Hess Reports Estimated Results for the Fourth Quarter of 2013

Fourth Quarter Highlights:

  • Net income was $1,925 million, up from $374 million in the fourth quarter of 2012
  • Adjusted earnings were $319 million or $0.96 per share, including an adjusted net loss of $9 million from the downstream businesses
  • Cash flow from operations, before changes in working capital, was $1.16 billion
  • Oil and gas production was 307,000 barrels of oil equivalent per day (boepd) in the fourth quarter, including new production from North Malay Basin and increased Valhall production, and 336,000 boepd for full year 2013
  • Bakken peak production guidance increased to 150,000 boepd in 2018 from prior guidance of 120,000 boepd in 2016
  • Capital and exploratory expenditures were $1.5 billion. Full year 2013 capital and exploratory expenditures were $6.3 billion, down 24 percent from last year
  • Year-end total proved reserves were 1,437 million barrels of oil equivalent (boe); reserve replacement was 118 percent for 2013
  • Proceeds from completed and announced asset sales totaled $7.8 billion for the year
  • The Corporation purchased approximately 19.3 million common shares in 2013, or approximately 5.5 percent of diluted shares outstanding, for a cost of $1.54 billion
  • Year-end 2013 cash balance was $1.8 billion; debt to capitalization ratio was 19.0 percent

NEW YORK--()--Hess Corporation (NYSE:HES) today reported net income of $1,925 million for the quarter ended December 31, 2013. Adjusted earnings, which excludes items affecting comparability, were $319 million or $0.96 per common share compared with $409 million or $1.20 per share in the prior year quarter, reflecting a decrease of $97 million in adjusted downstream earnings, partially offset by a $5 million increase in adjusted Exploration and Production earnings. Subsequent to our interim update of operating data for the first two months of the fourth quarter, a third party operated pipeline in the Gulf of Mexico was shut down on December 18th, which reduced our production and sales volumes by approximately 35,000 boepd through the end of the quarter and impacted fourth quarter after-tax income by an estimated $20 million.

After-tax income (loss) by major operating activity was as follows:

               

Three Months Ended
December 31,
(unaudited)

Years Ended
December 31,
(unaudited)

    2013    

 

    2012    

    2013    

 

    2012    

(In millions, except per share amounts)

Net Income (Loss) Attributable to Hess Corporation

Exploration and Production $ 1,029 $ 325 $ 4,303 $ 2,212
Corporate and Interest (115) (110) (440) (418)
Downstream Businesses   1,011   159   1,189   231
Net income attributable to Hess Corporation $ 1,925 $ 374 $ 5,052 $ 2,025
 
Net income per share (diluted) $ 5.76 $ 1.10 $ 14.82 $ 5.95
 
 

Adjusted Earnings (Losses)

Exploration and Production $ 436 $ 431 $ 2,192 $ 2,256
Corporate and Interest (108) (110) (416) (418)
Downstream Businesses   (9)   88   116   160
Adjusted earnings attributable to Hess Corporation $ 319 $ 409 $ 1,892 $ 1,998
 
Adjusted earnings per share (diluted) $ 0.96 $ 1.20 $ 5.55 $ 5.87
 
Weighted average number of shares (diluted)   334.3   340.5   340.9   340.3
      Note: See page 7 for a table of items affecting comparability of earnings between periods.
 

John Hess, Chief Executive Officer, said: “In March 2013, we announced a detailed plan to complete our transformation into a pure play E&P company, fully exit the downstream, strengthen financial flexibility, and increase cash returns to our shareholders. By any measure, our progress has been remarkable. We generated $7.8 billion in total proceeds from asset sales, paid down $2.4 billion of short term debt, funded our $1 billion cash flow deficit and added approximately $1 billion of cash to the balance sheet as a cushion against future commodity price volatility. We also began a $4 billion share repurchase program – purchasing $1.54 billion through December 31 - and raised our annual dividend by 150 percent to $1 per share.”

He continued: “We have entered 2014 with terrific momentum. Based on strong operational execution across our balanced portfolio, including the Bakken where we are increasing peak production guidance, we remain confident that we will deliver long-term, cash-generative growth by achieving 5 - 8 percent compound average production growth through 2017 from the 2012 pro forma.”

Exploration and Production:
Exploration and Production earnings were $1,029 million in the fourth quarter of 2013, compared with $325 million in the fourth quarter of 2012. Adjusted earnings were $436 million in the fourth quarter of 2013 and $431 million in the fourth quarter of 2012.

Oil and gas production was 307,000 boepd in the fourth quarter of 2013 and 396,000 boepd in the year ago quarter. Asset sales lowered production by 72,000 boepd, while extended shutdowns caused by civil unrest in Libya reduced production by approximately 20,000 boepd versus the year-ago quarter. Unplanned downtime at non-operated facilities in the Gulf of Mexico, natural declines, and lower entitlement in Algeria also contributed to the reduced production. Partially offsetting these reductions, Valhall production was up 37,000 boepd and new production from the North Malay Basin added 5,000 boepd compared with the fourth quarter of last year. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $98.27 per barrel, up from $84.46 per barrel in the same quarter a year ago. The average worldwide natural gas selling price was $6.97 per mcf in the fourth quarter of 2013, up from $6.60 per mcf in the fourth quarter a year ago.

Excluding production from assets sold and classified as held-for-sale, pro forma production was 285,000 boepd in 2013 and 289,000 boepd in 2012. Pro forma production that also excludes Libya was 270,000 boepd in 2013 and 268,000 boepd in 2012. Excluding asset sales and Libya, the Corporation expects production to average between 305,000 boepd to 315,000 boepd in 2014, an increase of approximately 15 percent from pro forma production in 2013. The increased production in 2014 is driven by continued growth in the Bakken, a full year of production for Valhall post completion of the redevelopment project in 2013 and the start-up of the Tubular Bells Field in the Gulf of Mexico in the third quarter of 2014.

Oil and Gas Reserve Estimates:
Oil and gas proved reserves were 1,437 million boe at the end of 2013, compared with 1,553 million barrels at the end of 2012. During 2013, the Corporation added 148 million boe to proved reserves, primarily relating to the Bakken, and sold 139 million boe of proved reserves through asset dispositions. The additions, which are subject to final review, replaced approximately 118 percent of the Corporation’s 2013 production, resulting in a year-end 2013 reserve life of 11.5 years.

Operational Highlights:
  Bakken (Onshore U.S.): In North Dakota, the Corporation holds approximately 645,000 net acres in the Bakken oil shale play. Net production from the Bakken averaged 68,000 boepd in the fourth quarter, which reflects the previously announced downtime associated with the Tioga Gas Plant expansion. Full year production averaged 67,000 boepd, an increase of 20 percent from 56,000 boepd for 2012. Hess brought 46 operated wells on production in the quarter and 168 wells for the full year, bringing the cumulative total to date to 722 wells. Drilling and completion costs per operated well averaged $8.1 million for the year, a reduction of 26 percent from $11.0 million per well in 2012. Infrastructure investments in 2013 included the Tioga gas plant expansion project, which is expected to be completed and operational in the first quarter of 2014.

In 2014, Hess plans to increase the rig count in the Bakken to 17 from 14 but is maintaining capital spending at $2.2 billion, which is consistent with 2013 capital spend. Production is expected to average between 80,000 boepd and 90,000 boepd in 2014, an increase of 19 percent to 34 percent from 2013.

The Corporation is increasing its peak net production guidance for the Bakken to 150,000 boepd in 2018 from prior guidance of 120,000 boepd in 2016, based upon performance to date and a current design of 9 wells for a typical 1,280 acre drilling unit. During 2014, the Corporation plans to pilot test tighter well spacing to determine whether there is additional upside in the estimates for future production and resources.

  Utica (Onshore U.S.): Eight wells were drilled, six wells were completed and eight wells were flow tested during the quarter. On our CONSOL joint venture acreage, five Hess operated wells were tested with an average rate of 1,810 boepd including 57 percent liquids. On the Hess 100 percent-owned acreage, three wells were tested at an average rate of 2,666 boepd including 10 percent liquids. For the year, 29 wells were drilled, 24 wells completed and 17 wells were tested across both the Corporation’s 100 percent-owned and CONSOL joint venture acreage.

  Valhall (Offshore Norway): Net production averaged 37,000 boepd during the fourth quarter and 23,000 boepd for the full year. The Field was shut down from July 2012 through January 2013 to complete field redevelopment activities. Two new wells were brought on line in the fourth quarter.

  North Malay Basin (Offshore Malaysia): First gas at the early production system was achieved in October 2013 and production averaged 5,000 boepd in the fourth quarter.

  Kurdistan Region of Iraq (Onshore): The Corporation spud its first exploration well on the Shakrok block and plans to begin drilling an exploration well on the Dinarta block in Kurdistan in the first quarter 2014.

Capital and Exploratory Expenditures:
Capital and exploratory expenditures in the fourth quarter of 2013 were $1,544 million, of which $1,476 million related to Exploration and Production operations, including $571 million invested in the Bakken. Capital and exploratory expenditures for the fourth quarter of 2012 were $1,914 million, of which $1,887 million related to Exploration and Production operations, including $720 million for the Bakken. For the year, capital and exploratory expenditures were $6,315 million, which is down approximately 24 percent from 2012 and 7 percent below guidance, due in part to a delay of retail marketing’s acquisition of its partner’s interest in WilcoHess until the first quarter of 2014.

Asset Sales Program:
During the fourth quarter, the Corporation completed the sales of its energy marketing and terminals businesses and its Natuna A asset, offshore Indonesia. The Corporation also announced the sale of its interest in the Pangkah Field, offshore Indonesia, and closed the transaction in January 2014. During the first nine months of 2013, the Corporation sold its subsidiary in Russia and its interests in the Beryl area fields in the United Kingdom North Sea, the Azeri-Chirag-Guneshli fields offshore Azerbaijan, and the Eagle Ford shale assets in Texas. Total proceeds from these asset sales were approximately $7.8 billion. Sales processes continue for our Thailand assets, retail marketing and energy trading operations. In addition, the Corporation filed a preliminary Form 10 in January 2014 for a possible spin-off of its retail marketing business.

Liquidity:
Net cash provided by operating activities was $1,550 million in the fourth quarter of 2013, compared with $1,570 million in the same quarter of 2012. At December 31, 2013, cash and cash equivalents totaled $1,814 million, compared with $642 million at December 31, 2012. Total debt of $5,798 million at December 31, 2013 was down 29 percent from $8,111 million at December 31, 2012. The Corporation’s debt to capitalization ratio at December 31, 2013 was 19.0 percent, compared with 27.7 percent at the end of 2012.

Returning Capital to Shareholders:
In the fourth quarter, the Corporation purchased approximately 12.8 million shares of common stock at a cost of approximately $1.0 billion under the Corporation’s authorized $4 billion share repurchase program, bringing total shares purchased in 2013 to approximately 19.3 million shares, or approximately 5.5 percent of outstanding fully diluted shares, at a cost of approximately $1.54 billion for an average cost of $79.65. Beginning in the third quarter of 2013, the Corporation increased its quarterly dividend 150 percent to 25 cents per common share.

Downstream Businesses:
The downstream businesses reported income of $1,011 million in the fourth quarter of 2013, compared with $159 million in the same period in 2012. Excluding items affecting comparability, results were a loss of $9 million in the fourth quarter of 2013 and income of $88 million in the fourth quarter of 2012. The decrease in earnings was primarily the result of exiting operations during the quarter.

The divested downstream businesses were reported as discontinued operations in the consolidated financial statements. Effective as of year end 2013, retail marketing and the energy trading joint venture have been reported as continuing operations for all periods presented in the consolidated financial statements due to the potential spin-off of retail marketing and the lengthy marketing processes. The retail marketing and energy trading joint venture will be classified as discontinued operations when the businesses are divested.

Items Affecting Comparability of Earnings:
The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods:

                         

Three Months Ended
December 31,
(unaudited)

Years Ended
December 31,
(unaudited)

    2013    

    2012    

    2013    

    2012    

(In millions)
Exploration and Production $ 593 $ (106) $ 2,111 $ (44)
Corporate and Interest (7) - (24) -
Downstream Businesses   1,020   71   1,073   71
Total items affecting comparability of earnings
between periods $ 1,606 $ (35) $ 3,160 $ 27
 

  Exploration and Production: In the fourth quarter, the Corporation announced the sale of its Indonesian assets for total after-tax proceeds of $1.3 billion. The sale was executed in two separate transactions with the sale of Natuna A completing in December 2013 and the sale of Pangkah closing in January 2014. Based on the negotiated allocation of sales proceeds between the two transactions, fourth quarter 2013 results include an after-tax gain on the sale of Natuna of $343 million ($388 million pre-tax) and an after-tax asset impairment charge of $187 million ($289 million pre-tax) to adjust the carrying value of the Pangkah asset to its fair value at December 31, 2013. In the fourth quarter, Denmark enacted changes to the hydrocarbon income tax law which required that the Corporation record an additional deferred tax asset of $674 million. The new law resulted in a combination of changes to tax rates, revisions to the amount of uplift allowed on capital expenditures and special transition rules, which will result in a higher effective tax rate in future years. Due to continued civil unrest in Libya, the Corporation recorded an after-tax charge of $163 million ($260 million pre-tax) to write-off previously capitalized exploration wells in offshore Area 54. The Corporation also recorded after-tax charges of $23 million ($38 million pre-tax) to write off its Marcellus leasehold costs and $51 million for employee severance, income taxes and other exit related costs, which include closure of the London office in the quarter.

  Corporate and Interest: Fourth quarter results include after-tax charges of $7 million ($11 million pre-tax) for severance and other exit costs.

  Downstream Businesses: Results for the fourth quarter include after-tax gains from the divestitures of energy marketing of $464 million ($761 million pre-tax) and the terminals network of $531 million ($739 million pre-tax). In addition, the Corporation recorded after-tax income of $134 million ($232 million pre-tax) in the quarter resulting from liquidation of LIFO inventories. Severance, exit related costs and other charges totaled $109 million after income taxes ($164 million pre-tax).

Reconciliation of U.S. GAAP to Non-GAAP measures:
The following table reconciles reported net income attributable to Hess Corporation and adjusted earnings:

         

Three Months Ended
December 31,
(unaudited)

Years Ended
December 31,
(unaudited)

    2013    

 

    2012    

    2013    

 

    2012    

(In millions)
Net income attributable to Hess Corporation $ 1,925 $ 374 $ 5,052 $ 2,025
Less: Total items affecting comparability of earnings
between periods   1,606   (35)   3,160   27
Adjusted earnings attributable to Hess Corporation $ 319 $ 409 $ 1,892 $ 1,998
 

The following table reconciles reported cash provided by operating activities to cash flow from operations before changes in working capital:

                     

 

 

 

Three Months Ended
December 31,
(unaudited)

Years Ended
December 31,
(unaudited)

    2013    

 

    2012    

    2013    

 

    2012    

(In millions)
Net cash provided by operating activities $ 1,550 $ 1,570 $ 4,870 $ 5,660
Less: Increases (decreases) in working capital   389   443   (681)   394
Cash flows from operations, excluding
working capital changes $ 1,161 $ 1,127 $ 5,551 $ 5,266
 

Hess Corporation will review fourth quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details about the event, refer to the Investor Relations section of our website at www.hess.com.

Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at www.hess.com.

 

Forward-looking Statements

Certain statements in this release may constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, uncertainties inherent in the measurement and interpretation of geological, geophysical and other technical data. Estimates and projections contained in this release are based on the Company’s current understanding and assessment based on reasonable assumptions. Actual results may differ materially from these estimates and projections due to certain risk factors discussed in the Corporation’s periodic filings with the Securities and Exchange Commission and other factors.
 

Adjusted Earnings:

The Corporation has used a non-GAAP financial measure in this earnings release. “Adjusted earnings” presented in this release is defined as reported net income attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. We believe that investors’ understanding of our performance is enhanced by disclosing this measure. This measure is not, and should not be viewed as, a substitute for U.S. GAAP net income. A reconciliation of reported net income attributable to Hess Corporation (U.S. GAAP) to adjusted earnings is provided in the release.
 
         

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 

 

 

     Fourth     
Quarter
2013

     Fourth     
Quarter
2012

      Third      
Quarter
2013

Income Statement

Revenues and Non-operating Income
Sales and other operating revenues $ 5,183 $ 5,718 $ 5,340
Gains (losses) on asset sales 380 172 (5)
Other, net   5   39   4
 
Total revenues and non-operating income   5,568   5,929   5,339
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 2,693 2,840 2,797
Operating costs and expenses 546 549 475
Production and severance taxes 61 141 84
Marketing expenses 245 212 199
Exploration expenses, including dry holes and lease impairment 458 362 154
General and administrative expenses 214 175 160
Interest expense 97 106 86
Depreciation, depletion and amortization 778 744 687
Asset impairments   289   315   -
 
Total costs and expenses   5,381   5,444   4,642
 
Income from continuing operations before income taxes 187 485 697
Provision (benefit) for income taxes   (666)   229   329
 
Income from continuing operations 853 256 368
Income from discontinued operations   1,062   120   50
 
Net income 1,915 376 418
Less: Net income (loss) attributable to noncontrolling interests   (10)   2   (2)
Net income attributable to Hess Corporation $ 1,925 $ 374 $ 420
 

See "Downstream Businesses" beginning on page 6 for basis of presentation.

 

Cash Flow Information

Net cash provided by operating activities – including working capital changes $ 1,550 $ 1,570 $ 1,254
Net cash provided by (used in) investing activities 1,390 (1,669) (1,487)
Net cash provided by (used in) financing activities   (1,447)   213   (171)
Net increase (decrease) in cash and cash equivalents $ 1,493 $ 114 $ (404)
 
     

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 

Years Ended December 31,

2013

2012

Income Statement

Revenues and Non-operating Income
Sales and other operating revenues $ 22,284 $ 23,381
Gains (losses) on asset sales 2,174 584
Other, net   (37)   121
 
Total revenues and non-operating income   24,421   24,086
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 11,368 11,500
Operating costs and expenses 2,116 2,202
Production and severance taxes 372 550
Marketing expenses 867 802
Exploration expenses, including dry holes and lease impairment 1,031 1,070
General and administrative expenses 709 613
Interest expense 406 419
Depreciation, depletion and amortization 2,770 2,922
Asset impairments   289   582
 
Total costs and expenses   19,928   20,660
 
Income from continuing operations before income taxes 4,493 3,426
Provision (benefit) for income taxes   525   1,559
 
Income from continuing operations 3,968 1,867
Income from discontinued operations   1,254   196
 
Net income 5,222 2,063
Less: Net income (loss) attributable to noncontrolling interests   170   38
Net income attributable to Hess Corporation $ 5,052 $ 2,025
 

See "Downstream Businesses" beginning on page 6 for basis of presentation.

 

Cash Flow Information

Cash provided by operating activities – including working capital changes                            

$ 4,870 $ 5,660
Net cash provided by (used in) investing activities 578 (7,051)
Net cash provided by (used in) financing activities   (4,276)   1,682
Net increase (decrease) in cash and cash equivalents $ 1,172 $ 291
 
                                 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 

December 31,
2013

December 31,
2012

Balance Sheet Information

 
Cash and cash equivalents $ 1,814 $ 642
Assets held for sale 1,097 1,092
Other current assets 5,725 6,653
Investments 687 443
Property, plant and equipment – net 28,771 28,807
Other long-term assets   4,697   5,804
Total assets $ 42,791 $ 43,441
 
Short-term debt and current maturities of long-term debt $ 378 $ 787
Liabilities associated with assets held for sale 286 539
Other current liabilities 5,931 7,056
Long-term debt 5,420 7,324
Other long-term liabilities 5,992 6,532
Total equity excluding other comprehensive income (loss) 25,122 21,696
Accumulated other comprehensive income (loss)   (338)   (493)
Total liabilities and equity $ 42,791 $ 43,441
 
         

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 

     Fourth     
Quarter
2013

Fourth
Quarter
2012

Third
Quarter
2013

Capital and Exploratory Expenditures

Exploration and Production
United States
Bakken $ 571 $ 720 $ 579
Other Onshore   176   154   161
Total Onshore 747 874 740
Offshore   212   195   208
Total United States   959   1,069   948
 
Europe 174 279 159
Africa 132 224 106
Asia and other   211   315   278
 
Total Exploration and Production 1,476 1,887 1,491
 
Other   68   27   36
 
Total Capital and Exploratory Expenditures $ 1,544 $ 1,914 $ 1,527
 
Total exploration expenses charged to income included above $ 123 $ 135 $ 96
 
 
 

Years Ended December 31,

2013 2012

Capital and Exploratory Expenditures

Exploration and Production
United States
Bakken $ 2,231 $ 3,164
Other Onshore   708   729
Total Onshore 2,939 3,893
Offshore   865   870
Total United States   3,804   4,763
 
Europe 724 1,381
Africa 630 771
Asia and other   993   1,231
 
Total Exploration and Production 6,151 8,146
 
Other   164   119
 
Total Capital and Exploratory Expenditures $ 6,315 $ 8,265
 
Total exploration expenses charged to income included above $ 442 $ 470
 
         

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)

 
Fourth Quarter 2013
United States International

      Total      

 
Sales and other operating revenues $ 1,396 $ 1,326 $ 2,722
Gains (losses) on asset sales (6) 386 380
Other, net   (1)   -   (1)
 
Total revenues and non-operating income   1,389   1,712   3,101
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 413 49 462
Operating costs and expenses 213 333 546
Production and severance taxes 56 5 61
Exploration expenses, including dry holes and lease impairment 129 329 458
General and administrative expenses 72 37 109
Depreciation, depletion and amortization 347 363 710
Asset impairments   -   289   289
 
Total costs and expenses   1,230   1,405   2,635
 
Results of operations before income taxes 159 307 466
Provision (benefit) for income taxes   45   (608)   (563)
 
Net income 114 915 1,029
Less: Net income attributable to noncontrolling interests   -   -   -
 
Net income attributable to Hess Corporation $ 114 (a) $ 915 (b) $ 1,029
 
Fourth Quarter 2012
United States International Total
 
Sales and other operating revenues $ 1,454 $ 1,499 $ 2,953
Gains (losses) on asset sales - 172 172
Other, net   (1)   28   27
 
Total revenues and non-operating income   1,453   1,699   3,152
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 338 35 373
Operating costs and expenses 176 373 549
Production and severance taxes 56 85 141
Exploration expenses, including dry holes and lease impairment 205 157 362
General and administrative expenses 59 32 91
Depreciation, depletion and amortization 399 327 726
Asset impairments   315   -   315
 
Total costs and expenses   1,548   1,009   2,557
 
Results of operations before income taxes (95) 690 595
Provision (benefit) for income taxes   (46)   313   267
 
Net income (49) 377 328
Less: Net income attributable to noncontrolling interests   -   3   3
 
Net income (loss) attributable to Hess Corporation $ (49) (a) $ 374 (b) $ 325
 
(a)  

The results from crude oil hedging activities comprised after-tax realized gains of $1 million in the fourth quarter of 2013 and losses of $5 million in the fourth quarter of 2012.

 
(b)

The results from crude oil hedging activities comprised after-tax realized gains of $1 million in the fourth quarter of 2013 and losses of $92 million in the fourth quarter of 2012.

 
         

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)

 
Third Quarter 2013
United States International

      Total      

 
Sales and other operating revenues $ 1,472

$

1,234 $ 2,706
Gains (losses) on asset sales (1) (7) (8)
Other, net   (1)   (2)   (3)
 
Total revenues and non-operating income   1,470   1,225   2,695
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 398 (24) 374
Operating costs and expenses 191 284 475
Production and severance taxes 64 20 84
Exploration expenses, including dry holes and lease impairment 71 83 154
General and administrative expenses 58 38 96
Depreciation, depletion and amortization   346   330   676
 
Total costs and expenses   1,128   731   1,859
 
Results of operations before income taxes 342 494 836
Provision (benefit) for income taxes   134   247   381
 
Net income 208 247 455
Less: Net income attributable to noncontrolling interests   -   -   -
 
Net income attributable to Hess Corporation $ 208 (a) $ 247 (b) $ 455
 
(a)   The after-tax realized gains from crude oil hedging activities were $0.3 million in the third quarter of 2013.
 
(b) The after-tax realized gains from crude oil hedging activities were $0.5 million in the third quarter of 2013.
 
         

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)

 
Year Ended December 31, 2013
United States International

      Total      

 
Sales and other operating revenues $ 6,076 $ 5,829 $ 11,905
Gains (losses) on asset sales (24) 2,195 2,171
Other, net   (12)   (45)   (57)
 
Total revenues and non-operating income   6,040   7,979   14,019
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 1,759 94 1,853
Operating costs and expenses 795 1,321 2,116
Production and severance taxes 232 140 372
Exploration expenses, including dry holes and lease impairment 371 660 1,031
General and administrative expenses 218 159 377
Depreciation, depletion and amortization 1,393 1,278 2,671
Asset impairments   -   289   289
 
Total costs and expenses   4,768   3,941   8,709
 
Results of operations before income taxes 1,272 4,038 5,310
Provision (benefit) for income taxes   495   336   831
 
Net income 777 3,702 4,479
Less: Net income attributable to noncontrolling interests   -   176   176
 
Net income attributable to Hess Corporation $ 777 (a) $ 3,526 (b) $ 4,303
 
Year Ended December 31, 2012
United States International

      Total      

 
Sales and other operating revenues $ 5,294 $ 6,951 $ 12,245
Gains (losses) on asset sales - 584 584
Other, net   18   81   99
 
Total revenues and non-operating income   5,312   7,616   12,928
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 1,190 144 1,334
Operating costs and expenses 758 1,444 2,202
Production and severance taxes 199 351 550
Exploration expenses, including dry holes and lease impairment 426 644 1,070
General and administrative expenses 196 118 314
Depreciation, depletion and amortization 1,406 1,447 2,853
Asset impairments   432   150   582
 
Total costs and expenses   4,607   4,298   8,905
 
Results of operations before income taxes 705 3,318 4,023
Provision (benefit) for income taxes   267   1,526   1,793
 
Net income 438 1,792 2,230
Less: Net income attributable to noncontrolling interests   -   18   18
 
Net income attributable to Hess Corporation $ 438 (a) $ 1,774 (b) $ 2,212
 
(a)  

The results from crude oil hedging activities comprised after-tax realized gains of $10 million for the year ended December 31, 2013 and losses of $39 million for the year ended December 31, 2012.

 
(b)

The results from crude oil hedging activities comprised after-tax realized gains of $15 million for the year ended December 31, 2013 and losses of $392 million for the year ended December 31, 2012.

 
                     

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 

    Fourth    
Quarter
2013

    Fourth    
Quarter
2012

     Third     
Quarter
2013

Operating Data

 

Net Production Per Day (in thousands)

Crude oil - barrels
United States
Bakken 57 53 57
Other Onshore 9 13 9
Total Onshore 66 66 66
Offshore 41 52 37
Total United States 107 118 103
 
Europe 39 64 38
Africa 42 77 57
Asia 9 16 9
Total 197 275 207
 
Natural gas liquids - barrels
United States
Bakken 5 6 7
Other Onshore 3 5 4
Total Onshore 8 11 11
Offshore 5 7 4
Total United States 13 18 15
 
Europe 2 2 1
Asia 1 1 1
Total 16 21 17
 
Natural gas - mcf
United States
Bakken 33 32 44
Other Onshore 23 29 24
Total Onshore 56 61 68
Offshore 58 77 42
Total United States 114 138 110
 
Europe 33 22 29
Asia and other 418 441 380
Total 565 601 519
 

Barrels of oil equivalent                                            

307 396 310
 
           

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 
Years Ended December 31,

    2013    

    2012    

Operating Data

Net Production Per Day (in thousands)

Crude oil - barrels
United States
Bakken 55 47
Other Onshore 10 13
Total Onshore 65 60
Offshore 43 48
Total United States 108 108
 
Europe 44 84
Africa 62 75
Asia 11 17
Total 225 284
 
Natural gas liquids - barrels
United States
Bakken 6 5
Other Onshore 4 5
Total Onshore 10 10
Offshore 5 6
Total United States 15 16
 
Europe 1 2
Asia 1 1
Total 17 19
 
Natural gas - mcf
United States
Bakken 38 27
Other Onshore 25 27
Total Onshore 63 54
Offshore 61 65
Total United States 124 119
 
Europe 23 43
Asia and other 418 454
Total 565 616
 
Barrels of oil equivalent 336 406
 
         

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 

 

 

 

 

 

 

   Fourth   
Quarter
2013

Fourth
Quarter
2012

Third
Quarter
2013

 

Sales Volumes Per Day (in thousands)

Crude oil - barrels 202 263 194
Natural gas liquids - barrels 16 22 17
Natural gas - mcf 566 600 515
Barrels of oil equivalent 313 385 296
 

Sales Volumes (in thousands)

Crude oil - barrels 18,598 24,187 17,857
Natural gas liquids - barrels 1,485 2,017 1,519
Natural gas - mcf 52,085 55,222 47,406
Barrels of oil equivalent 28,764 35,408 27,277
 
Years Ended December 31,
2013 2012
 

Sales Volumes Per Day (in thousands)

Crude oil - barrels 226 278
Natural gas liquids - barrels 17 19
Natural gas - mcf 565 616
Barrels of oil equivalent 337 400
 

Sales Volumes (in thousands)

Crude oil - barrels 82,402 101,770
Natural gas liquids - barrels 6,244 7,138
Natural gas - mcf 206,122 225,607
Barrels of oil equivalent 123,000 146,510
 
       

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 

 

 

 

 

 

 

    Fourth    
Quarter
2013

    Fourth    
Quarter
2012

 

     Third      
Quarter
2013

Operating Data

 

 

Average Selling Prices

Crude oil - per barrel (including hedging)
United States
Onshore $ 84.54 $ 85.38 $ 96.01
Offshore 93.62 99.83 106.66
Total United States 87.98 91.74 99.80
 
Europe 110.73 61.01 113.18
Africa 109.34 87.27 110.71
Asia 105.20 106.28 104.27
Worldwide 98.27 84.46 104.95
 
Crude oil - per barrel (excluding hedging)
United States
Onshore $ 84.47 $ 85.76 $ 95.98
Offshore 93.34 101.35 106.56
Total United States 87.83 92.63 99.75
 
Europe 110.20 61.29 112.51
Africa 109.32 109.76 110.95
Asia 105.20 107.86 104.27
Worldwide 98.07 90.86 104.88
 
Natural gas liquids - per barrel
United States
Onshore $ 46.02 $ 40.78 $ 44.59
Offshore 30.29 29.64 32.14
Total United States 40.08 36.21 41.03
 
Europe 59.78 85.62 58.67
Asia 81.11 85.24 70.05
Worldwide 44.59 44.66 43.67
 
Natural gas - per mcf
United States
Onshore $ 3.39 $ 2.48 $ 2.91
Offshore 2.96 2.92 2.56
Total United States 3.17 2.72 2.78
 
Europe 11.82 9.06 12.13
Asia and other 7.62 7.68 7.19
Worldwide 6.97 6.60 6.52
 
   

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 
Years Ended December 31,
2013 2012

Operating Data

Average Selling Prices

Crude oil - per barrel (including hedging)                        

United States
Onshore $ 90.00 $ 84.78
Offshore 103.83 101.80
Total United States 95.50 92.32
 
Europe 88.03 74.14
Africa 108.70 89.02
Asia 107.40 107.45
Worldwide 98.48 86.94
 
Crude oil - per barrel (excluding hedging)
United States
Onshore $ 89.81 $ 85.66
Offshore 103.15 104.39
Total United States 95.11 93.96
 
Europe 87.45 75.06
Africa 108.07 110.92
Asia 107.40 109.35
Worldwide 98.01 93.70
 
Natural gas liquids - per barrel
United States
Onshore $ 43.14 $ 44.22
Offshore 29.18 35.24
Total United States 38.07 40.75
 
Europe 58.31 78.43
Asia 74.94 77.92
Worldwide 40.68 47.81
 
Natural gas - per mcf
United States
Onshore $ 3.08 $ 2.02
Offshore 2.83 2.15
Total United States 2.96 2.09
 
Europe 11.06 9.50
Asia and other 7.50 6.90
Worldwide 6.64 6.16

Contacts

For Hess Corporation
Investors:
Jay Wilson, 212-536-8940
or
Media:
Michael Henson/Patrick Scanlan
Sard Verbinnen & Co
212-687-8080

Sharing

Contacts

For Hess Corporation
Investors:
Jay Wilson, 212-536-8940
or
Media:
Michael Henson/Patrick Scanlan
Sard Verbinnen & Co
212-687-8080