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Hess Announces Culmination Of Transformation Into Pure Play E&P Company

Hess Corporation (NYSE: HES) (“Hess”) today announced several initiatives marking the culmination of its multi-year strategic transformation into a pure play exploration and production (“E&P”) company. The Company today also announced a slate of five highly qualified independent director nominees for election at this year’s Annual Meeting, and appointed an additional independent director who will stand for election at the 2014 Annual Meeting.

Once complete, the transformed Hess will have a focused portfolio of higher growth and lower risk E&P assets. With attractive, oil linked reserves, Hess anticipates achieving a five year compound average annual production growth rate (“CAGR”) of 5 to 8%, based off of pro forma 2012 production, with aggregate mid-teens production growth between pro forma 2012 and 2014, while increasing returns to shareholders. Specific announcements today include:

  • Further focusing Hess’ E&P portfolio by divesting Indonesia and Thailand
  • Pursuing monetization of Bakken midstream assets, expected in 2015
  • Fully exiting the Company’s downstream businesses, including retail, energy marketing, and energy trading
  • Returning capital directly to shareholders through an increase in the annual dividend to $1.00 per share commencing in the third quarter of 2013, and a share repurchase authorization of up to $4 billion tied to the timing of asset sales
  • Naming six new world class independent directors with the right mix of corporate leadership, operational and financial expertise, and top level E&P experience

John Hess, Chairman and CEO of Hess, said, “Our Board and management team have been pursuing a multi-year strategy to transform Hess into a focused E&P company. The initiatives announced today represent the culmination of this process. By 2014, Hess will be a pure play E&P company with a tremendous portfolio comprised of higher growth, lower risk assets. We believe we will have the financial flexibility to pursue this growth at the same time that we increase current returns to shareholders and generate significant future value.”

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