Chevron to divest Hess Midstream stakes in $3-4B loss

Chevron has announced plans to divest its stakes in Hess Midstream and DJ Basin midstream assets, a move that will result in a significant one-time after-tax loss of $3 to $4 billion. The transaction is part of a broader strategy to streamline operations and reduce costs, particularly in the Bakken region, where Chevron expects to cut midstream costs by approximately 50%.

Under the terms of the deal, Chevron will transfer its ownership interests in Hess Midstream, including its general partner (GP) position, along with DJ Basin assets. In return, the company will receive improved contract terms for its Bakken operations and $200 million in cash. The revised Bakken contracts are anticipated to enhance Chevron’s earnings and return on capital employed (ROCE) by significantly lowering unit midstream costs.

The transaction is subject to customary conditions and regulatory approvals, with an expected closing date by the end of 2026. Upon completion, Chevron will deconsolidate Hess Midstream, which includes approximately $3.7 billion in associated debt. The one-time after-tax loss will be treated as a special item in the company’s financial statements.