HOUSTON - Hess Midstream LP (NYSE: HESM), a midstream energy company, has initiated a public offering of 10 million Class A shares, as disclosed by an affiliate of Global Infrastructure Partners. The shares are being offered through an underwritten public offering, and the affiliate also plans to provide underwriters a 30-day option to buy up to an additional 1.5 million Class A shares.
The company will not receive any proceeds from this transaction as the shares are being sold by an existing shareholder. Citigroup is serving as the bookrunning manager for the offering, which will be conducted on the New York Stock Exchange, over-the-counter markets, or through negotiated transactions.
The sale is being carried out in accordance with the prospectus supplement and the base prospectus filed with the Securities and Exchange Commission (SEC). Interested parties can obtain these documents from the SEC's website or directly from Citigroup.
Hess Midstream LP, which operates in the Bakken and Three Forks Shale plays in North Dakota, is known for providing services to Hess Corporation (NYSE:HES) and third-party customers through its diversified midstream assets. The assets include oil, gas, and produced water handling facilities.
The press release also included forward-looking statements regarding the company's expectations, which are based on projections and subject to risks and uncertainties. Hess Midstream has stated that it does not intend to update these forward-looking statements and advises caution in relying on them.
This announcement is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy the securities described. The offering is subject to registration or qualification under the securities laws of any relevant state or jurisdiction.
In other recent news, Hess Midstream LP has made significant strides in its financial and operational activities. The company reported strong second quarter results for 2024, surpassing production expectations and subsequently raising its full-year guidance. The company announced a 7% and 8% increase in gas processing and oil terminaling volumes, respectively, from the previous quarter. Furthermore, Hess Midstream has entered into an agreement to repurchase about $100 million of Class B units, a move approved unanimously by the board of its general partner.
These developments highlight Hess Midstream's commitment to delivering shareholder value, as the repurchase strategy is expected to provide immediate accretion to shareholders and support further distribution growth. Moreover, the company has outlined plans to maintain a balance between a solid leverage ratio and returning capital to shareholders. Expansion plans in 2027 are also in the pipeline to address the need for additional gas processing capacity.
In terms of future expectations, Hess Midstream projects Bakken net production to be between 200,000 to 205,000 barrels of oil equivalent per day in Q3. The company also anticipates generating $675 million to $725 million in adjusted free cash flow for 2024. These recent developments underscore Hess Midstream's operational strength and strategic planning, positioning the company for sustained performance.
InvestingPro Insights
As Hess Midstream LP (NYSE: HESM) navigates through its public offering of Class A shares, investors are considering the company's financial health and market performance. According to InvestingPro's real-time data, Hess Midstream boasts a robust market capitalization of $8.13 billion, reflecting investor confidence and the company's scale in the midstream energy sector.
InvestingPro data also highlights Hess Midstream's P/E ratio, which currently stands at 15.97. Although this ratio is high relative to the company's near-term earnings growth, it indicates that investors may expect future earnings potential or stability in the company's business model. Furthermore, the company's significant dividend yield of 7.23% is a testament to its commitment to returning value to shareholders, as evidenced by its consistent dividend payments over the last eight years.
Two InvestingPro Tips shed light on Hess Midstream's financial standing. Firstly, the company has managed to raise its dividend for seven consecutive years—a sign of financial strength and management's confidence in the company's cash flow. Secondly, Hess Midstream's stock generally trades with low price volatility, which might appeal to investors looking for stable returns in a typically volatile energy market.
For investors seeking more in-depth analysis and additional InvestingPro Tips related to Hess Midstream, there are 11 more tips available, which can be accessed through the dedicated page on InvestingPro: https://www.investing.com/pro/HESM. These tips provide valuable insights for making informed investment decisions, particularly in the context of the company's current public offering and the broader midstream energy landscape.
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