Hess Retail Sale Expected to Close by Year-End | ConvenienceStoreNews
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    Hess Retail Sale Expected to Close by Year-End

    By Brian Berk, Convenience Store News

    NEW YORK – Hess Corp. expects the sale of its 1,256-store retail division to close by the end of this year, CEO John Hess stated Wednesday during the company’s 2014 fiscal second-quarter earnings call.

    Marathon Petroleum Corp.’s Speedway LLC division announced in May that it will purchase the Hess convenience store and gas station division for $2.874 billion, comprising $2.6 billion in cash and $274 million for gas station leases.

    Once the sale is completed, Speedway will have more than 2,700 company-operated stores, good enough to be the second-largest convenience store chain in the country in terms of number of stores. The acquisition will also expand Speedway’s retail footprint from nine states to 23.

    Conversely, this retail division sale marks the final hurdle Hess needs to clear before transitioning to a pure-play exploration and production oil company.

    Hess announced on Wednesday it intends to pursue the formation and initial public offering of a master limited partnership (MLP) of its midstream assets. According to the company, it intends to use the MLP as the primary vehicle to support its Bakken shale production growth.

    Hess will own the general partner of the MLP, all of its incentive distribution rights and a majority of its limited partner interests following completion of the initial public offering. The company expects the MLP to file a registration statement with the U.S. Securities and Exchange Commission in the fourth quarter of 2014 and, subject to market conditions, make an initial public offering of common units representing limited partner interests in the MLP in the first quarter of 2015.

    As for its second-quarter earnings, Hess reported adjusted net income of $432 million in its latest quarter ended June 30. This compares to a $520-million profit during the same quarter in 2013. Hess attributed the earnings decline primarily to the impact on operating earnings of divesting several assets.

    Hess did not provide specific data regarding 2014 second-quarter earnings at its retail division.

    By Brian Berk, Convenience Store News
    • About Brian Berk Brian Berk is managing editor of Stagnito Business Information's Convenience Store News and Convenience Store News for the Single Store Owner, where he specializes in covering motor fuels, technology and financial news. He has served the magazine industry for 13 years and has also worked in the radio and newspaper fields. Berk holds a bachelor's degree in communications from the State University of New York at Cortland and a master's degree in journalism from Quinnipiac University in Hamden, Conn.
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