The following is a summary of the Hess Midstream LP (HESM) Q3 2024 Earnings Call Transcript:
Financial Performance:
Hess Midstream reported a Q3 net income of $165 million, an increase from $160 million in the previous quarter.
Adjusted EBITDA for Q3 was $287 million, up from $276 million in Q2, driven by higher throughput volumes.
Gross adjusted EBITDA margin was maintained at approximately 80%, above the targeted 75%.Full-year 2024 adjusted EBITDA forecasted to grow by greater than 10%, with capital expenditures expected to be around $270 million.
Total shareholder return yield remains one of the highest among midstream peers, with significant returns delivered through strategic repurchases amounting to $300 million year-to-date.
Business Progress:
Continuing development activities in the Bakken with a maintained 4-rig program, aiming to support an approximate 10% volume growth across oil and gas systems through 2024.
Construction and planning advances on new compressor stations and a new 125 million cubic foot per day gas processing plant to support long-term growth, slated to come online in 2027.
There's a steady focus on gas capture and maintaining high system availability, despite operational disruptions like wildfires and planned maintenance.
Opportunities:
Hess Midstream has forecasted a growth in throughput by approximately 10% for 2024, supported by upward trends in Bakken production from Hess Corporation and third-party developments.
The planned new gas processing plant and infrastructure developments underline a strategic expansion to cater to projected increases in production and demand.
Risks:
Potential volume impacts from wildfires and power outages affecting throughput volumes, specifically highlighted for the fourth quarter projections.
Market conditions and physical disruptions pose a continuous risk to operational stability and expected volume throughput, influencing financial projections marginally.
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