Key Highlights

● Adjusted free cash flow rose to $231.6 million in the quarter from $193.8 million.

● Net income was $173.7 million, compared with $179.7 million a year earlier.

● Oil terminalling volume fell 15 per cent and water gathering fell 12 per cent.

● A quarterly distribution of $0.7888 per Class A share was declared.

In results released around its 3 August 2026 earnings call, Hess Midstream (NYSE:HESM) reported net income of $173.7 million, compared with $179.7 million a year earlier, of which $96.4 million, or $0.75 per Class A share, was attributable to the partnership. Adjusted EBITDA was $313.7 million against $316.0 million. Adjusted free cash flow rose to $231.6 million from $193.8 million, helped by lower spending: capital expenditure was $30.6 million, down from $70.0 million. Volumes were mixed. Gas gathering averaged 445 million cubic feet per day, crude oil gathering 103 thousand barrels per day, gas processing 433 million cubic feet per day, crude terminals 117 thousand barrels per day and water gathering 121 thousand barrels per day. The release noted year-on-year falls of 15% in oil terminalling, 12% in water gathering and 4% in gas processing.

Guidance and distribution

The company reaffirmed 2026 guidance of net income between $650 million and $700 million, adjusted EBITDA of $1,225 million to $1,275 million, capital expenditure of about $105 million and adjusted free cash flow of $910 million to $960 million. These are management projections, not results. A quarterly distribution of $0.7888 per Class A share was declared, $0.0096 above the first quarter, payable on 14 August 2026 to holders of record on 6 August. The 2026 outlook also indicated about $280 million of free cash flow remaining after targeted distributions of $655 million, which gives a sense of how much cover the payout has.

Customer concentration and the balance sheet

The quarterly filing shows how concentrated the business is. Chevron has been the sponsor since 18 July 2025, following a brief period in which Hess held the role, and Chevron-related revenue accounted for 95% of the total in the three and six months to 30 June 2026. Contracts carry minimum volume commitments set at 80% of nominations on a rolling three-year basis, with fee escalators capped at 3% a year, and most agreements began in 2014 with secondary terms running to the end of 2033. Total debt had a carrying value of $3,680.0 million at 30 June 2026, including $256.0 million drawn on the revolving credit facility. The revolver and Term Loan A mature in July 2027, so refinancing is a visible item on the calendar. Against a diversified index of companies, this combination of fee-based contracts, a single dominant counterparty and near-term bank maturities is the clearest structural difference, and it is an editorial observation rather than a reported conclusion.

A Single-Customer Structure Shapes the Risk Profile

Hess Midstream's lower capital spending drove the free cash flow gain even as net income dipped slightly and several volume categories declined year over year, a reminder that the partnership's fee-based contracts matter more to results than headline throughput. Chevron, the sponsor since mid-2025, accounted for 95 per cent of revenue in the quarter under minimum-volume contracts running to 2033, and with the revolver and Term Loan A maturing in July 2027, refinancing timing sits alongside customer concentration as the structural features that separate HESM from a typical diversified benchmark constituent.