U.S. energy major,
), unfazed by hedge fund Elliott Management Corporation's
continued pressure, remains focused on continuing its transition
from an integrated oil and gas company to a predominantly
exploration and production (E&P) entity.
In contrast, Elliott Management recently acquired 4.5% stake in
Hess and is seeking to elect five of its own directors to the
Hess board. The Elliot game plan is in sharp contrast to Hess's
objective of shifting its growth approach from a high-impact
exploration to lower-risk unconventionals and a smaller, more
focused exploration portfolio.
The company is of the opinion that Elliott Management is moving
ahead with its own game plan without even making the effort to
learn about Hess. The firm added that the Elliott directors are
being compensated directly by the hedge fund through an unusual
contingent payment scheme that incentivizes them to support a
short-term break-up plan that will effectively liquidate Hess.
In a letter sent to all shareholders in connection with its
Annual Meeting of Shareholders, to be held on May 16, Hess urged
shareholders to vote for the election of Hess' "highly qualified"
independent nominees. The incumbent management of Hess also asked
shareholders to not let the Elliott hedge fund pursue its
self-serving short-term agenda and destroy the long-term value of
Elliott Management is proactive in playing its role of an
activist investor. Recently the hedge fund, which oversees $21
billion in assets, was helping Stan Lee Media in its wrangle with
The Walt Disney Company
). The tussle was over the ownership rights over the Stan
Lee-created superhero characters like Spider-Man, X-Men, The
Incredible Hulk and The Fantastic Four.
Hess is an integrated energy company engaged in oil and gas
E&P and refining as well as marketing. The company's E&P
activities are concentrated in Algeria, Australia, Azerbaijan,
Brazil, Denmark, Egypt, Equatorial Guinea, Gabon, Ghana,
Indonesia, Libya, Malaysia, Norway, Russia, Thailand, the United
Kingdom and the United States. As of year-end 2012, Hess' proved
reserves tally stood at 1.55 billion oil-equivalent barrels,
while the company replaced 141% of its production, resulting in a
reserve life of 10.3 years.
Hess carries a Zacks Rank #3, which is equivalent to a short-term
Hold rating. However, the Zacks Ranked #1 stocks of
Range Resources Corporation
NGL Energy Partners LP
) are expected to outperform the market over the next few months.
DISNEY WALT (DIS): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
NGL ENERGY PART (NGL): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
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