Hess Midstream Partners Q4 Earnings Call Highlights

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• Integration and coordination with Chevron has helped the company optimize midstream and upstream investments to avoid overbuilding

  80% confidence

• Tariff rates across most systems are higher in 2026 than in 2025

  80% confidence

• The company's gross adjusted EBITDA margin in the fourth quarter held at approximately 83%, above its 75% target, reflecting continued strong operating leverage

  80% confidence

• Chevron recently reiterated a target of 200,000 barrels per day plateau production in the Bakken

  80% confidence

• Improving weather should help activity and production recovery

  80% confidence

• The company expects 2027 and 2028 capex to be about $75 million, if not lower

  80% confidence

• First-quarter 2026 volumes are expected to be lower across the system due to continued severe winter weather in January and into early February, along with normal contingencies for the balance of the winter period

  80% confidence

• Approximately 95% of 2026 revenues are covered by minimum volume commitments (MVCs), providing significant revenue protection on a full-year basis

  80% confidence

• The $150 million 2026 outlook includes about $25 million to complete compression and gathering pipeline buildout, with the remainder tied to gathering system well connects and maintenance

  80% confidence

• The company expects lower volumes in the first half of the year relative to the second half

  80% confidence

• Full-year 2025 adjusted EBITDA increased about 9% from 2024

  80% confidence

• Fourth-quarter volumes were generally flat year-over-year but declined versus the third quarter due to severe weather during December

  80% confidence

• The company continues to target a gross adjusted EBITDA margin of approximately 75% in 2026

  80% confidence

• Adjusted free cash flow in 2026 is expected to be $850 million to $900 million, representing 12% growth over 2025 at the midpoint

  80% confidence

• The company continues to expect third-party volumes to average about 10% across oil and gas, though quarter-to-quarter variability can occur

  80% confidence

• The company's system is substantially built

  80% confidence

• Systems representing about 85% of revenues are fixed-fee with annual inflation escalators capped at 3%, while terminaling, water gathering, and a gas gathering subsystem representing about 15% of revenues reset through an annual rate redetermination process through 2033

  80% confidence

• The quarter-to-quarter decline in net income and adjusted EBITDA was primarily due to lower revenues driven by severe winter weather and slow recovery through December, as well as lower interruptible third-party volumes and annual maintenance at LM4

  80% confidence

• The company expects to generate adjusted free cash flow of $850 million to $900 million in 2026

  80% confidence

• Adjusted free cash flow in the first quarter of 2026 is expected to increase relative to the fourth quarter of 2025 because first-quarter capital spending is projected to be lower

  80% confidence

• The company expects excess adjusted free cash flow of approximately $210 million after funding its targeted 5% annual distribution growth, which it plans to use for incremental shareholder returns and debt repayment

  80% confidence

• The company is funding incremental shareholder returns from free cash flow after distributions rather than leveraged buybacks

  80% confidence

• The company's guidance through 2028 implies about $1 billion of financial flexibility to continue returning capital to shareholders and paying down debt

  80% confidence

• Longer laterals discussed by Chevron can reduce Hess Midstream's well-connect capital needs by delivering similar volumes with fewer wells

  80% confidence

• The company finished 2025 with record operational execution and completed major multiyear projects on time and on budget

  80% confidence

• The company reiterated its longer-term framework calling for 5% annualized net income and adjusted EBITDA growth and approximately 10% annualized adjusted free cash flow growth through 2028

  80% confidence

• The company's guidance and outlook are consistent with Chevron's optimized development program

  80% confidence

• 2026 capital spending is expected to be approximately $150 million, a roughly 40% reduction versus 2025

  80% confidence

• Capital spending is expected to decline further in 2027 and 2028 to less than $75 million per year

  80% confidence

• Full-year 2026 guidance for net income is $650 million to $700 million and adjusted EBITDA is $1,225 million to $1,275 million, approximately flat at the midpoint compared with 2025

  80% confidence