Hess Corp. (NYSE:HES) plans to sell its oil storage terminal network and exit its refining business as Paul Singer’s activist hedge fund Elliott Associates notifies that it will buy a more than $800 million stake and nominate directors to the company’s board.

Hess Corporation

Hess Corp. (NYSE:HES) says it hired Goldman Sachs Group, Inc. (NYSE:GS) to sell its U.S. terminal network, which has a storage capacity of 28 million barrels.

The $20 billion energy company will close its Port Reading, New Jersey, refinery by the end of February. Closing the refinery and selling terminals will allow the company to “redeploy substantial additional capital to fund… future growth opportunities.”

Nineteen terminal networks of the oil and gas producer are located along the U.S.East Coast with a storage capacity of 28 million barrels, and one in the Caribbean has a capacity of 10 million barrels.

The oil and gas producer said on Monday it would pursue the sale of 20 oil storage terminals in the United States and the Caribbean, and will sell its oil terminal to free up to $1 billion in capital.

“By closing the Port Reading refinery and selling our terminal network, Hess will complete its transformation from an integrated oil and gas company to one that is predominantly an exploration and production company,” Chief Executive John Hess said.

Analysts at Wells Fargo Securities state,  ‘in our opinion, HES management has appeared relatively insulated from outside influences at times. Thus the indication of increased ownership and request for board representation from Elliott Associates should be a positive for existing shareholders. Secondly, the decision to exit the final vestiges of refining is a clear positive as it removes a typically negative contributor to earnings and potentially frees up approximately $1.0 billion of capital for other efforts.’

“We have transformed Hess into a predominantly exploration and production company, which is part of a multi-year strategy to grow shareholder value,” Chairman and Chief Executive Officer John Hess said in the statement.

Hess Corp. (NYSE:HES) continues its “long-term commitment” to its retail operations as well as its exploration and production operations.

Shares of New York-based Hess were up 7 percent at $63.21 on the New York Stock Exchange on Monday.