Hess Corp. (HES), Exxon Mobil Corporation (XOM): Will The New Asset Help The Company Defend Its Home Turf?

How to Play This Situation

With its divestiture of a relatively inconsequential asset in a politically unfavorable part of the world, Hess Corp. (NYSE:HES) appears ready to refocus its efforts on managing its shareholders’ expectations and developing its Western Hemisphere resources. Given the tremendous promise that the company’s African and North American resources have shown in recent years, this may be a solid bet. Hess may also be able to improve its U.S. retailing operations by buying or building additional gas station properties.

Meanwhile, Lukoil clearly hopes to leverage its expertise to extract every barrel from the Samara-Nafta property. Given its success in other areas of the Russian Federation, investors should not bet against its ability to do so.

In sum, both Hess and Lukoil appear poised to benefit from this deal. Going forward, investors who wish to profit from a booming global energy market should look at both of these companies for potential strength, though risk-averse traders may prefer to stick with Hess Corp. (NYSE:HES)’s more stable portfolio. As always, investors are advised to conduct their own due diligence before trading in this space.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.