--- title: "Chevron agrees to exit Hess Midstream and cut its Bakken midstream costs about in half" url: "https://etf.net/news/chevron-agrees-to-exit-hess-midstream-and-cut-its-bakken-midstream-costs-about-in-half-2026-10-06" published_at: "2026-10-07T00:39:10.612Z" updated_at: "2026-10-07T00:39:10.612Z" byline: "ETF.net Research" --- # Chevron agrees to exit Hess Midstream and cut its Bakken midstream costs about in half Chevron agreed on Tuesday, October 6, to hand Hess Midstream its stake and Colorado gathering assets for $200 million, and to cut Chevron's Bakken unit midstream costs by about 50%, in a deal the companies expect to close by the end of 2026. By ETF.net Research. Published Oct 7, 2026. Chevron agreed on Tuesday, after the market closed, to exit Hess Midstream for $200 million and a cut of **about 50%** in what it pays to gather and move each unit of Bakken oil and gas in North Dakota. It will give up its stake, the general-partner role that controls the partnership, and its gathering assets in Colorado, the pipes that collect oil and gas from wells. Chevron said it cannot record the future Bakken savings as an asset, so it expects a one-time loss of **$3 billion to $4 billion** after tax at closing. It expects to treat that loss as a special item, separate from ordinary earnings. The deal has not closed. The companies expect to finish by the end of 2026. Closing still needs regulatory approvals and the usual conditions, and the new terms take effect only then. Chevron holds the stake because it bought Hess Corporation on July 18, 2025. At June 30, 2026, that stake was about 37.7%, a holding Hess Midstream said would cut the share count by nearly 40% once the units are canceled. ## The cut is in Chevron's bill That cut is in Chevron's bill for each unit of oil and gas, not in the total Hess Midstream expects to collect from Chevron. Chevron will remain a customer in the Bakken and in Colorado. The lower Bakken fees run from 2027 through 2033. Fees that now follow the cost of providing the service will become fixed fees that rise with inflation. The contracts set a floor at 80% of the Bakken revenue Hess Midstream expects from Chevron through 2033. For 2027 through 2029, that expected revenue assumes Chevron runs two drilling rigs. "It lowers our Bakken cost structure while positioning Hess Midstream to advance as an independent company," said Andy Walz, Chevron's President of Downstream, Midstream and Chemicals. The Colorado assets can gather about 400,000 barrels of oil a day in the Denver-Julesburg Basin. They include 20% of the Saddlehorn pipeline, which runs to Cushing, Oklahoma. Hess Midstream said the package will bring in more revenue from customers other than Chevron. ## What remaining shareholders are offered The quarterly distribution is not a cut. Hess Midstream still plans to raise it at a 5% annual rate in the third and fourth quarters of 2026, then hold the 2027 distribution at the fourth-quarter 2026 level and pay at least that much afterward. Both of those 2026 raises are still ahead, and neither has been declared. The board declared the third-quarter distribution on October 27, 2025. This plan drops the growth promise for 2027. On July 27, 2026, Jonathan Stein, chief executive of Hess Midstream, said the latest increase was in line with a target of 5% growth a year through 2028. Hess Midstream expects $525 million to $625 million of adjusted free cash flow in 2027 and says that will cover the distribution. In December 2025, Hess Midstream expected adjusted EBITDA, its main profit measure, to grow about 5% a year through 2028 from a 2026 forecast of $1.225 billion to $1.275 billion, which it reaffirmed on August 3, 2026. If the deal closes by the end of 2026, its new 2027 forecast is $850 million to $950 million. Hess Midstream said that 2027 forecast includes an estimate of revenue it will book through 2045 for the value of the Colorado assets and the shares it receives. It did not say how much of the $850 million to $950 million that estimate is. Nearly 40% of the shares are being canceled. Whether 2027 looks worse or better for each share that remains depends on that cancellation and on the company forecast. Hess Midstream did not publish a per-share figure. Hess Midstream has loosened the longer-term debt target, from 3 times adjusted EBITDA, a level it reiterated in September 2025, to 3.5 to 3.75 times. For 2027 it expects 3.75 to 4 times. Chevron expects to stop counting Hess Midstream in its own accounts, including about $3.7 billion of debt. That debt stays with the partnership. Shareholders cannot elect the directors now, because Chevron appoints the board through the general partner it owns. Chevron's directors leave at closing. Shareholders gain the right to elect directors only from 2028. Investors in the Alerian MLP ETF AMLP, a fund of master limited partnerships that move, store and process oil and gas, have Hess Midstream as 8.3% of that portfolio. Chart: Hess Midstream is AMLP's **seventh-largest** holding Once the deal closes, that holding is a slice of a partnership that also gathers oil and gas in Colorado. For a shareholder who remains, the exchange is an independent partnership and that Colorado business, in return for a distribution that stops growing in 2027 and a higher debt target. Source: etf.net, https://etf.net/news/chevron-agrees-to-exit-hess-midstream-and-cut-its-bakken-midstream-costs-about-in-half-2026-10-06. Please cite the page URL.