Hess Midstream (HESM) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $164.7 million, with $58.6 million attributable to Hess Midstream LP, or $0.63 per Class A share, and Adjusted EBITDA of $286.9 million; Bakken net production averaged 206,000 barrels of oil equivalent per day, exceeding guidance.

• Revenues for Q3 2024 were $378.5 million, up from $363.1 million in Q3 2023, driven by higher physical volumes, especially in gas gathering and processing.

• Quarterly cash distribution increased to $0.6846 per Class A share, above the targeted 5% annual growth rate, with public ownership rising to 47.3% after equity offerings and unit repurchases.

• Throughput volumes for gas gathering and processing rose 9% year-over-year, and water gathering volumes increased 29%, reflecting higher crude oil production and infrastructure utilization.

• Continued focus on supporting Hess and third-party development in the Bakken, with a visible trajectory of growth in operational and financial metrics.

Financial highlights

• Q3 2024 Net Income was $164.7 million; Adjusted EBITDA reached $286.9 million; Adjusted Free Cash Flow was $141.4 million; net cash provided by operating activities was $224.9 million.

• Revenues and other income for Q3 2024: $378.5 million, up $15.4 million year-over-year; operating costs and expenses: $146.8 million.

• Gross Adjusted EBITDA margin was 81% in Q3 2024, above the 75% target.

• Year-to-date, $300 million of unit repurchases completed, with $1.85 billion returned to shareholders since 2021.

• Quarterly distribution per Class A share increased each quarter in 2024, reaching $0.6846 for Q3.

Outlook and guidance

• Reaffirmed 2024 throughput guidance: gas processing 405–415 million cubic feet/day, crude terminaling 120,000–130,000 barrels/day, water gathering 115,000–125,000 barrels/day.

• Q4 2024 net income expected at $170–$185 million; Adjusted EBITDA at $295–$310 million, a 5% increase at midpoint over Q3.

• Full-year 2024 Adjusted EBITDA guidance reaffirmed at $1,135–$1,150 million; capital expenditure guidance updated to ~$275 million.

• Projected 10% annualized growth in oil and gas volumes and adjusted EBITDA through 2026; annualized distribution growth projected to exceed 5% through 2026.

• Management expects all volumes to remain above minimum volume commitments through at least 2026, supporting continued cash flow stability.