Hess Midstream said during its earnings call May 4 that it expected to reduce its capital expenditures to $100 million in 2026, about one-third less than its previous guidance, reflecting Chevron’s move to longer laterals in the Bakken and the completion of a second compressor station that is now online.
Severe winter weather in January and February has led to lower volumes across its system but Hess Midstream said it still expects to match its previous guidance for full-year 2026, which called for relatively flat volumes compared to 2025, executives said during the company’s quarterly earnings call February 2.
Hess Midstream expects its oil volumes to plateau while natural gas volumes increase into at least 2027, a function of Chevron reducing its Bakken rig count from four to three in Q4 2025 and higher gas-to-oil (GOR) ratios in the producing wells, according to the company’s quarterly earnings call on November 3.
It’s been a good couple of years for many of the midstream companies active in the Bakken. Crude oil-focused drilling and completion activity has rebounded from a mid-decade slump, flows through their crude and gas gathering systems have been rising, and gas processing constraints that had threatened continued production growth have been on the wane. All that has led Bakken producers to plan for further gains in output in 2020 –– though that may change as the economic effects of the coronavirus become clearer. In any case, production growth is only possible if there’s sufficient gathering infrastructure in place to handle it. Today, we continue our series on crude-related assets in western North Dakota with a look at two midstreamers that have experienced big gains in their Bakken crude-gathering volumes.
The Bakken was among the first plays to benefit big-time from the Shale Revolution, experiencing a 400%-plus increase in crude production in the first half of the 2010s. The play has had more than its share of challenges, however, including a serious lack of takeaway capacity that spurred the first rapid deployment of modern-day crude-by-rail, followed by a rig-count collapse and major production decline after the mid-decade crash in oil prices. But the Bakken has been roaring back. Crude output there now tops 1.5 MMb/d — some 250 Mb/d higher than its late-2014 peak — and producers have been planning for continued production growth in 2020, though many may be reassessing those plans in light of this week’s coronavirus-related price slide. In any case, production growth is only possible if there’s sufficient gathering infrastructure in place to handle it. Today, we continue our series on crude-related infrastructure in western North Dakota with a look at a leading Bakken midstreamer’s assets.
