Hess Midstream Partners LP (NYSE:HESM) Q2 2020 Earnings Conference Call - Final Transcript
Jul 29, 2020 • 12:00 pm ET
John A. Gatling
parties contributed approximately 11% of our gas and 8% of our oil volumes in the second quarter, consistent with our guidance and expectations at the midpoint of the range.
Now turning to Hess upstream highlights. Earlier today, Hess reported strong second quarter production results capitalizing on the success of the plug and perf completion design and mild weather conditions. Second quarter Bakken net production averaged 194,000 barrels of oil equivalent per day, an increase of 39% from the year ago quarter, and above guidance of approximately 185,000 barrels of oil equivalent per day.
Additionally, Hess was able to avoid production curtailments in the first half of 2020 by leveraging Hess Midstream's pipeline and rail terminal system which provides significant export capacity and optionality north and south of the Missouri River to key markets throughout the United States; including deliveries to load Hess chartered Very Large Crude Carriers. For the full year 2020, Hess now forecasts Bakken production to average approximately 185,000 barrels of oil equivalent per day, up from previous guidance of 175,000 barrels of oil equivalent per day.
Turning to Hess Midstream guidance. As announced earlier this month, the safety of our workforce and the communities where we operate is our top priority, and as such the planned maintenance turnaround at the Tioga Gas Plant originally scheduled for the third quarter of 2020 will be deferred until 2021 to ensure safe and timely execution in light of the COVID-19 pandemic. The turnaround preparation activities undertaken to date positions us well to complete the work in 2021.
We continue to progress the expansion of the Tioga Gas Plant, with the project now well advanced, and facility construction expected to be completed as previously announced by the end of 2020. Incremental gas processing capacity is expected to be available in 2021 upon completion of the turnaround, during which time the expanded plant and residue and natural gas liquids takeaway pipelines will be tied in.
As a result of the turnaround deferral, which removes previously planned downtime from our forecast, we have updated our full year gas throughput guidance. We now expect gas processing volumes to average 275 million to 285 million cubic foot per day for the full year 2020, an increase of 12% at the midpoint compared to previous guidance. Our complete financial and operational guidance is available on our earnings release that was distributed this morning.
For the balance of 2020, we continue to expect the majority of our systems to operate close to or below MVC levels. The low end of our updated full year volume guidance continues to reflect a conservative assumption that Hess Midstream will effectively receive zero third-party volumes for the remainder of 2020. While we do not anticipate this being the most likely outcome, this downside scenario demonstrates the strength of our contract structure with Hess Corporation, which allows us to continue to deliver our targeted 5% annual distribution per share growth in 2020 with coverage of approximately 1.2 times.
For the third quarter,