Chevron to divest Hess Midstream interests and DJ Basin midstream assets
- Revised agreements are expected to reduce Bakken unit midstream costs by approximately 50%.
- Chevron will transfer its ownership interests and general partner position in Hess Midstream plus DJ Basin crude midstream assets in exchange for improved long-term Bakken terms and $200 million cash.
- Transaction will result in full deconsolidation of Hess Midstream, including approximately $3.7 billion of Hess Midstream debt.
- Chevron expects a one-time after-tax loss of about $3–4 billion and absolute ROCE accretion of 0.5 percentage points; closing expected by year-end 2026.
Deal terms
Several Chevron subsidiaries have entered into definitive agreements with Hess Midstream LP to restructure Bakken midstream contracts and establish new DJ Basin midstream contracts. In exchange for the extended and improved Bakken commercial framework and $200 million in cash consideration, Chevron will transfer its ownership interests and general partner position in Hess Midstream, along with its DJ Basin crude oil midstream assets.
Financial impact
The revised agreements are expected to reduce Chevron’s Bakken unit midstream costs by approximately 50%, enhance future earnings and increase return on capital employed by 0.5 percentage points on an absolute basis. Chevron expects to fully deconsolidate Hess Midstream, including approximately $3.7 billion of Hess Midstream debt, and to recognize a one-time after-tax loss estimated at approximately $3 to $4 billion, treated as a special item.
Approvals and timing
The transaction was approved by the Conflicts Committee of the general partner of Hess Midstream following consultation with independent advisors. It remains subject to customary closing conditions and regulatory approvals and is expected to close by year-end 2026.
Advisors
BofA Securities and Latham & Watkins LLP are advising Chevron; Evercore and Gibson, Dunn & Crutcher LLP are advising the Conflicts Committee.
Source: Chevron