HESM

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Hess Midstream Partners (HESM) is technically in oversold territory now, so the heavy selling pressure might have exhausted. This along with strong agreement among Wall Street analysts in raising earnings estimates could lead to a trend reversal for the stock.

Hess Midstream's deal with Chevron means lower earnings but also longer contracts, fewer shares outstanding, and expansion into a second region.

Hess Midstream Partners NYSE: HESM said it has entered a definitive agreement with Chevron to become an independent, publicly owned multi-basin midstream company, expanding beyond its Bakken operations through the acquisition of Chevron's DJ Basin midstream assets.

Hess Midstream (NYSE:HESM) shares fell over 16% to $32.25 on Wednesday morning after Chevron agreed to transfer its ownership interests in the midstream company and DJ Basin crude oil assets in exchange for revised Bakken terms, with the company forecasting 2027 Adjusted EBITDA of $850 million to $950 million. The agreements will extend Chevron's Bakken midstream contracts and are expected to reduce its unit midstream costs by about 50%, improving its cost structure and return on capital employed.

Chevron said ​on Tuesday ‌that several ​of ​its subsidiaries signed ⁠agreements ​with ​Hess Midstream to restructure ​their ​Bakken midstream contracts ‌and ⁠create new midstream ​contracts ​in ⁠the DJ ​Basin.

HOUSTON--(BUSINESS WIRE)--Chevron Corporation (NYSE: CVX) announced today that several of its subsidiaries have entered into a series of definitive agreements with Hess Midstream LP (NYSE: HESM) to restructure the terms of its Bakken midstream contracts and establish new DJ Basin midstream contracts. The revised agreements extend the Bakken contracts and are expected to reduce Chevron's Bakken unit midstream costs by approximately 50%, enhancing future earnings and return on capital employed. I.

Hess Midstream remains a strong buy, offering a secure 7.9% yield and robust distribution growth, underpinned by long-term minimum volume commitments with Chevron. HESM's fee-based revenue model, protected by contracts through 2033, insulates cash flow from oil price volatility and supports at least 5% annual distribution growth through 2028. Leverage is healthy at 3.1x, with a path to 2.5x by 2028, enabling debt reduction, buybacks, and optionality for M&A or further capital returns.

Hess Midstream beat Q2 earnings expectations despite lower throughput, as higher tariffs and lower costs offset weaker volumes ahead of rising second-half spending.

Hess Midstream's rising free cash flow and lower capital spending support stronger returns, while flat volumes and near-median valuation temper its growth outlook.