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Hess shareholders approve acquisition by Chevron

Suzanne Downing
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Hess shareholders approve acquisition by Chevron

Hess Corporation shareholders approved the company’s acquisition by Chevron for $53 billion.

Hess was the company that drilled the first wildcat well on Alaska’s at Prudhoe Bay. Last year, Chevron shareholders voted to approve the acquisition, which has been underway ever since.

Breaking: ConocoPhillips to acquire Marathon Oil

It’s the second major movement between oil companies this week. ConocoPhillips announced Wednesday it is acquiring Marathon Oil.

At the special meeting of Hess stockholders held Tuesday, a majority of the Hess common stock were voted in favor of the adoption of the merger agreement, Hess said in a statement. News of the merger is dampened by an ongoing legal dispute with Exxon Mobil, which could still kill the deal.

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

Hess, purchased by Chevron, was a pioneer in Alaska’s oil boom

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

If Exxon prevails in that dispute and the Chevron-Hess deal falls apart, Hess would keep its stake in the Stabroek Block in Guyana, which is an Exxon-owned project.

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

During the time Hess was prominent in Alaska, it was known as Amerada Hess, after a merger with Amerada Petroleum Corp. in 1969. By May of 1970, Amerada Hess drilled the first successful wildcat well in Prudhoe Bay on Alaska’s North Slope. 

The next 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. That never came to fruition due to the permitting of the Trans Alaska Pipeline System.

Hess continued working in Alaska and in 1974 was the first company to apply for permits to unload supertankers from the Trans-Alaska Pipeline.

In the 1980s, the State of Alaska sued 17 oil companies for underpayment of oil production royalties. The case was named after Amerada Hess, because it was the first company in the alphabetical list of all the defendants. The oil companies eventually settled in 1997 in Alaska v. Amerada Hess et al. after 15 years of court proceedings; the settlement was about $600 million out of the $902 million that the State of Alaska said was due.

By 1986, Amerada Hess reported 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 manmade island in the Arctic to yield commercial quantities of oil and gas.

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

The company began focusing elsewhere and its business model changed over time. It sold off its retail locations, and spun off some of its operations around the globe. In 2003, Hess sold its 1.5 percent stake in the Trans-Alaska pipeline system to ConocoPhillips.

Currently, Hess is focused on oil in North Dakota, the Gulf of Mexico, and overseas, including Guyana and Malaysia.

The sale of Hess to Chevron, and the acquisition of Marathon by ConocoPhillips comes after last year’s acquisition of Pioneer Natural Resources by Exxon for roughly $60 billion. Pioneer had 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. It divested its Alaska operations to Caelus Energy in 2013 and exited Alaska for better prospects in the Permian Basin.

Breaking: ConocoPhillips to acquire Marathon Oil

Suzanne Downing
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5
Breaking: ConocoPhillips to acquire Marathon Oil

ConocoPhillips and Marathon Oil Corporation announced Wednesday the companies have entered into a definitive agreement in which ConocoPhillips will acquire Marathon Oil in an all-stock transaction, with an enterprise value of $22.5 billion, to include $5.4 billion of net debt.

ConocoPhillips, one of the world’s largest energy companies, is Alaska’s largest oil producer and has been a leader in oil and gas exploration and development in the state for more than 50 years.

Marathon Oil Corporation is an independent energy company specializing in exploration and production, which had a refinery on the Kenai Peninsula until 2011, when it was spun off as Marathon Petroleum, and operates in 12 states.

Hess shareholders approve acquisition by Chevron

“This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading U.S. unconventional position,” said Ryan Lance, ConocoPhillips chairman and chief executive officer. “Importantly, we share similar values and cultures with a focus on operating safely and responsibly to create long-term value for our shareholders. The transaction is immediately accretive to earnings, cash flows and distributions per share, and we see significant synergy potential.”

Under the terms of the agreement, Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock, representing a 14.7% premium to the closing share price of Marathon Oil on May 28, 2024, and a 16.0% premium to the prior 10-day volume-weighted average price.

Key points:

  • Acquisition of Marathon Oil Corporation is expected to be immediately accretive to earnings, cash flows and return of capital per share.
  • ConocoPhillips expects to achieve at least $500 million of run rate cost and capital savings within the first full year following the closing of the transaction.
  • Independent of the transaction, ConocoPhillips expects to increase its ordinary base dividend by 34% to 78 cents per share starting in the fourth quarter of 2024.
  • Upon closing of the transaction, ConocoPhillips expects share buybacks to be over $20 billion in the first three years, with over $7 billion in the first full year, at recent commodity prices.

Boundary commission staff recommends against new borough for Hoonah

Suzanne Downing
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Boundary commission staff recommends against new borough for Hoonah

Although the Alaska Local Boundary Commission will make the final decision, a proposed new borough in Southeast Alaska for the area around Hoonah received poor marks from the commission staff, who studied the matter.

A group petitioned for the new borough in November. The proposed Xunaa Borough would encompass 10,403 square miles, but would have just 980 residents. That would make it the eighth-largest borough in Alaska, but the third smallest by population, after Yakutat (pop. 687) and Bristol Bay (pop. 844) boroughs. The Xunaa Borough would be Alaska’s 20th borough; the previous borough approved for incorporation was the Petersburg Borough, which became effective on January 3, 2013.

The petition was filed Nov. 27. A 90-day public comment period commenced, followed by hearings, respondent briefs, and petitioner’s brief.

Hoonah is currently part of the Sitka House District 2, but Hoonah in the Hoonah/Angoon Census Area, not inside a borough.

“LBC staff does not recommend adopting the petition in its current form. As identified in this report, there exist substantive concerns about assumed areawide powers and the addition of fewer than 100 residents to the existing population fails to meet the LBC’s constitutional, statutory, and regulatory requirements for borough incorporation,” the staff report says.

In its current form, the petition only meets a few of the commission’s standards, the LBC says. “It essentially trades one local government for another. Further, the borough government would assume very little responsibility for services currently being delivered by the state, diminishing the benefit to the State from borough formation.”

Staff concludes that although the petitioner went to great lengths and expense to advance the proposal, “a more compelling petition would include one or more of the neighboring municipalities of Gustavus, Tenakee Springs, and Pelican, as well as a plan to consolidate school districts, and apportion borough assembly representation to ensure a more equitable distribution of resources throughout the region. There may be a growing desire and purpose for a regional form of government, as new opportunities for economic development continue to emerge. Forming regional governments is also consistent with, and in fact the intention of, Alaska’s Constitution, and is supported by Alaska statutes and regulations.”

But for now, staff writes, there’s no consensus in the area being proposed for a borough, including how cities of Gustavus, Pelican, and Tanakee Springs would operate.

“Though the residents would vote on the proposal, the petitioner’s draft charter does not account for the inclusion of either cities or town-site service areas in addition to the current community of Hoonah. If such a petition were proposed to include these additional three communities, the charter would also need to be amended to ensure balanced representation on a borough assembly and the appropriate delivery of area-wide services,” the staff writes in its report.

The last borough approved for incorporation was the Petersburg Borough, which went into effect on Jan. 3, 2013.

The report can be read at this link.

Alaska’s major candidates for Congress have all filed: Nick Begich, Nancy Dahlstrom, Mary Peltola

Suzanne Downing
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Alaska’s major candidates for Congress have all filed: Nick Begich, Nancy Dahlstrom, Mary Peltola

The most well-known candidates for Alaska’s only seat in Congress have all completed their official paperwork with the Division of Elections.

Nick Begich was the last of the three major candidates to file for the seat, finishing the application Tuesday at the Division of Elections.

Nancy Dahlstrom filed on May 23, and Rep. Mary Peltola the day before that.

Begich made a humorous social media post about his filing, to clear up the “confusion” about whether he or his son, Nick IV, was the candidate. The photo included the two Nicks playing “rock, paper, scissors,” while Dharna Begich holds the official filing paperwork. Begich has been running since last June, when he filed with the Federal Elections Commission. This filing ensures he gets on the state’s primary ballot.

Dahlstrom also did a social media post last week when she completed her paperwork. She had officially filed with the Federal Elections Commission in November.

Rep. Peltola apparently didn’t file in person, but said her team took in her paperwork for her. Her social media post shows a photo of Dahlstrom on the wall of the Division of Elections, which Dahlstrom oversees as lieutenant governor.

Other candidates have filed with the Division of Elections for the seat, including someone from Iowa, another from Arizona, one from Chicago, a South Dakotan, and some Alaskans, including Gerald Heikes, John Wayne Howe, and Lady Donna Dutchess.

The filing deadline is June 1.

For second time, Democrats decide to nominate Biden ‘virtually.’ This time, it will be weeks before the Chicago DNC convention in August

Suzanne Downing
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For second time, Democrats decide to nominate Biden ‘virtually.’ This time, it will be weeks before the Chicago DNC convention in August

The Democratic National Committee has decided not to wait for August, when delegates are scheduled to converge on Chicago for the Democratic National Convention, an event that usually culminates in the nomination of the presidential nominee.

Instead, the DNC is gong to conduct a “virtual roll call” in the coming weeks before the convention. This is to ensure that Biden can get on the Ohio ballot, which has a deadline of Aug. 7 for nominees. The DNC convention in Chicago is not until Aug 19-22.

Ohio is an important state for the presidential election, as it is often a swing state. This year, polling is strong for Donald Trump, according to FiveThirtyEight’s aggregation of recent surveys. But the Democrats know that anything can happen, and it would be embarrassing if the sitting president didn’t get on the Ohio ballot.

No date has been set for when the Democrats will have their virtual roll call vote, which will be done presumably by Zoom, Teams, or another online meeting application.

In the past, the Ohio Assembly has moved the deadline to accommodate candidates from both the Republican and Democrat parties, but the legislature has not moved the deadline this year. Gov. Mike DeWine, a Republican, called for a special session to begin on May 28 to try to resolve the issue; the Senate passed legislation moving the deadline but the House did not.

“The Legislature had Session yesterday and failed to take action on this urgent matter. Ohio is running out of time to get the sitting President of the United States on the ballot this fall. Failing to do so is unacceptable. Therefore, pursuant to Article III, Section 8 of the Ohio Constitution, I am calling a special session of the Ohio General Assembly to begin on Tuesday, May 28th. The purpose of the session will be for the General Assembly to pass legislation ensuring that both major party presidential candidates will be on the Ohio ballot in November, as well as legislation that would prohibit campaign spending by foreign nationals,” Gov. DeWine said.

“It is important that when Ohioans cast their vote for President of the United States, United States Senator, and many other offices this fall, they have the opportunity to cast a vote for either of the major party candidates for those offices,” DeWine said.

Whether the virtual nomination dampens the attendance to the Democratic National Convention remains to be seen. It costs delegates a lot of money to attend a national convention, and some may choose to sit it out, since inflation has cut their earnings dramatically under Bidenomics, and since they won’t actually be casting votes for their nominee.

The party has been plotting for weeks to have at least the option of a hybrid in-person and virtual convention — just in case.

This will be the second time in a row for Democrats to do the nomination via remote vote. In 2020, the Democrats held a virtual convention in order to minimize the spread of Covid. Biden accepted the nomination from the basement of his Delaware home, where he had spent most of his time during the campaign that year.

There are also worries about civil unrest or rioting. This year, some expert Chicago to see a reprisal of the 1968 Democratic Convention riots over the Vietnam War. The city now has a mayor, elected just last year, who appears to side with pro-Hamas protesters. In recent months, those protesters around the country have become unruly, lawless, and even violent.

Alaska’s Division of Elections’ deadline for independent candidates is Aug. 7, but is Aug. 30 for president and vice president candidates from the recognized parties. The deadlines are set so candidates can be included in the Official Election Pamphlet.

National Libertarian Party picks Chase Oliver for its presidential nominee

Suzanne Downing
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National Libertarian Party picks Chase Oliver for its presidential nominee

Chase Oliver is the national Libertarian Party’s nominee for president. His running mate is Mike ter Maat. The two emerged victorious from the 2024 nominating convention in Washington, D.C., held this past weekend.

Oliver is a 37-year-old Libertarian activist who currently in Atlanta and has a career in business, with an emphasis in human resource management. “

He began his political activism opposing the War in Iraq under George Bush, aligning with the Libertarian Party after an encounter with a Libertarian during the Atlanta Pride Festival in 2010, his web page says.

Oliver ran for Congress for Georgia’s 5th district in 2020, and for Senate in 2022. In the 2022 race, he was credited with forcing a runoff between Raphael Warnock and Herschel Walker; Warnock won that runoff.

“He advocates the adoption of Ranked Choice Voting to avoid future runoffs,” his web page says.

Oliver has described himself as described himself as “armed and gay.” He is pro-choice on abortion, pro-gun rights, and adamantly anti-war. He’s against the death penalty, and also against prosecution of “victimless crimes,” which is a common phrase for prostitution. His platform is at this link.

Oliver has visited all 50 states, coming to Alaska in April to meet with the Alaska Libertarian Party officers in April.

His running mate, ter Maat, was born in Portland, Ore., and is a retired Florida police officer and economics instructor. He ran for the top of the Libertarian ticket, but after being eliminated for president, ter Maat endorsed Oliver and accepted Oliver’s offer to run as his vice presidential nominee.

Alaska’s Libertarian Party was once a stronghold in the country with the most Libertarians per capita and some of the only Libertarians holding public office. Rep. Dick Randolph, for example, was elected to the Alaska House in 1978 and again in 1980, under the Libertarian banner. He had previously served in the House as a Republican.

The Alaska Libertarian Party, however, has lost some of its momentum over the past 20 years. In 2004, when the population of Alaska was 659,000, there were 6,929 registered Libertarians in Alaska. That grew to 7,179 registered members of the party in 2014, but by 2024, with an overall Alaska population of 733,000, the party is back down to 6,659.

A second Libertarian duo puts in for governor’s race

Rep. Comer report: Biden Green New Deal policies have resulted in higher gas and electric prices

Suzanne Downing
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Rep. Comer report: Biden Green New Deal policies have resulted in higher gas and electric prices

The House Committee on Oversight and Accountability, led by Chairman James Comer (R-Ky.), released a scathing report late last week that reveals the consumer cost of the Biden Administration’s Green New Deal energy policies.

The report, titled “The Biden Administration’s Green New Deal: Paying More for a Dimmer Future,” asserts that these policies have resulted in higher gas prices, increased electricity costs, market confusion, and a host of regulatory challenges that collectively burden American consumers and businesses.

The Kobeissi Letter, a financial newsletter, confirms the claim that since Biden took office, prices have skyrocketed.

Chairman Comer did not mince words: “The Biden Administration weaponized the power of the executive branch to wage a war against American-made energy production and cement in place radical, far-left energy policies that jeopardize domestic energy development, overload America’s power grid, and raise costs on all American consumers and businesses,” he stated. “From day one, the House Oversight Committee has worked to expose the Biden Administration’s radical climate agenda. The Committee will continue to fulfill its responsibility to hold this Administration accountable for its detrimental Green New Deal policies that are impacting Americans across the country.”

Key Findings of the Report

Surging Gas Prices: The report highlights a sharp increase in gas prices since President Biden took office. On January 20, 2021, the day after Biden’s inauguration, gas prices averaged $2.39 per gallon. By February 25, 2022, the day following Russia’s invasion of Ukraine, prices had already climbed to $3.57 per gallon, suggesting that domestic factors, not just international events, were driving the increase. By June 14, 2022, the average national gas price had reached a record high of $5.016 per gallon.

Regulatory Burden: According to the report, the Biden Administration’s aggressive regulatory agenda has imposed over $1 trillion in additional costs on American businesses and consumers. This “whole-of-government” approach has resulted in millions of hours of new annual paperwork demands, stifling economic growth and innovation.

Electricity Prices: The report notes that electricity prices have surged faster than inflation over the past year, exacerbated by the administration’s push for electrification, including the promotion of electric vehicles (EVs) and expansion of data centers. The Bureau of Labor Statistics reported that electricity prices have risen more than any other commodity.

EPA Emissions Rule: The Environmental Protection Agency’s (EPA) new emissions rule for fossil fuel-fired power plants has been criticized for being neither feasible nor cost-effective. The report claims the EPA disregarded scientific and policy recommendations, as well as stakeholder feedback, which could jeopardize the stability of America’s power grid and elevate long-term energy costs.

Inflation Reduction Act (IRA) Costs: Federal subsidies under the Democrats’ Inflation Reduction Act are projected to distort markets and potentially cost taxpayers up to $3 trillion by 2050. Testimony from an expert witness during a recent subcommittee hearing highlighted these concerns, suggesting that the IRA’s production tax credits will have significant financial implications.

The release of this report underscores the deep partisan divide over the nation’s energy policies. While Democrats argue that the transition to green energy is essential for combating climate change and ensuring long-term sustainability, Republicans contend that the current approach is economically damaging and overly burdensome.

The findings in the report are likely to fuel ongoing debates about the future of American energy policy, particularly as the country grapples with balancing environmental goals against economic realities. With electricity prices and regulatory costs continuing to rise, the impact of these policies on the average American consumer remains a critical point of contention.

As the 2024 elections approach, energy policy is poised to remain a pivotal issue, with both parties seeking to sway voters by presenting their vision for the nation’s energy future. The House Committee on Oversight and Accountability’s report serves as a potent reminder of the significant economic stakes involved in this debate.

Watch video of ice breaking away from shore in Nome

Suzanne Downing
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4
Watch video of ice breaking away from shore in Nome

Has summer arrived at Latitude 64.5006° N, just an ice floe south of the Arctic Circle?

Early in the morning on May 28, the landfast ice finally broke away from the shore and the Port in Nome, as can be seen in the radar imagery from the Sea Ice Group at the Geophysical Institute at University of Alaska Fairbanks. The Port of Nome usually plans on its ice-free season around the end of May or June 1; this opening up of the water in Norton Sound and the Bering Sea is right on schedule.

The image in the video is acquired by an 25 kW X-band marine radar mounted on a power pole on the Port of Nome causeway. Images are updated every 4 minutes. The video shows a 24-hour cycle of data and is updated hourly. You can view the updated video at this link.

Past imagery and animations can be found in at this (big files) UAF Google drive archive at this link.

In 2020, the ice went out by May 20, as shown in this photo by an MRAK reader:

On May 20, 2020, the ice had just left the shore, as shown in this photo by a MRAK reader.

The first cruise ship to arrive in Nome in 2024 is Holland America’s Westerdam, arriving on June 21 with up to 1,900 passengers and 800 crew.

Memorial Day in Anchorage and Wasilla with Gov. Dunleavy, Sen. Sullivan, Mayor Bronson, veterans, and patriots

Suzanne Downing
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Memorial Day in Anchorage and Wasilla with Gov. Dunleavy, Sen. Sullivan, Mayor Bronson, veterans, and patriots

Dignitaries and political figures were out and about in Alaska on Memorial Day, honoring fallen soldiers, sailors, airmen, and other military heroes who died in battle.

Sen. Dan Sullivan and his wife Julie attended both Memorial Day ceremonies in downtown Anchorage at the Alaska Veterans Memorial, and in Wasilla at the Veterans Wall. Gov. Mike Dunleavy attended Anchorage and Wasilla events as well.

Also in Anchorage at the Delaney Park Strip memorial service was Mayor Dave and Deb Bronson and Rep. Tom McKay.

Attending in Wasilla was Mayor Edna DeVries, Wasilla Mayor Glenda Ledford, House Speaker Cathy Tilton, and legislators, including Rep. Kevin McCabe.

Sen. Lisa Murkowski had a representative at the service on Joint Base Elmendorf-Richardson read her remarks but did not attend in person. Noted at the JBER event, the Memorial Day address sent by President Joe Biden was read aloud by someone, but no one at the event applauded afterward, leaving an awkward silence.

There was no sighting of Rep. Mary Peltola at any of the major events, nor did she appear to have sent a representative or a memorial wreath. Also missing from the Anchorage Memorial Day service was Anchorage mayor-elect Suzanne LaFrance, who reportedly declined the invitation from the mayor.

Congressional candidate Nick Begich attended both the Anchorage and Wasilla ceremonies.

Gov. Mike Dunleavy at Memorial Day service in Anchorage.
Mayor Dave and Deb Bronson bring a wreath.
A rider from American Veterans motorcycle club, at the Memorial Day event in Anchorage.
Veterans place a wreath in Anchorage.
Nick Begich listens to a veteran in Anchorage at the Memorial Day ceremony.

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