ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8 of this Annual Report on Form 10‑K.
Unless otherwise stated or the context otherwise indicates, references in this report to “Hess Midstream LP,” “the Company,” “us,” “our,” “we” or similar terms refer to Hess Midstream LP, including its consolidated subsidiaries. References to “Partnership” refer to Hess Midstream Operations LP. References to “Sponsor” or “Sponsors” refer to (a) Hess Corporation (“Hess”) and GIP II Blue Holding, L.P. (“GIP”) when referring to periods prior to May 30, 2025, (b) Hess from May 30, 2025 to July 17, 2025, and (c) Chevron from July 18, 2025.
As used in this report, 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.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled “Risk Factors” included elsewhere in this report.
Overview
Organization
We are a fee-based, growth-oriented, limited partnership that owns, operates, develops and acquires a diverse set of midstream assets and provides fee-based services to our Sponsor, its subsidiaries, and third-party customers. Our assets are primarily located in the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota, which we collectively refer to as the Bakken.
We are managed and controlled by Hess Midstream GP LLC (“GP LLC”), the general partner of our general partner. Prior to May 30, 2025, the general partner of our general partner was owned 50/50 by affiliates of Hess and GIP. As described below, as of the closing of the May 2025 GIP equity offering transaction, GIP no longer holds any Class A Shares of the Company or any Class B Units of the Partnership and no longer holds a direct or indirect ownership interest in GP LLC, our general partner, the Company, or the Partnership. From May 30, 2025 to July 17, 2025, the general partner of our general partner was wholly owned by Hess.
Chevron Merger
On July 18, 2025, Hess and Chevron completed the previously announced merger contemplated by the Agreement and Plan of Merger, dated as of October 22, 2023 (the “Merger”). As a result of the Merger, Chevron is the direct parent of Hess and, therefore, indirectly owns 100% of the limited liability company interests in GP LLC, 100% of the partnership interests in our general partner, and an approximate 37.9% interest in the Company on a consolidated basis.
Our historical commercial, omnibus and employee secondment agreements with Hess remain in effect subsequent to the Merger, and we refer to Chevron as the counterparty to these agreements as, following the completion of the Merger, Chevron wholly owns the Hess entities that are the counterparties to these agreements.
Operational Highlights
We substantially completed our multi-year projects to expand our compression capacity to support Chevron’s and third parties’ production in the Bakken. In 2025, we added approximately 20 MMcf/d of net compression capacity. Construction was also completed on an additional greenfield compressor station, which was placed in service in early 2026 and which further increased compression capacity by approximately 50 MMcf/d in 2026.
Equity Transactions
During 2025, the Company, the Partnership and the Sponsors completed the following equity transactions:
On February 12, 2025, GIP sold an aggregate of 11,000,000 of Class A shares representing limited partner interests in the Company (“Class A Shares”) in an underwritten public offering at a price of $39.45 per Class A Share, less underwriting discounts. GIP also granted the underwriter an option to purchase up to an additional 1,650,000 Class A Shares at the same price per Class A Share, which was exercised in full on February 19, 2025.
On May 30, 2025, GIP sold an aggregate of 15,022,517 of our Class A Shares in an underwritten public offering at a price of $37.25 per Class A Share, less underwriting discounts.
Table of Contents
In 2025, GIP received net proceeds from the offerings of approximately $1.0 billion after deducting underwriting discounts. The Company did not receive any proceeds in the offerings.
On January 15, 2025, the Partnership purchased directly from the Sponsors 2,572,677 Class B units representing limited partner interests in the Partnership (“Class B Units”) for an aggregate purchase price of approximately $100.0 million. The purchase price per Class B Unit was $38.87, the closing price of the Class A Shares on January 13, 2025.
On May 9, 2025, the Partnership purchased directly from the Sponsors 5,151,842 Class B Units for an aggregate purchase price of approximately $190.0 million. The purchase price per Class B Unit was $36.88, the closing price of the Class A Shares on May 5, 2025.
On August 8, 2025, the Partnership purchased directly from the Sponsor 695,894 Class B Units for an aggregate purchase price of approximately $30.0 million. The purchase price per Class B Unit was $43.11, the closing price of the Class A Shares on August 4, 2025.
The repurchase transactions described above were funded using borrowings under the Partnership’s existing revolving credit facility.
In the second quarter of 2025, we repurchased $10.0 million of our publicly traded Class A Shares through an accelerated share repurchase (“ASR”) transaction with a financial institution. Under the terms of the ASR, we paid $10.0 million in cash to the financial institution and received 267,532 Class A Shares as determined by the average of the daily volume-weighted average prices of Class A Shares during the term of the transaction.
In the third quarter of 2025, we repurchased $70.0 million of our publicly traded Class A Shares through an ASR transaction with a financial institution. Under the terms of the ASR, we paid $70.0 million in cash to the financial institution and received 1,706,118 Class A Shares as determined by the average of the daily volume-weighted average prices of Class A Shares during the term of the transaction.
The ASR transactions described above were funded using borrowings under the Partnership’s existing revolving credit facility. See Item 8. Financial Statements and Supplementary Data. Note 3, Equity Transactions, Note 7, Debt and Interest Expense and Note 8, Partners’ Capital and Distributions.
At December 31, 2025:
the Company held a 62.3% controlling interest in the Partnership and Chevron held a 37.7% noncontrolling economic interest in the Partnership;
public limited partners held a 62.1% voting interest and a 99.7% economic interest in the Company, which represents an indirect 62.1% economic interest in the Partnership;
Chevron and its affiliates held a 37.9% voting interest and a 0.3% economic interest in the Company, which, taken with their direct limited partnership interest in the Partnership, represents an indirect 37.9% economic interest in the Partnership. See Organizational Structure.
Credit Ratings
On July 24, 2025 (the “Investment Grade Rating Date”), the Partnership received an investment grade rating from S&P Global Ratings (“S&P”). S&P assigned a rating of ‘BBB-’ to the Partnership’s unsecured debt and raised the Partnership’s issuer level credit rating to ‘BBB-’, with a stable outlook. As a result of this investment grade rating, the Partnership is not required to comply with certain restrictive covenants set forth in the unsecured notes indentures. Additionally, as a result of the investment grade rating, certain restrictive covenants on the Partnership’s Credit Facilities fell away and became more permissive. Following the release of collateral due to the investment grade rating, Moody’s Investors Service (“Moody’s”) upgraded the Partnership’s senior unsecured notes to ‘Ba1’ and reaffirmed the stable outlook. At December 31, 2025, the Partnership’s senior unsecured debt is rated ‘BBB-’ by S&P, ‘BB+’ by Fitch Ratings, and ‘Ba1’ by Moody’s.
Income Taxes
On July 4, 2025, An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14 (the “Reconciliation Act”) was enacted into law in the U.S., providing for significant changes to U.S. Federal tax law. Under GAAP, the impact of tax law changes is recognized in the period of enactment. There was no material impact of the Reconciliation Act on our consolidated financial statements for the year ended December 31, 2025, and we do not expect a material impact on our future results of operations or cash flows.
Table of Contents
Business Strategies
Our principal business objective is to grow our business and available cash supported by fee-based contracts and disciplined financial strategy. We expect to achieve this objective through the following business strategies:
Focus on Cash Flow Stability and Growth Supported by Long-Term, Fee-Based Contracts and a Disciplined Financial Strategy . We seek to grow our available cash to be able to fund our capital projects and provide consistent and ongoing return of capital to shareholders while maintaining balance sheet strength. Our commercial agreements include dedications covering substantially all of Chevron’s existing and future owned or controlled production in the Bakken, minimum volume commitments, inflation escalators and fee recalculation mechanisms, all of which are intended to provide us with cash flow stability and downside risk protection.
Capitalize on Chevron’s Bakken Production Goals. Our midstream infrastructure is strategically positioned to service Chevron’s leading acreage position in the Bakken. The majority of the infrastructure necessary to support Chevron’s current and future drilling and production plans is already in place, thereby requiring relatively limited incremental capital investment.
Leverage Core Asset Base to Attract Additional Third‑Party Business. We currently handle volumes from third‑party producers and midstream companies contracted directly with us and contracted with Chevron and delivered to us under our commercial agreements with Chevron. Together with Chevron, we are pursuing strategic relationships with third‑party producers and other midstream companies with operations in the Bakken in order to maximize our utilization rates.
Grow Through Accretive Acquisitions from Our Sponsor and Third Parties. We evaluate potential acquisitions of complementary midstream assets from our Sponsor as well as from third parties.
Business Environment and Outlook
Chevron supports a global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy. We play a critical role in progress toward this objective in the Bakken region, including our focus on natural gas capture through increased availability and reliability at our compressor stations, gathering and processing infrastructure, and enhanced communication and coordination with third-party gatherers.
Segments
Our assets and operations are organized into the following three reportable segments: (i) gathering, (ii) processing and storage and (iii) terminaling and export.
Gathering
Our gathering segment includes Hess North Dakota Pipelines Operations LP, or Gathering Opco, and Hess Water Services Holdings LLC, which own the following assets:
Natural Gas Gathering and Compression . A natural gas gathering and compression system located primarily in McKenzie, Williams and Mountrail Counties, North Dakota connecting Chevron and third‑party owned or operated wells to the Tioga Gas Plant, Little Missouri 4 (“LM4”) gas processing plant and third‑party pipeline facilities. The system also includes the Hawkeye Gas Facility.
Crude Oil Gathering. A crude oil gathering system located primarily in McKenzie, Williams and Mountrail Counties, North Dakota, connecting Chevron and third-party owned or operated wells to the Ramberg Terminal Facility, the Tioga Rail Terminal and the Johnson’s Corner Header System. The system also includes the Hawkeye Oil Facility.
Produced Water Gathering and Disposal . A produced water gathering system and disposal facilities located primarily in Williams and Mountrail counties, North Dakota.
Processing and Storage
Our processing and storage segment includes Hess TGP Operations LP, or HTGP Opco, and Hess Mentor Storage Holdings LLC, or Mentor Holdings, which own the following assets, respectively:
Tioga Gas Plant . A natural gas processing and fractionation plant located in Tioga, North Dakota.
Equity Investment in LM4 Joint Venture. A 50% equity method investment in LM4 joint venture that owns a natural gas processing plant located in McKenzie County, North Dakota, that was placed in service in the third quarter of 2019. Targa Resources Corp. is the operator of the plant.
Mentor Storage Terminal . A propane storage cavern and rail and truck loading and unloading facility located in Mentor, Minnesota.
Table of Contents
Terminaling and Export
Our terminaling and export segment includes Hess North Dakota Export Logistics Operations LP, or Logistics Opco, which owns each of the following assets:
Ramberg Terminal Facility . A crude oil pipeline and truck receipt terminal located in Williams County, North Dakota that is capable of delivering crude oil into an interconnecting pipeline for transportation to the Tioga Rail Terminal, Dakota Access Pipeline (“DAPL”) and other third‑party pipelines and storage facilities.
Tioga Rail Terminal. A crude oil and NGL rail loading terminal in Tioga, North Dakota that is connected to the Tioga Gas Plant, the Ramberg Terminal Facility and our crude oil gathering system.
Crude Oil Rail Cars. A total of 550 crude oil rail cars, constructed to DOT‑117 safety standards, which we operate as unit trains consisting of approximately 100 to 110 crude oil rail cars.
Johnson’s Corner Header System. An approximately six‑mile crude oil pipeline header system located in McKenzie County, North Dakota that receives crude oil by pipeline from Chevron and third parties and delivers crude oil to DAPL and other third‑party interstate pipeline systems.
Other DAPL Connections . Various connections into DAPL that receive crude oil by pipeline from the crude oil gathering system for delivery into DAPL.
Significant 2025 Financial and Operating Results
Significant financial and operating results for the year ended December 31, 2025 include:
Throughput volumes increased 6% for gas processing, 5% for terminaling and 5% for water gathering in 2025 compared with 2024, primarily due to higher Chevron and third-party production.
Consolidated net income of $684.6 million.
Net income attributable to Hess Midstream LP after deduction for noncontrolling interest of $352.9 million, or $2.87 basic earnings per Class A Share.
Net cash provided by operating activities of $983.8 million.
Adjusted EBITDA of $1,238.1 million.
Paid cash distributions of $2.2016 per Class A share in total for the first three quarters of 2025 and declared a cash distribution of $0.7641 per Class A share for the fourth quarter of 2025, which was paid in February 2026.
Completed accretive $80.0 million repurchase of Class A shares of the Company and $320.0 million repurchase of Class B Units of the Partnership.
Revenues and other income in 2025 were $1,621.3 million, up from $1,495.5 million in 2024. The increase was attributable to $54.5 million higher physical volumes, $40.1 million higher tariff rates, $15.4 million higher revenues from services provided directly to third parties, $13.3 million higher pass-through revenues and $2.5 million attributable to minimum volume commitment (“MVC”) revenues that were previously deferred. Total operating costs and expenses in 2025 were $613.2 million, up from $576.5 million in the prior year. The increase was attributable to higher operating and maintenance expenses of $23.3 million, including higher pass-through costs, higher costs charged to us under our omnibus and employee secondment agreements and higher third-party processing and offload fees. Additionally, part of the increase was attributable to higher depreciation of $11.0 million and higher general and administrative expenses of $2.4 million. Income from equity investments in 2025 was $15.9 million, up from $14.0 million in 2024 primarily due to higher volumes processed at the LM4 plant. Interest expense, net of interest income, in 2025 was $225.6 million, up from $202.2 million in 2024, primarily attributable to new fixed-rate senior unsecured notes issued in 2024 and 2025. Income tax expense in 2025 was $113.8 million, up from $71.8 million in 2024, which was primarily driven by increased ownership of the Partnership by Hess Midstream LP following the equity offering and unit repurchase transactions in 2024 and 2025. As a result, consolidated net income increased $25.6 million and Adjusted EBITDA increased $102.0 million.
Throughput volumes increased 6% for gas processing, 6% for crude oil gathering, 5% for gas gathering, 5% for crude oil terminaling and 5% for water gathering, primarily due to higher Chevron and third-party production.
For additional discussion of the results of operations at the segment level, see “ Results of Operations ” below. For additional information regarding Adjusted EBITDA, our non‑GAAP financial measure, see “ How We Evaluate Our Operations ” and “ Reconciliation of Non‑GAAP Financial Measure ” below.
Table of Contents
How We Generate Revenues
We generate substantially all of our revenues by charging fees for gathering, compressing and processing natural gas and fractionating NGLs; gathering, terminaling, loading and transporting crude oil and NGLs; storing and terminaling propane; and gathering and disposing of produced water. We have entered into long-term, fee-based commercial agreements with Chevron effective January 1, 2014, for oil and gas services agreements, and effective January 1, 2019, for water services agreements.
Except for the water services agreements and except for a certain gathering sub-system, as described below, each of our commercial agreements with Chevron had an initial 10-year term. We exercised our renewal options to extend each of these commercial agreements for one additional 10-year term effective January 1, 2024, through December 31, 2033. There were no changes to any provisions of the existing commercial agreements as a result of the exercise of the renewal options. For this gathering sub-system, the initial term is 15 years effective January 1, 2014, and the Secondary Term is 5 years. For the water services agreements the initial term is 14 years effective January 1, 2019, and the Secondary Term is 10 years. We have the sole option to renew these remaining agreements for their Secondary Term that is exercisable at a later date. Upon the expiration of the Secondary Term, if any, the agreements will automatically renew for subsequent one-year periods unless terminated by either party no later than 180 days prior to the end of the applicable Secondary Term.
These agreements include dedications covering substantially all of Chevron’s existing and future owned or controlled production in the Bakken, minimum volume commitments, inflation escalators and fee recalculation mechanisms, all of which are intended to provide us with cash flow stability and growth, as well as downside risk protection. In particular, Chevron’s minimum volume commitments under our commercial agreements provide minimum levels of cash flows and the fee recalculation mechanisms under the agreements allow fees to be adjusted annually to provide us with cash flow stability during the initial term of the agreements. Year 2023 was the final year of the annual rate redetermination process for the majority of our systems. During the Secondary Term of the agreements, the fee recalculation model is replaced by an inflation-based fee structure. See Item 8. Financial Statements and Supplementary Data. Note 4, Related Party Transactions for additional description of our commercial agreements.
Our revenues also include revenues from (i) third-party volumes contracted directly with us, (ii) third-party volumes contracted with Chevron and delivered to us under the commercial agreements with Chevron described above, and (iii) pass-through third-party rail transportation costs, third-party produced water trucking and disposal costs, electricity fees and certain other third-party fees, for which we recognize revenues in an amount equal to the costs. For the year ended December 31, 2025, our gas gathering and gas processing revenues comprised 77% of total affiliate revenues, excluding affiliate pass-through revenues. Together with Chevron, we are pursuing strategic relationships with third-party producers and other midstream companies with operations in the Bakken in order to maximize our utilization rates.
How We Evaluate Our Operations
Our management uses a variety of financial and operating metrics to analyze our operating results and profitability. These metrics include (i) volumes, (ii) operating and maintenance expenses and (iii) Adjusted EBITDA.
Volumes . The amount of revenues we generate primarily depends on the volumes of crude oil, natural gas, NGLs and produced water that we handle at our gathering, processing, terminaling, storage and disposal facilities. These volumes are affected primarily by the supply of and demand for crude oil, natural gas and NGLs in the markets served directly or indirectly by our assets, including changes in crude oil prices, which may further affect volumes delivered by Chevron. Although Chevron has committed to minimum volumes under our commercial agreements described above, our results of operations will be impacted by our ability to:
utilize the remaining uncommitted capacity on, or add additional capacity to, our existing assets, and optimize our existing assets;
identify and execute expansion projects, and capture incremental throughput volumes from Chevron and third parties for these expanded facilities;
increase throughput volumes at our Ramberg Terminal Facility, Tioga Rail Terminal and the Johnson’s Corner Header System by interconnecting with new or existing third‑party gathering pipelines; and
increase gas processing throughput volumes by interconnecting with new or existing third‑party gathering pipelines.
Table of Contents
Operating and Maintenance Expenses. Our management seeks to maximize the profitability of our operations by effectively managing operating and maintenance expenses. These expenses are comprised primarily of costs charged to us under our omnibus agreement and employee secondment agreement, third‑party contractor costs, utility costs, insurance premiums, third‑party service provider costs, related property taxes and other non‑income taxes and maintenance expenses, such as expenditures to repair, refurbish and replace storage facilities and to maintain equipment reliability, integrity and safety. These expenses generally remain relatively stable across broad ranges of throughput volumes but can fluctuate from period to period depending on the mix of activities performed during that period and the timing of substantial expenses, such as gas plant turnarounds. We seek to manage our maintenance expenditures by scheduling periodic maintenance on our assets in order to minimize significant variability in these expenditures and minimize their impact on our cash flow.
Adjusted EBITDA . We define “Adjusted EBITDA” as reported net income (loss) before net interest expense, income tax expense (benefit), and depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance, such as transaction costs, other income and other non‑cash and non‑recurring items, if applicable. We use Adjusted EBITDA to analyze our performance and liquidity.
Adjusted EBITDA is a non‑GAAP supplemental financial measure that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:
our operating performance as compared to other publicly traded companies in the midstream energy industry, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;
the ability of our assets to generate sufficient cash flow to make distributions to our shareholders;
our ability to incur and service debt and fund capital expenditures; and
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
We believe that the presentation of Adjusted EBITDA provides useful information to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA should not be considered as an alternative to GAAP net income (loss), income (loss) from operations, net cash provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA has important limitations as an analytical tool because it excludes some but not all items that affect net income and net cash provided by operating activities. You should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of these measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
Table of Contents
Results of Operations
The following tables summarize our consolidated results of operations for the years ended December 31, 2025, 2024 and 2023. The variances between 2025 and 2024 are discussed in further detail following this overview (in millions, unless otherwise noted). A discussion of variances between 2024 and 2023 can be found in the “Results of Operations” section on page 61 of the Company’s 2024 Annual Report on Form 10-K filed with the SEC on February 27, 2025.
For the Year Ended December 31, 2025
Gathering
Processing and Storage
Terminaling and Export
Interest and Other
Consolidated Hess Midstream LP
Revenues
Affiliate services
Third-party services
Other income
Total revenues
Costs and expenses
Operating and maintenance expenses (exclusive
of depreciation shown separately below)
Depreciation expense
General and administrative expenses
Total operating costs and expenses
Income (loss) from operations
Income from equity investments
Interest expense, net
Income (loss) before income tax expense
Income tax expense
Net income (loss)
Less: Net income (loss) attributable to
noncontrolling interest
Net income (loss) attributable to Hess Midstream LP
Throughput volumes
Gas gathering (MMcf/d)
Crude oil gathering (MBbl/d)
Gas processing (MMcf/d)
Crude oil terminaling (MBbl/d)
NGL loading (MBbl/d)
Water gathering (MBbl/d)
Table of Contents
For the Year Ended December 31, 2024
Gathering
Processing and Storage
Terminaling and Export
Interest and Other
Consolidated Hess Midstream LP
Revenues
Affiliate services
Third-party services
Other income
Total revenues
Costs and expenses
Operating and maintenance expenses (exclusive
of depreciation shown separately below)
Depreciation expense
General and administrative expenses
Total operating costs and expenses
Income (loss) from operations
Income from equity investments
Interest expense, net
Income (loss) before income tax expense
Income tax expense
Net income (loss)
Less: Net income (loss) attributable to
noncontrolling interest
Net income (loss) attributable to Hess Midstream LP
Throughput volumes
Gas gathering (MMcf/d)
Crude oil gathering (MBbl/d)
Gas processing (MMcf/d)
Crude oil terminaling (MBbl/d)
NGL loading (MBbl/d)
Water gathering (MBbl/d)
Table of Contents
For the Year Ended December 31, 2023
Gathering
Processing and Storage
Terminaling and Export
Interest and Other
Consolidated Hess Midstream LP
Revenues
Affiliate services
Third-party services
Other income
Total revenues
Costs and expenses
Operating and maintenance expenses (exclusive
of depreciation shown separately below)
Depreciation expense
General and administrative expenses
Total operating costs and expenses
Income (loss) from operations
Income from equity investments
Interest expense, net
Income (loss) before income tax expense
Income tax expense
Net income (loss)
Less: Net income (loss) attributable to
noncontrolling interest
Net income (loss) attributable to Hess Midstream LP
Throughput volumes
Gas gathering (MMcf/d)
Crude oil gathering (MBbl/d)
Gas processing (MMcf/d)
Crude oil terminaling (MBbl/d)
NGL loading (MBbl/d)
Water gathering (MBbl/d)
Table of Contents
Year ended December 31, 2025 Compared to Year Ended December 31, 2024
Gathering
Revenues and other income increased $71.5 million in 2025 compared to 2024, of which $23.7 million is attributable to higher tariff rates, $12.2 million is attributable to higher gas gathering physical volumes, $10.0 million is attributable to higher pass-through revenues, $8.4 million is attributable to higher water gathering and disposal revenues, $7.9 million is attributable to higher crude oil gathering physical volumes, $7.2 million is attributable to services provided directly to third parties, and $2.1 million is attributable to MVC revenues that were previously deferred.
Operating and maintenance expenses (exclusive of depreciation) increased $12.5 million, of which $10.0 million is attributable to higher pass-through costs, including produced water trucking and disposal and electricity fees, $5.7 million is attributable to higher employee costs charged to us under our omnibus and employee secondment agreements, partially offset by $3.2 million attributable to lower maintenance activity and other costs. Depreciation expense increased $7.9 million, primarily due to new compressor stations and other new gathering assets placed in service.
Processing and Storage
Revenues and other income increased $42.3 million in 2025 compared to 2024, of which $19.2 million is attributable to higher gas processing physical volumes, $12.1 million is attributable to higher tariff rates, $7.7 million is attributable to services provided directly to third parties and $3.3 million is attributable to higher pass-through revenues .
Operating and maintenance expenses (exclusive of depreciation) increased $6.5 million, of which $7.0 million is attributable to higher third-party processing and offload fees, $3.3 million is attributable to pass-through costs, $0.8 million is attributable to higher employee costs charged to us under our omnibus and employee secondment agreements, partially offset by $4.6 million attributable to lower maintenance activity and other costs . Depreciation expense increased $2.9 million, primarily related to suspension of the Capa gas plant project and related engineering cost write off. General and administrative expenses increased $1.6 million due to higher employee costs charged to us under our omnibus and employee secondment agreements.
Income from equity investments increased $1.9 million in 2025 compared to 2024, primarily due to higher volumes processed at the LM4 plant.
Terminaling and Export
Revenues and other income increased $12.0 million in 2025 compared to 2024, of which $6.8 million is attributable to higher physical volumes, $4.3 million attributable to higher tariff rates, $0.5 million is attributable to other income and services provided directly to third parties, and $0.4 million is attributable to MVC revenues that were previously deferred .
Operating and maintenance expenses (exclusive of depreciation) increased $4.3 million, of which $3.2 million is attributable to higher maintenance activity and $1.1 million is attributable to higher employee costs charged to us under our omnibus and employee secondment agreements.
Interest and Other
Interest expense, net of interest income, increased $23.4 million in 2025 compared to 2024, of which $41.5 million is attributable to interest on $800.0 million 5.875% fixed-rate senior unsecured notes issued in February 2025, $14.7 million is attributable to interest on $600.0 million 6.500% fixed-rate senior unsecured notes issued in May 2024, $2.6 million is attributable to higher amortization of deferred finance costs and $2.0 million is attributable to extinguishment loss related to early redemption of $800.0 million 5.625% fixed-rate senior unsecured notes. These increases were partially offset by $37.1 million attributable to interest on $800.0 million 5.625% fixed-rate senior unsecured notes that were redeemed in March 2025 and $0.3 million attributable to interest on our Credit Facilities.
Income tax expense increased $42.0 million in 2025 compared to 2024, primarily driven by increased ownership of the Partnership by Hess Midstream LP following the equity offerings and unit repurchase transactions in 2024 and 2025.
Table of Contents
Other Factors Expected to Significantly Affect Our Future Results
We currently generate substantially all of our revenues under fee‑based commercial agreements with Chevron, including third parties contracted with affiliates of Chevron. These contracts provide cash flow stability and minimize our direct exposure to commodity price fluctuations, since we generally do not own any of the crude oil, natural gas, or NGLs that we handle and do not engage in the trading of crude oil, natural gas, or NGLs. However, commodity price fluctuations indirectly influence our activities and results of operations over the long-term, since they can affect production rates and investments by our Sponsor and third parties in the development of new crude oil and natural gas reserves. The markets for oil and natural gas are volatile and will likely continue to be volatile in the future.
The throughput volumes at our facilities depend primarily on the volumes of crude oil and natural gas produced by our Sponsor and third parties in the Bakken, which, in turn, are ultimately dependent on our Sponsor’s and third parties’ exploration and production margins. Exploration and production margins depend on the price of crude oil, natural gas, and NGLs. These prices are volatile and influenced by numerous factors beyond our or our customers’ control, including the domestic and global supply of and demand for crude oil, natural gas and NGLs. Sustained periods of low prices for oil and natural gas could materially and adversely affect the quantities of oil and natural gas that our Sponsor and third parties can economically produce. The commodities trading markets, as well as global and regional supply and demand factors, may also influence the selling prices of crude oil, natural gas and NGLs. To the extent our plans include revenues for volumes above currently established MVC levels, such revenues could decline to the MVC levels as a result of market volatility. Furthermore, our ability to execute our growth strategy in the Bakken, including attracting third-party volumes, will depend on crude oil and natural gas production in that area, which is also affected by the supply of and demand for crude oil and natural gas.
The majority of our systems entered the Secondary Term of our commercial agreements, which includes a fixed fee structure based on the average fees paid by Chevron during 2021-2023 adjusted annually for inflation up to 3% a year. Such a fee structure may provide less downside risk protection in the future compared to the fee structure we had during the initial term of the commercial agreements. For our terminaling and water gathering systems, the rates will continue to be reset through our annual rate redetermination process through 2033. For all of our systems, MVCs will continue to provide downside risk protection through 2033.
Table of Contents
Reconciliation of Non‑GAAP Financial Measure
The following table presents a reconciliation of Adjusted EBITDA to net income and net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.
Year Ended December 31,
(in millions)
Reconciliation of Adjusted EBITDA to net income:
Net income
Plus:
Depreciation expense
Interest expense, net
Income tax expense
Adjusted EBITDA
Reconciliation of Adjusted EBITDA to net cash
provided by operating activities:
Net cash provided by operating activities
Changes in assets and liabilities
Amortization of deferred financing costs
Interest expense, net
Distribution from equity investments
Income from equity investments
Other
Adjusted EBITDA
Table of Contents
Liquidity and Capital Resources
We expect our ongoing sources of liquidity to include:
cash on hand;
cash generated from operations;
borrowings under our revolving credit facility;
issuances of additional debt securities; and
issuances of additional equity securities.
We believe that cash generated from these sources will be sufficient to meet our operating requirements, our planned capital expenditures, debt service requirements, our quarterly cash distribution requirements, future internal growth projects or potential acquisitions.
Our partnership agreement requires that we distribute all of our available cash, as defined in the agreement, to our shareholders. For information related to the Company’s distributions, see Item 8. Financial Statements and Supplementary Data. Note 8, Partners’ Capital and Distributions and Note 14, Subsequent Events.
Fixed‑Rate Senior Notes
For information related to the Company’s fixed-rate senior unsecured notes, see Item 8. Financial Statements and Supplementary Data. Note 7, Debt and Interest Expense.
Credit Facilities
For information related to the Company’s senior unsecured credit facilities (the “Credit Facilities”), see Item 8. Financial Statements and Supplementary Data. Note 7, Debt and Interest Expense.
Cash Flows
The following table sets forth a summary of our cash flows (in millions):
Year Ended December 31,
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Operating Activities. Net cash provided by operating activities increased $43.5 million in 2025 compared to 2024. The change in net cash provided by operating activities resulted from an increase in revenues and other income of $125.8 million and an increase in distributions received from equity investments of $4.2 million, partially offset by an increase in expenses, other than depreciation, amortization, equity-based compensation and other non-cash gains and losses of $44.7 million and an increase in cash used by changes in working capital of $41.8 million.
Net cash provided by operating activities increased $73.9 million in 2024 compared to 2023. The change in net cash provided by operating activities resulted from an increase in revenues and other income of $146.9 million, an increase in distributions received from equity investments of $5.8 million, partially offset by an increase in expenses, other than depreciation, equity-based compensation and other non-cash gains and losses of $56.3 million and an increase in cash used by changes in working capital of $22.5 million.
Investing Activities. Net cash used in investing activities decreased $50.5 million in 2025 compared to 2024, driven by the timing of payments for additions to property, plant, and equipment predominantly related to our compression capacity and associated pipeline infrastructure expansion program.
Net cash used in investing activities increased $82.6 million in 2024 compared to 2023, driven by the timing of payments for additions to property, plant, and equipment predominantly related to our compression capacity and associated pipeline infrastructure expansion program.
Table of Contents
Financing Activities. Net cash used in financing activities increased $95.3 million in 2025 compared to 2024. In 2025, we received proceeds of $787.5 million, net of financing costs, from our issuance of the new 5.875% fixed-rate senior unsecured notes due 2028, compared to $590.5 million in proceeds, net of financing costs, from our issuance of the 6.500% fixed-rate senior unsecured notes in 2024. In addition, we received $300.5 million net proceeds from borrowings under our Credit Facilities compared to $337.5 million of repayments of borrowings under our Credit Facilities in 2024. We used the net proceeds from the issuance of the new 5.875% fixed-rate senior unsecured notes, along with borrowings under our revolving credit facility, to redeem the $800.0 million notes due 2026. In addition, in 2025, we spent $100.0 million more for share and unit repurchases, paid higher distributions to shareholders and noncontrolling interests of $29.6 million, as well as paid higher transaction costs of $0.7 million compared to 2024.
Net cash used in financing activities decreased $5.3 million in 2024 compared to 2023. In 2024, we received proceeds of $590.5 million, net of financing costs, from our issuance of $600.0 million aggregate principal amount of 6.500% fixed-rate senior unsecured notes, that we used to reduce indebtedness outstanding under our revolving credit facility and for general corporate purposes. In 2024, we repaid $337.5 million of net borrowings under our Credit Facilities compared to $319.5 million net proceeds from borrowings under our Credit Facilities in 2023. In addition, in 2024, we spent $100.0 million less for repurchases of Class B Units of the Partnership and had lower transaction costs of $0.9 million, partially offset by higher distributions to shareholders and noncontrolling interest of $29.1 million.
Capital Expenditures
Our operations can be capital intensive, requiring investments to expand, upgrade, maintain or enhance existing operations and to meet environmental and operational regulations.
The following table sets forth a summary of capital expenditures and reconciles capital expenditures on an accrual basis to additions to property, plant and equipment on a cash basis:
Year Ended December 31,
(in millions)
Total capital expenditures
(Increase) decrease in accrued capital expenditures
(Increase) decrease in capital expenditures included
in accounts payable - affiliate
Additions to property, plant and equipment
Capital expenditures in 2025 focused on construction of two new compressor stations and associated pipeline infrastructure.
Capital expenditures in 2024 and 2023 were also attributable to multi-year expansion of our compression capacity and related pipeline infrastructure.
Cash Requirements
Our cash requirements within the next twelve months include accounts payables, accrued liabilities, the current portion of long-term debt, interest, purchase obligations, which include a portion of our planned capital expenditure program in 2026, and other liabilities.
Our long-term contractual obligations and commitments include:
Debt and interest: See Item 8. Financial Statements and Supplementary Data. Note 7 , Debt and Interest Expense.
Purchase obligations: See Item 8. Financial Statements and Supplementary Data. Note 11, Commitments and Contingencies.
Off-Balance Sheet Arrangements
We have not entered into any transactions, agreements or other contractual arrangements that would result in off‑balance sheet liabilities.
Table of Contents
Critical Accounting Estimates
Accounting policies and estimates affect the recognition of assets and liabilities in our consolidated balance sheets and revenues and expenses in our consolidated statements of operations. The accounting methods used can affect net income, partners’ capital and various financial statement ratios. However, the accounting methods generally do not change cash flows or liquidity. We consider the following policies to be the most critical in understanding the judgments that are involved in preparing our financial statements and the uncertainties that could impact our financial condition and results of operations.
Property, Plant and Equipment
Property, plant and equipment are stated at the lower of historical cost less accumulated depreciation, subject to the results of impairment testing. We capitalize all construction-related direct labor and material costs, as well as indirect construction costs. Indirect construction costs include general engineering, taxes and the cost of funds used during construction of material projects. Costs, including complete asset replacements and enhancements or upgrades that increase the original efficiency, productivity or capacity of property, plant and equipment, are also capitalized. The costs of repairs, minor replacements and other projects, which do not increase the original efficiency, productivity or capacity of property, plant and equipment, are expensed as incurred. The determination of cost componentization and related estimated useful lives is a significant element in arriving at the results of operations. The estimates affect depreciation expense in our accompanying consolidated statements of operations and balance sheets, as described below.
Depreciation Expense
We calculate depreciation using the straight‑line method based on the estimated useful lives after considering salvage values of our assets. When assets are placed into service, we make estimates with respect to their useful lives that we believe are reasonable. Depreciation lives related to our significant assets primarily range between 12 to 35 years. However, factors such as maintenance levels, economic conditions impacting the demand for these assets, and regulatory or environmental requirements are inherently uncertain and could cause us to change our estimates, and impact our future calculation of depreciation. The determination of estimated useful lives is a significant element in arriving at depreciation expense. The estimates affect depreciation expense and cost componentization in our accompanying consolidated statements of operations and balance sheets. These estimates and assumptions have not changed during the periods included in the accompanying consolidated financial statements.
Impairment of Long‑Lived Assets
We review long-lived assets for impairment whenever events or changes in business circumstances indicate the net book values of the assets may not be recoverable. Factors that indicate potential impairment include a significant decrease in the market value of the asset, operating or cash flow losses associated with the use of the asset, and a significant change in the asset’s physical condition or use. Impairment is indicated when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ net book value. Undiscounted cash flows are based on identifiable cash flows that are largely independent of the cash flows of other assets and liabilities. If impairment occurs, a loss is recognized for the difference between fair value and net book value. Such fair value is generally determined by discounting anticipated future net cash flows, an income valuation approach, or by a market-based valuation approach, which are Level 3 fair value measurements. Assumptions and estimates about future cash flows and fair values are complex and subject to significant uncertainty. These assumptions and estimates can be affected by a variety of factors, including external factors such as industry and economic trends that are outside of our control and internal factors such as changes in our business strategy and our internal forecasts. No impairments of long-lived assets were recorded during the periods included in the accompanying consolidated financial statements. The determination of impairments could be a significant element in arriving at the results of operations. Impairment charges would impact total operating costs and expenses and net Property, Plant & Equipment in our accompanying consolidated statements of operations and balance sheets.
Contingencies
In the ordinary course of business, we may become party to lawsuits, administrative proceedings and governmental investigations, including environmental, regulatory and other matters, the outcomes of which are inherently uncertain. Damages or penalties may be sought from us in some matters for which the likelihood of loss may be probable or possible but the amount of loss is not currently estimable. Costs that relate to an existing condition caused by past operations are expensed. Contingent liabilities are recorded when probable and reasonably estimable, the determination of which requires significant judgment and is subject to inherent uncertainty. On the basis of existing information, we believe that the resolution of any such matters, individually or in the aggregate, will not have a material adverse effect on our financial position or results of operations. Estimates related to contingencies affect operating expenses in our accompanying consolidated statements of operations and liabilities in our balance sheets.
Table of Contents
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss arising from adverse changes in market rates and prices. We generally do not take ownership of the crude oil, natural gas or NGLs that we currently gather, process, terminal, store or transport for our customers. Because we generate substantially all of our revenues by charging fees under long-term commercial agreements with Chevron with minimum volume commitments, Chevron bears the risks associated with fluctuating commodity prices and we have minimal direct exposure to commodity prices.
In the normal course of our business, we are exposed to market risks related to changes in interest rates. Our financial risk management activities may include transactions designed to reduce risk by reducing our exposure to interest rate movements. Interest rate swaps may be used to convert interest payments on certain long‑term debt. At December 31, 2025, we did not have in place any derivative instruments to hedge any exposure to changes in interest rates.
At December 31, 2025, our total debt had a carrying value of $3,772.0 million and a fair value of approximately $3,832.6 million, based on Level 2 inputs in the fair value measurement hierarchy. A 15% increase or decrease in interest rates would decrease or increase the fair value of our fixed rate debt by approximately $68.2 million or $55.2 million, respectively. The carrying value of the amounts under our Term Loan A facility and revolving credit facility at the year-end approximated their fair value. Any changes in interest rates do not impact cash outflows associated with fixed rate interest payments or settlement of debt principal, unless a debt instrument is repurchased prior to maturity. A hypothetical change of 100 basis points in the rate of our variable interest rate debt would impact annual interest expense by $7.0 million based on our December 31, 2025, debt balances.
Table of Contents
ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA
HESS MIDSTREAM LP
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )
Report of Independent Registered Public Accounting Firm (PCAOB ID 42 )
Consolidated Balance Sheets as of December 31, 2025 and 2024
Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024 and 2023
Consolidated Statements of Changes in Partners’ Capital for the Years Ended December 31, 2025, 2024 and 2023
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023
Notes to Consolidated Financial Statements
Note 1 Description of Business
Note 2 Summary of Significant Accounting Policies and Basis of Presentation
Note 3 Equity Transactions
Note 4 Related Party Transactions
Note 5 Property, Plant and Equipment
Note 6 Accrued Liabilities and Other Current Liabilities
Note 7 Debt and Interest Expense
Note 8 Partners’ Capital and Distributions
Note 9 Earnings per Share
Note 10 Concentration of Credit Risk
Note 11 Commitments and Contingencies
Note 12 Segments
Note 13 Income Taxes
Note 14 Subsequent Events
Table of Contents
R eport of Independent Registered Public Accounting Firm
To the Board of Directors of Hess Midstream GP LLC and
Shareholders of Hess Midstream LP
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Hess Midstream LP and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of changes in partners’ capital (deficit) and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Table of Contents
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Affiliate Services Revenue Recognition
As described in Notes 2 and 4 to the consolidated financial statements, the Company’s affiliate services revenue was $1,573.6 million for the year ended December 31, 2025. The Company recognizes revenues for each performance obligation under commercial agreements over-time as services are rendered using the output method, measured using the amount of volumes serviced for the period. The Company has long-term fee-based commercial agreements with certain subsidiaries of Chevron Corporation to provide i) gas gathering, ii) crude oil gathering, iii) gas processing and fractionation, iv) storage services, v) terminaling and export services, and vi) water handling services. For the services performed under these commercial agreements, the Company receives a fee per barrel of crude oil, barrel of water, Mcf of natural gas, or Mcf equivalent of NGLs, as applicable, delivered during each month, and Chevron Corporation is obligated to provide the Company with minimum volumes of crude oil, water, natural gas and NGLs.
The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s affiliate services revenue recognition.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over revenue recognized under commercial agreements with Chevron Corporation. These procedures also included, among others (i) obtaining an understanding of the Company’s accounting policy for recognizing and recording revenue; (ii) evaluating whether the revenue recognized under the commercial agreements is consistent with the policy; (iii) testing the amount and timing of revenue recognized, including price and quantity, for a sample of transactions by obtaining confirmations from subsidiaries of Chevron Corporation; and (iv) confirmation of outstanding customer invoice balances as of December 31, 2025.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
February 25, 2026
We have served as the Company’s auditor since 2024.
Table of Contents
Report of Independent Registered P ublic Accounting Firm
To the Board of Directors of Hess Midstream GP LLC and
Shareholders of Hess Midstream LP
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of operations, changes in partners’ capital, and cash flows of Hess Midstream LP (the Company) for the year ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We served as the Company’s auditor from 2014 to 2024.
Houston, Texas
February 29, 2024, except for the effects of the Company’s adoption of ASU 2023-07, Improvements to Reportable Segment Disclosures , as to which the date is August 8, 2024.
Table of Contents
HESS M IDSTREAM LP
CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
(in millions, except share amounts)
Assets
Cash and cash equivalents
Accounts receivable from contracts with customers:
Accounts receivable—trade
Accounts receivable—affiliate
Other current assets
Total current assets
Equity investments
Property, plant and equipment, net
Long-term receivable—affiliate
Deferred tax asset
Other noncurrent assets
Total assets
Liabilities
Accounts payable—trade
Accounts payable—affiliate
Accrued liabilities
Current maturities of long-term debt
Other current liabilities
Total current liabilities
Long-term debt
Deferred tax liability
Other noncurrent liabilities
Total liabilities
Partners’ capital
Class A shares ( 129,403,244 shares issued and outstanding as of
December 31, 2025; 104,086,900 shares issued and outstanding
as of December 31, 2024)
Class B shares ( 78,283,296 shares issued and outstanding as of
December 31, 2025; 113,927,226 shares issued and outstanding as of
December 31, 2024)
Total Class A and Class B partners’ capital
Noncontrolling interest
Total partners’ capital
Total liabilities and partners’ capital
See accompanying notes to consolidated financial statements.
Table of Contents
HESS MIDS TREAM LP
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
(in millions, except per share data)
Revenues
Affiliate services
Third-party services
Other income
Total revenues
Costs and expenses
Operating and maintenance expenses (exclusive of
depreciation shown separately below)
Depreciation expense
General and administrative expenses
Total operating costs and expenses
Income from operations
Income from equity investments
Interest expense, net
Income before income tax expense
Income tax expense
Net income
Less: Net income attributable to noncontrolling interest
Net income attributable to Hess Midstream LP
Net income attributable to Hess Midstream LP
per Class A share:
Basic
Diluted
Weighted average Class A shares outstanding
Basic
Diluted
See accompanying notes to consolidated financial statements.
Table of Contents
HESS MIDSTREAM LP
CONSOLIDATED STATEMENTS OF CHA NGES IN PARTNERS’ CAPITAL (DEFICIT)
Partners’ Capital
Class
Shares
Class
Shares
Noncontrolling
Interest
Total
(in millions)
Balance at December 31, 2022
Net income
Equity-based compensation
Distributions - $ 2.3733 per share
Recognition of deferred tax asset
Sale of shares held by Sponsors
Share and unit repurchases
Transaction costs
Balance at December 31, 2023
Net income
Equity-based compensation
Distributions - $ 2.6382 per share
Recognition of deferred tax asset
Sale of shares held by Sponsors
Share and unit repurchases
Transaction costs
Balance at December 31, 2024
Net income
Equity-based compensation
Distributions - $ 2.9028 per share
Recognition of deferred tax asset
Sale of shares held by Sponsors
Share and unit repurchases
Transaction costs
Balance at December 31, 2025
See accompanying notes to consolidated financial statements.
Table of Contents
HESS MIDST REAM LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
(in millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation expense
Income from equity investments
Distributions from equity investments
Amortization of deferred financing costs
Equity-based compensation expense
Deferred income tax expense
Changes in assets and liabilities:
Accounts receivable – trade
Accounts receivable – affiliate
Other current and noncurrent assets
Accounts payable – trade
Accounts payable – affiliate
Accrued liabilities
Other current and noncurrent liabilities
Net cash provided by operating activities
Cash flows from investing activities
Additions to property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from (repayments of) borrowings with maturities of 90
days or less
Borrowings with maturities of greater than 90 days:
Proceeds
Repayments
Deferred financing costs
Transaction costs
Share and unit repurchases
Distributions to shareholders
Distributions to noncontrolling interest
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Supplemental disclosure of non-cash investing and financing activities:
(Increase) decrease in accrued capital expenditures and related liabilities
Recognition of deferred tax asset
See accompanying notes to consolidated financial statements.
Table of Contents
HESS MIDSTREAM LP
NOTES TO CONSOLIDATED FI NANCIAL STATEMENTS
Unless the context otherwise requires, references in this report to the “Company,” “we,” “our,” “us” or like terms, refer to Hess Midstream LP and its subsidiaries. The “Partnership” refers to Hess Midstream Operations LP (formerly Hess Midstream Partners LP), a consolidated subsidiary of the Company. Our “general partner” refers to Hess Midstream GP LP. References to “Sponsor” or “Sponsors” refer to (a) Hess Corporation (“Hess”) and GIP II Blue Holding, L.P. (“GIP”) when referring to periods prior to May 30, 2025, (b) Hess from May 30, 2025 to July 17, 2025, and (c) Chevron from July 18, 2025.
As used in this report, 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.
Note 1. Descr iption of Business
Description of Business. We are a fee-based, growth-oriented, Delaware limited partnership formed by Hess Infrastructure Partners GP LLC, the general partner of Hess Infrastructure Partners LP (“HIP”), and our general partner to own, operate, develop and acquire a diverse set of midstream assets and provide fee-based services to Chevron, its subsidiaries, and third-party customers. HIP was originally formed in 2015 as a 50 / 50 joint venture between Hess and GIP .
On April 10, 2017, we completed an initial public offering (“IPO”) as a master limited partnership, pursuant to which HIP contributed to the Partnership a 20 % controlling economic interest in each of (i) Hess North Dakota Pipelines Operations LP; (ii) Hess TGP Operations LP; and (iii) Hess North Dakota Export Logistics Operations LP (collectively, the “Joint Interest Assets”) and a 100 % interest in Hess Mentor Storage Holdings LLC. HIP owned the remaining 80 % economic interest in the Joint Interest Assets, a 100 % interest in certain other businesses, including Hess’ Bakken water services business (“Hess Water Services”), which it acquired from Hess on March 1, 2019, and a 100 % interest in Hess Midstream Partners GP LP, which held all of the Partnership’s outstanding incentive distribution rights and the general partner interest in the Partnership, and controlled the Partnership.
On December 16, 2019, the Company and the Partnership completed the transactions (the “Restructuring”) contemplated by the Partnership Restructuring Agreement, dated October 3, 2019, by and among the Company, the Partnership and the other parties thereto. Pursuant to the Restructuring, the Partnership acquired HIP, including HIP’s 80 % interest in the Joint Interest Assets, 100 % interest in Hess Water Services and the outstanding economic general partner interest and incentive distribution rights in the Partnership. The Partnership’s organizational structure converted from a master limited partnership into an “Up-C” structure in which the Partnership’s public unitholders received newly issued Class A Shares in the Company in a one-for-one exchange. Class A Shares commenced trading on the New York Stock Exchange under the former symbol “HESM” on December 17, 2019. As a result of the Restructuring, the Company was delegated control of the Partnership and replaced the Partnership as its publicly traded successor. The Partnership changed its name to “Hess Midstream Operations LP” and became a consolidated subsidiary of the Company.
On May 30, 2025, GIP sold all of its limited partner interests in the Partnership and no longer holds a direct or indirect ownership interest in the Company, the Partnership or our general partner. See Note 3, Equity Transactions for more details.
On July 18, 2025, Hess and Chevron completed the previously announced merger contemplated by the Agreement and Plan of Merger, dated October 22, 2023 (the “Merger”). As a result of the Merger, Chevron is the direct parent of Hess and, therefore, indirectly owns each of the following:
100 % of the limited liability company interests in Hess Infrastructure Partners GP LLC, the sole member of the general partner of our general partner;
100 % of the limited liability company interests in Hess Midstream GP LLC, the general partner of our general partner;
100 % of the partnership interests in Hess Midstream GP LP, our general partner and, through its ownership of the general partner, has the right to elect the entire board of directors;
100 % of the limited liability company interests in Hess Investments North Dakota LLC (“HINDL”), the holder of 449,000 Class A Shares representing limited partner interests in the Company (“Class A Shares”) and all of the issued and outstanding Class B shares representing limited partner interests in the Company (“Class B Shares”) and Class B units representing limited partner interests in the Partnership (“Class B Units”), which Class B Shares and Class B Units together are exchangeable into Class A Shares and, together with HINDL’s Class A Shares, collectively represent an approximate 37.9 % interest in the Company on a consolidated basis.
Throughout this filing and depending on the context, we make references to Chevron, as Chevron, following the completion of the Merger, is our Sponsor and indirectly wholly owns our general partner. Our historical commercial, omnibus and employee secondment agreements with Hess remain in effect subsequent to the Merger, and we refer to Chevron as the counterparty to these agreements, as Chevron currently wholly owns the Hess entities that are counterparties to these agreements.
Table of Contents
Our assets are primarily located in the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota, which we collectively refer to as the Bakken. Our assets and operations are organized into the following three segments: (i) gathering, (ii) processing and storage and (iii) terminaling and export (see Note 12 , Segments ).
LM4 Joint Venture. On January 25, 2018, we entered into a 50 / 50 joint venture with Targa Resources Corp. (“Targa”) to construct a new 200 MMcf/d gas processing plant called Little Missouri 4 (“LM4”). LM4 was placed in service in 2019. Targa is the operator of the plant. See Note 4 , Related Party Transactions .
Note 2. Summary of Sign ificant Accounting Policies and Basis of Presentation
Consolidation . The consolidated financial statements include our accounts and the accounts of entities over which we have a controlling financial interest through our ownership or the majority voting interests of the entity. We consolidate the activities of the Partnership as a variable interest entity (“VIE”) under U.S. Generally Accepted Accounting Principles (“GAAP”). We have concluded that we are the primary beneficiary of the VIE, as defined in the accounting standards, since we have the power, through our ownership, to direct those activities that most significantly impact the economic performance of the Partnership. This conclusion was based on a qualitative analysis that considered the Partnership’s governance structure and the delegation of control provisions, which provide us the ability to control the operations of the Partnership. All financial statement activities associated with the VIE are captured within gathering, processing and storage, and terminaling and export segments (see Note 12 , Segments ). We currently do not have any independent assets or operations other than our interest in the Partnership. At December 31, 2025, our noncontrolling interest represents the 37.7 % interest in the Partnership retained by our Sponsor (2024: 52.3 % ) . All intercompany transactions and balances have been eliminated.
Use of Estimates. We prepare our consolidated financial statements in conformity with the U.S. GAAP, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the years presented. Changes in facts and circumstances may result in revised estimates and actual results could differ from those estimates.
Cash and Cash Equivalents. Cash equivalents consist of highly liquid investments, which are readily convertible into cash and have maturities of three months or less when acquired.
Accounts Receivable – Trade . Trade accounts receivable represent valid claims against nonaffiliated customers for services rendered. We present accounts receivable net of an allowance for credit losses to reflect the net amount expected to be collected. There were no doubtful accounts written off, nor have we provided a material allowance for credit losses, as of December 31, 2025 and 2024 .
Accounts Receivable – Affiliate. We record affiliate accounts receivable upon performance of services to affiliated companies. Generally, we receive payments from affiliated companies on a monthly basis, shortly after performance of services. There were no doubtful accounts written off, nor have we provided an allowance for doubtful accounts, as of December 31, 2025 and 2024 .
Property, Plant and Equipment. Property, plant and equipment are stated at the lower of historical cost less accumulated depreciation subject to the results of impairment testing. We capitalize all construction-related direct labor and material costs, as well as indirect construction costs. Indirect construction costs include general engineering, taxes and the cost of funds used during construction. Costs, including complete asset replacements and enhancements or upgrades that increase the original efficiency, productivity or capacity of property, plant and equipment, are also capitalized. The costs of repairs, minor replacements and other projects, which do not increase the original efficiency, productivity or capacity of property, plant and equipment, are expensed as incurred.
Capitalization of Interest. Interest charges from borrowings are capitalized on material projects using the weighted average cost of outstanding borrowings until the project is substantially complete and ready for its intended use. Capitalized interest is depreciated over the useful lives of the assets in the same manner as the depreciation of the underlying assets.
Impairment of Long‑Lived Assets. We review long-lived assets for impairment whenever events or changes in business circumstances indicate the net book values of the assets may not be recoverable. Factors that indicate potential impairment include a significant decrease in the market value of the asset, operating or cash flow losses associated with the use of the asset, and a significant change in the asset’s physical condition or use. Impairment is indicated when the undiscounted cash flows estimated to be generated by those assets are less than the assets’ net book value. Undiscounted cash flows are based on identifiable cash flows that are largely independent of the cash flows of other assets and liabilities. If impairment occurs, a loss is recognized for the difference between the fair value and net book value. Such fair value is generally determined by discounting anticipated future net cash flows, an income valuation approach, or by a market-based valuation approach, which are Level 3 fair value measurements. No impairments of long‑lived assets were recorded during the years ended December 31, 2025, 2024 and 2023 .
Table of Contents
Leases . We determine if an arrangement is a lease at inception. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease right-of-use asset includes any initial direct costs and excludes lease incentives received. The lease term used in measurement of our lease obligations may include periods covered by an option to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected not to recognize lease assets and lease liabilities for leases with a term of 12 months or less for all classes of underlying assets. Our lease agreements may include lease and non-lease components, which are generally accounted for separately.
Equity Investments. We account for our investment in LM4 under the equity method of accounting, as we do not control, but have a significant influence over, its operations. Difference in the basis of the investment and the underlying net asset value of the equity investee is amortized into net income over the remaining useful lives of the underlying assets. Earnings from equity investments represent our proportionate share of net income generated by the equity investee. We classify distributions received from equity method investees on the basis of the nature of the activity of the investee that generated the distribution as either a return on investment classified as cash inflows from operating activities or a return of investment classified as cash inflows from investing activities when such information is available to us.
Deferred Financing Costs. We capitalize debt issuance costs and fees incurred related to the procurement of our credit facilities. We amortize such costs as additional interest expense over the life of the credit agreement using the straight-line method, which approximates the effective interest method. Unamortized deferred financing costs related to our revolving credit facility are presented in Other noncurrent assets (2025: $ 3.3 million, 2024 : $ 5.3 million) and unamortized deferred financing costs and discounts related to our fixed-rate senior notes and our term loan are presented as a direct reduction to the Long-term debt (2025: $ 28.5 million, 2024 : $ 28.1 million) in the accompanying consolidated balance sheets.
Asset Retirement Obligations. We record legal obligations to remove and dismantle long-lived assets. We recognize a liability for the fair value of legally required asset retirement obligations associated with long-lived assets in the period in which the retirement obligations are incurred if the liability can be reasonably estimated. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived assets. Accretion expense is included in Depreciation expense in the consolidated statement of operations. At December 31, 2025, the asset retirement obligation balance included in Other noncurrent liabilities was $ 21.1 million and the current portion included in Accrued liabilities was $ 5.1 million (2024: $ 14.4 million and $ 5.0 million, respectively).
Revenue Recognition—Contracts with Customers. We earn substantially all of our revenues by charging fees for gathering, compressing and processing natural gas and fractionating NGLs; gathering, terminaling, loading and transporting crude oil and NGLs; gathering and disposing produced water; and storing and terminaling propane. We do not own or take title to the volumes that we handle. Effective January 1, 2014, we entered into (i) gas gathering, (ii) crude oil gathering, (iii) gas processing and fractionation, (iv) storage services and (v) terminal and export services fee‑based commercial agreements with certain subsidiaries of Chevron, and effective January 1, 2019, we entered into water gathering and disposal services fee-based agreements with a subsidiary of Chevron.
Our responsibilities to provide each of the above services for each year under each of the commercial agreements are considered separate, distinct performance obligations. We recognize revenues for each performance obligation under our commercial agreements over‑time as services are rendered using the output method, measured using the amount of volumes serviced during the period. The minimum volume commitments are subject to fluctuation based on nominations covering substantially all of Chevron’s production and projected third-party volumes that will be purchased by Chevron in the Bakken. As the minimum volume commitments are subject to fluctuation, and these commercial agreements contain fee inflation escalators and fee recalculation mechanisms, substantially all of the transaction price, as this term is defined in Accounting Standards Codification (“ASC”) Topic, ASC 606, is variable at inception of each of the commercial agreements. As the variability is resolved prior to the recognition of revenue, we do not apply a constraint to the transaction price at the inception of the commercial agreements. We elected the practical expedient to recognize revenue in the amount to which we have a right to invoice as permitted under ASC 606. Due to this election and as the transaction price allocated to our unsatisfied performance obligations is entirely variable, we have elected the exemption provided by ASC 606 from the disclosure of revenue recognizable in future periods as our unsatisfied performance obligations are fulfilled. There are no significant financing components in any of our commercial agreements. The costs and expenses related to fulfilling our obligations under the commercial agreements are reflected in Operating and maintenance expenses in the accompanying Consolidated Statements of Operations.
Table of Contents
The minimum volumes that Chevron provides to our assets under our commercial agreements include dedicated production covering substantially all of Chevron’s existing and future owned or controlled production in the Bakken and projected third-party volumes owned or controlled by Chevron through dedicated third-party contracts. If Chevron delivers volumes less than the applicable minimum volume commitments under our commercial agreements during any quarter, Chevron is obligated to pay us a shortfall fee equal to the volume deficiency multiplied by the related gathering, processing and/or terminaling fee, as applicable. Our responsibility to stand-ready to service a minimum volume over each quarterly commitment period represents a separate, distinct performance obligation. Chevron is entitled to receive a credit, calculated in barrels or Mcf, as applicable, with respect to the amount of any shortfall fee paid by Chevron, which is initially reported in deferred revenue. Chevron may apply such credit against the fees payable for any volumes delivered to us under the applicable agreement in excess of Chevron’s nominated volumes up to four quarters after such credit is earned. Unused credits are recognized as revenue when the likelihood of Chevron exercising its remaining rights becomes remote. However, Chevron is not entitled to receive any such credit with respect to crude oil terminaling services under our terminal and export services agreement or water handling services under our water gathering and disposal services agreements.
In addition, we provide gathering and processing services directly to third-party customers. We recognize revenues for each performance obligation under our direct contracts with third-party customers over-time as services are rendered using the output method, measured using the amount of volumes serviced during the period.
Our revenues also include pass‑through third‑party rail transportation costs, third-party produced water trucking and disposal costs, electricity fees and certain other fees for which we recognize revenues in an amount equal to the costs.
Depreciation Expense. We calculate depreciation using the straight-line method based on the estimated useful lives after considering salvage values of our assets. Depreciation lives range from 12 to 35 years . However, factors such as maintenance levels, economic conditions impacting the demand for these assets, and regulatory or environmental requirements could cause us to change our estimates, thus impacting the future calculation of depreciation.
Income Taxes . Deferred income taxes are determined using the liability method and reflect temporary differences between the financial statement carrying amount and income tax basis of assets and liabilities recorded using the statutory income tax rate. Regular assessments are made of the likelihood of those deferred tax assets being realized. If it is more likely than not that some or all of the deferred tax assets will not be realized, a valuation allowance is established to reduce the deferred tax assets to the amount expected to be realized. Any corporate alternative minimum tax impacts are treated as a period cost rather than part of a valuation allowance assessment.
Environmental and Legal Contingencies. We accrue and expense environmental costs on an undiscounted basis to remediate existing conditions related to past operations when the future costs are probable and reasonably estimable.
In the ordinary course of business, the Company is from time to time party to various judicial and administrative proceedings. We regularly assess the need for accounting recognition or disclosure of these contingencies. In the case of a known contingency, we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued.
Fair Value Measurements. We measure assets and liabilities requiring fair value presentation using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability) and disclose such amounts according to the level of valuation inputs under the following hierarchy:
Level 1: Quoted prices in an active market for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are directly or indirectly observable.
Level 3: Unobservable inputs that are significant to the fair value of assets or liabilities.
The classification of an asset or liability within the fair value measurement hierarchy is based on the lowest level of input significant to its fair value.
There were no nonrecurring fair value measurements during the years ended December 31, 2025 and 2024. We had other short‑term financial instruments, primarily cash and cash equivalents, accounts receivable and accounts payable, for which the carrying value approximated their fair value as of December 31, 2025 and 2024 .
New Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires, among other disclosures, greater disaggregation of information, the use of certain categories in the rate reconciliation, and the disaggregation of income taxes paid by jurisdiction. We adopted this ASU for the year ended December 31, 2025 , and applied the amendments prospectively. See Note 13, Income Taxes.
Table of Contents
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of income statement expenses. This ASU requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The ASU is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. We are currently assessing the impact of this new ASU on our consolidated financial statements.
Note 3. Equity Transactions
Equity Offering Transactions
During the years ended December 31, 2025, 2024 and 2023, our Sponsors sold the following aggregate number of our Class A Shares in underwritten public offering transactions:
Public Offering Date
Number of Shares Offered
Overallotment Option (1)
Total Number of Shares Offered
Offering
Price Per Share (2)
May 19, 2023
August 17, 2023 (3)
February 8, 2024
May 31, 2024 (3)
September 20, 2024
February 12, 2025 (3)
May 30, 2025
Overallotment options were exercised in full on the same date as the public offering date unless stated otherwise.
Offering price per share for the 2023 and 2025 transactions represents price to the public excluding underwriting discounts. Offering price for the 2024 transactions represents price per share to the underwriter.
The overallotment options for these transactions were exercised in full on August 22, 2023, June 3, 2024, and February 19, 2025, respectively.
Hess and GIP sold their Class A Shares 50/50 as part of the May 19, 2023 transaction . For the remaining equity offering transactions listed above, GIP was the sole selling shareholder. GIP received net proceeds from the 2025 equity offering transactions of approximately $ 1.0 billion in total (2024: $ 1.2 billion , 2023: $ 662.2 million in total for both Sponsors, after deducting underwriting discounts). The Company did no t receive any proceeds in any of the equity offering transactions listed above. The above equity offering transactions were conducted pursuant to a registration rights agreement among us and the Sponsors. The Class A Shares sold in the offerings were obtained by the Sponsors by exchanging to us a corresponding number of their Class B Units in the Partnership, together with an equal number of our Class B Shares and, as a result, the total number of Class A and Class B Shares did not change. The Company retained control in the Partnership based on the delegation of control provisions, as described in Note 2, Summary of Significant Accounting Policies and Basis of Presentation . As a result of the equity offering transactions described above, we recognized adjustments decreasing the carrying amount of the Class A shareholders’ capital balance by $ 44.9 million and $ 8.6 million during the years ended December 31, 2025 and December 31, 2024, respectively, and increasing the carrying amount of noncontrolling interest by an equal amount to reflect the change in ownership interest. During the year ended December 31, 2023 we recognized adjustments increasing the carrying amount of the Class A shareholders’ capital balance by $ 17.8 million and decreasing the carrying amount of noncontrolling interest by an equal amount.
Class B Unit Repurchases
For the years ended December 31, 2025, 2024 and 2023, we had the following activity related to Class B Unit repurchases (aggregate purchase price in millions):
Unit Repurchase
Agreement Date
Closing Date
Number of Units Repurchased
Aggregate Purchase Price
Purchase Price
Per Unit
March 27, 2023
March 30, 2023
June 26, 2023
June 29, 2023
September 19, 2023
September 22, 2023
November 13, 2023
November 16, 2023
March 11, 2024
March 14, 2024
June 24, 2024
June 26, 2024
September 9, 2024
September 11, 2024
January 13, 2025
January 15, 2025
May 5, 2025
May 9, 2025
August 4, 2025
August 8, 2025
Table of Contents
T he purchase price per Class B Unit was set as the closing price of the Class A Shares on each respective unit repurchase agreement date. The unit repurchase transactions were funded using borrowings under the Partnership’s existing revolving credit facility and cash on hand (see Note 7, Debt and Interest Expense ).
Pursuant to the terms of the unit repurchase agreements described above, immediately following each purchase of the Class B Units from the Sponsors, the Partnership cancelled the repurchased units, and the Company cancelled, for no consideration, an equal number of Class B Shares representing limited partner interests in the Company.
Accelerated Share Repurchases
For the year ended December 31, 2025, we had the following activity related to accelerated share repurchase (“ASR”) transactions (aggregate purchase price in millions):
ASR Prepayment Date
ASR Termination Date
Number of Class A Shares Repurchased
Aggregate Purchase Price
Average Price Per Share
May 6, 2025
May 12, 2025
August 5, 2025
September 10, 2025
We did no t have ASR transactions during 2024 or 2023. For the 2025 ASR transactions, the purchase price per Class A Share was determined by the average of the daily volume-weighted average prices of Class A Shares during the term of the transaction. Following the settlement of the ASR transactions, the Company cancelled the repurchased Class A Shares, and the Partnership cancelled, for no consideration, an equal number of its Class A units representing limited partner interests in the Partnership.
The ASR transactions described above were funded using borrowings under the Partnership’s existing revolving credit facility (see Note 7, Debt and Interest Expense ).
The Class B Unit repurchases and ASR transactions were accounted for in accordance with ASC 810, whereby changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. The carrying amounts of the noncontrolling interest were adjusted to reflect the changes in the ownership interest with the difference between the amounts of consideration paid and the amounts by which the noncontrolling interest were adjusted recognized as a reduction in equity attributable to Class A shareholders. Distributions to noncontrolling interest holders related to the 2024 and 2025 repurchase transactions exceeded the noncontrolling interest’s carrying value resulting in a deficit balance as shown in the accompanying consolidated statement of changes in partners’ capital (deficit).
We incurred approximately $ 2.9 million of costs directly attributable to the repurchase transactions (2024: $ 2.4 million, 2023: $ 3.3 million) that were charged to equity.
As a result of the equity offering, Class B Unit repurchase and ASR transactions described above, we also recognized an additional deferred tax asset of $ 305.0 million (2024: $ 329.8 million, 2023: $ 185.1 million) related to the change in the temporary difference between the carrying amount and the tax basis of our investment in the Partnership. The effect of recognizing the additional deferred tax asset was included in Class A shareholders’ equity balance in the accompanying consolidated statement of changes in partners’ capital (deficit) due to the transactions being characterized as transactions among or with shareholders.
See Note 8, Partners’ Capital and Distributions for the impact of the above equity transactions on the number of shares outstanding.
Note 4. Related Party Transactions
We are part of the consolidated operations of Chevron, and substantially all of our revenues as shown on the accompanying consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023 were derived from transactions with Chevron and its affiliates. In 2023, we began providing our services directly to third-party customers and we plan to increase our services to third parties in the future. Chevron also provides substantial operational and administrative services to us in support of our assets and operations. In addition, we had Class B Unit repurchase transactions and distributions to the Sponsors, which are disclosed elsewhere in the Notes to consolidated financial statements.
Table of Contents
Commercial Agreements
We have long-term fee-based commercial agreements with certain subsidiaries of Chevron to provide (i) gas gathering, (ii) crude oil gathering, (iii) gas processing and fractionation, (iv) storage services, (v) terminaling and export services, and (vi) water handling services.
For the services performed under these commercial agreements, we receive a fee per barrel of crude oil, barrel of water, Mcf of natural gas, or Mcf equivalent of NGLs, as applicable, delivered during each month, and Chevron is obligated to provide us with minimum volumes of crude oil, water, natural gas and NGLs. MVCs are equal to 80 % of Chevron’s nominations in each development plan that apply on a three-year rolling basis such that MVCs are set for the three years following the most recent nomination. Without our consent, the MVCs resulting from the nominated volumes for any quarter or year contained in any prior development plan cannot be reduced by any updated development plan unless dedicated production is released by us. The applicable MVCs may, however, be increased as a result of the nominations contained in any such updated development plan. If Chevron fails to deliver its applicable MVCs during any quarter, then Chevron will pay us a shortfall fee equal to the volume of the deficiency multiplied by the applicable fee.
Except for the water services agreements and except for a certain gathering sub-system as described below, each of our commercial agreements with Chevron had an initial 10 -year term effective January 1, 2014 (“Initial Term”). For this gathering sub-system, the Initial Term is 15 years effective January 1, 2014 and for the water services agreements the Initial Term is 14 years effective January 1, 2019. Each of our commercial agreements other than our storage services agreement includes an inflation escalator capped at 3 % in any calendar year and a fee recalculation mechanism that allows fees to be adjusted annually during the Initial Term for updated estimates of cumulative throughput volumes and our capital and operating expenditures in order to target a return on capital deployed over the Initial Term of the applicable commercial agreement (or, with respect to the crude oil services fee under our terminal and export services agreement, the 20 -year period commencing on the effective date of the agreement).
For certain crude oil gathering, terminaling, storage, gas processing and gas gathering commercial agreements with Chevron, we exercised our renewal options to extend each of these commercial agreements for one additional 10 -year term (“Secondary Term”) effective January 1, 2024 through December 31, 2033. There were no changes to any provisions of the existing commercial agreements as a result of the exercise of the renewal options. For the remaining gathering sub-system, the Secondary Term is 5 years, and for the water services agreements the Secondary Term is 10 years, and we have the sole option to renew these remaining agreements for their Secondary Term that is exercisable at a later date. Upon the expiration of the Secondary Term, if any, the agreements will automatically renew for subsequent one-year periods unless terminated by either party no later than 180 days prior to the end of the applicable Secondary Term.
Consistent with the existing terms of the commercial agreements, during the Secondary Term of each of our commercial agreements other than our storage services agreement and terminal and export services agreement (with respect to crude oil terminaling services), the fee recalculation model under each applicable agreement is replaced by an inflation-based fee structure. The initial fee for the first year of the Secondary Term is determined based on the average fees paid by Chevron under the applicable agreement during the last three years of the Initial Term (with such fees adjusted for inflation through the first year of the Secondary Term). For each year following the first year of the Secondary Term, the applicable fee is adjusted annually based on the percentage change in the consumer price index, provided that we may not increase any fee by more than 3 % in any calendar year solely by reason of an increase in the consumer price index, and no fee may ever be reduced below the amount of the applicable fee payable by Chevron in the prior year as a result of a decrease in the consumer price index. During the Secondary Term, MVCs continue to be set at 80 % of Chevron’s nominated volumes in each development plan set three years in advance. Except for the crude oil terminaling and water handling services, Chevron is entitled to receive a credit, calculated in barrels or Mcf, as applicable, with respect to the amount of any shortfall fee paid by Chevron and may apply such credit against any volumes delivered to us under the applicable agreement in excess of Chevron’s nominated volumes during any of the following four quarters after such credit is earned, after which time any unused credits will expire. The shortfall amounts received under MVCs during the Secondary Term (except for the crude oil terminaling and water handling services) are initially recorded as deferred revenue and recognized as revenue as the credits are utilized, expire, or when the likelihood of Chevron utilizing its remaining credits becomes remote.
At December 31, 2025, deferred revenue included in Accrued liabilities in the accompanying consolidated balance sheet was $ 6.4 million (December 31, 2024: $ 2.6 million ).
For the years ended December 31, 2025, 2024 and 2023 , approximately 97 % , 98 % , and 99 % , respectively, of our revenues were attributable to our fee-based commercial agreements with Chevron, including revenues from third-party volumes contracted with Chevron and delivered to us under these agreements. In 2023, we began providing fee-based services directly to third-party customers. Together with Chevron, we are pursuing strategic relationships with third-party producers and other midstream companies with operations in the Bakken in order to maximize our utilization rates.
Table of Contents
Revenues from contracts with customers, including affiliated services and third-party services, on a disaggregated basis are as follows:
Year Ended December 31,
(in millions)
Affiliate services
Oil and gas gathering services
Processing and storage services
Terminaling and export services
Water gathering and disposal services
Total affiliate services
Third-party services
Total revenues from contracts with customers
Other income
Total revenues
The following table presents third-party pass-through costs for which we recognize revenues in an amount equal to the costs. These pass-through revenues are included in Affiliate services, and the related pass-through costs are included in Operating and maintenance expenses in the accompanying consolidated statements of operations.
Year Ended December 31,
(in millions)
Electricity and other related fees
Produced water trucking and disposal costs
Rail transportation costs
Total
Omnibus and Employee Secondment Agreements
We entered into an omnibus agreement with Chevron under which we pay Chevron on a monthly basis an amount equal to the total allocable costs of Chevron’s employees and contractors, subcontractors or other outside personnel engaged by Chevron and its subsidiaries to the extent such employees and outside personnel perform operational and administrative services for us in support of our assets, plus a specified percentage markup of such amount depending on the type of service provided, as well as an allocable share of direct costs of providing these services.
We also entered into an employee secondment agreement with Chevron under which certain employees of Chevron are seconded to our general partner to provide services with respect to our assets and operations, including executive oversight, business and corporate development, investor relations, communications and public relations, routine and emergency maintenance and repair services, routine operational services, routine administrative services, construction services, and such other operational, commercial and business services that are necessary to develop and execute the Company’s business strategy. On a monthly basis, we pay a secondment fee to Chevron that is intended to cover and reimburse Chevron for the total costs actually incurred by Chevron and its affiliates in connection with employing the seconded employees to the extent such total costs are attributable to the provision of services with respect to the Company’s assets and operations.
For the years ended December 31, 2025, 2024 and 2023, we had the following charges from Chevron included in the operating and maintenance expenses and general and administrative expenses in the accompanying consolidated statement of operations. The classification of these charges between operating and maintenance expenses and general and administrative expenses is based on the fundamental nature of the services being performed for our operations.
Year Ended December 31,
(in millions)
Operating and maintenance expenses
General and administrative expenses
Total
Table of Contents
LM4 Agreements
Separately from our commercial agreements with Chevron, effective January 24, 2018, we entered into a gas processing agreement with LM4, a 50 / 50 joint venture with Targa, under which we deliver natural gas to LM4, and LM4 processes and redelivers certain volumes of residue gas and NGLs resulting from such processing services. The agreement has a 16 -year initial term, after which it is automatically renewed for subsequent one-year terms unless terminated by either party . Under this agreement, we pay a processing fee per Mcf of natural gas and reimburse LM4 for our proportionate share of electricity costs. These processing fees are included in Operating and maintenance expenses in the accompanying consolidated statements of operations.
We are entitled to 50 % of the available processing capacity of the LM4 gas processing plant. Should Targa not use all of the remaining processing capacity at the plant on any day, such unutilized portion of the available capacity will be available for our use. Regardless of the actual portion of the plant available capacity utilized by each joint venture member during a given period, under the LM4 amended and restated limited liability company agreement, profits and losses and cash distributions of the LM4 joint venture are allocated 50 / 50 between Targa and us. LM4 was placed in service in 2019.
For the years ended December 31, 2025, 2024 and 2023, we had the following activity related to our agreements with LM4:
Year Ended December 31,
(in millions)
Processing fee incurred
Earnings from equity investments
Distributions received from equity investments
Note 5. Property, Plant and Equipment
Property, plant and equipment, at cost, is as follows:
Estimated useful lives
December 31, 2025
December 31, 2024
(in millions, except for number of years)
Gathering assets
Pipelines
22 years
Compressors, pumping stations and terminals
22 to 25 years
Gas plant assets
Pipelines, pipes and valves
22 to 25 years
Equipment
12 to 30 years
Processing and fractionation facilities
25 years
Buildings
35 years
Logistics facilities and railcars
20 to 25 years
Storage facilities
20 to 25 years
Other
20 to 25 years
Construction-in-progress
Total property, plant and equipment, at cost
Accumulated depreciation
Property, plant and equipment, net
Note 6. Accrued Liabilities and Other Current Liabilities
Accrued liabilities are as follows:
December 31, 2025
December 31, 2024
(in millions)
Accrued interest
Accrued capital expenditures
Other accruals
Total
Other current liabilities are as follows:
December 31, 2025
December 31, 2024
(in millions)
Property and sales and use tax payable
Other current liabilities
Total
Table of Contents
Note 7. Debt and Interest Expense
Total long-term debt is as follows:
December 31, 2025
December 31, 2024
(in millions)
Fixed-rate senior notes:
5.625 % due 2026
5.125 % due 2028
5.875 % due 2028
6.500 % due 2029
4.250 % due 2030
5.500 % due 2030
Total fixed-rate senior notes
Term Loan A facility
Revolving credit facility
Total Borrowings
Unamortized deferred financing costs and discounts
Total debt
Less: current maturities of long-term debt
Total long-term debt
As of December 31, 2025, the maturity profile of total debt, excluding deferred financing costs and discounts, is as follows:
(in millions)
Total
Fixed-rate senior notes
Term Loan facility
Revolving credit facility
Total debt (excluding interest)
Fixed‑Rate Senior Notes
In February 2025, the Partnership issued $ 800.0 million aggregate principal amount of 5.875 % fixed‑rate senior unsecured notes due 2028 to qualified institutional investors. Interest is payable semi‑annually on March 1 and September 1 , commencing September 1, 2025. The Partnership used the net proceeds from the issuance of the new notes, along with borrowings under its revolving credit facility, to redeem its outstanding $ 800.0 million aggregate principal amount of 5.625 % fixed‑rate senior unsecured notes due 2026 (the “2026 Notes”). The Partnership redeemed the 2026 Notes on March 5, 2025, and recognized an extinguishment loss of approximately $ 2.0 million included in Interest expense, net in the accompanying consolidated statement of operations.
In May 2024, the Partnership issued $ 600.0 million aggregate principal amount of 6.500 % fixed‑rate senior unsecured notes due 2029 to qualified institutional investors. Interest is payable semi‑annually on June 1 and December 1 . The Partnership used the proceeds to reduce indebtedness outstanding under the Partnership’s revolving credit facility, with the remaining net proceeds for general corporate purposes.
In April 2022, the Partnership issued $ 400.0 million aggregate principal amount of 5.500 % fixed-rate senior unsecured notes due 2030 to qualified institutional investors. Interest is payable semi‑annually on April 15 and October 15. The Partnership used the proceeds to repay the borrowings under its revolving credit facility used to finance the 2022 repurchase transaction (see Note 3, Equity Transactions ).
In August 2021, the Partnership issued $ 750.0 million aggregate principal amount of 4.250 % fixed‑rate senior unsecured notes due 2030 to qualified institutional investors. Interest is payable semi‑annually on February 15 and August 15 . The Partnership used the proceeds to fund a 2021 repurchase transaction.
In December 2019, the Partnership issued $ 550.0 million aggregate principal amount of 5.125 % fixed‑rate senior unsecured notes due 2028 to qualified institutional investors. Interest is payable semi‑annually on June 15 and December 15. The Partnership used the net proceeds to finance the acquisition of HIP, including to repay borrowings under HIP’s credit facilities, and pay related fees and expenses.
At December 31, 2025 and 2024, the Partnership’s fixed-rate senior unsecured notes had a weighted average interest rate of 5.4 % for both years.
Table of Contents
Each of the indentures for the senior unsecured notes described above contains covenants that the Partnership considers to be customary. On July 24, 2025 (the “Investment Grade Rating Date”), the Partnership received an investment grade rating from S&P Global Ratings (“S&P”). S&P assigned a rating of ‘BBB-’ to the Partnership’s unsecured debt and raised the Partnership’s issuer level credit rating to ‘BBB-’, with a stable outlook. As a result of this investment grade rating, the Partnership is not required to comply with certain restrictive covenants set forth in the unsecured notes indentures, including those related to (i) declaring or paying any dividend or making any other restricted payments; (ii) transfer or sale of assets or subsidiary stock; (iii) incurrence of additional debt; (iv) restricted investments; and (v) affiliate transactions. As of December 31, 2025, we were in compliance with all debt covenants under the indentures.
In addition, the covenants included in the indentures governing the senior unsecured notes contain provisions that allow the Company to satisfy the Partnership’s reporting obligations under the indentures, as long as any such financial information of the Company contains information reasonably sufficient to identify the material differences, if any, between the financial information of the Company, on the one hand, and the Partnership and its subsidiaries on a stand-alone basis, on the other hand, and the Company does not directly own capital stock of any person other than the Partnership and its subsidiaries, or material business operations that would not be consolidated with the financial results of the Partnership and its subsidiaries. The Company is a holding company and has no independent assets or operations. Other than the interest in the Partnership and the effect of federal and state income taxes that are recognized at the Company level, there are no material differences between the consolidated financial statements of the Partnership and the consolidated financial statements of the Company.
Credit Facilities
As of December 31, 2025 , the Partnership had $ 1.4 billion senior unsecured credit facilities (the “Credit Facilities”) consisting of a $ 1.0 billion five-year revolving credit facility and a $ 400.0 million five‑year Term Loan A facility. The Credit Facilities mature in July 2027 . Facility fees accrue on the total capacity of the revolving credit facility. Borrowings under the five-year Term Loan A facility generally bear interest at Secured Overnight Financing Rate (“SOFR”) plus the applicable margin that, prior to the Investment Grade Rating Date, ranged from 1.65 % to 2.55 %, while the applicable margin for the five‑year syndicated revolving credit facility ranged from 1.375 % to 2.050 %. As a result of the investment grade rating, on and after the Investment Grade Rating Date, borrowings under the Partnership’s five-year Term Loan A facility bear interest at SOFR plus the applicable margin ranging from 1.10 % to 1.85 %, while the applicable margin for the five-year syndicated revolving credit facility ranges from 1.00 % to 1.60 %. On and after the Investment Grade Rating Date, pricing levels for the facility fee and interest rate margins are based on the Partnership’s Designated Rating (as defined in the Credit Facilities) . At December 31, 2025, borrowings of $ 338.0 million were drawn and outstanding under the Partnership’s revolving credit facility, and borrowings of $ 362.5 million, excluding deferred issuance costs, were drawn and outstanding under the Partnership’s Term Loan A facility.
The Credit Facilities can be used for borrowings and letters of credit for general corporate purposes. After the Investment Grade Rating Date, each of the guarantors was released from its obligations under the guarantee agreement, each of the loan parties was released from its obligations under the security documents to which it was a party and all liens granted to the administrative agent by the loan parties on any collateral were released. Additionally, after the Investment Grade Rating Date, the covenant that requires the Partnership to maintain a ratio of secured debt to Consolidated EBITDA (as defined in the Credit Facilities) for the prior four fiscal quarters of not greater than 4.00 to 1.00 as of the last day of each fiscal quarter fell away . The Credit Facilities contain representations and warranties, affirmative and negative covenants and events of default that the Partnership considers to be customary for an agreement of this type, including a covenant that requires the Partnership to maintain a ratio of total debt to Consolidated EBITDA (as defined in the Credit Facilities) for the prior four fiscal quarters of not greater than 5.00 to 1.00 as of the last day of each fiscal quarter ( 5.50 to 1.00 during the specified period following certain acquisitions) . As of December 31, 2025, the Partnership was in compliance with this financial covenant.
Fair Value Measurement
At December 31, 2025, our total debt had a carrying value of $ 3,772.0 million and had a fair value of approximately $ 3,832.6 million, based on Level 2 inputs in the fair value measurement hierarchy. The carrying value of the amounts under the Term Loan A facility and revolving credit facility at December 31, 2025, approximated their fair value. Any changes in interest rates do not impact cash outflows associated with fixed rate interest payments or settlement of debt principal, unless a debt instrument is repurchased prior to maturity.
Interest Paid
The total amount of interest paid on all fixed-rate senior notes and credit facilities, including facility fees, during the years ended December 31, 2025, 2024 and 2023 was $ 214.2 million, $ 191.6 million and $ 170.6 million, respectively.
Table of Contents
Note 8. Partners’ Capital and Distributions
Shares Outstanding
As of December 31, 2025, our Sponsor and its affiliates collectively held 449,000 Class A Shares (economic and voting) and 78,283,296 Class B Shares (non-economic, voting only) of the Company, and 78,283,296 Cl ass B Units of the Partnership. Class B Units of the Partnership together with the equal number of Class B Shares of the Company are convertible to Class A Shares of the Company on a one -for-one basis.
The changes in the number of shares of the Company outstanding from December 31, 2022 through December 31, 2025 are as follows:
Class A Shares
Public
Sponsors
Total Class A Shares
Class B Shares
Sponsors
Total Class A and Class B Shares
Balance, December 31, 2022
Equity-based compensation
Repurchase Transaction -
March 2023
Equity offering transaction -
May 2023
Repurchase Transaction -
June 2023
Equity offering transaction -
August 2023
Repurchase Transaction -
September 2023
Repurchase Transaction -
November 2023
Balance, December 31, 2023
Equity-based compensation
Equity offering transaction -
February 2024
Repurchase Transaction -
March 2024
Equity offering transaction -
May 2024
Repurchase Transaction -
June 2024
Equity offering transaction -
September 2024
Repurchase Transaction -
September 2024
Balance, December 31, 2024
Equity-based compensation
Repurchase Transaction -
January 2025
Equity offering transaction -
February 2025
Repurchase Transaction -
May 2025
Equity offering transaction -
May 2025
Repurchase Transaction -
August 2025
Balance, December 31, 2025
Table of Contents
Distributions
Our partnership agreement requires that, within 45 days after the end of each quarter, we distribute all of our available cash to shareholders of record on the applicable record date. The following table details the distributions declared and/or paid for the periods presented:
Period
Record Date
Distribution Date
Distribution per Class A Share
First Quarter 2023
May 4, 2023
May 12, 2023
Second Quarter 2023
August 3, 2023
August 14, 2023
Third Quarter 2023
November 2, 2023
November 14, 2023
Fourth Quarter 2023
February 8, 2024
February 14, 2024
First Quarter 2024
May 2, 2024
May 14, 2024
Second Quarter 2024
August 8, 2024
August 14, 2024
Third Quarter 2024
November 7, 2024
November 14, 2024
Fourth Quarter 2024
February 6, 2025
February 14, 2025
First Quarter 2025
May 8, 2025
May 14, 2025
Second Quarter 2025
August 7, 2025
August 14, 2025
Third Quarter 2025
November 6, 2025
November 14, 2025
Fourth Quarter 2025 (1)
February 5, 2026
February 13, 2026
For more information, see Note 14 , Subsequent Events .
Note 9. Earnings per Share
We calculate earnin gs per Class A Share as we do not have any other participating securities. Substantially all of income tax expense is attributed to earnings of Class A Shares reflective of our organizational structure. Class B Units of the Partnership together with the equal number of Class B Shares of the Company are convertible to Class A Shares of the Company on a one -for-one basis. In addition, our restricted equity-based awards may have a dilutive effect on our earnings per share. Diluted earnings per Class A Share are calculated using the “treasury stock method” or “if-converted method”, whichever is more dilutive.
Year Ended December 31,
(in millions, except per share amounts)
Net income
Less: Net income attributable to noncontrolling interest
Net income attributable to Hess Midstream LP
Net income attributable to Hess Midstream LP
per Class A share:
Basic:
Diluted:
Weighted average Class A shares outstanding:
Basic:
Diluted:
For the year ended December 31, 2025 , the weighted average number of Class A Shares outstanding included 20,979 dilutive restricted shares ( 2024 : 31,426 shares; 2023 : 40,210 shares).
Table of Contents
In computing the dilutive effect, if any, of an exchange of Class B Units of the Partnership together with the equal number of Class B Shares of the Company to Class A Shares of the Company, net income attributable to Class A shareholders is adjusted, including for additional income tax expense, due to elimination of the noncontrolling interest associated with Class B Units of the Partnership. For the years ended December 31, 2024 and 2023, the “if-converted” method was more dilutive. A reconciliation of the numerator and the denominator of the diluted earnings per Class A Share calculation under the “if-converted” method, is presented below:
Year Ended December 31,
(in millions, except per share data)
Diluted net income per share
Numerator:
Net income attributable to Hess Midstream LP
Effect of exchange of Class B Units of the Partnership and
the equal number of Class B Shares of the Company to
Class A Shares of the Company
Effect of income tax expense on additional income attributable
to Hess Midstream LP (1)
Diluted net income attributable to Hess Midstream LP
Denominator:
Basic weighted average Class A Shares outstanding
Effect of dilutive securities:
Weighted average Class B Units/Shares
Restricted equity-based awards
Diluted weighted average shares outstanding
Diluted net income attributable to Hess Midstream LP
per Class A Share
Income tax effect is calculated assuming 24.39 % blended U.S. federal and state income tax rate.
Note 10. Concen tration of Credit Risk
As of December 31, 2025 and 2024, Chevron and its affiliates represented approximately 96 % and 97 % , respectively, of accounts receivable from contracts with customers. Total revenues attributable to Chevron for the years ended December 31, 2025, 2024 and 2023 were approximately 97 % , 98 % , and 99 % , respectively.
Note 11. Commitments and Contingencies
Environmental Contingencies
The Company is subject to federal, state and local laws and regulations relating to the environment. As of December 31, 2025 our reserves for all estimated remediation liabilities were $ 1.4 million in Accrued liabilities and $ 0.9 million in Other noncurrent liabilities , each in the accompanying consolidated balance she et, compared with $ 1.9 million and $ 1.4 million, respectively, as of December 31, 2024.
Legal Proceedings
As of December 31, 2025 and 2024 , we did no t have material accrued liabilities for legal contingencies. Based on currently available information, we believe it is remote that the outcome of known matters would have a material adverse impact on our financial condition, results of operations or cash flows.
Lease and Purchase Obligations
As of December 31, 2025 and 2024 , we did no t have material lease obligations.
As of December 31, 2025 , we did no t have material unconditional purchase commitment s for the year ending December 31, 2026 , or for any subsequent years thereafter.
Note 12. Segm ents
Our operations are located in the United States and are organized into three reportable segments: (i) gathering, (ii) processing and storage and (iii) terminaling and export. Our reportable segments comprise the structure used by our Chief Executive Officer and Chief Financial Officer , who, collectively, have been determined to be our Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance. These segments are strategic business units with differing products and services. Interest and Other includes certain functional departments that do not recognize revenues. The accounting policies of the segments are identical to those described in Note 2 , Summary of Significant Accounting Policies and Basis of Presentation .
Table of Contents
Our CODM evaluates the segments’ operating performance based on Adjusted EBITDA, defined as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization, as further adjusted for other non‑cash, non‑recurring items, if applicable. For all of the segments, the CODM uses segment Adjusted EBITDA in the annual budgeting and monthly forecasting process. The CODM considers budget-to-current forecast and prior forecast-to-current forecast variances for Adjusted EBITDA on a monthly basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment.
Gathering . Our gathering segment consists of the following assets:
Natural Gas Gathering and Compression . A natural gas gathering and compression system located primarily in McKenzie, Williams and Mountrail Counties, North Dakota connecting Chevron and third‑party owned or operated wells to the Tioga Gas Plant, LM4 gas processing plant, and third‑party pipeline facilities. The system also includes the Hawkeye Gas Facility.
Crude Oil Gathering : A crude oil gathering system located primarily in McKenzie, Williams, and Mountrail Counties, North Dakota, connecting Chevron and third‑party owned or operated wells to the Ramberg Terminal Facility and the Johnson’s Corner Header System. The system also includes the Hawkeye Oil Facility.
Produced Water Gathering and Disposal. A produced water gathering system and disposal facilities located primarily in Williams and Mountrail Counties, North Dakota.
Processing and Storage . Our processing and storage segment consists of the following assets:
Tioga Gas Plant (TGP) . A natural gas processing and fractionation plant located in Tioga, North Dakota.
Mentor Storage Terminal . A propane storage cavern and rail and truck loading and unloading facility located in Mentor, Minnesota.
Equity Investment in LM4 Joint Venture. The Partnership’s 50 % equity method investment in LM4 joint venture that owns a natural gas processing plant located in McKenzie County, North Dakota.
Terminaling and Export . Our terminaling and export segment consists of the following assets:
Ramberg Terminal Facility . A crude oil pipeline and truck receipt terminal located in Williams County, North Dakota that is capable of delivering crude oil into an interconnecting pipeline for transportation to the Tioga Rail Terminal, Dakota Access Pipeline (“DAPL”) and other third‑party pipelines and storage facilities.
Tioga Rail Terminal. A crude oil and NGL rail loading terminal in Tioga, North Dakota that is connected to the Tioga Gas Plant, the Ramberg Terminal Facility and our crude oil gathering system.
Crude Oil Rail Cars. A total of 550 crude oil rail cars, constructed to the DOT‑117 safety standards, which we operate as unit trains consisting of approximately 100 to 110 crude oil rail cars.
Johnson’s Corner Header System. An approximately six ‑mile crude oil pipeline header system located in McKenzie County, North Dakota that receives crude oil by pipeline from Chevron and third parties and delivers crude oil to DAPL and other third‑party interstate pipeline systems.
Other DAPL Connections . Various connections into DAPL that receive crude oil by pipeline from the crude oil gathering system for delivery into DAPL.
Table of Contents
The following tables reflect certain financial data for each reportable segment:
Gathering
Processing and Storage
Terminaling and Export
Total Reportable Segments
Interest and Other
Consolidated
(in millions)
For the Year Ended December 31, 2025
Revenues and other income
Operating and maintenance expenses
(exclusive of depreciation shown
separately below)
Depreciation expense
General and administrative expenses
Income from equity investments
Interest expense, net
Income tax expense
Adjusted EBITDA
Capital expenditures
Gathering
Processing and Storage
Terminaling and Export
Total Reportable Segments
Interest and Other
Consolidated
(in millions)
For the Year Ended December 31, 2024
Revenues and other income
Operating and maintenance expenses
(exclusive of depreciation shown
separately below)
Depreciation expense
General and administrative expenses
Income from equity investments
Interest expense, net
Income tax expense
Adjusted EBITDA
Capital expenditures
Gathering
Processing and Storage
Terminaling and Export
Total Reportable Segments
Interest and Other
Consolidated
(in millions)
For the Year Ended December 31, 2023
Revenues and other income
Operating and maintenance expenses
(exclusive of depreciation shown
separately below)
Depreciation expense
General and administrative expenses
Income from equity investments
Interest expense, net
Income tax expense
Adjusted EBITDA
Capital expenditures
Table of Contents
The following table presents a reconciliation of reportable segment Adjusted EBITDA to income before income tax expense:
Year Ended December 31,
(in millions)
Reconciliation of reportable segment Adjusted
EBITDA to income before income tax expense:
Total reportable segment Adjusted EBITDA
Less:
Depreciation expense
Unallocated general and administrative expenses
Interest expense, net
Income before income tax expense
Total assets for reportable segments are as follows:
December 31, 2025
December 31, 2024
(in millions)
Gathering
Processing and Storage (1)
Terminaling and Export
Total reportable segments assets
Interest and Other
Total consolidated assets
Includes investment in equity investees of $ 81.5 million as of December 31, 2025 and $ 87.0 million as of December 31, 2024 .
Note 13. Inc ome Taxes
Although the Company is a Delaware limited partnership, we are subject to corporate income tax on our share of the Partnership’s earnings because of our election to be treated as a corporation for U.S. federal and state income tax purposes. The provision for income taxes consisted of:
Year Ended December 31,
(in millions)
Federal
Current
Deferred taxes and other accruals
State
Total provision for income taxes
The reconciliation between the U.S. statutory federal income tax rate and the Company’s effective income tax rate for the year ended December 31, 2025, in accordance with ASU 2023-09 guidance is as follows:
Year Ended December 31, 2025
Amount
Percent
U.S . statutory rate
Noncontrolling interest in partnership
State income taxes, net of federal income tax (1)
Effective rate
(1) State taxes in North Dakota made up the majority (greater than 50 %) of the tax effect in this category.
The reconciliation between the U.S. statutory federal income tax rate and the Company’s effective income tax rate for the years ended December 31, 2024 and 2023, as previously reported, is as follows:
Year Ended December 31,
U.S. statutory rate
Noncontrolling interest in partnership
State income taxes, net of federal income tax
Effective rate
Table of Contents
As a result of the equity offering and unit repurchase transactions (see Note 3, Equity Transactions ), we recognized an additional deferred tax asset in the total amount of $ 305.0 million ( 2024: $ 329.8 million) related to the change in the temporary difference between the carrying amount and the tax basis of our investment in the Partnership. The effect of recognizing the additional deferred tax asset was included in Class A shareholders’ equity balance in the accompanying consolidated statement of changes in partners’ capital due to the transactions being characterized as transactions among or with shareholders.
The components of deferred tax assets and liabilities are as follows:
December 31,
(in millions)
Deferred tax liabilities
Investments
Total deferred tax liabilities
Deferred tax assets
Investments
Net operating loss carryforwards
Total deferred tax assets
Net deferred tax assets (liabilities)
At December 31, 2025 , we have recognized a deferred tax asset of $ 102.5 million related to U.S. federal net operating loss carryforwards which do not expire and $ 21.1 million related to U.S. state net operating loss carryforwards which begin to expire in 2029 . We have no unrecognized tax benefits or interest and penalties related to tax liabilities recorded in the financial statements. For the years presented, we earned all net income before taxes in the United States. We file income tax returns in the U.S. and various states. During the years presented, we did not have any material federal or state income tax payments. We are not subject to corporate income tax examination for years prior to 2022.
N ote 14. Sub sequent Events
On January 26, 2026 , the board of directors of our general partner declared a quarterly cash distribution of $ 0.7641 per Class A Share for the quarter ended December 31, 2025. The distribution was paid on February 13, 2026 to shareholders of record as of the close of business on February 5, 2026 . On February 13, 2026 , the Partnership also made a distribution of $ 0.7641 per Class B Unit of the Partnership to the Sponsor.
Table of Contents
