Hess Midstream has been named Breakthrough Company of the Year in the 2020 Ammy Awards, given annually by Alerian to recognize excellence in the North American energy infrastructure industry.
Hess Midstream is one of five companies nominated in the “Breakthrough” category, which recognizes excellence and celebrates a company’s contribution to the North American energy infrastructure sector.
The awards are determined by an elected council of investors and sell side analysts. Alerian serves a worldwide client list of asset managers and investment professionals through indexing, research and data collection.
The company’s performance captured the attention of investors and analysts last October when Hess Midstream Partners converted from a master limited partnership into an “Up-C” structure and acquired Hess Infrastructure Partners including its 80% interest in Hess Midstream Partners’ oil and gas midstream interests, water services business, outstanding economic general partner interest and Incentive Distribution Rights (IDR) in in Hess Midstream Partners. Hess Midstream Partners changed its name to “Hess Midstream Operations LP” (HESM Opco) and became a consolidated subsidiary of Hess Midstream, the new publicly listed entity.
In other words, Hess Midstream transformed two companies into a single entity.
“Other companies have tried to do what we did, but our approach was breakthrough because it impacted everyone involved positively,” said Jennifer Gordon, vice president, investor relations for the company.
Jonathan Stein, chief financial officer of Hess Midstream, noted that the transformation also created a win-win for Hess Midstream and for Hess Corporation, which received approximately $301 million in cash and approximately 115 million newly issued units in HESM Opco as part of the transaction.
“This was an extremely complicated transaction,” said Stein. “We did it all at once — consolidated the assets, eliminated IDR payments, created a new debt offering and a new bank facility. This transaction has become a model for how to do this properly.”
The company’s recognition has also been grounded in exceptional operational performance. In 2019, Hess Midstream delivered year-on-year double-digit percentage increases in volumes across all of its systems, realized significant EBITDA growth (earnings before interest, tax, depreciation and amortization), and completed the acquisition of Hess Infrastructure Partners, all of which caught the attention of the investor community.
The transaction “allowed us to enter 2020 as a large-scale, full service midstream company, well positioned for growth,” said John Gatling, Hess Midstream president and chief operating officer.
“While much has changed in the past month in the external environment, our disciplined actions ensure that we retain clear visibility to increasing free cash flow and preserving future growth opportunities.”
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