acquisition of Aris Water Solutions, solidifying our position as one of the largest three-stream midstream, flow-assurance providers in the Delaware Basin."
• "We are thrilled to welcome the Aris employees to the WES team, and we look forward to growing the combined entity and becoming the leading integrated water solutions provider in the basin."
• "Together, WES and Aris create a stronger, more agile enterprise, well positioned to meet the challenges facing our producer customers in Texas and New Mexico with respect to produced-water gathering, recycling, transportation, disposal, and beneficial reuse."

Industry Context

This acquisition positions WES as a major player in the Delaware Basin's midstream and water solutions sector. The focus on "three-stream midstream, flow-assurance" and "integrated water solutions" indicates a strategic move to offer comprehensive services, addressing the growing importance of produced water management in oil and gas operations, particularly in active basins like the Delaware. This trend reflects the industry's need for efficient and environmentally responsible water handling.

Comparison to Industry Standards

• The acquisition solidifies WES's position as one of the largest three-stream midstream, flow-assurance providers in the Delaware Basin.
• WES aims to become the leading integrated water solutions provider in the Delaware Basin.

Corporate Governance

Stakeholder Impact

• Shareholders (WES): Potential for enhanced market position, growth, and synergies, but also integration risks and potential dilution from unit issuance.
• Aris Securityholders: Received cash and/or WES Common Units, becoming WES limited partners or cashing out their investment.
• Employees (Aris): Continuing employees are welcomed to WES, with their equity awards converted to WES phantom units, while non-continuing employees' awards are cashed out.
• Customers: Expected to benefit from a stronger, more agile enterprise offering integrated water solutions and flow-assurance services in the Delaware Basin.
• Creditors (Aris Notes): Aris OpCo's 7.250% Senior Notes due 2030 remain outstanding and are assumed by WES OpCo, potentially strengthening the credit backing.

Next Steps

• Integration of Aris employees into the WES team.
• Growing the combined entity and expanding its operational footprint.
• Becoming the leading integrated water solutions provider in the Delaware Basin.
• Meeting challenges facing producer customers in Texas and New Mexico with respect to produced-water gathering, recycling, transportation, disposal, and beneficial reuse.
• Amendment of the Third Amended and Restated Agreement of Limited Partnership of WES OpCo to provide for the issuance of preferred units.

Key Dates

Recommendation

The completion of this strategic acquisition is a significant positive for Western Midstream, solidifying its market position in the critical Delaware Basin and expanding its capabilities in the high-growth water solutions sector. The stated goal of becoming the leading integrated water solutions provider suggests strong growth potential and operational efficiencies. While integration risks are inherent in any merger, the strategic rationale for enhancing flow assurance and produced water management services is compelling and aligns with industry trends. The combination creates a more robust and diversified midstream entity, which should be attractive to long-term investors.

Keywords

Western Midstream Partners, WES, Aris Water Solutions, Aris, Acquisition, Merger, Midstream, Water Solutions, Delaware Basin, Produced Water, Energy Infrastructure, Form 8-K, Common Units, Cash Consideration, Equity Awards, Corporate Governance