Hess Midstream LP

Good day, ladies and gentlemen, and welcome to the third quarter 2022 HES Midstream Conference Call. My name is Shannon, 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. 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, Shannon. 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.hessmidstream.com. Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include those set forth in the risk factor section of 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 and our transcript of today's prepared remarks. 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 2022 conference call. Today, I'll review the progress we're making on executing our strategy, discuss our operating performance and capital program, and review HESS Corporation's results and outlook for the Bakken. Jonathan will then review our financial results and guidance. Beginning with HESS Upstream's results, today HESS reported third quarter Bakken net production of 166,000 barrels of oil equivalent per day, which was above their guidance range of 155 to 160,000 barrels of oil equivalent per day, reflecting strong execution and recovery following challenging weather conditions in the first half of the year. HESS anticipates fourth quarter Bakken net production to be in the range of 165 to 170,000 barrels of oil equivalent per day and full year 2022 Bakken net production to average approximately 155,000 barrels of oil equivalent per day which is at the high end of HESA's previous guidance range of 150 to 155,000 barrels of oil equipment per day. HESA's fourth Bakken drilling rig commenced operations in July, supporting HESA's planned production ramp to approximately 200,000 barrels of oil equipment per day in 2024, which drives long-term volume growth for HESA Midstream. Looking ahead, we expect all our systems to be above MVC levels in 2023 and 2024 primarily driven by HESS's planned production growth and its goal of achieving zero routine flaring by the end of 2025. Turning to HESS midstream results. Our third quarter throughput volumes recovered strongly, growing approximately 20% on average from the second quarter. Third quarter volumes averaged 110,000 barrels of oil per day for crude terminaling and 83,000 barrels of water per day for water gathering. Reflecting strong gas capture, third quarter gas processing volumes exceeded MVC levels, averaging 354 million cubic foot per day, contributing to third quarter adjusted EBITDA of $254 million, which was above the top end of our guidance range. We anticipate fourth quarter gas, oil, and water volumes to be relatively flat compared to third quarter, driven by planned maintenance activities deferred from the third quarter. Now moving to HESS midstream guidance, which was included in our earnings release and is available on our website. We've updated our volume guidance to reflect third quarter performance and now expect full year 2022 gas processing volumes to average approximately 330 million cubic foot per day, crude terminaling volumes to average approximately 105,000 barrels of oil per day, and water gathering volumes to average approximately 75,000 barrels of water per day. We continue to make excellent progress on our 2022 capital program with activities primarily focused on flare reduction through the continued expansion of our gas gathering infrastructure. In September, we brought online the second of two new compressor stations planned this year. In aggregate, the two stations provide an additional 85 million cubic foot per day of capacity and can be expanded up to 130 million cubic foot per day in the future. Additionally, the stations were safely completed several months ahead of schedule and below budget, demonstrating the benefits of our lean approach to standardized compression design. We're proud of our team for outstanding execution amid a challenging inflationary cost environment. As previously announced, we expect to initiate construction on a third compressor station in the fourth quarter, which would provide an additional 65 million cubic foot per day of capacity in 2023. to further support HESS and third-party production growth. We expect full-year 2022 capital expenditures to total approximately $235 million, comprised of $120 million in compression expansion, approximately $105 million in gathering system well connects, and $10 million of maintenance activity. In closing, we continue to execute our strategy focused on safe and efficient operations, preserving cost discipline through our lean-driven standard design and build philosophy, allowing us to efficiently grow throughputs, sustainably generate cash flow, and return capital to our shareholders. I'll now turn the call over to Jonathan to review our financial results.