Hess Midstream has declared a significant share repurchase programme involving the buyback of $100m in shares, including $30m of class B units from its sponsor, an affiliate of Chevron, and $70m of class A shares from the public.
The repurchase of class B units is being conducted by the company's subsidiary, Hess Midstream Operations.
The board of directors of Hess Midstream's general partner unanimously approved the terms of the unit repurchase transaction following a recommendation from its conflicts committee, which is composed solely of independent directors.
This move is expected to result in increased distributable cash flow per class A share, providing the potential for incremental distribution growth above Hess Midstream’s annual target.
Furthermore, Hess Midstream has entered an accelerated share repurchase agreement with JPMorgan Chase Bank, National Association, to repurchase $70m of its publicly traded class A shares.
The securities acquired through these transactions will be cancelled upon settlement, which aligns with Hess Midstream’s strategy to enhance shareholder value and supports its commitment to a minimum of 5% annual distribution growth through 2027.
Hess Midstream CEO Jonathan Stein said: “We continue to execute repurchase transactions as part of our ongoing financial strategy, which prioritises return of capital to our shareholders.
“Following these repurchase transactions, we expect to continue to have more than $1.25bn of financial flexibility through 2027 for incremental shareholder returns, including the potential for further unit and share repurchases over this period.”
In a related development, Hess Midstream announced in May the pricing of its secondary public offering of approximately 15.02 million class A shares at $37.25 each, which are being sold by an affiliate of Global Infrastructure Partners, a part of BlackRock.
The offering is expected to generate gross proceeds of around $559.59m, with an expected closing date of 30 May 2025, subject to the satisfaction of customary closing conditions. Hess Midstream will not receive any proceeds from this offering.
