Hess Midstream reports higher Q3 income, after Chevron buys Hess

Hess Midstream LP

25/10/2023 13:54

By Stephanie Kelly
       NEW YORK, Oct 25 (Reuters) - Hess Midstream LP  HESM.N 
on Wednesday reported a rise in third quarter net income versus
the year earlier period, with the announcement coming just days
after Chevron  CVX.N  agreed to buy Hess Corp.  HES.N      
    Hess Midstream, which owns oil and gas assets primarily
located in the Bakken and Three Forks Shale plays in North
Dakota, reported income of $164.8 million for the July-September
period, up from $159.4 million in the third quarter of 2022. 
    Hess Midstream expects Chevron to acquire Hess Corp's 37.8%
ownership in it, the company said in an earnings release. 
    In the latest of a series of blockbuster U.S. oil
combinations, Chevron agreed to buy Hess for $53 billion in
stock to gain a bigger U.S. oil footprint and a stake in rival
Exxon Mobil's  XOM.N  massive Guyana discoveries. 
    Hess Midstream's contract structure remains in place, the
company added. 
    As part of its annual nomination process for long-term
commercial contracts, Hess Midstream plans to set its minimum
volume commitment contracts and rates, which are expected to be 
based on Hess's current four-rig play in the Bakken. 
    The company will release both in January 2024, consistent
with prior practice, it said.
    John Gatling, President of Hess Midstream, said in the
release that the company had raised its operational and
financial guidance for the second time this year. Hess Midstream
continues to target at least 5% annual distribution growth
through 2025, the company said.
    Third quarter terminal volumes increased nearly 20% versus
the previous quarter, while a gas processing volume of 386
million cubic feet per day was the company's highest quarterly
average to date, Gatling added.
    Throughput volumes increased 9% from a year earlier for gas
gathering and gas processing due to higher production and higher
gas capture, while throughput volumes increased 4% for crude oil
gathering and 17% for terminaling.
    Construction has been completed at one of two new compressor
stations and remains on schedule at the other, the company said,
with both expected online by year-end as planned.
    Gatling said the company's fourth quarter gas, oil and water
volumes are expected to be relatively stable from the third
quarter, reflecting winter weather contingencies.
    Revenue and other income in the third quarter was $363.1
million, compared with $334.8 million a year earlier, primarily
due to higher physical volumes and tariff rates.
    The company canceled an earnings call scheduled for
Wednesday in light of the Chevron/Hess deal.

 (Reporting by Stephanie Kelly; Editing by Kirsten Donovan)
 ((Stephanie.Kelly@thomsonreuters.com; 646-737-4649; Reuters
Messaging: stephanie.kelly.thomsonreuters.com@reuters.net))