Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Western Gas Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the call over to Mr. Ben Fink. Please go ahead.

Thanks. Good morning, everyone. And I’m glad you could join us today for Western Gas’ third quarter 2014 conference call. I’d like to remind you that today’s presentation includes forward-looking statements and certain non-GAAP financial measures. Be aware that actual results could differ materially from what we discuss today and I would encourage you to read our full disclosure on forward-looking statements and the non-GAAP reconciliations we’ve attached to last night’s earnings release and attached to the slides that we’ll reference on this call. With that, I’ll turn the call over to Don Sinclair and following his remarks, we’ll open it up for Q&A with Don and the rest of our executive team. Don?

Thanks Ben. Good morning, everyone, and thank you for joining us today. Yesterday, we announced the $1.5 billion acquisition of Nuevo Midstream, as well as our third quarter earnings. First, I’ll walk you through the quarterly results and then I’ll share my thoughts about the Nuevo acquisition and what an important transaction this is for Western Gas. WES increased its distribution to $0.675 per unit in the third quarter, which is a 16% increase over last year. WGP increased its distribution to $0.29125 per unit, which is a 36% increase over last year. We reported adjusted EBITDA of $167.3 million and distributable cash flow of $136.7 million, which are in line with our expectations. Our healthy distribution coverage ratio of 1.23 times was considerably higher than our long-term target of 1.1 times. While we experienced healthy throughput growth at our crude and NGL assets, I’d like to discuss the throughput for our natural gas assets, which was 3% lower than the second quarter. We experienced throughput gains at our Brasada plant and at our DJ Basin and Granger facilities, while overcoming on schedule downtime. The throughput gains of these higher margin systems were offset by declines of the following three lower margin assets. First, our Bison Treaters experienced the largest sequential throughput decline, but this had no impact on our EBITDA as 100% of the cash flows are supported by demand charges. Second, we experienced a decline in volumes at our Granger Straddle plant, which is one of the lowest margin assets in our portfolio. However, our gross margin at this asset actually increased by a $1 million over the second quarter despite the lower throughput. Third, our Anadarko operated Marcellus volumes were sequentially lower as a result of Anadarko’s reduced activity due to lower price realizations. However, throughput at…

Thanks Don. The Class C units that we will issue to Anadarko will look like our common units with two important exceptions. First, these units will pay distributions in the form of additional Class C units until the end of 2017, after which time they will convert into common units on a one-for-one basis. To maximize flexibility, Western Gas has the right to convert any or all of the units prior to the end of 2017 and Anadarko has the right to delay conversion of any or all of the units past the end of 2017 if it so chooses. The second important distinction is that these units will be disregarded for purposes of calculating cash distributions and no incentive distributions will be paid in connection with the Class C units until they convert into common units. The pricing in terms of the Class C units have been approved by the special committee of the Board of Directors. We believe that Anadarko's willingness to purchase $750 million of paid-in-kind units provide strong evidence of their confidence in the potential of the Delaware Basin and the attractiveness of this transaction. In addition, the Class C units when combined with the available borrowing capacity under our credit facility provide us with the flexibility to continue our practice of being opportunistic in deciding when to access the capital markets. Now I’ll turn it back to Don to discuss the Nuevo acquisition further.

Thanks, Ben. As we mentioned in last night’s release, Anadarko is the operator of over 50-50 midstream joint venture with an area of mutual interest that covers some of the counties where Nuevo has operations. Since WES is subject to this agreement as Anadarko's affiliate, we have offered the JV partner the right to purchase 50% of Nuevo. The JV partner will have 30 days to decide whether it wants to require that 50% interest and another 30 days to fund its share of the purchase price. I want to emphasize that we’re fully prepared to purchase 100% of Nuevo if the JV partner declines to participate. Notwithstanding Nuevo acquisition, we will continue to pursue dropdown transactions with Anadarko and organic growth projects in order to execute our sustainable distribution model. The Nuevo acquisition improves our basin and customer diversity and will allow us to extend the rise of our distribution growth while preserving the inventory of midstream assets at Anadarko. I've always said that Western Gas would not execute a third-party acquisition unless it was strategic, accretive and would not put our business model at risk. We believe the Nuevo acquisition meets all these criteria. This is a very exciting day for Western Gas and I hope you share our excitement about what this represents for our future. Let me take this opportunity to discuss or revise full year outlook for 2014, which does not include any results from the Nuevo acquisition. We believe adjusted EBITDA will be between $625 million and $650 million and our maintenance capital will be between 7% and 10% of adjusted EBITDA. We also believe our total capital expenditures, including equity investments, will be $670 million to $720 million due to lower capital in DJ Basin and updated information we received on our non-operated Marcellus assets. In addition, we believe WES and WGP will exceed the previously announced distribution growth guidance of 15% and 34% respectively. Furthermore based on our preliminary outlook, we estimate that WES will achieve at least 15% distribution growth in 2015. Our annual budgeting process is ongoing and when it is complete, we will give full year 2015 guidance for EBITDA and CapEx, including CapEx associated with the Nuevo assets. I would like to thank each of you for your continued support of both our team and our business model. And with that, I’d now like to open up the line for questions, Operator.

and:

Thank you. (Operator Instructions) Your first question comes from Shneur Gershuni from UBS. Your line is open.

Just a couple of quick questions if you don’t mind, just starting with the Nuevo transaction, you’ve highlighted the accretion that’s expected in 2016 and so forth. I was wondering if you have any initial thoughts with respect to kind of the CapEx investment outlook in 2015 for the Nuevo assets, and possibly, how are you thinking about the run rate of EBITDA for 2015, I am not sure if that’s available at this time but I figured I’d ask? UBS: Just a couple of quick questions if you don’t mind, just starting with the Nuevo transaction, you’ve highlighted the accretion that’s expected in 2016 and so forth. I was wondering if you have any initial thoughts with respect to kind of the CapEx investment outlook in 2015 for the Nuevo assets, and possibly, how are you thinking about the run rate of EBITDA for 2015, I am not sure if that’s available at this time but I figured I’d ask?

Hey, Shneur, this is Ben. And I do appreciate the question. On the CapEx side, I would ask if you could just give us one quarter and we will give full guidance at the beginning of '15. This is a very fluid time right now. Both Anadarko and all the other major producers are undergoing a budgeting process. That’s going to directly impact the level of CapEx in '15. That will impact the well connection capital, as well as how much additional processing capacity we actually plan on building. So one more quarter and we will give not just full CapEx for WES, but CapEx for West Texas as well. As far as the '15 EBITDA, I also appreciate the question. I certainly don’t hold it against you. But from our standpoint, it’s not particularly relevant. This is a very early-stage asset with another 400 a day of capacity coming online and '15 cash flow wasn’t particularly important in our view of the overall transaction. So we are disclosing the EBITDA once all that additional capacity that’s coming into service comes online and I hope you can appreciate that. I’ll just remind you that it will be accretive in ’15 and we've also reiterated our distribution guidance for ’15 million of no less than 15%.

And a follow-up question, the upward revision in the 2014 EBITDA guidance, I was just wondering if you can sort of walk through the drivers on how you arrived there, just sort of given the adjusted gross margins for the natural gas assets and for the crude and NGL assets declined in the third quarter relative to second quarter. Should we expect that to tick back up or is it going to come more from the throughput side? I was just wondering if you can give a little bit color on that. UBS: And a follow-up question, the upward revision in the 2014 EBITDA guidance, I was just wondering if you can sort of walk through the drivers on how you arrived there, just sort of given the adjusted gross margins for the natural gas assets and for the crude and NGL assets declined in the third quarter relative to second quarter. Should we expect that to tick back up or is it going to come more from the throughput side? I was just wondering if you can give a little bit color on that.

Gross margin per Mcf for natural gas assets are going up as you mentioned that’s change of the throughput mix. You have growth in higher margin assets, some decline in lower margin assets, so it tends to go up. And what I've said repeatedly about the gross margin for crude and NGL assets is that most of these assets are assets that have just recently come into service. And what you have is for the first few quarters, the gross margin tends to bump around as you kind of build your processes in place. Some quarters, you may receive two distributions and then get none the next quarter. Sometimes, you'll experience what we just had this quarter, which was a previous distribution was reclassified by the operator as a return of capital. And so it’s going to take a few quarters to have a really good trend line and so that number is going to bounce around probably until those have been in-service for at least a year. Does that make sense?

Yes, it does. And thank you very much for taking my questions. UBS: Yes, it does. And thank you very much for taking my questions.

Your next question comes from Gabe Moreen from Bank of America Merrill Lynch. Your line is open.

Let me try to push the question a little differently. In terms of the ’16 run rate that you’ve got out there on in multiple, does that contemplate any sizable additions to the assets of Nuevo beyond that other processing plant that’s coming online in ’15 and I guess I'm talking additional processing plants, and maybe some additional trunk lines? Bank of America Merrill Lynch: Let me try to push the question a little differently. In terms of the ’16 run rate that you’ve got out there on in multiple, does that contemplate any sizable additions to the assets of Nuevo beyond that other processing plant that’s coming online in ’15 and I guess I'm talking additional processing plants, and maybe some additional trunk lines?

Gabe, this is Don. As far as incremental plans, it does not have anything in it beyond what we've already disclosed. Obviously, we have pipeline projects that we will work on in the fourth quarter of ’14 and 2015 and they are embedded in here. As far as processing capacity, it doesn't have any incremental capacity above what we’ve already announced.

I guess, just following-up on that. Can you talk a little bit more about whether there's any NVCs here, I know Ben mentioned sort of the fluidity of Anadarko and likely other producers drilling budgets. So, I’m just kind of wondering in terms of NVCs and sort of the confidence in the ramp, does that play any role in that? Bank of America Merrill Lynch: I guess, just following-up on that. Can you talk a little bit more about whether there's any NVCs here, I know Ben mentioned sort of the fluidity of Anadarko and likely other producers drilling budgets. So, I’m just kind of wondering in terms of NVCs and sort of the confidence in the ramp, does that play any role in that?

Hey, Gabe this is Ben. There are NVCs but it’s less than a hundred today, so it’s not meaningful. I mean, the growth really comes from the acreage dedications. And to be clear, we feel the existing acreage dedications will fill up that additional 400 and that doesn't include what we have with the Anadarko acreage behind it.

The other variable, Gabe, relative to the volume commitments is, some of the producers as they get a better feel for their development. The third-party producers get a better development plan in front of them. They have the right to exercise incremental capacity. So we’ll obviously monitor those options as well as what Ben said about the development on the acreage and make determinations from there.

And then last one for me, just I don’t know Ben if you hit on this and I missed it. If the 50% third-party interest gets exercised, does that $750 million commitment from Anadarko we have downscaled or does that stay at $750 million? Bank of America Merrill Lynch: And then last one for me, just I don’t know Ben if you hit on this and I missed it. If the 50% third-party interest gets exercised, does that $750 million commitment from Anadarko we have downscaled or does that stay at $750 million?

Stays at 750.

Your next question comes from Jerren Holder from Goldman Sachs. Your line is open.

Just wanted to start off with, can you guys maybe go over the volume assumptions and maybe the commodity price assumptions around the 8.5 times EBITDA multiple in 2016? Goldman Sachs: Just wanted to start off with, can you guys maybe go over the volume assumptions and maybe the commodity price assumptions around the 8.5 times EBITDA multiple in 2016?

What we did relative to the commodity is we just looked at the forward-market. There is not -- there is an investment deck that we have at Anadarko as well. That suggested based on forward-market assumptions and that was what was put in there, what we used.

In terms of volumes, the additional 400 comes in towards the end of ’15 and fills up overtime.

And going back down to the dropdown trajectory, does this, I guess, third-party acquisition change the timeframes. I know you guys usually do every six to nine months, maybe that dropdown happens. Does this delay to replace a dropdown that we could have been expecting in the near-term maybe? Goldman Sachs: And going back down to the dropdown trajectory, does this, I guess, third-party acquisition change the timeframes. I know you guys usually do every six to nine months, maybe that dropdown happens. Does this delay to replace a dropdown that we could have been expecting in the near-term maybe?

Well I think, how I think about it, you have to kind of put dropdowns in perspective and have a little bit of a historical look back. When you think about the role that dropdowns played for us, call it, three years ago, that was our major vehicle to allow us to reconfigure the portfolio and get to a growing portfolio at WES. Now post all those decisions and capital that since been in organic growth projects, we now have more components in the existing portfolio for growth. So now instead of dropdowns being the only lever, if you will, that we could pull for growth, we now have other levers to look at. So we evaluate drops just as we always have and then determine where we think we need them to make sure that we stay within the execution of the distribution growth model that we’re looking at.

Your next question comes from Sunil Sibal from Seaport Global. Your line is open.

A couple of questions from me, going back to the transaction, especially now through your discussions with Anadarko, I was wondering if you could talk a little bit about what is or do you believe is Anadarko’s breakeven oil price for ramping up activity in those areas and also as you ramp-up the processing capacity. Do you have adequate NGL takeaway capacity there or we could see something on those lines of what happened in the DJ Basin with regards to your participation in other parts of the value chain? Seaport Global: A couple of questions from me, going back to the transaction, especially now through your discussions with Anadarko, I was wondering if you could talk a little bit about what is or do you believe is Anadarko’s breakeven oil price for ramping up activity in those areas and also as you ramp-up the processing capacity. Do you have adequate NGL takeaway capacity there or we could see something on those lines of what happened in the DJ Basin with regards to your participation in other parts of the value chain?

I probably didn’t get a chance to listen to Anadarko's earnings call today. They did not discuss a specific breakeven price and associated rate of return for Delaware Basin or the DJ or any other onshore place that are looking at. I'm sure they will provide that information in their Investor Conference in March. But what they did say is in the current commodity environment, you can still look at the DJ, as well as the Delaware Basin and they are both economic and we’ll still draw capital out of their portfolio to continue to keep rigs running. As far as, the plants and are there any what I think of is downstream pinch points. Nuevo is in the process of getting an incremental NGL connection to the facility today as far as capacity is concerned, it will be in service in the first quarter of 2015. So from an NGL takeaway, pure hydraulics, those issues would be resolved by then. As far as the other takeaway issue is gas, they have existing connections. We’re currently looking at as they were before we stepped into their shoes and signed a merger agreement and moved forward with the close, looking at a line to another interstate pipeline. So they’re in the middle of acquiring that right way. And so we will make sure that when the plants come into service that we don’t have any downstream pinch points.

And then just lastly on your CapEx guidance for 2014, it seems like you made some adjustments. I was wondering if you could talk a little about that. Is it mainly a timing issue or there were other factors which played into that? Seaport Global: And then just lastly on your CapEx guidance for 2014, it seems like you made some adjustments. I was wondering if you could talk a little about that. Is it mainly a timing issue or there were other factors which played into that?

Hi Sunil it’s Ben, three primary things. One, remember we’re the non-operated of a large interest in the Marcellus. And we’ve got some additional information from the operator in the third quarter, brought that down. And then in the DJ, it looks like we’re going to spend a little less on pipe than we thought and we now decide it will push it into ’15.

Your next question comes from Helen Rayu from Barclays. Your line is open.

Just some clarifications, regarding the timing of the JV partner exercising the option did you say its 30 days from closing or 30 days from now? Barclays Capital: Just some clarifications, regarding the timing of the JV partner exercising the option did you say its 30 days from closing or 30 days from now?

30 days from notice. And we provided notice to them yesterday.

And then the competitive exposure at the Nuevo System today is 70%, as you add additional 400 capacity next year. Is that expected and that capacity ramps up, is that expected to stay around 70%? Barclays Capital: And then the competitive exposure at the Nuevo System today is 70%, as you add additional 400 capacity next year. Is that expected and that capacity ramps up, is that expected to stay around 70%?

It actually Helen it improves from a commodity point of view. It’ll increase the percentage that’s not driven by commodity price and will increase as you bring this incremental acreage on and it’s developed and comes to the plans.

So, in another words, a lot of new gas that’s going to come into fill in the new capacity will be more fee mixed? Barclays Capital: So, in another words, a lot of new gas that’s going to come into fill in the new capacity will be more fee mixed?

That’s way it’s forecasted.

Your next question comes from Andy Gupta from HITE Hedge. Your line is open.

I’ve just got a couple of questions, one is to clarify that the $1.5 billion CapEx includes any CapEx you’re spending for this new processing plant coming online in ’15, is that right? HITE Hedge: I’ve just got a couple of questions, one is to clarify that the $1.5 billion CapEx includes any CapEx you’re spending for this new processing plant coming online in ’15, is that right?

No, no 1.5 billion is the purchase price. That’s it.

How much should we assume for incremental CapEx for this new processing plant in 2015? HITE Hedge: How much should we assume for incremental CapEx for this new processing plant in 2015?

As I mentioned this to Shneur earlier, just give us one quarter to get through the budgeting process with all the producers. And then we’ll give full CapEx details for all of WES and our West Taxes asset.

And my second question is on Brasada. So in the Eagle Ford presumably your plant is operating at capacity. Would love to see if you can confirm that and two is there an opportunity that you see with increasing production in the Eagle Ford from Anadarko that there might be an opportunity to expand capacity? HITE Hedge: And my second question is on Brasada. So in the Eagle Ford presumably your plant is operating at capacity. Would love to see if you can confirm that and two is there an opportunity that you see with increasing production in the Eagle Ford from Anadarko that there might be an opportunity to expand capacity?

You are correct. Brasada is full today and has been. As far as in another plant, Brasada II, we have talked about it in previous quarters. That opportunity still exists. Valuation is going on at APC level. Obviously, it’s their production and their decision. They have the option to looking at third-party capacity in the area or us constructing a plant. We have looked at different phase studies relative to the capacity of that plant, would it involve other partners and other production, and those decisions and information is being evaluated as we speak.

Your next question comes from Selman Akyol from Stifel. Your line is open.

Just couple of quick questions, could you guys talk about any of the producers behind the system for Nuevo? Stifel Nicolas: Just couple of quick questions, could you guys talk about any of the producers behind the system for Nuevo?

Selman, there is couple of things we’re always kind of cautious in this arena, and especially because we haven’t closed yet. I would like to tell you this I think there is a tremendous amount of publicly available information relative to the Delaware Basin. A lot of what we think of as quality producers that are public have information out there that I think is easily made available to you. And I’d ask for you to go look there until we do close. We want to make sure that we are cautious in how we talk about that asset until it’s closed and funded and we own and operate it.

In terms of the units and the conversion, can you just talk a little bit about what might drive an early conversion, or what might drive a delayed conversion of new units? Stifel Nicolas: In terms of the units and the conversion, can you just talk a little bit about what might drive an early conversion, or what might drive a delayed conversion of new units?

Coverage, I mean plain and simple in terms of, if we could manage it, so there is not a -- shall we call a shock to the system in '18 and do more staged conversion overtime if our distribution coverage would allow that, that would be the optimal outcome. But we structured this for maximum flexibility to give us the flexibility to ramp-up, add capacity as needed and not have to worry about distribution coverage pressure during that time of the pick. And that’s why we drive a delay as well.

And then you talk about 8.5 times multiple for 2016, but can you talk about capacity utilization assumptions that are behind that? Stifel Nicolas: And then you talk about 8.5 times multiple for 2016, but can you talk about capacity utilization assumptions that are behind that?

Well, as Ben said, Selman, the plant, obviously it won’t start full. We don’t have any word. The gas and production will have to ramp-up overtime. But we see a solid ramp relative to the capacity and utilization, so we think those plants will be full and pretty short order and give us the opportunity to look at further expansions.

Your next question comes from John Edwards from Credit Suisse. Your line is open.

Just a couple clarifying ones, so on the commodity exposure than the mix their post expense. I think you said it’s about 70% now, I didn’t catch what you said post expansion what that would end up being? Credit Suisse: Just a couple clarifying ones, so on the commodity exposure than the mix their post expense. I think you said it’s about 70% now, I didn’t catch what you said post expansion what that would end up being?

70% fee based now. It’s going to migrate to around 80% overtime. But more importantly, John is how we look at it as just what is WES’ gross margin and how much of that is commodity exposed. At all points in time, it'll be 5% or less.

And then and I was just curious how long was the transaction in discussion? Credit Suisse: And then and I was just curious how long was the transaction in discussion?

It seems like about 25 dog years, John. But I think it was, there were a quite few people involved. It kicked off in the second quarter and it was a standard three around auction process.

And then, I’m just curious with the weakening commodity price environment, are you seeing any impacts to producer budgets at this point, or are things staying pretty stable? Credit Suisse: And then, I’m just curious with the weakening commodity price environment, are you seeing any impacts to producer budgets at this point, or are things staying pretty stable?

So far we haven’t but as Ben said the fourth quarter is really where the rubber meets the road with budgets for 2015. So if there are changes, I think we will start to see them during that time period. As far as in West Texas, I think everyone is pretty comfortable and there is publicly available knowledge out there that resource development will continue even in this commodity environment.

Your next question comes from Sharon Lu from Wells Fargo. Your line is open.

Maybe if you could just touch on some of the longer-term organic growth opportunities. I think that Nuevo had indicated that capacity could, processing capacity could ramp-up to 900 by 2016? And they also talked about, I guess, maybe investments in crude oil gathering? Wells Fargo Securities: Maybe if you could just touch on some of the longer-term organic growth opportunities. I think that Nuevo had indicated that capacity could, processing capacity could ramp-up to 900 by 2016? And they also talked about, I guess, maybe investments in crude oil gathering?

Sharon, they have a lot of different horizons and opportunities out there. And we’ve looked at all of them. The ones that they had available to them were not dissimilar to ones that we had available to us, relative to our existing assets and footprint out there, which include building incremental processing. I think, how I would think about it from an investment community and for those who didn’t get to listen to Al Walker’s opening remarks this morning, I would suggest you go to his script. He talked about the DJ Basin and it being a template for how Anadarko looks at Midstream, what your growth opportunities will be there. I think that we look at that template knowing that you’re going to have a great opportunity around Anadarko suggesting acreage for position. The contracts that you have, there's a lot of great third-party quality producers out there, that have great development plans and we look forward to providing those services. So to put a number is at $900 million a day and how much pipeline capacity, I think that they are willing to service at this stage.

Next question comes from Brian Lasky from Morgan Stanley. Your line is open.

Just one quick follow-up, I was wondering Ben, can you talk to kind of the incremental EBIDTA contribution from an incremental processing plant, is that something you could provide, just kind of ballpark numbers? Morgan Stanley: Just one quick follow-up, I was wondering Ben, can you talk to kind of the incremental EBIDTA contribution from an incremental processing plant, is that something you could provide, just kind of ballpark numbers?

It depends on how large the plant is. So if it’s 200, 300, 400 a day and there is just no way to speculate. There is no average contribution. I mean, if you go back and look at history and look at the contribution of the Brasada and Lancaster plants, they were very different. So there is just no way to answer that in vacuum, I’m sorry.

At this time, I have no further questions. Thank you. I’ll turn the call back over to presenters for closing remarks.

I’d like to thank everyone for joining us today and for your interest in Western Gas and the newly acquired and announced Nuevo assets. And Ben and I look forward to seeing each of you and speaking to you soon. Thank you.

Thank you everyone. This concludes today’s conference call. You may now disconnect.