Hess Agrees to Sell Russian Unit Samara-Nafta for $2.05 Billion

Hess Corp. said Monday it will sell its stake in a Russian subsidiary to OAO Lukoil for $1.8 billion, the latest asset sale by the oil and gas producer as it shores up its balance sheet.

Hess has been shedding assets to raise funds as it struggles with lackluster profits and a shareholder revolt. The New York oil and gas producer has already sold its holdings in the U.K. North Sea, South Texas and Azerbaijan. The sale of its Samara-Nafta business in Russia would bring total proceeds to $3.4 billion, the company said.

"We are making excellent progress in executing our asset sales program," said Hess Chief Executive John B. Hess, adding such moves are "a central component" in plans to turn the company into "a more focused, higher growth, lower-risk, pure-play exploration and production company."

Hess owns 90% of the Samara-Nafta business that it will sell to Lukoil. Hess' partners in Samara-Nafta, chairman of Russia's Yukos Oil Co. Simon Kukes, will also sell his 10% stake to Lukoil, Hess said. Total after-tax proceeds for the entire company will be $2 billion, Hess said.

Hess will use the proceeds to reduce debt and strengthen its balance sheet, the company said.

Samara-Nafta is currently producing 50,000 barrels of oil equivalent per day in the Volga-Urals region of Russia.

Hess has been battling criticism from dissident investor Elliott Management Corp., which has aimed to elect five board members and directly pay them bonuses based on how Hess shares perform. Mr. Elliott, a hedge-fund manager that controls 4.4% of Hess's shares, wants to split Hess into two companies in a bid to boost the stock.

Mr. Elliott has pressed the company to create shareholder value by spinning off its assets in the oil-rich Bakken shale region and other U.S. unconventional formations from less prolific international assets and its vast network of gasoline stations.

Hess has said while it turns itself into a exploration and production company, it is exploring options for its refining and retail gasoline business and pruning its Asian portfolio.

Lukoil for its part is attempting to increase production after years of dwindling output at its main fields.

The deal will be closed once state antitrust authorities approve it, Lukoil said.

"We have acquired a quality asset with long-term potential growth in a new region for us," Lukoil Chief Executive Vagit Alekperov said in a statement.

Hess shares rose 2% to $73.05 in recent trading. The stock has risen 38% in the past three months.

Saabira Chaudhuri and James Marson contributed to this article.

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SandRidge Agrees to Either Fire CEO or Give TPG-Axon Control of Board

SandRidge Energy Inc. agreed to fire its chief executive or give control of its board to an activist shareholder, settling a closely watched proxy battle amid an outbreak of investor unrest in the oil patch.

SandRidge, an oil-and-gas producer with a stock-market value of about $3 billion, immediately appointed four directors to its board who were nominated by hedge fund TPG-Axon Capital Management LP, which owns 7.3% of its shares.

The company, which is based in Oklahoma City, Okla., said Wednesday that it would review its strategy, costs and certain transactions with entities controlled by relatives of Tom Ward, its chairman and chief executive. The company also cut directors' annual pay to $250,000 from $375,000.

Mr. Ward's prospects of retaining his job appeared to dim. SandRidge said it would decide whether to fire him by the end of June; if he remains, three incumbent directors would resign and TPG-Axon would get another seat on the board, giving the hedge fund, which has repeatedly called for Mr. Ward's ouster, majority representation.

"We believe these actions open a new chapter for SandRidge," its lead independent director, Jeffrey Serota, said in a statement.

A SandRidge spokesman said Mr. Ward had no comment.

In what SandRidge said was a separate development, Matthew Grubb, its president and chief operating officer, said he would resign.

The company's shares jumped sharply late Wednesday afternoon, but ended 4 p.m. EDT trading on the New York Stock Exchange little changed at $5.85, up two cents.

Dinakar Singh, TPG-Axon's founder, said, "We all believe that SandRidge has tremendous asset value, and we expect that the company will relentlessly focus on growing and realizing that value through a particular focus on execution and efficiency."

"Score one for the activists," said Mark Hanson, a Morningstar Inc. analyst.

TPG-Axon and another large shareholder, Mount Kellett Capital Management LP, have questioned SandRidge's transactions with entities controlled by Mr. Ward and his family. SandRidge said Wednesday that a board review of the transactions hadn't found any improper conduct by Mr. Ward, but that it would examine the issue further with the help of a law firm.

The proxy battle is the latest case of a shareholder shaking up the board of an energy-industry company, as activists demand better stock performance and more-generous dividends from laggards. In January, Chesapeake Energy Corp. Chief Executive Aubrey McClendon agreed to step down by April after the company's biggest shareholders took control of the board.

Hess Corp. is tussling with hedge fund Elliott Management Corp., which is opposing the company-backed directors who are up for election with its own slate.

Investor Carl Icahn, who agitated for change at Chesapeake, is now demanding that offshore driller Transocean Ltd. increase its dividend to $4 a share, up from the $2.24 the company plans to pay.

TPG-Axon took aim at SandRidge in November, pointing to poor stock performance and rich executive pay. It also demanded the ouster of Mr. Ward, who founded the company in 2006 after leaving Chesapeake, which he co-founded with Mr. McClendon in 1989.

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SandRidge Agrees to Either Fire CEO or Give TPG-Axon Control of Board

SandRidge Energy Inc. agreed to fire its chief executive or give control of its board to an activist shareholder, settling a closely watched proxy battle amid an outbreak of investor unrest in the oil patch.

SandRidge, an oil-and-gas producer with a stock-market value of about $3 billion, immediately appointed four directors to its board who were nominated by hedge fund TPG-Axon Capital Management LP, which owns 7.3% of its shares.

The company, which is based in Oklahoma City, Okla., said Wednesday that it would review its strategy, costs and certain transactions with entities controlled by relatives of Tom Ward, its chairman and chief executive. The company also cut directors' annual pay to $250,000 from $375,000.

Mr. Ward's prospects of retaining his job appeared to dim. SandRidge said it would decide whether to fire him by the end of June; if he remains, three incumbent directors would resign and TPG-Axon would get another seat on the board, giving the hedge fund, which has repeatedly called for Mr. Ward's ouster, majority representation.

"We believe these actions open a new chapter for SandRidge," its lead independent director, Jeffrey Serota, said in a statement.

A SandRidge spokesman said Mr. Ward had no comment.

In what SandRidge said was a separate development, Matthew Grubb, its president and chief operating officer, said he would resign.

The company's shares jumped sharply late Wednesday afternoon, but ended 4 p.m. EDT trading on the New York Stock Exchange little changed at $5.85, up two cents.

Dinakar Singh, TPG-Axon's founder, said, "We all believe that SandRidge has tremendous asset value, and we expect that the company will relentlessly focus on growing and realizing that value through a particular focus on execution and efficiency."

"Score one for the activists," said Mark Hanson, a Morningstar Inc. analyst.

TPG-Axon and another large shareholder, Mount Kellett Capital Management LP, have questioned SandRidge's transactions with entities controlled by Mr. Ward and his family. SandRidge said Wednesday that a board review of the transactions hadn't found any improper conduct by Mr. Ward, but that it would examine the issue further with the help of a law firm.

The proxy battle is the latest case of a shareholder shaking up the board of an energy-industry company, as activists demand better stock performance and more-generous dividends from laggards. In January, Chesapeake Energy Corp. Chief Executive Aubrey McClendon agreed to step down by April after the company's biggest shareholders took control of the board.

Hess Corp. is tussling with hedge fund Elliott Management Corp., which is opposing the company-backed directors who are up for election with its own slate.

Investor Carl Icahn, who agitated for change at Chesapeake, is now demanding that offshore driller Transocean Ltd. increase its dividend to $4 a share, up from the $2.24 the company plans to pay.

TPG-Axon took aim at SandRidge in November, pointing to poor stock performance and rich executive pay. It also demanded the ouster of Mr. Ward, who founded the company in 2006 after leaving Chesapeake, which he co-founded with Mr. McClendon in 1989.

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Cabot Oil Agrees to Disclose Procedures for Fracking Fluids

New York State Comptroller Thomas P. DiNapoli said Cabot Oil & Gas Corp. has agreed to publicly disclose its policy and procedures for handling toxic substances in its hydraulic-fracturing fluids.

Oil companies have increasingly used hydraulic fracturing, or "fracking," to explore for oil and gas in shale rock formations. But environmentalists have said the technique--which blasts the rock with sand, chemicals and water--can contaminate groundwater.

Mr. DiNapoli said Tuesday he has withdrawn a shareholder proposal that called for a report on the use of these substances in Cabot's shale-energy operations.

Representatives for Cabot weren't immediately available for comment.

Mr. DiNapoli, as trustee of the $150.1 billion New York State Common Retirement Fund, has filed several resolutions over the past three years with oil and natural-gas companies concerning their disclosure of chemicals used in the hydraulic-fracturing process and reducing potential hazards associated with fracking.

The comptroller's office has also reached agreements with Hess Corp., Range Resources Corp. and SM Energy Co. under which the companies will disclose their hydraulic-fracturing activities.

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Trap Oil Agrees Debt Deal to Fund North Sea Assets

North Sea-focused Trap Oil Group announced Wednesday that it has agreed a three-year debt deal to borrow up to $20 million with GE Energy Financial Services. The deal is designed to help the company fund production and development spending in relation to its Athena and Crazy Horse assets.

Trap also said that, in connected with the GE deal, it has also entered into oil price hedging arrangements for the duration of the facility with Britannic Trading – a subsidiary of BP International.

Trap CEO Mark Groves Gidney commented in a statement:

"I am delighted that we have secured this debt finance from an affiliate of GE Energy Financial Services supported by hedging arrangements with the BP group. The facility will assist with the further appraisal and development of the promising assets within our existing portfolio and the exploitation of good exploration opportunities alongside our partners where we earn carried interests. We look forward to building on our new relationships with GE and BP."

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Pitkin County agrees to back federal-private land swap at Mt. Sopris

Font ResizeColorado NewsAspen Daily Newsdenverpost.comPosted: 12/15/2012 02:05:21 PM MSTDecember 15, 2012 9:13 PM GMTUpdated: 12/15/2012 02:13:05 PM MST

ASPEN — Pitkin County has reached an agreement to support the long-discussed, controversial midvalley land swap proposed by the Wexner family, it was announced on Friday.

The family has agreed to conserve additional land and fund trails for the county, in exchange for the commissioners' support of a proposal to privatize more than 1,200 acres of federal land on the flanks of Mount Sopris adjacent to the Wexner family's Two Shoes Ranch property. The county had withheld support for the federal land swap, while negotiating in closed-door meetings with the Wexners' representatives over the last two years.

The federal swap proposal is currently being evaluated by the Bureau of Land Management (BLM). The Wexners are offering the feds the 557-acre Sutey Ranch, north of Carbondale and adjacent to the Red Hill Recreation Area, in exchange for the Sopris acreage. The BLM also would get a 112-acre parcel along Prince Creek Road allowing mountain bikers access to "the Crown" recreation area. Abigail and Leslie Wexner, owner of Limited Brands, also are offering $1.1 million to the BLM to help manage the properties.

http://www.aspendailynews.com/section/home/155972

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