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First Quarter Highlights:
- Income was $759 million compared with $370 million in first quarter 2007
- Cash flows from operations were $1,176 million compared with $639 million in first quarter 2007
- Oil and gas production was 391,000 barrels per day, up from 382,000 in first quarter 2007
- Debt to capitalization ratio decreased to 26.9 percent at March 31, 2008, from 28.9 percent at December 31, 2007
NEW YORK, Apr 30, 2008 (BUSINESS WIRE) -- Hess Corporation (NYSE: HES) reported net income of $759 million for the first quarter of 2008 compared with net income of $370 million for the first quarter of 2007. The after-tax results by major operating activity were as follows:
Three months ended
March 31 (unaudited)
-------------------------
2008 2007
------------ -----------
(In millions, except per
share amounts)
Exploration and Production $ 824 $ 340
Marketing and Refining 16 101
Corporate (39) (31)
Interest expense (42) (40)
------------ -----------
Net income $ 759 $ 370
============ ===========
Net income per share (diluted) $ 2.34 $ 1.17
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Weighted average number of shares (diluted) 323.8 317.3
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Exploration and Production earnings were $824 million in the first quarter of 2008 compared with $340 million in the first quarter of 2007. The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 391,000 barrels per day in the first quarter of 2008, compared with 382,000 barrels per day in the first quarter of 2007. In the first quarter of 2008, the Corporation's average worldwide crude oil selling price, including the effect of hedging, was $83.28 per barrel, an increase of $32.54 per barrel from the first quarter of 2007. The Corporation's average worldwide natural gas selling price, including the effect of hedging, was $7.06 per Mcf in the first quarter of 2008, an increase of $2.06 per Mcf from the first quarter of 2007.
Marketing and Refining earnings were $16 million in the first quarter of 2008 compared with $101 million in the first quarter of 2007, primarily reflecting lower refining margins and trading results. Refining operations generated a loss of $3 million in the first quarter of 2008 compared with earnings of $54 million in the first quarter of 2007. Marketing earnings were $32 million in the first quarter of 2008 compared with $43 million in the first quarter of 2007. Trading activities produced a loss of $13 million in the first quarter of 2008 compared with income of $4 million in the first quarter of 2007.
Net cash provided by operating activities was $1,176 million in the first quarter of 2008 compared with $639 million in the first quarter of 2007. Capital and exploratory expenditures for the first quarter of 2008 amounted to $970 million, of which $938 million related to Exploration and Production operations. Capital and exploratory expenditures for the first quarter of 2007 amounted to $1,181 million, of which $1,159 million related to Exploration and Production operations.
At March 31, 2008, cash and cash equivalents totaled $902 million compared with $607 million at December 31, 2007. Total debt was $3,960 million at March 31, 2008 and $3,980 million at December 31, 2007. The Corporation's debt to capitalization ratio at March 31, 2008 was 26.9 percent compared with 28.9 percent at the end of 2007.
Hess Corporation will review first quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details on the event, refer to the Investor Relations section of our website at www.hess.com.
Hess Corporation, with headquarters in New York, is a leading global independent energy company engaged in the exploration for and production of crude oil and natural gas, as well as in refining and marketing refined petroleum products, natural gas and electricity. 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.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS OF DOLLARS)
First First Fourth
Quarter Quarter Quarter
2008 2007 2007
------- ------- -------
Income Statement
--------------------------------------------
Revenues and Non-operating Income
Sales (excluding excise taxes) and other
operating revenues $10,667 $7,319 $9,456
Equity in income (loss) of HOVENSA
L.L.C. (10) 56 20
Other, net 63 (1) 24
------- ------- -------
Total revenues and non-operating
income 10,720 7,374 9,500
------- ------- -------
Costs and Expenses
Cost of products sold (excluding items
shown separately below) 7,718 5,410 6,651
Production expenses 424 347 463
Marketing expenses 233 222 243
Exploration expenses, including dry
holes and lease impairment 152 93 201
Other operating expenses 45 33 46
General and administrative expenses 152 131 208
Interest expense 67 64 71
Depreciation, depletion and amortization 452 327 530
------- ------- -------
Total costs and expenses 9,243 6,627 8,413
------- ------- -------
Income before income taxes 1,477 747 1,087
Provision for income taxes 718 377 577
------- ------- -------
Net income $ 759 $ 370 $ 510
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Supplemental Income Statement Information
--------------------------------------------
Foreign currency gains (losses), after-tax $ 11 $ (4) $ 1
Capitalized interest 1 15 1
Cash Flow Information
--------------------------------------------
Net cash provided by operating activities
(*) $ 1,176 $ 639 $ 806
Capital and Exploratory Expenditures
--------------------------------------------
Exploration and Production
United States $ 415 $ 651 $ 291
International 523 508 577
------- ------- -------
Total Exploration and Production 938 1,159 868
Marketing, Refining and Corporate 32 22 46
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Total Capital and Exploratory
Expenditures $ 970 $1,181 $ 914
======= ======= =======
Exploration expenses charged to income
included above
United States $ 62 $ 40 $ 43
International 59 35 66
------- ------- -------
$ 121 $ 75 $ 109
======= ======= =======
(*) Includes changes in working capital
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS OF DOLLARS)
March 31, December 31,
2008 2007
--------- -------------
Balance Sheet Information
---------------------------------------------
Cash and cash equivalents $ 902 $ 607
Other current assets 6,392 6,319
Investments 1,082 1,117
Property, plant and equipment - net 15,132 14,634
Other long-term assets 3,505 3,454
--------- ------------
Total assets $ 27,013 $ 26,131
========= ============
Current maturities of long-term debt $ 64 $ 62
Other current liabilities 7,882 7,962
Long-term debt 3,896 3,918
Other long-term liabilities 4,416 4,415
Stockholders' equity excluding other
comprehensive income (loss) 12,407 11,615
Accumulated other comprehensive income
(loss) (1,652) (1,841)
--------- ------------
Total liabilities and stockholders'
equity $ 27,013 $ 26,131
========= ============
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS OF DOLLARS)
First Quarter 2008
--------------------------------
United
States International Total
-------- ------------- ------
Sales and other operating revenues $448 $ 2,159 $2,607
Non-operating income 10 37 47
-------- ------------- ------
Total revenues and non-operating
income 458 2,196 2,654
-------- ------------- ------
Costs and expenses
Production expenses, including
related taxes 70 354 424
Exploration expenses, including dry
holes and lease impairment 83 69 152
General, administrative and other
expenses 32 31 63
Depreciation, depletion and
amortization 55 379 434
-------- ------------- ------
Total costs and expenses 240 833 1,073
-------- ------------- ------
Results of operations before income
taxes 218 1,363 1,581
Provision for income taxes 84 673 757
-------- ------------- ------
Results of operations $134 $ 690 $ 824
======== ============= ======
First Quarter 2007
--------------------------------
United
States International Total
-------- ------------- ------
Sales and other operating revenues $241 $ 1,270 $1,511
Non-operating income (loss) 8 (14) (6)
-------- ------------- ------
Total revenues and non-operating
income 249 1,256 1,505
-------- ------------- ------
Costs and expenses
Production expenses, including
related taxes 59 288 347
Exploration expenses, including dry
holes and lease impairment 50 43 93
General, administrative and other
expenses 33 24 57
Depreciation, depletion and
amortization 37 272 309
-------- ------------- ------
Total costs and expenses 179 627 806
-------- ------------- ------
Results of operations before income
taxes 70 629 699
Provision for income taxes 26 333 359
-------- ------------- ------
Results of operations $ 44 $ 296 $ 340
======== ============= ======
Fourth Quarter 2007
--------------------------------
United
States International Total
-------- ------------- ------
Sales and other operating revenues $401 $ 2,037 $2,438
Non-operating income (loss) (1) 14 13
-------- ------------- ------
Total revenues and non-operating
income 400 2,051 2,451
-------- -------------- ------
Costs and expenses
Production expenses, including
related taxes 71 392 463
Exploration expenses, including dry
holes and lease impairment 122 79 201
General, administrative and other
expenses 36 38 74
Depreciation, depletion and
amortization 58 454 512
-------- ------------- ------
Total costs and expenses 287 963 1,250
-------- ------------- ------
Results of operations before income
taxes 113 1,088 1,201
Provision for income taxes 44 574 618
-------- ------------- ------
Results of operations $ 69 $ 514 $ 583
======== ============= ======
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA (UNAUDITED)
First First Fourth
Quarter Quarter Quarter
2008 2007 2007
-------- -------- --------
Operating Data
-------------------------------------------
Net Production Per Day (in thousands)
-------------------------------------------
Crude oil - barrels
United States 36 29 34
Europe 83 110 83
Africa 119 99 121
Asia and other 17 15 22
-------- -------- --------
Total 255 253 260
======== ======== ========
Natural gas liquids - barrels
United States 11 9 11
Europe 4 7 5
-------- -------- --------
Total 15 16 16
======== ======== ========
Natural gas - mcf
United States 93 90 91
Europe 296 348 290
Asia and other 342 243 300
-------- -------- --------
Total 731 681 681
======== ======== ========
Barrels of oil equivalent 391 382 390
======== ======== ========
Average Selling Price
-------------------------------------------
Crude oil - per barrel (including
hedging)
United States $ 92.59 $ 53.19 $ 86.22
Europe 82.29 51.32 74.00
Africa 78.83 48.17 72.85
Asia and other 96.53 56.44 86.30
Worldwide 83.28 50.74 76.11
Crude oil - per barrel (excluding
hedging)
United States $ 92.59 $ 53.19 $ 86.22
Europe 82.29 51.32 74.00
Africa 93.52 56.09 84.84
Asia and other 96.53 56.44 86.30
Worldwide 89.62 53.75 81.87
Natural gas liquids - per barrel
United States $ 64.83 $ 42.44 $ 63.51
Europe 76.50 45.90 70.86
Worldwide 67.70 43.97 66.13
Natural gas - per mcf (including
hedging)
United States $ 8.53 $ 7.21 $ 6.47
Europe 8.96 4.74 8.92
Asia and other 5.01 4.56 5.13
Worldwide 7.06 5.00 6.93
Natural gas - per mcf (excluding
hedging)
United States $ 8.53 $ 7.21 $ 6.47
Europe 9.05 4.74 8.92
Asia and other 5.01 4.56 5.13
Worldwide 7.10 5.00 6.93
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL HEDGING INFORMATION
(UNAUDITED)
The following is a summary of the Corporation's outstanding crude oil
hedges at March 31, 2008:
Brent Crude Oil(*)
---------------------------------------
Average Thousands
Selling of Barrels
Price per Day
------------------ --------------------
Maturities
2008 $25.56 24
2009 25.54 24
2010 25.78 24
2011 26.37 24
2012 26.90 24
(*) There were no WTI crude oil hedges outstanding at March 31, 2008.
At March 31, 2008, the Corporation also had outstanding United Kingdom natural gas hedges of 50 thousand Mcf per day through October 2008 at an average selling price of approximately $10.65 per Mcf.
The after-tax losses from crude oil and natural gas hedges were $95 million in the first quarter of 2008. The after-tax losses from crude oil hedges were $39 million in the first quarter of 2007 and $89 million in the fourth quarter of 2007. At March 31, 2008, the after-tax deferred losses related to crude oil and natural gas hedges that were included in accumulated other comprehensive income amounted to $1.7 billion.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA
(UNAUDITED)
First First Fourth
Quarter Quarter Quarter
2008 2007 2007
------- ------- -------
Financial Information (in millions of
dollars)
-------------------------------------------
Marketing and Refining Earnings
-------------------------------------------
Income before income taxes $ 21 $ 159 $ 51
Provision for income taxes 5 58 20
------- ------- -------
Marketing and Refining Earnings $ 16 $ 101 $ 31
======= ======= =======
Summary of Marketing and Refining
Earnings
-------------------------------------------
Refining $ (3) $ 54 $ 27
Marketing 32 43 19
Trading (13) 4 (15)
------- ------- -------
Total Marketing and Refining Earnings $ 16 $ 101 $ 31
======= ======= =======
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Operating Data (barrels and gallons in
thousands)
-------------------------------------------
Refined Product Sales (barrels per day)
-------------------------------------------
Gasoline 223 194 205
Distillates 168 174 163
Residuals 67 94 57
Other 37 29 37
------- ------- -------
Total 495 491 462
======= ======= =======
Refinery Throughput (barrels per day)
-------------------------------------------
HOVENSA - Crude runs 446 470 488
HOVENSA - Hess 50% share 223 235 244
Port Reading 61 55 63
---------
Refinery
Refinery Utilization Capacity
--------------------------------- ---------
(barrels
HOVENSA per day)
Crude 500 89.1% 94.1% 97.6%
FCC 150 74.3% 93.2% 84.9%
Coker 58 91.5% 88.6% 99.3%
Port Reading 70(c) 87.1% 84.7% 96.3%
---------
Retail Marketing
---------------------------------
Number of retail stations (a) 1,367 1,345 1,371
Convenience store revenue (in millions
of dollars) (b) $ 239 $ 244 $ 255
Average gasoline volume per station
(gallons per month) (b) 195 191 209
(a) Includes company operated, Wilco-Hess, dealer and branded
retailer.
(b) Company operated only.
(c) Refinery utilization in 2007 is based on capacity of 65 thousand
barrels per day.
SOURCE: Hess Corporation
Hess Corporation
Investor:
Jay Wilson, 212-536-8940
or
Media:
Jon Pepper, 212-536-8550