Hess Corp. (NYSE:HES) and Newfield Exploration Co. (NYSE:NFX) have separately launched auctions to offload their Asian oil and gas assets. The value of their combined assets put on sale could go up to $3 billion, people familiar with the matter told Denny Thomas of Reuters.
U.S. companies have increasingly been selling their less productive and aging oil and gas fields in Asia. They are now investing in more profitable and strategic projects, especially in their home markets. Hess Corp. (NYSE:HES) and Newfield Exploration Co. (NYSE:NFX) have followed the same path, mainly due to mounting pressure from activist shareholders.
Hess & Newfield Under Shareholder Pressure
Their withdrawal from Asia has generated interest in many Asian oil firms that are eager to strengthen their portfolios in the region. Hess Corp. (NYSE:HES) has been under the attack of hedge fund Elliot Management since the beginning of this year to radically change its long-term strategy and corporate governance. So, the company added some Elliot Management nominees to its board, sold off several businesses, split the roles of chairman and CEO, and announced it will offload its retail gasoline, energy trading and marketing operations.
Newfield Exploration Co. (NYSE:NFX) was also under investor pressure to exit its stake in Malaysian and Chinese fields after posting a fourth quarter loss. Pertamina Persero PT of Indonesia, PTT Exploration and Production of Thailand, Premier Oil and Kuwait Petroleum Corp’s unit KUFPEC are all planning to place bids for assets. Talisman Energy Inc. (NYSE:TLM) (TSE:TLM) of Canada is also in the race.
Hess Sets Mid-July Deadline For Auction
Hess Corp. (NYSE:HES) has put a mid-July deadline for the auction, while Newfield Exploration Co. (NYSE:NFX)’s deadline is by the end of June. Goldman Sachs Group Inc (NYSE:GS) is handling both the deals.
Hess Corp. (NYSE:HES) will sell its interests in Thailand and Indonesia to focus on the North Malay basin, according to sources. These assets are valued at about $2 billion. It owns a 35 percent stake in Thailand’s Phu Horm onshore field, and has a controlling stake in Indonesia’s Pangkah gas field. Newfield Exploration Co. (NYSE:NFX) is selling assets in Malaysian and Chinese fields that are estimated to be worth about $1 billion.
Hess Corp. (NYSE:HES) shares plunged 1.93 percent to $63.02, while Newfield Exploration Co. (NYSE:NFX) was down 1.12 percent to $22.99 at 11:54 AM EDT.