Integrated energy company
) has agreed to divest its Eagle Ford assets in South Texas to
Sanchez Energy Corporation
) for $265 million.
The all-cash deal, which is effective since Mar 1, covers around
43,000 acres in the Eagle Ford shale in Dimmit, Frio, LaSalle and
The deal comes amid shareholder concerns to focus its operations
on a particular sector. The funds raised from the sale are
expected to finance drilling and exploration programs and reduce
overheads. Some of these strategic alternations are in sync with
hedge fund Elliott Management Corp.'s demand.
On the other hand, the deal will enhance Sanchez's yield by
nearly two times to touch 4,500 barrels of oil equivalent a day
(Boe/d) from its current yield of 3,800 Boe/d and add another 50
wells. The transaction will also boost Sanchez's total proved
reserves by 13.4 million Boe (MMBoe) and increase its proved
developed reserves by around 6.6 MMBoe.
Hess is in the process of a transition from an integrated oil and
gas company to a predominantly E&P entity, thereby shifting
its growth approach from high-impact exploration to lower-risk
unconventional and a smaller, more focused exploration portfolio.
The company's new strategy has consequently led to increased
spending on Bakken as well as North Malay Basin, Valhall and
Hess is engaged in oil and gas exploration, production (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.
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
EPL Oil & Gas, Inc.
) are expected to outperform the market over the next few
EPL OIL&GAS INC (EPL): Free Stock Analysis
HESS CORP (HES): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis
SANCHEZ ENERGY (SN): Free Stock Analysis
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