Hess Midstream LP (NYSE:HESM) Q2 2023 Earnings Call Transcript

Praneeth Satish : Got it. And then looking at ethane prices, they’ve come up quite a bit here in July. And I’m just wondering if you’ve seen any more ethane recovery at your plants, whether there’s any constraints on that side or any kind of just, I know you don’t have the price exposure, but any other kind of implications from this?

John A. Gatling: No, I think we’re uniquely positioned with our Tioga Gas Plant that we’ve got deep cut ethane extraction capability at the plant. It’s running at full capability. And we’re going to continue to look at our joint venture plant with Targa Resources down south, south of the Missouri River to look to optimize that for our customers. So from our perspective, we really don’t see any constraints on ethane recovery.

Praneeth Satish : Got it. Thank you.

John A. Gatling: Thank you.

Operator: Thank you. [Operator Instructions]. Our next question comes from the line of Jeremy Tonet from JPMorgan Securities LLC.

Jeremy Tonet : Hi, good afternoon.

John A. Gatling: Hi, good afternoon.

Jeremy Tonet : Just wanted to, I guess, come back to the EBITDA trajectory for the second half of the year. And as you talked about the midpoint of the guidance implies 8% uplift, back half versus front half. And wondering if you could break this down for us a little bit with regards to how much of that is kind of seasonality or other factors or how much does that portend to I guess 2024 EBITDA growth strength maybe being a bit higher than previously affected?

Jonathan C. Stein: Well, I think the way to think about the rest of the year is like I said, we’re really going to have we’ve given guidance therefore for Q3 that implies a slight step up even more so into Q4. Again, that’s really — continued growth in revenue that should be relatively consistent with the four rigs and continued gas capture operating. So really then it’s really going to be OpEx, which is going to create this kind of seasonality to EBITDA with the higher OpEx going up in Q3 and then seasonally coming down in Q4. So that will also create some more EBITDA. In terms of 2024, we certainly have a lot of great momentum coming through this year. There’s really no change to what we’ve said, which is to continue growth in net income and EBITDA more than 10% through 2025.

Obviously, in January, we’ll give an MVC for 2026, and that will also apply what our expected continued growth is there. So, really there are no change to 2024, just have some great momentum and looking for that to continue through the rest of the year to go on the revenue side and then continue into ‘24 and onto ‘25.

Jeremy Tonet : Got it. That’s helpful. I’ll leave it there. Thanks.

Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.