Hess Midstream LP Announces Accretive \$60 Million Securities Repurchase: What Investors Need to Know

Summary of Key Points

• Repurchase Announcement: Hess Midstream LP (NYSE: HESM) has executed a definitive agreement to repurchase \$60 million of securities, including Class B units from its sponsor (an affiliate of Chevron) and Class A shares from the public.
• Transaction Breakdown:
  • \$18 million repurchase of Class B units from Chevron.
  • \$42 million accelerated share repurchase (ASR) of Class A shares from the public, facilitated by JPMorgan Chase Bank.
• Board Approval: The unit repurchase terms were unanimously approved by both the Board of Directors and the conflicts committee, composed solely of independent directors.
• Financial Strategy: The transactions are part of Hess Midstream’s ongoing capital return and financial flexibility strategy, which anticipates approximately \$1 billion of flexibility through 2028 for incremental shareholder returns and debt repayment.
• Impact on Ownership: Upon completion of the Class B unit repurchase, public ownership will rise to approximately 62.2%, while Chevron’s stake will decrease to about 37.8% (prior to any ASR repurchase completion).
• Funding: Both transactions are expected to be funded via Hess Midstream’s existing revolving credit facility.
• Distribution Growth: The repurchased securities will be cancelled, expected to increase distributable cash flow per Class A share and provide capacity for incremental distribution growth above the annual target of at least 5% through 2028.

Detailed Transaction Information

Class B Unit Repurchase

• Hess Midstream Operations LP will repurchase 411 Class B units from Chevron at \$39.49 per unit (equivalent to the Class A share closing price on March 2, 2026).
• These units represent approximately 0.2% of the consolidated company.
• The transaction is anticipated to close on March 4, 2026.

Accelerated Share Repurchase (ASR) Agreement

• Hess Midstream has entered into an ASR agreement with JPMorgan Chase Bank, making an upfront payment of \$42 million.
• The company will receive an initial delivery of 744,492 Class A shares (about 70% of expected total ASR repurchases), based on the closing price of \$39.49 per share as of March 2, 2026.
• The final number of shares repurchased will depend on the average daily volume-weighted average price during the ASR period, subject to adjustments per the agreement’s terms.
• Final settlement is expected to occur within March 2026.

Implications for Shareholders

• Share Price Sensitivity: The cancellation of repurchased securities is expected to increase distributable cash flow per Class A share, supporting incremental distribution growth. This could positively impact share value and future dividend expectations.
• Capital Return Framework: The repurchases are consistent with Hess Midstream’s return of capital framework, reinforcing its commitment to shareholder returns and distribution growth.
• Financial Flexibility: Management forecasts up to \$1 billion in financial flexibility through 2028, providing opportunities for further repurchases and debt repayment.
• Ownership Changes: Chevron’s reduced stake and increased public ownership may affect future governance dynamics and investor sentiment.
• Funding Risks: Both transactions rely on the company’s revolving credit facility, making them subject to credit market conditions and facility terms.

Forward-Looking Statements and Risks

Hess Midstream has issued caution regarding forward-looking statements, highlighting risks such as Chevron’s ability to deliver nominated volumes, overall market conditions, compliance with regulations, potential disruptions from natural or human causes, and access to capital markets. Shareholders should be mindful of these uncertainties, as they may materially affect actual outcomes and share value.

About Hess Midstream

Hess Midstream is a fee-based, growth-oriented midstream company focused on oil, gas, and produced water handling, primarily in the Bakken and Three Forks Shale plays in North Dakota. The company provides services to Chevron, its subsidiaries, and third-party customers.

Investor Contact

For further information, investors may contact Jennifer Gordon at (212) 536-8244.

Disclaimer: This article is for informational purposes only. It is not investment advice. Investors are urged to review Hess Midstream’s filings with the Securities and Exchange Commission and consult their financial advisors before making any investment decisions. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations.

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