(New throughout, adds background and details on Hess and Elliott)
HOUSTON, March 8 (Reuters) - Oil producer Hess Corp on Thursday disclosed plans to buy back an additional $1 billion in shares by the end of 2018, averting a second tangle with activist hedge fund Elliott Management on the eve of nominations for the Hess board.
The new buy back would bring its total repurchase plan to $1.5 billion since late last year. It did not include a repurchase of Elliott shares, a Hess representative said.
The oil and gas producer said in addition to the buyback it would add two new drilling rigs to its North Dakota operations and look to lower operating costs at its biggest production area.
Hess did not mention Elliott in its disclosure, but the company's CEO said the greater buybacks would not hurt plans for heavy future investments in Guyana. Nominations for its board close on Friday.
"We can expand the buyback authorization without compromising our ability to fund this world-class investment," Chief Executive Officer John Hess said in a statement.
Elliott, which owns more than 6 percent of Hess, said it supports the buyback and praised Hess's plans to review its operations ahead of the Guyana project.
"We are encouraged that the company has indicated that they are committed to closing the value gap and will be dynamic in exploring further steps to do so" before beginning the project in Guyana, Elliott said in a statement.
In December, Elliott criticized what it called "continuing underperformance" at Hess, which has not made a profit since 2014, when its stock price was more than double current levels.
Hess's oil and natural gas production has dropped 7 percent in three years due largely to maturing operations in North Dakota, feeding concerns about how the company is managed. Rivals have bounced back faster from the industry downturn.
BACK IN THE RING
Elliott, the activist hedge fund led by billionaire Paul Singer, previously pushed for changes at Hess in a heated 2013 proxy fight. At that time Hess conceded to an agreement that added three Elliott appointees to the board.
After an acrimonious tangle, Elliott got much of what it sought. Just ahead of the annual shareholder meeting in May 2013, Hess conceded to an agreement that added three Elliott appointees to the board. In exchange, Elliott supported five directors from Hess's slate. John Hess remained chief executive officer, but yielded his role as chairman.
Hess shares were up a fraction at $46.67 in morning trading. (Reporting By Jessica Resnick-Ault with additional reporting by Ernest Scheyder; Editing by David Gregorio)