$60M Hess Midstream (NYSE: HESM) buyback targets sponsor units and public shares
Rhea-AI Filing Summary
Hess Midstream LP approved a combined
The company also entered into a
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Insights
Hess Midstream commits $60M to repurchases, mixing sponsor and public equity.
Hess Midstream is using a combined
The related-party deal went through a conflicts committee of independent directors with external advisors, which addresses governance concerns around pricing and terms. Both transactions are funded with borrowings under the existing revolving credit facility, modestly increasing leverage while shrinking the equity base.
Management links these steps to its capital return framework, citing expected financial flexibility of about
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 1.01. | Entry into a Material Definitive Agreement. |
Unit Repurchase Agreement
On March 2, 2026, Hess Midstream LP, a Delaware limited partnership (the “Company”), Hess Midstream Operations LP, a Delaware limited partnership and a subsidiary of the Company that holds all of the Company’s operating assets (“HESM OpCo” and, together with the Company, the “Partnership Entities”), and Hess Investments North Dakota LLC, a Delaware limited liability company (“HINDL”) and an indirect, wholly owned subsidiary of Chevron Corporation (“Chevron”), entered into a Unit Repurchase Agreement (the “Repurchase Agreement”) pursuant to which HESM OpCo agreed to purchase from HINDL 455,811 Class B units representing limited partner interests in HESM OpCo (“Class B Units” and such Class B Units subject to the Repurchase Agreement, the “Subject Units”) for an aggregate purchase price of approximately $18 million (the “Repurchase Transaction”). The purchase price per Class B Unit is $39.49, the closing price of the Class A shares representing limited partner interests in the Company (“Class A Shares”) on March 2, 2026. Pursuant to the terms of the Repurchase Agreement, immediately following the purchase of the Subject Units from HINDL, HESM OpCo will cancel the Subject Units, and the Company will cancel, for no consideration, an equal number of Class B shares representing limited partner interests in the Company held by HINDL, in accordance with Section 5.5(e) of the Amended and Restated Agreement of Limited Partnership of the Company, dated as of December 16, 2019, as amended by that certain First Amendment to the Amended and Restated Agreement of Limited Partnership of the Company, dated as of January 26, 2026.
The terms of the Repurchase Agreement were unanimously approved by the Board of Directors (the “Board”) of Hess Midstream GP LLC (“GP LLC”), the general partner of Hess Midstream GP LP, a Delaware limited partnership and the general partner of the Company (the “General Partner”), and the Conflicts Committee of the Board (the “Conflicts Committee”) consisting solely of independent directors. The Conflicts Committee retained independent legal and financial advisors to assist it in evaluating and negotiating the Repurchase Agreement and the Repurchase Transaction.
HINDL made customary representations and warranties in the Repurchase Agreement, including, among others, representations and warranties as to its organization, authorization to enter into the Repurchase Agreement, ownership of the Subject Units and necessary consents and approvals. Each of the Partnership Entities also made customary representations and warranties in the Repurchase Agreement, including, among others, representations and warranties as to their organization, authorization to enter into the Repurchase Agreement and necessary consents and approvals.
The Repurchase Transaction closed on March 4, 2026.
The above description of the Repurchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Repurchase Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The Repurchase Agreement has been included to provide investors with information regarding its terms. The document is not intended to provide any other factual information about the Company, HESM OpCo, or HINDL. The representations, warranties and covenants contained in the Repurchase Agreement are being made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the agreement, made solely for the allocation of risk between the parties and may be subject to limitations agreed upon by the contracting parties.
Relationships
The Company is managed and controlled by GP LLC. GP LLC is wholly owned by Hess Infrastructure Partners GP LLC (“HIP GP”), and HIP GP is owned 100% by HINDL. As a result, certain individuals, including officers and directors of Chevron, HINDL, HIP GP and the General Partner, serve as officers and/or directors of more than one of such other entities.
Unless expressly stated otherwise herein, the term “Chevron” may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or to all of them taken as a whole. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.
| Item 7.01. | Regulation FD Disclosure. |
On March 3, 2026, the Company issued a news release announcing the Repurchase Transaction and entry into the ASR Agreement (as defined below).
A copy of this press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
| Item 8.01. | Other Events. |
On March 2, 2026, following approval of the Board, the Company entered into an accelerated share repurchase (“ASR”) agreement with JPMorgan Chase Bank, National Association (the “Counterparty Bank”), to repurchase an aggregate of $42 million (the “Repurchase Price”) of Class A Shares (the “ASR Agreement”).
Pursuant to the terms of the ASR Agreement, the Company paid the Repurchase Price to the Counterparty Bank and received an initial delivery of 744,492 Class A Shares (which represents an aggregate value of 70% of the Repurchase Price based on the closing price of the Class A Shares on March 2, 2026). The exact total number of shares to be repurchased under the ASR Agreement will be based generally on the average of the daily volume-weighted average prices of the Class A Shares during the term of the ASR transaction, subject to adjustments pursuant to the terms and conditions of the ASR Agreement. The Class A Shares repurchased under the ASR Agreement will be cancelled following settlement thereof. Upon final settlement of the ASR transaction, the Company may be entitled to receive additional Class A Shares from the Counterparty Bank or, under certain circumstances, the Company may be required to deliver Class A Shares or make a cash payment, at its option, to the Counterparty Bank.
The ASR Agreement is scheduled to terminate in March 2026. The Company funded the Repurchase Price with borrowings under its existing revolving credit facility.
Cautionary Statement Relevant to Forward-Looking Information
This Current Report on Form 8-K includes forward-looking statements regarding future events. These forward-looking statements are based on the Company’s current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially from the results and events anticipated or implied by such forward-looking statements. For a further discussion of these risks and uncertainties, please refer to the “Risk Factors” section of the Company’s most recently filed Annual Report on Form 10-K and in other filings made by the Company with the Securities and Exchange Commission. While the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if new information becomes available.
| Item 9.01. | Exhibits |
| 10.1 | Unit Repurchase Agreement, dated as of March 2, 2026, by and among Hess Midstream LP, Hess Midstream Operations LP and Hess Investments North Dakota LLC. | |
| 99.1 | News Release Announcing the Repurchase Transaction | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HESS MIDSTREAM LP | ||||||
| By: | Hess Midstream GP LP, | |||||
| its general partner | ||||||
| By: | Hess Midstream GP LLC, | |||||
| its general partner | ||||||
| Date: March 4, 2026 | By: | /s/ Michael J. Chadwick | ||||
| Name: Michael J. Chadwick | ||||||
| Title: Chief Financial Officer | ||||||
Exhibit 99.1
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Investor Contact: | Jennifer Gordon (212) 536-8244 |
News Release
FOR IMMEDIATE RELEASE
HESS MIDSTREAM LP ANNOUNCES SIGNING OF ACCRETIVE $60 MILLION REPURCHASE FROM SPONSOR AND THE PUBLIC
HOUSTON, March 3, 2026 — Hess Midstream LP (NYSE: HESM) (“Hess Midstream”), today announced an accretive $60 million repurchase that included both Class B units of its subsidiary, Hess Midstream Operations LP, from an affiliate of Chevron, Hess Midstream’s sponsor (the “Sponsor”), and Hess Midstream’s Class A shares from the public.
Hess Midstream announced the execution of a definitive agreement providing for the repurchase of approximately $18 million of Class B units by its subsidiary, Hess Midstream Operations LP, from the Sponsor. The terms of the proposed unit repurchase transaction were unanimously approved by the Board of Directors of Hess Midstream’s general partner, based on the unanimous approval and recommendation of its conflicts committee composed solely of independent directors.
Hess Midstream also announced that it has entered into an accelerated share repurchase (“ASR”) agreement with JPMorgan Chase Bank, National Association (“JPM”), to repurchase $42 million of Hess Midstream’s publicly traded Class A shares.
“We continue to execute repurchase transactions as part of our ongoing financial strategy,” said Jonathan Stein, Chief Executive Officer of Hess Midstream. “Following these repurchase transactions, we continue to expect to have approximately $1 billion of financial flexibility through 2028 for incremental shareholder returns and debt repayment, including the potential for further unit and share repurchases over this period.”
The repurchased securities will be cancelled following settlement of each repurchase transaction, which is expected to result in increased distributable cash flow per Class A share providing capacity for incremental distribution growth above Hess Midstream’s annual distribution target of at least 5% through 2028, consistent with Hess Midstream’s return of capital framework.
Unit Repurchase Summary
Hess Midstream Operations LP, Hess Midstream’s consolidated subsidiary, agreed to repurchase 455,811 Class B units of Hess Midstream Operations LP, equal to approximately 0.2% of the consolidated company, held by the Sponsor for a purchase price of approximately $18 million. The purchase price per Class B unit is $39.49, the closing price of the Class A shares on March 2, 2026. After completing the unit repurchase transaction but before giving effect to any repurchase of publicly traded Class A shares purchased by Hess Midstream in the ASR transaction, ownership of Hess Midstream on a consolidated basis will be approximately 62.2% for the public and 37.8% for Chevron. The unit repurchase is anticipated to close on March 4, 2026. Hess Midstream expects to fund the unit repurchase with borrowings under its existing revolving credit facility.
ASR Transaction
Under the ASR agreement, Hess Midstream agreed to make an upfront payment of $42 million to JPM and will receive an initial share delivery of 744,492 Class A shares from JPM, representing approximately 70% of the expected Class A share repurchases under the ASR agreement, based on the closing price of the Class A shares of $39.49 on March 2, 2026.
The final number of Class A shares to ultimately be purchased by Hess Midstream under the ASR agreement will be based generally on the average of the daily volume-weighted average prices of Class A shares during the term of the transaction, subject to adjustments pursuant to the terms and conditions of the ASR agreement. Final settlement of the transactions under the ASR agreement is expected to occur in March 2026. Hess Midstream expects to fund the repurchase of Class A shares in the ASR from borrowings under its existing revolving credit facility.
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About Hess Midstream
Hess Midstream is a fee-based, growth-oriented midstream company that owns, operates, develops and acquires a diverse set of midstream assets to provide services to Chevron, its subsidiaries and third-party customers. Hess Midstream owns oil, gas and produced water handling assets that are primarily located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota. More information is available at www.hessmidstream.com.
As used in this press release, the term “Chevron” may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or to all of them taken as a whole. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.
Cautionary Note Regarding Forward-Looking Information
This press release contains “forward-looking statements.” Words such as “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “drive,” “could,” “may,” “should,” “would,” “enable,” “believe,” “intend,” “focus,” “potential,” “project,” “plan,” “trend,” “predict,” “will,” “target,” “opportunity” and similar expressions, and variations or negatives of these words, are intended to identify forward-looking statements, but not all forward-looking statements include such words.
Forward-looking statements relating to Hess Midstream’s operations, assets, and strategy are based on management’s current expectations, assessments, estimates, projections and assumptions about the industry. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties and other factors, many of which are beyond Hess Midstream’s control and difficult to predict. Therefore, actual outcomes and results may differ materially from our current projections or expectations of future results expressed or forecasted by these forward-looking
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statements. Among the important factors that could cause actual results to differ materially from those in our forward-looking statements are: the ability of Chevron and other parties to satisfy their obligations to us, including Chevron’s ability to meet its drilling and development plans on a timely basis or at all, its ability to deliver its nominated volumes to us, and the operation of joint ventures that we may not control; our ability to generate sufficient cash flow to pay current and expected levels of distributions; reductions in the volumes of crude oil, natural gas, natural gas liquids (“NGLs”) and produced water we gather, process, terminal or store; the actual volumes we gather, process, terminal or store for Chevron in excess of our minimum volume commitments and relative to Chevron’s nominations; fluctuations in the prices and demand for crude oil, natural gas and NGLs; changes in global economic conditions and the effects of a global economic downturn or inflation on our business and the businesses of our suppliers, customers, business partners and lenders; our ability to comply with government regulations or make capital expenditures required to maintain compliance, including our ability to obtain or maintain permits necessary for capital projects in a timely manner, if at all, or the revocation or modification of existing permits; our ability to successfully identify, evaluate and timely execute our capital projects, investment opportunities and growth strategies, whether through organic growth or acquisitions; costs or liabilities associated with federal, state and local laws, regulations and governmental actions applicable to our business, including legislation and regulatory initiatives relating to environmental protection and health and safety, such as spills, releases, pipeline integrity and measures to limit greenhouse gas emissions and climate change; our ability to comply with the terms of our credit facility, indebtedness and other financing arrangements, which, if accelerated, we may not be able to repay; reduced demand for our midstream services, including the impact of weather or the availability of competing third-party midstream gathering, processing and transportation operations; potential disruption or interruption of our business due to natural and human causes beyond our control, such as accidents, severe weather events, labor disputes, political crises, information technology failures, constraints or disruptions and cyber-attacks; any limitations on our ability to access debt or capital markets on terms that we deem acceptable, including as a result of changes in credit ratings, weakness in the oil and gas
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industry or negative outcomes within commodity and financial markets; liability resulting from litigation; risks and uncertainties associated with Hess Corporation’s integration with Chevron; our ability to satisfy the closing conditions of the Class B unit repurchase or the ASR transaction; and other factors described in Item 1A—Risk Factors in our Annual Report on Form 10-K and any additional risks described in our other filings with the Securities and Exchange Commission.
Other unpredictable or unknown factors not discussed in this press release could also cause actual results to differ materially from those in our forward-looking statements. Caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date of this press release. 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.
Investor Contact:
Jennifer Gordon
(212) 536-8244
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FAQ
What repurchase transactions did Hess Midstream (HESM) announce?
How many Hess Midstream units are being repurchased from the sponsor?
What are the key terms of Hess Midstream’s $42 million ASR agreement?
How will Hess Midstream fund the announced repurchase transactions?
What impact does Hess Midstream expect from these repurchases on distributions?
How did Hess Midstream address conflicts in the sponsor unit repurchase?
Filing Exhibits & Attachments
5 documentsPress Releases
Agreements & Contracts
