CVX
HESM
Chevron goes shopping in the plumbing aisle
Chevron said several subsidiaries struck definitive agreements with Hess Midstream LP to rewrite the rules of its Bakken midstream setup and launch new DJ Basin contracts. Translation: the company is trying to make the middleman part of its oil business a lot less expensive.
Why investors should care
The headline number here is the one that matters: Chevron expects Bakken unit midstream costs to fall by about 50%. That’s not the kind of tweak you make for fun — it can meaningfully help margins, boost future earnings, and improve return on capital employed.
The not-so-glamorous profit lever
Oil investors love drilling stories, but sometimes the real juice comes from boring stuff like contracts and logistics. If Chevron can keep more cash from each barrel by paying less to move and process it, that’s basically a margin upgrade without having to pump a drop more crude.
- The revised deals extend the Bakken contracts.
- Chevron also set up new midstream contracts in the DJ Basin.
- Hess Midstream is the counterparty, so this is a real business relationship, not just a casual name-drop.
Big picture: this is the kind of behind-the-scenes move that doesn’t scream from the rooftops, but can quietly make a giant energy company a little leaner, a little meaner, and a little happier with its cash flow.