Hess Midstream Lp · NYSE:HESM
Hess Midstream Lp — Hess Midstream Partners — Merger or Acquisition (October 2019)
24 slides from Hess Midstream Lp's merger presentation, Oct 4, 2019
Slide 1: Hess Midstream Partners LP Announces Acquisition of Hess Infrastructure Partners LP
Hess Midstream Partners LP Hess Midstream Partners LP Announces Acquisition of Hess Infrastructure Partners LP, IDR Simplification and Conversion to an Up-C Corporate Structure; Provides 2020 Guidance October 2019 Exhibit 99.2
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws regarding HESM and Hess Midstream. These forward-looking statements relate to, among other things, the proposed transaction between HESM and Hess Midstream and in
Slide 3: Hess Midstream Partners' Strategic Transaction
Hess Midstream Partners’ Strategic Transaction Immediate 6% Distributable Cash Flow Per Unit / Share (DCFPU) accretion in 2020(1); strong long term accretion, with greater than 15% accretion in 2021-22 Eliminate IDR payments to Sponsors, increasing share of Distributable Cash Flow (DCF) to sharehold
Slide 4: Transaction Summary
Transaction Summary 100% acquisition of HIP by HESM(1), consolidating all midstream operating assets Eliminate IDR payments to Sponsors Structure conversion from MLP to Up-C(2): Creation of a new public entity, Hess Midstream LP (“Hess Midstream”; NYSE:HESM)(3), taxed as a corporation HESM to become
Slide 5: Transaction Details
Transaction Details Transaction Sources & Uses Pro-Forma Capitalization(5) Pro-Forma Ownership(3) Creation of Hess Midstream LP in Up-C structure HESM to acquire HIP from Sponsors, consolidating 100% of midstream operations HIP’s interests include 80% of the joint interest assets, 100% of the HESM G
Slide 6: Continues Track Record of Unitholder Value Creation
Continues Track Record of Unitholder Value Creation No change to current distribution Continued commitment to 15% DPU growth target through 2021 DPU growth outlook unchanged since HESM’s IPO Increasing distribution coverage target to ~1.2x Targeted 15% Annualized Growth No Change to Distribution Pol
Slide 7: Enhances Leading Midstream Platform
Enhances Leading Midstream Platform Integrated Portfolio With Meaningful Scale Pro-forma >$7.25 billion enterprise value midstream platform(1) 100% consolidated ownership of strategic infrastructure assets No dependence on future asset drop downs Multiple Drivers of Forward Growth ~20% CAGR in Hess
Slide 8: 2020 Guidance Demonstrates Highly Visible Growth
2020 Guidance Demonstrates Highly Visible Growth Note: See appendix for definition of Adjusted EBITDA and a reconciliation to GAAP financial measures. (1) In 2020, gas gathering volumes and gas processing volume guidance each reflect an approximate 30 MMscf/d reduction due to the planned TGP turnaro
Slide 9: Multiple Drivers of Forward Growth
Multiple Drivers of Forward Growth Visible Organic Growth Best-in-Class Contract Structures Incremental infrastructure investments de-risked by contract structure MVCs provide ongoing near-term downside protection Annual fee recalculation for changes in volume forecast maintain EBITDA stability Stra
Slide 10: Self-Funding, High Growth, Significant Free Cash Flow
Self-Funding, High Growth, Significant Free Cash Flow $710 - $750 ~25% CAGR $550 - $575 Guidance ~5x Increase Funding both expansion capital and distribution growth with conservative leverage and no equity needs Significant and growing capacity to fund incremental growth Organic growth without a lar
Slide 11: Compelling Value Proposition
Compelling Value Proposition Differentiated Fundamentals with Peer-Leading Financial Metrics(1) Hess Midstream’s Leading Fundamentals Industry-Leading Growth Best-in-Class Contract Structure Financial Flexibility Conservative Balance Sheet 2019E – 2021E EBITDA CAGR 2021E Unlevered Free Cash Flow Con
Slide 12: Hess Midstream's Strategic Transaction
Hess Midstream’s Strategic Transaction Premier Large-Scale Midstream Company Positioned for Sustainable Long-Term Growth Transaction Immediately Accretive for Public Unitholders ~25% EBITDA Growth and Targeted 15% Annualized DPU Growth Visible Growing Cash Flow Generation From Leading Business Model
Slide 13: Appendix
Hess [HESS] Midstream Partners Appendix
Slide 14: Hess Midstream
Hess Midstream
Slide 15: Unitholder Accretion Table
Unitholder Accretion Table (1) Reflects GP share of cash flow distributed through IDR tiers at 1.0x coverage. Illustrative DCF per Unit/Share Accretion Based on 2020 EBITDA Guidance Range Low End Midpoint High End $ MM (unless otherwise noted) Existing MLP Structure New HESM Structure Existing MLP S
Slide 16: Reconciliation to GAAP Metrics
Reconciliation to GAAP Metrics Non-GAAP Financial Measures We define Adjusted EBITDA as net income (loss) before net interest expense, income tax expense (benefit) and depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of ou
Slide 17: Minimum Volume Commitments
Minimum Volume Commitments Growing MVCs provide line of sight to long-term organic growth Agreement 2019 2020 2021 Gas Gathering (MMcf/d) 251 303 304 Oil Gathering (MBbl/d) 113 126 126 Gas Processing (MMcf/d) 229 265 290 Crude Terminaling (MBbl/d) 127 143 153 Water Gathering (MBbl/d) 41 67 84 MVCs s
Slide 18: Strategically Located, Integrated, High Quality Large-Scale Asset Base
Strategically Located, Integrated, High Quality Large-Scale Asset Base Serving Hess & Third Parties Little Missouri 4 Johnson’s Corner Header System Hawkeye Oil Facility Hawkeye Gas Facility Tioga Gas Plant Ramberg Terminal Facility Tioga Rail Terminal ~350 MMcf/d of Gas Processing Capacity Tioga Ga
Slide 19: Stable, Growing Cash Flows Supported by Long-Term Commercial Contracts with Hess
Stable, Growing Cash Flows Supported by Long-Term Commercial Contracts with Hess 10-Year Commercial Contracts(1),(2) + Unilateral 10-Year Renewal(2) Right 100% Fee-Based Contracts Minimize commodity price exposure Minimum Volume Commitments Provide downside protection Fee Recalculation Mechanisms De
Slide 20: Opportunities to Deploy Capital
Opportunities to Deploy Capital Hess Acquisition Opportunities Focused Capacity Expansions Expanding processing capacity from 350 MMcf/d to 500 MMcf/d by mid-2021 Ongoing build-out of water gathering and disposal capacity Existing TGP Capacity LM4 Capacity Bakken Water Services Potential to acquire
Slide 21: Hess Bakken Upstream
Hess Bakken Upstream
Slide 22: Hess' Bakken Upstream Growth Engine
Hess’ Bakken Upstream Growth Engine Leading Acreage Position Delivering Long-Term Volume Growth 2019 Hess Guidance(1) Bakken represents ~50% of 2019 Production and Capex & Exploratory spend (1) Hess guidance as of July 2019. (2) Upstream capital and exploratory expenditures. 115-120 130-135 140-145
Slide 23: Significant Future Production Growth
Significant Future Production Growth Hess Expects Bakken Net Production to Grow to ~200 MBoe/d by 2021 (1) Hess guidance as of July 2019 (2) Point forward Jan 2019, assumes ~30 wells/rig-year. Includes Middle Bakken and Three Forks (3) Includes Goliath, Red Sky and Buffalo Wallow. Keene Stony Creek
Slide 24: Hess Midstream Partners
Hess [HESS] Midstream Partners
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