• Chevron to divest its ownership interests in Hess Midstream and DJ Basin crude oil midstream assets in exchange for extended and improved Bakken midstream commercial terms
• Expected to improve Chevron’s Bakken cost structure and increase return on capital employed
• Supports competitive upstream development activity

Chevron Corporation announced  that several of its subsidiaries have entered into a series of definitive agreements with Hess Midstream LP  to restructure the terms of its Bakken midstream contracts and establish new DJ Basin midstream contracts. The revised agreements extend the Bakken contracts and are expected to reduce Chevron’s Bakken unit midstream costs by approximately 50%, enhancing future earnings and return on capital employed. In exchange for the improved long-term commercial framework and $200 million in cash consideration, Chevron will transfer to Hess Midstream its ownership interests and general partner position in Hess Midstream, as well as its DJ Basin crude oil midstream assets.

As part of this transaction, Chevron expects to fully deconsolidate Hess Midstream, including approximately $3.7 billion of Hess Midstream’s debt. Chevron expects this transaction to be accretive to return on capital employed by 0.5% on an absolute basis and generate long-term future economic value through a lower cost structure and improved earnings. At closing, Chevronexpects to recognize a one-time after-tax loss estimated at approximately $3 to $4 billion,¹ given that the company is unable to recognize future Bakken midstream cost savings as an asset.

“This transaction resets the commercial framework between our upstream and midstream assets in the Bakken and DJ Basins,” said Andy Walz, Chevron’s President of Downstream, Midstream and Chemicals. “It lowers our Bakken cost structure while positioning Hess Midstream to advance as an independent company.” Chevron expects to sustain Bakken production through ongoing technology deployment and operational improvements drawn from its global shale and tight portfolio.

Approvals and Timing

The transaction has been approved by the Conflicts Committee of the Board of Directors of the general partner of Hess Midstream, comprised entirely of independent directors, following consultation with its independent legal and financial advisors. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by year-end 2026.

Advisors

BofA Securities is acting as financial advisor and Latham & Watkins LLP is acting as legal advisor to Chevron. Evercore is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal advisor to the Conflicts Committee of the Board of Directors of the general partner of Hess Midstream.