Hess shareholders approve takeover by Chevron

hess-oil-well-prudhoe-bay-alaska-1969 — Amerada-Hess oil wells in Prudhoe Bay, Alaska, in 1969. Photo: Hess Corp.

Hess Corporation shareholders approved Chevron’s $53 billion takeover of the company.

The Hess Company drilled the first wildcat well in Alaska at Prudhoe Bay. Last year, Chevron shareholders voted to approve the takeover, which is still pending today.

This is the second big move between oil companies this week. ConocoPhillips announced Wednesday that it is acquiring Marathon Oil.

Hess said in a statement that at a special meeting of Hess shareholders held on Tuesday, a majority of Hess common stock voted in favor of the merger agreement. News of the merger is being muted by an ongoing legal dispute with Exxon Mobil that could still derail the deal.

“We are very pleased that a majority of our shareholders recognize the compelling value in this strategic transaction and look forward to the successful completion of our merger with Chevron,” said CEO John Hess. “Together, we will position ourselves as a leading integrated energy company with the leadership, asset portfolio and financial resources to deliver significant shareholder value in the years ahead.”

No further approval by Chevron shareholders is required in connection with the merger. Completion of the merger remains subject to other closing conditions, including the resolution of an ongoing arbitration regarding rights under the Stabroek Block joint operating agreement that Hess entered into with Exxon Mobil, the company said.

If Exxon prevails in this dispute and the Chevron-Hess deal falls apart, Hess will retain its interest in the Stabroek Block in Guyana, an Exxon project.

In an interview with Financial Times.last year, CEO Hess said the time was right to sell: “Our company is 90 years old — we’re celebrating our anniversary this year — and it all started with my father driving a used truck delivering heating oil during the Depression.”

During the period when Hess played a significant role in Alaska, following the merger with Amerada Petroleum Corp. in 1969 she was known as Amerada Hess. By May 1970, Amerada Hess drilled the first successful wildcat well in Prudhoe Bay on Alaska’s North Slope.

The following year, Amerada Hess was one of several oil companies invited by the Canadian government to work on building pipelines from the North Slope through Canada to the United States. This never came to fruition due to the permitting of the Trans Alaska Pipeline System.

Hess continued to work in Alaska and in 1974 became the first company to apply for permission to unload supertankers from the Trans-Alaska Pipeline.

In the 1980s, the state of Alaska sued 17 oil companies for underestimating royalties on oil production. The case was named after Amerada Hess because it was the first company on the alphabetical list of all defendants. The oil companies finally settled in 1997 Alaska v. Amerada Hess et al. after 15 years of court proceedings; the settlement amounted to approximately $600 million of the $902 million owed according to the state of Alaska.

By 1986, Amerada Hess reported that it had discovered oil about five miles west of Seal Island in the Beaufort Sea in a joint venture with Shell Western Exploration Production Inc., Amoco, Texas Eastern and Murphy. The Seal Island project was the world’s first artificial island in the Arctic from which commercial quantities of oil and gas were extracted.

Mergers and acquisitions typical of the industry are also marked by the history of Hess, which acquired Monsanto Oil Company and Triton.

The company began to focus elsewhere and its business model changed over time. It sold its retail stores and spun off parts of its worldwide operations. In 2003, Hess sold his 1.5 percent interest in the Trans-Alaska pipeline system to ConocoPhillips.

Hess currently focuses on oil in North Dakota, the Gulf of Mexico and overseas, including Guyana and Malaysia.

Hess’s sale to Chevron and ConocoPhillips’ acquisition of Marathon follows Exxon’s acquisition last year of Pioneer Natural Resources for about $60 billion. Pioneer made discoveries in the offshore Oooguruk field, west of Prudhoe Bay, and in 2008 became the first independent operator to produce oil on the North Slope. In 2013, it sold its Alaska operations to Caelus Energy and left Alaska in search of better prospects in the Permian Basin.