This deal keeps Chevron tied to the Bakken for years, with contracts running to 2045, and Chevron says it expects to sustain its Bakken production.
Hess Midstream's own filing on the deal says Chevron is expected to go from 3 drilling rigs to 2 in December, and that with less Chevron activity, volumes on its Bakken system should dip about 5% in 2027 before leveling off in 2028.
The Deal
- Chevron hands Hess Midstream all of its ownership stake and its control of the company, plus its midstream assets in Colorado's DJ Basin
- Hess Midstream pays Chevron $200 million in cash
- The rates Chevron pays to gather and process its Bakken crude and gas come down for 2027 through 2033
- Once the deal closes, the crude and gas contracts run through 2045, and Chevron can extend them up to 10 more years. They were set to end in 2033
- Cost-of-service fees switch to fixed fees that rise with inflation, capped at 3% a year
- Chevron commits to a minimum of 80% of the Bakken revenue Hess Midstream expects from it through 2033. The minimums for 2027 through 2029 are set on a 2-rig program
- Expected to close by year-end, pending regulatory approvals
The $3 To $4 Billion
Chevron expects to book a one-time after-tax loss of about $3 to $4 billion when the deal closes. That's an accounting charge. No cash goes out the door for it, and Chevron still collects the $200 million. Chevron says the loss comes from not being able to count the future Bakken savings as an asset.
It also takes about $3.7 billion of Hess Midstream's debt off its books. That debt stays with Hess Midstream.
What Changes In North Dakota
No North Dakota gas plant or terminal is being sold in this deal. Hess Midstream already owns them, the Tioga Gas Plant included. The deal papers also call for some Bakken pipeline assets tied to the new contracts to be transferred at closing.
The biggest change is who owns Hess Midstream. Chevron's stake goes away, and the company will operate under a new name, to be picked before closing.
Hess Midstream has no employees of its own. The people who run it are Chevron employees on loan, about 195 full-time equivalents at the end of 2025, per its annual report. Chevron keeps lending them for up to 2 years after closing, and some are expected to move onto Hess Midstream's own payroll.
Neither company announced layoffs with the deal. After it bought Hess, Chevron notified the state of 111 North Dakota layoffs, 63 in Minot and 48 in Tioga, starting in September 2025.
The Rigs
- Hess ran 4 drilling rigs in the Bakken in 2024, per its own reports
- Chevron said in July it was keeping Bakken production about the same with 1 fewer rig, crediting laterals that average 28% longer plus better workovers and chemicals
- Hess Midstream counts Chevron at 3 rigs now, going to 2 in December
- The state's daily list showed 4 rigs under Hess Bakken Investments II, the Chevron subsidiary on the list, out of 34 statewide on Friday. 2 of those 4 are on the same pad
What It Means On Location
Cheaper midstream lowers what each Chevron barrel costs to get to market, and that helps the math on its wells. Hess Midstream says the changes are expected to support Chevron investment in the Bakken, and Chevron says the deal supports competitive upstream development activity.
Neither company tied that to more rigs or frac crews. The only rig numbers in the filings point to 2 rigs from December, with the minimums built on 2 rigs through 2029.
Longer laterals can pull the same barrels out of fewer wells. On a pad, that usually means fewer wells with more stages on each one.
Where It Goes From Here
What to watch...the rig change in December, the deal closing by year-end, Hess Midstream's new name, and the state's August production numbers on 10/20.
Who's Hiring
This week's board has 22 North Dakota seats, 10 of them with no CDL, plus seats in Wyoming, Texas and New Mexico.
The current board is the one to check.
Field Report
If you work Chevron locations or around the Tioga plant, drop what you're seeing out there.
Everybody else, drop your basin and how many drilling rigs are turning to the right near you.