Hess Midstream Reports $161.4M Net Income in Q1 2025, Revenue Rises to $382M

Hess Midstream LP reported a consolidated net income of $161.4 million for the first quarter of 2025, slightly down from $161.9 million in the same period last year. The net income attributable to Hess Midstream LP increased to $71.6 million, or $0.65 per Class A share, compared to $44.6 million, or $0.60 per Class A share, in the prior year. Total revenues rose to $382.0 million, up from $355.6 million in the first quarter of 2024, primarily driven by increased physical volumes in affiliate services, which accounted for $374.3 million of total revenues.

Operating costs and expenses for the first quarter of 2025 totaled $144.6 million, an increase from $133.6 million in the previous year. This rise was attributed to higher employee costs under omnibus agreements, increased pass-through costs for electricity and produced water trucking, and higher depreciation expenses due to new assets placed in service. Interest expense also increased to $56.4 million from $48.5 million, largely due to the issuance of new senior unsecured notes and the early redemption of previous notes.

Strategically, Hess Midstream executed significant equity transactions, including the sale of 11 million Class A shares in February 2025, generating approximately $494.7 million in net proceeds. This transaction increased public ownership from 47.3% to 53.8% as of March 31, 2025. Additionally, the company repurchased 2.57 million Class B units for $100 million in January 2025, funded through its revolving credit facility. These actions reflect Hess Midstream's ongoing strategy to optimize its capital structure and enhance shareholder value.

Operationally, throughput volumes showed positive trends, with gas processing volumes increasing by 8%, oil terminaling by 7%, and water gathering by 9% compared to the first quarter of 2024. The company continues to focus on expanding its service offerings to third-party producers in the Bakken region, which is expected to further enhance its utilization rates. As of March 31, 2025, Hess Midstream maintained a strong liquidity position, with net cash provided by operating activities amounting to $202.4 million, up from $185.3 million in the prior year.

Looking ahead, Hess Midstream anticipates continued growth driven by its fee-based commercial agreements with Hess and third-party customers. The company expects to maintain its cash distribution levels, having declared a quarterly cash distribution of $0.7098 per Class A share, reflecting a slight increase from the previous quarter. However, management remains cautious about potential market volatility and its impact on production rates and investment decisions by Hess and other third parties in the oil and gas sector.