Hess Midstream LP (HESM) Stock Down 14.6% but Still Overvalued -

Chevron will transfer its stake in Hess Midstream and DJ Basin assets to Hess Midstream LP for $200M cash and revised contracts. The deal extends Bakken midstream contracts, reduces Chevron's costs by 50%, and removes $3.7B of Hess Midstream debt from Chevron's balance sheet. Chevron expects a $3B-$4B one-time loss but anticipates improved earnings and returns. The transaction is expected to close by the end of 2026.

Chevron agreed to transfer its ownership in Hess Midstream and DJ Basin assets to Hess Midstream LP in exchange for improved Bakken midstream terms and $200M. The deal aims to cut Chevron's Bakken midstream costs by 50%, boosting earnings and return on capital. Chevron expects a $3-4B after-tax loss at closing but anticipates long-term value. The transaction is set to close by year-end 2026, pending approvals.

Hess Midstream (HESM) expects a nearly 40% drop in its share count. Chevron will contribute 100% of its consolidated ownership interests in HESM. The deal includes Chevron selling Class A Shares and Class B Units, and transferring Class B shares. The transaction is expected to close by year-end 2026, subject to conditions. HESM will pay $200 million plus closing working capital of CMH.

Hess Midstream LP (HESM) will acquire Chevron's DJ Basin assets and Chevron's stake in Hess Midstream, reducing HESM's share count by 40% and creating a multi-basin midstream company. The deal includes $200M in cash and fixed-fee contracts over 670K acres. HESM's board will become independent by 2028. Analysts rate HESM stock as Sell with a $39 target, while TipRanks' AI rates it Neutral.

Hess Midstream (HESM) agreed to acquire Chevron's DJ Basin midstream assets for $200M in cash, plus working capital. The deal includes long-term service contracts with Chevron through 2045, a two-year transition agreement, and an amended secondment framework. The existing omnibus agreement will be terminated at closing.

Chevron (CVX) will exit Hess Midstream (HESM) via a swap, retaining infrastructure use at lower costs. Chevron expects a $3-4B after-tax loss but anticipates 50% cost savings in Bakken midstream operations. Hess Midstream will acquire Chevron's DJ Basin assets and become independent, with the deal expected to close by year-end.