Replies to post #6464 on The Rising Influence of Rising Affluence

[DewDiligence]

Transcript of HES 4Q12 CC today:

http://seekingalpha.com/article/1144011-hess-management-discusses-q4-2012-results-earnings-call-transcript

CEO John Hess said the company would issue a formal response to Elliott’s demands (#msg-83955734) in the near future, which I interpret to mean within the next week or so. On the CC, HES executives pointed out several ways in which Elliott’s proposals, if implemented in full, would cost HES money, particularly with respect to taxes. Hess also ruled out an MLP structure for HES’ midstream assets in the Bakken.

Guidance for Bakken production is 64-70K bbl/day in 2013 and 120K bbl/day by “mid decade”; the latter goal is unchanged from prior guidance.

[DewDiligence]

HES (+3.5%) counters Elliott’s proposal with one of its own, and shareholders evidently like it…

PR:
http://finance.yahoo.com/news/hess-announces-culmination-transformation-pure-120000264.html

Webcast slides:
http://www.sec.gov/Archives/edgar/data/4447/000119312513088685/d495802ddefa14a.htm

The main difference between the two proposals is the constitution of the BoD (i.e. HES’ new nominees vs Elliott’s nominees) and the degree of business fragmentation when all is said and done.

HES’ own proposal contemplates divesting the downstream operations (including the convenience stores), the Bakken midstream assets, and all assets in Indonesia and Thailand. Elliott’s proposal would have split HES into many more pieces, including distinct companies for the Bakken, Gulf of Mexico, and foreign assets.

All told, I think HES has addressed the concerns raised by Elliott and done them one better. Comments welcome.