Financial Data and Key Metrics Changes - For Q1 2025, net income was $161 million, down from $172 million in Q4 2024 [11] - Adjusted EBITDA for Q1 2025 was $292 million, compared to $298 million in Q4 2024, primarily due to lower volumes and revenues [11] - Total revenues, excluding pass-through revenues, decreased by approximately $13 million, driven by lower throughput volumes [11] - Adjusted free cash flow for Q1 2025 was approximately $191 million [12] Business Line Data and Key Metrics Changes - Gas processing throughput averaged 424 million cubic feet per day, crude terminaling averaged 125,000 barrels per day, and water gathering averaged 126,000 barrels per day [5] - Processing revenues decreased by approximately $7 million, and gathering revenues decreased by approximately $6 million due to lower throughput volumes [11] Market Data and Key Metrics Changes - Hess reported first quarter net production for the Bakken averaged 195,000 barrels of oil equivalent per day, with expectations for Q2 production to be in the range of 210,000 to 215,000 barrels, reflecting a 9% increase at the midpoint compared to Q1 [5] Company Strategy and Development Direction - The company remains focused on disciplined, low-risk investments to meet basin demand while maintaining reliable operations and strong financial performance [7] - Capital expenditures for 2025 are expected to total approximately $300 million, unchanged from previous guidance [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong recovery in volumes following challenging weather conditions in January and February [42] - The company anticipates adjusted EBITDA in the second half of 2025 to be approximately 11% higher than in the first half [13] Other Important Information - The company has returned $1.95 billion to shareholders since the beginning of 2021 through share repurchases and has increased distributions per Class A share by approximately 57% since 2021 [9] - The company expects to generate over $1.25 billion of financial flexibility through 2027 for incremental shareholder returns [10] Q&A Session Summary Question: Bakken outlook in light of ongoing macroeconomic volatility - Management noted that activity levels remain stable, with no changes in Hess's plans to run four rigs for the rest of the year, supported by established MVCs through 2027 [19][20] Question: Volumes in excess of MVCs and performance against MVCs - Management indicated that MVCs are set at approximately 80% of nomination, with third parties expected to represent about 10% of total volume [24] Question: Risk of rig reduction in the current macro environment - Management reaffirmed that they are looking past short-term volatility and expect consistent activity levels in the Bakken [30][31] Question: Buybacks and secondaries - Management clarified that there is no specific plan for secondaries and expects to continue multiple repurchases per year, with flexibility for $1.25 billion through 2027 [36][37] Question: Gas processing volumes recovery - Management reported a strong recovery in volumes and expressed optimism about meeting guidance for the year [42][43] Question: Impact of oil prices on rig count - Management stated that they are prepared for price volatility and expect to maintain the four-rig program, with improved well economics reducing breakeven costs [45][48] Question: Gas growth in the basin and egress - Management anticipates gas volumes to continue increasing over time, supported by existing export agreements [55][66]

Financial Performance - First quarter 2025 net income was $161.4 million, a slight decrease from $161.9 million in the first quarter of 2024, with net income attributable to Hess Midstream LP at $71.6 million or $0.65 per Class A share, up from $0.60 per Class A share in the prior year[1][6]. - Adjusted EBITDA for the first quarter of 2025 was $292.3 million, compared to $274.5 million in the first quarter of 2024, reflecting a year-over-year increase[7][17]. - Revenues for the first quarter of 2025 were $382.0 million, an increase of $26.4 million from $355.6 million in the prior-year quarter, primarily due to higher physical volumes[5][19]. - Total revenues for Q1 2025 were $382.0 million, an increase of 7.5% from $355.6 million in Q4 2024[27]. - Net income attributable to Hess Midstream LP for Q1 2025 was $71.6 million, compared to $44.6 million in Q1 2024, representing a 60.2% increase[27]. - Income from operations for Q1 2025 was $237.4 million, up from $222.0 million in Q4 2024, reflecting a growth of 6.9%[27]. - Affiliate services revenue in Q1 2025 was $374.3 million, compared to $349.4 million in Q4 2024, marking a 7.0% increase[27]. Operational Metrics - Throughput volumes increased by 8% for gas processing, 7% for oil terminaling, and 9% for water gathering compared to the first quarter of 2024, driven by higher production levels[4][9]. - Gas gathering throughput volumes increased to 431 Mcf of natural gas per day in Q1 2025, up from 404 Mcf per day in Q1 2024[33]. - Crude oil gathering volumes rose to 117 bopd in Q1 2025, compared to 106 bopd in Q1 2024[33]. - The company reported an increase in gas processing volumes to 424 Mcf of natural gas per day in Q1 2025, compared to 393 Mcf per day in Q1 2024[33]. - Crude terminals throughput was 125 bopd in Q1 2025, slightly up from 117 bopd in Q1 2024[33]. Expenses and Cash Flow - Capital expenditures for the first quarter of 2025 totaled $50.1 million, up from $35.2 million in the prior-year quarter, mainly due to the expansion of gas compression and pipeline infrastructure[10][17]. - Interest expense for the first quarter of 2025 was $56.4 million, an increase from $48.5 million in the prior-year quarter, primarily due to new debt issuances[5][17]. - Adjusted Free Cash Flow for the first quarter of 2025 was $190.7 million, slightly down from $192.9 million in the first quarter of 2024[7][17]. - Operating and maintenance expenses for Q1 2025 were $85.6 million, up from $78.1 million in Q4 2024, indicating a rise of 9.6%[27]. - Interest expense for Q1 2025 was $56.4 million, compared to $48.5 million in Q4 2024, an increase of 16.3%[27]. - Operating and maintenance expenses totaled $92.7 million in Q4 2024, with depreciation expenses at $51.3 million[31]. - The company experienced a net interest expense of $52.2 million in Q4 2024, impacting overall profitability[31]. Guidance and Future Outlook - Hess Midstream reaffirmed its full year 2025 guidance, projecting net income between $715 million and $765 million, Adjusted EBITDA between $1,235 million and $1,285 million, and capital expenditures of $300 million[12][20]. - The company anticipates continued growth in revenues and profitability, driven by strategic investments and market expansion[23]. - Hess Midstream LP is actively pursuing opportunities for organic growth and potential acquisitions to enhance its service offerings[23]. - The company is closely monitoring the impact of global economic conditions and regulatory changes on its operations and financial performance[23]. Debt and Financing - The company had a drawn balance of $128.0 million on its revolving credit facility as of March 31, 2025, following the issuance of $800.0 million in senior unsecured notes[8][12].

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Operational Segments - The company operates through three segments: gathering, processing and storage, and terminaling and export[33]. - The natural gas gathering system has a capacity of approximately 675 MMcf/d and includes 1,415 miles of pipelines, with an added compression capacity of 50 MMcf/d in 2024[39]. - The crude oil gathering system consists of approximately 590 miles of pipelines with a capacity of up to 290 MBbl/d[40]. - The Tioga Gas Plant has a total processing capacity of 400 MMcf/d, making it one of the largest in North Dakota, with a recent de-bottlenecking project completed in 2021[46][47]. - The LM4 gas processing plant has a processing capacity of 200 MMcf/d, with the company entitled to 100 MMcf/d of that capacity[50]. - The produced water gathering system has a combined permitted disposal capacity of 180 MBbl/d across 12 facilities[42]. - The Hawkeye Oil Facility has a total receipt capacity of approximately 75 MBbl/d and can be filled through the crude oil gathering system or truck unloading bays[41]. - The Ramberg Terminal Facility has a combined pipeline and truck receipt capability of approximately 200 MBbl/d, with 130 MBbl/d from the crude oil gathering system and 70 MBbl/d from truck unloading bays[58]. - The facility's redelivery capability is up to approximately 285 MBbl/d, supported by various pipeline connections[59]. - The Tioga Rail Terminal has a crude oil loading capacity of 140 MBbl/d and NGL loading capacity of 30 MBbl/d, with a total storage capacity of approximately 290 MBbls[60][61]. - The company owns 550 crude oil rail cars, with an effective working capacity of approximately 32 MBbl/d based on an average round-trip duration of 11 days[65][70]. - The Johnson's Corner Header System has a delivery capacity of approximately 100 MBbl/d and entered into service in 2017[66]. Revenue Sources - The company has long-term fee-based commercial agreements with Hess, ensuring stable cash flows and minimum volume commitments (MVCs) for crude oil gathering and terminaling services[72][78]. - For 2024, Hess's MVCs for crude oil gathering are set at 103 MBbl/d, increasing to 112 MBbl/d by 2027[78]. - In 2023, 98% of the company's revenues were derived from fee-based commercial agreements with Hess, with gas gathering and processing revenues comprising 77% of total affiliate revenues[80]. - The company expects to continue deriving substantially all revenues in the near term under multiple commercial agreements with Hess[132]. - Approximately 100% of the company's revenues for the years ended December 31, 2024, 2023, and 2022 were derived from fee-based commercial agreements with Hess[149]. Environmental Regulations and Compliance - The company is subject to extensive and frequently-changing federal, state, and local environmental regulations, which increase overall business costs, including capital expenditures and net income[81]. - Compliance with the Clean Air Act and other regulations may require significant future capital expenditures, particularly affecting the company's Bakken operations, which generate substantially all revenues[85]. - Legislative measures addressing greenhouse gas emissions are under discussion, with potential requirements for the company to report emissions and reduce greenhouse gas outputs, impacting operational costs[86]. - The Inflation Reduction Act of 2022 provides funding and incentives for low-carbon energy production and includes a methane emissions reduction program, which may impose additional costs on the company[86]. - The company may face substantial expenses related to the release of hydrocarbons or hazardous substances, including cleanup costs and claims for damages, which could adversely affect financial position and liquidity[82]. - The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes liability for hazardous substance releases, potentially leading to significant cleanup costs for the company[90]. - The Resource Conservation and Recovery Act (RCRA) regulates the disposal of hazardous wastes, and any changes in regulations could increase capital expenditures and operating expenses for the company[91]. - The company maintains Spill Prevention Control and Countermeasure (SPCC) plans and discharge permits under the Clean Water Act, which impose regulatory burdens on operations[95]. - The company acknowledges the potential for future regulatory changes that could impact operations and financial performance, particularly in light of evolving climate change legislation[88]. - The company is monitoring international climate agreements, such as the Paris Agreement, which may influence domestic regulatory frameworks and operational costs[87]. - The company has implemented emergency oil response plans and SPCC plans for facilities covered by OPA-90 to manage risks associated with hazardous substance releases[96]. - Regulatory requirements for wetlands may delay pipeline projects and increase costs, impacting project timelines and budgets[97]. - The company is subject to OSHA regulations and has established safety protocols to protect employee health and safety[98]. - The Endangered Species Act may impose additional costs or operational restrictions if new endangered species are identified in operational areas[99]. Financial Performance and Risks - The company may face reduced revenues if Hess' production volumes decrease due to competition or market conditions[117]. - The company is significantly dependent on Hess for its operations, and any adverse developments in Hess could materially affect its financial condition[162]. - The company may not be able to significantly increase third-party revenues due to competition and other factors, which could limit growth and extend dependence on Hess[144]. - Any decrease in the volumes of natural gas or crude oil handled could adversely affect the company's business and operating results[138]. - The company is subject to risks related to the Chevron merger with Hess, which could adversely affect its business and financial condition[128]. - The company has limited control over the level of drilling activity in its areas of operation, which may impact throughput levels and cash flows[139]. - The company may face challenges in attracting new unaffiliated customers due to its relationship with Hess and the preference for fee-based contracts[145]. - The company’s ability to service its indebtedness will depend on future financial performance, which may be affected by economic conditions and other factors beyond its control[176]. - The company’s credit facilities contain various operating and financial restrictions that could limit its ability to finance future operations or capital needs[172]. - The company may incur significant costs and liabilities due to pipeline integrity management program testing and related repairs, with compliance costs not expected to materially affect overall financial results[190]. - The maximum administrative civil penalties for violations of pipeline safety laws will increase to $272,926 per violation per day, effective December 28, 2023[193]. - The company’s operations may be adversely affected by geopolitical conflicts, such as the ongoing war between Russia and Ukraine, impacting commodity prices and demand for midstream services[168]. - The company may experience increased obligations related to produced water facilities, potentially raising operating costs and impacting financial performance[216]. Corporate Governance and Structure - The company holds a 47.7% controlling interest in the Partnership, while public limited partners hold a 47.3% voting interest[35]. - The partnership agreement requires the distribution of all available cash to shareholders, potentially limiting the company's growth and acquisition capabilities[225]. - The general partner has the authority to conduct the company's business without shareholder approval, including decisions on asset purchases and sales[223]. - Shareholders have very limited voting rights and cannot remove the general partner without its consent, which may affect the trading price of Class A Shares[232]. - The general partner and its affiliates may compete with the company and are not obligated to present business opportunities to it, potentially impacting operational results[230]. - The partnership agreement eliminates the fiduciary duties of the general partner to shareholders, replacing them with contractual standards[231]. - The company may incur additional costs if the exclusive forum provision in the partnership agreement is found unenforceable, affecting financial condition and cash distributions[226]. - The waiver of the right to a jury trial may limit shareholders' ability to pursue claims, potentially resulting in less favorable outcomes[227]. - The partnership agreement does not restrict the issuance of additional shares, which could increase the risk of maintaining or increasing per share distribution levels[225]. Strategic Initiatives and Future Outlook - The company aims to expand its business by capitalizing on organic growth from Hess and third parties in the Bakken region[34]. - The company is pursuing strategic relationships with third-party producers to maximize utilization rates in the Bakken region[80]. - Future acquisitions are critical for growth, but the company may face challenges such as decreased divestitures of midstream assets and competition for attractive acquisition candidates[179]. - The company recognizes the growing importance of ESG practices and may face pressure from stakeholders to adopt more aggressive climate-related goals, which could impact operational costs[213]. - The company is involved in the Global Methane Pledge, committing to reduce methane emissions by at least 30% from 2020 levels by 2030, reflecting its alignment with international climate goals[209]. - The company intends to make a minimum quarterly distribution of at least $0.30 per Class A Share, equating to $1.20 annually, contingent on generating approximately $65.4 million in available cash per quarter[219]. - The company must handle fluctuations in cash generation based on volumes of crude oil, natural gas, NGLs, and produced water processed, as well as competition in the midstream energy market[219].

Financial Data and Key Metrics Changes - For full year 2024, the company reported a net income of $659 million and adjusted EBITDA of $1,136 million, representing a growth of approximately 12% from 2023 [14][18] - The adjusted EBITDA for Q4 was $298 million, an increase from $287 million in Q3, driven by higher throughput volumes [18][19] - The company anticipates adjusted EBITDA for 2025 to be in the range of $1,235 million to $1,285 million, reflecting an approximate 11% growth at the midpoint compared to 2024 [10][22] Business Line Data and Key Metrics Changes - Gas processing volumes averaged 447 million cubic feet per day in Q4, with full year 2024 averaging 420 million cubic feet per day [9][10] - Crude terminaling volumes averaged 127,000 barrels of oil per day in Q4, with a full year average of 123,000 barrels per day [9][10] - Water gathering volumes averaged 130,000 barrels of water per day in Q4, with a full year average of 125,000 barrels per day [9][10] Market Data and Key Metrics Changes - Bakken net production averaged 208,000 barrels of oil equivalent per day in Q4, with a full year average of 204,000 barrels per day, marking a 12% year-over-year increase [7][8] - The company expects gas volumes to grow by more than 25% from 2024 through 2027, driven by Hess' planned development activity and increasing third-party volumes [6][10] Company Strategy and Development Direction - The company plans to maintain annual capital expenditures in the range of approximately $250 million to $300 million through 2027, focusing on disciplined, low-cost investments to meet growing basin demand [12][24] - A new gas processing plant with a capacity of 125 million cubic feet per day is set to begin construction in 2025, expected to support throughput growth through at least the end of the decade [10][12] - The company aims to generate sustainable cash flow and return additional capital to shareholders, with a targeted distribution growth of at least 5% annually through 2027 [16][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory supported by Hess production and third-party opportunities, with a disciplined approach to capital allocation [35][36] - The company anticipates a strong recovery in volumes following severe winter weather impacts in Q1 2025, with expectations for significant growth in EBITDA throughout the year [57][58] - Management highlighted the importance of maintaining a strong balance sheet while prioritizing shareholder returns through unit repurchases and distribution increases [16][25] Other Important Information - The company has returned $1.95 billion to shareholders since 2021 through accretive repurchases, with a distribution per Class A share growth of approximately 55% since 2021 [16][18] - The gross adjusted EBITDA margin for Q4 was maintained at approximately 80%, above the 75% target, indicating strong operating leverage [18] Q&A Session Summary Question: Multi-year growth outlook and EBITDA growth potential - Management explained that the MVCs provide visibility to the volumes underpinning growth, with gas processing expected to drive significant revenue [27][29][30] Question: Long-term outlook in Bakken and potential for M&A - Management confirmed no plans to expand outside of Bakken, focusing on organic growth supported by Hess production and potential third-party volumes [34][35][36] Question: Capital expenditures and future growth CapEx - Management indicated that the increase in CapEx is driven by activity phasing and efficiency improvements, with expectations for a step down in CapEx post-2027 [41][44][45] Question: Capital allocation program and potential changes - Management reiterated confidence in the return on capital framework, emphasizing continued unit repurchases and distribution growth, while considering public participation in repurchases as ownership changes [48][50] Question: Use of leverage and financial flexibility - Management discussed the balance between leverage capacity and excess free cash flow, maintaining a focus on shareholder returns while exploring organic growth opportunities [53][55] Question: Q1 guidance and weather impacts - Management acknowledged the unpredictability of Q1 weather but expressed confidence in recovery and growth in volumes for the remainder of the year [56][57][58]

Financial Performance - Fourth quarter 2024 net income was $172.1 million, an increase from $152.8 million in the fourth quarter of 2023, with net income attributable to Hess Midstream LP at $70.4 million, or $0.68 basic earnings per Class A share, compared to $0.55 in the prior year [3][8]. - Adjusted EBITDA for the fourth quarter of 2024 was $298.2 million, up from $262.9 million in the prior-year quarter, while Adjusted Free Cash Flow was $164.3 million, compared to $145.4 million in the fourth quarter of 2023 [9][19]. - Revenues for the fourth quarter of 2024 were $395.9 million, up from $356.5 million in the prior-year quarter, primarily due to higher physical volumes [7]. - Full year 2024 net income was $659.0 million, with full year Adjusted EBITDA at $1,136.1 million [9]. - Net income for the year ended December 31, 2024, was $659.0 million, a 8.5% increase from $607.7 million in 2023 [21]. - Adjusted EBITDA for the year ended December 31, 2024, was $1,136.1 million, compared to $1,017.1 million in 2023, marking a 11.7% increase [21]. - Total revenues for the year ended December 31, 2024, were $1,495.5 million, up from $1,348.6 million in 2023, representing a 10.9% growth [23]. Operational Metrics - Throughput volumes increased approximately 15% for gas gathering and gas processing, 11% for crude oil gathering, and 6% for terminaling compared to the fourth quarter of 2023, driven by higher production and gas capture [6][11]. - Gas gathering throughput volumes increased to 463 Mcf per day in Q4 2024, up 14.9% from 403 Mcf per day in Q4 2023 [38]. - Crude oil gathering volumes rose to 120 bopd in Q4 2024, a 11.1% increase from 108 bopd in Q4 2023 [38]. Capital Expenditures - Capital expenditures for the fourth quarter of 2024 totaled $84.3 million, an increase from $71.8 million in the prior-year quarter, mainly for the expansion of gas compression and related pipeline infrastructure [12]. - Capital expenditures for the year ended December 31, 2024, were $288.5 million, an increase from $245.7 million in 2023 [21]. Cash Flow and Debt - Net cash provided by operating activities for the fourth quarter of 2024 was $258.5 million, compared to $247.6 million in the prior-year quarter [19]. - The company reported net cash provided by operating activities of $940.3 million for the year ended December 31, 2024, compared to $866.4 million in 2023 [21]. - At December 31, 2024, cash and cash equivalents were $4.3 million, and total debt was approximately $3.5 billion, resulting in a leverage ratio of approximately 3.1x Adjusted EBITDA [9]. Shareholder Returns - The company completed a $100 million repurchase of Class B units in January 2025, which supported an increase in quarterly cash distribution to $0.7012 per Class A share for the fourth quarter of 2024 [6][13]. - Basic net income per Class A share for the year ended December 31, 2024, was $2.51, up from $2.11 in 2023 [32]. Expenses - Operating and maintenance expenses for Q4 2024 totaled $92.7 million, up from $88.0 million in Q4 2023, reflecting a 4.3% increase [34]. - Interest expense for Q4 2024 was $52.2 million, compared to $47.8 million in Q4 2023, indicating an increase of 9.2% [34]. - General and administrative expenses for Q4 2024 were $8.9 million, slightly up from $8.0 million in Q4 2023 [34]. Future Outlook - The company anticipates continued growth in throughput volumes and revenue for the upcoming quarters, driven by market expansion and operational efficiencies [34]. - The company plans to issue 2025 guidance in a separate release on January 29, 2025 [9].

Financial Performance - Net income for the nine months ended September 30, 2024, was $161.9 million, compared to $142.2 million for the same period in 2023, indicating a year-over-year increase of 13.0%[9] - Net income for 2024 was $486.9 million, an increase of 7.4% from $454.9 million in 2023[10] - Net income attributable to Hess Midstream LP for the three months ended September 30, 2024, was $58.6 million, compared to $35.3 million for the same period in 2023, indicating a significant increase of 66.5%[36] - Net income attributable to Hess Midstream LP for the nine months ended September 30, 2024, was $152.7 million, compared to $127.3 million in the prior year, representing a 19.4% increase[70] - Basic earnings per share (EPS) for the third quarter of 2024 was $0.63, up from $0.57 in the same quarter of 2023, representing a growth of 10.5%[7] - Basic earnings per share for the nine months ended September 30, 2024, was $1.82, compared to $1.56 for the same period in 2023[7] Revenue Growth - Total revenues for 2024 reached $1,099.6 million, compared to $992.1 million in 2023, marking an increase of 10.8%[21] - Total revenues for the nine months ended September 30, 2024, were $1,099.6 million, an increase from $1,079.3 million in the same period of 2023[70] - Total revenues from contracts with customers increased to $1,096.9 million for the nine months ended September 30, 2024, compared to $990.3 million for the same period in 2023, reflecting a growth of approximately 10.7%[21] - Total affiliate services revenue for 2024 was $1,079.3 million, an increase of 9.4% from $986.6 million in 2023[21] Asset and Liability Changes - Total assets increased to $4,146.9 million as of September 30, 2024, up from $3,789.5 million at December 31, 2023, representing a growth of 9.5%[5] - Total current assets increased to $154.2 million, up from $136.8 million, reflecting a growth of 12.1%[5] - Total liabilities increased to $3,705.1 million as of September 30, 2024, compared to $3,426.3 million at December 31, 2023, reflecting an increase of 8.1%[5] - Long-term debt increased to $3,469.8 million from $3,198.9 million, an increase of 8.5%[5] - The partnership's total debt as of September 30, 2024, was $3,489.8 million, with a fair value of approximately $3,497.3 million[35] Cash Flow and Investments - Net cash provided by operating activities increased to $681.8 million in 2024, up from $618.8 million in 2023, reflecting a growth of 10.3%[10] - Net cash provided by operating activities increased by $63.0 million for the nine months ended September 30, 2024, driven by a $107.5 million increase in revenues and other income[84] - Net cash used in investing activities rose by $51.0 million for the nine months ended September 30, 2024, primarily due to higher payments for property, plant, and equipment related to compression capacity and pipeline infrastructure expansion[84] - The company reported a net cash used in investing activities of $211.0 million in 2024, compared to $160.0 million in 2023, representing an increase of approximately 31.9%[10] Expenses and Costs - Operating and maintenance expenses for the three months ended September 30, 2024, were $24.9 million, compared to $22.7 million for the same period in 2023, representing an increase of 9.7%[25] - Operating and maintenance expenses increased by $13.7 million, primarily due to higher pass-through costs and maintenance activities[73] - Interest expense, net, increased by $6.0 million in the third quarter of 2024 compared to the same period in 2023, primarily due to the issuance of $600.0 million in fixed-rate senior unsecured notes[68] - Interest expense increased by $18.8 million in the first nine months of 2024, largely due to the issuance of $600.0 million in fixed-rate senior unsecured notes[76] Shareholder Distributions - The company distributed $0.6677 per share in the latest quarter, compared to $0.5851 per share in the same quarter of the previous year, indicating a 14.1% increase in distributions[9] - Total distributions to shareholders in the first quarter of 2024 amounted to $163.9 million, compared to $85.2 million in the same period of 2023, showing an increase of about 92.3%[10] - The partnership's quarterly distribution level per Class A Share increased in each of the first three quarters of 2024, significantly above the target of at least 5% growth in annual distributions per Class A Share through 2026[53] Equity and Ownership Changes - Public ownership increased from approximately 29.8% at December 31, 2023, to approximately 47.3% at September 30, 2024, on a consolidated basis[53] - The company completed an equity offering on May 19, 2023, raising approximately $333.4 million from the sale of 12,765,000 Class A Shares[14] - The company repurchased Class B units totaling $100.0 million in the first quarter of 2024, consistent with the repurchase amount in the same quarter of 2023[9] Tax and Deferred Tax Assets - Deferred tax assets rose significantly to $605.2 million from $324.4 million, an increase of 86.3%[5] - The company recognized an additional deferred tax asset of $329.8 million in 2024, up from $177.7 million in 2023[17] - Income tax expense increased by $7.5 million in the third quarter of 2024, driven by increased ownership of the Partnership following equity offerings and unit repurchase transactions[68]

Financial Data and Key Metrics Changes - For Q3 2024, net income was $165 million, an increase from $160 million in Q2 2024 [20] - Adjusted EBITDA for Q3 2024 was $287 million, up from $276 million in Q2 2024, primarily due to higher throughput volumes [20][22] - The gross adjusted EBITDA margin for Q3 was maintained at approximately 80%, above the 75% target [22] Business Line Data and Key Metrics Changes - Gas processing throughput averaged 419 million cubic feet per day, crude terminaling averaged 122,000 barrels per day, and water gathering averaged 128,000 barrels per day in Q3 2024 [7] - Gathering revenues increased by approximately $3 million, processing revenues increased by approximately $1 million, while terminaling revenues decreased by approximately $1 million compared to the previous quarter [20] Market Data and Key Metrics Changes - Hess reported Q3 net production for the Bakken averaged 206,000 barrels of oil equivalent per day, exceeding the guidance range of 200,000 to 205,000 barrels [9] - The company anticipates Bakken net production to be in the range of 200,000 to 205,000 barrels in Q4 2024, reflecting lower expected volumes due to wildfires [9] Company Strategy and Development Direction - The company is focused on executing its operational priorities and delivering growth strategies to drive sustainable cash flow generation [14] - Capital expenditures for 2024 are expected to be approximately $270 million, supporting Hess and third-party development in the Bakken [13] - The company plans to grow throughput by approximately 10% across its oil and gas systems in 2024 compared to 2023 [11] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the impact of October wildfires would primarily affect volume rather than costs, with a recovery expected [36] - The company expects approximately 10% annualized growth in oil and gas volumes through 2026, supporting greater than 10% growth in adjusted EBITDA [24] - Management remains optimistic about capturing additional third-party volumes while supporting Hess' production growth [32] Other Important Information - The company has returned $1.85 billion to shareholders through repurchases since 2021, with a distribution per Class A share growth of over 10% in 2024 year-to-date [15][18] - The company expects to generate greater than $1.25 billion of financial flexibility through 2026 for incremental shareholder returns [17] Q&A Session Summary Question: What is the sponsorship appetite given recent ownership changes? - Management indicated that secondary offerings are demand-driven and there is no preset pace for changes in ownership levels [27][30] Question: How does the company view long-term growth in Bakken? - The company maintains a long-term outlook of approximately 10% for third-party volumes and is positioned to capture additional opportunities [31][56] Question: What impact will wildfires have on costs and volumes? - The primary impact will be on volumes due to power outages, with a recovery expected [36] Question: Can you elaborate on the guidance for 2024? - Despite the wildfires, the company anticipates a 5% increase in EBITDA for Q4 compared to Q3, with various factors influencing the range [39] Question: What is the outlook for M&A activity? - The company continues to look for strategic bolt-on opportunities that strengthen its position in the basin while prioritizing its return of capital program [58][61]

Financial Performance - Net income for Q3 2024 was $164.7 million, with net income attributable to Hess Midstream LP at $58.6 million, or $0.63 per Class A share, compared to $0.57 per Class A share in Q3 2023[1][7] - Adjusted EBITDA for Q3 2024 was $286.9 million, representing an increase from $269.7 million in Q3 2023[1][22] - Total revenues for the third quarter of 2024 reached $378.5 million, an increase from $363.1 million in the same quarter of 2023[28] - Net income attributable to Hess Midstream LP for the third quarter of 2024 was $58.6 million, compared to $35.3 million in the third quarter of 2023, reflecting a growth of 66%[28] - The company reported total revenues of $1,099.6 million for the nine months ended September 30, 2024, up from $992.1 million in the same period of 2023, indicating a year-over-year increase of approximately 11%[31] - The basic net income per Class A share for the third quarter of 2024 was $0.63, compared to $0.57 in the same quarter of 2023, reflecting an increase of approximately 10.5%[28] - The company reported a net income of $164.7 million for Q3 2024, compared to $164.8 million in Q3 2023, indicating a marginal decrease[33] Cash Distribution and Guidance - Quarterly cash distribution was increased to $0.6846 per Class A share, reflecting a $0.0169 increase from Q2 2024, supported by excess Adjusted Free Cash Flow[3][14] - Hess Midstream expects Q4 2024 net income of $170 - $185 million and Adjusted EBITDA of $295 - $310 million, indicating a projected 5% increase in Adjusted EBITDA compared to Q3 2024[4][15] - The company anticipates adjusted free cash flow for the fourth quarter to be between $180 million and $195 million, with an annual guidance of $670 million to $685 million[24] - Net income for the fourth quarter is projected to be between $170 million and $185 million, with an annual guidance of $655 million to $670 million[24] - Adjusted EBITDA for the fourth quarter is expected to range from $295 million to $310 million, with an annual guidance of $1,135 million to $1,150 million[24] Operational Metrics - Throughput volumes increased by 9% for gas gathering and processing compared to Q3 2023, driven by higher production and gas capture[4][12] - Gas gathering throughput averaged 442 Mcf per day in Q3 2024, an increase from 404 Mcf per day in Q3 2023, marking a 9% growth[37] - Gas processing throughput averaged 419 Mcf per day in Q3 2024, up from 386 Mcf per day in Q3 2023, indicating an 8% increase[37] - Crude oil gathering throughput remained stable at 116 bopd in both Q3 2024 and Q3 2023[37] - Water gathering throughput improved to 128 blpd in Q3 2024, compared to 99 blpd in Q3 2023, reflecting a 29% increase[37] - NGL loading increased to 15 blpd in Q3 2024, up from 13 blpd in Q3 2023, representing a 15% increase[37] Expenses and Capital Expenditures - Capital expenditures for Q3 2024 totaled $96.3 million, up from $64.5 million in the prior-year quarter, primarily for gas compression and pipeline infrastructure expansion[13][22] - Operating and maintenance expenses for the nine months ended September 30, 2024, were $254.6 million, compared to $225.0 million in the same period of 2023, representing an increase of about 13%[31] - Operating and maintenance expenses for Q3 2024 totaled $89.0 million, compared to $89.4 million in Q3 2023, showing a slight decrease[33] - Interest expense for Q3 2024 was $51.8 million, an increase from $45.8 million in Q3 2023, mainly due to new debt issuance[10][22] - Interest expense for the third quarter of 2024 was $51.8 million, up from $45.8 million in the same quarter of 2023[28] - Interest expense for Q3 2024 was $51.8 million, consistent with $45.8 million in Q3 2023, reflecting stable financing costs[33] Future Outlook and Strategy - The company reaffirms its full-year 2024 throughput guidance, anticipating approximately 10% annualized growth in gas throughput volumes from 2024 through 2026[5][17] - Hess Midstream targets at least 5% annual distribution growth per Class A share through 2026, with a long-term leverage target of 3x Adjusted EBITDA[6][17] - The company anticipates generating over $1.25 billion of financial flexibility through 2026 for potential shareholder returns, including unit repurchases[6][17] - The company is currently evaluating future growth strategies, including potential mergers and acquisitions, as indicated in their forward-looking statements[26]