December 11, 2018 - 8:30 AM EST
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Hess Infrastructure Partners LP Announces Proposed Acquisition of Hess Corporation’s Bakken Water Business


Hess Infrastructure Partners LP (“HIP” or the “Partnership”), a midstream energy joint venture between Hess Corporation (“Hess”) (NYSE: HES) and Global Infrastructure Partners (“GIP”) and the sponsor of Hess Midstream Partners LP, a publicly traded master limited partnership (“Hess Midstream”), today announced that it has entered into a Memorandum of Understanding (“MOU”) with Hess to acquire Hess’ existing Bakken water services business for $225 million in cash, subject to customary adjustments. The parties expect to execute definitive agreements and close the transaction in the first quarter of 2019, subject to receipt of regulatory approvals. Under the terms contemplated by the MOU, the Partnership will offer Hess Midstream a right of first offer to acquire the water services business in the event the Partnership decides to sell the water services business in the future.

“Adding an integrated water business is a great opportunity for HIP,” said John Gatling, Chief Operating Officer of HIP. “Hess has been actively building the water infrastructure necessary to meet its accelerated Bakken growth profile in tandem with HIP’s oil and gas infrastructure buildout. The expected growth in produced water volumes over the next several years and underdeveloped basin infrastructure creates an attractive opportunity for continued investment to build additional infrastructure for Hess and third parties.”

The scope of the water services business includes substantially all of Hess’ Bakken produced water gathering assets and saltwater disposal services in North Dakota, which currently consist of over 150 miles of existing Hess water gathering pipelines capturing about 24,000 barrels per day of produced water.

“Consistent with our commitment to deliver stable cash flows, the water services business is expected to be underpinned by a long-term contract that includes minimum volume commitments for both produced water gathering and disposal services, and annual tariff rate recalculations for the produced water gathering services,” said Jonathan Stein, Chief Financial Officer of HIP. “This contract structure is expected to be complementary with the current contract structure of our existing assets, making the water services business a strong addition to the HIP portfolio.”

About Hess Infrastructure Partners LP

HIP is a midstream energy joint venture between Hess and GIP. The Partnership owns interests in various operating companies that provide a diverse mix of midstream oil and natural gas services in the core of the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota. The Partnership also owns a 100% interest in the general partner of Hess Midstream.

About Hess Midstream Partners LP

Hess Midstream is a fee-based, growth-oriented, traditional master limited partnership that was formed to own, operate, develop and acquire a diverse set of midstream assets to provide services to Hess and third-party customers. Hess Midstream’s assets are primarily located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota.

About Hess Corporation and Global Infrastructure Partners

Hess is a global independent energy company engaged in the exploration and production of crude oil and natural gas. GlP is an independent infrastructure fund that invests in infrastructure assets and businesses across three core sectors: energy, transportation and water/waste.

Cautionary Statement Relevant to Forward-Looking Information

This press release includes forward-looking statements regarding future events. These forward-looking statements are based on the Partnership’s current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially from the results and events anticipated or implied by such forward-looking statements. These risks include the possibility that the proposed acquisition of Hess’ Bakken water services business by HIP will not be consummated on the expected timeline, or at all, that Hess Midstream does not receive a right of first offer on the water services business, that HIP may elect not to offer the water services business for sale in the future, and that produced water volumes in the Bakken do not grow as expected, or at all. While the Partnership may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if new information becomes available in the future. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

Jennifer Gordon
Director – Investor Relations
(212) 536-8244
Robert Young
(346) 319-8783

Source: Business Wire (December 11, 2018 - 8:30 AM EST)

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