Hess Midstream LP (HESM) 2024 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the second quarter 2024 Hess Midstream conference call. (Operator Instructions) 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.

女士們、先生們，美好的一天，歡迎參加 2024 年第二季 Hess Midstream 電話會議。（操作員說明）請注意，今天的會議正在錄製以供重播之用。我現在想將會議交給投資者關係副總裁 Jennifer Gordon。請繼續。

Thank you [Gigi]. Good afternoon, everyone, and thank you for participating in our second quarter earnings conference call. Our earnings release was issued this morning and appears on our website, www.hessmidstream.com.

謝謝[吉吉]。大家下午好，感謝您參加我們的第二季財報電話會議。我們的收益報告於今天上午發布，並發佈在我們的網站 www.hessmidstream.com 上。

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.

今天的電話會議包含聯邦證券法含義內的預測和其他前瞻性陳述。這些陳述受到已知和未知的風險和不確定性的影響，可能導致實際結果與此類陳述中明示或暗示的結果不同。

These risks include those set forth in the risk factors section of Hess 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.

這些風險包括 Hess Midstream 向 SEC 提交的文件的風險因素部分中列出的風險。同樣在今天的電話會議上，我們可能會討論某些非公認會計準則財務指標。這些非公認會計原則財務指標與最直接可比較的公認會計原則財務指標之間的差異的調節可以在收益報告中找到。

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.

今天與我在一起的有總裁兼營運長約翰‧加特林 (John Ga特林)；和財務長喬納森斯坦。我現在將把電話轉給約翰·加特林。

Thanks Jennifer, and good afternoon, everyone, and welcome to Hess Midstream's second quarter 2024 conference call. Today, I'll discuss our second quarter performance and review Hess Corporation's results and outlook for the Bakken. Jonathan will then review our financial results and guidance. In the second quarter, throughput volumes averaged 419 million cubic foot per day for gas processing, 126,000 barrels of oil per day for crude terminaling, and 124,000 barrels of water per day for water gathering.

謝謝 Jennifer，大家下午好，歡迎參加 Hess Midstream 的 2024 年第二季電話會議。今天，我將討論我們第二季的業績，並回顧赫斯公司的業績和巴肯的前景。然後喬納森將審查我們的財務業績和指導。第二季度，天然氣加工平均每天吞吐量為4.19億立方英尺，原油碼頭平均每天吞吐量為12.6萬桶，集水每天平均吞吐量為12.4萬桶。

Throughputs increased across all segments of our business with gas processing and oil terminaling volumes increasing by approximately 7% and 8% respectively from the first quarter, primarily driven by strong Hess performance system availability remained high across our midstream assets and gas capture was particularly strong in the second quarter.

我們業務所有部門的吞吐量均有所增加，天然氣加工和石油碼頭量較第一季分別增長約7% 和8%，這主要是由於我們中游資產的Hess 性能係統可用性仍然很高，而天然氣捕獲在第二季。

Now turning to Hess upstream highlights. Earlier today, Hess reported second quarter net production for the Bakken averaged 212,000 barrels of oil equivalent per day, which was above the high end of their guidance range of 195,000 to 200,000 barrels of oil equivalent per day. Approximately one-third of the increase is from volumes received under percentage of proceeds contracts, which do not impact Hess Midstream's throughputs or revenues.

現在轉向赫斯上游亮點。今天早些時候，Hess 報告稱，第二季度巴肯油田平均淨產量為每天 212,000 桶油當量，高於其指導範圍每天 195,000 至 200,000 桶油當量的上限。大約三分之一的增長來自收益合約百分比下收到的數量，這不會影響 Hess Midstream 的吞吐量或收入。

Hess anticipated, Bakken net production will be in the range of 200,000 to 205,000 barrels of oil equivalent per day in the third quarter, reflecting lower anticipated volumes under percentage of proceeds contracts and planned maintenance at the Little Missouri 4 Gas plant. Hess reiterated its plans to run a four rig program in the Bakken in 2024.

Hess 預計，第三季巴肯淨產量將在每天 20 萬至 20.5 萬桶油當量範圍內，反映出收益合約百分比和小密蘇裡州 4 天然氣廠計畫維護的預期產量較低。Hess 重申其計劃於 2024 年在巴肯運營四台鑽機項目。

Turning to Hess Midstream guidance, which was included in our earnings release this morning. With Hess's continued strong Bakken production and our focus on gas capture, we're raising our gas gathering and processing throughput volume guidance for full year 2024 to average between 425 and 435 million cubic foot per day and between 405 and 415 million cubic foot per day, respectively.

轉向赫斯中游指導，該指導已包含在我們今天早上發布的收益報告中。隨著赫斯巴肯產量的持續強勁以及我們對天然氣捕獲的關注，我們將 2024 年全年的天然氣收集和加工吞吐量指導提高至平均每天 425 至 4.35 億立方英尺和每天 405 至 4.15 億立方英尺， 分別。

This implies approximately 3% growth at the midpoint for the second half of the year and includes our expectations for roughly flat volumes in the third quarter, which incorporates Hess upstream guidance and lower midstream throughputs due to a planned week-long maintenance outage at the Little Missouri 4 Gas plant. Consistent with prior guidance, we continue to make excellent progress on our 2024 capital plans and are focused on supporting Hess and third party development in the Bakken.

這意味著下半年中點成長率約為 3%，並包括我們對第三季產量大致持平的預期，其中包括 Hess 上游指導和由於 Little 計劃為期一周的維護停運而導致的中游吞吐量下降。密蘇裡州4 天然氣廠。根據先前的指導，我們繼續在 2024 年資本計畫方面取得出色進展，並專注於支持赫斯和巴肯的第三方開發。

The progress of our multiyear projects to build two compressor stations and associated gathering pipelines continue as planned. We expect to spend more in the second half of the year as we continue construction activities.

我們建造兩個壓縮機站和相關集輸管道的多年項目繼續按計劃取得進展。隨著建設活動的持續，我們預計下半年將支出更多。

In summary, remain focused on executing our operational priorities and safely delivering our growth strategy, which will continue to drive sustainable cash flow generation and the potential to return additional capital to our shareholders.

總而言之，繼續專注於執行我們的營運優先事項並安全地實施我們的成長策略，這將繼續推動可持續的現金流產生以及向股東返還額外資本的潛力。

I'll now turn the call over to Jonathan to review our financial results and guidance.

我現在將把電話轉給喬納森，以審查我們的財務表現和指導。

Thanks, John, and good afternoon, everyone. We continue to execute a financial strategy that prioritizes return of capital to shareholders with a demonstrated track record of differentiated shareholder return. Since the beginning of 2021, we have returned $1.75 billion to shareholders through accretive repurchases that have reduced our total unit count by nearly 25%.

謝謝約翰，大家下午好。我們繼續執行優先考慮股東資本回報的財務策略，並在差異化股東回報方面擁有良好的記錄。自 2021 年初以來，我們已透過增量回購向股東返還 17.5 億美元，使我們的總單位數量減少了近 25%。

In addition to the combination of our 5% targeted annual distribution growth and eight distribution level increases following each repurchase, we have increased our distribution per Class A share by approximately 48% over this period and by over 10% in 2024 year to date on an annualized basis.

除了我們的目標年度分配成長 5% 和每次回購後八次分配水準增加之外，我們在此期間將 A 類股的分配增加了約 48%，並在 2024 年迄今增加了 10% 以上。按年化計算。

As a result, our total shareholder return yield is one of the highest of our midstream peers. Furthermore, our leverage of approximately 3.2 times adjusted EBITDA is one of the lowest among our peers, highlighting our differentiated ability to deliver significant shareholder returns while also maintaining balance sheet strength.

因此，我們的股東總回報率是中游同行中最高的之一。此外，我們調整後 EBITDA 約為 3.2 倍的槓桿率是同業中最低的之一，凸顯了我們在維持資產負債表實力的同時提供顯著股東回報的差異化能力。

In January, we announced that we expect to generate greater than $1.25 billion of financial flexibility through 2026 for incremental shareholder returns, including potential unit repurchases. Utilizing this capacity in June, we completed our second repurchase transaction in 2024 of $100 million that was accretive on both an adjusted free cash flow per Class A share basis and an earnings per Class A share basis.

今年 1 月，我們宣布，預計到 2026 年將產生超過 12.5 億美元的財務彈性，以增加股東回報，包括潛在的單位回購。利用 6 月的這項能力，我們在 2024 年完成了第二筆 1 億美元的回購交易，該交易在每 A 類股的調整後自由現金流和每 A 類股的基礎上都有增值。

As we have done in the past, our quarterly distribution increase included our targeted 5% annual growth per Class A share, an additional increase utilizing the excess adjusted free cash flow available for distributions following the repurchase. As a result, on an annualized basis, our distribution per Class A share growth of over 10% is significantly above our targeted 5% annual growth through 2026.

正如我們過去所做的那樣，我們的季度分配成長包括每股 A 類股 5% 的年度成長目標，這是利用回購後可用於分配的超額調整後自由現金流的額外成長。因此，以年化計算，我們的 A 類股分配成長率超過 10%，遠高於我們到 2026 年 5% 的年增長率目標。

Final unit repurchase, we expect to continue to have more than $1.25 billion of financial flexibility through 2026 that can be used for continued execution of our return of capital framework, including potential ongoing unit repurchases.

在最終的單位回購中，我們預計到 2026 年將繼續擁有超過 12.5 億美元的財務靈活性，可用於繼續執行我們的資本回報框架，包括潛在的持續單位回購。

Turning to our results. For the second quarter, net income was $160 million compared to $162 million for the first quarter. Adjusted EBITDA for the second quarter was $276 million compared to $275 million for the first quarter. The increase in adjusted EBITDA relative to the first quarter was primarily attributable to the following.

轉向我們的結果。第二季淨利為 1.6 億美元，而第一季淨利為 1.62 億美元。第二季調整後 EBITDA 為 2.76 億美元，而第一季為 2.75 億美元。調整後 EBITDA 相對第一季的成長主要歸因於以下因素。

Total revenues, excluding pass-through revenues and a one-time $8 million reduction in second quarter revenues related to the setting the 2024 tariff rates for certain subsystems increased by approximately $26 million, primarily driven by higher throughput volumes resulting in segment revenue changes as follows.

總收入（不包括轉手收入和與設定某些子系統 2024 年關稅率相關的第二季度收入一次性減少 800 萬美元）增加了約 2600 萬美元，主要是由於吞吐量增加導致部門收入變化如下。

Gathering revenues increased by approximately $15 million. Processing revenues increased by approximately $9 million and terminaling revenues increased by approximately $2 million. Total costs and expenses excluding depreciation, amortization, pass-through costs and net of our proportional share of LM4 earnings increased by approximately $9 million, primarily due to higher seasonal operating and maintenance activity.

收集收入增加了約 1500 萬美元。處理收入增加了約 900 萬美元，終端收入增加了約 200 萬美元。不包括折舊、攤提、轉嫁成本以及我們在 LM4 收益中所佔比例的淨成本和費用增加了約 900 萬美元，這主要是由於季節性營運和維護活動增加。

Resulting in adjusted EBITDA for the second quarter of $276 million at the midpoint of our guidance range. Our growth adjusted EBITDA margin for the second quarter was maintained at approximately 80% above our 75% target, highlighting our continued strong operating leverage.

第二季調整後 EBITDA 為 2.76 億美元，處於我們指引範圍的中點。我們第二季的成長調整後 EBITDA 利潤率維持在比 75% 目標高出約 80% 的水平，凸顯了我們持續強勁的營運槓桿。

Second quarter capital expenditures were approximately $73 million and net interest, excluding amortization of deferred finance costs, was approximately $47 million, resulting in adjusted free cash flow of approximately $156 million. In May, we issued $600 million of 6.5% senior unsecured notes due 2029 in a private offering. We used the proceeds from the offering to repay the borrowings on our revolving credit facility. And therefore, we had no drawn balance on our revolving credit facility at quarter-end.

第二季資本支出約 7,300 萬美元，淨利息（不含遞延財務費用攤提）約 4,700 萬美元，調整後自由現金流約 1.56 億美元。5 月份，我們透過私募發行了 6 億美元、利率為 6.5%、2029 年到期的優先無抵押票據。我們使用此次發行的收益來償還循環信貸額度的借款。因此，我們在季度末的循環信貸安排上沒有提取餘額。

Turning to guidance. For the third quarter, we expect net income to be approximately $160 million to $170 million and adjusted EBITDA to be approximately $280 million to $290 million compared to the second quarter. This reflects relatively flat volumes net of the 8 million cubic feet per day impact from the maintenance at the Little Missouri 4 Gas plant as well as stable operating costs with continued seasonally higher maintenance activity in the third quarter.

轉向指導。與第二季相比，我們預計第三季淨利潤約為 1.6 億至 1.7 億美元，調整後 EBITDA 約為 2.8 億至 2.9 億美元。這反映出，扣除小密蘇裡 4 號天然氣廠每天 800 萬立方英尺的維護影響後，產量相對持平，而且第三季維護活動持續季節性增加，營運成本穩定。

We also expect CapEx to increase in the third quarter, consistent with seasonally higher activity in the fourth quarter, we expect increasing revenues, ongoing volumes and seasonally lower maintenance activity, resulting in higher EBITDA compared with the third quarter.

我們也預期第三季資本支出將增加，與第四季季節性較高的活動一致，我們預期收入增加、持續銷售和季節性較低的維護活動，從而導致與第三季相比更高的EBITDA。

For the full year 2024, we are updating net income and adjusted free cash flow guidance to include the impact of an incremental $15 million of interest expense resulting from the $600 million notes issued in the quarter, partially offset by lower interest on the revolving credit facility. The updated net income guidance also includes the impact of an incremental $10 million of income tax expense resulting from ownership changes fund the secondary equity offerings and Class B unit repurchase transaction completed this year.

對於2024 年全年，我們正在更新淨利潤和調整後的自由現金流指引，以包括本季度發行的6 億美元票據導致的1500 萬美元利息支出增量的影響，部分被循環信貸額度利息降低所抵消。更新後的淨利潤指引還包括因所有權變更為今年完成的二次股權發行和 B 類單位回購交易提供資金而產生的 1000 萬美元增量所得稅費用的影響。

As a result, we now expect net income of $650 million to $700 million. We are also maintaining our adjusted EBITDA guidance range of $1,125 million to $1,175 million, implying growth of approximately 9% in adjusted EBITDA at the midpoint in the second half of the year. Our total expected capital expenditures of $250 million to $275 million.

因此，我們現在預計淨利潤為 6.5 億至 7 億美元。我們也將調整後 EBITDA 指引範圍維持在 11.25 億美元至 11.75 億美元之間，這意味著下半年調整後 EBITDA 成長約 9%。我們預計資本支出總額為 2.5 億至 2.75 億美元。

We expect to generate adjusted free cash flow of approximately $675 million to $725 million with distributions to our Class A share target to grow at least 5% annually from the new higher distribution level. We expect to be free cash flow positive after fully funding distributions by 2024.

我們預計將產生約 6.75 億至 7.25 億美元的調整後自由現金流，我們的 A 類股票目標分配將比新的更高分配水平每年至少增長 5%。我們預計，到 2024 年，在充分資助分配後，自由現金流將達到正數。

Looking ahead to 2026, we continue to expect approximately 10% annualized growth in gas and oil volumes supporting a greater than 10% growth per year in adjusted EBITDA with stable CapEx through 2026, we expect adjusted free cash flow to grow greater than 10% per year in excess of our 5% targeted distribution per Class A share growth, together with capacity as our leverage falls below 2.5 times adjusted EBITDA supports greater than $1.25 billion in financial flexibility that can be utilized to continued unit repurchases.

展望 2026 年，我們繼續預期天然氣和石油產量年化增加約 10%，支持調整後 EBITDA 每年增長 10% 以上，資本支出穩定，到 2026 年，我們預計調整後自由現金流每年增長 10% 以上今年超過我們A 類股成長5% 的目標分配，加上我們的槓桿率低於2.5 倍調整後EBITDA 的能力，支持超過12.5 億美元的財務靈活性，可用於持續的單位回購。

In summary, we are very pleased to have delivered additional incremental return of capital to Hess Midstream shareholders and look forward to a visible trajectory of growth in our operational and financial metrics that underpins our unique and differentiated financial strategy with a focus on consistent and ongoing return of capital to our shareholders.

總之，我們很高興為Hess Midstream 股東帶來額外的增量資本回報，並期待我們的營運和財務指標出現明顯的成長軌跡，這將支撐我們獨特和差異化的財務策略，重點是一致和持續的回報為我們的股東提供資本。

This concludes my remarks. We'll be happy to answer any questions. I will now turn the call over to the operator.

我的發言到此結束。我們很樂意回答任何問題。我現在將把電話轉給接線生。

(Operator Instructions)

（操作員說明）

Doug Irwin, Citi.

道格歐文，花旗銀行。

Hi, thanks for the question. I just want to start with the growth outlook beyond 2024. If I just look at the updated volume guidance and think about 10% growth a year for gas beyond '24, you start to get pretty close to your processing capacity by end of '26, if not above it. I just want to get your thoughts around whether processing might become a constraint more quickly than anticipated, just given some of the gas capture you've seen. And if so, what options you might have ahead of additional processing capacity in '27?

你好，謝謝你的提問。我只想從 2024 年以後的成長前景開始。如果我只看更新後的產量指導，並考慮 24 年後天然氣每年增長 10%，那麼到 26 年底，即使沒有超過，你也開始非常接近你的處理能力。我只是想了解您對處理是否會比預期更快地成為限制因素的想法，僅考慮到您所看到的一些氣體捕獲。如果是這樣，在 27 年增加處理能力之前您可能有哪些選擇？

Yes. Thanks. Thanks for the question, Doug. Yes, from our perspective, we feel like we have sufficient capacity. We've been working on the process and expansion activities for some time now. We've got a really strong partnership with the upstream, and we're planning the infrastructure and the well plans along the needs for processing.

是的。謝謝。謝謝你的提問，道格。是的，從我們的角度來看，我們覺得我們有足夠的能力。我們致力於流程和擴展活動已經有一段時間了。我們與上游建立了非常牢固的合作夥伴關係，我們正在根據加工需求規劃基礎設施和井計劃。

So from our perspective and the gas processing capacity will be available when the upstream needs it. So again, it's kind of that symbiotic relationship we've got between the upstream and midstream, that kind of drives that integrated development planning activity that gives us some confidence that we've got the right infrastructure plans for the upstream development.

因此，從我們的角度來看，當上游需要時，天然氣處理能力就會可用。再說一遍，我們在上游和中游之間建立了一種共生關係，這種關係推動了綜合開發規劃活動，使我們有信心為上游開發制定了正確的基礎設施計劃。

Great, thanks. And then my follow-up is kind of along similar lines, but more just around the basin as a whole, there's several kind of long-haul NGL expansions underway in the Bakken. Just curious to get your take on what that means, just in terms of the incremental gathering and processing capacity that might be required around the basin to supply the volumes for these projects and then kind of if that means any potential opportunities for us and beyond the current backlog?

太好了，謝謝。然後我的後續行動有點類似，但更多的是圍繞整個盆地，巴肯正在進行幾種長途 NGL 擴建。只是想知道您對這意味著什麼，就流域周圍可能需要的增量收集和處理能力來為這些項目提供數量，然後這是否意味著我們和其他地區目前有任何潛在的機會積壓？

Yeah. It's a great question. I think you know, as you can probably tell from the North Dakota Petroleum Council's pipeline authority forecasts, I mean gas production has grown from about 3.5 Bcf towards the 5 to 6 Bcf range. So there will absolutely need to be additional processing for that additional gas forecast. And again, it's all going to be activity driven on what actually materializes from a gas production perspective.

是的。這是一個很好的問題。我想您知道，正如您可能從北達科他州石油委員會管道管理局的預測中得知的那樣，我的意思是天然氣產量已從約 3.5 Bcf 增長到 5 至 6 Bcf 範圍。因此，絕對需要對額外的天然氣預測進行額外的處理。再說一遍，這一切都將由從天然氣生產角度實際實現的活動所驅動。

I think having additional export capacity out of basin, it helps everybody. I think it makes there is that it allows to have more flexibility for takeaway options. And my guess is -- like we are going to be expanding processing in '27 that there will be other providers that will also be expanding.

我認為擁有額外的盆地出口能力對每個人都有幫助。我認為這使得外帶選擇具有更大的靈活性。我的猜測是，就像我們將在 27 年擴大處理範圍一樣，其他提供者也將擴大處理範圍。

The other thing that we continue to look at as opportunities to smartly capture additional third party volumes into our system, and we have the flexibility to add additional capacity over the long term if the gas becomes available and it's something that we feel like that we can provide that support. So we do anticipate the basin to continue to grow from a gas perspective, and we expect that the capacity will be there.

我們繼續將另一件事視為巧妙地將額外的第三方容量捕獲到我們的系統中的機會，如果天然氣可用，我們可以靈活地長期增加額外的容量，並且我們認為我們可以提供這種支援。因此，從天然氣的角度來看，我們確實預計該盆地將繼續成長，並且我們預計產能將會存在。

And I think, again, having the export capacity out of the Bakken is going to be critical to making sure that works and that we're able to actually support the producers as the volume comes online.

我再次認為，擁有巴肯的出口能力對於確保其發揮作用以及我們能夠在產量上線時真正支持生產商至關重要。

Great. Appreciate all the detail. I'll leave it there.

偉大的。欣賞所有的細節。我會把它留在那裡。

Okay. Thank you.

好的。謝謝。

John Mackay, Goldman Sachs & Company.

約翰·麥凱，高盛公司。

Hi, thanks for the time. Maybe I'll pick up on that last one a little bit. I mean, if we're thinking about kind of a shift in the competitive environment in the Bakken, I guess I would just be curious, your thoughts on what that can mean for your third-party business. I mean is it good because you can offer more outlets and don't have to depend as much on one other party? Or do you think you actually have a handful of other companies up there kind of trying to step it up on the commercial front now?

你好，謝謝你的時間。也許我會稍微了解最後一個。我的意思是，如果我們正在考慮巴肯競爭環境的某種轉變，我想我只是好奇您對這對第三方業務意味著什麼的想法。我的意思是，這很好嗎？或者你認為現在實際上還有一些其他公司正在嘗試在商業方面加強它嗎？

Yeah, I mean -- I don't think I can really speak to some of the other companies, but I definitely think that as the basin continues to grow in other parts of the field -- there will be providers that will that will offer capacity to them. I think from our perspective, the third party opportunities become those operators that are around and near our strategic footprint and where we can actually extend our footprint to provide support to those other operators.

是的，我的意思是 - 我認為我無法真正與其他一些公司交談，但我絕對認為，隨著盆地在該領域的其他部分繼續增長 - 將會有供應商提供他們的能力。我認為從我們的角度來看，第三方機會成為那些在我們策略足跡周圍和附近的營運商，我們實際上可以擴展我們的足跡，為其他營運商提供支援。

As far as the export goes, again, I think the more flexibility there is to get out of the basin. I think just commercially, it's going to it's going to create more competition for those volumes. From our perspective, flow assurance has always been really critical, making sure that we have flow assurance all the way from the well pad to export and ultimately to end customers.

就出口而言，我認為離開盆地的彈性越大。我認為僅從商業角度來看，這將為這些銷售帶來更多競爭。從我們的角度來看，流量保證一直非常重要，確保我們從井場到出口並最終到達最終客戶的整個過程中都有流量保證。

That's a priority for Hess. And I think from our perspective, we've looked at that to make sure that we actually have capacity for that flow assurance. But again, is as export options open up, it gives us a chance to look at different commercial opportunities as well. So again, I think it's a net positive for the basin. I think it's a net positive for Hess Midstream, Hess and other operators and midstream companies in North Dakota.

這是赫斯的首要任務。我認為從我們的角度來看，我們已經研究了這一點，以確保我們確實有能力保證流量。但同樣，隨著出口選擇的開放，它也讓我們有機會看到不同的商業機會。再說一次，我認為這對該盆地來說是一個淨積極因素。我認為這對 Hess Midstream、Hess 以及北達科他州的其他營運商和中游公司來說是一個淨積極因素。

I appreciate that. That's helpful. Maybe just shifting to the capital return story. You guys have been extremely consistent on the repurchase side. I guess I'd just be curious, is there room for that to start moving up a little higher on an annual basis given the size of the EBITDA base now, the growing free cash flow, etcetera?

我很欣賞這一點。這很有幫助。也許只是轉向資本回報的故事。你們在回購方面一直非常一致。我想我只是好奇，考慮到現在 EBITDA 基礎的規模、不斷增長的自由現金流等等，是否有空間開始逐年上升一點？

Yeah. So right now, our leverage, as I said, is 3.2 times EBITDA. Our target leverage is 3 times. We have been willing to continue to do repurchases being slightly above our target when we have visibility as we do now, as we've talked about through 2026 growth, more than 10% growth per year in EBITDA. So that gives us confidence to continue.

是的。所以現在，正如我所說，我們的槓桿是 EBITDA 的 3.2 倍。我們的目標槓桿是3倍。當我們有像現在這樣的可見性時，我們一直願意繼續進行略高於我們目標的回購，正如我們所談到的，到 2026 年增長，EBITDA 每年增長超過 10%。這讓我們有信心繼續下去。

So for this year, we feel as if we're going to be limited to stick to that target, which we -- is a big focus for us in terms of balancing shareholders returns but also balance sheet strength. As we go forward certainly we'll continue we'll have $1.25 billion of capacity still available. We'll continue to calibrate that relative to our growth. But certainly for this year, we'll focus on, I think, slightly above by the end of the year we expect to be just at 3 times.

因此，今年，我們覺得我們將僅限於堅持這一目標，這是我們在平衡股東回報和資產負債表實力方面的一個重點。隨著我們的前進，我們肯定會繼續前進，我們仍然有 12.5 億美元的可用產能。我們將繼續根據我們的成長來調整這一點。但我認為，今年我們的重點肯定是略高於我們預期的 3 倍。

And then as you go certainly into next year, we'll certainly, as we've talked about, delever well below 3 times less than 2.5 times by the end of 2025. And then also, we have, of course, our free cash flow after distributions. So building that cash balance as well, that can also fund additional return of capital to shareholders.

然後，當你進入明年時，正如我們所說，到 2025 年底，我們肯定會將槓桿率遠低於 3 倍，低於 2.5 倍。當然，我們還有分配後的自由現金流。因此，建立現金餘額也可以為股東提供額外的資本回報。

That was clear. Appreciate the time.

這很清楚。珍惜時間。

Naomi Marfatia, UBS.

內奧米·瑪法蒂亞，瑞銀集團。

Good morning. Maybe to touch on the guidance a bit. Curious if you could help us understand the moving pieces around the discrepancy between throughput and EBITDA guidance. I know you guys mentioned about Hess planned maintenance on has a massive? Is there any other noise that under that you would like to point to?

早安.也許可以稍微談談指導。很好奇您能否幫助我們了解吞吐量與 EBITDA 指導之間差異的變化因素。我知道你們曾提到赫斯計劃進行大規模維護？您還想指出以下任何其他噪音嗎？

Yeah. And so I'll start with the mechanics and then I'll let John talk about maybe the underlying drivers. I mean, if you look at our EBITDA guidance for the year, we've maintained our EBITDA guidance, that's a 9% increase in EBITDA in the second half. And the driver of that is primarily volume growth across our gas and oil systems.

是的。因此，我將從機制開始，然後讓約翰談談潛在的驅動因素。我的意思是，如果你看看我們今年的 EBITDA 指導，我們會維持 EBITDA 指導，即下半年 EBITDA 成長 9%。其驅動因素主要是我們的天然氣和石油系統的銷售成長。

We had a really strong volume growth in the second quarter. I mentioned on my in my remarks, $26 million in additional revenue just in the quarter on volumes alone. And that allowed us also consistent with increasing our gas guidance just slightly, but by 10 million cubic feet per day on a full year basis. As we go into Q3, we expect flat volumes with Q2, but that includes as I mentioned that 8 million cubic feet per day impact from the planned maintenance at LM4, the gas plant.

第二季我們的銷售成長非常強勁。我在發言中提到，僅就銷售而言，本季就增加了 2,600 萬美元的收入。這使得我們能夠稍微增加我們的天然氣指導，但全年每天增加 1000 萬立方英尺。當我們進入第三季時，我們預計產量與第二季持平，但這包括正如我提到的 LM4 天然氣廠計劃維護每天 800 萬立方英尺的影響。

So really what that means is that where that implies that we see continued growth around outside the maintenance in the quarter. And then as we go into Q4, we're really expecting higher revenues, ongoing volumes and then of course, lower seasonally OpEx as we usually have in the fourth quarter, and that will support accelerating even into the fourth quarter. So that's really how it kind of all fits mechanically.

因此，這實際上意味著我們看到本季維護之外的持續成長。然後，當我們進入第四季度時，我們確實預計收入會增加，銷量會持續增加，當然，季節性營運支出也會下降，就像我們通常在第四季度那樣，這將支持加速甚至進入第四季度。這就是它在機械上的真正配合方式。

Let me just turn over John, he can talk about what's happening behind that in terms of the business driving all of that?

讓我把約翰轉過來，他能談談推動這一切的業務背後發生了什麼事嗎？

Yeah. Thanks, Jonathan. It's a really good question. And I think at the end of the day, Hess has been performing exceptionally well. I think the D&C function and bringing wells online has been outstanding. The overall deferred production, the availability of the system has been extremely high and partnered with the midstream.

是的。謝謝，喬納森。這是一個非常好的問題。我認為歸根結底，赫斯的表現非常出色。我認為 D&C 功能和油井上線非常出色。整體延期生產，系統的可用性已經極高，並與中游合作。

Our system availability has been very high as well. And then from a just well planning and infrastructure planning perspective, they're really marrying up really nicely from the standpoint of when the wells come on the gas infrastructure is there to take that away.

我們的系統可用性也非常高。然後，從井規劃和基礎設施規劃的角度來看，從油井何時投入天然氣基礎設施的角度來看，它們確實非常完美地結合在一起。

And that's what has enabled us to bump up our gas guidance slightly as a result of just that that gas capture, I mean, in the second quarter, we were above 97% yet total gas capture across the entire field when you look at it on a routine flaring basis, we're getting very, very low from up for routine flaring. So basically, as the wells are coming online, the infrastructure is in place to capture that gas.

這就是使我們能夠稍微提高天然氣指導的原因，因為氣體捕獲，我的意思是，在第二季度，當你在常規燃燒的基礎上，我們的常規燃燒高度非常非常低。因此，基本上，隨著油井投入使用，捕獲天然氣的基礎設施就已經到位。

And I would say the second quarter, both from upstream delivery side, but also midstream availability and ability to have the infrastructure in place right when it was needed was it was exceptionally strong in the second quarter. We expect to see that to continue into the third quarter. But as Jonathan mentioned, there is some planned maintenance activities routine planned maintenance activity at LM4, which is going to keep volumes relatively flat from Q2 into Q3.

我想說，第二季度，無論是上游交付方面，還是中游可用性以及在需要時就位基礎設施的能力，第二季度都異常強勁。我們預計這種情況將持續到第三季。但正如喬納森所提到的，LM4 有一些計劃內的維護活動，這將使第二季到第三季的銷售量相對持平。

Thank you. That's helpful. And maybe as a follow up, seems like your water volumes are growing fast. Are there any trends that you'd like to call out?

謝謝。這很有幫助。也許作為後續行動，你的水量似乎正在快速成長。您有什麼想要指出的趨勢嗎？

Yeah, water has been -- I think we've talked about this previously, but water has been a very strong story. As we've talked about on prior earnings calls, the water infrastructure has been an underinvested area and this is something that we've been over the last several years have been aggressively investing in the water capture as far as getting trucks off the road and getting it captured in the pipe into our gathering system has been really good.

是的，水一直是——我想我們之前已經討論過這個問題，但水一直是一個非常強大的故事。正如我們在先前的財報電話會議上談到的那樣，水利基礎設施一直是投資不足的領域，這是我們在過去幾年中一直在積極投資於水捕獲的領域，以使卡車遠離道路並將其從管道中捕獲到我們的收集系統中真是太好了。

The operational teams and the infrastructure teams building the infrastructure operating has been just doing a phenomenal job and it's a very, very high system utilization. We would expect to start to see water trend closer to oil. So I would say that the really aggressive growth and being able to capture the water is materially behind us.

營運團隊和建置基礎設施營運的基礎設施團隊做得非常出色，系統利用率非常非常高。我們預計水的趨勢將開始接近石油。所以我想說，真正積極的增長和捕獲水的能力已經在實質上變成了。

And now the growth that's going to continue into the into the future is going to look a lot more like oil growth as you bring on new wells. The total fluids, both from an oil and water perspective, will be now captured on pad, and that will go into our system. So we do expect to continue to see growth. We just won't be expect to see the growth rate we've seen over the last several years.

現在，隨著新油井的開發，未來將持續的成長看起來更像是石油成長。從油和水的角度來看，總流體現在將被捕獲在墊上，並將進入我們的系統。因此，我們確實預計會繼續看到成長。我們只是不會期望看到過去幾年的成長率。

Okay. Thank you. I'll leave it there. And share the rest of your afternoon.

好的。謝謝。我會把它留在那裡。並分享你下午剩下的時間。

Okay. Thank you so much.

好的。太感謝了。

Praneeth Satish, Wells Fargo.

普拉尼思‧薩蒂什，富國銀行。

Thanks. Good morning all. Maybe just on Hess's Bakken production. So it's now running at 212,000 barrels per day higher than kind of the long-term target of around 200,000 barrels per day. I mean, you mentioned -- I guess I'm just trying to translate this into the impact for Hess Midstream. I mean, I know you mentioned some of that outperformance is related to POP. But how sustainable do you think this is? And does that provide any kind of tailwind to your volume projections into Q3, Q4 and maybe '25?

謝謝。大家早安。也許只是赫斯的巴肯作品。因此，目前的產量為每天 212,000 桶，高於每天約 20 萬桶的長期目標。我的意思是，你提到 - 我想我只是想將其轉化為對赫斯中游的影響。我的意思是，我知道您提到過一些出色的表現與 POP 有關。但你認為這有多可持續？這是否會為您對第三季、第四季甚至 25 年的銷售預測提供任何推動力？

Yes. No, I mean, I think it's a good question. Q2 again, I mentioned this before, both from the upstream and the midstream side, which was just phenomenal. I think the overall performance on well delivery and infrastructure availability was exceptionally high in the second quarter, which was great. I mean, gas capture about 97%, almost zero routine flaring essentially it's just phenomenal.

是的。不，我的意思是，我認為這是一個很好的問題。Q2 再次，我之前提到過這一點，無論是從上游還是中游方面，這都是驚人的。我認為第二季油井交付和基礎設施可用性的整體表現非常高，這非常棒。我的意思是，氣體捕獲率約為 97%，常規燃燒幾乎為零，這本質上是驚人的。

And as you mentioned a big piece of the second quarter about one-third of that total volume beat was related to POP. That really doesn't translate to additional throughputs or revenues for us. As we've been looking at the uncertainty of wells and as they come on in the future, we expect that performance to continue to be very high.

正如您提到的第二季度的很大一部分，總銷量的三分之一左右與 POP 有關。這實際上並沒有轉化為我們額外的吞吐量或收入。由於我們一直在關注油井的不確定性以及它們在未來的出現，我們預計性能將繼續保持非常高的水平。

But we are comfortable with where our guidance ranges are. We've said our long-term MVCs, and I think we see a 10% growth rates going into the future, I think we feel very comfortable with where that is. Again, that that relationship between our upstream and midstream and that flow assurance focus that we've got is really important to us. So as we're doing well, planning. We're doing infrastructure planning at the same time.

但我們對我們的指導範圍感到滿意。我們已經說過我們的長期 MVC，我認為我們預計未來的成長率為 10%，我認為我們對此感到非常滿意。同樣，上游和中游之間的關係以及我們所關注的流量保證對我們來說非常重要。既然我們做得很好，就要做好計劃。我們同時也在做基礎建設規劃。

And if there is opportunity to capture upside, we will absolutely do that and look for the wells to perform better and we'll make sure that the infrastructure is sized to accommodate it. But again, I wouldn't say it's going to be a material change in anything we've seen and it's something that we're going to continue to partner with the upstream on and we just feel really good about Hess's long-term growth trajectory there.

如果有機會獲得優勢，我們絕對會這樣做，並尋找表現更好的油井，我們將確保基礎設施的規模能夠容納它。但再說一遍，我不會說這將是我們所看到的任何重大變化，我們將繼續與上游合作，我們只是對 Hess 的長期成長軌跡感到非常滿意在那裡。

They are going to run four rigs through '24, and we expect to continue to see that growth trajectory, that's translated into our into our MVCs and the implied volumes, gross growth volumes that go into the MVCs.

他們將在 2024 年運行四台鑽機，我們預計將繼續看到這種成長軌跡，這將轉化為我們的 MVC 以及隱含量，即進入 MVC 的總增長量。

Got it. Thanks. And maybe this question is for Jonathan. Historically, you've run the business at around a 3 times leverage ratio kind of doing buybacks to keep that leverage ratio at 3 times as EBITDA grows. But the business has become at least a little bit more incrementally risky with the expiration of the cost of service contracts. So do you think 3 times is still the right leverage target kind of over the next few years? Or could you look to trend that down over time?

知道了。謝謝。也許這個問題是問喬納森的。從歷史上看，您以大約 3 倍的槓桿率經營業務，透過回購來保持槓桿率隨著 EBITDA 的成長而保持在 3 倍。但隨著服務合約成本的到期，該業務的風險至少增加了一點。那麼您認為 3 倍仍然是未來幾年正確的槓桿目標嗎？或者你可以考慮隨著時間的推移而逐漸下降嗎？

Yeah. So I think we feel very comfortable at 3 times. We felt 3 times leverage is conservative, but it's not constraining to our strategy in any way. Certainly on a relative basis, if you look at 3 times EBITDA. It's one of the lowest leverages in the sector and certainly consistent with our objective of stable cash flow and distributions.

是的。所以我覺得我們3次感覺很舒服。我們認為3倍槓桿是保守的，但它不會以任何方式限制我們的策略。當然是相對而言，如果你看看 EBITDA 的 3 倍。這是該行業槓桿率最低的公司之一，當然符合我們穩定現金流和分配的目標。

I think at the same time, though, if you look, it doesn't constrain our strategy. So we've demonstrated our ability to utilize that capacity and together increasingly more so as we go forward with free cash flow after distribution building, but still leveraging that capacity to really, as I talked about more than $1.75 billion in buybacks in 2021, really just amazing.

但我同時認為，如果你仔細觀察，你會發現它並沒有限制我們的策略。因此，我們已經證明了我們利用這種能力的能力，並且隨著我們在分銷建設後繼續實現自由現金流，但仍然充分利用這種能力，正如我談到的2021 年回購額將超過17.5 億美元，真正太棒了。

And really that highlights what I said in my comments, which is we have our total shareholder return yield is one of the highest of any in the midstream sector. At the same time our leverage is and one of the lowest. And so really, we think that balance is correct and really highlights our ability to really deliver differentiated shareholder returns, but also maintain a balance sheet strength.

這確實凸顯了我在評論中所說的內容，即我們的股東總回報率是中游行業中最高的之一。同時，我們的槓桿率是最低的之一。事實上，我們認為這種平衡是正確的，並且真正凸顯了我們真正提供差異化股東回報的能力，同時也保持了資產負債表的實力。

Thank you.

謝謝。

Thank you. This concludes today's conference call and thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束，感謝您的參與。您現在可以斷開連線。