Hess Midstream LP(HESM) - 2022 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended June 30, 2022, increased to $313.4 million, up 6.0% from $294.8 million in the same period of 2021[15] - Net income attributable to Hess Midstream LP for the three months ended June 30, 2022, was $22.0 million, a 100.0% increase from $11.0 million in the same period of 2021[15] - Total revenues for the six months ended June 30, 2022, reached $625.8 million, an increase of 7.5% from $583.6 million in the same period of 2021[46] - Consolidated net income for Q2 2022 was $151.8 million, with net income attributable to Hess Midstream LP at $22.0 million, or $0.51 per Class A share[102] - Net income attributable to Hess Midstream LP for the six months ended June 30, 2022, was $38.9 million, compared to $30.6 million in the same period of 2021[134] Revenue Sources - For the three months ended June 30, 2022, total revenues from contracts with customers were $313.0 million, an increase of 6.4% compared to $294.8 million for the same period in 2021[46] - Oil and gas gathering services generated $148.4 million in revenue for the three months ended June 30, 2022, up from $133.4 million in 2021, reflecting a year-over-year increase of 11.5%[46] - Processing and storage services revenue increased to $116.5 million for the three months ended June 30, 2022, compared to $105.3 million in 2021, representing a growth of 10.4%[46] - The company recognized a total of $57.7 million in MVC shortfall fees for the three months ended June 30, 2022, significantly higher than $18.7 million in the same period of 2021[46] Expenses and Costs - Operating and maintenance expenses for the six months ended June 30, 2022, were $134.3 million, compared to $123.4 million for the same period in 2021, reflecting an increase of 8.0%[15] - Total costs and expenses in Q2 2022 were $118.1 million, an increase from $109.2 million in Q2 2021, primarily due to higher depreciation and operating expenses[99] - Interest expense increased by $14.5 million in Q2 2022, primarily due to the issuance of $750.0 million and $400.0 million fixed-rate senior notes[99] Cash Flow and Investments - Cash flows from operating activities for the six months ended June 30, 2022, were $403.8 million, compared to $390.0 million for the same period in 2021, indicating a growth of 3.8%[22] - Net cash used in investing activities for the six months ended June 30, 2022, was $(110.7) million, compared to $(52.7) million for the same period in 2021[22] - Capital expenditures for the six months ended June 30, 2022, totaled $108.8 million, compared to $69.5 million for the same period in 2021, indicating a 56.5% increase[81] Debt and Financing - Long-term debt increased to $2,937.4 million as of June 30, 2022, up 15.5% from $2,543.5 million as of December 31, 2021[12] - The Partnership issued $400.0 million of 5.500% fixed-rate senior unsecured notes due 2030 on April 8, 2022, to repay borrowings under its revolving credit facility[55] - As of June 30, 2022, the Partnership had total debt with a carrying value of $2,937.4 million, with a fair value of approximately $2,691.7 million[65] Shareholder Returns - The distribution per Class A share for the second quarter of 2022 was $0.5559, an increase from $0.5042 in the second quarter of 2021[66] - A quarterly cash distribution of $0.5559 per Class A share was declared for the quarter ended June 30, 2022, marking a 1.2% increase from the previous quarter[85] Operational Updates - The company has long-term fee-based agreements with Hess, with minimum volume commitments set at 80% of Hess' nominations over a three-year rolling basis[37] - The new compressor stations are expected to provide an additional 85 MMcf/d of installed capacity in 2022, with future expansion potential up to 130 MMcf/d[93] - The company is focused on expanding its infrastructure to support growing production in the Bakken region, which is expected to drive future revenue growth[192] Market and Strategic Outlook - The management provided guidance for the upcoming quarter, projecting a revenue increase of approximately 10% year-over-year[195] - The company is exploring strategic partnerships and potential acquisitions to further enhance its market position and service offerings[193] - Hess Midstream LP's leadership reiterated confidence in the long-term growth prospects of the midstream sector, driven by increasing energy demand[195]