Hess Sells Interests in Norway; Commences Process to Sell Interests in Denmark
October 24 2017 - 1:14AM
Business Wire
Continued Execution of Strategic Plan to Focus Portfolio on
Higher Return Assets, Prefund Development of World Class Guyana
Investment Opportunity
Hess Corporation (NYSE: HES) today announced several additional
steps in the continued execution of its strategic plan to further
focus the company’s portfolio and allocate capital to higher return
assets:
- An agreement to sell its oil and gas
interests in Norway for total proceeds of $2 billion
- Commencement of a process to sell its
interests in Denmark
- Implementation of a cost reduction
program expected to deliver annual cost savings of more than $150
million starting in 2019
“With the continued success of our asset sale program, we are
focusing our portfolio on higher return assets and reducing our
breakeven oil price,” CEO John Hess said. “Proceeds from these
asset sales, along with cash on the balance sheet, will prefund
development of our world class investment opportunity in offshore
Guyana, where we have participated in one of the world’s largest
oil discoveries of the past decade – positioning our company to
deliver more than a decade of cash generative growth and
significant value for our shareholders.”
The sale of its interests in Norway combined with the company’s
previously announced divestitures of its enhanced oil recovery
assets in the Permian Basin and interests in Equatorial Guinea have
captured approximately $3.25 billion in cash proceeds year to date.
These reshaping moves including the planned sale of interests in
Denmark will also extinguish approximately $3.2 billion in future
abandonment liabilities. In addition, with a portion of these cash
proceeds, we expect to reduce Hess Corporation debt (excluding
midstream) by $500 million in 2018. Together with the planned $150
million annual cost reduction program, these actions are expected
to reduce cash unit production costs by approximately 30 percent –
to less than $10 per BOE – by 2020.
Sale of Interests in Norway, Sales Process in Denmark
Hess has entered into an agreement to sell its subsidiary Hess
Norge, which owns interests in the Valhall and Hod fields in
Norway, to Aker BP ASA for total proceeds of $2 billion, effective
January 1, 2017. The Valhall and Hod fields produced an average of
26,000 barrels of oil equivalent per day net to Hess over the first
six months of 2017. Hess holds a 64.05 percent interest in Valhall
and a 62.5 percent interest in Hod. The sale is subject to
customary conditions for completion, including approval by the
Ministry of Oil and Energy, Ministry of Finance and relevant
competition clearance and is expected to be completed by year end
2017.
In addition, Hess will commence a process to sell its interests
in Denmark, where it holds a 61.5 percent interest in the South
Arne Field. This sales process is expected to be completed in 2018.
The South Arne Field produced an average of 11,000 barrels of oil
equivalent per day net to Hess in the first six months of 2017.
Lower Cash Unit Costs from Portfolio Reshaping and Associated
Cost Reduction Program
Starting in 2020, cash unit costs are expected to be reduced by
approximately 30 percent from 2017 levels. This reduction results
from investment in higher return growth assets, the sale of higher
cost assets and a cost reduction program that is expected to
deliver annual cost savings of more than $150 million starting in
2019.
Hess Corporation is a leading global independent energy company
engaged in the exploration and production of crude oil and natural
gas. More information on Hess Corporation is available at
http://www.hess.com.
Cautionary Statements
This news release contains projections and other forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
These projections and statements reflect the company’s current
views with respect to future events and financial performance. No
assurances can be given, however, that these events will occur or
that these projections will be achieved, and actual results could
differ materially from those projected as a result of certain risk
factors. A discussion of these risk factors is included in the
company’s periodic reports filed with the Securities and Exchange
Commission.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171023006582/en/
Hess CorporationInvestor:Jay Wilson, (212)
536-8940jrwilson@hess.comorMedia:Lorrie Hecker, (212)
536-8250lhecker@hess.com
Hess (NYSE:HES)
Historical Stock Chart
From Aug 2024 to Sep 2024
Hess (NYSE:HES)
Historical Stock Chart
From Sep 2023 to Sep 2024