Hess Midstream LP(US:HESM)2020-10-28 19:05Financial Data and Key Metrics Changes - The company raised its full year 2020 adjusted EBITDA guidance to a range of $725 million to $735 million, representing a 33% growth year-over-year at the midpoint [9][24] - Net income for the third quarter was $116 million, compared to $108 million for the second quarter [28] - Adjusted EBITDA for the third quarter was $182 million, exceeding the top end of guidance by approximately 10% [31] Business Line Data and Key Metrics Changes - Gas processing volumes averaged 296 million cubic feet per day, and crude terminaling volumes were 141,000 barrels of oil per day, both approximately flat compared to the second quarter [11] - Water gathering volumes averaged 78,000 barrels of water per day in the third quarter, an 18% increase compared to the second quarter [11] - The company expects gas gathering volumes to average 315 million to 320 million cubic feet per day for the full year 2020, an increase of 8% at the midpoint compared to previous guidance [15] Market Data and Key Metrics Changes - Hess Corporation's Bakken production averaged 198,000 barrels of oil equivalent per day, a 21% increase from the year-ago quarter [12] - The company anticipates maintaining approximately 75% EBITDA margin for 2020, consistent with historical margins [24] Company Strategy and Development Direction - The company is focused on expanding its strategic footprint in the Bakken while evaluating Gulf of Mexico assets for potential acquisition [41][43] - The capital program for 2020 remains unchanged, with full year expansion capital expected to be $250 million [17] - The company emphasizes a disciplined approach to managing costs and optimizing infrastructure to support growth [80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong operational and financial performance despite macro challenges, with a commitment to safety during the pandemic [20] - The company expects another year of double-digit adjusted EBITDA growth in 2021, driven primarily by a rate reset and contractual inflation escalators [26][91] Other Important Information - The company plans to complete the expansion of the Tioga Gas Plant by the end of 2020, which will create significant new opportunities for gas capture growth [20] - Maintenance capital and cash interest are projected to total approximately $100 million for the full year 2020 [25] Q&A Session Summary Question: M&A interest in Gulf of Mexico assets - Management indicated a focus on strategic acquisitions that integrate well into their system, with Gulf of Mexico assets being attractive due to similar contract structures with Hess [41][43] Question: Timing of the Tioga Gas Plant turnaround - Management confirmed that construction will wrap up by the end of the year, with the turnaround planned for 2021, dependent on the COVID-19 situation [45][46] Question: Hess production outlook and rig count - Management expects Hess to maintain production flat with one rig, with a focus on sustaining production levels into 2023 [51][52] Question: Free cash flow and buyback options - Management confirmed the ability to buy back shares from Hess and GIP, while also exploring growth opportunities in Gulf of Mexico and Bakken [61][63] Question: Gas capture and processing volumes - Management noted significant improvements in gas capture due to infrastructure investments, with expectations for continued optimization and increased volumes [80][84]