Hess Midstream Partners, a Bakken-Focused MLP


Jan. 4 2018, Updated 9:01 a.m. ET

Hess Midstream Partners

Hess (HES) had initially planned to spin off its midstream assets in 2014. However, those plans were abandoned after oil prices crashed. Hess then launched an initial public offering in early 2017 for Hess Midstream Partners (HESM), which was successfully completed in April. The company received net proceeds of $175 million.

In the company’s 2Q17 earnings conference call, management stated that “the MLP structure will allow us to further unlock value with a combination of embedded growth in EBITDA[1.earnings before interest, tax, depreciation, and amortization] as Bakken production continues to increase and through future drop downs.”

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Hess added that it has assets that it could consider dropdown assets, such as its North Dakota water-handling business and its Gulf of Mexico assets, which could give “more EBITDA runway to the midstream business.” Hess Midstream Partners is a master limited partnership sponsored by Hess and Global Infrastructure Partners. It holds ten-year commercial contracts that are renewable for ten additional years.


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