Hess Corp. (NYSE:HES) enlarged its holdings in the Bakken shale, acquiring an additional 167,000 acres at a bargain price of $4,500 an acre.
"HES agreed to acquire 167,000 net acres in the Bakken shale play from privately held TRZ Energy for $1.05 billion in cash, or an attractive price of -$4,500/acre after adjusting for 4.4 MBoed of production. This is well below the $8,500/acre price paid by WMB last week, the $5,000/acre paid for AEZ’s acreage, and other recent deal metrics of $5,500-$6,500/acre. The transaction will be funded by HES’ $2.4 billion cash balance at the end of 3Q, and is expected to close by year-end," said UBS.
UBS reiterated their "Buy" rating on Hess, which was trading at $68.86, losing $0.83, or 1.19 percent at 12:32 PM EST. UBS has a price target of $78 on Hess, increasing it from $76.
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