Hess Corporation to Receive Cash and Equity from Sale of Hess Infrastructure Partners LP to Hess Midstream Partners LP
October 04 2019 - 7:09AM
Business Wire
Hess Corporation (NYSE: HES) will receive approximately $275
million in cash and approximately 115 million newly issued units in
Hess Midstream Partners LP (NYSE: HESM) as part of a proposed
transaction announced today by HESM.
Under the terms of the proposed transaction, HESM will acquire
Hess Infrastructure Partners LP (HIP), a 50/50 joint venture
between Hess Corporation and Global Infrastructure Partners,
including HIP’s 80% interest in HESM’s oil and gas midstream
assets, HIP’s water services business and the outstanding economic
general partner interest and incentive distribution rights in HESM.
In addition, HESM’s organizational structure will convert from a
master limited partnership (MLP) into an “Up-C” structure in which
HESM’s public unitholders will receive newly issued securities in a
new public entity to be named “Hess Midstream LP” (“Hess
Midstream”). Upon completion of the transaction, Hess Corporation
will own approximately 134 million HESM units, or 47 percent of
Hess Midstream on a consolidated basis, valued at approximately
$2.6 billion based on the closing price per HESM common unit on
Oct. 2, 2019.
Hess Corporation Chief Executive Officer John Hess said: “This
transaction is compelling for all parties involved and was
unanimously approved by each company’s board of directors. It
simplifies the ownership structure of Hess Midstream, provides
transparency on the value of Hess’ midstream interests, and
positions Hess Midstream for sustainable growth and value creation
as a large-scale, publicly traded midstream company accessible to a
broad range of investors.”
“Hess Midstream will continue to play an important role in
supporting Hess’ production growth in the Bakken, where we have a
premier acreage position and a 15 year inventory of high return
drilling locations. In turn, Hess’ production growth in the Bakken
along with third parties are expected to drive Hess Midstream’s
industry leading earnings growth through 2021,” Hess said. “Cash
proceeds from the transaction will be used to fund our world class
investment opportunities in Guyana and the Bakken.”
Hess Corporation will continue to provide operational services
to Hess Midstream and maintain the same commercial contracts with
Hess Midstream as under the current MLP structure. The transaction,
which is non-taxable to Hess Corporation, is expected to close in
the fourth quarter of 2019, subject to customary closing conditions
and regulatory approvals. Morgan Stanley & Co. LLC acted as
financial advisor to Hess Corporation on this transaction.
About Hess Corporation
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
www.hess.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of federal securities laws regarding Hess Corporation,
HESM and Hess Midstream. These forward-looking statements relate
to, among other things, the proposed transaction among HESM, HIP
and Hess Midstream and includes expectations with respect to the
benefits of the proposed transaction to Hess Corporation and use of
proceeds therefrom. You can identify forward-looking statements by
words such as “anticipate,” “believe,” “could,” “design,”
“estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,”
“intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,”
“position,” “potential,” “predict,” “project,” “prospective,”
“pursue,” “seek,” “should,” “strategy,” “target,” “would,” “will”
or other similar expressions that convey the uncertainty of future
events or outcomes. While Hess Corporation believes that the
assumptions concerning future events are reasonable, such
forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties and other factors, some of
which are beyond Hess Corporation’s control and are difficult to
predict. Factors that could cause actual results to differ
materially from those implied in the forward-looking statements
include the following: the ability to consummate the proposed
transaction among HESM, HIP and Hess Midstream on the proposed
terms and timeline; the ability to satisfy various conditions to
closing of the proposed transaction, and any conditions imposed on
the combined entity in connection with the consummation of the
proposed transaction; and the risk that anticipated benefits of the
proposed transaction may not be fully realized or may take longer
to realize than expected. When considering these forward-looking
statements, you should keep in mind the risk factors and other
cautionary statements in Hess Corporation's Annual Report on Form
10-K for the year ended December 31, 2018, and those set forth from
time to time in Hess Corporation's and HESM's filings with the
Securities and Exchange Commission (the "SEC"). Hess Corporation
undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances
occurring after this press release except as required by applicable
law. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release.
No Offer or Solicitation
This press release is for informational purposes only and shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities or a solicitation of any proxy, vote or approval
with respect to the proposed transaction or otherwise, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction.
Additional Information
In connection with the proposed transaction, a registration
statement on Form S-4 (the "Registration Statement") will be filed
with the SEC by Hess Midstream. INVESTORS AND SECURITY HOLDERS ARE
ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROSPECTUS
THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION. Investors and security holders will be
able to obtain the documents free of charge at the SEC’s website,
www.sec.gov, from HESM at its website, www.hessmidstream.com, or by
contacting HESM’s Investor Relations at (212) 536-8244.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191004005214/en/
Investors: Jay Wilson (212)
536-8940
Media: Lorrie Hecker (212)
536-8250 or Jamie Tully Sard Verbinnen & Co. (312) 895-4700
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