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 - Enbridge would gauge demand for increased capacity for exports at Ingleside, Texas.
2023-11-20 - Along with NGL and oil pipelines and gas processing, Stephen Lipscomb, partner at Tailwater Capital, says the firm wants to bring a “full suite” of water services to the play.
2023-11-15 - Reading between the lines of midstream management's third-quarter commentary, executives had plenty to say about dividends, M&A and misjudged opportunities.
2023-11-14 - Pipeline company M&A continues as Lower 48 production soars while midstream companies also hiked dividends despite weak commodity prices.