NEW YORK (AP) - Hess is selling its energy marketing business to a subsidiary of Centrica PLC for approximately $1.03 billion. The sale is part of Hess' plan to focus on its exploration and production activities.
The energy marketing business supplies natural gas and electricity to 23,000 commercial, industrial and small business customers in the eastern U.S.
Hess Corp. has been working on reshaping its business. In May the company said that it planned to split the roles of chairman and CEO. That same month it reached a deal with activist hedge fund Elliott Capital Management to revamp its board. Elliott had battled for spots on Hess' board while pushing for drastic changes at the energy company.
This transaction brings year-to-date asset sales to $4.5 billion. The company said that selling the energy marketing business to Direct Energy, Centrica's North American subsidiary, will now allow it to start buying back shares under an existing $4 billion repurchase program. It used proceeds from prior asset sales to pay back $2.4 billion of debt and strengthen its balance sheet for future growth.
The sale is expected to close in the fourth quarter, pending regulatory approvals and other customary closing conditions.
Hess shares rose $1.16, or 1.6 percent, to $73.19 in trading Tuesday.