Chevron Restructures Midstream Contracts to Cut Bakken Costs
On October 6, 2026, Chevron Corp (NYSE: CVX) announced that it had finalized agreements with Hess Midstream LP (HESM) to restructure midstream contracts in the Bakken region. The deal extends existing agreements and introduces new contracts for operations in the DJ Basin, aiming to cut Chevron’s midstream costs in Bakken by half. This restructuring is expected to boost Chevron’s earnings and improve its return on capital employed by 0.5%. As part of the agreement, Chevron will pay $200 million in cash and surrender its ownership stakes and general partner role in Hess Midstream, including its DJ Basin crude oil midstream assets. The move will also remove approximately $3.7 billion of Hess Midstream’s debt from Chevron’s balance sheet but result in a one-time after-tax loss of $3 billion to $4 billion.
Chevron, a global integrated energy company with a market capitalization of $410.13 billion, operates across the oil and gas value chain. The company’s upstream segment includes exploration and production activities in key regions such as the U.S. Permian Basin, Gulf of Mexico, Kazakhstan, Australia, and the Guyana Stabroek block. Its downstream operations refine crude oil into fuels and lubricants and produce petrochemicals. Chevron is also investing in lower-carbon energy solutions, including renewable fuels and carbon capture technologies.
The company offers a dividend yield of 3.3% with a payout ratio of 61% and a 3-year dividend growth rate of 6.4%, making it an attractive option for income-focused investors. However, Chevron’s stock is trading 24.2% above its GF Value™ of $167.09, suggesting a modest overvaluation. The company’s GF Score™ stands at 62 out of 100, indicating solid financial health and profitability but modest growth and momentum.
Insider activity shows no insider buying and substantial insider selling totaling $636.8 million over the past 12 months. Meanwhile, 24 premium gurus hold CVX shares, with 13 trimming and 9 adding positions recently. This mixed activity suggests a balanced view among top institutional investors, reflecting both confidence in Chevron’s long-term prospects and caution amid current valuation levels.