Hess Corporation (HES) announced the filing of a registration statement by its subsidiary, Hess Midstream Partners LP. The company said that Hess Midstream Partners has filed the statement with the U.S. Securities and Exchange Commission for a proposed initial public offering (“IPO”) of common units representing limited partner interests.
The offering is expected in the first quarter of 2015. Hess Midstream Partners intends to list its common units on the stock exchange under the symbol "HESM". The number of common units to be offered and the price range for the offering have not yet been determined.
Hess Midstream Partners' initial assets will be contributed by Hess and are expected to include a 30% interest in Hess' natural gas processing plant and a 50% interest in Hess' rail loading terminal in Tioga, ND. The partnership would also receive a 50% interest in Hess' crude oil truck and pipeline terminal located in Williams County, ND and 100% interest in Hess' propane storage cavern and rail and truck transloading facility located in Mentor, MN.
Hess is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. With the filing for the IPO of its subsidiary, the company remains on track with its strategy of becoming an E&P company entirely while boosting its shareholder value, much like ConocoPhillips (COP) and Marathon Oil Corp. (MRO).
With this intention, the company is progressing steadily on the formation and IPO of a master limited partnership or MLP. Hess stated that it plans to use the MLP as the primary midstream vehicle to support its Bakken production growth.
Going forward, we believe the company’s asset divestiture program and significant progress in multi-year transformation will reduce its financing needs. Hess remains focused on value creation and the pursuit of its previously announced monetization plan of its midstream assets in the Bakken oil shale play in North Dakota.
Hess Corp. currently carries a Zacks Rank #3 (Hold). Meanwhile, one can consider the Zacks Ranked #1 (Strong Buy) stock Delek Logistics Partners LP (DKL).
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