Chevron to exit Hess Midstream stake, expects $3 billion to $4 billion after-tax loss

Chevron is giving up its stake in Hess Midstream in exchange for cheaper long-term midstream contracts in the Bakken, a deal the energy company said will trigger a one-time after-tax loss of about $3 billion to $4 billion when it closes.

Under agreements announced after the market closed Tuesday, Chevron subsidiaries will transfer their ownership interests and general partner position in Hess Midstream LP, along with Chevron's DJ Basin crude oil midstream assets, to Hess Midstream. In return, Chevron gets $200 million in cash and extended, restructured Bakken midstream contracts plus new DJ Basin contracts.

Chevron said the revised Bakken terms are expected to cut its Bakken unit midstream costs by roughly 50%. It expects the deal to lift return on capital employed by 0.5% on an absolute basis.

The company plans to fully deconsolidate Hess Midstream, taking about $3.7 billion of Hess Midstream's debt off its books. In a regulatory filing, Chevron said the expected loss reflects that it cannot record the future Bakken cost savings as an asset, and it plans to treat the charge as a special item.

"It lowers our Bakken cost structure while positioning Hess Midstream to advance as an independent company," said Andy Walz, Chevron's president of downstream, midstream and chemicals.

The transaction was approved by the conflicts committee of Hess Midstream's general partner board, made up entirely of independent directors. It still needs customary closing conditions and regulatory approvals and is expected to close by year-end 2026.

Chevron shares closed at $207.58 Tuesday, up 0.5%, before the announcement.

By the numbers

• Cash to Chevron: $200 million
• Expected Bakken unit midstream cost cut: about 50%
• Hess Midstream debt to be deconsolidated: about $3.7 billion
• Expected one-time after-tax loss: about $3 billion to $4 billion
• Expected ROCE uplift: 0.5% absolute
• Target close: by year-end 2026

Sources

1. Chevron Corporation Form 8-K (Items 7.01, 8.01, 9.01), filed Oct. 6, 2026, accession 0000093410-26-000192
2. Chevron press release, "Chevron to Divest its Ownership Interests in Hess Midstream and DJ Basin Crude Midstream Assets," Exhibit 99.1, Oct. 6, 2026

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