Tags: Hess | Oil | Terminals | Refining

Hess to Sell 20 Oil Storage Terminals, Exit Refining Business

Monday, 28 Jan 2013 09:42 AM

 

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Hess Corp. plans to sell its oil storage terminal network and exit its refining business, and said activist hedge fund Elliott Associates is considering nominating directors to the company's board, sending its shares up 7 percent.

Elliott is also looking to buy shares worth more than $800 million, Hess said.

The hedge fund will be able to buy about 13.6 million shares, or a 4 percent stake, based on Hess's Friday closing price of $58.90. The share purchase will make Elliott one of the top three shareholders in Hess, according to Thomson Reuters data.

Hess said a law firm representing Elliott Associates informed that the fund is considering nominating candidates for election to the board at the 2013 annual meeting.

The oil and gas producer said on Monday it would pursue the sale of 20 oil storage terminals in the United States and the Caribbean, and close its money-losing New Jersey refinery, freeing up $1 billion of capital.

The Port Reading refinery, which will be closed by the end of February, incurred losses in two of the past three years.

"By closing the Port Reading refinery and selling our terminal network, Hess will complete its transformation from an integrated oil and gas company to one that is predominantly an exploration and production company," Chief Executive John Hess said.

Nineteen terminal networks are located along the U.S. East Coast with a storage capacity of 28 million barrels, and the one in the Caribbean has a capacity of 10 million barrels.

Hess has retained Goldman Sachs as financial adviser for the terminal network divestment.

Shares of New York-based Hess were up 7 percent at $63.21 on the New York Stock Exchange on Monday.

© 2014 Thomson/Reuters. All rights reserved.

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