8. Hess Separates Exploration and Production From Refining and Marketing
Finally, in the break-up world, I am looking for the worst performing major oil company of the last few years to become the best, simply by following a blue print executed well by Marathon and by Conoco (COP). The underperformer? Hess (HES - Get Report). The plan? Separate the exploration and production assets from the refining and marketing plays. This company, with its $49 stock, has a remarkable portfolio of worldwide assets, include premier properties in Malaysia, the North Sea, Equatorial Africa, Indonesia and Thailand. But perhaps the real crown jewel is the Bakken, where EOG (EOG) and Continental Resources (CLR) -- two of my favorite growth stocks -- have produced a remarkable amount of oil and have only scratched the surface of what might be the biggest find since Prudhoe Bay in Alaska almost 50 years ago. Did you know, though that the old Amerada Hess is the company that discovered the Bakken and may still have among the best properties in that play?
I conservatively tally these oil assets at $70 a share. Then its refining and marketing division, which rivals newly spun off Marathon Petroleum (MPC) and Phillips 66, could shine on its own. I see $10 a share based on the performance of these two other spinoffs. The resulting value for this $49 stock? At least $81 a share almost immediately upon dissolution. Yes, there is that much pent-up value in a company that's become an industry joke for its terrible management except for its beautiful Hess toy trucks now available at a local station near you.