Buckeye Partners LP

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
850MM
Description

Sold U.S. East Coast and St. Lucia terminal network for $850 million in cash.

Hess Corp. (NYSE: HES) has entered into an agreement with Buckeye Partners LP to sell its U.S. East Coast and St. Lucia terminal network for $850 million in cash.

As a result of the sale, Hess is expected separately to release approximately $900 million of working capital, with another $100 million continuing to be retained by the retail business as part of its ongoing operations.

In January, Hess announced plans to sell its terminal network following the sale of its refining business.

At the time, John Hess, chairman and CEO, said the terminal sale “should release approximately $1 billion of working capital in addition to the proceeds from the transaction.”

The sale of the terminal network, along with the sale of four upstream producing assets completed earlier this year and the announced sale of the Energy Marketing business, brings total year-to-date divestitures to $5.4 billion.

Hess has used the initial proceeds from its completed asset sales to repay debt and to further strengthen its balance sheet.

The company started purchasing shares under a $4 billion authorization program and intends to use proceeds and working capital to continue the program.

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 sold its refining business after 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.

The agreement is subject to regulatory approvals and other customary closing conditions and is expected to close in the fourth quarter of 2013.