Hedge fund-backed oil and gas company Hess Corporation announced the sale of its Russian subsidiary Samara-Nafta to OAO LUKOIL for $2.05 billion in an effort to reduce debt.
Hess chairman and CEO John Hess, which is 4.4% owned by Paul Singer’s Elliott Management, said in a statement released Monday that the sale will “transform Hess into a more focused, higher growth, lower risk pure play exploration and production company.” Hess is expected to pocket about $1.8 billion after taxes.
Hess owns about 90% of Samara-Nafta, which is currently producing about 50,000 barrels of oil per day.
The sale is subject to approval from the Federal Antimonopoly Service of the Russian Federation. Application for this approval process is expected to be filed within the next week.
eVestment reported earlier this year that New York-based Elliott urged Hess to consider a spin-off of its holdings in the U.S. and to sell its retail operations in an attempt to boost the latter’s value.