Q4 2020 Hess Midstream Operations LP Earnings Call
Good day, ladies and gentlemen, and welcome to the fourth quarter, 'twenty and 'twenty Hess Midstream conference call.
Sarah and I will be your operator for today.
At this time, all participants on a listen only mode.
Later, we will conduct the question and answer session.
And at anytime you acquire operator assistance. Please press star followed by zero and we will be happy to of since June.
As a reminder of just conferences. This conference call is being recorded for replay purposes I would now like to turn the conference over to Jennifer Gordon Vice President of Investor Relations. Please proceed.
Thank you Sarah good afternoon, everyone and thank you for participating in our fourth quarter earnings Conference call. Our earnings release was issued this morning and appears on our website Www Dot Hess midstream Dot com.
Today's conference call contains projections and other forward looking statements within the meaning of the federal Securities laws. These statements are known or are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied and such statements. The.
These risks include those set forth and the risk factors section of Hess midstream filings with the SEC.
Also on today's conference call, we may discuss certain non-GAAP financial measures a reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found and the earnings release.
With me today are John Gatling, President and Chief operating Officer, and Jonathan Stein, Chief Financial Officer in compliance with social distancing protocols. As a result of COVID-19, we are conducting the call remotely. So please bear with US in case, there are audio issues, we will be Poe.
Listing transcripts of each speaker's prepared remarks on www Dot Hess midstream dot com following their presentation I'll now turn the call over to John Gatling.
Thanks, Jennifer and good afternoon, everyone and welcome to Hess Midstream fourth quarter, 2000, and 'twenty Conference call today, I'll review, our operating performance and highlights as we continue to execute our strategy provide details regarding our 2021 plans and discuss Hess Corporation's latest results and outlook for the Bakken.
Jonathan will then review our financial results.
And Tony was another year of strong performance and strategic execution for Hess, midstream and and exceptionally challenging macro environment.
First we are most proud of maintaining safe and reliable operations throughout this unprecedented pandemic.
Hess and Hess midstream implemented comprehensive Covid, 19, health and safety measures, including health screenings extended work schedules for rotational employees and social distancing and initiatives.
On government and public Health agency recommendations the.
Safety of our work force and the communities, where we operate is and will continue to be our top priority.
Despite the macro headwinds throughout 2020, Hess midstream delivered very strong operational performance achieving year on year of double digit percentage increases in volumes across all our systems, resulting in annual adjusted EBITDA growth of 36% compared to full year of 2019.
Hess Midstream also completed the investment phase for a series of strategically important projects. During 2020 further enhancing our gas capture capability and providing the platform for future growth.
In December of last year, we completed construction activities for the Tayo good gas plant expansion and the expanded plant, including the residue and natural gas liquids takeaway pipelines will be tight and during the maintenance turnaround and currently plan to commence in the third quarter of 2021, increasing.
Increasing Hess midstream is total Bakken processing capacity to 500 million cubic foot per day double the system capacity at the time of our IPO in 2017.
Over the past 12 months, we've also completed several other projects and enhance our gas capture capability, which enable the immediate volume growth.
We successfully completed expansions of two existing compressor stations and restarted two additional legacy compression facilities, increasing gas gathering capacity by 70 million cubic foot per day or approximately 30% over 2019.
These projects were delivered on time and on budget as we continued to leverage our lean manufacturing capabilities and a standard design philosophy, eliminating waste and reducing cycle time and cost.
Incremental gas compression together with consistently reliable performance at our processing plants enabled increased gas capture in 'twenty, and 'twenty and positions Hess midstream for future volume growth as we continue to support Hess and our other customers and meeting North Dakota State flare reduction targets.
Reflecting this positive outlook our longer term guidance as shown by our 'twenty twenty-three minimum volume commitments, which was released earlier. This week highlights that organic volumes from Hess and third parties are expected to grow above current MVC levels once again.
In addition to our gas capture performance, our crude oil assets, which are key components of our integrated service offering continued to perform well our fully integrated crude oil system, located north and south of the Missouri River has capability to transport oil by pipe and rail, giving Hess and third party customers valuable export really.
The ability and Optionality.
Furthermore, our water services business made great progress in 'twenty, and 'twenty, achieving significant growth and gathering throughput as we extended our system reduce truck volumes and delivered material improvements and operational efficiency and brought new saltwater disposal facilities into service at very competitive costs.
Furthermore, supporting our long term growth the renewal of our agreements with Hess Corporation continues to provide Hess midstream a contract structure with 100% fee based revenues and volume protection through 'twenty and 33.
Now turning to Hess midstream fourth quarter, 'twenty, and 'twenty performance gas processing volumes average 317 million cubic foot per day as strong performance from Hess Corporation, and our newly available gas gathering capacity, coupled with mild weather drove results above expectations crude terminalling volumes were 130.
2000 barrels of oil per day in line with guidance.
And third parties contributed approximately 10% of our gas and oil volumes for the fourth quarter, approximately flat with the third quarter and inline with expectations.
Water gathering volumes averaged 81000 barrels of water per day, and the fourth quarter, a modest increase from the third quarter as we continue to capture incremental water into one of our expanding gathering system.
The strong into the year enabled us to exceed our throughput and financial guidance for the fourth quarter and full year 'twenty and 'twenty.
Now turning to Hess upstream highlights earlier today Hess reported strong fourth quarter production results with Bakken production, averaging 189000 barrels of oil locum per day and increase of approximately 9% above the year ago quarter, reflecting the strong performance of plug and police plug and perf completions increased gas cash.
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And the quality of Hess of acreage position.
For full year, 'twenty and 'twenty Bakken net production average 193000 barrels of oil locum and per day compared to 152000 <unk>.
Barrels of oil local and per day, and 2019 and well above the original full year guidance of 180000 barrels of oil income per day, despite dropping from six rigs to one rig in may of last year.
Hess continues to maintain and robust inventory of more than 1800 drilling locations in the Bakken that can generate attractive returns at current oil prices, representing approximately 60 rig years of activity with.
With W. T I prices now and the range of $50 per barrel Hess plans to add a second operated drilling rig during the first quarter.
For the full year 'twenty 'twenty, one Hess forecast Bakken net production to average approximately 170000 barrels of oil locum per day.
Turning to Hess midstream guidance, our complete financial and operational guidance was released earlier this week and is available on our website.
For full year 'twenty 'twenty, one we expect gas processing volumes to average between 270 and 280 million cubic foot per day. This guidance incorporates the previously announced 45 day T. G. P maintenance turnaround, which is planned to commence in the third quarter, reducing our annual gas gathering and processing volumes by approximately 30 million cubic foot per day.
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As we progress the turnaround planning activities, we will continue to closely monitor potential COVID-19 risks.
Our full year guidance anticipates that third parties will contribute approximately 10% of our gas volumes consistent with levels, we achieved and the fourth quarter of 'twenty and 'twenty.
Turning to our crude oil assets for full year 'twenty 'twenty, one we anticipate crude terminalling volumes to average between 120 and 130000 barrels oil per day.
And third party throughput are expected to comprise approximately 15% of our total crude oil volumes.
As the physical volumes of most of our systems are at or below MVC levels. Our revenue forecast is approximately 95% revenue protected giving a high degree of confidence to our guidance, which projects adjusted EBITDA in the range of $860 million to $890 million and increase of approximately 17% at the midpoint.
Compared to full year 'twenty and 'twenty.
We expect first quarter gas oil and water volumes to each be modestly lower compared to fourth quarter, 'twenty and 'twenty, reflecting production declines and potentially seasonal winter weather conditions.
Turning to Hess Midstream is 2021 capital program.
With the completion of the Greenfield construction activities at T. G. P. We plan a reduction and capital expenditures on an ongoing basis relative to prior years, which with activities focused on gas compression capacity additions system optimization and well pad interconnects.
Full year 'twenty 'twenty, one capital expenditures are expected to total.
$160 million, approximately 35% lower than full year, 'twenty and 'twenty expansion capital is planned to be of $140 million, comprising $90 million and gas compression and $40 million in gas gathering and well pad interconnects and approximately $10 million in gas processing, as we tie and residue and the liquids export to the.
T G P expansion.
Compression and capital is focused on construction of two new Greenfield compressor stations, which went online in 'twenty and 'twenty. Two we'll provide a further 64 million cubic foot per day of gas compression capacity expandable to approximately 130 million cubic foot per day.
Further improving gas capture capability and supporting Hess as development in the basin.
In summary, Hess midstream is and increasingly differentiated story and the sector with volume growth free cash flow growing dividend and contract protection through the thirty-three. We remained focused on executing our strategy to drive long term and sustainable growth.
I'll now turn the call over to Jonathan to review, our financial results and guidance.
Thanks, John and good afternoon, everyone.
As John described we are proud with the progress we made in 'twenty and 'twenty on executing on our strategy continuing our track record of delivering strong results and demonstrating how both of our contract structure and financial strength differentiate our business model.
And and 'twenty and 'twenty, our conservative financial strategy combined with proactive reductions and capital expenditures enabled us to respond quickly and successfully navigate through a challenging macro environment.
Our fourth quarter results again beat our quarterly guidance and we can.
Completed 2028 with full year, adjusted EBITDA of $749 million, representing 36% growth compared to 2019 with the wide range of $2 six times adjusted EBITDA below our three times target and clearly differentiated from our peers.
For the fourth quarter, 'twenty and 'twenty net income was $132 million compared to $116 million from the third quarter Jack.
Adjusted EBITDA for the fourth quarter was $199 million compared to 188 $182 million for the third quarter.
The change and adjusted EBITDA relative to the third quarter was primarily attributable to the following.
Total revenue increased by $9 million, primarily driven by increased GAAP capture including an increase in processing revenue of approximately $7 million and the increase in gathering revenue of approximately $2 million.
Total operating expenses, including G&A, and excluding depreciation and amortization and pass through costs were lower increasing adjusted EBITDA by approximately $9 million, including lower seasonal maintenance activity and our gathering segment of approximately $6 million and.
And while our maintenance activity and our processing segment of approximately $3 million as work related to the deferred turnaround was completed and the third quarter.
Alan and for our proportional share of earnings and depreciation net of processing fees increased adjusted EBITDA by approximately $1 million.
Belting and fourth quarter, adjusted EBITDA of $199 million exceeding the top end of our guidance range by approximately 8% primarily due to higher than expected GAAP capture volume and lower than expected maintenance activity.
Fourth quarter of maintenance capital expenditures were less than $1 million and net interest excluding amortization of deferred finance costs of approximately $22 million and.
The result was that distributable cash flow was approximately $177 million for the <unk>.
Fourth quarter, covering our distribution by approximately 1.4 time of.
On January 20th fifth, we announced our fourth quarter and distributions that increased 5% on the annualized basis.
This increase represents our 14th consecutive quarterly distribution increase since the IPO.
And expansion capital expenditures and the fourth quarter were $50 million as I highlighted earlier at quarter end debt was approximately $1 $9 billion, representing leverage of approximately 2.6 times adjusted EBITDA on a trailing 12 month basis and below our conservative three times adjusted EBITDA target.
Turning to our commercial agreement on December 30th 'twenty, and 'twenty Hess midstream exercised its renewal option to extend for an additional 10 year period through December 31st 2033, its crude oil gathering terminalling gas processing Zorich survey and certain gas gathering commercial agreements with half the and.
No changes to any terms of the commercial agreement as a result of the exercise of the renewal option.
At the end of 'twenty and 'twenty. We also completed our nomination process with Hess and updated our tax rate for 'twenty and 'twenty, one and all four years.
As in prior cycles, the nomination process considered changes and actual and forecasted volume and capex to maintain our contractual targeted return on capital deployed tax increase in 'twenty and 'twenty, one primarily from lower expected volumes compared to the previous year nomination and Thats reduced rig activity and the Bakken.
As part of this process, we also established and new MVC, the 'twenty and 'twenty three based on 80% nominate volumes of each of them and that year.
And our recent guidance release, we provided N V six for the year 'twenty and 'twenty, one through 'twenty and 'twenty three.
Our N V. C's provide line of sight to expected long term growth and system throughput and incremental revenue growth each year through a combination of increasing and B C and higher expected physical volume through 'twenty and 'twenty three.
For example, looking at gas processing, we expect the physical volume to be generally at or below MVC in 'twenty and 'twenty, one and 'twenty and 'twenty two.
And on which time on N V C's grow from 292 million cubic feet per day, and 'twenty and 'twenty, one to 345 million cubic feet per day, and 'twenty and 'twenty. Two in addition, the N V sees the 20th of 33 2023 is that at 292 million cubic feet per day, which when gross up from the 80% to the 100.
Per cent non made level implies an expected volume of 365 million cubic feet per day and increase compared to the 'twenty and 'twenty two N B C and 345 million cubic feet per day.
Turning to 'twenty and 'twenty one in line with prior guidance, we expect at the midpoint full year 'twenty and 'twenty, one net income of $605 million and adjusted EBITDA of $875 million.
Presenting on annual growth of approximately 17% from full year, 'twenty and 'twenty, primarily from our annual rate Redetermination and increase in 'twenty and 'twenty, one M. B C, which provided approximately 95% protection to our revenue.
And the expected increase and adjusted EBITDA combined with lower ongoing capital expenditure is expected at the midpoint to generate adjusted free cash flow of $625 million with our definition of adjusted free cash flow update to be distributable cash flow less expansion capex.
We continue to target annual distribution per share growth of at least 5% and 'twenty and 'twenty one.
With approximately 1.4 times distribution coverage and expect and maintain and adjusted EBITDA margin consistent with our historical margin of greater than 75%.
Highlighting our financial strength, we have the ability to fully fund our distributions with adjusted free cash flow and excess of approximately $100 million.
With this positive adjusted free cash flow after the distribution tick.
With the expected leverage of approximately two times adjusted EBITDA on a full year basis in 'twenty and 'twenty. One that is below our conservative three times adjusted EBITDA target, we maintain significant financial flexibility.
For the first quarter of 2021 in particular, we expect net income to be approximately $150 million to $160 million and adjusted EBITDA to be approximately $215 million to $225 million and approximate 10% increase and adjusted EBITDA at the midpoint relative to the fourth quarter of 'twenty and 'twenty.
And it's at higher cap rates and seasonally lower opex.
First quarter of maintenance capital expenditure of the net interest excluding amortization of deferred finance costs are expected to be approximately $25 million, resulting in expected distributable cash flow of approximately $190 million to $200 million delivering distribution coverage at the midpoint of the range of approximately 1.5.
Time.
As John described we anticipate commencing a maintenance turnaround at T. G P and the third quarter during which time, we will incur a higher operating expenses and maintenance capital, we don't think and expected distribution coverage below our full year guidance of one four times for the period of the turnover on the tour.
And as expected the last 45 days and has been fully incorporated into our 'twenty and 'twenty, one volume and financial guidance as a reminder, Hess midstream will receive MVC payments during the turnaround.
Our contract structure and financial strength enable us to also provide visibility and stability to our forward trajectory beyond 'twenty and 'twenty. One our revenues continued to be 95% protected by generally increasing N V CS and 'twenty 'twenty, two and we expect continued higher volume higher revenues and 2023 and physical volumes.
Got it to be above N V C.
The increase in expected revenue and lower ongoing capital spending focused primarily on the well connects and targeted compression project, we have a unique level of visibility across the financial matrix and 'twenty and 'twenty, two and 'twenty and 'twenty three including.
The continued growth and adjusted EBITDA and adjusted free cash flow target of distribution per share growth of at least five per cent and fully funding our growing distributions with the adjusted free cash flow and without incremental debt or equity funding the.
The combination of positive adjusted free cash flow after distributions and the leverage below our conservative three times adjusted EBITDA target provides us with significant financial flexibility for accretive capital allocation, including potential and return of capital to shareholders.
In summary, with our strategic asset base visible financial metric and unique contract structure, we have a differentiated value proposition across the midstream sector with the.
It is of both financial metrics, including wind and fight to expected revenue growth supported by growing EM and Ts protecting 95% of revenue in 'twenty and 'twenty, one and 'twenty and 'twenty, two and implied volume growth in 'twenty and 'twenty three.
And EBITDA growth of approximately 17% in 'twenty and 'twenty, one with continued growth in 'twenty and 'twenty, two and 'twenty 'twenty three.
And free cash flow of approximately $625 million at the midpoint of our guidance in 'twenty and 'twenty, one with continued growth expected in 'twenty and 'twenty, two and 'twenty and 'twenty three.
And continued positive adjusted free cash flow after fully funding distribution growing at least 5% annually on a per share basis through 'twenty and 'twenty three and this.
This concludes my remarks, we'll be happy to answer any questions I will now turn the call over to the operator.
Thank you ladies and gentlemen, if you have a question. Please press star followed by the one on your phone. If your question has been answered or you would like to withdraw your question.
The press pound.
Questions will be taken and the order received.
Please press star one to begin.
Your first question comes from the lineup Brian of Reynolds with UBS. Your line is now open.
Hi, Good afternoon, everyone. This is Brian Reynolds entrepreneur I have a two part question around capital allocation and your thoughts around M&A and given.
Given the recent comments and about and administration on the permitting pause on federal lands and how should we think about potential acquisition of gum assets from Hess and 'twenty one given limited expected activity does this pause of your prior discussions. Thank you.
Yes sure.
Thanks, Brian for the question. So we continue to evaluate as we've mentioned previously we're continuing to evaluate Gulf of Mexico.
Hess has very attractive assets and you know we're definitely interested in.
Continuing the partnership with Hess, but you know, we're obviously very aware of the political climate and we're continuing to monitor that and that'll be part of the evaluation process that were and the process of working through so again, we still think the assets are of high quality and as John Hess and Greg Hill.
Mentioned in their earnings call.
Energy is still going to play a big role in our in the future.
So from our perspective, it's still attractive, but but again, we're we're continuing to monitor the the political environment and any impacts that the might of the bite and administration.
And May you know.
And they place on the on the industry.
Great. Thank you and I was just kind of a quick follow up on capital allocation just given your free cash flow profile for 'twenty and 'twenty. One of you guys considering different growth opportunities for Hess outside of the Gulf of Mexico assets and if not should we expect the return of capital to unitholders through.
On a form of buybacks from sponsors of what Hess midstream consider of special distributions. Thanks, Yeah sure. Thanks, Brian and again I'll I'll kind of kick off the question and then hand it over to Jonathan.
The we're not really interested in any kind of corporate acquisition. At this time you know we're continuing to look at the natural acquisitions, where there are of strategic bolt ons to our focused areas. I mean, obviously the Bakken as is the natural place, where we're looking for those high value opportunities to bolt on some some.
Assets again, because of our structure and how we're set up you know are the growth ahead of US you know, we're really not tapping to chase growth. So we can be very disciplined at how we how we kind of attack those those opportunities.
You know and and as I mentioned, you know work will continue to evaluate the Gulf of Mexico, and and make a determination of how that fits into the to the broader portfolio again, just just to the reminder, you know our cost of service structure, which we very much favor, but favorite of that contract structure and you know if we were to do any acquisitions or and in particular, if we were to acquire.
The the Gulf of Mexico assets, we would expect a very similar structure. So downside protection is a key component to two two of those those asset acquisition evaluations and thus.
As far as the capital structure question, and I'll hand, it over to Jonathan day to speak to some of that.
Thanks, John I'd, just add I think in terms of the you know our financial strategy will continue to be on very disciplined as we've been and the path certainly we're in a position with being free cash flow positive now after dividends really going forward at this point as well decreasing leverage relative to our already conservative three times EBITDA leverage target that gives us and.
Difficult and financial flexibility of accretive opportunities like John described but also return of capital to shareholders along that lines within that return of capital. There is multiple options and you mentioned both in terms of distribution along those lines or potentially buybacks on the sponsors. We certainly are looking at both of them to each of them.
Different criteria in terms of execution and timing, but we are really and a unique and differentiated position with the flexibility that we have and will continue to make disciplined choices in terms of how we use that blocks the ability in terms of of our choices and how we do return of capital to shareholders.
Great. Thank you for that and have a great rest of your day of Cowen.
Thanks, you too Bryan.
Thank you.
Your next question comes from the line of Jeremy Tonet with J P. Morgan. Your line is now open.
Hi, guys. This is the night on for Jeremy.
Just wanted to quickly follow up on the bolt on transactions and as you talked about interest and the Bakken.
And again, there is a couple of thoughts.
The regulatory uncertainty with the adopt the and.
And we did.
And discussed previously and how it's not going on and bought his machine, but just wanted to understand given the dapple uncertainty and the failure of land risk how have you guys thought of.
Position and well take any opportunities in the Bakken and also kind of give any thoughts on how the taught by the activities going on solid with us not on the nor does anybody right now.
Sure. So maybe let me just address the dapple question first because I know it's been you know theres been some some recent developments there just from our perspective on the Hess midstream perspective it.
It doesn't really impact us all and all directly all of that much I mean, if you think about how our structure is from a terminalling perspective, you know, whether we export via pipe of export via rail. It. It really is the it. It's the same for US we kind of have that postage stamp approach to to how we handle the terminalling. So if if if.
Oil is deliver to the the pipe terminal. It gets the same fee as it does when it hits the rail terminal and then just as a reminder, you know we we've we've had of continuing operation at the rail terminal throughout the duration of of Hess midstream, even and the even when oil prices were much lower and the activity was lower.
Our rail terminal maintained operation consistent operation through the duration of that so we feel like for and a very very strong position to provide hess and our other customers export optionality and flexibility.
And as you mentioned you know we have the terminalling capabilities at both north of the Missouri River and South of the Missouri River and the ability to move product North and South. So again I think our strategic infrastructure is is really provides a lot of support for for Hess and our customers and then.
As far as the third party question comes back I mean.
We're continuing to see as oil prices strength, and we're continuing to see additional activity in the basin.
Hess has as adding a rig and there's also been some other producers that have talked about increasing activity and in the basin as well and again I think because of our strategic infrastructure, a physical location and and how were were we span both north and south of the river, we can just add tremendous flexibility.
Due to all of our customers and in particular, you know Hess is and very strong position from the standpoint of we can we have the capability of of exporting all of Hess is the hydrocarbons and and also meet some third party.
The capacities as well.
And this is Jonathan just one thing I'd just add I think just the highlight you know similar not last year, obviously, we despite what's happened on the external environment, we still delivered a 36%.
The increase in EBITDA and this year and we have the 17% increase that we have talked about and so despite the there's certainly some uncertainty to adopt and things like that and as John described we are because of the contract structure are really protected from most of that and if you really look at a line of sight to what's going to occur and we really have clear line of sight.
<unk> revenue growth, whether it's through as I talked about on the script and in terms of increasing and B C and the expected higher volumes in 2023 that are implied by those N V C's and of course, even if volumes come in lower in 'twenty and 'twenty. Three then we have the rate reset at that point together with the fact that as John described our capital costs are at lower levels.
Going forward and the ability now to have the visibility that we have to being free cash flow positive after distributions on the outgoing board basis supported by a growing free cash flow and growing EBITDA and really unique position and allows us to navigate and even if there are uncertainties that are out there as we've done on the path.
Yeah, and and maybe one thing that I did forget to mention as well and you know John Hess, and Greg Hill mentioned and the and the and their earnings call earlier today.
There's still very limited impact in the Bakken on federal lands and you know theres only about two per cent of the Bakken.
Production within the Hesston's portfolio, that's that's exposed so from from from that perspective, and we sort of like again that Hess and and and even other producers and the in the basin have have a favourable position from that perspective.
Got it thanks.
Just wanted to quickly follow up on the gas capture the opportunity here I mean, you guys did add quite a bit of competition capacity this year and presenting a more additions going forward in 'twenty and 'twenty, one and that's what Annie <unk>.
Guidance it could go on and how much of the opportunity set is available right and on has that create jewelry and thinking more from the towards the I said sort of what.
Just wanted to understand the.
Sure, Yeah, and I would say that that has been a huge win for us and in 'twenty and 'twenty and we're very proud and excited of what we delivered last.
The last year and see a lot of opportunity and the future.
The team just did an amazing job from a from an infrastructure operational.
[noise] perspective that just really integrated all of that additional capacity and you know the combination of the midstream team along with Hess upstream just did a great job gathering as much of the gas says as we possibly could you know when we build infrastructure, we built infrastructure with a line of sight to two gross.
And you know it's not just speculative at it is it's focused and very disciplined approach to how we how we build infrastructure. So you know I've I've kind of highlighted some of the increases in capacity that we're expecting that we've realized but we're also expecting to see you know rolling into 'twenty, 'twenty, one and 'twenty and 'twenty two.
And as you can see from the N V C profile that we've got in 'twenty and 'twenty three the you know we are continuing to expect expect to see growth as the real result of Hess, adding a rig and then as Greg mentioned earlier today on the earnings call you know depending on oil price, there's there's definitely a and and interest from Hess to get.
Up to four rigs, there's 1800, well locations remaining that are economic at current prices and Hess is definitely interested and in developing those and so our infrastructure plan is really linked to Hess as development plan along with our other third party customers. So again I think of I've, given a little bit of indication.
Of of where that's heading and then I think our N V. C's gives it gives a little bit of of visibility into into that growth profile of that that we're expecting if passed or other producers.
Decides to increase further and are well, obviously be looking at opportunities to continue to grow on infrastructure to support that as well, but again you know we really liked the stay focused on on line of sight around that growth and that's been our history over the last several years and will be and and into the future.
Got it that's very helpful. That's all from me thanks for taking my questions.
Sure absolutely. Thank you.
Thank you.
Our next question comes from the line of Spiro Donna's with Credit Suisse. Your line is now open.
Hey, this is Doug on for Spiro.
Maybe just to follow up real quick on on Bakken activity and you just touched on this a little bit.
But I know Hess has just talked about adding a second rig and and basically keeping production flat this year and and D. C inventories high and the base and overall, but but just in general of rigs don't seem to be coming back terribly quickly.
Just curious at what point kind of over the next year or two to do and need to see rigs start coming back in order to being able to maintain or even grow volumes.
Yeah, I mean I know.
And that you're kind of bringing up of more of a macro basin question. You know I think we've got as I mentioned, we've got a lot of line of sight to what Hess has plans are and the INR third party customers and we're you know, we're very well positioned to support that growth trajectory. You know Hess has already announced adding a rig back and as Greg mentioned again just to you know.
Highlight that around the interest to add even more rigs back to the basin.
I think it's it's pretty exciting stuff when you when you hear the the president and Chief operating officer of Hess talking about getting back potentially.
Yeah.
Thank you very much. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a great day.
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