Hess Midstream LP Class A Share representing a limited partner Interest (HESM)

Hess Midstream reported third-quarter 2026 net income of $179.1 million on 30 October, against $175.5 million a year earlier 1.

Revenues and other income were $410.1 million, down from $420.9 million, mainly because throughput volumes were lower, partly offset by higher tariff rates 1.

A tariff is the fee the company charges for each barrel, cubic foot or other unit it moves for a customer 4.

The deal announced on 6 October has Hess Midstream acquire the DJ Basin oil and gas gathering assets of its parent Chevron and take over the interests that let Chevron control it 23.

In return Hess Midstream pays $200 million in cash plus the closing working capital of the acquired business, and Chevron receives lower and longer Bakken contracts 2.

Chevron said the revised agreements are expected to cut its Bakken unit midstream costs by approximately 50 percent 6.

The agreement has Hess Midstream cancel the interests Chevron contributes, about 37.9 percent of the company on a consolidated basis, and the company expects its outstanding shares to fall by nearly 40 percent at closing 24.

Chief executive Jonathan Stein said the company expects the deal to close by the end of the year 1.

Closing depends among other things on the end of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 2.

Hess Midstream traces back to Hess Infrastructure Partners, formed in 2015 as a 50/50 joint venture between Hess and Global Infrastructure Partners (GIP), an infrastructure investor 4.

On 10 April 2017 the business went public as a master limited partnership, after its parent contributed a 20% controlling economic interest in each of three groups of assets 4.

The revenue engine is a set of long-term contracts with Hess, now Chevron, that took effect on 1 January 2014 4. Each pays a fee per barrel, cubic foot or other unit moved, so revenue follows volumes, not oil prices 4.

Chevron has to deliver minimum volumes set at 80% of its own nominations, and pays a shortfall fee if it falls short 4. Fees carry an inflation escalator capped at 3% a year 4.

On 16 December 2019 the partnership restructured into an Up-C structure, in which the public owns Class A shares of a new company while the sponsors keep exchangeable units 4. The Class A shares began trading on the New York Stock Exchange on 17 December 2019 4.

Revenue grew each year after that as Bakken volumes rose and the company built more compression, the equipment that pushes gas through pipelines 4. Total revenues were $1,348.6 million in 2023, $1,495.5 million in 2024 and $1,621.3 million in 2025 4.

Gas gathering volumes show the climb: 381 million cubic feet a day in 2023, 437 in 2024 and 458 in 2025 4.

In 2025 gathering revenue rose $71.5 million, of which $23.7 million came from higher tariff rates and $12.2 million from higher gas gathering volumes 4.

The ownership above the company changed twice in 2025 4. On 30 May GIP sold all of its interests, and on 18 July Hess and Chevron completed their merger, making Chevron the parent 4.

The company repurchased Class B units, the exchangeable units held by its sponsors, in three 2025 purchases costing about $100.0 million, $190.0 million and $30.0 million 4. All three were funded with borrowings under its revolving credit facility 4.

On 24 July 2025 S&P Global Ratings gave the partnership an investment grade rating of BBB-, which let some restrictive loan covenants fall away 4.

The company funded growth with debt 4. It issued $600.0 million of 6.500% senior unsecured notes in May 2024 and $800.0 million of 5.875% notes in February 2025 4.

What it does and who pays

Hess Midstream owns pipes, plants and terminals in North Dakota's Bakken and Three Forks shale plays and charges fees to move and process oil, gas and water for Chevron and other customers 4.

Chevron accounted for approximately 97%, 98% and 99% of total revenues in 2025, 2024 and 2023, so the customer side of the business is effectively one company 4.

Third-party revenue was $43.6 million in 2025 against $24.1 million in 2024, about 2.7 percent of the total (computed) 4.

Gathering

Gathering collects oil, gas and produced water, the salty water that comes up with oil, from wells and carries it to processing and shipping points 4. It was the largest segment in 2025, with revenues of $870.6 million 4.

The gas system has about 1,430 miles of pipe and capacity of up to approximately 685 MMcf/d, the crude oil system about 615 miles and 290 MBbl/d, and water about 360 miles 4.

In 2025 it handled 458 million cubic feet of gas, 121 thousand barrels of crude oil and 131 thousand barrels of water a day 4. A new compressor station added about 50 MMcf/d of capacity in early 2026 4.

Processing and storage

The Tioga Gas Plant in Tioga, North Dakota has total processing capacity of 400 MMcf/d and separates gas liquids such as propane and butane 4. It was first built in 1954 4.

The company also owns 50 percent of the Little Missouri 4 plant with Targa Resources, which operates it 4. It has a propane storage cavern in Mentor, Minnesota that Chevron uses to smooth seasonal demand 4. The segment earned revenues of $620.0 million in 2025 4.

Terminaling and export

The Ramberg Terminal Facility in Williams County, North Dakota and the Tioga Rail Terminal load crude oil onto rail cars or inject it into the Dakota Access Pipeline 4. The rail terminal loads approximately 140 MBbl/d of crude oil 4.

The segment was the smallest, with revenues of $130.7 million in 2025 4.

The newest quarter

In the third quarter of 2026 oil terminaling volumes fell 10 percent, gas processing 8 percent and water gathering 4 percent against a year earlier, which the company put down to lower production 1.

Capital spending was $21.5 million against $79.8 million, a 73 percent drop, mainly because the gas compression expansion was finished in January 2026 1.

The people

Jonathan Stein became chief executive on 18 July 2025 after serving as chief financial officer since September 2019 4.

Michael Chadwick is chief financial officer, Michael Bast has been president and chief operating officer since 26 September 2025, and Kristi McCarthy, a Chevron lawyer, became chair of the board in December 2025 4.

The company has no employees of its own 4. About 195 full-time equivalents of affiliates, including Chevron, support its operations 4.

Rivals and problems

The company says it does not expect significant competition for Chevron's Bakken volumes because of its contracts and direct connections to Chevron's wells 4.

Its main exposure is Chevron's drilling 4. If Chevron's volumes fall it may pay only the minimum commitments, and Chevron is expected to move from three to two drilling rigs in the Bakken in December 2026 43.

Debt is large: total borrowings at 30 June 2026 included $3,100.0 million of fixed-rate senior unsecured notes, $256.0 million on the revolving credit facility and $347.5 million on a term loan 5.

The 10-K reports no material accrued liability for legal matters at the end of 2025 4.

The umbrella, in words

Chevron owns the general partner and, through Hess Investments North Dakota LLC, 449,000 Class A shares and all Class B shares, together about 37.9 percent of the company on a consolidated basis 4.

Hess Midstream LP holds 62.3 percent of the operating partnership, Hess Midstream Operations LP, with Chevron holding the remaining 37.7 percent economic interest 4.

It also owns 50 percent of the Little Missouri 4 gas plant joint venture with Targa Resources 4.

Exhibit 21.1 of the annual report lists its subsidiaries, all Delaware entities, among them Hess North Dakota Pipelines Operations LP, Hess Water Services LLC, Hess Tioga Gas Plant LLC and Hess Mentor Storage LLC 7.

The Mentor Storage Terminal sits on approximately 40 acres in Mentor, Minnesota 4.

Chevron has agreed to try to get a licence for the company to keep using the Hess name for nine months after closing, and the company expects to operate under a new name 23.

Hess Midstream and Chevron expect the transaction to close by year-end 2026, subject to customary closing conditions 3.

Either side can end the purchase agreement if closing has not happened by 6 October 2027, with an automatic six-month extension if certain regulatory approvals are missing 2.

At closing the Bakken contracts are to be rewritten 2. The main oil and gas agreements have a primary term to 31 December 2045, which Chevron may extend twice by five years 2.

Chevron's minimum revenue commitment is set at 80 percent of expected Bakken revenues from it through 2033, and annual inflation increases are capped at 3 percent 2.

For 2026 the company reiterated guidance of net income of $650 million to $675 million and adjusted EBITDA of $1,225 million to $1,250 million 1. It also guided to capital expenditures of $105 million and adjusted free cash flow of $910 million to $935 million 1. Adjusted EBITDA and adjusted free cash flow are the company's own non-GAAP measures of operating profit and cash left after interest, taxes and spending 1.

For 2027, assuming closing, it gave preliminary adjusted EBITDA of $850 million to $950 million, capital expenditures of $125 million and adjusted free cash flow of $525 million to $625 million 3.

It expects Bakken throughput to decline by approximately 5% in 2027 with reduced Chevron activity, and to issue updated 2027 guidance after the closing 3.

The company expects to keep its quarterly distribution in 2027 at the fourth-quarter 2026 amount and to target annual distribution growth of 5 percent per share in the fourth quarter of 2026 1. It expects 2027 leverage of 3.75x to 4.0x adjusted EBITDA 3.

At closing all Chevron-affiliated directors leave the board of the general partner, John Reddy is expected to be chair, and shareholders can elect directors from 2028 3.

Chevron is to provide transition services and seconded staff for up to two years after closing, while executive officers move onto the company's own payroll 2.