Guidance highlights include:
- 2022 net income of $630—$660 million, Adjusted EBITDA1 of $970—$1,000million and Distributable Cash Flow1 of $840—$870million.
-
2022 capital expenditures expected to be approximately
$235 million , focused on expansion of gas compression capacity and gathering system well connects to meet Hess Corporation’s accelerated pace of development in the Bakken. -
Hess Midstream LP expects to generate Adjusted Free Cash Flow1 of approximately $615—645 million in 2022, more than sufficient to fully fund targeted distributions. In addition,Hess Midstream LP expects leverage to be approximately 2.6x Adjusted EBITDA on a full-year basis, which is expected to provide capital allocation flexibility in 2022. -
Completed annual tariff rate redetermination process and established minimum volume commitments (“MVCs”) for 2024. MVCs for 2024 reflect expected organic throughput volume growth across all systems relative to 2022 volume guidance. MVCs for 2023 were generally revised higher, providing visibility of expected volume and revenue growth relative to 2022 MVC levels.
Hess Midstream LP expects approximately 95% MVC revenue protection in 2022. -
Hess Midstream LP is extending its annual distribution per share growth target of 5% through 2024 with expected annual distribution coverage greater than 1.4x. -
Hess Midstream LP is extending its previously announced expectation of continued growth in Adjusted EBITDA through 2024 and continued Adjusted Free Cash Flow generation sufficient to fully fund growing distributions and provide capital allocation flexibility.
“We are poised for continued volume and Adjusted EBITDA growth after a strong finish to 2021. The tie-in of our newly expanded Tioga Gas Plant gives us the capacity to capture further volume growth and drive free cash flow, creating an opportunity to return additional capital to our shareholders," said
(1) Adjusted EBITDA, Distributable Cash Flow and Adjusted Free Cash Flow are non‑GAAP measures. Definitions and reconciliations of these non‑GAAP measures to GAAP reporting measures appear in the following pages of this release.
Full Year 2022 Guidance
In 2022,
Full year 2022 financial guidance includes approximately 95% MVC revenue, as Hess Midstream’s physical volumes are generally expected to be at or below MVC levels.
In 2022, full year gas gathering volumes are anticipated to average 350 to 365 million cubic feet ("MMcf") of natural gas per day and gas processing volumes are expected to average 330 to 345 MMcf of natural gas per day, reflecting Hess’ announced three-rig program in the Bakken.
Crude oil gathering volumes are anticipated to average 100 to 105 thousand barrels ("MBbl") per day of crude oil in 2022, and crude oil terminaling volumes are expected to average 110 to 115 MBbl of crude oil per day.
Water gathering volumes are expected to average 70 to 75 MBbl of water per day for full year 2022.
Full Year 2022 Capital Guidance
Approximately
Full year 2022 guidance is summarized below:
|
Year Ending |
|
|
|
|
|
(Unaudited) |
|
Financials (in millions) |
|
|
Net income |
$ |
630 – 660 |
Adjusted EBITDA |
$ |
970 – 1,000 |
Distributable cash flow |
$ |
840 – 870 |
Expansion capital expenditures |
$ |
225 |
Maintenance capital expenditures |
$ |
10 |
Adjusted free cash flow |
$ |
615 – 645 |
|
|
Year Ending |
|
|
|
|
|
(Unaudited) |
Throughput volumes |
|
|
Gas gathering - MMcf of natural gas per day |
|
350 – 365 |
Crude oil gathering - MBbl of crude oil per day |
|
100 – 105 |
Gas processing - MMcf of natural gas per day |
|
330 – 345 |
Crude terminals - MBbl of crude oil per day |
|
110 – 115 |
Water gathering - MBbl of water per day |
|
70 – 75 |
Minimum Volume Commitments
As part of the annual nomination process set forth in our long-term commercial contracts, Hess’ MVCs were reviewed and updated based on
As part of the process, MVCs for 2024 were set at 80% of nominated volumes, reflecting expected organic throughput volume growth across all systems relative to 2022 volume guidance.
|
|
Hess Minimum Volume Commitments |
|
|||||||
|
|
2022 |
|
2023 |
|
2024 |
|
|||
Gas Gathering Agreement- MMcf of natural gas per day |
|
|
363 |
|
|
317 |
|
|
351 |
|
Crude Oil Gathering Agreement- MBbl of crude oil per day |
|
|
117 |
|
|
100 |
|
|
100 |
|
Gas Processing and Fractionation Agreement- |
||||||||||
MMcf of natural gas per day |
|
|
345 |
|
|
302 |
|
|
340 |
|
Terminaling and Export Services Agreement - |
||||||||||
MBbl of crude oil per day |
|
|
145 |
|
|
113 |
|
|
114 |
|
Water Services Agreement - MBbl of water per day |
|
|
67 |
|
|
70 |
|
85 |
|
Long-Term Financial Metrics
In 2023 and 2024,
About
Reconciliation of
In addition to our financial information presented in accordance with
|
Guidance |
|
||
|
Year Ending |
|
||
|
|
|
||
|
(Unaudited) |
|
||
(in millions) |
|
|
|
|
Reconciliation of Adjusted EBITDA, Distributable Cash Flow |
|
|
|
|
and Adjusted Free Cash Flow to net income: |
||||
Net income |
$ |
630 – 660 |
|
|
Plus: |
|
|
|
|
Depreciation expense* |
|
|
190 |
|
Interest expense, net |
|
|
130 |
|
Income tax expense |
|
|
20 |
|
Adjusted EBITDA |
$ |
970 – 1,000 |
|
|
Less: |
|
|
|
|
Interest, net, and maintenance capital expenditures |
|
|
130 |
|
Distributable cash flow |
$ |
840 – 870 |
|
|
Less: |
|
|
|
|
Expansion capital expenditures |
|
|
225 |
|
Adjusted free cash flow |
$ |
615 – 645 |
|
|
*Includes proportional share of equity affiliates' depreciation |
|
|
|
Cautionary Note Regarding Forward-looking Information
This press release contains “forward-looking statements” within the meaning of
Forward-looking statements are based on our current understanding, assessments, estimates and projections of relevant factors and reasonable assumptions about the future. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. The following important factors could cause actual results to differ materially from those in our forward-looking statements: the direct and indirect effects of the COVID-19 global pandemic and other public health developments on our business and those of our business partners, suppliers and customers, including
As and when made, we believe that our forward-looking statements are reasonable. However, given these risks and uncertainties, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur and actual results may differ materially from those contained in any forward-looking statement we make. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.
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