Financial Performance - Hess Midstream LP reported fourth-quarter 2025 earnings per share of $0.72, meeting analyst expectations, while revenue was $404.2 million, falling short of the forecast of $417.05 million [1] - The net income for the quarter totaled $168.0 million, with $93.3 million attributable to Hess Midstream LP [2] - Adjusted EBITDA reached $309.1 million, and adjusted free cash flow totaled $207.8 million, indicating resilient financial performance despite lower throughput volumes [2] Operational Metrics - Throughput volumes declined year over year across all segments: oil terminaling volumes decreased by 4%, gas processing by 1%, and water gathering by 5% [3] - The declines in throughput were primarily attributed to reduced production caused by severe winter weather [3] - Capital expenditures for the quarter totaled $47.6 million, down 44% from the prior-year period, reflecting the completion of gas compression expansion projects [3]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported a net income of approximately $685 million and adjusted EBITDA of $1,238 million, representing a growth of approximately 9% from 2024 [10] - In Q4 2025, net income was $168 million, down from approximately $176 million in Q3 2025, while adjusted EBITDA was $309 million compared to approximately $321 million in Q3 2025 [10][11] - The company expects adjusted free cash flow in Q1 2026 to increase relative to Q4 2025, with projected capital expenditures lower than in the previous quarter [12] Business Line Data and Key Metrics Changes - Gas processing volumes for 2025 averaged 445 million cubic feet per day, crude terminaling volumes averaged 129,000 barrels of oil per day, and water gathering volumes averaged 131,000 barrels of water per day [6] - In Q4 2025, gas processing volumes averaged 444 million cubic feet per day, crude terminaling volumes averaged 122,000 barrels of oil per day, and water gathering volumes averaged 124,000 barrels of water per day [5] Market Data and Key Metrics Changes - The company anticipates lower volumes across its systems in Q1 2026 due to severe winter weather, but expects growth in volumes throughout the rest of 2026 consistent with historical seasonal expectations [6][12] - Approximately 95% of the company's revenues are protected by minimum volume commitments (MVCs) for the full year 2026, providing a stable revenue base [7][13] Company Strategy and Development Direction - The company plans to reduce capital spending significantly, expecting to spend approximately $150 million in 2026, a 40% reduction from 2025, and further decrease to less than $75 million per year in 2027 and 2028 [4][14] - The strategy includes a targeted 5% distribution growth per Class A share through 2028, supported by significant free cash flow generation and debt repayment [5][9] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the severe winter weather impacted Q4 2025 performance but expects a recovery in production as weather conditions improve [40] - The company reiterated its long-term growth outlook, expecting approximately 10% annualized adjusted free cash flow growth through 2028, driven by gas volume growth and lower operating and capital expenditures [8][29] Other Important Information - The gross adjusted EBITDA margin for Q4 2025 was maintained at approximately 83%, above the target of 75%, indicating strong operating leverage [11] - The company had a drawn balance of $338 million on its revolving credit facility at year-end [12] Q&A Session Summary Question: Balance Sheet and Debt Repayment Strategy - Management confirmed plans to use a portion of free cash flow after distributions for debt repayment, expecting to naturally deliver below 3x leverage in the coming years as EBITDA grows [18][19] Question: Third-Party Outlook and Chevron's Production Target - Management indicated no change to the third-party outlook, expecting an average of 10% across oil and gas, and reaffirmed Chevron's target of 200,000 barrels of oil equivalent per day [21][23] Question: Growth Drivers and Cost-Cutting Impact - Management stated that growth in EBITDA is driven by inflation escalators and gas volume growth, with free cash flow growth supported by reduced capital expenditures [27][29] Question: Capital Expenditures Flexibility - Management expects capital expenditures to be lower than $150 million in 2026, with potential for further reductions in 2027 and 2028 [32][35] Question: Weather Impact on Production - Management noted that while severe weather has impacted production, they expect a recovery as conditions improve, with 95% of revenues protected by MVCs [40][41] Question: Long-Term Leverage Target - Management indicated there is no specific leverage target, but expects natural deleveraging as EBITDA grows and debt levels remain stable [43][44]

On a full-year basis, we are reiterating the volume guidance that we gave in December for the full year of 2026 and expect growth in volumes across our systems through the rest of the year consistent with historical seasonal volume expectations. With revenues that are approximately 95% protected by MVCs on a full-year basis, we anticipate net income and adjusted EBITDA to be higher through the rest of 2026 relative to our first quarter guidance.Crude terminaling volumes averaged 122,000 barrels of oil per d ...

Core Viewpoint - Energy Transfer's units have fallen below $17, resulting in a yield exceeding 8%, prompting consideration for investment in the high-yielding master limited partnership (MLP) [1] Group 1: Performance Overview - Energy Transfer's units have declined over 15% year-to-date, contrasting with a 16% rally in the S&P 500 [3] - The primary reason for Energy Transfer's underperformance is its slowing growth rate, with adjusted EBITDA growth expected to be slightly below the lower end of the $16.1 billion to $16.5 billion guidance range, representing less than 4% growth from the previous year [4][5] Group 2: Growth Factors - The company experienced robust growth from 2020 to 2024, with a 10% compound annual growth rate in adjusted EBITDA, driven by improving market conditions, accretive acquisitions, and organic expansion projects [4] - Energy Transfer has invested $4.6 billion in growth capital projects this year and plans an additional $5 billion investment in 2026, with several expansion projects recently completed and more set to enter commercial service next year [6] Group 3: Strategic Agreements and Future Projects - The company has secured new gas supply agreements to meet the rising power demand of AI data centers, including contracts with Oracle and Entergy, with flows expected to begin by the end of this year and continuing through 2026 [7] - Energy Transfer is advancing several large-scale projects, including the $5.3 billion Desert Southwest Expansion, expected to be completed by Q4 2029, and is nearing approval for the Dakota Access North Project and Lake Charles LNG Export Terminal [8] Group 4: Valuation Insights - Energy Transfer's unit price decline has resulted in a valuation of less than nine times EBITDA, the second-lowest among large-scale energy midstream companies, compared to an average of around 12 times EBITDA [9] - Despite the current valuation discount, Energy Transfer is in a strong financial position, with expectations for growth acceleration in 2026 and beyond as expansion projects come online [10] Group 5: Investment Consideration - The current lower valuation and higher distribution yield make Energy Transfer an attractive investment opportunity, particularly for investors willing to accept the Schedule K-1 Federal Tax Form [11]

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]

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]