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- Completed annual tariff rate redetermination process and established minimum volume commitments (\u201cMVCs\u201d) for 2025 that imply approximately 10% annualized growth in throughput volumes across gas, oil and water systems from 2023 to 2025.<\/i><\/b><\/li>\n
- Hess Midstream LP expects $600 – $640 million of Net Income and $990 – $1,030 million of Adjusted EBITDA1<\/sup> in 2023 followed by at least 10% per year expected growth in Net Income and Adjusted EBITDA in each of 2024 and 2025, supported by growth in gas processing and gathering throughput volumes that represent approximately 75% of total affiliate revenues, excluding passthrough revenues.<\/i><\/b><\/li>\n
- Hess Midstream LP expects capital expenditures of approximately $225 million in 2023 and expects capital expenditures in 2024 and 2025 to be stable with 2023 levels.<\/i><\/b><\/li>\n
- Adjusted Free Cash Flow1<\/sup> is expected to grow by greater than 10% on an annualized basis in both 2024 and 2025, more than sufficient to fully fund targeted growing distributions. \u00a0<\/i><\/b><\/li>\n
- Hess Midstream LP is extending its annual distribution per share growth target of 5% through 2025 with expected annual distribution coverage of at least 1.4x.<\/i><\/b><\/li>\n
- Hess Midstream LP continues to prioritize financial strength with a long-term leverage target of 3x Adjusted EBITDA.<\/i><\/b><\/li>\n
- Hess Midstream LP expects to generate greater than $1 billion of financial flexibility through 2025 for capital allocation, including potential for incremental shareholder returns beyond targeted distribution growth, funded by excess Adjusted Free Cash Flow beyond targeted distribution growth and leverage capacity with leverage of below 2.5x Adjusted EBITDA expected by the end of 2025.<\/i><\/b><\/li>\n<\/ul>\n
HOUSTON–(BUSINESS WIRE<\/a>)–
\nHess Midstream LP (NYSE: HESM) (\u201cHess Midstream\u201d) today provided 2023 financial and operational guidance and expectations for 2024 and 2025.\n<\/p>\n\u201cHess Midstream is well-positioned, generating growing Adjusted EBITDA, Adjusted Free Cash Flow and distributions, underpinned by expected production growth in the Bakken,\u201d said John Gatling, President and Chief Operating Officer of Hess Midstream. “With our robust balance sheet, unique contract structure, and strong cash flow generation, we have flexibility to deliver ongoing and significant return of capital to our shareholders.\u201d<\/i><\/p>\n
Full Year 2023 Guidance
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<\/b>Hess Midstream’s financial guidance incorporates the outcomes of the year-end tariff rate recalculation and nomination process conducted with Hess Corporation (\u201cHess\u201d) under Hess Midstream\u2019s commercial agreements with Hess.\n<\/p>\n\nHess Midstream expects full year 2023 net income of between $600 million and $640 million and Adjusted EBITDA of between $990 million and $1,030 million. Gross Adjusted EBITDA Margin2<\/sup> is targeted to be approximately 75% in 2023. Hess Midstream expects full year 2023 Distributable Cash Flow2<\/sup> to range between $815 million and $855 million, resulting in a distribution coverage ratio of approximately 1.5x.\n<\/p>\n
\nIn 2023, Hess Midstream expects to generate Adjusted Free Cash Flow of between $605 million and $645 million and approximately $60 million after funding distributions that are targeted to grow 5% per annum on a distribution per share basis.\n<\/p>\n
\nIn 2023, full year gas gathering volumes are anticipated to average 365 to 375 million cubic feet (“MMcf”) of natural gas per day and gas processing volumes are expected to average 350 to 360 MMcf of natural gas per day, reflecting Hess\u2019 announced four-rig program in the Bakken.\n<\/p>\n
\nCrude oil gathering volumes are anticipated to average 95 to 105 thousand barrels (“MBbl”) per day of crude oil in 2023, and crude oil terminaling volumes are expected to average 105 to 115 MBbl of crude oil per day.\n<\/p>\n
\nWater gathering volumes are expected to average 85 to 95 MBbl of water per day for full year 2023.\n<\/p>\n
Full Year 2023 Capital Guidance
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<\/b>Hess Midstream expects 2023 capital expenditures of approximately $225 million, focused on expansion of gas compression capacity and gathering system well connects. Approximately $210 million is allocated to expansion capital expenditures, with an estimated $15 million allocated to maintenance capital expenditures.\n<\/p>\n\nApproximately $100 million of the 2023 capital budget is allocated to gas compression, with activities focused on the completion of two new greenfield compressor stations and associated pipeline infrastructure, which are expected to provide, in aggregate, an additional 100 MMcf per day of gas compression capacity when brought online, further enhancing gas capture capability and supporting Hess\u2019 development in the basin. Approximately $110 million is allocated to gathering system well connects to service Hess and third\u2011party customers and focused optimizations of our existing system.\n<\/p>\n
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(1)<\/sup> Adjusted EBITDA and Adjusted Free Cash Flow are non\u2011GAAP measures. Definitions and reconciliations of these non\u2011GAAP measures to GAAP reporting measures appear in the following pages of this release.
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(2)<\/sup> Gross Adjusted EBITDA Margin and Distributable Cash Flow are non\u2011GAAP measures. Definitions and reconciliations, as applicable, of these non\u2011GAAP measures to GAAP reporting measures appear in the following pages of this release.\n<\/p>\n\nFull year 2023 guidance is summarized below:\n<\/p>\n
- Hess Midstream LP expects $600 – $640 million of Net Income and $990 – $1,030 million of Adjusted EBITDA1<\/sup> in 2023 followed by at least 10% per year expected growth in Net Income and Adjusted EBITDA in each of 2024 and 2025, supported by growth in gas processing and gathering throughput volumes that represent approximately 75% of total affiliate revenues, excluding passthrough revenues.<\/i><\/b><\/li>\n
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