Hess Midstream LP Class A Share representing a limited partner Interest M&A announcement

Please proceed. Thank you, Kevin.

Good morning, everyone, and thank you for participating in our investor call to discuss our definitive agreement with Chevron to establish Hess Midstream as an independent multi-basin midstream company. Our press release announcing the transaction was issued yesterday and appears on our website, www.hessmidstream.com. Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include those set forth in the risk factor section of Hess Midstream's filings with the SEC. Also, on today's conference call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable non-GAAP financial measures can be found in the press release.

With me today are Jonathan Stein, Chief Executive Officer, and Mike Chadwick, Chief Financial Officer. I will now turn the call over to Jonathan Stein.

Thank you, Jennifer. Good morning and welcome to the Hess Midstream Investor Update conference call to discuss the transaction that we announced yesterday. I am going to review the transaction and our go-forward business strategy, and then Mike will discuss the financial strategy going forward and provide initial guidance. There is also a presentation on the website to be viewed alongside our call comments. Starting with slide 3 of the presentation. We are excited to announce today entry into definitive agreement for a significant transformative transaction that will create a new independent multi-basin midstream company with leading positions in the Bakken and the DJ Basin. For Hess Midstream, we are now well-positioned for the long term with Chevron as an anchor customer and a solid foundation for independent growth while maintaining shareholder returns.

Looking at the elements of the transaction, Hess Midstream has agreed with Chevron to simplify our Bakken commercial agreements to support ongoing investment. This includes reducing our rates for 2027 through 2033, while extending the contracts through 2045 and replacing multiple volume-based MVCs with a single basin-wide minimum revenue commitment, or MRC, that allows for more flexibility in volume levels while continuing to provide our hallmark downside protection. The MRC will be established 3 years in advance, and once the MRC is established for a given year, it can only be increased and not decreased based on updated annual development plans provided by Chevron. MRCs from 2027 through 2029 have been established on a 2-rig program. All of our fees will now be on a fixed-fee basis and continue to have inflation escalators.

In addition, Hess Midstream will pay Chevron $200 million at closing, which we expect to fund from our revolver. In exchange for the Bakken commercial agreement simplification and cash payment, we will be acquiring DJ Basin midstream assets from Chevron, as well as 100% of Chevron's ownership in Hess Midstream, including the general partner. The DJ Basin midstream assets include crude oil gathering and storage assets, gas and water gathering systems, 100% of the Black Diamond gathering system, and 20% of the long-haul interstate Saddlehorn pipeline. In terms of Chevron's ownership in Hess Midstream, this represents a complete exit by Chevron from Hess Midstream and will significantly reduce the total unit share count by approximately 40%, reducing total distributions and supporting transaction accretion on an adjusted EBITDA per share basis.

With the complete exit of Chevron and acquisition of the general partner, Hess Midstream will transition to a completely independent midstream company owned 100% by the public. I am excited to continue as CEO of this new independent company. We will be joining the board of directors with the initial size of the board set to 7 members, including myself. The 3 current independent directors will remain on the board, and John P. Reddy, one of these independent directors, will become chairman of the board. We will begin the search for the remaining 3 directors as soon as possible, and directors will be elected by the public starting in 2028. In addition, both Hess Midstream and Chevron are aligned during this transaction through multi-year shared services agreements that support the establishment of an independent organization while allowing us to maintain safe and reliable operations. Turning to slide 4. After this transaction, we will have created an independent multi-basin midstream company that is well-positioned for growth and returns.

The addition of the DJ Basin assets will significantly diversify and increase the footprint of our business, approximately tripling our crude gathering throughput and grow our gas gathering throughput by more than 30%, while also broadening our asset base with ownership participation in a long-haul crude pipeline. Our volumes are underpinned by long-term Chevron production plateaus in both the Bakken and the DJ. They will continue to be backed by strong commercial contracts with Chevron that now extend through 2045 and a 100% fee base with inflation escalators. In addition, primarily through our new MRCs in the Bakken and Chevron ship-or-pay commitments on long-haul pipelines in the DJ, approximately 70% of our revenue is downside protected.

With Chevron as our anchor customer in both the Bakken and the addition of the DJ Basin assets that include significant third parties, our third-party volumes will increase to approximately 20% of total volumes. Most importantly, leveraging the stable volume platform, we have the ability to focus on accretive growth opportunities, which we plan to prioritize as part of our go-forward capital allocation priorities. We will continue to maintain a solid financial foundation, with an expected 75% adjusted EBITDA margin and low ongoing capital requirements that support our volumes and drive sector-leading free cash flow conversion.

With this free cash flow generation, we will continue to target distribution growth of 5% per class A share on the annual basis through the fourth quarter of 2026 and expect our 2027 distribution to be maintained at that level, representing an approximate 2% annual distribution per growth rate that is fully funded by our adjusted free cash flow. Looking forward, we expect to have the ability to continue to fully fund distribution at that level, remaining free cash flow positive after distribution, and maintain leverage in the range of 3.5 to 3.75 times adjusted EBITDA on a long-term basis. Turning to slide 5. Following the transaction, Hess Midstream will have a sector-leading gathering platform and adjusted free cash flow conversion.

We will gather Chevron's second largest production platform, and we expect to be the largest gathering platform in the Bakken by volumes gathered, providing scale and efficiencies to compete effectively for new third-party business. We expect to maintain our sector-leading adjusted free cash flow conversion. With an established asset base and significant historical investment, we expect to have one of the lowest reinvestment rates in the sector with low ongoing required capital needs. Turning to slide 6. With the addition of the DJ Basin platform, we will own the largest crude gathering system in the basin, operating a unique and irreplaceable system that gathers almost 100% of Chevron's DJ Basin oil gathering volumes. This platform provides a stable cash flow base and a growth platform to capture nearby opportunities with minimal capital investment from a dominant position.

The two gathering systems, including the Black Diamond gathering system, have approximately 400,000 barrels a day of crude gathering throughput capacity, 300 million cubic feet per day of natural gas gathering capacity, and two terminals with a total of 420,000 barrels of storage capacity. These systems are competitively advantaged and have direct connectivity to every major pipeline in the DJ Basin, including Saddlehorn, White Cliffs, Grand Mesa, and Pony Express. Turning to slide 7. In addition to these gathering systems, Hess Midstream will also own a 20% equity stake in the Saddlehorn pipeline, which is the largest crude oil pipeline out of the DJ Basin, connecting Colorado to the Cushing Storage Hub in Oklahoma. The addition of long-haul pipeline ownership to Hess Midstream extends our participation in the midstream value chain and provides an additional source of stable and predictable cash flows supported by ship-or-pay commitments.

Turning to slide 8. The Bakken remains our historical base, where we have a high-quality, integrated portfolio with meaningful scale. Chevron intends to move from 3 to 2 rigs this December. For Hess Midstream, we now expect Bakken volumes to decline by approximately 5% through 2027 before plateauing in 2028. Our midstream assets remain best in class in the Bakken, with an integrated platform of 500 million cubic feet per day of gas processing capacity, approximately 500,000 barrels a day of crude oil trucking capacity, approximately 700 million cubic feet per day of gas gathering pipeline capacity, and approximately 300,000 barrels a day of crude oil gathering capacity. Putting it all together, this significant and transformative transaction creates a unique multi-basin midstream company with a long-term platform supported by Chevron as an anchor customer and a solid foundation for accretive growth and ongoing shareholder returns.