Integrated energy company,
) has completed the sale of its Pangkah asset to a subsidiary of
state-owned Indonesian oil and natural gas company, PT Saka
HESS CORP (HES): Free Stock Analysis Report
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Hess received a total after tax consideration of $650 million
comprising the sale of equity interests in certain holding
entities and certain inter-company debts. The asset, located off
the coast of Indonesia, produced an average of 9,000 barrels of
oil equivalent per day net in the first three quarters of 2013.
Hess will use the proceeds from the sale on buying back shares
under its existing $4 billion share repurchase program.
New York-based Hess Corp. is an integrated energy company engaged
in oil and gas exploration, production and refining as well as
Hess, however, remains on track with its transition to a pure
play E&P company while boosting shareholder value. The
company has already divested its U.S. East Coast bunkering
business, subsidiary in Russia as well as interests in the Beryl
area fields in the United Kingdom North Sea, the
Azeri-Chirag-Guneshli fields offshore Azerbaijan and the Eagle
Ford assets in Texas.
In an attempt to better manage its portfolio with respect to
resource availability, project development and its intricacy,
Hess intends to arrive at a 50:50 ratio between unconventional
and conventional assets. Currently, the ratio of the company's
undrilled inventory is 40:60 between unconventional and
conventional. The recent lease in the Bakken and augmentation of
Utica acreage are in sync with its new strategy.
Going forward, we believe that the company's strong exploration
upside in Ghana and continued improvement in Bakken productivity
hold a lot of promise. This would help the company to
consistently deliver 5-8% annualized production growth in the
Hess currently holds a Zacks Rank #3 (Hold), implying that it is
expected to perform in line with the broader U.S. equity market
over the next one to three months.
Better-ranked energy players include
Harvest Natural Resources Inc.
Helmerich & Payne, Inc.
Seadrill Partners LLC
). All these stocks currently sport a Zacks Rank #1 (Strong Buy)
and offer value.