Hess Midstream Cuts Capex, Lifts Cash Flow Outlook to $960 Million
Hess Midstream raises its 2026 free cash flow outlook while lowering capital spending, as the company focuses on returns, efficiency and disciplined growth.
(P&GJ) — Hess Midstream increased its 2026 free cash flow outlook and lowered capital spending after posting steady first-quarter earnings, as the company emphasized capital discipline and shareholder returns.
The company now expects adjusted free cash flow of $910 million to $960 million this year, up from prior guidance, while reducing planned capital expenditures to about $105 million.
For the first quarter, Hess Midstream reported net income of $157.7 million, with adjusted EBITDA of $299.8 million and adjusted free cash flow of $237.0 million.
The improved outlook reflects lower capital spending and the deferral of income tax payments, which the company said will support additional cash available for distributions and debt reduction.
“We continued to execute on our operational priorities and financial strategy,” CEO Jonathan Stein said, adding that reduced capital spending is expected to drive higher free cash flow and support shareholder returns.
Hess Midstream also increased its quarterly distribution to $0.7792 per Class A share, reflecting ongoing efforts to return capital to investors.
Operationally, throughput volumes were mixed. Oil terminaling volumes fell 5% and water gathering declined 9% compared with the prior-year quarter, largely due to lower production. Gas processing volumes rose slightly, supported by increased third-party activity.
Capital spending dropped sharply in the quarter to $10.4 million, down from $50.1 million a year earlier, primarily due to the completion of gas compression expansion projects.
Despite lower volumes in some segments, the company maintained its full-year guidance for throughput, net income and adjusted EBITDA.
Hess Midstream, which operates gathering, processing and terminaling assets in the Bakken, said it expects to continue generating strong cash flow through 2028 to support distributions and balance sheet improvements.