Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Hess Needs to Play Offense to Justify Valuation

Hess (NYSE: HES  ) announced its third quarter earnings yesterday and largely missed Street estimates thanks to lower output from its 8.13% stake in the Waha oilfield in Libya. The Waha oilfield is an asset that both ConocoPhillips (NYSE: COP  ) and Marathon Oil (NYSE: MRO  ) have a respective 16.33% ownership piece in. However, both companies are desperately trying to divest away from that property due to increased geopolitical unrest in the area. So why is Hess spending more in Libya? I mean Hess has sold assets in Russia, the North Sea and Azerbaijan and there have been expectations the company may also divest upstream assets in Indonesia and Thailand or the downstream terminal. The company could also look to shed its retail and trading businesses as per the company's prior announced Asset Sales Program. 

After Hess completes its non-core asset sales though, what really is the game plan for this company? I mean it's one thing to be leaner, but I have an issue with the company getting too skinny and banking on existing assets for growth, especially the Bakken, which fortunately was a bright spot for Hess in Q313. I give management credit for recently raising the company's dividend, but I do believe more needs to be done in order to justify shares of Hess exchanging hands at anywhere near its present valuation. 


Your best bet on energy
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2707270, ~/Articles/ArticleHandler.aspx, 8/28/2016 12:52:53 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,395.40 -53.01 -0.29%
S&P 500 2,169.04 -3.43 -0.16%
NASD 5,218.92 6.71 0.13%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/26/2016 4:02 PM
COP $42.30 Down -0.48 -1.12%
ConocoPhillips CAPS Rating: ****
HES $56.67 Down -0.14 -0.25%
Hess CAPS Rating: ****
MRO $15.95 Down -0.06 -0.37%
Marathon Oil CAPS Rating: ****