| Hess, Global Infrastructure Partners to Form Joint Venture - Analyst Blog | |
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Hess Corporation HES has agreed to farm out a stake of 50% in its Bakken midstream assets to Global Infrastructure Partners. The transaction is valued at $2.675 billion.
Hess and Global Infrastructure Partners will join hands to form a premier midstream joint venture, which will be named Hess Infrastructure Partners.
On completion of the transaction, the joint venture will assume a debt of $600 million through a five-year Term Loan A facility. The proceeds will be divided equally among both the partners. This will result in total after-tax cash proceeds, net to Hess, of $3.0 billion. Moreover, the joint venture will gain independent access to capital comprising a $400 million five-year Senior Revolving Credit Facility, which is fully committed. Post completion, the joint venture intends to continue with a planned initial public offering (IPO) of Hess Midstream Partners LP common units.
The transaction is expected to be immediately value accretive to the shareholders of Hess. The funds raised from this transaction, including cash in hand and an available $4 billion revolving credit facility, will give Hess significant advantage over its peers in terms of liquidity.
In line with its financial strategy, Hess plans to utilize the proceeds from this transaction for various purposes. These include the company’s intention to preserve the strength of its balance sheet in the currently weak oil price environment, offer further financial flexibility for future growth opportunities and to continue share buybacks on a disciplined basis.
Subject to customary closing conditions, the transaction is scheduled to complete at the beginning of the third quarter of 2015. The Hess midstream assets to be included in the newly formed joint venture are the natural gas processing plant in Tioga, ND; rail loading terminal in Tioga and associated rail cars; crude oil truck and pipeline terminal in Williams County, ND; propane storage cavern and rail and truck transloading facility in Mentor, MN; and crude oil and natural gas gathering systems in North Dakota.
Global Infrastructure Partners is a leading global infrastructure investor with a widespread midstream energy investment track record.
Hess currently carries a Zacks Rank #3 (Hold). Better-ranked players from the same space include Transmontaigne Partners L.P. TLP, LRR Energy, L.P. LRE and Pembina Pipeline Corporation PBA. All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report TRANSMONTN PTNR (TLP): Free Stock Analysis Report HESS CORP (HES): Free Stock Analysis Report PEMBINA PIPELN (PBA): Free Stock Analysis Report LRR ENERGY LP (LRE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Hess Corporation
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CODE : HES |
ISIN : US42809H1077 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Hess Corp. is a and oil exploration company based in United states of america. Hess Corp. is listed in Germany and in United States of America. Its market capitalisation is US$ 48.6 billions as of today (€ 45.7 billions). Its stock quote reached its lowest recent point on November 17, 1989 at US$ 10.06, and its highest recent level on April 19, 2024 at US$ 154.35. Hess Corp. has 315 053 615 shares outstanding. |