By SAABIRA CHAUDHURI
Hess Corp. said it is exploring options for its entire
downstream business and pruning its Asian portfolio, while also
unveiling a share buyback program of up to $4 billion and more
than doubling its quarterly dividend.
The moves come as Hess continues to battle with an activist
investor seeking to replace much of its board and restructure
In a letter to shareholders highlighting actions Hess is
taking to turn itself into a pure play exploration and
production company, Hess said it is further focusing its
E&P portfolio by divesting Indonesia and Thailand assets,
looking to generate money from its Bakken midstream assets --
which is expected to be completed in 2015--and fully exiting
the downstream businesses, including retail, energy marketing,
and energy trading.
Hess is raising its quarterly common dividend 150% to $1 a
share on an annual basis, beginning in third quarter of this
The company also said it is adding six new independent
directors to its board, including the chief executive of GE's
energy business, John Krenicki Jr., and ConocoPhillips's former
senior vice president of E&P for the Americas, Kevin
"By 2014, Hess will be a pure play E&P company with a
tremendous portfolio comprised of higher growth, lower risk
assets," CEO John Hess said.
Elliott Management Corp. -- which amassed a 4% stake in
Hess, has previously said Hess's portfolio is scattered.
Elliott has noted the company would be much more valuable if it
spun off its assets in the oil-rich Bakken shale region and
other US unconventional formations from less prolific
international assets as it pressed the company to separate its
assets in the oil-rich Bakken Shale region from less-prolific
international assets and its vast network of gasoline
The investors are seeking to replace Hess's board members at
the company's annual meeting in order to press for changes.
On Monday, Hess said Elliott, which it described as "a hedge
fund with almost no oil and gas experience and known for
aggressive tactics," had a central thesis amounting to "little
more than financial engineering based on flawed
It said Elliott's founder, Paul Singer's proposals
"demonstrate no meaningful operational insight" into its
"For the most part, his proposals would orphan our most
promising assets and foreclose the potential for future real
value creation," Hess said in its letter. "We are convinced
that Singer's agenda would destroy shareholder value."
Dow Jones Newswires