Hess Midstream Partners Lp ((HESM)) has held its Q1 earnings call. Read on for the main highlights of the call.
Hess Midstream Partners LP: Resilience and Optimism in Earnings Call
The recent earnings call for Hess Midstream Partners LP painted a generally positive picture, highlighting the company’s resilience and strong performance despite adverse weather conditions. While the weather did impact throughput and financial metrics, the reaffirmation of guidance, strong shareholder returns, and a robust financial position contributed to an optimistic outlook for the future.
Strong Operating and Financial Performance
Hess Midstream showcased its strong operating and financial performance, even in the face of challenging weather. The company reported throughput volumes of 424 million cubic feet per day for gas processing, 125,000 barrels of oil per day for crude terminaling, and 126,000 barrels of water per day for water gathering, underscoring its operational resilience.
Bakken Production Growth
Hess Corporation’s Bakken production saw significant growth, with first-quarter net production averaging 195,000 barrels of oil equivalent per day. The company plans to run a four-rig drilling program in 2025, expecting Bakken net production to rise to 210,000-215,000 barrels of oil equivalent per day in the second quarter, marking a notable increase from the first quarter.
Reaffirmed Guidance
The company reaffirmed its full-year 2025 financial and throughput guidance, projecting increased volumes and revenues in the second quarter despite higher seasonal maintenance activity. This reaffirmation signals confidence in their strategic direction and operational capabilities.
Shareholder Returns
Since 2021, Hess Midstream has returned $1.95 billion to shareholders through accretive repurchases. The distribution per Class A share has increased by approximately 57% since 2021, reflecting the company’s commitment to delivering value to its shareholders.
Strong Financial Position
Hess Midstream’s leverage stands at approximately 3.1 times adjusted EBITDA, one of the lowest among its peers. This highlights the company’s strong balance sheet and financial stability, positioning it well for future growth and investment.
Weather Impact on Throughput Volumes
Severe winter weather in January and February led to a decrease in throughput volumes compared to the fourth quarter. However, this was partially offset by higher third-party oil volumes and a strong recovery in March, demonstrating the company’s ability to adapt to challenging conditions.
Decrease in Net Income and Adjusted EBITDA
The first quarter of 2025 saw a decrease in net income to $161 million from $172 million in the previous quarter. Adjusted EBITDA also fell to $292 million from $298 million, primarily due to lower volumes and revenues resulting from severe winter weather.
Forward-Looking Guidance
Hess Midstream’s forward-looking guidance remains robust, with expectations for net income between $715-765 million and adjusted EBITDA of $1,235-1,285 million for the year. Capital expenditures are projected at approximately $300 million, with adjusted free cash flow anticipated between $735-785 million. The company aims for sustainable cash flow growth and plans to increase distribution per Class A share by at least 5% annually through 2027, while generating over $1.25 billion in financial flexibility by 2027.
In conclusion, Hess Midstream Partners LP’s earnings call highlighted a resilient and optimistic outlook despite weather-related challenges. The company’s strong operational performance, commitment to shareholder returns, and robust financial position underscore its strategic capabilities and future growth potential.