Hess Midstream has executed a definitive agreement to repurchase approximately $100 million worth of units from its sponsors Hess Corp. and Global Infrastructure Partners, the company said in a Sept. 20 press release. The unit repurchase is expected to close on Sept. 22.
Following the unit repurchase, Hess Midstream said it expects to have more than $1 billion in financial flexibility through 2025, which can support potential incremental unit repurchases.
Hess Midstream Operations LP, Hess Midstream’s consolidated subsidiary, agreed to repurchase more than 3.3 million Class B units, equal to approximately 1.4% of the consolidated company.
The purchase price per Class B unit is $30.29, the closing price of the Class A shares on Sept.19.
Following the repurchase transaction, public ownership of Hess Midstream will be approximately 29.4%. Hess Midstream expects to fund the unit repurchase through borrowings under its existing revolving credit facility.
The terms of the transaction were unanimously approved by the board of Hess Midstream’s general partner.
“We continue to execute unit repurchase transactions as part of our unique and differentiated financial strategy, which prioritizes consistent and ongoing return of capital to our shareholders,” said Jonathan Stein, Hess Midstream’s CFO. “The unit repurchase transaction is expected to provide immediate accretion to our shareholders.”
Pursuant to the terms of the repurchase agreement, the repurchased units will be cancelled upon the closing of the unit repurchase transaction, which is expected to result in increased distributable cash flow per Class A share. Hess Midstream said that would provide capacity for incremental distribution growth beyond its annual distribution target of at least 5% through 2025.
Recommended Reading
Seatrium Awarded Contract for FPSO Bound for Guyana’s Stabroek
2024-05-17 - The topsides fabrication and integration contract will be for the FPSO Jaguar, bound for the Whiptail Field in the Stabroek block offshore Guyana for Exxon Mobil.
Seadrill Sells Three Jackups for $338MM to Gulf Drilling International
2024-05-17 - Seadrill Ltd. is also selling its 50% equity interest in the joint venture that operates the rigs offshore Qatar.
Third Suriname Find for Petronas, Exxon Could Support 100,000 bbl/d FPSO
2024-05-17 - A recent find offshore Suriname in Block 52 by Petronas and Exxon Mobil could support a 100,000 bbl/d FPSO development, according to Wood Mackenzie.
US NatGas Flows to Freeport LNG in Texas Seen at Five-month High, LSEG Data Shows
2024-05-17 - The startup and shutdown of Freeport and other U.S. LNG export plants often has a major impact on global gas prices.
US Drillers Add Oil, Gas Rigs for First Time in Four Weeks: Baker Hughes
2024-05-17 - The oil and gas rig count rose by one to 604 in the week to May 17.