Hess Midstream has executed a definitive agreement to repurchase approximately $100 million worth of units from its sponsors Hess Corp. and Global Infrastructure Partners, the company said in a Sept. 20 press release. The unit repurchase is expected to close on Sept. 22.
Following the unit repurchase, Hess Midstream said it expects to have more than $1 billion in financial flexibility through 2025, which can support potential incremental unit repurchases.
Hess Midstream Operations LP, Hess Midstream’s consolidated subsidiary, agreed to repurchase more than 3.3 million Class B units, equal to approximately 1.4% of the consolidated company.
The purchase price per Class B unit is $30.29, the closing price of the Class A shares on Sept.19.
Following the repurchase transaction, public ownership of Hess Midstream will be approximately 29.4%. Hess Midstream expects to fund the unit repurchase through borrowings under its existing revolving credit facility.
The terms of the transaction were unanimously approved by the board of Hess Midstream’s general partner.
“We continue to execute unit repurchase transactions as part of our unique and differentiated financial strategy, which prioritizes consistent and ongoing return of capital to our shareholders,” said Jonathan Stein, Hess Midstream’s CFO. “The unit repurchase transaction is expected to provide immediate accretion to our shareholders.”
Pursuant to the terms of the repurchase agreement, the repurchased units will be cancelled upon the closing of the unit repurchase transaction, which is expected to result in increased distributable cash flow per Class A share. Hess Midstream said that would provide capacity for incremental distribution growth beyond its annual distribution target of at least 5% through 2025.
2023-11-29 - No new oil has been spotted since Nov. 20 from the suspected release, the U.S. Coast Guard said as it leads clean-up efforts.
2023-11-06 - Mexico’s Pemex, still the world’s most indebted energy company, continues to boost production while making significant inroads to reduce flared volumes and greenhouse-gas emissions.
2023-09-27 - Admiral William McRaven, the former chancellor of the University of Texas System, discusses University of Texas' lands in West Texas, their environmental impact and their influence in keeping Europe supplied with energy in this Hart Energy LIVE Exclusive.
2023-09-29 - In this Hart Energy LIVE Exclusive, VTX Energy's Gene Shepherd describes how he thinks consolidation in the Permian is going to play out going forward.