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Hess to buy back up to $1B of common stock, plans strategy review

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Hess to buy back up to $1B of common stock, plans strategy review

Hess Corp.'s board of directors approved a $1.0 billion share repurchase program for its common stock by the end of 2018, comprising a $500 million accelerated stock repurchase program and a $500 million repurchase in the open market.

"We are pleased to be in a position to increase cash returns to shareholders, which remains one of our top priorities and is reviewed regularly by the management team and board," said John Hess, CEO of Hess. "We believe that repurchasing our shares represents a highly compelling return opportunity for our shareholders."

The timing and amount for the open market repurchases will depend on factors such as Hess' stock price, trading volume, oil prices and general market conditions, according to a March 8 news release. Hess plans to fund the repurchases from existing cash and asset sale proceeds.

The oil and gas producer intends to hold an investor day later in the year to discuss the company's strategy and progress in Guyana, where Hess recently made its seventh offshore oil discovery, as well as in the Bakken Shale in the upper Midwest, Hess' largest operated growth asset. Hess plans to boost its presence in the Bakken from four rigs to six and to review its techniques for enhanced completion and cost efficiencies.

The activist investor Elliott Management Corp., which manages funds holding the fourth-largest stake in Hess, expressed its support for the company's planned operating review, particularly Hess' plan to boost its position in the Bakken. "We are encouraged that the company has indicated that they are committed to closing the value gap and will be dynamic in exploring further steps to do so before first oil in Guyana," Elliott said in a separate news release March 8.

Elliott has been pressuring Hess to address its poor stock performance, demanding either an ouster of the CEO or a sale of the company. The hedge fund also previously criticized Hess' favoring a dividend reduction over stock buybacks.

Hess stock was up 1.5% in morning trading March 8, at $47.17.