Hess Corporation (NYSE: HES) announced today that it will pursue the
sale of its terminal network in the United States. Hess also announced
that it will complete its exit from the refining business by closing its
Port Reading, New Jersey refinery.
The terminal network is located along the U.S. East Coast and has a
total of 28 million barrels of storage capacity in 19 terminals, 12 of
which have deep water access. The terminals previously served as the
primary outlet for Hess’ share of production from its HOVENSA joint
venture refinery, most of which was used to supply Hess’ Retail and
Energy Marketing businesses. With the closure of the HOVENSA refinery in
2012 as well as Hess’ ability to access refined products from third
parties to supply these marketing businesses, the terminal system is no
longer core to the company’s operations. The company’s St. Lucia oil
storage terminal in the Caribbean with 10 million barrels of capacity
will also be included in the package for divestiture. In addition to the
proceeds from the sale of the terminal network, the transaction should
also release approximately $1 billion of working capital for
redeployment to fund Hess’ future growth opportunities.
Hess will continue its long term commitment to the Retail and Energy
Marketing businesses and take all the necessary steps to ensure supply
security, competitive prices and high quality service for its customers.
The Port Reading refinery, which will be closed by the end of February,
is comprised solely of a Fluid Catalytic Cracking unit and it primarily
manufactures gasoline and components used for blending heating oil. The
refinery incurred losses in two of the past three years. The financial
outlook for the facility is expected to remain challenged due to the
requirement for future expenditures to comply with environmental
regulations for low sulfur heating oil and the weak forecast for
gasoline refining margins.
“By closing the Port Reading refinery and selling our terminal network,
Hess will complete its 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,” said John Hess, Chairman and CEO.
Hess has retained Goldman, Sachs & Company as its financial advisor for
the divestiture of the terminal network.
Hess Corporation is a leading global independent energy company
primarily engaged in the exploration and production of crude oil and
natural gas, and the marketing of refined petroleum products, natural
gas and electricity. 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.
