Hess Midstream Partners Lp ((HESM)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call from Hess Midstream Partners LP reflected a strong performance in 2024, highlighted by notable growth in gas processing and Bakken production. The financial results were robust, with a significant increase in EBITDA. Despite challenges such as weather impacts and planned maintenance leading to temporary volume reductions, the outlook remains optimistic with strategic expansions and volume growth anticipated.
Strong Volume Growth in Gas Processing
Hess Midstream experienced a remarkable 14% year-over-year growth in gas processing throughputs for 2024. The company is optimistic about the future, projecting gas volumes to grow by more than 25% from 2024 through 2027.
Bakken Net Production Increase
The company reported an average Bakken net production of 204,000 barrels of oil equivalent per day for 2024. This marks a significant 12% year-over-year increase, underscoring Hess Midstream’s strong production capabilities.
Financial Performance and EBITDA Growth
Hess Midstream’s financial performance was solid with a full year adjusted EBITDA of $1.136 billion for 2024, representing a growth of approximately 12% from the previous year. This demonstrates the company’s effective financial management and operational efficiency.
Projected Volume Growth and New Projects
Looking ahead to 2025, Hess anticipates approximately 10% growth in volumes across its oil and gas systems. They are also initiating the construction of the Capa Gas Plant, which will have a capacity of 125 million cubic feet per day, to support future growth.
Strategic Capital Allocation
The company plans to maintain annual capital expenditures in the range of $250 million to $300 million through 2027. This investment will focus on infrastructure expansions and necessary maintenance, ensuring sustained growth.
Impact of Severe Winter Weather
Hess Midstream anticipates lower volumes in the first quarter of 2025 due to severe winter weather in January, which is expected to affect overall production.
Temporary Reduction in Gas Volumes Due to Maintenance
Planned regulatory inspections and maintenance at the Tioga Gas Plant in 2027 are expected to temporarily reduce gas volumes, with an estimated full year impact of approximately 10 million cubic feet per day.
Forward-Looking Guidance
During the Hess Midstream Fourth Quarter 2024 Conference Call, the company provided a positive outlook with expectations of strong operational and financial performance. They anticipate an 11% growth in adjusted EBITDA for 2025, reaching between $1.235 billion and $1.285 billion. Additionally, a 10% growth in volumes across oil and gas systems is expected, supported by the continuation of a four-rig drilling program and strategic capital investments.
In conclusion, the earnings call from Hess Midstream Partners LP painted a positive picture of the company’s performance and future prospects. Strong financial results, strategic expansions, and a commitment to capital investments position Hess Midstream for continued success, despite challenges posed by weather and maintenance activities.
