Hess Corporation

Hess Corporation. Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. Headquartered in New York City, the company's operations are primarily focused on key assets in the United States, Guyana, and the Malaysia-Thailand joint development area. Under the leadership of John B. Hess, the company has strategically pivoted towards high-return, lower-carbon intensity resources, most notably through its significant stake in the prolific Stabroek Block offshore Guyana.

History

The company was founded in 1933 as Hess Incorporated by Leon Hess, who began by delivering heating oil to residential customers in New Jersey. It expanded into refining and marketing, operating the Hess retail network of gasoline stations, notable for their distinctive green and white colors. A major transformation began in the 2010s under John B. Hess, who initiated a strategic shift to become a pure-play exploration and production company. This involved the divestment of downstream assets, including the sale of its retail network to Marathon Petroleum in 2014 and its Port Reading refinery. The company's history was further defined by its early and prescient investment in offshore Guyana alongside partners ExxonMobil and CNOOC Limited, a move that has reshaped its future.

Operations

Operations are concentrated in several high-potential regions. In the United States, the company holds a premier position in the Bakken Formation of North Dakota, operating the Tioga Gas Plant and employing advanced drilling techniques. Internationally, its most significant operation is the Stabroek Block offshore Guyana, operated by ExxonMobil, where multiple discoveries have been made, including at the Liza oil field and Yellowtail field. Production here utilizes FPSO vessels. In Southeast Asia, the company operates in the North Malay Basin joint development area between Malaysia and Thailand, focusing on natural gas. The company also maintains offshore production assets in the Gulf of Mexico, such as the Shenzi field.

Corporate affairs

Corporate leadership is led by CEO John B. Hess, son of the founder. The company's board of directors includes notable figures from industry and finance. Its common stock is a component of the S&P 500 index and trades on the New York Stock Exchange under the ticker symbol HES. In a landmark corporate development, the company agreed to be acquired by Chevron Corporation in October 2023 in an all-stock transaction, pending regulatory and shareholder approvals. Major institutional shareholders include firms like The Vanguard Group and BlackRock. The corporate headquarters are located in New York City, with major operational offices in Houston, Texas.

Environmental and social impact

The company has committed to targets for reducing its greenhouse gas emissions intensity, with a focus on minimizing flaring and methane emissions across its operations. In Guyana, its projects are developed under stringent environmental standards set by the Government of Guyana and involve extensive environmental impact assessments. Socially, the company engages in community investment programs in its areas of operation, focusing on education, health, and local capacity building. It publishes an annual sustainability report detailing its performance on ESG metrics and is a signatory to initiatives like the Oil and Gas Climate Initiative.

Financial performance

Financial performance has been fundamentally strengthened by the startup and ramp-up of production from the Stabroek Block in Guyana, which provides high-margin, low-cost barrels. This growth has significantly boosted the company's operating cash flow and reserves base. Capital expenditure is heavily directed towards these Guyana developments and sustaining its Bakken assets. The company has utilized its strong cash flow to increase shareholder returns through rising dividend payments and substantial share repurchase programs. The pending acquisition by Chevron Corporation valued the company at approximately $53 billion, reflecting the market's valuation of its asset portfolio and growth prospects.

Category:Oil and gas companies of the United States Category:Companies listed on the New York Stock Exchange Category:Companies based in Manhattan