Hess Cites Potential Governance Issues in Dissident Holder's Plan

Hess Corp. (HES) again urged shareholders to support its slate of board candidates as the exploration-and-production company continued its criticism of dissident investor Elliot Management Corp.'s efforts to elect five board members and directly pay them bonuses based on how Hess shares perform.

In a letter to shareholders Tuesday, Chairman and Chief Executive John Hess outlined support for Hess's multiyear plan to transform into a pure-play exploration and production company as well as the company's board nominees. The letter provided a list of quotes from Wall Street analysts in recent weeks and also touted the company nominees' qualifications in the key areas such as restructurings and alternative shale drilling.

In the letter to shareholders, Mr. Hess stated, "We find the prospect of Paul Singer, a shareholder, potentially paying directors millions of dollars in contingency fees for pre-determined outcomes to be highly troublesome from a governance perspective, and have concerns about the Singer directors' ability to act as fiduciaries on behalf of all Hess shareholders."

Elliott, a hedge-fund manager that controls 4.4% of Hess' shares, wants to split Hess into two companies in a bid to boost the stock, which has lost 47% of its value since peaking in 2008.

Hess reiterated that Elliott's plan to pay bonuses to its board nominees--in addition to the regular compensation they would receive as directors from Hess-- means they wouldn't be truly independent from the hedge-fund manager, a claim Elliott has disputed.

The outcome of the contest is being closely watched in the energy industry amid a rise in shareholder activism that has forced changes in recent months at natural-gas producers Chesapeake Energy Corp. (CHK) and SandRidge Energy Inc. (SD). The meeting is set for May 16.

Hess shares closed Monday at $70.44 and were inactive in recent premarket trading.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Hess Cites Potential Governance Issues in Dissident Holder's Plan

Hess Corp. (HES) again urged shareholders to support its slate of board candidates as the exploration-and-production company continued its criticism of dissident investor Elliot Management Corp.'s efforts to elect five board members and directly pay them bonuses based on how Hess shares perform.

In a letter to shareholders Tuesday, Chairman and Chief Executive John Hess outlined support for Hess's multiyear plan to transform into a pure-play exploration and production company as well as the company's board nominees. The letter provided a list of quotes from Wall Street analysts in recent weeks and also touted the company nominees' qualifications in the key areas such as restructurings and alternative shale drilling.

In the letter to shareholders, Mr. Hess stated, "We find the prospect of Paul Singer, a shareholder, potentially paying directors millions of dollars in contingency fees for pre-determined outcomes to be highly troublesome from a governance perspective, and have concerns about the Singer directors' ability to act as fiduciaries on behalf of all Hess shareholders."

Elliott, a hedge-fund manager that controls 4.4% of Hess' shares, wants to split Hess into two companies in a bid to boost the stock, which has lost 47% of its value since peaking in 2008.

Hess reiterated that Elliott's plan to pay bonuses to its board nominees--in addition to the regular compensation they would receive as directors from Hess-- means they wouldn't be truly independent from the hedge-fund manager, a claim Elliott has disputed.

The outcome of the contest is being closely watched in the energy industry amid a rise in shareholder activism that has forced changes in recent months at natural-gas producers Chesapeake Energy Corp. (CHK) and SandRidge Energy Inc. (SD). The meeting is set for May 16.

Hess shares closed Monday at $70.44 and were inactive in recent premarket trading.

Copyright (c) 2012 Dow Jones & Company, Inc.

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BSEE Cites GOM Contractors for Violations

The Bureau of Safety Environmental Enforcement (BSEE) issued over a two-week period six Incidents of Noncompliance (INCs) to four offshore contractors working in the Gulf of Mexico for violations of federal regulations related to oil and gas operations.

ENSCO Drilling, Nabors Offshore Corporation, Alliance Oilfield Services, Island Operators Co. Inc. and ERT GOM Inc. are among the companies that were issued INCs by BSEE from early February to early March. The contractors have 60 days to appeal the INCs, BSEE said in a March 15 statement. The violations will be reviewed for possible civil penalty statements.

ENSCO was issued an INC for operating for at least seven days with a faulty blowout preventer control system and did not cease well operations during this period as required. Nabors was cited after a worker was seriously injured due to personnel's failure to determine whether an electricity source was on or off before an attempt to place a 30-amp plug into a receptacle. The BSEE inspector also found personnel were not wearing proper protective attire.

A civil penalty of up to $40,000 per violation per day can be assessed if the operator fails to correct the violation in the reasonable amount of time specified on the INC, or the violation resulted in a threat of serious harm or damage to human life or the environment, according to BSEE's website.

The INCs issued are part of BSEE's crackdown on contractors operating on the Outer Continental Shelf following the April 2010 Deepwater Horizon incident. BSEE first exercised its authority to issue an INC to a contractor in October 2011 when Transocean and Halliburton received INCs related to Deepwater Horizon.

"While the primary focus of BSEE's enforcement actions will continue to be on lessees and operators, BSEE will, in appropriate circumstances, issue incidents of noncompliance to contractors for serious violations of BSEE regulations," BSEE said Aug. 15, 2012, when it issued its Interim Policy Document on issuing INCs to contractors working on the OCS. "The issuance of an INC to a contractor does not relieve the lessees from liability. In fact, in instances in which INCs are issued to a
contractor, INCs will also be issued to the lessee or operator."

The violations cited in an INC must be corrected within 14 days or a plan of corrective action has to be submitted. In the case of an accident or a one-time event where the conditions of the violation no longer exist, the contractors are being asked to document how the violation took place and what is being done to prevent its reoccurrence.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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BSEE Cites GOM Contractors for Violations

The Bureau of Safety Environmental Enforcement (BSEE) issued over a two-week period six Incidents of Noncompliance (INCs) to four offshore contractors working in the Gulf of Mexico for violations of federal regulations related to oil and gas operations.

ENSCO Drilling, Nabors Offshore Corporation, Alliance Oilfield Services, Island Operators Co. Inc. and ERT GOM Inc. are among the companies that were issued INCs by BSEE from early February to early March. The contractors have 60 days to appeal the INCs, BSEE said in a March 15 statement. The violations will be reviewed for possible civil penalty statements.

ENSCO was issued an INC for operating for at least seven days with a faulty blowout preventer control system and did not cease well operations during this period as required. Nabors was cited after a worker was seriously injured due to personnel's failure to determine whether an electricity source was on or off before an attempt to place a 30-amp plug into a receptacle. The BSEE inspector also found personnel were not wearing proper protective attire.

A civil penalty of up to $40,000 per violation per day can be assessed if the operator fails to correct the violation in the reasonable amount of time specified on the INC, or the violation resulted in a threat of serious harm or damage to human life or the environment, according to BSEE's website.

The INCs issued are part of BSEE's crackdown on contractors operating on the Outer Continental Shelf following the April 2010 Deepwater Horizon incident. BSEE first exercised its authority to issue an INC to a contractor in October 2011 when Transocean and Halliburton received INCs related to Deepwater Horizon.

"While the primary focus of BSEE's enforcement actions will continue to be on lessees and operators, BSEE will, in appropriate circumstances, issue incidents of noncompliance to contractors for serious violations of BSEE regulations," BSEE said Aug. 15, 2012, when it issued its Interim Policy Document on issuing INCs to contractors working on the OCS. "The issuance of an INC to a contractor does not relieve the lessees from liability. In fact, in instances in which INCs are issued to a
contractor, INCs will also be issued to the lessee or operator."

The violations cited in an INC must be corrected within 14 days or a plan of corrective action has to be submitted. In the case of an accident or a one-time event where the conditions of the violation no longer exist, the contractors are being asked to document how the violation took place and what is being done to prevent its reoccurrence.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Report on state business climate cites need for energy and environmental planning

Bruce Ritchie, 01/02/2013 – 04:13 PM. http://www.thefloridacurrent.com/

A Florida Department of Economic Opportunity report on the state's business climate is calling for a statewide strategy to ensure adequate future water supplies and for a statewide energy strategy to reduce dependence on fossil fuels. 

The Legislature in 2011 passed bills reducing state oversight of local government land-use decisions and eliminating the Department of Community Affairs, while moving state planners to the new Department of Economic Opportunity. The Legislature also directed the new department to issue a report on Florida's business and economic development climate each year before Dec. 31.

While mostly laying out strategies for attracting new industries and creating jobs, the 2011 report made only slight mention of the need for protecting "critical lands, waters and habitats" and addressing potential harm from major developments.

The 2012 report, received Wednesday from DEO in response to a request, still deals mostly with the need for coordination among government agencies to attract new businesses and create jobs. But it also adds a few details about the need for policies dealing with growth management and environmental protection. 

The report says there is a critical need for a more "proactive, effective and collaborative approach" on development and infrastructure decisions at the state, regional and local levels.

DEO calls on the Department of Transportation and Department of Environmental Protection to initiate a statewide process to address economic development, land use, infrastructure and environmental stewardship over a 50-year period.

Read more at http://www.thefloridacurrent.com/article.cfm?id=30921554

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