Chevron Restructures Bakken Assets to Cut Costs Boost Returns

Chevron has announced plans to divest its midstream assets in the Bakken region as part of a restructuring effort aimed at reducing costs and improving returns. The company agreed to sell its stakes in Hess Midstream and DJ Basin crude oil midstream assets, a move that will remove Hess Midstream from Chevron’s balance sheet, including approximately $3.7 billion of the unit’s debt. The transaction is expected to close by the end of the year, with Chevron anticipating a one-time after-tax loss of $3 billion to $4 billion.

Under the revised agreements, Chevron’s Bakken unit midstream costs are expected to decrease by about 50%. The company will transfer its DJ Basin crude oil midstream assets to Hess Midstream in exchange for $200 million in cash, extended Bakken contracts on revised terms, and new DJ Basin midstream contracts. Hess Midstream LP and Chevron will also amend their existing Bakken commercial agreements, aligning long-term interests by reducing tariffs and extending the terms through 2045.

Chevron plans to reduce its drilling rigs in the Bakken from three to two by December 2026. The restructuring is part of a broader strategy to streamline operations and enhance financial performance in the region.