Hess Corp. (NYSE: HES) is leaving the refining business behind and plans to sell off its terminal network, potentially freeing up $1 billion in working capital for other projects, the company announced Jan. 28.

The announcement comes after an "activist investor," Elliott Associates, filed for regulatory approval to buy an $800 million stake in the company with aspirations for a seat on the board.

In the past several months, Hess has announced divestitures of $2.4 billion in non-strategic assets and has committed to sell its oil and gas assets in the Eagle Ford and Russia.

“We are completing our exit from refining with the closure of our Port Reading, N.J., refinery and we are pursuing the sale of our U.S. oil storage terminal network,” said John Hess, chairman and chief executive officer. “The terminals sale, when complete, should release approximately $1 billion of working capital in addition to the proceeds from the transaction.

“Proceeds from our divestiture program will help fund our future growth opportunities,” he added.

Roger D. Read, senior analyst for Wells Fargo Securities, said the decision to exit the company’s “final vestiges of refining is a clear positive as it removes a typically negative contributor to earnings and potentially frees up approximately $1 billion of capital for other efforts.”

The Port Reading refinery will be closed by the end of February. It is comprosed of a fluid catalytic cracking unit and primarily makes gasoline and components for blending heating oil. The refinery has been a money loser in two of the past three years and looks to remain a poor bet due to costs of the required regulatory changes for low sulfur heating oil. The margins for refining gasoline also look to be weak.

The sale falls in line with Hess’s strategy to focus the company on exploration and production. The strategy centers on development of lower risk, higher return assets such the company’s interests in the Bakken oil shale of North Dakota.

Hess will continue retail and energy marketing and “take all the necessary steps to ensure supply security, competitive prices and high quality service for its customers,” the company said.

The Hess terminal network is located along the U.S. East Coast and has a total of 28 million barrels of storage capacity in 19 terminals, 12 of which have deep-water access.

The terminals previously served as the primary outlet for Hess’ share of production from its HOVENSA joint-venture refinery. The HOVENSA refinery closed in 2012. The company’s St. Lucia oil storage terminal in the Caribbean with 10 million barrels of capacity will also be included in the package for divestiture.

Hess also announced Jan. 28 that Elliott Associates LP and its associated entity Elliott International Ltd. notified Hess they intend to seek regulatory clearance to acquire additional Hess shares beyond those they may already own.

The correspondence suggests that Elliott may seek to acquire shares valued at more than $800 million. A law firm representing Elliott Associates LP also informed the company that Elliott is considering nominating candidates for election to Hess’s board of directors at Hess’s upcoming 2013 annual meeting. That would constitute about 4% of outstanding shares.

John Malone, managing director and senior analyst at Global Hunter Securities, said Hess has undergone a turnaround since mid-2012 and that beyond a sale of Hess’ retail business, “we don’t see too much than an activist would encourage that the company isn’t already pursing.”

The company’s capex guidance is down to $6.5 billion in 2013 from $8.2 billion.

Hess said it did know about Elliot’s intentions prior to letters it sent Hess on Jan. 25.

“As we do with all shareholders who engage with us, if Elliott wishes to do so we will meet to hear their ideas,” Hess, the CEO, said,

Read said both announcements are big positives for the company.

“HES management has appeared relatively insulated from outside influences at times,” Read said.”The indication of increased ownership and request for board representation from Elliott Associates should be a positive for existing shareholders.”

Hess has a $20.1 billion market cap. The stock closed at $58.90 on Jan. 25. In early trading Jan. 28 the stock was trading at $62.01, up 5%.

Hess is an international independent energy company headquartered in New York.

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