Hess (NYSE: HES ) will be selling its New Jersey-based Energy Marketing business to Direct Energy, the North American subsidiary of British company Centrica, for a total consideration of $1.025 billion, Hess announced today.
The cost will be made up of $731 million in cash and approximately $300 million of net working capital, according to Centrica.
Energy Marketing supplied natural gas and electrical power to 23,000 customers along the East Coast of the U.S. during 2012. Centrica says Direct Energy's acquisition of Energy Marketing will make it the largest gas supplier on the East Coast and the second largest business power supplier in the U.S. retail market.
Hess said selling Energy Marketing is part of its plan to exit the downstream business and become a pure exploration and production company.
The sale also gives it more cash with which it can begin repurchasing shares under its existing share repurchase authorization. Hess says that its divestitures of assets this year now total $4.5 billion, of which $2.4 billion has been used to repay debt.
Hess expects the sale to close in the fourth quarter of 2013.