Hess to sell half of Bakken midstream assets for $2.68 billion
Oil and natural gas producer Hess Corp said it would sell half of its Bakken midstream assets to private equity firm Global Infrastructure Partners for $2.68 billion to form a master limited partnership.
The MLP, valued at $5.35 billion, plans to file for an initial public offering upon closing of the transaction early in the third quarter this year, Hess said on Thursday.
Hess’ shares, which had fallen about 11 percent this year, were up 5 percent at $69 in premarket trading on Thursday.
Including a debt offering by the joint venture, Hess will receive $3 billion in proceeds from the asset sale, the company said.
Hess said the assets included in the joint venture are a natural gas processing plant, a crude oil truck, a pipeline terminal and a rail loading terminal in North Dakota.
The MLP will also include a propane storage cavern as well as related rail and truck loading facility in Mentor, Minnesota.
Hess said in July it plans to form a publicly traded MLP comprising its pipeline and storage assets in North Dakota’s Bakken oil shale field.
Hess, which will retain control of the midstream assets’ operations, expects the MLP’s net income of $145 million to $155 million for the year ending March 31.
The company also expects capital expenditures to be funded by the joint venture for the same period to be $325 million to $350 million.
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