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- **Operational Excellence**: Q3 volumes up 3% in gas gathering, supporting $321M EBITDA (80% margin). 2025 free cash flow ~$760M.
- **Distribution Growth**: 5% annual Class A share target through 2027, backed by $140M+ annual excess cash flow.
- **CapEx Reduction**: 2026+ CapEx ~$125M+ (vs $250-300M prior), freeing up $140M+ annual free cash flow.
- **Chevron Synergy**: 3-rig program maintains 200,000 BOE/d plateau, driving gas volume growth (~75% of revenue).

**【CEO Summary Section】**
- **Operational Strength**: Q3 2025 throughput volumes averaged 462 MMcf/d gas processing, 130,000 bbl/d oil terminaling, and 137,000 bbl/d water gathering, up 3% QoQ in gas gathering. 
- **Distribution Growth**: Increased distribution by 2.4% (10% annualized) and completed $100M share/unit repurchase. Class A shares target 5% annual distribution growth through 2027.
- **Capital Discipline**: Suspended Capa gas plant project, reducing 2025 CapEx to $270M. 2026+ CapEx expected to be ~$125M+ (vs prior $250-300M guidance), freeing up $140M+ annual excess cash flow.
- **Free Cash Flow**: Q3 adjusted free cash flow $187M, full year ~$760-770M. 2026+ EBITDA expected flat vs 2025, but free cash flow to grow with lower CapEx.

**【CFO Financial Commentary】**
- **Q3 Financials**: Net income $176M, adjusted EBITDA $321M (80% margin). Q4 guidance: net income $170-180M, EBITDA $315-325M. Full year EBITDA ~$1.25B (10% YoY growth).
- **Distribution Policy**: Target 5% annual Class A share growth through 2027. 2025 excess free cash flow ~$140M after distributions. 2026+ financial flexibility for buybacks with leverage at 3x target.
- **Leverage Management**: Revolver balance $356M at quarter end. 2026+ EBITDA flat but free cash flow growth from reduced CapEx.

**【Q&A Key Highlights】**
- **Bakken Trends**: Chevron's 3-rig program supports 200,000 BOE/d plateau. Gas volumes to grow as GORs rise (~75% of revenue). Hess Midstream expects long-term gas-driven growth.
- **2026 Outlook**: EBITDA flat vs 2025 due to lower third-party volumes, but free cash flow to grow with $125M+ CapEx. 2026+ guidance to be released post-December budget.
- **Buyback Cadence**: $100M Q3 repurchase. 2026+ buybacks possible with ~$140M annual excess cash flow and 3x leverage target.
- **Chevron Relationship**: Smooth integration, 2 distribution increases approved. Chevron's focus on efficiency (longer laterals) supports Hess Midstream's capital framework.

Hess Midstream LP (HESM) Q3 2025 Earnings Call Transcript

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