In exchange, Chevron will receive $200 million in cash and revised commercial terms intended to reduce its Bakken midstream costs by approximately 50%. The transaction was announced Oct. 6 and is expected to close by the end of 2026, subject to customary closing conditions and regulatory approvals.
Tariffs and fees are expected to decline for 2027 through 2033, while the contracts will be extended through 2045 and converted from cost-of-service arrangements to fixed-fee structures with inflation escalators. Hess Midstream will receive a minimum revenue commitment equal to 80% of its expected Bakken revenue attributable to Chevron through 2033. The commitment for each year will be set three years in advance and cannot later be reduced under the announced framework.
Chevron expects to recognize a one-time after-tax loss of about $3 billion to $4 billion at closing because the future Bakken savings cannot be recorded as an asset under the transaction’s accounting treatment. Chevron also expects to fully deconsolidate Hess Midstream, removing approximately $3. 7 billion of Hess Midstream debt from its consolidated balance sheet. The company has described the arrangement as a way to lower its Bakken cost structure and improve future earnings and return on capital employed, but those benefits remain subject to the transaction closing and the projected savings being achieved.
For Hess Midstream, the transaction creates an independent, multi-basin company. Its acquired DJ Basin assets, located primarily in Weld County, Colorado, include roughly 400,000 barrels per day of oil-gathering capacity, 300 million cubic feet per day of gas-gathering capacity and 420,000 barrels of storage capacity. The package also includes Chevron’s 20% interest in the 600-mile Saddlehorn crude-oil pipeline, which has capacity of about 300,000 barrels per day and connects the DJ Basin with Cushing, Oklahoma.
Chevron-affiliated directors are expected to leave Hess Midstream’s board at closing, with shareholder elections for board members beginning in 2028. Hess Midstream expects to operate under a new name while remaining headquartered in Houston. The company projects 2027 adjusted EBITDA of $850 million to $950 million and adjusted free cash flow of $525 million to $625 million, based on about $125 million in capital spending, although those figures are preliminary and depend on the transaction closing.
The restructuring comes as Chevron reduces its Bakken drilling program from three rigs to two in December 2026. Hess Midstream expects Bakken throughput to fall about 5% in 2027 before generally leveling off from 2028, while the revised minimum-revenue provisions provide some contractual support. The transaction therefore presents two different near-term outcomes: Chevron absorbs a large accounting loss and receives cash, while seeking lower operating costs and a simpler portfolio; Hess Midstream gains broader assets and independence but must integrate the DJ Basin operations alongside reduced expected Bakken activity.