WESTERN GAS EQUITY PARTNERS, LP (WGP) IPO

 operate, acquire
and develop midstream energy assets. Our only cash-generating assets consist of
our partnership interests in WES, which upon the completion of this offering
will consist of the following:

• 2,112,512 WES general partner units, representing a 2.0% general partner  
  interest in WES;                                                          

• all of the incentive distribution rights in WES, which entitle us to      
  receive increasing percentages, up to the maximum level of 48.0%, of any  
  incremental cash distributed by WES as certain target distribution levels 
  are reached in any quarter; and                                           

• 48,148,701 WES common units, representing a 45.6% limited partner interest
  in WES.  

We were formed in September 2012 upon the conversion of our predecessor, WGR
Holdings, LLC, into a Delaware limited partnership. As of September 30, 2012, we
owned 40,573,239 WES common units and, indirectly through our 100% membership
interest in WES GP, 1,957,845 WES general partner units and all of the incentive
distribution rights.

Based on WES’s anticipated fourth quarter cash distribution and our expected
ownership of WES following this offering, we expect our initial quarterly cash
distribution to be $0.165 per common unit, or $0.660 per common unit on an
annualized basis. Our primary objective is to increase distributions to our
unitholders over time through growth in the distributions payable with respect
to our partnership interests in WES. To achieve this objective, we intend to
actively monitor and support WES in the successful execution of its business
strategy. In the future, we may facilitate WES’s growth through the use of our
capital resources, which could involve capital contributions, loans or other
forms of financial support.

WES is required by its partnership agreement to distribute, and it has
historically distributed within 45 days of the end of each quarter, all of its
cash on hand at the end of each quarter, less reserves established by its
general partner to provide for the proper conduct of its business or to provide
funds for future distributions. Like WES, we are structured as a limited
partnership and will distribute all of our cash on hand at the end of each
quarter, less reserves established by our general partner.

Our cash flows will consist of the cash distributions we receive with respect to
the WES partnership interests we own. While we, like WES, are structured as a
limited partnership, our capital structure and cash distribution policy differ
materially from those of WES. Most notably, (i) our general partner does not
have an economic interest in us and is not entitled to receive any distributions
from us and (ii) our capital structure does not include incentive distribution
rights. Therefore, our distributions will be allocated exclusively to our common
units.

Our ownership of WES’s incentive distribution rights entitles us to receive the
following percentages of cash distributed by WES at the following target cash
distribution levels:

• 13.0% of all incremental cash distributed in a quarter after $0.345 has   
  been distributed in respect of each common unit and general partner unit  
  of WES for that quarter;                                                  

• 23.0% of all incremental cash distributed in a quarter after $0.375 has   
  been distributed in respect of each common unit and general partner unit  
  of WES for that quarter; and                                              

• the maximum sharing level of 48.0% of all incremental cash distributed in 
  a quarter after $0.450 has been distributed in respect of each common unit
  and general partner unit of WES for that quarter.   

The cash distributions we receive from WES are tied to (i) WES’s per unit
distribution level and (ii) the number of WES common units outstanding. An
increase in either factor (assuming the other factor remains constant or
increases) will generally result in an increase in the amount of cash
distributions we receive from WES. Since its initial public offering, WES has
engaged in transactions that have resulted in significant increases in both its
per unit distribution level and outstanding equity capitalization, and we expect
WES to engage in similar transactions in the future. WES has increased its
quarterly cash distribution from $0.30 per common unit, or $1.20 on an
annualized basis, for the quarter ended June 30, 2008, to $0.50 per common unit,
or $2.00 on an annualized basis, for the quarter ended September 30, 2012.
During the same period, WES issued a total of 42.9 million common units.

Our discussion of WES Adjusted EBITDA for the year ending December 31, 2013,
included elsewhere in this prospectus, assumes a WES quarterly distribution of
$0.52 per unit, because based on WES’s fourth quarter operating results to date,
the management of WES GP has informed us that it plans to recommend that the WES
GP board of directors approve an increase in WES’s distribution with respect to
the fourth quarter of 2012 to $0.52 per WES common unit. This distribution
increase for the fourth quarter of 2012 has not been submitted to, or approved
by, the board of directors of WES GP and is therefore subject to change.

Based on WES’s ownership structure after giving effect to our acquisition of WES
common units and general partner units in connection with the closing of this
offering as described under “Use of Proceeds,” WES’s anticipated fourth quarter
2012 distribution of $0.52 per common unit will result in a quarterly
distribution to us of $36.1 million, or approximately $144.6 million on an
annualized basis, consisting of (i) $25.0 million from distributions on our WES
common units, (ii) $1.3 million from distributions on our WES general partner
units and (iii) $9.8 million from distributions on the incentive distribution
rights. We are currently receiving distributions at the highest level on the
incentive distribution rights and therefore will receive 48.0% of the cash that
WES distributes in excess of $0.450 per common unit, if any. As a result, the
cash distributions we receive from WES with respect to the incentive
distribution rights will increase more rapidly than those with respect to our
WES common and general partner units.

The impact on us of changes in WES’s per unit cash distribution levels will vary
depending on several factors, including the number of WES’s outstanding common
units on the record date for cash distributions and the impact of the incentive
distribution rights structure. In addition, the level of cash distributions we
receive may be affected by risks associated with the underlying business of WES.

We expect to make an initial quarterly cash distribution of $0.165 per common
unit, or $0.660 on an annualized basis, to the extent we have sufficient cash
from operations after establishment of cash reserves and payment of fees and
expenses, including reimbursements to our general partner. If WES is successful
in implementing its business strategy and increasing distributions to its
partners, we generally would expect to increase distributions to our
unitholders, although the timing and amount of any such increase in our
distributions will not necessarily correlate to any increase in WES’s
distributions. However, we cannot assure you that any distributions will be
declared or paid. The common units offered hereby are not entitled to arrearages
in distributions.

Western Gas Partners, LP

Western Gas Partners, LP (NYSE: WES) is a growth-oriented Delaware master
limited partnership formed by Anadarko to own, operate, acquire and develop
midstream energy assets. WES’s assets are located in East, West and South Texas,
the Rocky Mountains (Colorado, Utah and Wyoming) and the Mid-Continent (Kansas
and Oklahoma), and WES is engaged in the business of gathering, processing,
compressing, treating and transporting natural gas, condensate, natural gas
liquids (“NGLs”) and crude oil for Anadarko, as well as third-party producers
and customers. Approximately two-thirds of WES’s services are provided under
long-term contracts with fee-based rates with the remainder provided under
percent-of-proceeds and keep-whole contracts. A substantial majority of the
commodity price risk associated with the percent-of-proceeds and keep-whole
contracts is hedged under commodity price swap agreements with Anadarko. WES’s
only commodity price risk that is not hedged is associated with the
non-fee-based agreements that were acquired with the purchase of the Platte
Valley system, which represented less than 5% of WES’s gross margin for the
twelve months ended September 30, 2012. A substantial part of WES’s business is
conducted under long-term contracts with Anadarko that typically have a minimum
term of ten years from the date of execution. None of WES’s material gathering
and processing contracts with Anadarko expires before December 30, 2017, and, as
of September 30, 2012, the volume weighted-average remaining life of all of such
contracts with Anadarko was 7.7 years. WES currently has over 700 third-party
gathering and processing contracts with over 200 customers, with no third-party
customer representing more than 10% of WES’s revenues. The largest third-party
customer, which represents approximately 6% of WES’s revenues, has entered into
a “life of lease” contract with WES, meaning that the contract remains in effect
until the customer ceases production from the leases that are dedicated under
this contract.

As of September 30, 2012, WES’s assets consisted of thirteen gathering systems,
seven natural gas treating facilities, ten natural gas processing facilities,
two NGL pipelines, one interstate natural gas pipeline that is regulated by the
Federal Energy Regulatory Commission (“FERC”), one intrastate natural gas
pipeline and interests in two natural gas gathering systems and a crude oil
pipeline.

The following table provides information regarding WES’s assets by geographic
region, other than natural gas processing facilities currently under
construction in South Texas and Colorado, as of and for the nine months ended
September 30, 2012:

                                                                                                                                      Average      
                                                                                                                                     Gathering,    
                                                                                                                Processing         Processing and  
                                                                       Approximate              Gas             or Treating        Transportation  
                                                      Miles of          Number of           Compression          Capacity            Throughput    
Area                              Asset Type          Pipeline        Receipt Points        (horsepower)         (MMcf/d)             (MMcf/d)      
Rocky Mountains (1)          Gathering, Processing                                                                                                 
                             and Treating                 7,232                 4,983             352,912              2,480                 2,215  
                             Transportation                 982                    34              26,828                 —                     83  
Mid-Continent                Gathering                    2,012                 1,501              92,097                 —                     81  
East Texas                   Gathering and                                                                                                         
                             Treating                       590                   845              37,820                502                   244  
West Texas                   Gathering                      120                    90                  —                  —                     52  
                                                                                                                                                    
Total                                                    10,936                 7,453             509,657              2,982                 2,675  

(1) Throughput includes 100% of Chipeta system volumes; 50% of Newcastle         
    gathering system volumes; 22% of Rendezvous volumes; and 14.81% of Fort Union
    volumes. For the nine months ended September 30, 2012, throughput excludes 25
    MBbls/d of average NGL pipeline volumes from the Chipeta assets and 6 MBbls/d
    of oil pipeline volumes representing WES’s 10% share of average White Cliffs 
    volumes.      

We believe that one of WES’s principal strengths is its relationship with
Anadarko. Anadarko is among the largest independent oil and gas exploration and
production companies in the world. Anadarko’s upstream oil and gas business
explores for and produces natural gas, crude oil, condensate and NGLs. We
believe Anadarko, through its indirect economic interest in WES and in us
following this offering, will continue to be motivated to promote and support
the successful execution of WES’s business plan and to pursue projects that help
to enhance the value of WES’s business.

Approximately 75% and 76% of WES’s total natural gas gathering, transportation
and treating throughput (excluding equity investment throughput) during the year
ended December 31, 2011 and the nine months ended September 30, 2012,
respectively, was comprised of natural gas production owned or controlled by
Anadarko. Approximately 64% and 59% of WES’s total processing throughput
(excluding equity investment throughput) during the year ended December 31, 2011
and the nine months ended September 30, 2012, respectively, was attributable to
natural gas production owned or controlled by Anadarko. In addition, with
respect to WES’s Wattenberg, Dew/Pinnacle, Haley, Helper, Clawson and Hugoton
gathering systems, Anadarko has dedicated to WES pursuant to the terms of its
applicable gathering agreements all of the natural gas production it owns or
controls from (i) wells that are currently connected to such gathering systems,
and (ii) additional wells that are drilled within one mile of wells connected to
such gathering systems as those systems currently exist and as they are expanded
to connect additional wells in the future. As a result, this dedication will
continue to expand as long as additional wells are connected to these gathering
systems. In executing its growth strategy, which includes acquiring and
constructing additional midstream assets, WES utilizes the significant
experience of Anadarko’s management team.

Although we believe WES’s relationship with Anadarko provides it with a
significant advantage in the midstream natural gas sector, it is also a source
of potential conflicts. For example, Anadarko is not restricted from competing
with WES. Given Anadarko’s significant indirect economic interest in WES and in
us, we believe it will be in Anadarko’s best interest for it to transfer
additional assets to WES over time. However, Anadarko continually evaluates
acquisitions and divestitures and may elect to acquire, construct or dispose of
midstream assets in the future without offering WES the opportunity to acquire,
construct or participate in the ownership of those assets. Anadarko is under 
no contractual obligation to offer any such opportunities to WES, nor is WES 
obligated to participate in any such opportunities. We cannot state with any 
certainty which, if any, opportunities to acquire additional assets from 
Anadarko may be made available to WES or if WES will elect, or will have the 
ability, to pursue any such opportunities.      

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Our principal executive offices are located at 1201 Lake Robbins Drive, The 
Woodlands, Texas 77380-1046, and our telephone number is (832) 636-6000. Our 
website will be located at www.westerngas.com.