Hess Midstream LP (NYSE:HESM) Q1 2023 Earnings Call Transcript

Jonathan Stein: Sure. So first, just a reminder, our return on capital framework has really 2 elements, first is the 5% annual distribution growth through 2025 at least. And then, of course, the repurchases, which are an incremental return on capital, utilizing our available financial flexibility. If you look back how we’ve done this historically in ’21 and ’22, we really did one large buyback transaction per year. What’s really changed now as we go forward, we intend to do multiple buybacks per year on an ongoing basis through 2025, using the more than $1 billion of financial flexibility that we’ve talked about. And really, the $100 million buyback was really the start of this approach. So what we expect is, again, we would see multiple opportunities each year starting this year, starting with the $100 million and again multiple opportunities for the rest of this year.

Together with potentially related distribution level increases like we did here following the repurchase when we have the lower share count as a result of the repurchase, we have the opportunity to utilize that additional capacity to just bring us back to the same distributed cash flow and increase our distribution level. But overall, really the change is rather than doing this one per doing this multiple per year. And through that, we think there will be significant ongoing accretion as we significantly continue to reduce our share count over the period.

Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.