Good day, Ladies and Gentlemen, Welcome to The Fourth Quarter 2022 Hess Midstream Conference Call. My name is Tawanda, and I will be your operator for today. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask the question during the session, you will need to press star one one on your telephone. You will hear an automated message advising hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded for replay purposes. I would now like to turn the conference over to Jennifer Gordon, Vice President of Investor Relations. You may proceed. Thank you. Good afternoon, everyone, and thank you for participating in our fourth quarter earnings conference call. Our earnings release was issued this morning and appears on our website, www.hessmidstream.com. Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include those set forth in the Risk Factors section of Hess Midstream's filings with the SEC. Also, on today's conference call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the earnings release. With me today are John Gatling, President and Chief Operating Officer, and Jonathan Stein, Chief Financial Officer. I'll now turn the call over to John Gatling. Thanks, Jennifer. Good afternoon, everyone, and Welcome to Hess Midstream's fourth quarter 2022 conference call. Today, I'll review our 2022 operating performance and highlights, provide details regarding our 2023 plans and outlook for through 2025, and discuss Hess Corporation's latest results and outlook for the Bakken. Jonathan will review our financial results. Despite severe winter weather conditions, 2022 was a year of continued strong performance and execution for Hess Midstream. We delivered volume growth and expanded our compression capacity by more than 25%, further enhancing our gas capture capability. As discussed in our guidance release, we've established our 2025 Minimum Volume Commitments, and we're confident in the implied volume growth, which is underpinned by the following. Hess plans to continue to operate a four-rig drilling program and expects to bring approximately 110 wells online per year in 2023 and 2024. This will grow Hess's production to an average of approximately 200,000 BOE/d in 2025. Hess has an approximate 15-year inventory of profitable drilling locations with a four-rig program at $60 WTI. Hess Midstream's focused capital program prioritizes the expansion of our gas gathering system to support gas Throughput Volumes increasing by more than 30% in 2025 relative to 2022, driven by Hess's planned development activity and goal of achieving Zero Routine Flaring by the end of 2025. We're also confident in the delivery of our financial guidance and the potential to provide incremental shareholder returns above our targeted annual distribution growth as our revenues are 80%-90% covered by MVCs through 2025, and the significant growth in gas volumes, which is supportive to Hess Midstream as approximately 75% of our revenues are generated from our gas business. Turning to Hess Upstream highlights. Hess announced Bakken net production averaged 158,000 BOE/d in the fourth quarter, reflecting severe winter weather impacts in December, which limited bringing new wells online to 15 for the quarter. For full year 2022, Bakken net production averaged 154,000 BOE/d. Turning to Hess's production guidance. For full year 2023, Hess forecasts Bakken net production will average between 165,000 and 170,000 BOE/d, a 9% increase compared to 2022. First quarter net production is forecast to average between 155,000 and 160,000 BOE/d, including weather contingencies and carryover effects from December. Hess forecasts Bakken net production to steadily grow over the course of 2023 and 2024 and average approximately 200,000 BOE/d in 2025. Hess expects to hold this level of production for nearly a decade. Focusing on Hess Midstream's fourth quarter 2022 results. Gas processing volumes averaged 312 MMcf/d, reflecting the impact of severe winter weather in December. Fourth quarter crude Terminaling and water gathering volumes averaged 101,000 bbl/d and 77,000 bwpd respectively, resulting in full year Adjusted EBITDA of $983 million, representing an 8% increase of 8% compared to 2021. Turning to Hess Midstream's guidance. For full year 2023, we expect gas processing volumes to average between 350 and 360 MMcf/d, representing growth of approximately 11% compared to 2022, primarily driven by Hess's development activity and our focused gas capture efforts. For full year 2023, we anticipate crude Terminaling volumes to average between 105,000 and 115,000 bbl/d and water gathering volumes to average between 85,000 and 95,000 bwpd. we project Adjusted EBITDA for 2023 in the range of $990 million-$1,030 million, an increase of approximately 3% at the midpoint compared to full year 2022. The Adjusted EBITDA increase driven primarily by the transition from high MVC coverage to physical volume growth, which is underpinned by full impact of Hess' four-rig development program. Turning to Hess Midstream's 2023 capital program. For full year 2023, capital expenditures are expected to total $225 million, comprised of $210 million of expansion activity and $15 million of maintenance activity. Approximately $100 million of the 2023 expansion capital budget is allocated to gas compression, with activities focused on the completion of two greenfield compressor stations and associated pipeline infrastructure, which are expected to provide, in aggregate, an additional 100 MMcf/d of gas compression capacity when brought online, further enhancing our gas capture capability. Approximately $110 million is allocated to gathering system well connects to service Hess and third-party customers and optimization of our existing gathering system. In summary, we're continuing to execute our strategy of making focused low-risk investments to meet basin demands, delivering reliable operating performance and strong financial results. We're well-positioned for substantial growth, as implied by our guided 2025 MVCs, which are underpinned by Hess's planned development activity and our continued focus on gas capture, which is expected to result in sustainable excess cash flow generation and the potential to return additional capital to our shareholders. I'll now turn the call over to Jonathan to review our financial results and guidance. Tawanda, operator. We're having some technical difficulties at this end with the webcast. If everybody can please dial back in, and we are going to start the call over in approximately two minutes. Thank you so much. Ladies and gentlemen, please stand by. Okay. Ladies and gentlemen, please stand by. Your conference will resume shortly. Please stand by. Your conference will resume shortly. Once again, ladies and gentlemen, please stand by. Your conference will resume shortly. Thank you for your patience. Please stand by. We're gonna do Gatling again, yes? Okay. Okay, everybody. Sorry about that. We're going to pick up where we just left off with Jonathan Stein. Over to you, Jonathan. Thank you. Good afternoon, everyone. Today, I will summarize our financial highlights from 2022, discuss our recently completed nomination process with Hess, and provide details on our 2023 guidance and outlook through 2025, including our continued prioritization of ongoing and incremental return of capital to shareholders. For 2022, we delivered strong results with full year net income of $621 million and Adjusted EBITDA of $983 million, an 8% increase compared to the prior year. Looking forward, we have line of sight to at least 10% annual growth in net income, Adjusted EBITDA and Adjusted Free Cash Flow in 2024 and 2025, driven by Hess's growth in the Bakken and underpinned by our 2025 MVCs that provide visibility to approximately 10% annualized growth in physical volumes across gas, oil and water systems from 2023. Return of capital to shareholders continues to be a key priority for our financial strategy. In 2022, we increased our distributions per share, consistent with our 5% annual target, and also completed incremental shareholder returns, including a $400 million repurchase of units from our sponsors and an additional increase in our distribution level by 5% following the repurchase. Over the past two years, we have completed $1.15 billion of unit repurchases and grown our distributions by approximately 27% on a per share basis. These shareholder returns as a percent of market capitalization represent differentiated and peer-leading metrics. Looking forward, we plan to continue this financial strategy that includes consistent and ongoing return of capital as a primary objective. We are targeting 5% annual distribution growth through 2025, and we expect greater than $1 billion in financial flexibility through 2025 for capital allocation. That includes prioritization of potential unit repurchases on an ongoing basis. Turning to our results. For the fourth quarter, net income was $150 million, compared to $159 million for the third quarter. Adjusted EBITDA for the fourth quarter was $245 million, compared to $254 million for the third quarter. The change in Adjusted EBITDA relative to third quarter was primarily attributable to the following: Total revenues, excluding pass-through revenues, decreased by approximately $15 million, primarily driven by lower Throughput Volumes from extreme winter weather, as John Gatling described, partially offset by higher MVC shortfall fees, resulting in segment revenue changes as follows: A decrease in gathering revenue of approximately $13 million, a decrease in processing revenue of approximately $1 million, and a decrease in export revenue of approximately $1 million. Total costs and expenses, excluding depreciation and amortization, pass-through costs and net of our proportional share of LM4 earnings, decreased by $6 million due to lower remediation expenses related to a produced water spill in our gathering segment during the third quarter, resulting in Adjusted EBITDA for the fourth quarter of $245 million. Gross Adjusted EBITDA Margin for the fourth quarter was maintained at approximately 80%, highlighting our continued strong Operating Leverage. Fourth quarter maintenance capital expenditures were approximately $4 million, and net interest, excluding amortization of deferred finance costs, were approximately $38 million. The result was that Distributable Cash Flow was approximately $203 million for the fourth quarter, covering our distribution by 1.5x Expansion capital expenditures in the fourth quarter were approximately $59 million, resulting in Adjusted Free Cash Flow of approximately $144 million. At year-end, debt was approximately $2.9 billion, representing leverage of approximately 3x Adjusted EBITDA on a trailing twelve-month basis. We had a drawn balance of $18 million on a revolving credit facility at year-end. Turning to our annual nomination process. Our contracts continue to provide a unique and differentiated level of downside protection through a combination of our annual rate redetermination process that maintains a contractual return on capital deployed and MVCs that provide revenue floors set at 80% of expected throughput three years in advance. We have commercial contracts with Hess with downside protection through 2033. At the end of 2022, we completed our nomination process with Hess and updated our tariff rates for 2023 and all forward years. As with prior cycles, the nomination process considered changes in actual and forecasted volumes and CapEx to maintain our contractual targeted return on capital deployed. 2023 tariff rates were generally slightly higher than 2022, reflecting the annual inflation escalator. As a reminder, 2023 is the final year of the annual rate redetermination process for the majority of our systems that represent approximately 85% of our revenue. At the end of 2023, the base rates for 2024 will be set based on the average of the tariff rate from the years of 2021 through 2023, adjusted for inflation. Rates will be increased each year based on an inflation escalator capped at 3%, resulting in steadily increasing rates through 2033. For our Terminaling and water gathering systems that represent approximately 15% of our revenues, we will continue to reset our rates through our annual rate redetermination process through 2033. For all of our systems, MVCs will continue to be set at 80% of nominated volumes set three years in advance, providing downside protection through 2033. In our guidance release this morning, we provided MVCs for the years 2023 through 2025. As part of the nomination process, MVCs for 2023 and 2024 were reviewed and where required, increased, while MVCs in 2025 were newly established based on 80% of the nominated volumes for each system in that year. For our oil revenues, our MVCs are expected to provide approximately 100% revenue coverage in 2023 and 90% revenue coverage in 2024. For our gas revenues, our MVCs are expected to provide approximately 85% revenue coverage in both 2023 and 2024. Our MVCs for 2025 provide line of sight to long-term growth in system throughput. For example, looking at gas processing, Hess's nomination for expected volumes for 2025 was 429 MMcf/d, resulting in an MVC of 343 MMcf/d, set at 80% of the nomination level, implying more than 30% growth in physical natural gas volumes from 2022 levels. Turning to guidance for 2023. While physical volumes are expected to grow in 2023, as John described, we are transitioning from higher MVCs in 2022 to physical volumes that are at or above MVCs in 2023. As a result, our revenue growth in 2023 is expected to be driven by our rates that have been increased primarily as a result of the annual inflation adjustment as described earlier. For the full year 2023, we expect net income of $600 million-$640 million and Adjusted EBITDA of $990 million-$1,030 million, representing a 3% increase in Adjusted EBITDA at the midpoint of our range. We continue to target a Gross Adjusted EBITDA Margin of approximately 75% in 2023. For 2023, with total expected capital expenditures of $225 million, we expect at the midpoint to generate Adjusted Free Cash Flow of approximately $625 million. Highlighting our financial strength, we expect Distribution Coverage of approximately 1.45x and excess Adjusted Free Cash Flow of approximately $60 million after fully funding our targeted growing distribution. We also expect to repay the 2022 year end balance of $18 million on our revolving credit facility in 2023. For the first quarter of 2023, we expect net income to be approximately $135 million-$145 million and Adjusted EBITDA to be approximately $230 million-$240 million. First quarter maintenance capital expenditures and net interest, excluding amortization of deferred finance costs, are expected to be approximately $45 million, resulting in expected Distributable Cash Flow of approximately $185 million-$195 million, delivering Distribution Coverage at the midpoint of the range of approximately 1.4x. For the remainder of 2023, we expect growing Adjusted EBITDA consistent with increasing volumes across oil, gas, and water systems, with seasonally higher operating costs in the second and third quarters of the year. Looking beyond 2023, we have clear visibility to volume, Adjusted EBITDA, and Adjusted Free Cash Flow growth that supports our financial strategy. As described, our MVCs provide visibility to annualized growth of approximately 10% across our oil, gas, and water volumes. With continued investment supporting increasing gas capture, our gas volumes have the highest expected physical growth rate and represent approximately 75% of our expected revenues. Driven by these growing volumes together with fees that are steadily increasing based on our annual inflation escalator and Operating Leverage based on a targeted growth Adjusted EBITDA margin of approximately 75%, we expect growth in Adjusted EBITDA of at least 10% per year in both 2024 and 2025. With growing Adjusted EBITDA and capital expenditures that are expected to remain stable with 2023 levels, we expect growth in Adjusted Free Cash Flow of greater than 10% on an annualized basis in both 2024 and 2025. Our financial strategy, supported by the significant growth in our financial metrics, includes a continued focus on financial strength with a long-term leverage target of 3x Adjusted EBITDA. We are continuing to prioritize shareholder returns with our return of capital framework. First, we are continuing to grow our base distribution by extending our targeted distribution growth of 5% annually on a per share basis through to 2025, with annual Distribution Coverage of at least 1.4x. Second, we have financial flexibility for potential significant incremental shareholder returns beyond our growing base distribution. With expected Adjusted EBITDA and Adjusted Free Cash Flow growth of at least 10% annually in excess of our targeted annual distribution growth of 5%, we expect to generate excess Adjusted Free Cash Flow beyond our distributions and leverage is expected to decline to below 2.5x Adjusted EBITDA by the end of 2025, providing leverage capacity relative to our long-term 3 times Adjusted EBITDA leverage target. As a result, with a growing cash balance and significant leverage capacity, we expect to have greater than $1 billion in financial flexibility through 2025 for a capital allocation that includes prioritization of unit repurchases on an ongoing basis. In summary, we are pleased to have delivered a strong 2022 and look forward to a visible trajectory of growth in our operational financial metrics that underpin our unique and differentiated financial strategy with a focus on consistent and ongoing return of capital to our shareholders. This concludes my remarks. We'll be happy to answer any questions. I will now turn the call over to the operator. Thank you. Ladies and gentlemen, as a reminder to ask the question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Doug Irwin with Citi. Your line is open. Hey, everyone. Thanks for the question. Maybe just starting with capital allocation, just wanted to ask how you're thinking about the cadence of the potential billion dollars in returns. Should we expect it to be pretty ratable over the next few years, or do you plan to be a little more opportunistic? To that point, I guess, would you be willing to kind of move above your 3x leverage target to return capital kind of more near term if you have a pretty good line of sight to lower leverage moving forward? Sure. Great. Thanks for the question. Yeah, let me provide a little bit more context on our return on capital program, which we're really excited about. First, let's start with how do we get to a billion dollars As we talked about, we have 10%, at least 10% EBITDA growth in both 2024 and 2025. As I said, we expect leverage to be at 2.5x by the end of 2025. With a half return of EBITDA based on that growing EBITDA growth, that gets you to at least $600 million there. We also noted that we're gonna be free cash flow positive after distributions as our EBITDA is growing and our CapEx is stable. We're growing cash flow, free cash flow in excess of our 5% target distribution growth. With that, we expect to build approximately or at least $400 million of cash through 2025. You put that together, that gets you to the billion dollars Again, that billion dollars is targeted, has the potential to be targeted for just unit repurchases or share repurchases and does not include potential dividend step-ups or, and dividend level increases as we've done after each of the share repurchases in the past. Those are funded primarily through the fact that our share repurchases end up with, lower share count, and then we're just bringing our Distributable Cash Flow back to where it was before. A billion dollars with the potential to use that for share repurchases. In terms of the timing, second part of your, of your question, we see the ability to do this really multiple opportunities, over the period starting this year and then really on an ongoing basis through 2025, to be able to utilize that billion dollars, in really just multiple, potential buybacks and then potentially related distribution level increases, that would come, with that as well beyond our 5% distribution growth. Now that brings us finally to our leverage. As you note, there's no change to our 3x long-term target. If you look at what we've done in previous transactions, we have gone slightly above that three, you know, let's say in past three, two based on visibility of getting back to our long-term leverage target of 3x. We expect that as we execute multiple opportunities over the next, starting this year and then through 2025, that we continue that same strategy. Particularly with the visibility that we have through our 2025 MVCs driving our expected growing EBITDA, you know, we feel confident that as we execute these multiple potential share buybacks over this period, that we could go slightly above that 3x, with visibility to getting back to our long-term 3x, targeted leverage. Again, we're really excited about, you know, this program with a billion dollar in capacity. As we noted, we've, you know, really had peer-leading metrics in terms of shareholder returns. We look forward to the opportunity to continue that forward with this return on capital program. Great. That's helpful. Maybe a follow-up just on kind of guidance. Could you maybe talk about how you're factoring third-party volume mix into kind of your 2023 volume guidance? Then as we kind of think about the 10% growth in both 2024 and 2025, is that pretty much all driven by MVCs and the Hess outlook, or does that kind of assume some third-party volume in that mix as well? The third-party, we've been staying consistent with our third-party assumption, which is about 10% for both oil and gas. You know, with our strategic infrastructure and our position in the basin, we obviously can attract volumes into the infrastructure. We're gonna continue to focus on that. But as we've seen over the last, you know, year or so, it's been in the kind of the 10% range, and that's essentially what we're planning for into the future. So as we talk about the growth and kind of transitioning above, you know, above MVCs heading into 2025, you know, we expect that to be about the same percentage split between Hess and third-party volumes. Okay, great. That's all for me. Thanks for your time. Thanks, Doug. Thank you. Please stand by for our next question. Our next question comes from the line of John Mackay with Goldman Sachs. Your line is open. Hey, everyone. Thanks for the time. I wanted to pick up on Doug's first question, just on the billion-dollar potential, incremental cash returns. Could you talk a little bit about maybe just, you know, it's $1 billion of potential, maybe just some of the puts and takes on actual kind of willingness to deploy that? Because if we look at $1 billion, that's, you know, 15% of your market cap or something right now. That's a pretty big number. Is that somewhat dependent on, you know, share price? Could it swing more towards larger distribution increases? Just trying to think of the, again, the puts and takes on us actually kind of seeing that $1 billion come out over the next three years. Sure. In terms of, you know, capital allocation, in terms of our, I'd call it willingness or, you know, our focus on that $1 billion and what it's for, you know, as we've said, really the focus of our financial strategy, is really on, of course, maintaining our financial strength, but in terms of our leverage target, but also prioritizing our return on capital. We're very fortunate that, as we've talked about with, the investments we've made historically, you know, we can really get this 10% per year EBITDA growth and volume growth, as we described, really on just stable capital. There's really, at least nothing, you know, of course, there's always, we've talked about bolt-ons in the past, but absent anything like that, there's really nothing in our plan, or we certainly don't need any of that in order to be able to achieve the growth that we already have in our plan. With that said, then that a billion dollar, the prioritization of that would be, for return of capital to shareholders. Of course, everything, you know, every transaction would be subject to market conditions and board approval at the time, but that is the priority in the financial strategy that we've, laid out. In terms of share repurchases versus dividend increases, of course, we'll make a decision at the time, but we, you know, we have gotten very positive feedback, and we're very positive ourselves on the strategy we've executed so far, which has been share repurchases. With those share repurchases, utilizing, as I discussed in that previous answer, was utilizing the fact that we have now lower share count to be able to just really increase the dividend and really just getting us back to that distributed cash flow that we had before the repurchase. That has allowed us to, as I mentioned in my comments, generate not only the 5% annual growth, but now over the past two years, 27% increase in our dividends. Just an amazing result there together with the $1.15 billion in repurchases. You know, I'd say that's gonna be our focus. That's our priority. You know, of course, we'll make decisions each time on what the exact right optimization is in terms of capital structure, but certainly the strategy that we've taken so far is certainly one that we like. Certainly that would be probably our base case going forward. Again, multiple opportunities to do this going forward through now through 2025. All right. That's great. Maybe, maybe just turning to operations. I mean, look, there's always gonna be weather up in the Bakken. December was really bad. It was also really bad earlier in 2022. I guess this is a little more of a Hess question, but maybe could you just talk a little bit around, you know, your comfort in kind of not getting pushed to the right again when, you know, there's bad weather again up there? I mean, you commented that your guide and the Hess guide are, you know, I guess, weather adjusted or there's some give in there for weather. Maybe just how much kind of conservatism you have in there and how you're thinking about that going forward and whether it's maybe evolved over the last year or two. Yeah. Thanks. I mean, I think it's somewhat difficult to say. I mean, obviously North Dakota, there's weather every year. It snows every year, you know, starting sometime in October, November timeframe, and it kind of carries on through, you know, through March, April timeframe and sometimes into May. 2022 was definitely challenging. It was abnormal weather 2x. I mean, it kind of struck twice in one year. We had the freezing rain earlier in the year in the April-May timeframe, and that just totally took out power. Without the power, you know, we obviously couldn't, we couldn't lift the, the hydrocarbons and couldn't get it to the infrastructure and ultimately, to be processed and, and shipped out via pipe or rail or, you know, to the, to the export markets. That was the challenge in, at the beginning of the year. Then in December We just had abnormally high snowfall, and then very, very cold weather. As the upstream team attacked the snow with winds and very cold weather, the snow would just blow back, and it was a constant battle for them over that time frame. You know, I've been working in the Bakken for going on 12 years, and the weather in 2022 was abnormal. Having said that, the upstream team, and obviously that carries into some of our forecasts as well, they do build in weather contingencies in the first quarter and the fourth quarter of every year. They're really based more on historical weather contingencies and not abnormal. I would say that, you know, based on what we saw in 2022, we're probably a little bit gun-shy here, going into the first quarter of this year. Again, we're gonna continue to monitor it. I mean, the team is doing a great job trying to stabilize the system and really reinforce it for even abnormal weather. You know, we feel like we've got a good plan. You know, we've got a very integrated team between the upstream and the midstream. We have good transparency and visibility into the forecast and understand kind of where the plan is and what we need to do to help them achieve it. I would say that both Hess and Hess Midstream are confident in the delivery, in particular as we march towards the, you know, average of 200,000 barrels oil come per day in 2025. I think that's gonna be the real anchor point to the, to the growth over the next, you know, next three years. We see solid growth in 2023, 2024 and into 2025. You know, there's a lot of opportunity there. Again, I know it's a little bit of a long-winded response to your question, you know, the weather in 2022 was abnormal and challenging for the team. Really thorough. Appreciate it. Thanks everyone for the time today. Yeah, absolutely. Thank you. I'm showing no further questions in the queue. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.