SCHEDULE 13D/A: BlackRock Amends Hess Midstream LP Filing, Details $190 Million Unit Repurchase

BlackRock Portfolio Management LLC has filed an amendment to its Schedule 13D for Hess Midstream LP, detailing its beneficial ownership and a significant $190 million unit repurchase agreement by Hess Midstream Operations LP.

Summary

• BlackRock Portfolio Management LLC (BPM) filed Amendment No. 4 to its Schedule 13D regarding Hess Midstream LP's Class A Shares, primarily to include an inadvertently omitted Annex A.
• BPM beneficially owns 18,731,641 Class A Shares of Hess Midstream LP, representing 13.9% of the class.
• BPM acquired an additional 147,238 Class A Shares for approximately $5,048,874 for investment purposes on behalf of its client accounts.
• On May 5, 2025, Hess Midstream Operations LP (HESM Opco) entered into a Unit Repurchase Agreement to buy back a total of 5,151,842 Opco Class B Units from Hess Investments North Dakota LLC (2,038,956 units) and Blue Holding (3,112,886 units).
• The aggregate purchase price for these repurchased units was approximately $190 million, at a price of $36.88 per unit.
• Following the repurchase, HESM Opco will cancel the repurchased units, and Hess Midstream LP will cancel an equal number of Class B Shares held by Hess Investments and Blue Holding for no consideration.
• BlackRock also disclosed economic exposure through cash-settled swaps: long positions on 17,700 Class A Shares (less than 0.1% economic exposure) and short positions on 142,277 Class A Shares (approximately 0.1% economic exposure).

Sentiment

Score: 6

Explanation: The document primarily provides factual updates on beneficial ownership and a significant unit repurchase transaction. The repurchase can be viewed positively as a capital management strategy, and BlackRock's continued investment is a neutral to positive signal. There are no explicit negative operational or financial disclosures.

Positives

• The unit repurchase agreement indicates a strategic move by Hess Midstream Operations LP to consolidate ownership or return capital, which can be positive for remaining shareholders by potentially reducing the share count and increasing earnings per share.
• BlackRock's continued beneficial ownership and recent acquisition of additional Class A Shares suggest ongoing confidence in Hess Midstream LP.

Future Outlook

The document does not contain explicit forward-looking statements or guidance from Hess Midstream LP. It primarily reports on a past transaction and beneficial ownership.

Industry Context

The midstream sector involves the transportation, storage, and processing of oil and gas. Unit repurchases are common strategies for companies to manage their capital structure and return value to shareholders, especially in mature industries or when cash flow is strong. This specific repurchase involves Opco Class B Units and corresponding Class B Shares, suggesting a restructuring or consolidation of ownership among key stakeholders, likely related to the original sponsors of Hess Midstream LP.

Related Party Transactions

• The May 2025 Repurchase Agreement involves Hess Midstream Operations LP purchasing Opco Class B Units from Hess Investments North Dakota LLC and Blue Holding, which are likely related parties given their holding of Class B Units and Class B Shares.

Stakeholder Impact

• Shareholders: The unit repurchase could lead to a reduction in outstanding units/shares, potentially increasing earnings per share for remaining shareholders.
• Hess Investments and Blue Holding: These entities are selling a portion of their Opco Class B Units and having corresponding Class B Shares cancelled, receiving cash proceeds from the transaction.

Next Steps

• HESM Opco will cancel the Repurchased Units.
• Hess Midstream LP will cancel an equal number of Class B Shares held by Hess Investments and Blue Holding for no consideration.

Key Dates

Keywords

Hess Midstream LP, HESM, BlackRock, Schedule 13D, beneficial ownership, unit repurchase, Class A Shares, Class B Units, SEC filing, investment, midstream, energy infrastructure