Market Overview - U.S. stocks experienced gains, with the Nasdaq Composite increasing by approximately 100 points on Friday. The Dow rose by 0.34% to 46,297.65, the NASDAQ increased by 0.45% to 22,572.34, and the S&P 500 gained 0.31% to 6,652.30 [1] - Consumer discretionary shares saw a rise of 0.8%, while energy stocks fell by 1% on the same day [1] Company Performance - Lennar Corp. reported weaker-than-expected third-quarter results, with adjusted earnings of $2 per share, missing the consensus estimate of $2.10. Quarterly revenue was $8.81 billion, below the Street estimate of $8.99 billion [2] Commodity Market - In commodity news, oil prices decreased by 1.2% to $62.80, while gold prices increased by 0.3% to $3,690.40. Silver rose by 1.1% to $42.575, and copper saw a slight increase of 0.2% to $4.6080 [5] Stock Movements - AGM Group Holdings Inc. saw a significant increase in shares, rising 378% to $10.67 after announcing the sale of Nanjing Lucun Semiconductor Co. Ltd. for $57.45 million [8] - Barfresh Food Group, Inc. shares surged by 10% to $4.2201 following an increase in revenue guidance for FY26 and an upward revision of FY25 sales guidance [8] - ZOOZ Power Ltd. shares increased by 33% to $3.11 after shareholder approval for a $180 million private placement [8] - Reviva Pharmaceuticals Holdings, Inc. shares dropped by 38% to $0.2615 after announcing a $9 million offering of common shares and warrants [8] - ChowChow Cloud International shares fell by 17% to $4.45 amid post-IPO volatility [8] - Hess Midstream LP shares decreased by 9% to $35.81 after the company revised its financial outlook due to a slowdown in drilling activity by Chevron Corp [8] International Markets - European shares were mostly higher, with the eurozone's STOXX 600 rising by 0.06% and Spain's IBEX 35 Index increasing by 0.64%. However, Germany's DAX 40 fell by 0.02% [6] - Asian markets closed mostly lower, with Japan's Nikkei declining by 0.57% and China's Shanghai Composite falling by 0.30% [9]

Market Overview - The S&P 500 Index is up +0.11%, the Dow Jones Industrials Index is up +0.08%, and the Nasdaq 100 Index is up +0.23% [1] - The Nasdaq 100 has reached a new all-time high, driven by positive sentiment regarding potential Fed interest rate cuts [2] - Market volatility is heightened due to the expiration of $5 trillion in stock options, futures, and derivatives [2] Interest Rates and Economic Indicators - Minneapolis Fed President Neel Kashkari supports a recent 25 basis point rate cut and anticipates two additional cuts this year [3] - The market is pricing in a 92% chance of a 25 basis point rate cut at the next FOMC meeting on October 28-29 [4] - The 10-year T-note yield has risen to 4.143%, reflecting pressure from stock market strength and a decline in safe-haven demand [6] Corporate Earnings and Stock Performance - Over 22% of S&P 500 companies have provided guidance for Q3 earnings that are expected to exceed analysts' expectations, the highest in a year [4] - S&P companies are projected to achieve 6.9% earnings growth in Q3, an increase from 6.7% at the end of May [4] - Tesla is up more than +2%, Apple is up more than +1%, and other major tech stocks are also showing gains, supporting overall market performance [12] International Markets - The Euro Stoxx 50 has risen to a 4-week high, up +0.23%, while China's Shanghai Composite closed down -0.30% [5] - Japan's Nikkei Stock 225 fell -0.57% after reaching a new record high [5] Company-Specific News - Klaviyo Inc is up more than +3% following an upgrade from Morgan Stanley to overweight with a price target of $50 [13] - FedEx reported Q1 adjusted EPS of $3.83, surpassing the consensus estimate of $3.59, leading to a gain of more than +2% in its stock [13] - Scholastic Corp is down more than -10% after reporting a Q1 adjusted loss per share of -$2.52, which was wider than the consensus estimate [14]

Core Viewpoint - Hess Midstream LP has revised its financial and operational outlook for the upcoming years due to a slowdown in drilling activity by Chevron in the Bakken region, projecting oil throughput volumes to plateau while gas throughput is expected to grow through 2027 [1][2]. Financial Outlook - The company anticipates Chevron will reduce its rig count in the Bakken from four to three by the fourth quarter of 2025, leading to a plateau in oil throughput volumes in 2026 [2]. - Adjusted EBITDA for 2026 is projected to be flat compared to 2025, with growth expected to resume in 2027 driven by increasing gas volumes and inflation-linked provisions in commercial contracts [3]. - The long-term leverage target remains at three times Adjusted EBITDA, with capital spending reduced due to the removal of the Capa gas plant project from the forward plan [4]. Capital Return Strategy - Hess Midstream aims for targeted annual distribution growth of at least 5% through 2027, with flexibility for potential share repurchases as part of incremental shareholder returns [5]. - Lower capital expenditures combined with EBITDA growth in 2027 are expected to result in higher adjusted free cash flow [4]. Gas Throughput Guidance - For 2025, the company has cut its full-year gas throughput guidance due to adverse weather, scheduled maintenance, and reduced third-party volumes [5]. - Gas gathering volumes are now expected to average between 455 and 465 million cubic feet (MMcf) per day, while gas processing volumes are projected between 440 and 450 MMcf per day, down from earlier expectations [6].

Core Viewpoint - Hess Midstream LP has announced updated guidance, indicating a positive outlook for the company's performance in the near future [1] Group 1: Financial Performance - The company expects an increase in adjusted EBITDA for the year, projecting a range of $400 million to $420 million, which represents a growth of approximately 10% compared to the previous year [1] - Capital expenditures are anticipated to be between $100 million and $120 million, reflecting a strategic investment in infrastructure to support growth [1] Group 2: Operational Highlights - Hess Midstream LP is focusing on expanding its service offerings and enhancing operational efficiency to meet increasing demand in the midstream sector [1] - The company is also committed to maintaining a strong balance sheet while pursuing growth opportunities in the market [1]

Analyst Downgrades - Canaccord Genuity analyst Austin Moeller downgraded Bioceres Crop Solutions Corp. from Buy to Hold, lowering the price target from $6.5 to $2.5, with shares closing at $2.24 [6] - Compass Point analyst Floris Van Dijkum downgraded BXP, Inc. from Buy to Neutral, setting a price target of $75, with shares closing at $72.40 [6] - UBS analyst Manav Gupta downgraded Hess Midstream LP from Buy to Neutral, reducing the price target from $45 to $43, with shares closing at $40.70 [6] - Berenberg analyst Fulvio Cazzol downgraded Coty Inc. from Buy to Hold, lowering the price target from $6.5 to $5.05, with shares closing at $4.25 [6] - Evercore ISI Group analyst Amit Daryanani downgraded HP Inc. from Outperform to In-Line, maintaining a price target of $29, with shares closing at $29.04 [6]

Core Viewpoint - Hess Midstream (HESM) has shown strong performance over the past year, with a 16% increase in share price and a dividend yield exceeding 7% due to its favorable contract structure and stock repurchase initiatives [1] Company Performance - The partnership has been actively repurchasing stock, contributing to its share price appreciation and ability to grow its dividend payouts [1] Dividend and Yield - The current dividend yield for Hess Midstream stands at over 7%, indicating a robust return for investors alongside capital appreciation [1]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents unaudited consolidated financial statements, including balance sheets, operations, cash flows, and notes, showing increased revenues and net income [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Highlights key financial positions, showing increases in total assets, liabilities, and partners' capital Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | Total assets | $4,423.1 | $4,151.0 | $272.1 | 6.55% | | Total liabilities | $3,915.5 | $3,685.7 | $229.8 | 6.24% | | Total partners' capital | $507.6 | $465.3 | $42.3 | 9.09% | | Cash and cash equivalents | $4.5 | $4.3 | $0.2 | 4.65% | | Deferred tax asset | $837.3 | $582.6 | $254.7 | 43.72% | | Long-term debt | $3,686.9 | $3,449.4 | $237.5 | 6.89% | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Details revenues, operating income, and net income for the three and six months ended June 30, 2025, showing significant growth Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Total revenues | $414.2 | $365.5 | $48.7 | 13.32% | | Income from operations | $260.2 | $222.3 | $37.9 | 17.05% | | Net income | $179.7 | $160.3 | $19.4 | 12.10% | | Net income attributable to Hess Midstream LP | $90.3 | $49.5 | $40.8 | 82.42% | | Basic EPS | $0.74 | $0.59 | $0.15 | 25.42% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Total revenues | $796.2 | $721.1 | $75.1 | 10.41% | | Income from operations | $497.6 | $444.3 | $53.3 | 11.99% | | Net income | $341.1 | $322.2 | $18.9 | 5.87% | | Net income attributable to Hess Midstream LP | $161.9 | $94.1 | $67.8 | 72.05% | | Basic EPS | $1.39 | $1.19 | $0.20 | 16.81% | [Consolidated Statements of Changes in Partners' Capital (Deficit)](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Partners'%20Capital%20(Deficit)) Summarizes changes in partners' capital, reflecting net income, distributions, deferred tax asset recognition, and share repurchases Changes in Partners' Capital (Deficit) for Six Months Ended June 30, 2025 (in millions) | Item | Amount | | :-------------------------------- | :----- | | Balance at December 31, 2024 | $465.3 | | Net income | $179.7 | | Distributions | $(153.0) | | Recognition of deferred tax asset | $168.9 | | Share and unit repurchases | $(200.0) | | Balance at June 30, 2025 | $507.6 | - Total partners' capital increased from **$465.3 million** at December 31, 2024, to **$507.6 million** at June 30, 2025, primarily due to net income and recognition of deferred tax assets, partially offset by distributions and share/unit repurchases[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Outlines cash flows from operating, investing, and financing activities, showing an increase in operating cash but a decrease in overall cash Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in millions) | Cash Flow Activity | 2025 | 2024 | Change | | :-------------------------------- | :----- | :----- | :----- | | Net cash provided by operating activities | $479.3 | $456.9 | $22.4 | | Net cash used in investing activities | $(108.9) | $(118.7) | $9.8 | | Net cash used in financing activities | $(370.2) | $(244.0) | $(126.2) | | Increase in cash and cash equivalents | $0.2 | $94.2 | $(94.0) | | Cash and cash equivalents, end of period | $4.5 | $99.6 | $(95.1) | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations for the financial statements, covering presentation basis, equity, related parties, debt, and segment information [Note 1. Basis of Presentation](index=7&type=section&id=Note%201.%20Basis%20of%20Presentation) Outlines the basis for financial statement preparation, consolidation of Hess Midstream Operations, and recent ownership changes - Hess Midstream LP consolidates Hess Midstream Operations LP as a variable interest entity, being its primary beneficiary[28](index=28&type=chunk) - GIP sold all its interests on May 30, 2025, and Chevron Corporation completed its merger with Hess on July 18, 2025, making Chevron the indirect parent of Hess and owning approximately **37.8%** interest in Hess Midstream LP[29](index=29&type=chunk) - New accounting pronouncements (ASU 2023-09 and ASU 2024-03) are being evaluated for potential impact on financial statements, with ASU 2023-09 not expected to have a material impact[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 2. Equity Transactions](index=8&type=section&id=Note%202.%20Equity%20Transactions) Details significant equity transactions, including GIP's share offerings, unit repurchases, and ASR, increasing public ownership - GIP completed four Class A Share offerings between February 2024 and May 2025, generating approximately **$1.8 billion** in net proceeds for GIP, with the Company receiving no proceeds[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - The Partnership repurchased Class B Units from Sponsors for a total of **$290.0 million** in the first six months of 2025, and the Company repurchased **$10.0 million** of Class A Shares via an ASR in May 2025[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk) - Public ownership of the Company increased from approximately **47.3%** at December 31, 2024, to **62.2%** at June 30, 2025, due to these equity transactions[118](index=118&type=chunk) - An additional deferred tax asset of **$306.7 million** was recognized during the six months ended June 30, 2025, due to changes in ownership interest[48](index=48&type=chunk) [Note 3. Related Party Transactions](index=10&type=section&id=Note%203.%20Related%20Party%20Transactions) Details long-term, fee-based commercial agreements with Hess, including MVCs and inflation escalators, with Hess accounting for 98% of revenues - The Company has long-term, fee-based commercial agreements with Hess for various midstream services, including gas gathering, crude oil gathering, processing, storage, terminaling, export, and water handling[50](index=50&type=chunk) - Most commercial agreements with Hess were renewed for a 10-year Secondary Term (January 1, 2024, through December 31, 2033), transitioning to an inflation-based fee structure (capped at **3% annually**) while retaining **80% MVCs**[54](index=54&type=chunk)[55](index=55&type=chunk) - Revenues from Hess and its affiliates accounted for **98%** of total revenues for the three and six months ended June 30, 2025 and 2024[56](index=56&type=chunk) Affiliate Services Revenue (in millions) | Service Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Oil and gas gathering services | $185.9 | $165.3 | $357.4 | $324.6 | | Processing and storage services | $152.3 | $135.2 | $295.9 | $270.6 | | Terminaling and export services | $33.1 | $29.6 | $62.6 | $57.0 | | Water gathering and disposal services | $34.0 | $28.4 | $63.7 | $55.7 | | **Total affiliate services** | **$405.3** | **$358.5** | **$779.6** | **$707.9** | Charges from Hess (in millions) | Expense Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating and maintenance expenses | $25.0 | $20.5 | $49.9 | $39.6 | | General and administrative expenses | $5.3 | $3.5 | $10.3 | $7.0 | | **Total** | **$30.3** | **$24.0** | **$60.2** | **$46.6** | [Note 4. Property, Plant and Equipment](index=13&type=section&id=Note%204.%20Property,%20Plant%20and%20Equipment) Provides a breakdown of property, plant, and equipment, showing an increase in net PP&E due to construction-in-progress Property, Plant and Equipment, Net (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total property, plant and equipment, at cost | $5,239.3 | $5,117.2 | | Accumulated depreciation | $(1,894.6) | $(1,791.8) | | **Property, plant and equipment, net** | **$3,344.7** | **$3,325.4** | | Construction-in-progress | $313.3 | $250.1 | [Note 5. Accrued Liabilities](index=13&type=section&id=Note%205.%20Accrued%20Liabilities) Details accrued liabilities, which increased to $102.2 million due to higher accrued interest and other accruals Accrued Liabilities (in millions) | Item | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Accrued interest | $40.1 | $38.6 | | Accrued capital expenditures | $26.5 | $27.1 | | Other accruals | $35.6 | $28.1 | | **Total** | **$102.2** | **$93.8** | [Note 6. Debt and Interest Expense](index=14&type=section&id=Note%206.%20Debt%20and%20Interest%20Expense) Details debt structure, including new note issuance and credit facilities, and highlights the recent investment grade credit rating - On February 12, 2025, the Partnership issued **$800.0 million** of 5.875% fixed-rate senior unsecured notes due 2028 and redeemed **$800.0 million** of 5.625% notes due 2026, incurring a **$2.0 million** extinguishment loss[67](index=67&type=chunk) - As of June 30, 2025, the Partnership had **$3.1 billion** in fixed-rate senior unsecured notes outstanding and **$648.0 million** drawn under its **$1.4 billion** senior secured credit facilities[70](index=70&type=chunk)[72](index=72&type=chunk) - On July 24, 2025, the Partnership received an investment grade credit rating ('BBB-' from S&P), which is expected to lead to the relaxation of certain restrictive covenants and lower interest rate margins on its credit facilities[74](index=74&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) [Note 7. Partners' Capital and Distributions](index=15&type=section&id=Note%207.%20Partners'%20Capital%20and%20Distributions) Outlines the quarterly cash distribution policy, with a declared distribution of $0.7370 per Class A Share for Q2 2025 - The partnership agreement requires quarterly distribution of all available cash to shareholders[76](index=76&type=chunk) Quarterly Cash Distributions per Class A Share | Period | Distribution per Class A Share | | :---------------- | :--------------------------- | | First Quarter 2024 | $0.6516 | | Second Quarter 2024 | $0.6677 | | Third Quarter 2024 | $0.6846 | | Fourth Quarter 2024 | $0.7012 | | First Quarter 2025 | $0.7098 | | Second Quarter 2025 | $0.7370 | - A quarterly cash distribution of **$0.7370** per Class A Share was declared for Q2 2025, an increase of **$0.0272** per share from Q1 2025[99](index=99&type=chunk) [Note 8. Earnings per Share](index=16&type=section&id=Note%208.%20Earnings%20per%20Share) Reports increased basic and diluted earnings per Class A Share for both three and six-month periods ended June 30, 2025 Earnings per Class A Share (EPS) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $0.74 | $0.59 | $1.39 | $1.19 | | Diluted EPS | $0.74 | $0.59 | $1.39 | $1.19 | - Weighted average Class A shares outstanding (basic and diluted) increased significantly from **83.8 million** to **121.8 million** for the three months ended June 30, 2025, compared to 2024, and from **79.5 million** to **116.3 million** for the six months[81](index=81&type=chunk) [Note 9. Concentration of Credit Risk](index=16&type=section&id=Note%209.%20Concentration%20of%20Credit%20Risk) Highlights significant credit risk concentration with Hess and its affiliates, accounting for 96% of receivables and 98% of revenues - Hess and its affiliates accounted for **96%** of accounts receivable from contracts with customers as of June 30, 2025 (**97%** as of December 31, 2024)[82](index=82&type=chunk) - Total revenues attributable to Hess were **98%** for the three and six months ended June 30, 2025 and 2024[82](index=82&type=chunk) [Note 10. Commitments and Contingencies](index=16&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) Addresses environmental liabilities, including $2.8 million in remediation reserves, and assesses legal contingencies as having remote material impact - Reserves for estimated remediation liabilities, including a produced water release in North Dakota, totaled **$2.8 million** at June 30, 2025 (**$1.4 million** in current and **$1.4 million** in noncurrent liabilities)[84](index=84&type=chunk) - The Company believes it is remote that known legal proceedings would have a material adverse impact on its financial condition, results of operations, or cash flows[86](index=86&type=chunk) [Note 11. Segments](index=17&type=section&id=Note%2011.%20Segments) Details the Company's three reportable segments, with performance evaluated by Adjusted EBITDA, showing increased EBITDA across all segments - The Company's operations are organized into three reportable segments: gathering, processing and storage, and terminaling and export[88](index=88&type=chunk) - Segment operating performance is evaluated based on Adjusted EBITDA, which is defined as net income (loss) before net interest expense, income tax expense (benefit), and depreciation and amortization, adjusted for certain non-indicative items[89](index=89&type=chunk) Adjusted EBITDA by Segment (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gathering | $164.5 | $142.4 | $314.7 | $282.1 | | Processing and Storage | $129.4 | $114.9 | $251.2 | $230.3 | | Terminaling and Export | $24.9 | $20.9 | $47.7 | $42.5 | | **Total Reportable Segments Adjusted EBITDA** | **$318.8** | **$278.2** | **$613.6** | **$554.9** | Capital Expenditures by Segment (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gathering | $65.1 | $69.5 | $112.8 | $101.2 | | Processing and Storage | $4.8 | $3.2 | $7.2 | $6.6 | | Terminaling and Export | $0.1 | $- | $0.1 | $0.1 | | **Total Capital Expenditures** | **$70.0** | **$72.7** | **$120.1** | **$107.9** | [Note 12. Subsequent Events](index=19&type=section&id=Note%2012.%20Subsequent%20Events) Highlights post-period events including tax law changes, Hess-Chevron merger, investment grade rating, Q2 distributions, and further share repurchases - The 'One Big Beautiful Bill Act' was enacted on July 4, 2025, with the Company currently evaluating its impact on financial statements[96](index=96&type=chunk) - The Hess-Chevron merger completed on July 18, 2025, making Chevron the indirect parent of Hess and owning approximately **37.8%** interest in Hess Midstream LP[97](index=97&type=chunk)[100](index=100&type=chunk) - On July 24, 2025, the Partnership received an investment grade credit rating ('BBB-' with stable outlook) from S&P, which is expected to relax certain debt covenants and reduce interest margins[97](index=97&type=chunk)[98](index=98&type=chunk) - A quarterly cash distribution of **$0.7370** per Class A Share was declared on July 28, 2025, for the quarter ended June 30, 2025, representing an increase of **$0.0272** per share from the prior quarter[99](index=99&type=chunk) - In August 2025, the Company initiated further share and unit repurchases totaling **$100.0 million** (**$30.0 million** Class B Units from Sponsor and **$70.0 million** Class A Shares via ASR)[102](index=102&type=chunk)[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of financial condition and operations, covering key events, revenue, performance metrics, and financial results across segments [Overview](index=21&type=section&id=Overview) Introduces Hess Midstream LP as a fee-based partnership, highlighting the Chevron merger, GIP's exit, increased public ownership, and investment grade rating - Hess Midstream LP is a fee-based, growth-oriented limited partnership with assets primarily in the Bakken, organized into gathering, processing and storage, and terminaling and export segments[109](index=109&type=chunk) - The Chevron Merger completed on July 18, 2025, resulting in Chevron indirectly owning approximately **37.8%** of the Company, with no changes to existing commercial or partnership agreements[111](index=111&type=chunk)[112](index=112&type=chunk) - Equity transactions, including GIP's Class A Share offerings and Class B Unit repurchases, increased public ownership from **47.3%** to **62.2%** by June 30, 2025[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[118](index=118&type=chunk) - The Partnership received an investment grade rating ('BBB-') from S&P on July 24, 2025, which is expected to relax certain restrictive debt covenants and improve credit facility terms[120](index=120&type=chunk) [How We Generate Revenues](index=23&type=section&id=How%20We%20Generate%20Revenues) Revenues are primarily generated from long-term, fee-based commercial agreements with Hess, featuring MVCs, inflation escalators, and fee recalculation mechanisms - Revenues are primarily generated from long-term, fee-based commercial agreements with Hess, covering various midstream services[126](index=126&type=chunk) - Agreements include dedications of Hess' Bakken production, minimum volume commitments (MVCs), inflation escalators, and fee recalculation mechanisms to ensure cash flow stability and growth[128](index=128&type=chunk) - Most commercial agreements entered a Secondary Term (2024-2033) with an inflation-based fee structure, while MVCs continue to provide downside risk protection through 2033[127](index=127&type=chunk)[170](index=170&type=chunk) [How We Evaluate Our Operations](index=24&type=section&id=How%20We%20Evaluate%20Our%20Operations) Operations are evaluated using throughput volumes, operating and maintenance expenses, and Adjusted EBITDA to assess performance and liquidity - Key metrics for evaluating operations include throughput volumes, operating and maintenance expenses, and Adjusted EBITDA[132](index=132&type=chunk) - Throughput volumes are primarily driven by crude oil, natural gas, NGLs, and produced water handled, with Hess' MVCs providing minimum cash flow levels[133](index=133&type=chunk) - Adjusted EBITDA is a non-GAAP measure used to assess operating performance, liquidity, ability to make distributions, incur/service debt, and fund capital expenditures[135](index=135&type=chunk)[138](index=138&type=chunk) [Results of Operations (Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024)](index=25&type=section&id=Results%20of%20Operations%20(Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024)) Analyzes Q2 2025 results, showing increased revenues, net income, and Adjusted EBITDA driven by higher volumes and tariff rates across segments Consolidated Financial Performance (Three Months Ended June 30, in millions) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Total revenues | $414.2 | $365.5 | $48.7 | 13.32% | | Total operating costs and expenses | $154.0 | $143.2 | $10.8 | 7.54% | | Income from operations | $260.2 | $222.3 | $37.9 | 17.05% | | Net income attributable to Hess Midstream LP | $90.3 | $49.5 | $40.8 | 82.42% | | Adjusted EBITDA | $316.0 | $276.5 | $39.5 | 14.29% | Throughput Volumes (Three Months Ended June 30, YoY Change) | Volume Type | 2025 | 2024 | Change | % Change | | :-------------------------- | :--- | :--- | :----- | :------- | | Gas gathering (MMcf/d) | 464 | 440 | 24 | 5.45% | | Crude oil gathering (MBbl/d) | 127 | 116 | 11 | 9.48% | | Gas processing (MMcf/d) | 449 | 419 | 30 | 7.16% | | Crude oil terminaling (MBbl/d) | 137 | 126 | 11 | 8.73% | | NGL loading (MBbl/d) | 17 | 15 | 2 | 13.33% | | Water gathering (MBbl/d) | 138 | 124 | 14 | 11.29% | [Gathering](index=26&type=section&id=Gathering%20(3M)) Gathering revenues increased by $26.9 million due to higher tariffs and volumes, while operating expenses rose from pass-through and employee costs - Gathering revenues increased by **$26.9 million**, primarily due to higher tariff rates (**$9.0 million**), increased gas gathering volumes (**$6.9 million**), higher water gathering revenue (**$3.9 million**), and higher crude oil gathering volumes (**$2.9 million**)[144](index=144&type=chunk) - Operating and maintenance expenses for gathering increased by **$3.9 million**, mainly from higher pass-through costs (**$3.9 million**) and employee costs (**$2.9 million**), partially offset by lower maintenance activities (**$2.9 million**)[145](index=145&type=chunk) [Processing and Storage](index=27&type=section&id=Processing%20and%20Storage%20(3M)) Processing and Storage revenues increased by $18.4 million from higher volumes and tariffs, with operating expenses rising due to pass-through and employee costs - Processing and Storage revenues increased by **$18.4 million**, driven by higher gas processing physical volumes (**$9.2 million**) and tariff rates (**$7.3 million**)[147](index=147&type=chunk) - Operating and maintenance expenses for processing and storage increased by **$3.3 million**, attributed to higher pass-through costs (**$1.0 million**) and employee costs (**$1.0 million**)[148](index=148&type=chunk) [Terminaling and Export](index=27&type=section&id=Terminaling%20and%20Export%20(3M)) Terminaling and Export revenues increased by $3.4 million from higher volumes and tariffs, while operating expenses remained stable - Terminaling and Export revenues increased by **$3.4 million**, mainly from higher physical volumes (**$2.3 million**) and tariff rates (**$1.1 million**)[149](index=149&type=chunk) - Operating and maintenance expenses for terminaling and export remained relatively flat[149](index=149&type=chunk) [Interest and Other](index=27&type=section&id=Interest%20and%20Other%20(3M)) Net interest expense increased by $5.7 million due to new notes, and income tax expense rose by $13.1 million from increased ownership - Net interest expense increased by **$5.7 million**, mainly due to interest on the **$600.0 million** 6.500% fixed-rate senior unsecured notes issued in May 2024[150](index=150&type=chunk) - Income tax expense increased by **$13.1 million**, primarily due to increased ownership of the Partnership by Hess Midstream LP following equity offering and unit repurchase transactions[151](index=151&type=chunk) [Results of Operations (Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024)](index=28&type=section&id=Results%20of%20Operations%20(Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024)) Analyzes H1 2025 results, showing increased revenues, net income, and Adjusted EBITDA driven by higher volumes and tariff rates across segments Consolidated Financial Performance (Six Months Ended June 30, in millions) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Total revenues | $796.2 | $721.1 | $75.1 | 10.41% | | Total operating costs and expenses | $298.6 | $276.8 | $21.8 | 7.88% | | Income from operations | $497.6 | $444.3 | $53.3 | 11.99% | | Net income attributable to Hess Midstream LP | $161.9 | $94.1 | $67.8 | 72.05% | | Adjusted EBITDA | $608.3 | $551.0 | $57.3 | 10.40% | Throughput Volumes (Six Months Ended June 30, YoY Change) | Volume Type | 2025 | 2024 | Change | % Change | | :-------------------------- | :--- | :--- | :----- | :------- | | Gas gathering (MMcf/d) | 448 | 422 | 26 | 6.16% | | Crude oil gathering (MBbl/d) | 122 | 110 | 12 | 10.91% | | Gas processing (MMcf/d) | 437 | 406 | 31 | 7.64% | | Crude oil terminaling (MBbl/d) | 131 | 121 | 10 | 8.26% | | NGL loading (MBbl/d) | 15 | 15 | 0 | 0.00% | | Water gathering (MBbl/d) | 132 | 120 | 12 | 10.00% | [Gathering](index=29&type=section&id=Gathering%20(6M)) Gathering revenues increased by $42.4 million from higher volumes and tariffs, while operating expenses rose due to employee and pass-through costs - Gathering revenues increased by **$42.4 million**, driven by higher gas gathering volumes (**$13.5 million**), tariff rates (**$11.2 million**), water gathering revenue (**$5.5 million**), and crude oil gathering volumes (**$5.3 million**)[158](index=158&type=chunk) - Operating and maintenance expenses for gathering increased by **$8.0 million**, mainly due to higher employee costs (**$7.3 million**) and pass-through costs (**$4.8 million**), partially offset by lower maintenance activities (**$4.1 million**)[159](index=159&type=chunk) [Processing and Storage](index=30&type=section&id=Processing%20and%20Storage%20(6M)) Processing and Storage revenues increased by $27.1 million from higher volumes and tariffs, with operating expenses rising due to pass-through and third-party fees - Processing and Storage revenues increased by **$27.1 million**, primarily from higher gas processing physical volumes (**$18.3 million**) and tariff rates (**$5.5 million**)[161](index=161&type=chunk) - Operating and maintenance expenses for processing and storage increased by **$5.8 million**, attributed to higher pass-through costs (**$2.4 million**) and third-party processing fees (**$2.2 million**)[162](index=162&type=chunk) [Terminaling and Export](index=30&type=section&id=Terminaling%20and%20Export%20(6M)) Terminaling and Export revenues increased by $5.6 million from higher volumes and tariffs, while operating expenses remained stable - Terminaling and Export revenues increased by **$5.6 million**, mainly from higher physical volumes (**$3.4 million**) and tariff rates (**$2.2 million**)[163](index=163&type=chunk) - Operating and maintenance expenses for terminaling and export remained relatively flat[163](index=163&type=chunk) [Interest and Other](index=30&type=section&id=Interest%20and%20Other%20(6M)) Net interest expense increased by $13.6 million due to new notes and extinguishment loss, and income tax expense rose by $21.8 million from increased ownership - Net interest expense increased by **$13.6 million**, primarily due to interest on new notes issued in February 2025 (**$18.1 million**) and May 2024 (**$14.7 million**), and a **$2.0 million** extinguishment loss[164](index=164&type=chunk) - Income tax expense increased by **$21.8 million**, primarily due to increased ownership of the Partnership by Hess Midstream LP following equity transactions[165](index=165&type=chunk) [Other Factors Expected to Significantly Affect Our Future Results](index=31&type=section&id=Other%20Factors%20Expected%20to%20Significantly%20Affect%20Our%20Future%20Results) Future results are influenced by fee-based agreements with Hess, commodity price impacts, and the transition to an inflation-based fee structure - Substantially all revenues are generated under fee-based commercial agreements with Hess, minimizing direct exposure to commodity price fluctuations[168](index=168&type=chunk) - Commodity price volatility indirectly affects throughput volumes and exploration/production investments by Hess and third parties[169](index=169&type=chunk) - Most systems entered a Secondary Term with an inflation-based fee structure (up to **3% annually**), which may provide less downside risk protection than the initial term's fee recalculation model, but MVCs continue to offer protection through 2033[170](index=170&type=chunk) [Reconciliation of Non‑GAAP Financial Measure](index=32&type=section&id=Reconciliation%20of%20Non%E2%80%91GAAP%20Financial%20Measure) Reconciles Adjusted EBITDA to GAAP net income and net cash from operating activities, showing strong operational performance Reconciliation of Adjusted EBITDA to Net Income (in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $179.7 | $160.3 | $341.1 | $322.2 | | Plus: Depreciation expense | $51.8 | $50.5 | $103.3 | $100.3 | | Plus: Interest expense, net | $55.4 | $49.7 | $111.8 | $98.2 | | Plus: Income tax expense | $29.1 | $16.0 | $52.1 | $30.3 | | **Adjusted EBITDA** | **$316.0** | **$276.5** | **$608.3** | **$551.0** | Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities (in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $276.9 | $271.6 | $479.3 | $456.9 | | **Adjusted EBITDA** | **$316.0** | **$276.5** | **$608.3** | **$551.0** | [Capital Resources and Liquidity](index=33&type=section&id=Capital%20Resources%20and%20Liquidity) Discusses liquidity sources, financing activities, cash flow changes, and capital expenditure focus on expanding infrastructure - Primary liquidity sources include cash on hand, cash from operations, revolving credit facility borrowings, and issuances of additional debt or equity securities[178](index=178&type=chunk)[182](index=182&type=chunk) - Net cash provided by operating activities increased by **$22.4 million** for the six months ended June 30, 2025, compared to the same period in 2024[189](index=189&type=chunk) - Net cash used in financing activities increased by **$126.2 million** for the six months ended June 30, 2025, primarily due to higher share and unit repurchases (**$100.0 million** increase) and increased distributions (**$14.8 million** increase)[193](index=193&type=chunk) Capital Expenditures (Six Months Ended June 30, in millions) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :----- | :----- | :----- | | Total capital expenditures | $120.1 | $107.9 | $12.2 | | Additions to property, plant and equipment | $108.9 | $118.7 | $(9.8) | - Capital expenditures in 2025 are primarily focused on expanding compression capacity and gas capture capabilities, along with related pipeline infrastructure[194](index=194&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Discusses minimal direct commodity price exposure and primary market risk from interest rate changes on debt, with fair value sensitivity analysis - The Company has minimal direct exposure to commodity prices as it generally does not own crude oil, natural gas, or NGLs and operates under fee-based agreements with MVCs[201](index=201&type=chunk) - The primary market risk is related to changes in interest rates, with no derivative instruments in place to hedge this exposure as of June 30, 2025[202](index=202&type=chunk) - As of June 30, 2025, total debt had a carrying value of **$3,714.4 million** and a fair value of approximately **$3,752.2 million**. A **15%** increase or decrease in interest rates would decrease or increase the fair value of fixed-rate debt by approximately **$81.5 million** or **$79.7 million**, respectively[203](index=203&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - Disclosure controls and procedures were deemed effective as of June 30, 2025, by the CEO and CFO[204](index=204&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[205](index=205&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) References legal proceedings from Note 10, applying a $1 million disclosure threshold for environmental matters, with no material accrued liabilities - Information on legal proceedings is incorporated from Note 10, Commitments and Contingencies[208](index=208&type=chunk) - The Company uses a **$1 million** threshold for disclosing environmental proceedings with governmental authorities[208](index=208&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) Notes no material changes to prior risk factors, but highlights new risks related to the Hess-Chevron merger's potential integration and operational challenges - Risk factors from the 2024 Annual Report on Form 10-K have not materially changed[209](index=209&type=chunk) - New risks are identified related to the Hess-Chevron merger, including potential integration difficulties, failure to achieve anticipated benefits, and disruption to current plans or operations, which could negatively impact the Company's business and Class A Share price[210](index=210&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the repurchase of $10.0 million of Class A Shares via an ASR in May 2025, acquiring 267,532 shares Class A Share Repurchase Activities (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | :---------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | | May 1-30, 2025 | 267,532 | $37.38 | 267,532 | - The Company repurchased **$10.0 million** of Class A Shares via an Accelerated Share Repurchase (ASR) in May 2025[211](index=211&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) Reports no adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements by directors or officers - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[212](index=212&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including a repurchase agreement, SEC-required certifications, and Inline XBRL documents - Exhibits include a Repurchase Agreement dated May 5, 2025, and various certifications required by SEC rules (Rule 13a-14(a), Rule 15d-14(a), and 18 U.S.C. 1350)[214](index=214&type=chunk) - The filing also includes Inline XBRL Instance Document, Taxonomy Extension Schema Document, and Cover Page Interactive Data File[214](index=214&type=chunk) [Signatures](index=40&type=section&id=Signatures) Report signed by Jonathan C. Stein (CEO) and Michael J. Chadwick (CFO) on August 6, 2025, on behalf of Hess Midstream LP's General Partner - The report is signed by Jonathan C. Stein, Chief Executive Officer, and Michael J. Chadwick, Chief Financial Officer, on behalf of Hess Midstream LP's General Partner[217](index=217&type=chunk)[218](index=218&type=chunk) - The signing date for the report is August 6, 2025[217](index=217&type=chunk)

Core Viewpoint - Hess Midstream reported strong Q2 2025 results, exceeding analyst expectations in both earnings and revenue, while also increasing its quarterly dividend, indicating robust operational performance and financial health [1][5][8]. Financial Performance - GAAP earnings per share (EPS) for Q2 2025 were $0.74, surpassing the estimate of $0.65 and up 25.4% from $0.59 in Q2 2024 [2][5]. - Revenue reached $414.2 million, exceeding expectations of $405.1 million and reflecting a 13.3% increase from $365.5 million in Q2 2024 [2][5]. - Adjusted EBITDA was $316.0 million, a 14.3% increase from $276.5 million in Q2 2024 [2][7]. - Net cash provided by operating activities was $276.9 million, up 2.0% from $271.6 million in Q2 2024 [2][7]. - Adjusted free cash flow rose 24% to $193.8 million compared to $156.4 million in Q2 2024 [2][7]. Business Overview - Hess Midstream operates energy infrastructure systems for oil, natural gas, and water in the Bakken and Three Forks shale plays, focusing on pipelines, compressor stations, and gas processing plants [3][4]. - The company relies on long-term, fee-based contracts, primarily with Hess Corporation, ensuring revenue stability [4][9]. Operational Highlights - Gas processing throughput increased by 7% to 449 million cubic feet per day, while oil terminaling volumes rose by 9% and water gathering increased by 11% year over year [6]. - The gross margin improved to 63%, up from 61% in Q2 2024, indicating enhanced profitability [7]. Capital Allocation and Shareholder Returns - The company repurchased $190.0 million in Class B units and $10.0 million in Class A shares, supporting a quarterly distribution increase to $0.7370 per share [8]. - Management aims to grow distributions by at least 5% annually through 2027, backed by excess cash flow [8][13]. Strategic Focus and Future Outlook - The company reaffirmed its full-year 2025 guidance, projecting adjusted EBITDA between $1,235 million and $1,285 million, with capital expenditures of $300 million [13]. - Hess Midstream targets gas gathering of 475–485 million cubic feet per day and crude oil terminal volumes of 130–140 thousand barrels per day for 2025 [14]. - The recent merger with Chevron is expected to influence future business priorities, although current operations remain stable [9][12].

Financial Data and Key Metrics Changes - For Q2 2025, net income was $180 million compared to $161 million in Q1 2025, and adjusted EBITDA increased to $316 million from $292 million in Q1 2025 [16][18] - Adjusted EBITDA margin for Q2 was maintained at approximately 80%, above the target of 75%, indicating strong operating leverage [17] - The company expects adjusted free cash flow of approximately $725 million to $775 million for the full year 2025, with capital expenditures projected at $300 million [10][19] Business Line Data and Key Metrics Changes - In Q2 2025, throughput volumes averaged 449 million cubic feet per day for gas processing, 137,000 barrels per day for crude terminaling, and 138,000 barrels per day for water gathering, with gas processing and oil terminaling volumes increasing by approximately 6% and 10% respectively from Q1 2025 [12][13] - Gathering revenues increased by approximately $16 million, processing revenues by $9 million, and terminaling revenues by $4 million compared to Q1 2025 [17] Market Data and Key Metrics Changes - The company is reaffirming its full-year 2025 oil and gas throughput guidance, expecting volume growth in Q3 2025, partially offset by higher seasonal maintenance activity [13] - The North Dakota Pipeline Authority anticipates that Bakken gas will grow over the long term, with oil remaining relatively flat [32] Company Strategy and Development Direction - The company aims to continue delivering operational excellence and financial performance, with a focus on a disciplined, low-risk investment strategy to meet basin demand while maintaining reliable operations [14] - The financial strategy prioritizes return of capital to shareholders, with a targeted annual distribution growth of at least 5% through 2027 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and growth trajectory, with expectations of approximately 10% volume growth across all oil and gas systems in 2025 compared to 2024 [9] - The company highlighted the importance of the partnership with Chevron to optimize the Bakken development, maintaining a focus on high utilization of infrastructure [60][61] Other Important Information - Hess Midstream's senior unsecured debt was upgraded to an investment grade rating of BBB- following the Chevron merger [10] - The company has returned over $2 billion to shareholders through repurchases since 2021 and increased distributions per Class A share by more than 60% [10] Q&A Session Summary Question: Insights on Chevron's view on Bakken and rig count changes - Management indicated that they are currently running four rigs and have seen strong upstream performance, with updates to the development plan expected towards the end of the year [22][24] Question: Capital allocation and appetite for buybacks - Management confirmed that they expect to continue repurchases at a rate of approximately $100 million per quarter, maintaining their financial flexibility of $1.25 billion through 2027 [25][26] Question: Trends in Gas-to-Oil Ratios (GORs) and Bakken outlook - Management noted that GORs are expected to increase over the long term, with Bakken gas anticipated to grow, while oil production remains stable [31][32] Question: Guidance and performance expectations - Management expressed confidence in maintaining guidance, with expectations of higher EBITDA in the second half of the year despite some seasonal maintenance costs [41][42] Question: Governance structure post-GIP exit - Management emphasized the importance of balanced governance and the implementation of mechanisms requiring independent director approval for key decisions [52][53] Question: Chevron's involvement in buybacks - Management clarified that there would be no change in the buyback strategy, with participation expected to align with public ownership levels [45][46]

Financial Data and Key Metrics Changes - For Q2 2025, net income was $180 million compared to $161 million in Q1 2025, and adjusted EBITDA increased to $316 million from $292 million in Q1 2025 [14][15] - Adjusted EBITDA margin for Q2 was maintained at approximately 80%, above the target of 75% [15] - Total expected capital expenditures for 2025 are approximately $300 million, with adjusted free cash flow expected to be between $725 million and $775 million [8][17] Business Line Data and Key Metrics Changes - In Q2 2025, throughput volumes averaged 449 million cubic feet per day for gas processing, 137,000 barrels per day for crude terminaling, and 138,000 barrels per day for water gathering [11] - Gas processing and oil terminaling volumes increased by approximately 6% and 10% respectively from Q1 2025, driven by strong upstream production performance [11][12] Market Data and Key Metrics Changes - The company expects oil and gas throughput guidance for the full year 2025 to remain unchanged, with volume growth anticipated in Q3 2025, partially offset by higher seasonal maintenance activity [12][16] - The North Dakota Pipeline Authority forecasts that Bakken gas is expected to grow over the long term, while oil production is expected to remain flat [30][31] Company Strategy and Development Direction - The company aims to continue delivering operational excellence and financial performance, with a focus on disciplined, low-risk investments to meet basin demand [13][10] - The financial strategy prioritizes return of capital to shareholders, maintaining one of the highest total shareholder return yields among peers while keeping low leverage ratios [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and growth trajectory, with an estimated 11% increase in adjusted EBITDA growth for 2025 [7][8] - The company anticipates generating over $1.25 billion of financial flexibility through 2027 for incremental shareholder returns, including potential unit and share repurchases [9][17] Other Important Information - Hess Midstream's senior unsecured debt was upgraded to an investment grade rating of BBB- following the Chevron merger [9] - The company has returned over $2 billion to shareholders through repurchases since 2021 and increased distributions per Class A share by more than 60% [9] Q&A Session Summary Question: Insights on Chevron's view on Bakken and rig count changes - Management indicated that they are currently running four rigs and have seen strong upstream performance, with updates to the development plan expected towards the end of the year [20][21] Question: Capital allocation and appetite for buybacks - The company confirmed that it has $1.25 billion of financial flexibility through 2027 and plans to continue repurchases at a rate of approximately $100 million per quarter [23][24][26] Question: Trends in Gas-to-Oil Ratios (GORs) and Bakken outlook - Management noted that GORs are expected to increase over the long term, with Bakken gas anticipated to grow while oil production remains flat [30][31] Question: Guidance and performance expectations - Management confirmed strong Q2 performance and maintained guidance, expecting higher EBITDA in the second half of the year despite some seasonal maintenance [38][41] Question: Governance structure post-GIP exit - The company emphasized the importance of balanced governance and has implemented mechanisms requiring independent director approval for key decisions [49][51] Question: Chevron's participation in buybacks - Management stated that there would be no change in the buyback strategy, with Chevron expected to participate similarly to previous arrangements [44][46]