Hess ‘watching the market’ after Noble IPO, considers listing its own MLP, COO says

Provided exclusively by Mergermarket

Hess (NYSE: HES) sees the performance of Noble Midstream‘s (NYSE: NBLX) initial public offering as a positive sign for its own IPO of a master limited partnership, Hess COO Greg Hill said.

It’s “absolutely” a positive sign, Hill said, speaking on the sidelines of the Deloitte Oil & Gas Conference in Houston on 21 September.

New York-based Hess refiled for an IPO of its midstream operations in the Bakken in December. Earlier that year, it sold a 50% stake in Hess Midstream to GIP for USD 2bn. It had originally filed for an IPO in September 2014, with a USD 250m placeholder, but that deal never launched.

The company is “watching the market” and will make a determination at an uspecified time in the future on when to take the business public, Hill told this news service.

A first industry investor “wouldn’t be surprised” to see Hess launch its IPO soon but had not heard of any imminent plans.

Noble Midstream raised USD 323m from an IPO earlier this month. The sale closed early and priced at an above the marketed range of 22.50 a unit, giving it an implied yield of 6.7%. The units have risen almost 19% since the offering.

Three industry investors described Noble Midstream and Hess Midstream as being very similar offerings as both are gathering and processing midstream companies in predominantly crude oil plays backed by an upstream sponsor.

Both were also described as being only moderately interesting to investors because they did not bring anything new to the market. Investors have “done a 180” on Noble Midstream, however, and the deal saw strong interest, said a second industry investor.

Noble was marketed similarly to Antero Midstream (NYSE: AM), where increasing production volumes would drive high distributions with drop-down acquisitions providing added “juice,” said the first industry investor. Antero Midstream is a natural gas focused midstream company sponsored by Antero Resources (NYSE: AR) that owns infrastructure in the Marcellus.

by Mark Druskoff in Houston

As seen in the mergermarket newsletter on 23/09/2016


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