Hess sells 50 pc stake in Bakken Midstream Assets $2.675 billion

Hess sells 50 pc stake in Bakken Midstream Assets for $2.675 billion

3:18 PM, 13th June 2015
Hess sells 50 pc stake in Bakken Midstream Assets for $2.675 billion
John Hess, chief executive officer, Hess Corporation. (File photo)

NEW YORK, US: Hess Corporation said it has agreed to sell a 50 percent interest in its Bakken midstream assets to Global Infrastructure Partners for $2.675 billion in cash and the two companies will create a premier midstream joint venture - Hess Infrastructure Partners. The transaction is expected to be completed early in the third quarter of 2015.

Upon closing, the joint venture plans to pursue a proposed initial public offering (IPO) of Hess Midstream Partners LP common units. Also with the proceeds from this transaction, plus cash on hand and an untapped $4 billion revolving credit facility, Hess will have a highly advantaged liquidity position compared to its peer group. Consistent with its financial strategy, the company will use proceeds from this transaction to preserve the strength of its balance sheet in the current oil price environment, provide additional financial flexibility for future growth opportunities and continue to repurchase stock on a disciplined basis, it said.

“This transaction delivers significant and immediate value to our shareholders. The joint venture with its strategically located assets will be one of the largest midstream operators in the Bakken. By capitalizing on the financial strength and midstream energy experience of Global Infrastructure Partners, the joint venture will be in a strong position to fund future energy infrastructure investments and continue to grow its midstream business,” said John Hess, chief executive officer, Hess Corporation.

As a result of the joint venture, Hess will begin reporting its Bakken-related midstream operations as a separate midstream segment. For the three months ended 31 March, the midstream segment had net income of $27 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $64 million. Hess expects midstream segment EBITDA for the twelve months ending 31 March, 2016 to be $290 million to $300 million, it said.

The board of directors for Hess Infrastructure Partners will be comprised of six directors, with three members elected by Hess and three by Global Infrastructure Partners. Also Hess will operate the assets owned by the JV as a contract service provider, the company said.

© Worldofchemicals News



Your Comments (Up to 2000 characters)
Please respect our community and the integrity of its participants. WOC reserves the right to moderate and approve your comment.

Related News

IFF to acquire Canadian cosmetics ingredients firm Lucas Meyer Cosmetics

NEW YORK, US: International Flavors & Fragrances Inc said that it has offered to acquire Lucas Meyer Cosmetics, a company that develops, manufactu ...

Read more
AkzoNobel to help modernize Dutch theatre; provides paint, colour expertise

AMSTERDAM, NETHERLANDS: AkzoNobel NV said it is adding its own artistic flair to Dutch National Opera & Ballet after agreeing a two-year partnersh ...

Read more
Williams Partners acquires 13 pc additional interest in Utica East Ohio

TULSA, US: Williams Partners LP said that its subsidiary Utica Gas Services has successfully completed the previously announced acquisition of approxi ...

Read more
Omnova shuts SB latex production in Georgia, Ohio; to cut 40 jobs

BEACHWOOD, US: Omnova Solutions Inc said that it is shutting down styrene butadiene (SB) latex production at its facilities in Calhoun, GA and Mogador ...

Read more
PPG to acquire US-based firm IVC Industrial Coatings

PITTSBURGH, US: PPG Industries Inc said that it has agreed to acquire the US-based IVC Industrial Coatings Inc, a specialty powder and liquid coatings ...

Read more
New boron compounds for organic light-emitting diodes (OLEDs)

FRANKFURT, GERMANY: Chemists at the Goethe University have now developed a new class of organic luminescent materials through the targeted introductio ...

Read more
www.worldofchemicals.com uses cookies to ensure that we give you the best experience on our website. By using this site, you agree to our Privacy Policy and our Terms of Use. X