SCHEDULE 13D/A: Hess Midstream LP Amends Ownership Disclosure Following $190 Million Unit Repurchase

Hess Midstream LP has filed an amendment to its Schedule 13D, detailing a unit repurchase agreement totaling approximately $190 million from Hess Investments North Dakota LLC and GIP II Blue Holding, L.P.

Summary

• Hess Midstream LP (the "Issuer"), HESM Opco, Hess Investments North Dakota LLC, and GIP II Blue Holding, L.P. ("Blue Holding") entered into a Unit Repurchase Agreement on May 5, 2025.
• Under the agreement, HESM Opco purchased 2,038,956 Opco Class B Units from Hess Investments and 3,112,886 Opco Class B Units from Blue Holding.
• The total number of repurchased units is 5,151,842 Opco Class B Units.
• The aggregate purchase price for these units was approximately $190 million, at a price of $36.88 per unit.
• Following the transaction, HESM Opco will cancel the repurchased units, and the Issuer will cancel an equal number of Class B Shares held by Hess Investments and Blue Holding for no consideration.
• Hess Investments North Dakota LLC and Hess Corporation now beneficially own 81,916,146 Class A Shares, representing 41.4% of the class.
• Hess Midstream GP LP, Hess Midstream GP LLC, and Hess Infrastructure Partners GP LLC collectively beneficially own 898,000 Class A Shares, representing 0.8% of the class.

Sentiment

Score: 7

Explanation: The repurchase of units is generally viewed positively as it can be accretive to remaining shareholders and indicates a proactive approach to capital management. No negative information or risks were disclosed.

Positives

• The unit repurchase reduces the total number of outstanding units, which can be accretive to earnings per unit for remaining shareholders.
• The transaction demonstrates a commitment to optimizing the capital structure and returning value to unitholders.

Future Outlook

The document primarily details a past transaction and does not provide specific forward-looking statements or guidance beyond the immediate cancellation of units and shares post-repurchase.

Industry Context

This unit repurchase by Hess Midstream LP reflects a common strategy in the midstream energy sector where companies manage their capital structure and return value to shareholders, often through buybacks, especially when cash flows are strong or strategic ownership adjustments are desired. It aligns with broader trends of optimizing balance sheets and enhancing shareholder returns in mature infrastructure assets.

Comparison to Industry Standards

• The document details a specific unit repurchase transaction rather than operational or financial performance metrics that would typically be compared to industry standards.
• The $36.88 per unit repurchase price is specific to this transaction and the negotiated terms between the parties involved (Hess Investments and GIP II Blue Holding, L.P.).
• Without context on the company's valuation multiples (e.g., EV/EBITDA, P/DCF) or recent comparable transactions in the midstream sector, a direct assessment against industry benchmarks for this specific repurchase price is not feasible from the provided document alone.
• However, unit repurchases are a common capital allocation strategy among midstream companies like Enterprise Products Partners (EPD), Kinder Morgan (KMI), and Energy Transfer (ET) to manage equity dilution and enhance shareholder value.

Related Party Transactions

• The Unit Repurchase Agreement was entered into by Hess Midstream LP, HESM Opco, Hess Investments North Dakota LLC, and GIP II Blue Holding, L.P. Hess Investments North Dakota LLC is a subsidiary of Hess Corporation, which is a significant owner and related party to Hess Midstream LP. GIP II Blue Holding, L.P. is also a significant unitholder and related party.

Stakeholder Impact

• Shareholders: The repurchase of units can be accretive to earnings per unit for existing Class A shareholders by reducing the total unit count, potentially increasing their proportional ownership and future distributions.
• Hess Investments North Dakota LLC and GIP II Blue Holding, L.P.: These entities received approximately $190 million in exchange for their Opco Class B Units and Class B Shares, reducing their direct ownership stake in Hess Midstream LP.

Next Steps

• HESM Opco will cancel the repurchased Opco Class B Units.
• The Issuer (Hess Midstream LP) will cancel an equal number of Class B Shares held by Hess Investments and Blue Holding.

Key Dates

Recommendation

Keywords

Hess Midstream LP, HESM, SEC Filing, Schedule 13D, Unit Repurchase, Class A Shares, Class B Units, Hess Investments, GIP II Blue Holding, Ownership Disclosure, Capital Management, Midstream, Energy Infrastructure