UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of Earliest Event Reported): October 28, 2009
HESS
CORPORATION
(Exact
Name of Registrant as Specified in Its Charter)
|
DELAWARE |
No. 1-1204 |
No. 13-4921002 |
|
(State or Other |
(Commission File Number) |
(IRS Employer Identification No.) |
|
1185 Avenue of the Americas |
|
(Address of Principal Executive Offices) (Zip Code) |
Registrant's Telephone Number, Including Area Code: (212)
997-8500
N/A
(Former Name or Former Address, if
Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On October 28, 2009, Hess Corporation issued a news release reporting its results for the third quarter of 2009. A copy of this news release is attached hereto as Exhibit 99(1) and is hereby incorporated by reference.
Item 7.01. Regulation FD Disclosure.
Furnished hereunder are the prepared remarks of John B. Hess, Chairman of the Board of Directors and Chief Executive Officer of Hess Corporation at a public conference call held on October 28, 2009. A copy of his remarks is attached as Exhibit 99(2) and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
| (c) | Exhibits | |
| 99(1) | News release dated October 28, 2009 reporting results for the third quarter of 2009. | |
| 99(2) | Prepared remarks of John B. Hess, Chairman of the Board of Directors and Chief Executive Officer. | |
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date: October
28, 2009
|
|
HESS CORPORATION |
|
|
|
|
|
|
|
By: |
/s/ John P. Rielly |
|
Name: |
John P. Rielly |
|
|
Title: |
Senior Vice President and |
|
|
|
Chief Financial Officer |
|
EXHIBIT INDEX
|
Exhibit No. |
Description |
|
99(1) |
News release dated October 28, 2009 reporting results for the third quarter of 2009. |
|
99(2) |
Prepared remarks of John B. Hess, Chairman of the Board of Directors and Chief Executive Officer. |
4
Exhibit 99(1)
Hess Reports Estimated Results for the Third Quarter of 2009
Third Quarter Highlights:
- Net Income was $341 million compared with $775 million in third quarter 2008
- Oil and gas production was 420,000 barrels per day, up from 361,000 in third quarter 2008
- Exploration and Production results included after-tax income of $89 million related to the resolution of a U.S. royalty dispute
- Capital and exploratory expenditures were $668 million, down from $1,368 million in the third quarter 2008
NEW YORK--(BUSINESS WIRE)--October 28, 2009--Hess Corporation (NYSE: HES) reported net income of $341 million for the third quarter of 2009 compared with net income of $775 million for the third quarter of 2008. The after-tax results by major operating activity were as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||
|
September 30, (unaudited) |
September 30, (unaudited) |
|||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||
| Exploration and Production | $ | 397 | $ | 699 | $ | 548 | $ | 2,548 | ||||||||
| Marketing and Refining | 38 | 161 | 110 | 125 | ||||||||||||
| Corporate | (33 | ) | (42 | ) | (108 | ) | (114 | ) | ||||||||
| Interest expense | (61 | ) | (43 | ) | (168 | ) | (125 | ) | ||||||||
| Net income attributable to Hess Corporation | $ | 341 | $ | 775 | $ | 382 | $ | 2,434 | ||||||||
| Net income per share (diluted) | $ | 1.05 | $ | 2.37 | $ | 1.17 | $ | 7.47 | ||||||||
| Weighted average number of shares (diluted) | 326.0 | 327.4 |
|
325.8 |
|
325.7 | ||||||||||
Exploration and Production earnings were $397 million in the third quarter of 2009 compared with $699 million in the third quarter of 2008. The Corporation’s oil and gas production was 420,000 barrels of oil equivalent per day in the third quarter of 2009, an increase of 16% from the third quarter of 2008. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $56.07 per barrel in the third quarter of 2009 compared with $93.36 per barrel in the third quarter of 2008. The Corporation’s average worldwide natural gas selling price was $4.60 per Mcf in the third quarter of 2009 compared with $7.60 per Mcf in the third quarter of 2008.
Marketing and Refining earnings were $38 million in the third quarter of 2009 compared with $161 million in the third quarter of 2008. Refining operations generated a loss of $3 million in the third quarter of 2009 compared with income of $46 million in the third quarter of 2008 as a result of lower refining margins. Marketing earnings were $35 million in the third quarter of 2009 compared with $110 million in the third quarter of 2008, primarily due to lower margins. Trading activities produced income of $6 million in the third quarter of 2009 and $5 million in the third quarter of 2008.
The following table reflects the total after-tax impact of items affecting comparability of earnings between periods (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||
|
September 30, |
September 30, |
||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Exploration and Production | $ | 89 | $ | - | $ | 45 | $ | - | |||||||
| Marketing and Refining | 12 | - | 12 | - | |||||||||||
| Corporate | - | - | (16 | ) | - | ||||||||||
| $ | 101 | $ | - | $ | 41 | $ | - | ||||||||
In the third quarter of 2009, the Corporation recorded after-tax income of $89 million related to the resolution of a royalty dispute on production from certain leases subject to the U.S. Deep Water Royalty Relief Act. The Corporation also recorded a benefit of $12 million due to an income tax adjustment relating to refining operations.
Net cash provided by operating activities was $534 million in the third quarter of 2009 compared with $1,205 million in the third quarter of 2008. Capital and exploratory expenditures for the third quarter of 2009 amounted to $668 million, of which $646 million related to Exploration and Production operations. Capital and exploratory expenditures for the third quarter of 2008 amounted to $1,368 million, of which $1,338 million related to Exploration and Production operations.
At September 30, 2009, cash and cash equivalents totaled $957 million compared with $908 million at December 31, 2008. Total debt was $4,379 million at September 30, 2009 and $3,955 million at December 31, 2008. The Corporation’s debt to capitalization ratio at September 30, 2009 was 25.2 percent compared with 24.2 percent at the end of 2008.
Hess Corporation will review third 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) |
||||||||||||
| Third | Third | Second | ||||||||||
| Quarter | Quarter | Quarter | ||||||||||
| 2009 | 2008 | 2009 | ||||||||||
|
Income Statement (*) |
||||||||||||
| Revenues and Non-operating Income | ||||||||||||
| Sales (excluding excise taxes) and other operating revenues | $ | 7,270 | $ | 11,396 | $ | 6,751 | ||||||
| Equity in income (loss) of HOVENSA L.L.C. | (49 | ) | 52 | (75 | ) | |||||||
| Other, net | 163 | (62 | ) | 79 | ||||||||
| Total revenues and non-operating income | 7,384 | 11,386 | 6,755 | |||||||||
| Costs and Expenses | ||||||||||||
| Cost of products sold (excluding items shown separately below) | 5,069 | 8,164 | 4,705 | |||||||||
| Production expenses | 460 | 503 | 444 | |||||||||
| Marketing expenses | 240 | 266 | 245 | |||||||||
| Exploration expenses, including dry holes | ||||||||||||
| and lease impairment | 167 | 157 | 312 | |||||||||
| Other operating expenses | 43 | 62 | 43 | |||||||||
| General and administrative expenses | 148 | 170 | 136 | |||||||||
| Interest expense | 97 | 68 | 95 | |||||||||
| Depreciation, depletion and amortization | 626 | 497 | 558 | |||||||||
| Total costs and expenses | 6,850 | 9,887 | 6,538 | |||||||||
| Income before income taxes | 534 | 1,499 | 217 | |||||||||
| Provision for income taxes | 182 | 725 | 115 | |||||||||
| Net income | 352 | 774 | 102 | |||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 11 | (1 | ) | 2 | ||||||||
| Net Income attributable to Hess Corporation | $ | 341 | $ | 775 | $ | 100 | ||||||
|
Supplemental Income Statement Information |
||||||||||||
| Foreign currency gains (losses), after-tax | $ | 3 | $ | (10 | ) | $ | 6 | |||||
| Capitalized interest | 1 | 2 | 2 | |||||||||
|
Cash Flow Information (*) |
||||||||||||
| Net cash provided by operating activities (**) | $ | 534 | $ | 1,205 | $ | 616 | ||||||
|
Capital and Exploratory Expenditures |
||||||||||||
| Exploration and Production | ||||||||||||
| United States | $ | 198 | $ | 509 | $ | 300 | ||||||
| International | 448 | 829 | 470 | |||||||||
| Total Exploration and Production | 646 | 1,338 | 770 | |||||||||
| Marketing, Refining and Corporate | 22 | 30 | 15 | |||||||||
| Total Capital and Exploratory Expenditures | $ | 668 | $ | 1,368 | $ | 785 | ||||||
| Exploration expenses charged to income included above | ||||||||||||
| United States | $ | 22 | $ | 56 | $ | 52 | ||||||
| International | 42 | 35 | 48 | |||||||||
| $ | 64 | $ | 91 | $ | 100 | |||||||
| (*) Reflects the retrospective adoption of a new accounting standard for noncontrolling interests in consolidated subsidiaries | ||||||||||||
| (**) Includes changes in working capital | ||||||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS OF DOLLARS) |
|||||||
| Nine Months | |||||||
| 2009 | 2008 | ||||||
|
Income Statement (*) |
|||||||
| Revenues and Non-operating Income | |||||||
| Sales (excluding excise taxes) and other operating revenues | $ | 20,936 | $ | 33,754 | |||
| Equity in income (loss) of HOVENSA L.L.C. | (165 | ) | 23 | ||||
| Other, net | 240 | 38 | |||||
| Total revenues and non-operating income | 21,011 | 33,815 | |||||
| Costs and Expenses | |||||||
| Cost of products sold (excluding items shown separately below) | 14,956 | 24,206 | |||||
| Production expenses | 1,313 | 1,421 | |||||
| Marketing expenses | 742 | 766 | |||||
| Exploration expenses, including dry holes | |||||||
| and lease impairment | 672 | 467 | |||||
| Other operating expenses | 134 | 154 | |||||
| General and administrative expenses | 444 | 478 | |||||
| Interest expense | 269 | 200 | |||||
| Depreciation, depletion and amortization | 1,670 | 1,431 | |||||
| Total costs and expenses | 20,200 | 29,123 | |||||
| Income before income taxes | 811 | 4,692 | |||||
| Provision for income taxes | 374 | 2,255 | |||||
| Net income | 437 | 2,437 | |||||
| Less: Net income attributable to noncontrolling interests | 55 | 3 | |||||
| Net Income attributable to Hess Corporation | $ | 382 | $ | 2,434 | |||
|
Supplemental Income Statement Information |
|||||||
| Foreign currency gains (losses), after-tax | $ | (1 | ) | $ | 2 | ||
| Capitalized interest | 4 | 4 | |||||
|
Cash Flow Information (*) |
|||||||
| Net cash provided by operating activities (**) | $ | 1,775 | $ | 4,120 | |||
|
Capital and Exploratory Expenditures |
|||||||
| Exploration and Production | |||||||
| United States | $ | 813 | $ | 1,645 | |||
| International | 1,362 | 1,836 | |||||
| Total Exploration and Production | 2,175 | 3,481 | |||||
| Marketing, Refining and Corporate | 83 | 97 | |||||
| Total Capital and Exploratory Expenditures | $ | 2,258 | $ | 3,578 | |||
| Exploration expenses charged to income included above | |||||||
| United States | $ | 127 | $ | 162 | |||
| International | 138 | 134 | |||||
| $ | 265 | $ | 296 | ||||
| (*) Reflects the retrospective adoption of a new accounting standard for noncontrolling interests in consolidated subsidiaries | |||||||
| (**) Includes changes in working capital | |||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS OF DOLLARS) |
||||||||
|
|
September 30, | December 31, | ||||||
| 2009 | 2008 | |||||||
|
Balance Sheet Information |
||||||||
| Cash and cash equivalents | $ | 957 | $ | 908 | ||||
| Other current assets | 5,969 | 6,424 | ||||||
| Investments | 975 | 1,127 | ||||||
| Property, plant and equipment – net | 16,646 | 16,271 | ||||||
| Other long-term assets | 3,890 | 3,859 | ||||||
| Total assets | $ | 28,437 | $ | 28,589 | ||||
| Current maturities of long-term debt | $ | 136 | $ | 143 | ||||
| Other current liabilities | 6,332 | 7,587 | ||||||
| Long-term debt | 4,243 | 3,812 | ||||||
| Other long-term liabilities | 4,719 | 4,656 | ||||||
| Total equity excluding other comprehensive income (loss) | 14,834 | 14,399 | ||||||
| Accumulated other comprehensive income (loss) | (1,827 | ) | (2,008 | ) | ||||
| Total liabilities and equity | $ | 28,437 | $ | 28,589 | ||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS OF DOLLARS) |
||||||||||||||
|
Third Quarter 2009 |
||||||||||||||
| United | ||||||||||||||
| States | International | Total | ||||||||||||
| Sales and other operating revenues | $ |
499 |
$ | 1,293 | $ | 1,792 | ||||||||
|
Other, net |
137 | 8 | 145 | |||||||||||
| Total revenues and non-operating income | 636 | 1,301 | 1,937 | |||||||||||
| Costs and expenses | ||||||||||||||
| Production expenses, including related taxes | 106 | 354 | 460 | |||||||||||
| Exploration expenses, including dry holes | ||||||||||||||
| and lease impairment | 56 | 111 | 167 | |||||||||||
| General, administrative and other expenses | 37 | 28 | 65 | |||||||||||
| Depreciation, depletion and amortization | 176 | 426 | 602 | |||||||||||
| Total costs and expenses | 375 | 919 | 1,294 | |||||||||||
| Results of operations before income taxes | 261 | 382 | 643 | |||||||||||
| Provision for income taxes | 99 | 147 | 246 | |||||||||||
| Results of operations attributable to Hess Corporation | $ | 162 | $ | 235 | $ | 397 | ||||||||
| Third Quarter 2008 | ||||||||||||||
| United | ||||||||||||||
| States | International | Total | ||||||||||||
| Sales and other operating revenues | $ | 460 | $ | 2,201 | $ | 2,661 | ||||||||
|
Other, net |
(1 | ) | (70 | ) | (71 | ) | ||||||||
| Total revenues and non-operating income | 459 | 2,131 | 2,590 | |||||||||||
| Costs and expenses | ||||||||||||||
| Production expenses, including related taxes | 96 | 407 | 503 | |||||||||||
| Exploration expenses, including dry holes | ||||||||||||||
| and lease impairment | 82 | 75 | 157 | |||||||||||
| General, administrative and other expenses | 41 | 43 | 84 | |||||||||||
| Depreciation, depletion and amortization | 59 | 420 | 479 | |||||||||||
| Total costs and expenses | 278 | 945 | 1,223 | |||||||||||
| Results of operations before income taxes | 181 | 1,186 | 1,367 | |||||||||||
| Provision for income taxes | 71 | 597 | 668 | |||||||||||
| Results of operations attributable to Hess Corporation | $ | 110 | $ | 589 | $ | 699 | ||||||||
| Second Quarter 2009 | ||||||||||||||
| United | ||||||||||||||
| States | International | Total | ||||||||||||
| Sales and other operating revenues | $ | 358 | $ | 1,341 | $ | 1,699 | ||||||||
|
Other, net |
(3 | ) | 60 | 57 | ||||||||||
| Total revenues and non-operating income | 355 | 1,401 | 1,756 | |||||||||||
| Costs and expenses | ||||||||||||||
| Production expenses, including related taxes | 109 | 335 | 444 | |||||||||||
| Exploration expenses, including dry holes | ||||||||||||||
| and lease impairment | 139 | 173 | 312 | |||||||||||
| General, administrative and other expenses | 33 | 28 | 61 | |||||||||||
| Depreciation, depletion and amortization | 105 | 433 | 538 | |||||||||||
| Total costs and expenses | 386 | 969 | 1,355 | |||||||||||
| Results of operations before income taxes | (31 | ) | 432 | 401 | ||||||||||
| Provision (benefit) for income taxes | (11 | ) | 197 | 186 | ||||||||||
| Results of operations attributable to Hess Corporation | $ | (20 | ) | $ | 235 | $ | 215 | |||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS OF DOLLARS) |
|||||||||||||
| Nine Months 2009 | |||||||||||||
| United | |||||||||||||
| States | International | Total | |||||||||||
| Sales and other operating revenues | $ | 1,024 | $ | 3,598 | $ | 4,622 | |||||||
|
Other, net |
132 | 78 | 210 | ||||||||||
| Total revenues and non-operating income | 1,156 | 3,676 | 4,832 | ||||||||||
| Costs and expenses | |||||||||||||
| Production expenses, including related taxes | 327 | 986 | 1,313 | ||||||||||
| Exploration expenses, including dry holes | |||||||||||||
| and lease impairment | 306 | 366 | 672 | ||||||||||
| General, administrative and other expenses | 97 | 85 | 182 | ||||||||||
| Depreciation, depletion and amortization | 338 | 1,267 | 1,605 | ||||||||||
| Total costs and expenses | 1,068 | 2,704 | 3,772 | ||||||||||
| Results of operations before income taxes | 88 | 972 | 1,060 | ||||||||||
| Provision for income taxes | 35 | 477 | 512 | ||||||||||
| Results of operations attributable to Hess Corporation | $ | 53 | $ | 495 | $ | 548 | |||||||
| Nine Months 2008 | |||||||||||||
| United | |||||||||||||
| States | International | Total | |||||||||||
| Sales and other operating revenues | $ | 1,453 | $ | 6,890 | $ | 8,343 | |||||||
|
Other, net |
9 | (11 | ) | (2 | ) | ||||||||
| Total revenues and non-operating income | 1,462 | 6,879 | 8,341 | ||||||||||
| Costs and expenses | |||||||||||||
| Production expenses, including related taxes | 267 | 1,154 | 1,421 | ||||||||||
| Exploration expenses, including dry holes | |||||||||||||
| and lease impairment | 227 | 240 | 467 | ||||||||||
| General, administrative and other expenses | 109 | 111 | 220 | ||||||||||
| Depreciation, depletion and amortization | 175 | 1,200 | 1,375 | ||||||||||
| Total costs and expenses | 778 | 2,705 | 3,483 | ||||||||||
| Results of operations before income taxes | 684 | 4,174 | 4,858 | ||||||||||
| Provision for income taxes | 263 | 2,047 | 2,310 | ||||||||||
| Results of operations attributable to Hess Corporation | $ | 421 | $ | 2,127 | $ | 2,548 | |||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED) |
|||||||||
| Third | Third | Second | |||||||
| Quarter | Quarter | Quarter | |||||||
| 2009 | 2008 | 2009 | |||||||
|
Operating Data |
|||||||||
|
Net Production Per Day (in thousands) |
|||||||||
| Crude oil - barrels | |||||||||
| United States | 73 | 31 | 58 | ||||||
| Europe | 83 | 80 | 76 | ||||||
| Africa | 124 | 121 | 124 | ||||||
| Asia and other | 17 | 12 | 16 | ||||||
| Total | 297 | 244 | 274 | ||||||
| Natural gas liquids - barrels | |||||||||
| United States | 12 | 9 | 10 | ||||||
| Europe | 2 | 4 | 3 | ||||||
| Asia and other | - | - | 1 | ||||||
| Total | 14 | 13 | 14 | ||||||
| Natural gas - mcf | |||||||||
| United States | 105 | 76 | 92 | ||||||
| Europe | 120 | 216 | 160 | ||||||
| Asia and other | 429 | 333 | 459 | ||||||
| Total | 654 | 625 | 711 | ||||||
| Barrels of oil equivalent | 420 | 361 | 407 | ||||||
|
Average Selling Price |
|||||||||
| Crude oil - per barrel (including hedging)* | |||||||||
| United States | $ | 63.79 | $ | 116.14 | $ | 55.53 | |||
| Europe | 47.34 | 83.23 | 47.41 | ||||||
| Africa | 54.97 | 91.72 | 47.16 | ||||||
| Asia and other | 67.49 | 105.58 | 55.84 | ||||||
|
Worldwide |
56.07 | 93.36 | 49.27 | ||||||
| Crude oil - per barrel (excluding hedging) | |||||||||
| United States | $ | 63.79 | $ | 116.14 | $ | 55.53 | |||
| Europe | 47.34 | 83.23 | 47.41 | ||||||
| Africa | 67.27 | 108.49 | 57.13 | ||||||
| Asia and other | 67.49 | 105.58 | 55.84 | ||||||
| Worldwide | 61.42 | 102.80 | 54.03 | ||||||
| Natural gas liquids - per barrel | |||||||||
| United States | $ | 36.05 | $ | 77.50 | $ | 31.03 | |||
| Europe | 43.53 | 81.84 | 36.51 | ||||||
| Asia and other | 44.74 | - | 35.92 | ||||||
| Worldwide | 37.27 | 78.50 | 32.97 | ||||||
| Natural gas - per mcf (including hedging)* | |||||||||
| United States | $ | 2.65 | $ | 8.57 | $ | 3.26 | |||
| Europe | 4.38 | 10.12 | 4.53 | ||||||
| Asia and other | 5.12 | 5.77 | 4.82 | ||||||
| Worldwide | 4.60 | 7.60 | 4.56 | ||||||
| Natural gas - per mcf (excluding hedging) | |||||||||
| United States | $ | 2.65 | $ | 8.57 | $ | 3.26 | |||
| Europe | 4.38 | 10.84 | 4.53 | ||||||
| Asia and other | 5.12 | 5.77 | 4.82 | ||||||
| Worldwide | 4.60 | 7.85 | 4.56 | ||||||
| * The after-tax losses from hedging activities were $84 million in the third quarter of 2009, $138 million in the third quarter of 2008 and $83 million in the second quarter of 2009. | |||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED) |
||||||
| Nine Months | ||||||
| 2009 | 2008 | |||||
|
Operating Data |
||||||
|
Net Production Per Day (in thousands) |
||||||
| Crude oil - barrels | ||||||
| United States | 54 | 34 | ||||
| Europe | 82 | 82 | ||||
| Africa | 125 | 123 | ||||
| Asia and other | 16 | 14 | ||||
| Total | 277 | 253 | ||||
| Natural gas liquids - barrels | ||||||
| United States | 10 | 10 | ||||
| Europe | 3 | 4 | ||||
| Asia and other | 1 | - | ||||
| Total | 14 | 14 | ||||
| Natural gas - mcf | ||||||
| United States | 92 | 84 | ||||
| Europe | 153 | 260 | ||||
| Asia and other | 442 | 346 | ||||
| Total | 687 | 690 | ||||
| Barrels of oil equivalent | 406 | 382 | ||||
|
Average Selling Price |
||||||
| Crude oil - per barrel (including hedging)* | ||||||
| United States | $ | 56.02 | $ | 109.39 | ||
| Europe | 42.80 | 90.69 | ||||
| Africa | 44.98 | 89.66 | ||||
| Asia and other | 56.63 | 106.09 | ||||
| Worldwide | 47.09 | 93.62 | ||||
| Crude oil - per barrel (excluding hedging) | ||||||
| United States | $ | 56.02 | $ | 109.39 | ||
| Europe | 42.80 | 90.69 | ||||
| Africa | 56.59 | 106.91 | ||||
| Asia and other | 56.63 | 106.09 | ||||
| Worldwide | 52.35 | 102.03 | ||||
| Natural gas liquids - per barrel | ||||||
| United States | $ | 32.38 | $ | 72.79 | ||
| Europe | 37.86 | 84.77 | ||||
| Asia and other | 38.49 | - | ||||
| Worldwide | 33.90 | 75.96 | ||||
| Natural gas - per mcf (including hedging)* | ||||||
| United States | $ | 3.19 | $ | 9.35 | ||
| Europe | 5.25 | 9.75 | ||||
| Asia and other | 4.88 | 5.33 | ||||
| Worldwide | 4.74 | 7.48 | ||||
| Natural gas - per mcf (excluding hedging) | ||||||
| United States | $ | 3.19 | $ | 9.35 | ||
| Europe | 5.25 | 10.16 | ||||
| Asia and other | 4.88 | 5.33 | ||||
| Worldwide | 4.74 | 7.64 | ||||
| * The after-tax losses from hedging activities were $249 million for the nine months ended September 30, 2009 and $377 million for the nine months ended September 30, 2008. | ||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED) |
||||||||||||
| Third | Third | Second | ||||||||||
| Quarter | Quarter | Quarter | ||||||||||
| 2009 | 2008 | 2009 | ||||||||||
|
Financial Information (in millions of dollars) |
||||||||||||
|
Marketing and Refining Results |
||||||||||||
| Income (loss) before income taxes | $ | 29 | $ | 262 | $ | (56) | ||||||
| Provision (benefit) for income taxes | (9) | 101 | (26) | |||||||||
| Results of operations attributable to Hess Corporation | $ | 38 | $ | 161 | $ | (30) | ||||||
|
Summary of Marketing and Refining Results |
||||||||||||
| Refining | $ | (3) | $ | 46 | $ | (26) | ||||||
| Marketing | 35 | 110 | (13) | |||||||||
| Trading | 6 | 5 | 9 | |||||||||
| Results of operations attributable to Hess Corporation | $ | 38 | $ | 161 | $ | (30) | ||||||
|
Operating Data (barrels and gallons in thousands) |
||||||||||||
|
Refined Product Sales (barrels per day) |
||||||||||||
| Gasoline | 253 | 249 | 223 | |||||||||
| Distillates | 113 | 122 | 126 | |||||||||
| Residuals | 51 | 46 | 65 | |||||||||
| Other | 26 | 43 | 41 | |||||||||
| Total | 443 | 460 | 455 | |||||||||
|
Refinery Throughput (barrels per day) |
||||||||||||
| HOVENSA - Crude runs | 384 | 457 | 442 | |||||||||
| HOVENSA - Hess 50% share | 192 | 228 | 221 | |||||||||
| Port Reading | 65 | 65 | 65 | |||||||||
|
Refinery Utilization |
Refinery Capacity |
|||||||||||
| HOVENSA | (barrels per day) | |||||||||||
| Crude | 500 | 76.9% | 91.3% | 88.4% | ||||||||
| FCC | 150 | 82.9% | 72.8% | 71.2% | ||||||||
| Coker | 58 | 78.9% | 105.4% | 91.2% | ||||||||
| Port Reading | 70 | 92.2% | 92.4% | 93.0% | ||||||||
|
Retail Marketing |
||||||||||||
| Number of retail stations (a) | 1,353 | 1,357 | 1,355 | |||||||||
| Convenience store revenue (in millions of dollars) (b) | $ | 313 | $ | 279 | $ | 300 | ||||||
| Average gasoline volume per station (gallons per month) (b) | 202 | 215 | 209 | |||||||||
|
|
||||||||||||
| (a) Includes company operated, Wilco-Hess, dealer and branded retailer. | ||||||||||||
| (b) Company operated only. | ||||||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED) |
|||||||||
| Nine Months | |||||||||
| 2009 | 2008 | ||||||||
|
Financial Information (in millions of dollars) |
|||||||||
|
Marketing and Refining Results |
|||||||||
| Income before income taxes | $ | 135 | $ | 198 | |||||
| Provision for income taxes | 25 | 73 | |||||||
| Results of operations attributable to Hess Corporation | $ | 110 | $ | 125 | |||||
|
Summary of Marketing and Refining Results |
|||||||||
| Refining | $ | (47) | $ | 46 | |||||
| Marketing | 123 | 102 | |||||||
| Trading | 34 | (23) | |||||||
| Results of operations attributable to Hess Corporation | $ | 110 | $ | 125 | |||||
|
Operating Data (barrels and gallons in thousands) |
|||||||||
|
Refined Product Sales (barrels per day) |
|||||||||
| Gasoline | 234 | 236 | |||||||
| Distillates | 129 | 140 | |||||||
| Residuals | 67 | 54 | |||||||
| Other | 36 | 40 | |||||||
| Total | 466 | 470 | |||||||
|
Refinery Throughput (barrels per day) |
|||||||||
| HOVENSA - Crude runs | 412 | 458 | |||||||
| HOVENSA - Hess 50% share | 206 | 229 | |||||||
| Port Reading | 64 | 63 | |||||||
|
Refinery Utilization |
Refinery Capacity | ||||||||
| HOVENSA | (barrels per day) | ||||||||
| Crude | 500 | 82.4% | 91.5% | ||||||
| FCC | 150 | 75.2% | 73.4% | ||||||
| Coker | 58 | 83.6% | 98.8% | ||||||
| Port Reading | 70 | 91.1% | 90.3% | ||||||
|
Retail Marketing |
|||||||||
| Number of retail stations (a) | 1,353 | 1,357 | |||||||
| Convenience store revenue (in millions of dollars) (b) | $ | 868 | $ | 793 | |||||
| Average gasoline volume per station (gallons per month) (b) | 203 | 210 | |||||||
|
|
|||||||||
| (a) Includes company operated, Wilco-Hess, dealer and branded retailer. | |||||||||
| (b) Company operated only. | |||||||||
CONTACT:
Hess Corporation
Investors:
Jay
Wilson, 212-536-8940
or
Media:
Jon
Pepper, 212-536-8550
Exhibit 99(2)
2009
Third Quarter Earnings Conference Call
Thank you
Jay and welcome to our third quarter conference call. I will make a few
brief comments after which John Rielly will review our financial results.
Net income for the third quarter of 2009 was $341 million versus $775 million a year ago. Our results were negatively impacted by sharply lower crude oil and natural gas selling prices and lower marketing and refining margins which more than offset the positive impact of higher crude oil production volumes.
For the third quarter of 2009, Exploration and Production earned $397 million. Crude oil and natural gas production averaged 420 thousand barrels of oil equivalent per day, which was 16 percent above the year ago quarter. This increase resulted primarily from higher production from the Shenzi Field in the deepwater Gulf of Mexico and the Malaysia-Thailand JDA and the resumption of production from the Gulf of Mexico that was shut-in during last year’s third quarter due to Hurricanes Gustav and Ike.
As a result of strong year-to-date production performance, we have raised our full year 2009 production forecast to a range of 400 to 410 thousand barrels of oil equivalent per day, versus our previous estimate of 390 to 400 thousand barrels of oil equivalent per day.
With regard to exploration, drilling is continuing on Permit WA-390-P in the Northwest Shelf of Australia, where Hess has a 100% interest. We have now completed 9 wells and expect to drill the remaining 7 wells of the program by mid-2010.
In Libya, the Stena Forth drillship is expected to arrive soon on location in Area 54, where Hess is the operator and has a 100% working interest. We intend to perform a drill stem test of our 2008 Arous Al Bahar discovery, which encountered 500 feet of gross hydrocarbon column, and also drill a down dip appraisal well to delineate the prospect.
Turning to Marketing and Refining, we reported a profit of $38 million for the third quarter of 2009. The weak economy continued to have a negative impact on both margins and volumes.
Refining margins at our Hovensa joint venture refinery were significantly lower than the prior year quarter as a result of lower distillate crack spreads and narrower light / heavy crude differentials.
Marketing results were weaker than the year ago quarter, reflecting lower margins and volumes. Retail marketing gasoline volumes, on a per site basis, were down 6%, while total convenience store revenue was up 12%. In Energy Marketing, electricity and fuel oil sales were higher, while natural gas sales volumes declined year over year.
The improvement in crude oil prices and increase in our production volumes during 2009 have enabled us to fund most of our capital and exploratory expenditures with internal cash flow. We remain committed to maintaining our financial strength so that we have the capability to fund the future growth of our reserves and production.
I will now turn the call over to John Rielly.
- 4 -