* Hess 'looking carefully' at breakup proposal
* Company going forward with production focus
* 4th-qtr earnings $1.66/share vs loss $0.39 year earlier
Jan 30 Hess Corp, which is under
pressure from an activist investor to break up the company, is
"looking carefully" at that proposal, Chief Executive John Hess
told analysts on Wednesday.
He said the company was considering proposals from hedge
fund Elliott Management to consider a spinoff of its U.S.
onshore assets and the sale of retail operations.
He noted the company's ongoing efforts to sell non-core
assets - including an exit from the refining business - and pour
more than 90 percent of its capital into exploration and
"We have no sacred cows in the business. We have no sacred
cows in the boardroom," he said.
But he declined to address Elliott's proposals, which also
include a plan to nominate five directors to the company's
Hess said the company would respond "in a short period of
Elliott had said Hess could be worth more than $126 per
share if the company split itself. Hess shares, which closed
down 0.3 percent at $67.88 on Wednesday, have gained nearly 16
percent since the activist investor's plan to buy a 4 percent
stake in Hess was disclosed on Monday.
Also on Monday, Hess, which is looking to become a
predominantly exploration and production company, announced
plans to sell its oil storage terminal network and its New
Jersey refinery, a year after shutting its much larger
joint-venture St. Croix refinery.
On Wednesday, the company reported a fourth-quarter profit
as production soared from its wells in North Dakota's Bakken
shale, where Hess has a substantial foothold.
The company's oil and gas production rose 8 percent to
396,000 barrels of oil equivalent per day (boe/d). Production
from the oil-rich Bakken soared 68 percent to 64,000 boe/d.
North Dakota has became the second-largest oil producer in
the United States after Texas, just a few years after oil
companies unlocked the state's oil bounty in the Bakken.
Hess told analysts that the company expects its Bakken
production in 2013 to range from 64,000 to 70,000 boe/d.
He noted that the company last year cut Bakken drilling and
well completion costs by more than 30 percent while production
Greg Hill, executive vice president of worldwide exploration
and production, said switching to lower-cost drilling methods
and completion design cut per-well costs to $9 million in the
fourth quarter from $13.4 million in the first quarter last
The company has earmarked a capital and exploratory budget
of $6.8 billion for the year.
Hess posted a profit of $566 million, or $1.66 per share in
the fourth quarter, compared with a loss of $131 million, or 39
cents per share, a year earlier.
Revenue rose 10 percent to $9.69 billion.