The Hess Corporation said on Monday that it planned to sell its network of terminals, as the oil company begins to focus on finding and producing new sources of petroleum.
Hess, which has hired Goldman Sachs to lead the sales process, also said that it will close its refinery in Port Reading, N.J.
Separately, the company said that it received a letter on Friday from Elliott Management, which told the company that it is seeking to buy a major stake â€" potentially more than $800 million worth of shares â€" and is considering nominating board candidates. Hess said that the hedge fun had not spoken up before sending the letter to the company’s board.
Hess is the latest oil concern to limit itself to exploration and production, as a way to sharpen focus and improve growth. Rivals ranging from ConocoPhillips to Marathon Oil have spun off their slower-growing refining businesses, leaving them with more capital to invest in finding new sources of oil and natural gas.
Shares of Hess have risen about 6.6 percent over the past 12 months. They rose an additional 6.6 percent in premarket trading on Monday, to $62.66.
The 19-terminal network that Hess is selling, which stretches along the East Coast, has about 28 million barrels of storage capacity. The oil compa! ny will also include a storage terminal in St. Lucia, which can hold about 10 million barrels.
The network became nonessential after Hess closed its Hovensa refinery last year and began to rely on third parties to obtain refined products for its retail and energy marketing businesses.
By selling off the terminals, Hess is hoping to free up about $1 billion of working capital.
“By closing the Port Reading refinery and selling our terminal network, Hess will complete its transformation from an integrated oil and gas company to one that is predominantly an exploration and production company and be able to redeploy substantial additional capital to fund its future growth opportunities,†John Hess, the company’s chairman and chief executive, said in a statement.
