NEW YORK -- Hess Corp. announced that it has entered into an agreement with Buckeye Partners LP to sell its U.S. East Coast and St. Lucia terminal network for a total consideration of $850 million in cash. As a result of this sale, Hess said it expects to release approximately $900 million of working capital, with another $100 million continuing to be retained by the retail business as part of its ongoing operations.
The sale of the terminal network, along with the sales of four upstream producing assets completed earlier this year and the announced sale of the Energy Marketing business, brings total year-to-date divestitures to $5.4 billion. Hess has used the initial proceeds from its completed asset sales, first, to repay debt and, then, to further strengthen its balance sheet. Subsequently, the company started purchasing shares under its $4 billion authorization and intends to use proceeds from, and working capital released by, the sale of its terminal network to continue this program.
The agreement is subject to regulatory approvals and other customary closing conditions and is expected to close in the fourth quarter of 2013.
Hess said in February that it would divest its retail network as part of a broad restructuring of its business, but did not specify whether it would do so by selling them or possibly by spinning them out into a separate business. Hess has approximately 1,360 gas stations, many with convenience stores, spread among several East Coast states.
In mid-June. Hess agreed to acquire the 56% interest in Winston-Salem, N.C.-based c-store and travel plaza operator WilcoHess LLC it did not already hold from A.T. Williams Oil Co. "We believe that the agreement will enable Hess to continue its divestiture of the downstream business in a way that maximizes value for shareholders," he told CSP Daily Newsat the time. It ties up the Hess retail offering in a neater package, he said.
In July, it enlisted Goldman Sachs Group Inc. to sell its gas station network as the oil company moves to reshape itself into a pure exploration-and-production (E&P) company.
New York City-based Hess is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas.
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