At the end of July, 2014, Hess Corp. announced its plan to spin off pipeline and storage assets, mostly in the Bakken area, into a MLP (master limited partnership) next year. The effort is a strategic move for the company to generate cash and further production growth in the Bakken.
The company expects to file a registration statement with the U.S. Securities and Exchange Commission in the fourth quarter and move forward with an IPO (initial public offering) of the MLP in the first quarter of 2015. Hess said it will own the general partner of the MLP, all of its incentive distribution rights and a majority of its limited partner interests after completion of the IPO. With an MLP, the partnership does not pay taxes from the profit, and the money is only taxed when unitholders receive distributions.
Assets that would be held by the MLP include the Hess' Tioga natural gas processing plant; a rail loading terminal in Tioga along with associate rail cars; a crude oil truck and pipeline terminal in Tioga; and a propane storage cavern and related rail and truck loading and storage terminal in Mentor, Minnesota.
The announcement was concurrent with the company's second quarter earnings, which indicated a 25 % growth in Bakken production year-over-year (80,000 boe/d). During the quarter, the company brought 53 gross operated wells online. Drilling and completion costs were down 12% year-over-year.
Read more at hess.com