Chevron will divest its ownership interests in Hess Midstream and in DJ Basin crude oil midstream assets, the company said in an Oct. 6 news release. In exchange, Chevron gets extended and improved commercial terms covering its midstream operations in the Bakken.
Chevron said it expects the deal to improve its Bakken cost structure and increase its return on capital employed there. The company also said the new terms support competitive upstream development activity in the region. Chevron described the deal as resetting the commercial framework between its upstream and midstream assets in the Bakken and DJ Basins.
What Chevron is giving up and getting back
Chevron is exiting its equity position in Hess Midstream and in a separate package of DJ Basin crude oil midstream assets. In place of ownership, it secures new contractual terms covering its Bakken midstream assets, rather than holding equity in them directly.
The transaction has been approved by the Conflicts Committee of the Board of Directors of Hess Midstream's general partner, according to the release.
Chevron said it expects the financial impact of the deal to be treated as a special item, a non-GAAP category the company uses to separate one-time effects from its underlying results.
