Hess Corporation has sold its retail operations to Marathon Petroleum for $2.87 billion.
This will raise the gas company's stock buyback from $4 billion to $6.5 billion, the Associated Press reported.
The transaction is the first from the company's re-purchasing program, which first launched in August.
The deal gives Marathon $2.37 billion in cash, an estimated $230 million of working capital and $274 million in capital leases.
Retail locations, transport operations and oil shipper history on different pipelines, are also included in the sale. These involve 40,000 oil barrels on the Colonial pipeline stretching from New York, N.Y. to Houston Texas.
Marathon Petroleum's CEO told AP that the change will also help keep the business's operations running.
"With this significant geographic expansion, we will be able to further leverage our integrated refining and transportation logistics operations, providing an outlet for an incremental 200,000 (barrels per day) of assured sales from our refining system," Gary Heminger said.
Hess's chief executive officer said the transaction allows the company to experiment with the oil market.
"The sale of our retail business marks the culmination of our strategic transformation into a pure-play exploration and production company," John Hess said in a statement. "I especially want to express my deepest appreciation to our employees in the retail business for their outstanding work and extraordinary dedication over the years, building the Hess brand and serving our loyal customers."
Hess's April 23 selling of interest in Thailand's Sinphuhorm and Pailin Fields to PTT Exploration and Production Public Company are some of the many transaction deals and repurchasing agreements that have kept the oil franchise busy as of late.
According to a press release, the deal totals one billion dollars after taxes. Changes will take effect on July 1.
