Hess Corporation today announced it would be selling its Indonesian assets for $1.3 billion in two separate sales through agreements with a joint venture between Thailand-based PTT Exploration and Production Company Limited and Indonesian firm PT Pertamina.
Located off the coast of Indonesia, the assets on average produced an equivalent of 15,000 barrels of oil equivalent per day through the first nine months of 2013, according to Hess. In March Hess announced it would divesting its assets in Indonesia and Thailand in an effort to mark its "multi-year strategic transformation into a pure play exploration and production company."
Hess says it will use the $1.3 billion received from the sale to continue its $4 billion share repurchase plan, which was announced during the same March press release that detailed the desire to divest its Indonesian business. In its most recent quarterly SEC filing, Hess announced that it has so far repurchased $500 million worth of common stock, and has remaining capacity of $3.5 billion.
Excluding the most recent sale, Hess has had approximately $6.5 billion of proceeds from completed and announced assets sales through the first nine months of 2013. It has used that money to repurchase common stock, and also repay $2.1 billion of debt. In addition the company announced it would be increasing its dividend by 150% in September, to $0.25 per share.
"Our transformation into a pure play exploration and production company allows us to increase cash returns to shareholders," said chief executive officer John Hess when announcing the dividend increase in September. "We remain committed to ensuring that our reshaped portfolio of focused, lower risk upstream assets is optimally positioned to drive production growth, enhance profitability, and generate superior returns."
The sale of the Indonesian assets is expected to close before the end of the first quarter of next year.
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