Hess Midstream LP Q1 FY2025 earnings call

• First quarter performance: Despite challenging weather, Hess Midstream delivered strong operating and financial performance with throughput volumes averaging 424 MMcf/d for gas processing, 125,000 bbl/d for crude terminaling, and 126,000 bbl/d for water gathering. • Hess upstream highlights: Hess reported first quarter net production for the Bakken averaged 195,000 boe/d and plans to continue a four-rig drilling program in 2025, expecting Bakken net production to be 210-215,000 boe/d in Q2. • Guidance reaffirmation: Reaffirming full-year 2025 financial and throughput guidance; second quarter expected to have volumes growth across oil and gas systems, partially offset by higher seasonal maintenance. • Capital program: Multi-year projects continue with focus on completing two new compressor stations and their associated gathering systems, and starting civil construction on the Capa Gas Plant; 2025 capital expenditures expected to total ~$300 million. • Financial strategy: Prioritizing return of capital to shareholders, having returned $1.95 billion since 2021 through repurchases, and increasing distribution per Class A share by ~57% since 2021; leverage of ~3.1 times adjusted EBITDA is low among peers.

In the first quarter, Hess Midstream's gas processing had a throughput volume average of 424 million cubic foot per day, crude terminaling averaged 125,000 barrels per day, and water gathering averaged 126,000 barrels per day. Total revenues, excluding pass-through revenues, decreased by approximately $13 million due to lower throughput volumes from severe winter weather. Processing revenues decreased by approximately $7 million, and gathering revenues decreased by approximately $6 million. The gross adjusted EBITDA margin for the first quarter was maintained at approximately 80%, above the 75% target.

• Reaffirming full-year 2025 guidance: Net income expected $715M-$765M, adjusted EBITDA $1,235M-$1,285M, capital expenditures ~$300 million, adjusted free cash flow $735M-$785M. • Second quarter 2025: Net income expected $170M-$180M, adjusted EBITDA $300M-$310M; CapEx expected to increase in Q2 and Q3 due to seasonally higher activity levels. • Distribution: Targeting at least 5% annual growth in distributions per Class A share, expecting excess adjusted free cash flow of ~$135 million after funding targeted distributions.

• Weather impact: Severe winter weather in January and February affected first quarter volumes. • Macroeconomic volatility: Uncertainty in basin rig count and oil prices could impact operations. • Commodity price exposure: Contracts have no direct commodity price exposure, but macroeconomic factors can influence throughput volumes.

Q: Elias Jossen from JPMorgan asked about Bakken outlook in light of macroeconomic volatility and sensitivities.

A: John Gatling said Hess is running a four-rig program, well above MVC levels, and third-party business is active; Jonathan Stein added Hess Midstream has stability with contracts, inflation escalators, and low leverage.

Q: Naomi Marfatia from UBS asked about basin rig count and buybacks.

A: John Gatling said Hess is looking past short-term volatility with a four-rig plan; Jonathan Stein said no plan for secondaries, expect multiple repurchases per year with over $1.25 billion financial flexibility through 2027.

Q: Praneeth Satish from Wells Fargo asked about gas processing volumes and oil price impact on rig count.

A: John Gatling said January/February weather affected Q1 volumes but March recovery is strong; John Gatling and Jonathan Stein discussed Hess's 4-rig plan and looking past short-term price volatility.

Q: Doug Irwin from Citi asked about gas growth in Bakken and capital allocation.

A: John Gatling said gas volumes expected to increase as wells mature; Jonathan Stein explained $1.25 billion flexibility is half from leverage capacity and half from excess cash flow.

Q: John Mackay from Goldman Sachs asked about 4-mile laterals and gas egress.

A: John Gatling said 4-mile laterals don't materially change CapEx intensity; John Gatling discussed gas egress with Bison system adding flexibility.