By TESS STYNES
Hess Corp. is seeking to sell its US terminal network and complete its exit from the refining business with the closing of its Port Reading, N.J., refinery by the end of February.
CEO John Hess said the moves "will complete [the company's] transformation from an integrated oil and gas company to one that is predominantly an exploration and production company and be able to redeploy substantial additional capital to fund its future growth opportunities."
Hess on Monday also said it was notified by Elliott Associates on Friday that it is seeking clearance from US regulators to acquire more than $800 million in Hess shares and that Elliott also is considering nominating candidates for election to Hess's board at its upcoming annual meeting.
Mr. Hess said the company is willing to meet with Elliott to hear its ideas. Further details weren't provided.
Hess recently had a market capitalization of about $20.12 billion.
The company has been pruning its portfolio to fund drilling and exploration efforts, recently reaching a deal for $525 million from Royal Dutch Shell for its stake in the Beryl area fields in the UK North Sea and the Scottish Area Gas Evacuation System. In September, Hess agreed to sell some minority stakes it holds in fields in Azerbaijan to India's ONGC Videsh Ltd. for $1 billion.
In addition to proceeds from the sale of the terminal network, the company on Monday said it expects the planned terminal-assets divestiture and exit from the refining business will free up about $1 billion of working capital for other growth opportunities.
Hess no longer considers the terminal network -- which includes 19 terminals along the East Coast and which had been a main outlet for production for its Hovensa joint venture with Petroleos de Venezuela SA -- as central to its operations. Hess's St. Lucia terminal in the Caribbean also will be in the group offered for sale.
Hess also said it has access to refined petroleum products from third parties to support its retail and marketing operations.
The Port Reading operation produces primarily gasoline and components used for blending heating oil and has incurred losses during two of the past three years.
Dow Jones Newswires