Highlights

  • Second quarter net income was $173.7 million on revenues of $399.0 million, versus $179.7 million and $414.2 million.
  • Non-GAAP Adjusted EBITDA came in at $313.7 million, while operating cash flow reached $278.6 million for the quarter.
  • Oil terminaling volumes fell 15% and water gathering volumes fell 12%, which the partnership tied to lower new-well activity.
  • The board declared a $0.7888 quarterly distribution per Class A share, up $0.0096 from the first quarter.

Hess Midstream (NYSE:HESM) shares were trading near their 52-week low at USD 31.36 on October 21, 2026, up 2.25%. The Bakken midstream operator repurchased shares and units in the first quarter, reported second quarter 2026 results in a Form 10-Q filed August 6, and declared a higher quarterly distribution on July 27, with lower revenues and volumes in the period.

The filing reports results and does not explain the share price. Hess Midstream LP is a Delaware limited partnership based at 1400 Smith Street in Houston. It describes itself as a fee-based, growth-oriented partnership that owns, operates and develops midstream assets, mainly in the Bakken and Three Forks shale plays of North Dakota. Its general partner structure is owned by Chevron. Its three reportable segments are gathering, processing and storage, and terminaling and export. Chevron and its affiliates represented about 94% of accounts receivable from contracts at June 30, 2026.

Revenue Dips, Earnings Per Share Edge Up

Revenues and other income for the three months ended June 30, 2026 were $399.0 million, down from $414.2 million. The partnership attributed the decline mainly to lower throughput volumes, partly offset by higher tariff rates and third-party services. Operating costs fell to $145.8 million from $154.0 million, helped by lower employee and maintenance costs, although depreciation rose to $54.4 million.

Consolidated net income was $173.7 million versus $179.7 million. After noncontrolling interest, net income attributable to Hess Midstream LP rose to $96.4 million from $90.3 million, or $0.75 per Class A share versus $0.74. Adjusted EBITDA, a non-GAAP measure, was $313.7 million against $316.0 million. For the six months, net income was $331.4 million, net income attributable to Hess Midstream LP was $184.0 million, or $1.43 per Class A share, and Adjusted EBITDA was $613.5 million.

Throughput told a softer story. Oil terminaling volumes fell 15% and water gathering fell 12%, which the filing links to lower new-well activity. Gas processing volumes declined 4% due to planned maintenance at the Tioga Gas Plant. Gathering segment revenues fell $12.6 million, led by $16.0 million from lower gas volumes delivered by Chevron, though higher tariff rates and minimum volume commitment revenue offset part of that.

Chevron Contracts, Debt and Buybacks

Substantially all revenue comes from long-term, fee-based agreements with Chevron subsidiaries that include dedications, minimum volume commitments and inflation escalators. Most were renewed for a second ten-year term through December 31, 2033. In that term, fees follow a fixed structure based on 2021 to 2023 average fees adjusted annually for inflation of up to 3%, which the partnership notes may provide less downside protection than the initial term. Minimum volume commitments continue through 2033.

At June 30, total debt had a carrying value of $3.68 billion. Borrowings comprised $3.10 billion of fixed-rate senior unsecured notes, $256.0 million drawn on a $1.0 billion revolving credit facility and $347.5 million outstanding on a $400.0 million Term Loan A. Both credit facilities mature in July 2027.

In the first quarter, the partnership paid $42.0 million for an accelerated share repurchase and received 1,065,724 Class A shares. It also bought 455,811 Class B units from its sponsor for about $18.0 million at $39.49 per unit. Borrowings under the revolver funded both transactions. Net revolver repayments over six months were $82.0 million.

Distribution, Capital Spending and Outlook Items

The July 27 declaration of $0.7888 per Class A share is payable August 14 to holders of record on August 6. Total capital expenditures for six months were $41.0 million, versus $120.1 million, after completion of multi-year compression expansion projects. A new compressor station with about 50 MMcf/d of installed capacity entered service in the first quarter and can be expanded by 20 MMcf/d.

The 10-Q offers no numerical guidance. Management says cash on hand, operating cash flow, revolver borrowings and new debt or equity issuance should cover operating needs, planned capital spending, debt service and distributions.