From: Richard Kahn Sent: Wednesday, September 14, 2016 4:30 PM To: jeffrey E. Subject: Fwd: ***Buy HES convert preferred following a 15% drop in the stock.... Richard Kahn HBRK Associates Inc. 575 Lexington =venue 4th Floor New York, NY 10022 tel fax cel Begin forwarded message: From: =/b>"Ens, Amanda" Subject: ./b>"*Buy HES =onvert preferred following a 15% drop in the stock.... Date: =/b>September 14, 2016 at 11:05:05 =M EDT To: =/b> Macro Focus: Oil is down modestly in front of EIA at 10:30am.... =PI was modestly bullish (+1.44m bbl, gasoline - 2.39m, distillate =5.31m, Cushing crude -1.12m) with a smaller build and a Cushing draw, but people are willing to wait for EIA... All eyes will be on DOE =ata at 10:30am after last week's draw of 14.5mmb which was =he biggest draw going back to 1999. This was the result of storms =nd related shutins. This kicked off a massive short squeeze where higher beta outperformed lower risk in last week's rising =ommodity price environment. The lEA weighed on group yesterday =along with stronger dollar) as they said the oil glut will last longer =han initially estimated. HES is down over 15% in the last couple of weeks =fter results for their Skipjack well disappointed investors. We believe =hat "shorts" have piled on and see a potential opportunity =o get long the stock into year-end as they are due to announce the =esult of the Liza#3 well in 4Q. Conclusions....Skipjack disappointed and HES equity has more than =aid the price. While the lack of imminent news may weigh following the exploration miss, Guyana is not discounted in =hares, and Liza #3 is an event that investors will have to revisit in =oming weeks. Next catalysts are the Liza #3 appraisal (4Q16) and Payara =early 2017). The Liza #3 well, has the potential =o further de-risk a resource base for the play opening Liza discovery currently suggested by XOM at between 800mm -1.4bn =oe. At the mid-point this represents a 30% increase in Hess'