Hess Midstream LP

Good day, ladies and gentlemen, and welcome to the first quarter 2023 HESS Midstream Conference Call. My name is Gigi, and I'll be your operator for today. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's 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, Gigi. Good afternoon, everyone, and thank you for participating in our first 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 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. I'll now turn the call over to John Gatling.

Thanks, Jennifer. Good afternoon, everyone, and welcome to HES Midstream's first quarter 2023 conference call. Today I'll discuss our first quarter performance, which demonstrates a continued focus on the safe execution of our operational strategy while simultaneously advancing our financial priorities. I will also review HES Corporation's results and outlook for the Bakken, Jonathan will then review our financial results and guidance. In the first quarter, we successfully advanced two key priorities. First, to organically grow our business in a safe, efficient, and cost-effective manner, and second, to return available capital to our shareholders. Our focused gas capture investments continue to drive increasing volumes through our systems while supporting HESA's commitment to achieving zero routine flaring by the end of 2025. Additionally, in the first quarter, we executed an accretive buyback and increased our distribution, leveraging our strong financial position. We remain focused on executing our operational and financial priorities and are well positioned for growth as reflected in our guidance through 2025. Now turning to HESS midstream operations. In the first quarter, throughput volumes averaged 338 million cubic foot per day for gas processing, 104,000 barrels of oil per day for crude terminaling, and 79,000 barrels of water per day for water gathering. Gas processing throughput increased by approximately 8% from the fourth quarter, mainly driven by strong weather recovery and increased gas capture. Now turning to HESS upstream highlights. Earlier today, HESS reported strong first quarter results with Bakken net production averaging 163,000 barrels of oil equivalent per day, which was above their guidance range of 155 to 160,000 barrels of oil equipment per day, reflecting high uptime and recovery from challenging weather conditions during the fourth quarter. HESS anticipates Bakken net production will increase to between 165 and 170,000 barrels of oil equipment per day in the second quarter. HESS continues to operate a four-rig program in the Bakken and plans to bring online approximately 110 wells in 2023. Furthermore, HESS forecasts Bakken net production to grow over the course of 2023 and 2024 and average approximately 200,000 barrels of olecum per day in 2025, which implies approximately 10% annualized throughput growth rate across all HESS midstream systems from 2023 to 2025. Additionally, HESS expects to hold production at approximately 200,000 barrels of olecum per day for nearly a decade. Turning to HESS midstream guidance, which was included in our earnings release, we're reaffirming our previously announced throughput guidance for full year 2023. Now focusing on the second quarter. We expect volume growth from the first quarter across all our systems, mainly driven by HESS's planned production growth and continued focus on gas capture. For full year 2023, we're forecasting gas processing volumes to average between 350 and 360 million cubic foot per day. Additionally, we expect crude terminaling volumes to average between 105 and 115,000 barrels of oil per day, and water gathering volumes to average between 85 and 95,000 barrels of water per day. Our 2023 planned volume growth continues to support adjusted EBITDA in the range of $990 million to $1,030,000,000. Now turning to HES Midstream's 2023 capital program. We continue to make excellent progress on our 2023 capital plans and are focused on supporting HESA's development in the basin. Construction is progressing on schedule for two new compressor stations and associated infrastructure, and when brought online is expected increased gas gathering capacity by 100 million cubic foot per day. The planned expansion of our gas gathering system is expected to increase gas throughputs by more than 30% in 2025 relative to 2022. driven by HESA's planned development activity and goal of achieving zero routine flaring by the end of 2025. Full year 2023 capital expenditures remain unchanged and are expected to total $225 million, which is comprised of $210 million of expansion activity and $15 million of maintenance activity. In summary, we remain focused on safe, reliable, and efficient operating performance and project delivery, which will continue to drive strong financial results. The year is off to a strong start, and we're well positioned for substantial growth through at least 2025, which is expected to result in sustainable excess cash flow generation and the potential to return additional capital to our shareholders. I'll now turn the call over to Jonathan to review our financial results and guidance.