Hess Announces Bakken Midstream Joint Venture Valued at $5.35B

Hess Corporation

(the "Company") announced today that it has agreed to sell a 50 percent interest in its Bakken midstream assets to Global Infrastructure Partners, a leading global infrastructure investor with an extensive midstream energy investment track record, for cash consideration of $2.675 billion. Hess and Global Infrastructure Partners will create a premier midstream joint venture – Hess Infrastructure Partners. Upon closing, the joint venture will incur $600 million of debt through a 5-year Term Loan A facility with proceeds distributed equally to both partners, resulting in total after-tax cash proceeds, net to Hess, of $3.0 billion. In addition the joint venture will have independent access to capital including a $400 million 5-year Senior Revolving Credit Facility, which is fully committed. The joint venture upon closing plans to continue to pursue a proposed initial public offering (IPO) of Hess Midstream Partners LP common units. John Hess, Chief Executive Officer of Hess Corporation, said, "This transaction delivers significant and immediate value to our shareholders. The joint venture with its strategically located assets will be one of the largest midstream operators in the Bakken. By capitalizing on the financial strength and midstream energy experience of Global Infrastructure Partners, the joint venture will be in a strong position to fund future energy infrastructure investments and continue to grow its midstream business." With the proceeds from this transaction, plus cash on hand and an untapped $4 billion revolving credit facility, Hess will have a highly advantaged liquidity position compared to its peer group. Consistent with its financial strategy, the company will use proceeds from this transaction to preserve the strength of its balance sheet in the current oil price environment, provide additional financial flexibility for future growth opportunities and continue to repurchase stock on a disciplined basis. The transaction is subject to customary closing conditions and is expected to be completed early in the third quarter of 2015. The Hess midstream assets to be included in the joint venture are: Natural gas processing plant in Tioga, North Dakota; Rail loading terminal in Tioga and associated rail cars; Crude oil truck and pipeline terminal in Williams County, North Dakota; Propane storage cavern and rail and truck transloading facility in Mentor, Minnesota; and Crude oil and natural gas gathering systems in North Dakota. Financial Information As a result of the joint venture, Hess will begin reporting its Bakken-related midstream operations as a separate midstream segment in its consolidated financial statements and will begin disclosing certain historical and forward-looking financial information for this segment. For the three months ended March 31, 2015, the midstream segment had net income of $27 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $64 million. Hess expects midstream segment EBITDA for the twelve months ending March 31, 2016 to be $290 million to $300 million. Hess also expects capital expenditures to be funded by the joint venture on a 100 percent basis for the same period to be $325 million to $350 million. Joint Venture The board of directors for Hess Infrastructure Partners will be comprised of six directors, with three members elected by Hess and three by Global Infrastructure Partners. Pursuant to the joint venture agreement, Hess, through its elected directors, will retain control of the midstream assets' operations and annual budgeting process. Other decisions, such as capital structure, debt and equity offerings, and new contracts will require joint approval by both Hess and Global Infrastructure Partners elected directors. Hess will operate the assets owned by the joint venture as a contract service provider. Employees who work in these assets today will remain Hess employees. Conference Call Webcast and Presentation Hess Corporation will hold a conference call webcast today at 9 a.m. Eastern Daylight Time. Please click here to listen to the call and view related presentation materials. An audio-only option will be available by dialing 1-866-578-5771 and entering the pass code 25002870 after 8:45 a.m. To join the call from outside the United States, parties should dial 1-617-213-8055 and enter the pass code 25002870. The presentation materials will be available immediately after the call on hess.com. An audio-only replay will be available from 1 p.m. today through June 25, 2015 by dialing 1-888-286-8010 and entering the pass code 81060610. Outside the United States, parties should dial 1-617-801-6888 and enter the pass code 81060610.