Chevron is divesting its ownership interests in Hess Midstream and Denver-Julesburg Basin crude oil midstream assets in exchange for better midstream commercial terms at the Bakken oil site in North America.

The energy company entered a series of agreements with Hess to restructure the terms of its Bakken midstream contracts and establish new Denver-Julesburg Basin midstream contracts.

At closing, Chevron anticipates a one-time after-tax loss of about $3 billion to $4 billion, since the company can't recognize future Bakken midstream cost savings as an asset.

The revised agreements extend the contracts in Bakken, an oil field that covers parts of North Dakota, Montana, Saskatchewan and Manitoba. The agreements are also expected to roughly halve Chevron's Bakken unit midstream costs.

In exchange for the revised deal, along with $200 million in cash consideration, Chevron will transfer its ownership interests in Hess Midstream back to Hess. It will also give Hess its crude oil midstream assets in the Denver-Julesburg Basin.

As part of the deal, Chevron expects to deconsolidate Hess, including about $3.7 billion of Hess's debt.

"It lowers our Bakken cost structure while positioning Hess Midstream to advance as an independent company," Andy Walz, Chevron's president of downstream, midstream and chemicals, said.

Hess's board has agreed to the deal, which is now slated to close by the end of 2026.