Hess Corporation announced that it entered into an agreement with Direct Energy, a North American subsidiary of Centrica plc, to sell its Energy Marketing business for a total consideration of $1.025 billion. The Energy Marketing business supplies natural gas and electricity to 23,000 commercial, industrial and small business customers in the eastern half of the United States.
The transaction is part of the previously announced plan for Hess to exit the entirety of its downstream business as it transforms into a pure play E&P company with a portfolio of focused, high growth and lower risk assets. The sale of Energy Marketing, along with the sales of four producing assets earlier this year, brings total year-to-date divestitures to $4.5 billion. Hess has used the proceeds from its previously completed asset sales to repay $2.4 billion of debt and further strengthen the company’s balance sheet for future growth. The sale of Energy Marketing now puts the company in a position to begin repurchasing shares under its existing $4 billion share repurchase authorization, it said in a statement.
John B. Hess, Chief Executive Officer, said, “Our Energy Marketing business has had a proud history and has been built upon long term relationships with our customers. We are grateful to all of our customers for their trust and support of our company over many years. We also want to recognize and thank our dedicated employees for their tireless efforts as well as their invaluable contributions in providing outstanding service to meet our customers’ energy needs.”
The agreement is subject to regulatory approvals and other customary closing conditions and is expected to close in the fourth quarter of 2013.
