Hess Midstream Cuts Outlook As Chevron Scales Back Bakken Drilling

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].