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. 

 

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