Hess Corporation is transforming into a pure play exploration and production (E&P) company by 2014 and divesting its downstream businesses, including retail, energy marketing and energy trading.
A company spokesman said the divestiture of these customer-facing businesses is in the early stage and will take some time. In the meantime, it will be business as usual.
Once complete, the transformed Hess will have a focused portfolio of higher growth and lower risk E&P assets with which Hess anticipates achieving a five year compound average annual production growth rate of 5 percent to 8 percent, based off of pro forma 2012 production, with aggregate mid-teens production growth between pro forma 2012 and 2014, while increasing returns to shareholders.
In addition to exiting its downstream business, Hess is further focusing its E&P portfolio by divesting Indonesia and Thailand, and the company is pursuing monetization of Bakken midstream assets, expected in 2015.
The company also announced a slate of five independent director nominees for election at the May 16, 2013, annual meeting and appointed an additional independent director who will stand for election at the 2014 annual meeting:
- John Krenicki Jr. Former Vice Chairman of GE; President and Chief Executive Officer of GE Energy
- Dr. Kevin Meyers Former Senior Vice President of E&P for the Americas, ConocoPhillips
- James H. Quigley (2014) Former Chief Executive Officer, Deloitte
- Fredric Reynolds Former Executive Vice President and Chief Financial Officer, CBS Corporation
- William Schrader Former Chief Operating Officer, TNK-BP Russia
- Dr. Mark Williams Former Executive Committee Member, Royal Dutch Shell
With these changes, 13 of the 14 Hess board members will be independent. Nicholas F. Brady, Thomas H. Kean, Frank A. Olson, Samuel A. Nunn, Gregory P. Hill and F. Borden Walker will be leaving the board.