Hess Corp. reported it has entered into an agreement with Buckeye Partners LP to sell its US East Coast and St. Lucia terminal network for $850 million in cash. As a result of this sale, the company is expected separately to release $900 million of working capital, with another $100 million continuing to be retained by the retail business as part of its ongoing operations.
Hess has divested $5.4 billion this year, including the sale of its terminal network, four upstream producing assets, and the energy marketing business. The company stated its intention to withdraw from downstream operations to focus on exploration and production in January, when it reported a 2013 exploration and production budget of $6.7 billion, investing 40% to unconventional oil and gas plays (OGJ Online, Jan. 11, 2013). That month, it exited refining by closing its 70,000-b/d fluid catalytic cracking unit at Port Reading, NJ (OGJ Online, Jan. 29, 2013).
In March, Hess sold its South Texas Eagle Ford shale properties and acreage to Houston’s Sanchez Energy Corp. for $265 million in cash (OGJ Online, March 18, 2013). In April, Hess said it was looking to divest its exploration and production assets in Indonesia and Thailand, where it also was trying to sell its remaining downstream businesses, including terminals, retail, marketing, and trading divisions. Also that month, the company closed its sale of Russian subsidiary Samara-Nafta to OAO Lukoil for a $2.05 billion (OGJ Online, April 30, 2013).
In July, Hess agreed to sell its energy marketing business to Direct Energy Business LLC, a North American subsidiary of Centrica PLC, London, for $1.025 billion (OGJ Online, July 30, 2013).
The company has used the divestiture’s initial proceeds to repay debt and enhance its balance sheet. The company began acquiring shares under its $4 billion authorization and intends to use proceeds from, and working capital released by, the sale of its terminal network to continue this program.