Financial Data and Key Metrics Changes - For Q1 2025, net income was $161 million, down from $172 million in Q4 2024. Adjusted EBITDA decreased to $292 million from $298 million in the previous quarter, primarily due to lower volumes and revenues, partially offset by lower costs and annual rate increases due to inflation [12][13] - Total revenues, excluding pass-through revenues, decreased by approximately $13 million, driven by lower throughput volumes from severe winter weather [12] Business Line Data and Key Metrics Changes - Throughput volumes averaged 424 million cubic feet per day for gas processing, 125,000 barrels per day for crude terminaling, and 126,000 barrels per day for water gathering, reflecting a decrease compared to Q4 2024 due to lower production from Hess [6][12] - Processing revenues decreased by approximately $7 million, while gathering revenues decreased by approximately $6 million [12] 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, representing a 9% increase at the midpoint compared to Q1 [6][12] 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. The capital program includes completion of two new compressor stations and starting civil construction on the Capa gas plant, with total capital expenditures expected to be approximately $300 million for 2025 [9][12] - The company aims to generate sustainable cash flow and create opportunities to return additional capital to shareholders, with a targeted annual distribution growth of at least 5% through 2027 [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in throughput volumes following severe winter weather, indicating a strong performance in March and a positive trajectory into Q2 [43] - The company highlighted its ability to maintain stability and visibility even during volatile periods, supported by contracts with no direct commodity price exposure and a low leverage ratio of approximately 3.1 times adjusted EBITDA [22][11] Other Important Information - The company has returned $1.95 billion to shareholders through accretive repurchases since the beginning of 2021, with a total shareholder return yield among the highest in the midstream sector [10] - Adjusted free cash flow for Q1 2025 was approximately $191 million, with expectations for excess adjusted free cash flow of approximately $135 million after fully funding targeted growing distributions for the year [13] Q&A Session Summary Question: Bakken outlook amidst macroeconomic volatility - Management noted that activity levels remain consistent, with Hess reaffirming plans to run four rigs for the rest of the year, supported by established MVCs through 2027 [20][21] Question: Volumes in excess of MVCs - Management indicated that MVCs are set at approximately 80% of nomination, with expectations for long-term growth in both Hess and third-party volumes [26] Question: Rig count and potential reductions - Management expressed confidence in maintaining the four rig count, emphasizing a focus on long-term supply-demand dynamics despite short-term volatility [31][32] Question: Buybacks and secondaries - Management clarified that there are no specific plans for secondaries, and they expect to continue multiple repurchases per year, maintaining financial flexibility [36][38] Question: Gas processing volumes recovery - Management reported a strong recovery in processing volumes following weather challenges, with optimism for meeting annual guidance [43] Question: Capital allocation and leverage - Management explained that the $1.25 billion of financial flexibility is driven by both leverage capacity and excess cash flow, with plans to maintain a leverage ratio below 2.5 times by the end of 2026 [58]

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]