Hess to Form MLP for midstream ND Assets | Russell T. Rudy Energy LLC
According to a recent article in “Rigzone”, Hess Corporation will form a master limited partnership (MLP) for its mid-stream North Dakota assets. The move appears to be part of a trend motivated by the favorable tax treatment, lower cost of capital and higher cash flows associated with MLP’s. MLP’s do not pay federal income taxes as the profits flow to the individual partners. Generally MLP payouts to partners are higher than dividends from corporations.
As general partner, Hess will operate the North Dakota assets which include a newly opened natural gas processing plant and a crude pipeline terminal near Tioga.
The formation of the MLP is evidence of a continuing commitment by Hess to North Dakota. Their production there has increased by 23% from a year ago to 48,000 barrels of oil equivalent per day. During the same period, Hess has drilled 53 new wells and reduced completion costs per well by 12% to $7.4 million.
Concurrently, Hess is selling their downstream assets to Marathon Petroleum, and its interest in a New Jersey power plant to private investors. Talks are also underway with Lukoil to sell their assets in Ghana.
To read the article in its entirety, please go to www.rigzone.com/news/article.asp?hpf=1&a_id=134297&utm
