Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited financial statements and accompanying footnotes included under Item 1. Financial Statements and in conjunction with the audited consolidated financial statements and accompanying footnotes in our Annual Report on Form 10‑K for the year ended December 31, 2025 (our “2025 Annual Report”).
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 risk factors discussed in our 2025 Annual 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. We are managed and controlled by Hess Midstream GP LLC, the general partner of our general partner that is owned by Chevron. 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 reportable segments: (1) gathering (2) processing and storage and (3) terminaling and export.
Operational Highlights. In the first quarter of 2026, we placed in service a new compressor station, which provides approximately 50 MMcf/d of installed compression capacity and can be expanded to provide an additional 20 MMcf/d in the future.
Equity Transactions. On March 4, 2026, the Partnership purchased directly from the Sponsor 455,811 Class B units representing limited partner interests in the Partnership (“Class B Units”) for an aggregate purchase price of approximately $18.0 million. The purchase price per Class B Unit was $39.49, the closing price of the Class A shares representing limited partner interests in the Company (the “Class A Shares”) on March 2, 2026.
In the first quarter of 2026, we repurchased $42.0 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 $42.0 million in cash to the financial institution and received 1,065,724 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 Class B Unit repurchase and the ASR transactions described above were funded using borrowings under the Partnership’s existing revolving credit facility.
Credit Ratings. At June 30, 2026, the Partnership’s senior unsecured debt is rated ‘BBB-’ by S&P Global Ratings and ‘Ba1’ by Moody’s Investors Service.
Second Quarter Results
Significant financial and operating highlights for the second quarter of 2026 included:
•Consolidated net income of $173.7 million;
•Net income attributable to Hess Midstream LP after deduction for noncontrolling interest of $96.4 million, or $0.75 basic earnings per Class A Share;
•Net cash provided by operating activities of $278.6 million;
•Adjusted EBITDA of $313.7 million;
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•Cash distribution of $0.7888 per Class A Share declared on July 27, 2026, an increase of $0.0096 per Class A Share for the second quarter of 2026 as compared with the first quarter of 2026.
Revenues and other income in the second quarter of 2026 were $399.0 million, down from $414.2 million in the prior‑year quarter, primarily due to lower throughput volumes, partially offset by higher tariff rates and third-party services. Total operating costs and expenses in the second quarter of 2026 were $145.8 million, down from $154.0 million in the prior-year quarter, primarily due to lower employee costs and lower maintenance expense, partially offset by higher depreciation expense. Income from equity investments in the second quarter of 2026 was $6.1 million, up from $4.0 million in the prior‑year quarter, primarily due to higher volumes processed at the LM4 plant. Interest expense, net of interest income, in the second quarter of 2026 was $54.5 million, approximately flat compared with $55.4 million in the prior-year quarter. Income tax expense was $31.1 million, up from $29.1 million in the prior-year quarter as a result of changes in income attributable to the Company. As a result, consolidated net income decreased $6.0 million while Adjusted EBITDA decreased $2.3 million for the second quarter of 2026 compared with the second quarter of 2025.
Throughput volumes decreased 15% for oil terminaling and 12% for water gathering in the second quarter of 2026 compared with the second quarter of 2025, primarily due to lower production as a result of lower new-well activity. Throughput volumes decreased 4% for gas processing in the second quarter of 2026 compared with the second quarter of 2025, primarily due to planned maintenance at the Tioga Gas Plant.
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.
How We Generate Revenues
We generate substantially all of our revenues by charging fees for gathering, compressing and processing natural gas and fractionating natural gas liquids (“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 (“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 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. During the Secondary Term of the agreements, the fee recalculation model is replaced by an inflation-based fee structure. See Note 3, 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. Together with our Sponsor, 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.
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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 facilities 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 throughput volumes by interconnecting with new or existing third‑party gathering pipelines.
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 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 Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
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Results of Operations
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Results of operations for the three months ended June 30, 2026 and 2025 are presented below (in millions, unless otherwise noted).
For the Three Months Ended June 30, 2026 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated Hess Midstream LP
Revenues
Affiliate services $ 203.2 $ 140.1 $ 36.5 $ - $ 379.8
Third-party services 6.6 11.2 0.1 - 17.9
Other income - - 1.3 - 1.3
Total revenues 209.8 151.3 37.9 - 399.0
Costs and expenses
Operating and maintenance expenses (exclusive of depreciation shown separately below) 50.4 28.0 7.5 - 85.9
Depreciation expense 36.6 13.4 4.4 - 54.4
General and administrative expenses 2.8 0.9 0.3 1.5 5.5
Total operating costs and expenses 89.8 42.3 12.2 1.5 145.8
Income (loss) from operations 120.0 109.0 25.7 (1.5 ) 253.2
Income from equity investments - 6.1 - - 6.1
Interest expense, net - - - 54.5 54.5
Income (loss) before income tax expense 120.0 115.1 25.7 (56.0 ) 204.8
Income tax expense - - - 31.1 31.1
Net income (loss) 120.0 115.1 25.7 (87.1 ) 173.7
Less: Net income (loss) attributable to noncontrolling interest 45.3 43.5 9.7 (21.2 ) 77.3
Net income (loss) attributable to Hess Midstream LP $ 74.7 $ 71.6 $ 16.0 $ (65.9 ) $ 96.4
Throughput volumes
Gas gathering (MMcf/d)(1) 445 445
Crude oil gathering (MBbl/d)(2) 103 103
Gas processing (MMcf/d)(1) 433 433
Crude oil terminaling (MBbl/d)(2) 117 117
NGL loading (MBbl/d)(2) 17 17
Water gathering (MBbl/d)(2) 121 121
(1) Million cubic feet per day
(2) Thousand barrels per day
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For the Three Months Ended June 30, 2025 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated Hess Midstream LP
Revenues
Affiliate services $ 219.9 $ 152.3 $ 33.1 $ - $ 405.3
Third-party services 2.5 5.6 0.1 - 8.2
Other income - - 0.7 - 0.7
Total revenues 222.4 157.9 33.9 - 414.2
Costs and expenses
Operating and maintenance expenses (exclusive of depreciation shown separately below) 54.7 30.6 8.8 - 94.1
Depreciation expense 32.7 14.8 4.3 - 51.8
General and administrative expenses 3.2 1.9 0.2 2.8 8.1
Total operating costs and expenses 90.6 47.3 13.3 2.8 154.0
Income (loss) from operations 131.8 110.6 20.6 (2.8 ) 260.2
Income from equity investments - 4.0 - - 4.0
Interest expense, net - - - 55.4 55.4
Income (loss) before income tax expense 131.8 114.6 20.6 (58.2 ) 208.8
Income tax expense - - - 29.1 29.1
Net income (loss) 131.8 114.6 20.6 (87.3 ) 179.7
Less: Net income (loss) attributable to noncontrolling interest 56.5 49.1 8.7 (24.9 ) 89.4
Net income (loss) attributable to Hess Midstream LP $ 75.3 $ 65.5 $ 11.9 $ (62.4 ) $ 90.3
Throughput volumes
Gas gathering (MMcf/d)(1) 464 464
Crude oil gathering (MBbl/d)(2) 127 127
Gas processing (MMcf/d)(1) 449 449
Crude oil terminaling (MBbl/d)(2) 137 137
NGL loading (MBbl/d)(2) 17 17
Water gathering (MBbl/d)(2) 138 138
(1) Million cubic feet per day
(2) Thousand barrels per day
Gathering
Revenues and other income decreased $12.6 million in the second quarter of 2026 compared to the second quarter of 2025, of which, $16.0 million is attributable to lower gas gathering physical volumes delivered by Chevron, $6.7 million is attributable to lower crude oil gathering physical volumes delivered by Chevron and $2.3 million is attributable to lower water gathering and disposal revenue. These decreases are partially offset by $4.9 million attributable to higher tariff rates, $3.5 million attributable to services provided directly to third parties, $2.7 million attributable to higher MVC revenue recognized in the second quarter of 2026 and $1.3 million attributable to higher pass‑through revenue.
Operating and maintenance expenses (exclusive of depreciation) decreased $4.3 million, of which $5.6 million is attributable to lower employee costs charged to us under our omnibus and employee secondment agreements, partially offset by $1.3 million attributable to higher pass-through costs, including produced water trucking and disposal and electricity fees. Depreciation expense increased $3.9 million due to new gathering assets brought into service.
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Processing and Storage
Revenues and other income decreased $6.6 million in the second quarter of 2026 compared to the second quarter of 2025, of which $16.0 million is attributable to lower gas processing physical volumes delivered by Chevron, partially offset by $5.2 million attributable to services provided directly to third parties, $3.9 million attributable to higher tariff rates and $0.3 million attributable to higher pass‑through revenue.
Operating and maintenance expenses (exclusive of depreciation) decreased $2.6 million primarily due to lower maintenance activity.
Income from equity investments increased $2.1 million in the second quarter of 2026 compared to the second quarter of 2025 primarily due to higher volumes processed at the LM4 plant.
Terminaling and Export
Revenues and other income increased $4.0 million in the second quarter of 2026 compared to the second quarter of 2025, of which $7.0 million is attributable to higher tariff rates, $0.6 million is attributable to higher MVC revenue and another $0.6 million is attributable to services provided directly to third parties. These increases were partially offset by $4.2 million attributable to lower physical volumes delivered by Chevron.
Operating and maintenance expenses (exclusive of depreciation) remained relatively flat in the second quarter of 2026 compared to the second quarter of 2025.
Interest and Other
Interest expense, net of interest income, remained relatively flat in the second quarter of 2026 compared to the second quarter of 2025. Income tax expense increased $2.0 million in the second quarter of 2026 compared to the second quarter of 2025 as a result of changes in income attributable to the Company.
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Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Results of operations for the six months ended June 30, 2026 and 2025 are presented below (in millions, unless otherwise noted).
For the Six Months Ended June 30, 2026 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated Hess Midstream LP
Revenues
Affiliate services $ 401.1 $ 279.2 $ 72.6 $ - $ 752.9
Third-party services 12.8 20.5 0.2 - 33.5
Other income - - 2.7 - 2.7
Total revenues 413.9 299.7 75.5 - 789.1
Costs and expenses
Operating and maintenance expenses (exclusive of depreciation shown separately below) 100.1 57.3 14.1 - 171.5
Depreciation expense 74.3 29.8 8.8 - 112.9
General and administrative expenses 6.9 2.3 0.6 3.6 13.4
Total operating costs and expenses 181.3 89.4 23.5 3.6 297.8
Income (loss) from operations 232.6 210.3 52.0 (3.6 ) 491.3
Income from equity investments - 9.3 - - 9.3
Interest expense, net - - - 109.9 109.9
Income (loss) before income tax expense 232.6 219.6 52.0 (113.5 ) 390.7
Income tax expense - - - 59.3 59.3
Net income (loss) 232.6 219.6 52.0 (172.8 ) 331.4
Less: Net income (loss) attributable to noncontrolling interest 87.7 82.9 19.6 (42.8 ) 147.4
Net income (loss) attributable to Hess Midstream LP $ 144.9 $ 136.7 $ 32.4 $ (130.0 ) $ 184.0
Throughput volumes
Gas gathering (MMcf/d)(1) 442 442
Crude oil gathering (MBbl/d)(2) 106 106
Gas processing (MMcf/d)(1) 432 432
Crude oil terminaling (MBbl/d)(2) 118 118
NGL loading (MBbl/d)(2) 16 16
Water gathering (MBbl/d)(2) 118 118
(1) Million cubic feet per day
(2) Thousand barrels per day
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For the Six Months Ended June 30, 2025 Gathering Processing and Storage Terminaling and Export Interest and Other Consolidated Hess Midstream LP
Revenues
Affiliate services $ 421.1 $ 295.9 $ 62.6 $ - $ 779.6
Third-party services 4.9 9.8 0.2 - 14.9
Other income - - 1.7 - 1.7
Total revenues 426.0 305.7 64.5 - 796.2
Costs and expenses
Operating and maintenance expenses (exclusive of depreciation shown separately below) 105.1 58.3 16.3 - 179.7
Depreciation expense 65.1 29.5 8.7 - 103.3
General and administrative expenses 6.2 3.6 0.5 5.3 15.6
Total operating costs and expenses 176.4 91.4 25.5 5.3 298.6
Income (loss) from operations 249.6 214.3 39.0 (5.3 ) 497.6
Income from equity investments - 7.4 - - 7.4
Interest expense, net - - - 111.8 111.8
Income (loss) before income tax expense 249.6 221.7 39.0 (117.1 ) 393.2
Income tax expense - - - 52.1 52.1
Net income (loss) 249.6 221.7 39.0 (169.2 ) 341.1
Less: Net income (loss) attributable to noncontrolling interest 113.8 101.1 17.7 (53.4 ) 179.2
Net income (loss) attributable to Hess Midstream LP $ 135.8 $ 120.6 $ 21.3 $ (115.8 ) $ 161.9
Throughput volumes
Gas gathering (MMcf/d)(1) 448 448
Crude oil gathering (MBbl/d)(2) 122 122
Gas processing (MMcf/d)(1) 437 437
Crude oil terminaling (MBbl/d)(2) 131 131
NGL loading (MBbl/d)(2) 15 15
Water gathering (MBbl/d)(2) 132 132
(1) Million cubic feet per day
(2) Thousand barrels per day
Gathering
Revenues and other income decreased $12.1 million in the first six months of 2026 compared to the first six months of 2025, of which $22.8 million is attributable to lower gas gathering physical volumes delivered by Chevron, $8.5 million is attributable to lower crude oil gathering physical volumes delivered by Chevron and $3.7 million is attributable to lower water gathering and disposal revenue. These decreases are partially offset by $8.8 million attributable to higher tariff rates, $6.5 million attributable to services provided directly to third parties, $6.2 million attributable to higher pass‑through revenue and $1.4 million attributable to higher MVC revenue recognized in the first six months of 2026.
Operating and maintenance expenses (exclusive of depreciation) decreased $5.0 million, of which $10.6 million is attributable to lower employee costs charged to us under our omnibus and employee secondment agreements and $4.6 million is attributable to lower maintenance activity. These decreases are partially offset by $6.2 million attributable to higher pass‑through costs, including produced water trucking and disposal and electricity fees and $4.0 million attributable to all other costs. Depreciation expense increased $9.2 million due to new gathering assets brought into service.
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Processing and Storage
Revenues and other income decreased $6.0 million in the first six months of 2026 compared to the first six months of 2025, of which $24.3 million is attributable to lower gas processing physical volumes delivered by Chevron, partially offset by $10.0 million attributable to services provided directly to third parties, $7.8 million attributable to higher tariff rates and $0.5 million attributable to higher pass‑through revenue.
Operating and maintenance expenses (exclusive of depreciation) decreased $1.0 million, of which $3.7 million is attributable to lower maintenance activity and $1.3 million is attributable to lower employee costs charged to us under our omnibus and employee secondment agreements, partially offset by $4.0 million attributable to higher third-party processing and offload fees.
Income from equity investments increased $1.9 million in in the first six months of 2026 compared to the first six months of 2025 primarily due to higher volumes processed at the LM4 plant.
Terminaling and Export
Revenues and other income increased $11.0 million in the first six months of 2026 compared to the first six months of 2025, of which $14.2 million is attributable to higher tariff rates, $1.1 million is attributable to higher MVC revenue and $1.0 million is attributable to services provided directly to third parties, partially offset by $5.3 million attributable to lower physical volumes delivered by Chevron.
Operating and maintenance expenses (exclusive of depreciation) decreased $2.2 million primarily due to lower employee costs charged to us under our omnibus and employee secondment agreements.
Interest and Other
Interest expense, net of interest income, decreased $1.9 million in the first six months of 2026 compared to the first six months of 2025, of which $2.8 million is attributable to lower interest on our senior unsecured notes and $2.0 million is attributable to extinguishment loss, each related to the early redemption of $800.0 million 5.625% fixed-rate senior unsecured notes in the prior year, partially offset by $1.5 million attributable to higher interest on higher borrowings under our Credit Facilities and $1.4 million attributable to lower interest income.
Income tax expense increased $7.2 million in the first six months of 2026 compared to the first six months of 2025 as a result of changes in income attributable to the Company.
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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.
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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.
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Reconciliation of Adjusted EBITDA to net income:
Net income $ 173.7 $ 179.7 $ 331.4 $ 341.1
Plus:
Depreciation expense 54.4 51.8 112.9 103.3
Interest expense, net 54.5 55.4 109.9 111.8
Income tax expense 31.1 29.1 59.3 52.1
Adjusted EBITDA $ 313.7 $ 316.0 $ 613.5 $ 608.3
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Net cash provided by operating activities $ 278.6 $ 276.9 $ 531.9 $ 479.3
Changes in assets and liabilities (19.5 ) (12.1 ) (23.7 ) 28.0
Amortization of deferred financing costs (3.0 ) (3.2 ) (6.0 ) (8.1 )
Interest expense, net 54.5 55.4 109.9 111.8
Distribution from equity investments (2.9 ) (4.7 ) (7.6 ) (9.6 )
Income from equity investments 6.1 4.0 9.3 7.4
Other (0.1 ) (0.3 ) (0.3 ) (0.5 )
Adjusted EBITDA $ 313.7 $ 316.0 $ 613.5 $ 608.3
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Capital Resources and Liquidity
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 short‑term 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 to shareholders. For information related to the Company’s distributions, see Note 6, Partners’ Capital and Distributions and Note 11, Subsequent Events in the Notes to Consolidated Financial Statements.
Fixed‑Rate Senior Notes
For information related to the Company's fixed-rate senior notes, see Note 5, Debt and Interest Expense in the Notes to Consolidated Financial Statements.
Credit Facilities
For information related to the Company's Credit Facilities, see Note 5, Debt and Interest Expense in the Notes to Consolidated Financial Statements.
Cash Flows
Operating Activities. Net cash provided by operating activities increased $52.6 million for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to an increase in cash provided by changes in working capital of $51.7 million and a decrease in expenses, other than depreciation, amortization, equity-based compensation and other non-cash gains and losses of $10.0 million, partially offset by a decrease in revenues and other income of $7.1 million and a decrease in distributions received from equity investments of $2.0 million.
Investing Activities. Net cash used in investing activities decreased $57.0 million for the six months ended June 30, 2026, compared to the same period in 2025, primarily driven by completion of our multi-year projects for expansion of compression capacity and the timing of payments for additions to property, plant, and equipment related to ongoing capital projects.
Financing Activities. Net cash used in financing activities increased $106.7 million for the six months ended June 30, 2026, compared to the same period in 2025. In the first six months of 2026, net repayments of our revolving credit facility balances were $82.0 million compared to $258.0 million of borrowings in the first six months of 2025, and repayments of the term loan were $15.0 million compared to $10.0 million, respectively. The prior period also included impacts of refinancing of senior unsecured notes of $12.5 million. In addition, in the first six months of 2026, we spent $241.0 million less for share and unit repurchases and paid higher distributions to shareholders and noncontrolling interests of $15.2 million compared to the same period in 2025.
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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:
Six Months Ended June 30,
2026 2025
(in millions)
Total capital expenditures $ 41.0 $ 120.1
(Increase) decrease in accrued capital expenditures 10.4 0.6
(Increase) decrease in capital expenditures included in accounts payable - affiliate 0.5 (11.8 )
Additions to property, plant and equipment $ 51.9 $ 108.9
Capital expenditures in 2026 primarily relate to ongoing gathering system well connects to service Chevron and third-party customers, with the remainder attributable to completion of the compression and gathering pipeline buildout. Capital expenditures in 2025 were attributable to our multi-year expansion of compression capacity and focused on construction of two new compressor stations and associated pipeline infrastructure.
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Cautionary Note Regarding Forward-looking Statements
This Quarterly Report on Form 10-Q, including information incorporated by reference herein, contains “forward-looking statements.” Words such as “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “drive,” “could,” “may,” “should,” “would,” “enable,” “believe,” “intend,” “focus,” “potential,” “project,” “plan,” “trend,” “predict,” “will,” “target,” “opportunity” and similar expressions, and variations or negatives of these words, are intended to identify forward-looking statements, but not all forward-looking statements include such words.
Forward-looking statements relating to the Company’s operations, assets, and strategy are based on management’s current expectations, assessments, estimates, projections and assumptions about the industry. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties and other factors, many of which are beyond the Company’s control and difficult to predict. Therefore, actual outcomes and results may differ materially from our current projections or expectations of future results expressed or forecasted by these forward-looking statements. Among the important factors that could cause actual results to differ materially from those in our forward-looking statements are:
•the ability of Chevron and other parties to satisfy their obligations to us, including Chevron’s ability to meet its drilling and development plans on a timely basis or at all, its ability to deliver its nominated volumes to us, and the operation of joint ventures that we may not control;
•our ability to generate sufficient cash flow to pay current and expected levels of distributions;
•reductions in the volumes of crude oil, natural gas, NGLs and produced water we gather, process, terminal or store;
•the actual volumes we gather, process, terminal or store for Chevron in excess of our MVCs and relative to Chevron’s nominations;
•fluctuations in the prices and demand for crude oil, natural gas and NGLs;
•changes in global economic conditions and the effects of a global economic downturn or inflation on our business and the businesses of our suppliers, customers, business partners and lenders;
•our ability to comply with government regulations or make capital expenditures required to maintain compliance, including our ability to obtain or maintain permits necessary for capital projects in a timely manner, if at all, or the revocation or modification of existing permits;
•our ability to successfully identify, evaluate and timely execute our capital projects, investment opportunities and growth strategies, whether through organic growth or acquisitions;
•costs or liabilities associated with federal, state and local laws, regulations and governmental actions applicable to our business, including legislation and regulatory initiatives relating to environmental protection and health and safety, such as spills, releases, pipeline integrity and measures to limit greenhouse gas emissions and climate change;
•our ability to comply with the terms of our credit facility, indebtedness and other financing arrangements, which, if accelerated, we may not be able to repay;
•reduced demand for our midstream services, including the impact of weather or the availability of competing third-party midstream gathering, processing and transportation operations;
•potential disruption or interruption of our business due to natural and human causes beyond our control, such as accidents, severe weather events, labor disputes, political crises, information technology failures, constraints or disruptions and cyber-attacks;
•any limitations on our ability to access debt or capital markets on terms that we deem acceptable, including as a result of changes in credit ratings, weakness in the oil and gas industry or negative outcomes within commodity and financial markets;
•liability resulting from litigation;
•risks and uncertainties associated with Hess’ integration with Chevron following the completion of the merger, including the failure of Chevron to realize anticipated synergies of the merger in the expected timeframe, operational challenges, the diversion of management’s attention from ongoing business concerns, or unforeseen expenses associated with the merger; and
•other factors described in Item 1A — Risk Factors in our 2025 Annual Report and any additional risks described in our other filings with the Securities and Exchange Commission.
Other unpredictable or unknown factors not discussed in this report could also cause actual results to differ materially from those in our forward-looking statements. Caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date of this report. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.
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