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Hess Corporation (HES - Analyst Report) is about to become a pure play in exploration and production (E&P) as it plans to exit its retail, energy marketing and energy trading businesses.

The announcement was taken positively by the investors and pushed the company’s shares up by 3.46% in the New York Stock Exchange on Mar 4 (Monday). This move comes even as Hess continues to encounter hedge fund Elliott Management’s proposal to split the company.

Hess is executing a transition from an integrated oil and gas company to a predominantly E&P entity, thereby shifting its growth approach from high-impact exploration to lower-risk unconventionals and a smaller, more focused exploration portfolio.

For this, it aims to shed assets in Indonesia and Thailand, announced a share repurchase plan of up to $4 billion, and a boost in its annual dividend to $1 a share starting in the third quarter, more than doubling its quarterly dividend. Hess will also elect a slate of six independent directors to its board, replacing the existing six seats.

As part of this strategic shift, the company closed its Port Reading, New Jersey refinery. This marked its complete exit from the refining business, much like ConocoPhillips (COP - Analyst Report) and Marathon Oil Corporation (MRO - Analyst Report). These companies also spun off their refining units in recent times.

Hess is also looking for other non-core assets, including the Asian assets of Indonesia and Thailand. Hess holds the operatorship interest of the Sinphuhorm gas field onshore Thailand.

Other associate partners in the project include Apico with 35%, PTT Exploration & Production with 20% and ExxonMobil Corporation (XOM - Analyst Report) with 10%. Alternatively, it plans to focus on the North Malay basin and a joint development area in Malaysia and Thailand. The company is also looking to monetize its Bakken midstream assets by 2015.

Some of these strategic alternations may appear in sync with Hedge fund Elliott Management Corp.’s demand. Hess rejected Elliott's recommendation to divide its properties in the fast-growing Bakken oil formation in North Dakota from costly international assets.

The company stated that the proposal ignored credit risk and tax consequences. It also rejected the 4% stakeholder Elliott's proposed board members in a letter to shareholders on Monday, condemning the firm of trying to interrupt Hess’ development in reshaping itself.

Billionaire Paul Singer is the founder and president of Elliott Management, which manages two funds, namely, Elliott Associates and Elliott International LP.

Hess expects to augment production by 5% to 8% annually between 2012 and 2014. Production growth is expected to be driven by Hess’ core assets of Bakken Shale (North Dakota), Valhall Field (Norway), Tubular Bells (Deepwater Gulf of Mexico), North Malay Basin (Malaysia) as well as Utica Shale (Ohio) and Ghana. The company has been looking to pour more than 90% of its capital spending into exploration and production.

Hess retains a Zacks Rank #3, implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

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