Urges Shareholders to Support Hess’ Successful Execution of Its
Recommends Voting the White Proxy Card for the Election of Hess’ New, Highly Qualified, Independent Nominees
The Board recommends that shareholders vote FOR the election of Hess’ highly qualified independent nominees on the WHITE proxy card.
For information about Hess’ transformation and the 2013 Annual Meeting, please visit: www.transforminghess.com.
Included below is the full text of the letter to Hess shareholders:
Dear Fellow Shareholder:
HESS’ TRANSFORMATION IS WORKING
VOTE THE WHITE PROXY CARD TODAY TO CONTINUE OUR MOMENTUM
Your vote at the
In recent discussions with shareholders, we have reiterated our belief that our strategy to transform Hess into a more focused, pure play exploration and production (“E&P”) company is the right one. We appreciate the strong support we have received, and promise to continue working hard on your behalf.
“EXECUTION HAS CLEARLY BEEN OUTSTANDING”
There is tremendous value in Hess, and we are taking decisive actions to deliver that value to all Hess shareholders. Our core oil and gas assets are some of the best in the industry, and our world class E&P team is executing in the field to ensure that we are realizing the intrinsic value of these assets.
In our leadership position in the Bakken oil shale, for example, we are increasing production while achieving best in class drilling and completion costs.
Hess appears to be drilling one of the best portfolios of wells in the industry according to our analysis.
We also continue to significantly cut capital expenditures and
exploration spending, while driving production growth and maintaining a
focused exploration program. Our recent success in
Additionally, since beginning our five-year transformation in 2010, we have been executing a successful asset divestiture program that has enabled us to focus on our most promising higher growth, lower risk E&P assets. Specifically, we have:
Phase I (
January 1, 2010– July 25, 2012):
$1.7 billionin non-core E&P asset sales, including Snohvit, Schiehallion, and Bittern.
Closed the HOVENSA joint venture refinery in
St. Croix, U.S. Virgin Islands.
Phase II (
July 25, 2012– March 4, 2013):
Began the sale process for Beryl,
Azerbaijan, Eagle Ford, Russia(Samara-Nafta), and our terminal network.
- Completed exiting the refining business with the closure of Port Reading.
- Began the sale process for Beryl,
Phase III (
March 4, 2013– Ongoing):
Announced the sale of our Russian subsidiary, Samara-Nafta, for
total after tax proceeds to Hess of
Completed the sales of Beryl and
Azerbaijan, respectively, and announced the sale of Eagle Ford.
Began a sale process for our mature E&P assets in
Indonesia& Thailand, as well as remaining downstream businesses.
- Announced the sale of our Russian subsidiary, Samara-Nafta, for total after tax proceeds to Hess of
So far in 2013, Hess has announced or completed asset sales worth
The market has had an overwhelmingly positive response to these
transactions: Hess shares significantly outperformed the peer
index, rising from
DON’T LET ELLIOTT’S SHORT TERM AGENDA HALT OUR TRANSFORMATION
Unfortunately, Elliott Management, a hedge fund that recently acquired
shares in Hess, has its own agenda; it is seeking to disrupt our
progress in favor of a short-term exit. Having put forward a plan to
break up Hess that was widely discredited by
The fact remains that Hess, under the leadership of its independent
directors, already has the right plan in place to deliver shareholder
value, and is executing well. Our transformation is working. With
your vote on the WHITE proxy card, you will
help ensure that Hess’ future is guided by an independent
ELLIOTT’S VALUE DESTRUCTIVE IDEAS LACK CREDIBILITY
While we are making considerable progress and creating value, Elliott’s plan undermines the potential for future real value creation. Astute market commentators agree:
…we do not think breaking up the company into an onshore resource player (Hess Resources) and international, mostly offshore, entity (Hess Remainco) is the best way to generate value.
Our long standing view on the shares is that Hess has provided line of sight for investors that provides a route to release value and underlines a balanced growth outlook that is competitive versus peers. To separate the company in two introduces unnecessary risks and a level of uncertainty that reasonably impacts our current view of the investment case.
ELLIOTT’S BACKWARD LOOKING ANALYSIS IS MISLEADING
Despite misleading shareholders by cherry picking data and using deceptive statistics to suit its purpose, Elliott cannot hide from the facts:
Since 1995, Hess has delivered total returns of nearly 400% and
S&P500 – the gold standard benchmark index – by over 75%.
- Further, notwithstanding the wide discretion Elliott takes in mixing-and-matching peer sets, Hess – operating historically as an integrated company – has outperformed its integrated proxy peers by nearly 200% over the past decade, and in excess of 20% over the past year.
We believe that the transformation of Hess into a pure-play E&P company will deliver real, lasting value to Hess shareholders that outstrips the flawed assumptions underlying Elliott’s short-term plan.
YOUR VOTE IS IMPORTANT – NO MATTER HOW MANY SHARES YOU OWN
MAKE YOUR VOICE HEARD
PLEASE VOTE THE WHITE PROXY CARD TODAY
Hess’ new, independent
Whether or not you plan to attend the Annual Meeting, you have the opportunity to protect your investment by promptly voting the WHITE proxy card. We urge you to vote today by telephone, by Internet, or by signing, dating and returning the enclosed WHITE proxy card in the postage-paid envelope provided. We urge you to reject Elliott’s short term, value destructive ideas by discarding any proxy materials sent to you by Elliott Management or its representatives.
On behalf of the Board of Directors, we thank you for your continued support, and we look forward to continuing to deliver outstanding value to you in the future.
Chairman and CEO
This document contains projections and other forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These projections
and statements reflect the Company’s current views with respect to
future events and financial performance. No assurances can be given,
however, that these events will occur or that these projections will be
achieved, and actual results could differ materially from those
projected as a result of certain risk factors. A discussion of these
risk factors is included in the Company’s periodic reports filed with
This document contains quotes and excerpts from certain previously published material. Consent of the author and publication has not been obtained to use the material as proxy soliciting material.
Important Additional Information
Jay Wilson, 212-536-8940
MacKenzie Partners, Inc.
Dan Burch/Bob Marese, 212-929-5500
Jon Pepper, 212-536-8550
Sard Verbinnen & Co
Michael Henson/Patrick Scanlan, 212-687-8080