Hess Midstream reduces guidance amid lower Chevron rig activity

Hess Midstream LP (NYSE: HESM) updated its financial and operational guidance for 2025-2027, citing an expected reduction in Chevron's Bakken drilling activity from four to three rigs starting in the fourth quarter of 2025.

The midstream company now expects oil throughput volumes to plateau in 2026 due to lower planned rig activity, while gas throughput volumes are projected to continue growing through at least 2027. The company expects relatively flat Adjusted EBITDA in 2026 compared to 2025, with growth resuming in 2027.

Capital spending is expected to decrease significantly in 2026 and 2027 following the suspension of early engineering activities on the Capa gas plant and its removal from forward plans.

For 2025, Hess Midstream revised its gas gathering volumes guidance to 455-465 million cubic feet per day, down from previous expectations. Gas processing volumes are now projected at 440-450 million cubic feet per day. The company attributed the reduction to adverse weather conditions and maintenance in the third quarter, plus lower expected third-party volumes in the fourth quarter.

Third quarter 2025 net income and Adjusted EBITDA are expected at the lower end of the previously announced guidance range, with full year 2025 results anticipated in the lower half of prior guidance.

Despite the reduced activity, Hess Midstream expects throughput volumes to remain above established minimum volume commitments. The company maintains its target of at least 5% annual distribution growth per Class A share through 2027 and continues to target a leverage ratio of 3x Adjusted EBITDA.

The company plans to issue updated operational and financial guidance, including 2028 minimum volume commitments, following its 2026 budget approval in December and receipt of an updated development plan from Chevron.

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