Hess Midstream LP

Good day, ladies and gentlemen, and welcome to the third quarter 2021 HESS Midstream Conference Call. My name is Michelle, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If at any time you require operator's assistance, please press star followed by the zero, and we will be happy to assist you. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Jennifer Gordon, Vice President of Investor Relations. Please proceed.

Thank you, Michelle. Good afternoon, everyone, and thank you for participating in our third quarter earnings conference call. Our earnings release was issued this morning and appears on our website, www.hetsmidstream.com. Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include those set forth in the risk factors section of HES Midstream's filings with the SEC. Also, on today's conference call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the earnings release. With me today are John Gatling, President and Chief Operating Officer, and Jonathan Stein, Chief Financial Officer. In case there are audio issues, we will be posting transcripts of each speaker's prepared remarks on www.hessmidstream.com following their presentation. I'll now turn the call over to John Gatling.

Thanks, Jennifer. Good afternoon, everyone, and welcome to HESS Midstream's third quarter 2021 conference call. Today, I'll review our operating performance and highlights as we continue to execute our strategy and discuss HESS Corporation's latest results and outlook for the Bakken. Jonathan will then review our financial results. We continue to deliver strong operational performance in the third quarter, anchored by the safe and successful execution of the Tioga gas plant turnaround. Extensive COVID-19 protocols were implemented to keep the workforce of more than 650 people safe. We're proud of our team for their outstanding execution under challenging conditions. Following the safe and quick ramp up of TGP, the team has turned their attention to the commissioning of the 150 million cubic foot per day expansion, which is underway and progressing well. The additional capacity is expected to be available at year end concurrent with the completion of the WBI residue export tie-in. Focusing on our third quarter performance, gas throughputs exceeded expectations as processing volumes ramped more quickly than anticipated following the turnaround. Third quarter gas processing volume averaged 285 million cubic foot per day and, as expected, remained below MVC levels. Third quarter crude termling volumes averaged 111,000 barrels of oil per day, and water gathering volumes averaged 75,000 barrels of water per day. Now turning to HESS upstream highlights. Earlier today, HESS reported third quarter production results with the Bakken net production averaging 148,000 barrels of oil equivalent per day versus a guidance of 145,000 barrels of oil equivalent per day. primarily driven by the strong execution of the TGP turnaround. HESS confirmed that the third drilling rig commenced operations in September, allowing HESS to accelerate the development of their inventory of high-return well locations. A three-rig program allows HESS to grow production and leverage our strategic infrastructure, driving incremental volume growth for the midstream. The additional rig, combined with our aggressive gas capture strategy, positions HESS midstream for strong organic growth. For full year 2021, HESS expects Bakken net production to average approximately 155,000 barrels of oil equivalent per day. Now turning to our guidance. For full year 2021, we now expect gas processing volumes to average approximately 300 million cubic foot per day, modestly higher than previous guidance, primarily driven by the successful execution of the TGP turnaround and strong ramp up upon resuming operations. We expect full year 2021 crude terminaling volumes to average approximately 120,000 barrels of oil per day and water gathering volumes to average approximately 75,000 barrels of water per day. Our full year throughput guidance continues to anticipate that third parties will contribute approximately 10% of our gas and 15% of our oil volumes. Our higher expected full-year gas volumes is the primary reason for increasing our 2021 adjusted EBITDA guidance to $900 million at the midpoint. Our full financial and operational guidance is included in our earnings release and is available on our website. Now turning to our 2021 capital program. We continue to make good progress on our capital program. The commissioning of the TGP expansion and focused build-out of our gas compression system ensures that we're well-positioned to meet HESS's accelerated development pace. During the third quarter turnaround, we completed a series of plant tie-ins for the TGP expansion, which is now being commissioned. We expect final export tie-ins to be completed at the end of this year, concurrent with the WBI residue system startup, taking HESS Midstream's total processing capacity up to 500 million cubic feet per day, enabling us to meet our customers' expected accelerated development pace. In 2022, we anticipate substantial organic growth in our gas processing volumes, although we expect physical volumes to remain generally at or below MVC levels, which are approximately 15% higher compared to our 2021 physical volume guidance. We expect physical volumes to be above currently set MVCs in 2023, in line with our previous guidance. Construction activities have commenced on two new greenfield compressor stations, which will expand our gas compression capacity by approximately 20% online in 2022. Approximately 50% of the expenditures for the new stations and related infrastructure is expected to be incurred in 2021, with the balance planned for 2022 when we complete construction and bring the stations online. We're also executing our oil, gas, and water well connect program to meet HESA's accelerated development plan. Full year 2021 capital expenditure guidance is unchanged at $180 million. We expect expansion capital to be approximately $165 million, which is comprised of $95 million for compression projects, $60 million for low pressure gathering and well interconnects, and $10 million for gas processing. Maintenance capital is expected to be approximately $15 million. In summary, we're continuing to execute our strategy, making focused investments to expand infrastructure to meet the needs of our customers, delivering safe and reliable operating performance and strong financial results, which provides the flexibility to take advantage of future accretive growth opportunities, including potential incremental return of capital to our shareholders. I'll now turn the call over to Jonathan to review our financial results and guidance.