Hess Midstream Delivers Strong Q1 Performance Amid Challenging Weather Conditions
Hess Midstream has reported strong operating and financial performance for the first quarter of 2025, despite being affected by severe winter weather conditions in January and February.
Throughput volumes averaged 424 million cubic foot 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. These numbers are in line with the company's guidance, but reflect lower production from Hess due to severe winter weather partially offset by higher third-party oil volumes and a strong recovery in March.
John Gatling, President and Chief Operating Officer, highlighted the company's ability to adapt to challenging conditions during the conference call. "In the first quarter, we delivered strong operating and financial performance despite challenging weather," he said. "Throughput volumes were down compared to the fourth quarter, reflecting lower production from Hess due to severe winter weather in January and February, partially offset by higher third-party oil volumes and a strong recovery in March."
The company also provided an update on Hess Upstream's highlights, which included an average net production of 195,000 barrels of oil equivalent per day. Hess Corporation reiterated their plans to continue running a 4-rig drilling program in 2025 and expects Bakken net production to be in the range of 210,000 to 215,000 barrels of oil equivalent per day in the second quarter.
Hess Midstream also reaffirmed its full-year financial and throughput guidance for 2025. The company expects volume growth from the first quarter across their oil and gas systems, partially offset by higher seasonal maintenance activity.
The company's capital program continues to progress as planned. Hess Midstream is focused on completing two new compressor stations and their associated gathering systems, as well as starting civil construction on the Capa gas plant. Full-year 2025 capital expenditures remain unchanged at approximately $300 million.
Jonathan Stein, Chief Financial Officer, highlighted the company's financial strategy during the conference call. "We continue to execute a financial strategy that prioritizes return of capital to shareholders with a demonstrated track record of differentiated shareholder returns," he said. The company has returned $1.95 billion to shareholders through accretive repurchases since 2021 and increased its distribution per Class A share by approximately 57% during the same period."
Hess Midstream's strong performance and commitment to return value to its shareholders have been recognized industry-wide. The company's total shareholder return yield is one of the highest among its midstream peers, and its leverage of approximately 3.1x adjusted EBITDA is one of the lowest.
