Hess Midstream Partners LP (NYSE:HESM) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 12:00 pm ET


Hess Midstream Partners LP (NYSE:HESM) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Second Quarter 2020 Hess Midstream Conference Call. My name is Andrew, and I will be your operator for today. [Operator Instructions]. Later, we'll conduct a question-and-answer session. [Operator Instructions].

I would now like to turn the conference over to Jennifer Gordon, Vice President of Investor Relations. Please proceed.

Jennifer Gordon

Thank you, Andrew. Good afternoon, everyone, and thank you for participating in our second quarter earnings conference call. Our earnings release was issued this morning and appears on our website, www.hessmidstream.com.

Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include those set forth in the Risk Factor section of Hess Midstream's filings with the SEC.

Also on today's conference call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the earnings release.

With me today are John Gatling, President and Chief Operating Officer; and Jonathan Stein, Chief Financial Officer. In compliance with social distancing protocols as a result of COVID-19, we are conducting the call remotely, so please bear with us. In case there are audio issues, we will be posting transcripts of each speaker's prepared remarks on www.hessmidstream.com following their presentation.

I'll now turn the call over to John Gatling.

John A. Gatling

Thanks, Jennifer. Good afternoon everyone, and welcome to Hess Midstream's second quarter 2020 conference call. Today, I'll review our operating performance and highlights as we continue to execute our strategy, provide additional details regarding our 2020 plans, and discuss Hess Corporation's latest results and outlook for the Bakken. Jonathan will then review our financial results.

I'd like to begin with our results for the second quarter 2020. Despite a volatile environment, today we're announcing that we exceeded our second quarter earnings guidance, lowered expenses and raised our 2020 operational and financial guidance. Additionally, we're reaffirming our 2021 guidance, including adjusted EBITDA growth of 25% compared to full year 2020 and a targeted annual distribution growth per share of 5%. Our second quarter results reflect strong Bakken performance led by Hess Corporation, which drove our throughputs above expectations, and contributed to Hess Midstream exceeding second quarter adjusted EBITDA guidance.

For the second quarter 2020 gas processing volumes averaged 289 million cubic foot per day, a decrease of 10% compared to the first quarter, and crude terminaling volumes were 144,000 barrels of oil per day, a 12% decrease compared to the first quarter. Both decreases were primarily driven by lower third-party throughputs, which was in line with our expectations and guidance. Water gathering volumes averaged 66,000 barrels of water per day in the second quarter 2020, a 22% increase compared to the first quarter, as we continued to capture incremental trucked water into our expanding gathering system. Third