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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 Fee Required
For the fiscal year ended December 31, 1993
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 No Fee Required
For the transition period from to
COMMISSION FILE NUMBER 1-1204
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AMERADA HESS CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
13-4921002
(I.R.S. Employer Identification Number)
1185 AVENUE OF THE AMERICAS, NEW YORK, N.Y. 10036
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code, is (212) 997-8500)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock (par value $1.00) New York Stock Exchange
Montreal Stock Exchange
Toronto Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of voting stock held by non-affiliates of the
Registrant amounted to $3,681,000,000 as of February 28, 1994.
At February 28, 1994, 93,011,355 shares of Common Stock were outstanding.
Certain items in Parts I and II incorporate information by reference from
the 1993 Annual Report to Stockholders and Part III is incorporated by reference
from the Proxy Statement for the annual meeting of stockholders to be held on
May 4, 1994.
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PART I
ITEM 1. BUSINESS
Amerada Hess Corporation (the "Registrant") was incorporated in 1920 in the
State of Delaware. The Registrant and its subsidiaries (collectively referred to
herein as the "Corporation") are engaged in the exploration for and the
production, purchase, gathering, transportation and sale of crude oil and
natural gas and the manufacture, purchase, transportation and marketing of
petroleum products.
EXPLORATION AND PRODUCTION
The Corporation's exploration and production activities are located
primarily in the United States, Canada and the United Kingdom and Norwegian
sectors of the North Sea. The Corporation also conducts exploration and/or
production activities in Abu Dhabi, Egypt, Gabon, Namibia and Thailand. Of the
Company's proved reserves (on a barrel of oil equivalent basis), 32% are located
in the United States, 52% are located in the United Kingdom and Norwegian
sectors of the North Sea, 12% are located in Canada and the remainder are
located in Gabon and Abu Dhabi. Worldwide crude oil and natural gas liquids
production amounted to 215,390 barrels per day in 1993 compared with 224,187
barrels per day in 1992. Worldwide natural gas production was 887,309 Mcf per
day in 1993 compared with 924,961 Mcf per day in 1992.
At December 31, 1993, the Corporation has 670 million barrels of proved
crude oil and natural gas liquids reserves compared with 652 million barrels at
the end of 1992. Proved natural gas reserves were 2,653 million Mcf at December
31, 1993 compared with 2,640 million Mcf at December 31, 1992. The Corporation
has an inventory of drillable prospects primarily in the United States, Canada
and the United Kingdom and Norwegian sectors of the North Sea.
UNITED STATES. The Corporation operates principally offshore in the Gulf
of Mexico and onshore in the states of Texas, Louisiana and North Dakota. During
1993, 33% of the Corporation's crude oil and natural gas liquids production and
57% of its natural gas production were from United States operations.
The table below sets forth the Corporation's average daily net production
by area in the United States:
1993 1992
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CRUDE OIL, INCLUDING CONDENSATE AND
NATURAL GAS LIQUIDS (BARRELS PER DAY)
Texas........................................................ 27,573 28,183
Gulf of Mexico............................................... 15,389 15,924
North Dakota................................................. 13,699 13,487
Alaska....................................................... 4,341 5,016
Louisiana.................................................... 2,546 2,507
Other........................................................ 8,423 8,463
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Total................................................ 71,971 73,580
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NATURAL GAS (MCF PER DAY)
Gulf of Mexico............................................... 283,340 369,063
Louisiana.................................................... 54,848 44,699
North Dakota................................................. 47,617 39,259
Texas........................................................ 47,508 56,950
California................................................... 19,744 45,884
Other........................................................ 49,402 45,969
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Total................................................ 502,459 601,824
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CANADA. The Corporation, through its wholly-owned Canadian subsidiary,
Amerada Hess Canada Ltd., conducts operations in the Provinces of Alberta and
British Columbia. The Corporation's crude oil and natural gas liquids production
in Canada amounted to 13,492 net barrels per day in 1993 compared to 13,509 net
barrels per day in 1992, and its natural gas production increased to 167,839 net
Mcf per day in 1993 from 137,680 net Mcf per day in 1992.
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UNITED KINGDOM. The Corporation's activities in the United Kingdom are
conducted by its wholly-owned British subsidiary, Amerada Hess Limited. During
1993, 39% of the Corporation's crude oil and natural gas liquids production and
21% of its natural gas production were from United Kingdom operations.
The table below sets forth the Corporation's average daily net production
in the United Kingdom by field and the Corporation's interest in each at
December 31, 1993:
PRODUCING FIELD INTEREST 1993 1992
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CRUDE OIL, INCLUDING CONDENSATE AND
NATURAL GAS LIQUIDS (BARRELS PER DAY)
Ivanhoe/Rob Roy........................ 42.08% 27,343 27,452
Beryl/Ness............................. 20.00 20,478 20,595
Scott.................................. 35.27 10,690 --
Arbroath/Montrose...................... 28.21 9,679 10,556
Hudson................................. 28.46 4,714 --
Angus.................................. 93.92 4,178 23,053
Other.................................. Various 6,720 6,077
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Total............................. 83,802 87,733
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NATURAL GAS (MCF PER DAY)
Leman.................................. 21.74% 48,523 53,777
Indefatigable.......................... 23.08 38,836 55,347
Beryl/Ness............................. 20.00 46,219 14,484
Everest/Lomond......................... 18.67%/16.67% 18,596 --
Anglia................................. 29.29 15,962 11,112
Amethyst............................... 6.49 9,615 8,962
Ivanhoe/Rob Roy........................ 42.08 6,701 8,575
Other.................................. Various 3,572 1,342
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Total............................. 188,024 153,599
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Crude oil production commenced from the Scott and Hudson Fields in the
third quarter of 1993. Natural gas production commenced from the Everest and
Lomond Fields in mid-1993. The Angus Field ceased production in June 1993.
NORWAY. The Corporation's activities in Norway are conducted through its
wholly-owned Norwegian subsidiary, Amerada Hess Norge A/S. The Corporation's
Norwegian operations accounted for crude oil and natural gas liquids production
of 27,820 and 31,305 net barrels per day in 1993 and 1992, respectively.
Approximately 60% of this production is from the Corporation's 28.09% interest
in the Valhall Field.
GABON. The Corporation has a 5.5% interest in the Rabi Kounga oil field
onshore Gabon. The Corporation's share of production from Gabon averaged 8,136
and 6,660 net barrels of crude oil per day in 1993 and 1992, respectively.
REFINING AND MARKETING
The Corporation's refining facilities are located in St. Croix, United
States Virgin Islands and Port Reading, New Jersey. The Purvis refinery operated
throughout 1993 but was mothballed in early 1994. Total crude runs in 1993
averaged 351,000 barrels per day. Approximately 12% of the Corporation's crude
runs was supplied from the Corporation's production directly, or indirectly
under exchange arrangements with other producers. The balance comes from various
suppliers under contracts of one year or less and through spot purchases on the
open market. Approximately 85% of the petroleum products marketed in 1993 was
obtained from the Corporation's refineries. The Corporation purchased the
balance from other companies under short-term supply contracts and by spot
purchases from various sources. Sales of refined products averaged 386,000
barrels per day in 1993 compared with 377,000 barrels per day in 1992.
HESS OIL VIRGIN ISLANDS REFINERY. The Corporation owns and operates a
petroleum refinery in St. Croix, United States Virgin Islands through its
wholly-owned subsidiary, Hess Oil Virgin Islands Corp. ("HOVIC").
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In 1993, refined products produced were approximately 50% gasoline and
distillates, 20% refinery feedstocks and the remainder principally residual fuel
oil. In addition to crude distillation capacity, the refinery has a fluid
catalytic cracking unit which commenced production in the fourth quarter of 1993
and has increased gasoline production. The refinery also has catalytic reforming
units, vacuum distillation capacity, visbreakers, a sulfolane unit, a penex
unit, distillate desulfurizers, vacuum gas oil desulfurizers and sulfur recovery
facilities. The refinery has approximately 30 million barrels of storage
capacity.
The refinery has the capability to process a variety of crude oils,
including high-sulfur crudes. The refinery has a 60-foot-deep harbor and docking
facilities for ten ocean-going tankers at one time. The refinery's harbor
accommodates very large crude carriers after a portion of their crude oil cargo
is lightered at the Corporation's storage and transshipment facility in Saint
Lucia, which has a 90-foot-deep harbor. The Saint Lucia facility has
approximately 10 million barrels of storage capacity.
PORT READING FACILITY. The Corporation owns and operates a fluid catalytic
cracking facility in Port Reading, New Jersey, which processes vacuum gas oil
and operated at the rate of approximately 50,000 barrels per day in 1993. The
Port Reading facility primarily produces gasoline and heating oil.
PURVIS REFINERY. In early 1994, the Corporation mothballed its 30,000
barrel per day Purvis, Mississippi refinery.
MARKETING. The Corporation markets refined petroleum products principally
on the East and Gulf Coasts of the United States to public utilities, industrial
and commercial users, governmental agencies, wholesale distributors, commercial
airlines and the motoring public.
At December 31, 1993, the Corporation has 535 HESS(R) gasoline stations of
which approximately 83% are operated by the Corporation. Most of the
Corporation's stations are concentrated in highly-populated, urban areas,
principally in New York, New Jersey and Florida. 147 of the Corporation's
stations have HESS MART(R) convenience stores. The Corporation owns in fee
approximately 75% of the properties on which its stations are located. The
Corporation also has 44 terminals located throughout its marketing area, with
aggregate storage capacity of approximately 46 million barrels.
COMPETITION AND MARKET CONDITIONS
The petroleum industry is highly competitive. The Corporation encounters
competition from numerous companies in each of its activities, particularly in
acquiring rights to explore for crude oil and natural gas and in the purchasing
and marketing of petroleum products. Many competitors are larger and have
substantially greater resources than the Corporation. The Corporation is also in
competition with producers and marketers of other forms of energy.
The petroleum business involves large-scale capital expenditures and
risk-taking. In the search for new oil and gas reserves, long lead times are
often required from successful exploration to subsequent production. Operations
in the petroleum industry depend on a depleting natural resource. The number of
areas where it can be expected that hydrocarbons will be discovered in
commercial quantities is constantly diminishing and exploration risks are high.
Areas where hydrocarbons may be found are often in remote locations or in
offshore water where exploration and development activities are capital
intensive and operating costs are high. In addition, low crude oil prices have
reduced the number of areas from which hydrocarbons can be economically
produced.
The major foreign oil producing countries, including the Organization of
Petroleum Exporting Countries ("OPEC"), exert considerable influence over the
supply and price of crude oil and refined petroleum products. Their ability or
inability to agree on a common policy on rates of production, oil prices, and
other matters has a significant impact on the oil market and the Corporation. In
recent years, the futures markets have become increasingly important in
influencing the prices of crude oil, natural gas and petroleum products. The
Corporation cannot predict the extent to which future market conditions may be
affected by OPEC, the futures markets or other external influences.
Market conditions continue to affect the Corporation's earnings. The
Corporation's refining and marketing results were affected in 1993 by weak
refining margins caused, in part, by product prices falling
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faster than crude oil costs. Residual fuel oil prices continued to be weak
because of oversupply and competition from other forms of energy. Results of
refining and marketing operations will be negatively affected in the future if
conditions comparable to those prevailing in 1993 continue.
The Corporation's exploration and production operations were profitable in
1993, but are impacted by volatility in the selling prices of crude oil and
natural gas. The low worldwide crude oil selling prices which existed in 1993
have continued in the early part of 1994. The balance between supply and demand
for natural gas in the United States improved in 1993 and the selling price
increased; however, there is no assurance that these conditions will continue.
OTHER ITEMS
The Corporation's operations may be affected by federal, state, local,
territorial and foreign laws and regulations relating to tax increases and
retroactive tax claims, expropriation of property, cancellation of contract
rights, and changes in import regulations, as well as other political
developments. The Corporation has been affected by certain of these events in
various countries in which it operates. The Corporation markets motor fuels
through lessee-dealers and wholesalers in certain states where legislation
prohibits producers or refiners of crude oil from directly engaging in retail
marketing of motor fuels. Similar legislation is periodically proposed in
Congress and in various other states. The Corporation, at this time, cannot
predict the effect of any of the foregoing on its future operations.
Compliance with the various environmental and pollution control regulations
imposed by federal, state and local governments is not expected to have a
materially adverse effect on the Corporation's earnings and competitive position
within the industry. However, the cost of such compliance has been increasing in
recent years and is expected to increase in the future. Capital expenditures for
facilities, primarily to comply with federal, state and local environmental
standards, were $28 million in 1993 and the Corporation anticipates comparable
capital expenditures in 1994. These amounts do not include capital expenditures
incurred in connection with the upgrading of the Corporation's St. Croix
refinery to produce gasolines required under the 1990 amendments to the Clean
Air Act. In addition, the Corporation expended $14 million in 1993 for
environmental remediation, with at least a comparable amount anticipated for
1994.
The number of persons employed by the Corporation averaged 10,173 in 1993
and 10,263 in 1992.
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Additional operating and financial information relating to the business and
properties of the Corporation appears on pages 9 and 10 under the heading
"United States Exploration and Production," on pages 13, 14 and 17 under the
heading "International Exploration and Production," on pages 19 and 20 under the
heading "Refining and Marketing," on pages 23 through 27 under the heading
"Financial Review" and on pages 28 through 53 of the accompanying 1993 Annual
Report to Stockholders, which information is incorporated herein by reference.*
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* Except as to information specifically incorporated herein by reference under
Items 1, 2, 5, 6, 7 and 8, no other information or data appearing in the 1993
Annual Report to Stockholders is deemed to be filed with the Securities and
Exchange Commission (SEC) as part of this Annual Report on Form 10-K, or
otherwise subject to the SEC's regulations or the liabilities of Section 18 of
the Securities and Exchange Act of 1934, as amended.
ITEM 2. PROPERTIES
Reference is made to Item 1 and the operating and financial information
relating to the business and properties of the Corporation, which is
incorporated in Item 1 by reference.
Additional information relating to the Corporation's oil and gas operations
follows.
1. OIL AND GAS RESERVES
The Corporation's net proved oil and gas reserves at the end of 1993, 1992
and 1991 are presented under Supplementary Oil and Gas Data in the accompanying
1993 Annual Report to Stockholders, which has been incorporated herein by
reference.
During 1993, the Corporation provided oil and gas reserve estimates for
1992 to the Department of Energy. Such estimates are compatible with the
information furnished to the SEC on Form 10-K, although not necessarily directly
comparable due to the requirements of the individual requests. There were no
differences in excess of 5%.
The Corporation has no long-term contracts or agreements to supply fixed
quantities of its crude oil production. Approximately 80% of the Corporation's
1993 natural gas production was sold under long-term contracts to various
purchasers. Contractual commitments in 1994 (which are expected to be comparable
to 1993) will be filled from the Corporation's production and from contractual
purchases.
2. AVERAGE SELLING PRICES AND AVERAGE PRODUCTION COSTS
1993 1992 1991
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Average selling prices (Note A)
Crude oil, including condensate and natural
gas liquids (per barrel)
United States.......................... $ 17.40 $ 17.94 $ 22.59
Canada................................. 16.30 17.05 18.21
Europe................................. 17.04 19.79 19.85
Other areas............................ 16.41 18.70 18.18
Average................................ 17.05 18.92 20.54
Natural gas (per Mcf)
United States.......................... $ 2.06 $ 1.69 $ 1.62
Canada................................. 1.43 1.24 1.22
Europe................................. 1.83 1.83 1.71
Average................................ 1.87 1.66 1.59
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Note A: Includes inter-company transfers valued at approximate market
prices and the effect of the Corporation's forward sales activities.
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1993 1992 1991
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Average production (lifting) costs per barrel of
production (Note B)
United States.......................... $ 4.06 $ 3.43 $ 3.61
Canada................................. 3.21 3.61 4.35
Europe................................. 4.89 6.03 5.54
Other areas............................ 4.15 4.01 4.40
Average................................ 4.31 4.51 4.39
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Note B: Production (lifting) costs consist of amounts incurred to operate
and maintain the Corporation's producing oil and gas wells and related equipment
and facilities, including severance and other related production taxes. The
average production (lifting) costs per barrel of production reflect the crude
oil equivalent of natural gas production converted on the basis of relative
energy content.
The foregoing tabulation does not include substantial costs and charges
applicable to finding and developing proved oil and gas reserves, nor does it
reflect significant outlays for related general and administrative expenses,
interest expense and income taxes.
3. GROSS AND NET DEVELOPED ACREAGE AND PRODUCTIVE WELLS AT DECEMBER 31, 1993
DEVELOPED
ACREAGE PRODUCTIVE WELLS (NOTE A)
APPLICABLE TO -------------------------------------
PRODUCTIVE WELLS OIL GAS
(IN THOUSANDS) ----------------- ----------------
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GROSS NET GROSS NET GROSS NET
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United States...................... 3,095 713 14,506 1,673 1,964 763
Canada............................. 779 392 1,914 465 1,003 325
Europe............................. 470 90 348 36 133 27
Other areas........................ 91 24 125 15 -- --
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Total.................... 4,435 1,219 16,893 2,189 3,100 1,115
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Note A: Includes multiple completion wells (wells producing from different
formations in the same bore hole) totaling 290 gross wells and 155 net wells.
4. GROSS AND NET UNDEVELOPED ACREAGE AT DECEMBER 31, 1993
UNDEVELOPED
ACREAGE
(IN THOUSANDS)
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GROSS NET
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United States................................ 2,766 1,854
Canada....................................... 1,557 788
Europe....................................... 6,712 1,858
Other areas.................................. 6,694 1,664
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Total.............................. 17,729 6,164
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5. NUMBER OF NET EXPLORATORY AND DEVELOPMENT WELLS DRILLED
NET EXPLORATORY WELLS NET DEVELOPMENT WELLS
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1993 1992 1991 1993 1992 1991
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Productive wells
United States................. 25 12 31 43 25 31
Canada........................ 9 1 4 10 7 9
Europe (Note A)............... 6 Nil Nil 3 7 10
Other areas................... Nil - - 1 1 1
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Total.................... 40 13 35 57 40 51
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Dry holes
United States................. 23 16 19 1 - 2
Canada........................ 10 5 10 2 Nil Nil
Europe........................ 1 1 4 - - -
Other areas................... - Nil 1 - - -
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Total.................... 34 22 34 3 Nil 2
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Total.............................. 74 35 69 60 40 53
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Note A: Excludes 1 exploratory well in 1992 and 4 in 1991 which have
encountered hydrocarbons, but are not expected to be used for production.
6. NUMBER OF WELLS IN PROCESS OF DRILLING AT DECEMBER 31, 1993
GROSS NET
WELLS WELLS
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United States.................................... 34 10
Canada........................................... 8 5
Europe........................................... 8 1
Other areas...................................... 1 Nil
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Total.................................. 51 16
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7. NUMBER OF WATERFLOODS AND PRESSURE MAINTENANCE PROJECTS IN PROCESS OF
INSTALLATION AT
DECEMBER 31, 1993 -- FIVE (ONE NET) -- UNITED STATES
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ITEM 3. LEGAL PROCEEDINGS
On September 29, 1992, Region II of the United States Environmental
Protection Agency ("EPA") commenced an administrative proceeding under Section
113(d) of the Federal Clean Air Act against Amerada Hess (Port Reading)
Corporation, a wholly-owned subsidiary of the Registrant, alleging violations of
Sections 111 and 114 of the Federal Clean Air Act arising out of this
subsidiary's alleged failure to comply with certain monitoring and reporting
obligations under regulations relating to new source performance standards. The
proceeding seeks penalties totaling approximately $198,000 for the alleged
violations. The Registrant's subsidiary is actively engaged in settlement
discussions with the EPA but is also prepared to vigorously defend this action.
The Registrant is currently the subject of an investigation by United
States Attorneys for federal judicial districts in New Jersey and the U.S.
Virgin Islands and by the EPA with respect to possible violations of federal
environmental and other laws and regulations in connection with hazardous waste
handling at the HOVIC refinery. The investigation apparently focuses on whether
or not certain spent catalyst generated at the HOVIC refinery should have been
managed as a hazardous waste under the Resource Conservation and Recovery Act.
It is not possible at this time for Registrant to state what the outcome of the
investigation will
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be, or, if any proceedings arising out of the investigation were to be commenced
against the Registrant or HOVIC, what claims would be asserted or what relief
would be sought.
On April 27, 1993, the Texas Natural Resource Conservation Commission
("TNRCC", then known as the Texas Water Commission) notified the Registrant of
alleged violation of the Texas Water Code as a result of alleged discharges of
hydrocarbon compounds into the groundwater in the vicinity of the Registrant's
terminal in Corpus Christi, Texas. Penalties provided for these violations
include administrative penalties not to exceed $10,000 per day. The Registrant
has undertaken a groundwater assessment and an interim correction measures
program and is formulating other appropriate responses to these allegations. The
Registrant expects to enter into an agreed order with the TNRCC that will
address any remediation of the soil or groundwater that may be required. The
TNRCC has not proposed a penalty amount to be assessed in conjunction with the
issuance of such an order. Management does not currently expect that the outcome
of this proceeding will have a material adverse effect on the financial
condition of the Corporation.
The Corporation periodically receives notices from the EPA that the
Corporation is a "potentially responsible party" under the Superfund legislation
with respect to various waste disposal sites. Under this legislation, all
potentially responsible parties are jointly and severally liable. For certain
sites, EPA's claims or assertions of liability against the Corporation relating
to these sites have not been fully developed. With respect to the remaining
sites, EPA's claims have been settled, or a proposed settlement is under
consideration, in all cases for amounts which are not material. The ultimate
impact of these proceedings, and of any related proceedings by private parties,
on the business or accounts of the Corporation cannot be predicted at this time
due to the large number of other potentially responsible parties and the
speculative nature of clean-up cost estimates, but is not expected to be
material.
The Corporation is from time to time involved in other judicial and
administrative proceedings, including proceedings relating to other
environmental matters. Although the ultimate outcome of these proceedings cannot
be ascertained at this time and some of them may be resolved adversely to the
Corporation, no such proceeding is required to be disclosed under applicable
rules of the Securities and Exchange Commission. In management's opinion, based
upon currently known facts and circumstances, such proceedings in the aggregate
will not have a material adverse effect on the financial condition of the
Corporation.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of 1993, no matter was submitted to a vote of
security holders through the solicitation of proxies or otherwise.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table presents information as of January 15, 1994 regarding
executive officers of the Registrant:
YEAR
INDIVIDUAL
BECAME AN
EXECUTIVE
NAME AGE OFFICE HELD* OFFICER
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Leon Hess............... 79 Chairman of the Board, Chief Executive 1969
Officer and Director
Robert F. Wright........ 68 President, Chief Operating Officer and 1971
Director
John B. Hess............ 39 Senior Executive Vice President and Director 1983
H. W. McCollum.......... 79 Chairman of the Finance Committee and 1969
Director
J. Barclay Collins II... 49 Executive Vice President, General Counsel and 1986
Director
W. S. H. Laidlaw........ 38 Executive Vice President of the Corporation 1986
and Managing Director, Amerada Hess Limited
John Y. Schreyer........ 54 Executive Vice President, Chief Financial 1990
Officer and Director
Alan A. Bernstein....... 49 Senior Vice President 1987
Marco B. Bianchi........ 54 Senior Vice President and Director 1986
James F. Cassidy........ 66 Senior Vice President 1992
F. Lamar Clark.......... 60 Senior Vice President 1990
Neal Gelfand............ 49 Senior Vice President 1980
Charles H. Norz......... 56 Senior Vice President 1982
Benedict J. O'Bryan..... 56 Senior Vice President 1991
Rene L. Sagebien........ 53 Senior Vice President 1990
Andrew A. Zizinia....... 63 Senior Vice President 1991
Gerald A. Jamin......... 52 Treasurer 1985
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* All officers referred to herein hold office in accordance with the
By-Laws until the first meeting of the Directors following the annual meeting of
stockholders of the Registrant, and until their successors shall have been duly
chosen and qualified. Each of said officers was elected to the office set forth
opposite his name on May 5, 1993. The first meeting of Directors following the
next annual meeting of stockholders of the Registrant is scheduled to be held
May 4, 1994.
Except for Mr. Schreyer, each of the above officers has been employed by
the Registrant in various managerial and executive capacities for more than five
years. Prior to his employment with the Company in July 1990, Mr. Schreyer was a
partner with the accounting firm of Ernst & Young.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Information pertaining to the market for the Registrant's Common Stock,
high and low sales prices of the Common Stock in 1993 and 1992, dividend
payments and restrictions thereon and the number of holders of Common Stock is
presented on page 27 (Financial Review), page 35 (Long-Term Debt) and on page 50
(Ten-Year Summary of Financial Data) of the accompanying 1993 Annual Report to
Stockholders, which has been incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
A Ten-Year Summary of Financial Data is presented on pages 48 through 51 of
the accompanying 1993 Annual Report to Stockholders, which has been incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is presented on pages 23 through 27
of the accompanying 1993 Annual Report to Stockholders, which has been
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, including the Report of Ernst &
Young, Independent Auditors, the Supplementary Oil and Gas Data (unaudited) and
the Quarterly Financial Data (unaudited) are presented on pages 27 through 47 of
the accompanying 1993 Annual Report to Stockholders, which has been incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to Directors is incorporated herein by reference to
"Election of Directors" from the Registrant's definitive proxy statement for the
annual meeting of stockholders to be held on May 4, 1994.
Information regarding executive officers is included in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation is incorporated herein by
reference to "Election of Directors-Executive Compensation and Other
Information", other than information under "Compensation Committee Report on
Executive Compensation" and "Performance Graph" included therein, from the
Registrant's definitive proxy statement for the annual meeting of stockholders
to be held on May 4, 1994.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information pertaining to security ownership of certain beneficial owners
and management is incorporated herein by reference to "Election of
Directors-Ownership of Voting Securities by Certain Beneficial Owners" and
"Election of Directors-Ownership of Equity Securities by Management" from the
Registrant's definitive proxy statement for the annual meeting of stockholders
to be held on May 4, 1994.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to this item is incorporated herein by reference to
"Election of Directors" from the Registrant's definitive proxy statement for the
annual meeting of stockholders to be held on May 4, 1994.
------------------------
10
12
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) 1. AND 2. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The financial statements and schedules filed as part of this Annual
Report on Form 10-K are listed in the accompanying index to financial
statements and schedules.
3. EXHIBITS
3(1) -Restated Certificate of Incorporation of Registrant incorporated by
reference to Exhibit 19 of Form 10-Q of Registrant for the three
months ended September 30, 1988.
3(2) -By-Laws of Registrant incorporated by reference to Exhibit 3(2) of
Form 10-K of Registrant for the fiscal year ended December 31,
1985.
4(1) -Note and Warrant Purchase Agreement, dated June 27, 1991 (including
the form of the Common Stock Purchase Warrant expiring June 27,
2001, included as Exhibit B thereof) incorporated by reference to
Exhibit 4 of Form 10-Q of Registrant for the three months ended
June 30, 1991.
4(2) -Amendment, dated as of May 15, 1992 to the Note and Warrant
Purchase Agreement, dated June 27, 1991 (including the form of the
common stock purchase warrant expiring June 27, 2001, included as
Exhibit B thereof), incorporated by reference to Exhibit 19 of
Form 10-Q of Registrant for the three months ended June 30, 1992.
-Other instruments defining the rights of holders of long-term debt
of Registrant and its consolidated subsidiaries are not being
filed since the total amount of securities authorized under each
such instrument does not exceed 10 percent of the total assets of
Registrant and its subsidiaries on a consolidated basis.
Registrant agrees to furnish to the Commission a copy of any
instruments defining the rights of holders of long-term debt of
Registrant and its subsidiaries upon request.
10(1) -Extension and Amendment Agreement between the Government of the
Virgin Islands and Hess Oil Virgin Islands Corp. incorporated by
reference to Exhibit 10(4) of Form 10-Q of Registrant for the
three months ended June 30, 1981.
10(2) -Restated Second Extension and Amendment Agreement dated July 27,
1990 between Hess Oil Virgin Islands Corp. and the Government of
the Virgin Islands incorporated by reference to Exhibit 19 of Form
10-Q of Registrant for the three months ended September 30, 1990.
10(3) -Technical Clarifying Amendment dated as of November 17, 1993 to
Restated Second Extension and Amendment Agreement between the
Government of the Virgin Islands and Hess Oil Virgin Islands Corp.
10(4)* -Incentive Compensation Award Plan for Key Employees of Amerada Hess
Corporation and its subsidiaries incorporated by reference to
Exhibit 10(2) of Form 10-K of Registrant for the fiscal year ended
December 31, 1980.
10(5)* -Financial Counseling Program description incorporated by reference
to Exhibit 10(3) of Form 10-K of Registrant for the fiscal year
ended December 31, 1980.
11
13
3. EXHIBITS (continued)
10(6)* -Executive Long-Term Incentive Compensation and Stock Ownership Plan
of Registrant dated June 3, 1981 incorporated by reference to
Exhibit 10(5) of Form 10-Q of Registrant for the three months
ended June 30, 1981.
10(7)* -Amendment dated as of December 5, 1990 to the Executive Long-Term
Incentive Compensation and Stock Ownership Plan of Registrant
incorporated by reference to Exhibit 10(9) of Form 10-K of
Registrant for the fiscal year ended December 31, 1990.
10(8)* -Amerada Hess Corporation Pension Restoration Plan dated January 19,
1990 incorporated by reference to Exhibit 10(9) of Form 10-K of
Registrant for the fiscal year ended December 31, 1989.
10(9)* -Letter Agreement dated August 8, 1990 between Registrant and Mr.
John Y. Schreyer relating to Mr. Schreyer's participation in the
Amerada Hess Corporation Pension Restoration Plan incorporated by
reference to Exhibit 10(11) of Form 10-K of Registrant for the
fiscal year ended December 31, 1991.
13 -1993 Annual Report to Stockholders of Registrant.
21 -Subsidiaries of Registrant.
23 -Consent of Ernst & Young, Independent Auditors, dated March 24,
1994, to the incorporation by reference in Registrant's
Registration Statement on Form S-8 (No. 33-39816) of its report
relating to Registrant's financial statements and schedules, which
consent appears on page F-2 herein.
- --------------------------------------------------------------------------------
* These exhibits relate to executive compensation plans and arrangements.
(B) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the last quarter of Registrant's
fiscal year ended December 31, 1993.
12
14
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON THE 24TH DAY OF
MARCH 1994.
AMERADA HESS CORPORATION
(REGISTRANT)
By /s/ JOHN Y. SCHREYER
............................
(JOHN Y. SCHREYER)
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- ----------------------------------------------------------------------------------------------
Director, Chairman of
the Board and
Chief Executive Officer
/s/ LEON HESS (Principal Executive Officer) March 24, 1994
...................................
(LEON HESS)
Director, President and Chief
/s/ ROBERT F. WRIGHT Operating Officer March 24, 1994
...................................
(ROBERT F. WRIGHT)
/s/ MARCO B. BIANCHI Director March 24, 1994
...................................
(MARCO B. BIANCHI)
/s/ J. BARCLAY COLLINS II Director March 24, 1994
...................................
(J. BARCLAY COLLINS II)
Director March , 1994
...................................
(BERNARD T. DEVERIN)
/s/ PETER S. HADLEY Director March 24, 1994
...................................
(PETER S. HADLEY)
/s/ JOHN B. HESS Director March 24, 1994
...................................
(JOHN B. HESS)
/s/ EDITH E. HOLIDAY Director March 24, 1994
...................................
(EDITH E. HOLIDAY)
/s/ THOMAS H. KEAN Director March 24, 1994
...................................
(THOMAS H. KEAN)
Director March , 1994
...................................
(C. C. F. LAIDLAW)
/s/ H. W. MCCOLLUM Director March 24, 1994
...................................
(H. W. MCCOLLUM)
/s/ ROGER B. ORESMAN Director March 24, 1994
...................................
(ROGER B. ORESMAN)
13
15
SIGNATURE TITLE DATE
- ----------------------------------------------------------------------------------------------
/s/ WILLIAM A. POGUE Director March 24, 1994
...................................
(WILLIAM A. POGUE)
Director March , 1994
...................................
(WILLIAM S. RENCHARD)
Director, Executive Vice
President
and Chief Financial Officer
(Principal Accounting and
/s/ JOHN Y. SCHREYER Financial Officer) March 24, 1994
...................................
(JOHN Y. SCHREYER)
/s/ RICHARD B. SELLARS Director March 24, 1994
...................................
(RICHARD B. SELLARS)
/s/ WILLIAM I. SPENCER Director March 24, 1994
...................................
(WILLIAM I. SPENCER)
- ----------------------------------------------------------------------------------------------
14
16
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
PAGE
NUMBER
- -----------------------------------------------------------------------------------------
Consolidated Balance Sheet at December 31, 1993 and 1992......................... *
Statement of Consolidated Income for each of the three years in the period ended
December 31, 1993.............................................................. *
Statement of Consolidated Retained Earnings for each of the three years in the
period ended December 31, 1993................................................. *
Statement of Consolidated Cash Flows for each of the three years in the period
ended December 31, 1993........................................................ *
Statement of Consolidated Changes in Common Stock and Capital in Excess of Par
Value for each of the three years in the period ended December 31, 1993........ *
Notes to Consolidated Financial Statements....................................... *
Report of Ernst & Young, Independent Auditors.................................... *
Quarterly Financial Data......................................................... *
Supplementary Oil and Gas Data................................................... *
Consent of Independent Auditors.................................................. F-2
Schedules**
V-Property, Plant and Equipment.......................................... F-3
VI-Accumulated Depreciation, Depletion, Amortization and Impairment of
Property, Plant and Equipment........................................ F-4
IX-Short-Term Borrowings.................................................. F-5
X-Supplementary Income Statement Information............................. F-6
- ----------------------------------------------------------------------------------------
* The financial statements and notes thereto together with the Report of
Ernst & Young, Independent Auditors, on pages 28 through 42, the Quarterly
Financial Data (unaudited) on page 27, and the Supplementary Oil and Gas Data
(unaudited) on pages 43 through 47 of the accompanying 1993 Annual Report to
Stockholders are incorporated herein by reference.
** Schedules other than those listed above have been omitted because of the
absence of the conditions under which they are required or because the required
information is presented in the financial statements or the notes thereto.
F-1
17
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form
10-K) of Amerada Hess Corporation of our report dated February 14, 1994,
included in the 1993 Annual Report to Stockholders of Amerada Hess Corporation.
Our audits also included the consolidated financial statement schedules of
Amerada Hess Corporation listed in Item 14(a). These schedules are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion based on our audits. In our opinion, the consolidated financial
statement schedules referred to above, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration
Statement (Form S-8, No. 33-39816) pertaining to the Amerada Hess Corporation
Employees' Savings and Stock Bonus Plan, of our report dated February 14, 1994,
with respect to the consolidated financial statements incorporated herein by
reference, and of our report included in the preceding paragraph with respect to
the consolidated financial statement schedules included in this Annual Report
(Form 10-K) of Amerada Hess Corporation.
/s/ ERNST & YOUNG
ERNST & YOUNG
New York, N.Y.
March 24, 1994
F-2
18
SCHEDULE V
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(IN THOUSANDS)
OTHER
CHANGES --
BALANCE ADDITIONS SALES AND ADD BALANCE
CLASSIFICATION JANUARY 1 AT COST RETIREMENTS (DEDUCT)(A) DECEMBER 31
- ---------------------------------------------------------------------------------------------------------------
1993
Exploration and
production................ $ 9,071,396 $ 754,876 $ 446,169 $(152,166)(b) $ 9,227,937
Refining.................... 2,483,357 558,637 47,304 191 2,994,881
Marketing................... 811,601 32,908 5,047 331 839,793
Transportation.............. 685,067 1,180 406 (23) 685,818
Other....................... 39,344 440 11 (962) 38,811
----------- ---------- ----------- ----------- -----------
$13,090,765 $1,348,041 $ 498,937 $(152,629) $13,787,240
----------- ---------- ----------- ----------- -----------
----------- ---------- ----------- ----------- -----------
1992
Exploration and
production................ $ 9,174,705 $ 915,476 $ 295,705 $(723,080)(b)(c) $ 9,071,396
Refining.................... 1,837,967 615,296 3,994 34,088 2,483,357
Marketing................... 794,059 24,069 5,091 (1,436) 811,601
Transportation.............. 684,791 1,540 1,089 (175) 685,067
Other....................... 38,310 1,413 30 (349) 39,344
----------- ---------- ----------- ----------- -----------
$12,529,832 $1,557,794 $ 305,909 $(690,952) $13,090,765
----------- ---------- ----------- ----------- -----------
----------- ---------- ----------- ----------- -----------
1991
Exploration and
production................ $ 8,210,531 $1,292,935 $ 280,691 $ (48,070)(b) $ 9,174,705
Refining.................... 1,491,025 347,452 678 168 1,837,967
Marketing................... 738,975 63,193 6,398 (1,711) 794,059
Transportation.............. 682,216 5,404 2,804 (25) 684,791
Other....................... 35,236 3,331 649 392 38,310
----------- ---------- ----------- ----------- -----------
$11,157,983 $1,712,315 $ 291,220 $ (49,246) $12,529,832
----------- ---------- ----------- ----------- -----------
----------- ---------- ----------- ----------- -----------
- --------------------------------------------------------------------------------
(a) Includes cost basis adjustments and transfers to and from other accounts.
(b) Reflects decreases of $134,869 in 1993, $884,254 in 1992 and $27,696 in
1991, resulting from foreign currency translation adjustments under FAS No.
52 (see Notes 1 and 7 to the consolidated financial statements contained in
the accompanying 1993 Annual Report to Stockholders).
(c) Includes an increase of $126,915 due to the addition of a capital lease.
The methods of computing depreciation, depletion and amortization are
described in Note 1 to the consolidated financial statements of the accompanying
1993 Annual Report to Stockholders.
F-3
19
SCHEDULE VI
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION, AMORTIZATION
AND IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(IN THOUSANDS)
ADDITIONS OTHER
CHARGED CHANGES --
BALANCE TO COSTS SALES AND ADD BALANCE
DESCRIPTION JANUARY 1 AND EXPENSES RETIREMENTS (DEDUCT)(A) DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------
1993
Exploration and production... $4,938,833 $694,330 $ 283,275 $ (84,401)(b) $5,265,487
Refining..................... 873,275 78,492 47,038 160 904,889
Marketing.................... 425,655 35,015 3,716 265 457,219
Transportation............... 377,173 15,035 371 (11) 391,826
Other........................ 31,865 1,779 11 (726) 32,907
---------- ------------ ----------- ------------- -----------
$6,646,801 $824,651 $ 334,411 $ (84,713) $7,052,328
---------- ------------ ----------- ------------- -----------
---------- ------------ ----------- ------------- -----------
1992
Exploration and production... $4,720,214 $736,445 $ 140,862 $(376,964)(b) $4,938,833
Refining..................... 823,595 53,425 3,781 36 873,275
Marketing.................... 391,417 37,311 2,656 (417) 425,655
Transportation............... 374,201 4,153 1,026 (155) 377,173
Other........................ 29,805 2,071 30 19 31,865
---------- ------------ ----------- ------------- -----------
$6,339,232 $833,405 $ 148,355 $(377,481) $6,646,801
---------- ------------ ----------- ------------- -----------
---------- ------------ ----------- ------------- -----------
1991
Exploration and production... $4,062,555 $733,230 $ 68,911 $ (6,660)(b) $4,720,214
Refining..................... 773,897 50,193 624 129 823,595
Marketing.................... 362,096 35,542 3,166 (3,055) 391,417
Transportation............... 369,564 7,476 2,814 (25) 374,201
Other........................ 26,287 2,324 541 1,735 29,805
---------- ------------ ----------- ------------- -----------
$5,594,399 $828,765 $ 76,056 $ (7,876) $6,339,232
---------- ------------ ----------- ------------- -----------
---------- ------------ ----------- ------------- -----------
- --------------------------------------------------------------------------------
(a) Includes cost basis adjustments and transfers to and from other accounts.
(b) Reflects decreases of $66,163 in 1993, $396,902 in 1992 and $23,791 in 1991,
resulting from foreign currency translation adjustments under FAS No. 52.
F-4
20
SCHEDULE IX
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(IN THOUSANDS OF DOLLARS)
MAXIMUM AVERAGE WEIGHTED
WEIGHTED AMOUNT AMOUNT AVERAGE
CATEGORY OF AVERAGE OUTSTANDING OUTSTANDING INTEREST RATE
AGGREGATE SHORT- BALANCE AT INTEREST DURING THE DURING THE DURING THE
TERM BORROWINGS (A) END OF PERIOD RATE PERIOD PERIOD (B) PERIOD (C)
- -----------------------------------------------------------------------------------------------------------------
1993
Notes payable to banks....... $ 117,900 3.8% $ 188,000 $ 28,292 3.7%
------------- ----------- -----------
------------- ----------- -----------
1992
Notes payable to banks....... $ -- -- $ 160,000 $ 18,290 5.2%
------------- ----------- -----------
------------- ----------- -----------
1991
Notes payable to banks....... $ 160,000 5.3% $ 345,000 $ 80,939 7.2%
------------- ----------- -----------
------------- ----------- -----------
- --------------------------------------------------------------------------------
(a) The short-term borrowings have varying terms some of which are payable
on demand and others at fixed terms with maturities of less than one
year.
(b) The average amount outstanding during the period is based on the
average daily outstanding short-term borrowings.
(c) The weighted average interest rates were determined by dividing total
interest expense by the related average daily outstanding short-term
borrowings.
F-5
21
SCHEDULE X
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(IN THOUSANDS)
CHARGED TO COSTS AND EXPENSES
----------------------------------
ITEM 1993 1992 1991
- ---------------------------------------------------------------------------------------------
Maintenance and repairs................................ $297,404 $275,956 $301,001
-------- -------- --------
-------- -------- --------
Taxes, other than payroll and income taxes
Production and other taxes-oil and gas............. $ 26,580 $ 31,206 $ 31,924
Property taxes and other........................... 82,430 87,973 77,118
-------- -------- --------
Total..................................... $109,010 $119,179 $109,042
-------- -------- --------
-------- -------- --------
- ---------------------------------------------------------------------------------------------
F-6
22
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
---------- ------------------------------------------------------------
3(1) -- Restated Certificate of Incorporation of Registrant
incorporated by reference to Exhibit 19 of Form 10-Q of
Registrant for the three months ended September 30, 1988.
3(2) -- By-Laws of Registrant incorporated by reference to Exhibit
3(2) of Form 10-K of Registrant for the fiscal year ended
December 31, 1985.
4(1) -- Note and Warrant Purchase Agreement, dated June 27, 1991
(including the form of the Common Stock Purchase Warrant
expiring June 27, 2001, included as Exhibit B thereof)
incorporated by reference to Exhibit 4 of Form 10-Q of
Registrant for the three months ended June 30, 1991.
4(2) -- Amendment, dated as of May 15, 1992 to the Note and Warrant
Purchase Agreement, dated June 27, 1991 (including the form
of the common stock purchase warrant expiring June 27, 2001,
included as Exhibit B thereof), incorporated by reference to
Exhibit 19 of Form 10-Q of Registrant for the three months
ended June 30, 1992.
-- Other instruments defining the rights of holders of
long-term debt of Registrant and its consolidated
subsidiaries are not being filed since the total amount of
securities authorized under each such instrument does not
exceed 10 percent of the total assets of Registrant and its
subsidiaries on a consolidated basis. Registrant agrees to
furnish to the Commission a copy of any instruments defining
the rights of holders of long-term debt of Registrant and
its subsidiaries upon request.
10(1) -- Extension and Amendment Agreement between the Government of
the Virgin Islands and Hess Oil Virgin Islands Corp.
incorporated by reference to Exhibit 10(4) of Form 10-Q of
Registrant for the three months ended June 30, 1981.
10(2) -- Restated Second Extension and Amendment Agreement dated July
27, 1990 between Hess Oil Virgin Islands Corp. and the
Government of the Virgin Islands incorporated by reference
to Exhibit 19 of Form 10-Q of Registrant for the three
months ended September 30, 1990.
10(3) -- Technical Clarifying Amendment dated as of November 17, 1993
to Restated Second Extension and Amendment Agreement between
the Government of the Virgin Islands and Hess Oil Virgin
Islands Corp.
10(4)* -- Incentive Compensation Award Plan for Key Employees of
Amerada Hess Corporation and its subsidiaries incorporated
by reference to Exhibit 10(2) of Form 10-K of Registrant for
the fiscal year ended December 31, 1980.
10(5)* -- Financial Counseling Program description incorporated by
reference to Exhibit 10(3) of Form 10-K of Registrant for
the fiscal year ended December 31, 1980.
10(6)* -- Executive Long-Term Incentive Compensation and Stock
Ownership Plan of Registrant dated June 3, 1981 incorporated
by reference to Exhibit 10(5) of Form 10-Q of Registrant for
the three months ended June 30, 1981.
10(7)* -- Amendment dated as of December 5, 1990 to the Executive
Long-Term Incentive Compensation and Stock Ownership Plan of
Registrant incorporated by reference to Exhibit 10(9) of
Form 10-K of Registrant for the fiscal year ended December
31, 1990.
10(8)* -- Amerada Hess Corporation Pension Restoration Plan dated
January 19, 1990 incorporated by reference to Exhibit 10(9)
of Form 10-K of Registrant for the fiscal year ended
December 31, 1989.
23
EXHIBIT
NUMBER DESCRIPTION
---------- ------------------------------------------------------------
10(9)* -- Letter Agreement dated August 8, 1990 between Registrant and
Mr. John Y. Schreyer relating to Mr. Schreyer's
participation in the Amerada Hess Corporation Pension
Restoration Plan incorporated by reference to Exhibit 10(11)
of Form 10-K of Registrant for the fiscal year ended
December 31, 1991.
13 -- 1993 Annual Report to Stockholders of Registrant.
21 -- Subsidiaries of Registrant.
23 -- Consent of Ernst & Young, Independent Auditors, dated March
24, 1994, to the incorporation by reference in Registrant's
Registration Statement on Form S-8 (No. 33-39816) of its
report relating to Registrant's financial statements and
schedules, which consent appears on page F-2 herein.
- --------------------------------------------------------------------------------
* These exhibits relate to executive compensation plans and arrangements.
1
TECHNICAL CLARIFYING AMENDMENT TO RESTATED SECOND EXTENSION
AND AMENDMENT AGREEMENT BETWEEN THE GOVERNMENT OF THE VIRGIN
ISLANDS AND HESS OIL VIRGIN ISLANDS CORP.
THIS TECHNICAL CLARIFYING AMENDMENT entered into between the
GOVERNMENT OF THE VIRGIN ISLANDS, herein called the "Government", and HESS OIL
VIRGIN ISLANDS CORP., a corporation existing under the laws of the Virgin
Islands, herein called "Hess":
WITNESSETH:
WHEREAS, the Government and Hess are parties to an Agreement
relating to the construction and operation of an oil refinery and related
facilities on St. Croix, Virgin Islands, approved by the Legislature of the
Virgin Islands on September 1, 1965 and amended, supplemented and clarified at
various times by mutual agreement of the parties (the "1965 Agreement"); and
WHEREAS, pursuant to the 1965 Agreement Hess was, among other
things, exempted from payment to the Government of certain taxes, charges, fees
and duties to induce Hess to construct and operate the Oil Refinery and Related
Facilities in St. Croix in order to promote the public interest by economic
development of the Virgin Islands; and
2
WHEREAS, the 1965 Agreement was amended and extended by the
Extension and Amendment Agreement approved by the Legislature of the Virgin
Islands on May 7, 1981 (the "First Extension Agreement"); and
WHEREAS, the 1965 Agreement, as amended and extended by the
First Extension Agreement, was further amended and extended by the Restated
Second Extension and Amendment Agreement approved by the Legislature of the
Virgin Islands on August 22, 1990 (the "Second Extension Agreement", together
with the 1965 Agreement, as amended and extended by the First Extension
Agreement, referred to as the "Agreement"); and
WHEREAS, it was the original intent of the Government and
Hess, under the Agreement, to induce Hess to construct and operate the Oil
Refinery and Related Facilities in St. Croix that Hess be able, without
restriction, to import crude oil into the Virgin Islands for processing,
blending and/or storage and Hess be able, without restriction, to export from
the Virgin Islands finished refined petroleum products and/or crude oil and
petroleum products as expressed in Section 1 of the 1965 Agreement; and
WHEREAS, the Government and Hess desire to clarify the
Agreement in order that it will accurately reflect the intent of the parties to
the Agreement that certain benefits provided to Hess and its Affiliates under
the Agreement apply with
- 2 -
3
respect to all materials brought into the Virgin Islands to be consumed,
processed, manufactured, blended or stored by Hess or its Affiliates, and with
respect to all materials and products shipped from the Virgin Islands that were
processed, manufactured, blended or stored by Hess or its Affiliates regardless
of who has title to such materials or products at the time; and
WHEREAS, the Government and Hess do not intend to affect the
provisions of Section 10 of the First Extension Agreement pursuant to which
Hess agreed to pay to the Government a fee equal to two cents per barrel for
each barrel of finished refined products manufactured at the Oil Refinery and
Related Facilities and exported from the Virgin Islands, which shall continue
to be payable with respect to such exports.
NOW, THEREFORE, the parties hereto agree as follows:
1. For purposes of Section 4(A) of the 1965 Agreement, as
amended by Section 3 of the First Extension Agreement, (a) all materials
brought into the Virgin Islands to be consumed, processed, manufactured,
blended or stored by Hess or one of its Affiliates at the Oil Refinery and
Related Facilities shall be deemed to have been brought into the Virgin Islands
by Hess or such Affiliate regardless of whether Hess, such Affiliate or any
other person (including, without limitation, a bank or other financial
institution) is listed as the importer of record
- 3 -
4
and regardless of whether, or when, title to such material is transferred to
Hess, such Affiliate or such other person, (b) all materials or products
shipped from the Virgin Islands that were processed, manufactured, blended or
stored by Hess or one of its Affiliates at the Oil Refinery and Related
Facilities shall be deemed to have been shipped from the Virgin Islands by Hess
or such Affiliate regardless of whether Hess, such Affiliate or any other
person (including, without limitation, a bank or other financial institution)
is listed as the exporter or shipper of record and regardless of whether Hess,
such Affiliate or such other person has title to such products at the time of
shipment or export, and (c) no other person (including, without limitation, a
bank or other financial institution) shall be liable for any taxes, excises,
duties, imposts or exactions, or any wharfage, tonnage dues or ships dues at
the marine facilities of Hess and its Affiliates (as more fully described in
Section 4(A) of the 1965 Agreement, as amended by Section 3 of the First
Extension Agreement) with respect to any such materials or products described
in clause (a) or (b), which are to be or have been consumed, processed,
manufactured, blended or stored by Hess or one of its Affiliates at the Oil
Refinery and Related Facilities.
2. The provisions of Section 10 of the First Extension
Agreement requiring payment by Hess of a two cents per barrel fee on finished
refined
- 4 -
5
products manufactured at the Oil Refinery and Related Facilities and exported
from the Virgin Islands shall not be affected by the foregoing and shall
continue to apply to any materials or products described in clauses (a) and (b)
of Section 1 above.
3. The Agreement shall in all other respects remain unchanged.
IN WITNESS WHEREOF, the parties hereto, by their duly
authorized representatives, have executed and delivered this Clarifying
Amendment as of the 17th day of November, 1993.
GOVERNMENT OF THE
VIRGIN ISLANDS
(Seal)
Attest:
/S/ DEREK M. HODGE By /S/ ALEXANDER A. FARRELLY
- -------------------------------- -----------------------------------
Derek M. Hodge Alexander A. Farrelly
Lieutenant Governor Governor
HESS OIL VIRGIN ISLANDS CORP.
(Seal)
Attest:
/S/ CARL T. TURSI By /S/ LEON HESS
- -------------------------------- -----------------------------------
Carl T. Tursi Leon Hess
Asst. Secretary Chairman of the Board and
President
- 5 -
1
UNITED STATES EXPLORATION AND PRODUCTION
Amerada Hess focused its efforts in the United States on the Gulf of Mexico
and the Gulf Coast in 1993. While drilling remained curtailed in order to
dedicate cash flow to completing the Corporation's major capital projects, the
Corporation continued to accumulate exploration acreage on which it has
identified drillable prospects. Amerada Hess will concentrate on its promising
natural gas prospects when it accelerates its drilling program.
DRILLING IN
THE UNITED STATES
REMAINS FOCUSED
ON THE GULF OF
MEXICO AND
THE GULF COAST.
OFFSHORE Amerada Hess completed the development of the East Cameron Block
188 Field in early January 1994. Initial production from the field, in which
Amerada Hess has a 100% interest, is 20,000 Mcf of natural gas per day.
Exploration and development drilling continued throughout 1993 in the South
Pass 89 Field area. On South Pass Block 89 itself, in which Amerada Hess has a
25% interest, gross natural gas deliverability increased from 22,000 Mcf per
day to 62,000 Mcf per day during 1993. Previous settlement of natural gas sales
litigation will result in the Corporation receiving a favorable price for its
production from this area.
On South Pass Block 86 (AHC 25%), five development wells were completed.
Gross production, which averaged 33,000 Mcf of natural gas per day and 7,100
barrels of oil per day in 1993, currently is curtailed while a reservoir
management study is conducted to optimize field development.
Development of South Pass Block 87 (AHC 33.33%) has begun. A platform with
the capacity to handle 70,000 Mcf of natural gas per day and 7,000 barrels of
oil per day is being designed. Initial production is scheduled for mid-1995.
Development wells also were drilled on South Timbalier Block 206 (AHC
50%), Galveston Block 210 (AHC 100%), High Island Block A-557 (AHC 100%),
Eugene Island Block 342 (AHC 25%) and Galveston Blocks 343/363 (AHC 14.50%).
These wells proved additional reserves, which currently are being produced.
9
2
Exploration drilling continues on Garden Banks Block 260 (AHC 50%).
Preliminary engineering to formulate development concepts for the area is
underway.
At offshore Gulf of Mexico Federal lease sales in 1993, Amerada Hess
acquired interests in 31 blocks at a cost of $16.3 million. The table below
lists these blocks and the Corporation's interest in each:
AHC
LOCATION BLOCK INTEREST %
- ---------------------------------------------------------------------------------
Brazos . . . . . . . . . . . . . . . . . . . . . A-3, A-25, A-38 100
East Cameron South . . . . . . . . . . . . . . . 314, 319 100
East Cameron South . . . . . . . . . . . . . . . 312 50
Galveston . . . . . . . . . . . . . . . . . . . . A-101, A-105 100
Galveston South . . . . . . . . . . . . . . . . . A-122 100
Garden Banks . . . . . . . . . . . . . . . . . . 76, 135, 136, 141,
142, 172, 180, 186 100
Garden Banks . . . . . . . . . . . . . . . . . . 216 50
High Island East and South . . . . . . . . . . . A-372, A-391, A-402 100
Mustang Island East . . . . . . . . . . . . . . . A-110 100
Ship Shoal South . . . . . . . . . . . . . . . . 304 100
South Timbalier South . . . . . . . . . . . . . . 215 100
Vermilion . . . . . . . . . . . . . . . . . . . 43 100
Vermilion South . . . . . . . . . . . . . . . . . 272, 290, 292 100
Viosca Knoll . . . . . . . . . . . . . . . . . . 742 50
West Cameron . . . . . . . . . . . . . . . . . . 39 100
West Delta South . . . . . . . . . . . . . . . . 134 100
- ---------------------------------------------------------------------------------
ONSHORE In the Leleux Field in Louisiana, Amerada Hess completed two
development wells in 1993, bringing gross field deliverability to 80,000 Mcf of
natural gas per day. Amerada Hess has an average interest of 91% in the Leleux
Field.
AMERADA HESS
CONTINUED TO
EXPERIENCE SUCCESS
IN DEVELOPING
THE LELEUX FIELD NATURAL GAS
RESERVES.
Exploration wells drilled on the Corporation's North Clara (AHC 100%) and
Dry Creek (AHC 72%) prospects in Mississippi successfully proved natural gas
reserves. Development efforts have commenced in both areas and production has
begun at Dry Creek.
In response to a State of North Dakota drilling incentive program, Amerada
Hess installed gas lift facilities and drilled two development wells in the
Beaver Lodge Devonian Unit (AHC 90%). Crude oil production increased 35% to a
gross level of 3,800 barrels per day as a result of the program. Amerada Hess
successfully drilled and completed ten additional wells in North Dakota during
1993. Amerada Hess continues to be the leading producer of oil and gas in the
state.
10
3
INTERNATIONAL EXPLORATION AND PRODUCTION
Significant milestones were reached in the United Kingdom, when the Scott
Field and the Everest/Lomond natural gas project came on stream. Reserves
increased significantly in the Valhall Field in Norway. In Canada, natural gas
reserves increased, primarily from successful exploration drilling on
properties acquired in 1990.
AMERADA HESS
COMPLETED THE
DEVELOPMENT OF THE
SCOTT FIELD IN THE
UNITED KINGDOM
NORTH SEA IN 1993.
UNITED KINGDOM A significant step forward in the Corporation's United Kingdom
activities took place when first oil was produced from the Scott Field on
September 1, 1993. Operated by Amerada Hess Limited, the Corporation's British
subsidiary, which holds a 35.27% interest, the field is one of the largest to
be developed in the United Kingdom in the last ten years. The first export of
gas followed on October 17. By the end of the year, gross production rates of
180,000 barrels of oil per day and 90,000 Mcf of natural gas per day had been
achieved.
Further development of Scott is planned to exploit the South Scott Field
extension. Production is expected to begin in mid-1995, which will sustain
plateau production until late in the decade.
In mid-1993, production commenced from the Everest (AHL 18.67%) and Lomond
(AHL 16.67%) natural gas fields. Late in the year, gross natural gas production
averaged 162,000 Mcf per day from Lomond and 95,000 Mcf per day from Everest.
The natural gas is transported through the Central Area Transmission System
(CATS) pipeline (AHL 17.72%). This development increased Amerada Hess Limited's
natural gas production to 188,024 Mcf per day in 1993, the highest level in its
history.
Exploration and appraisal activities on Blocks 15/21 (AHL 42.08%) and
15/22 (AHL 28.46%) concentrated on prospects in the Sigma and Telford trends to
the south of the Scott Field. Further appraisal and consideration of
development options for these discoveries are planned.
13
4
Production began from the first phase of the development of the Hudson
Field (AHL 28.46%) in July through the Petrojarl vessel and within days reached
its peak gross level of 38,000 barrels of oil per day. The development of phase
two, a subsea tie-back to the Tern platform, is proceeding for start-up early
in 1995.
Appraisal of the Fife Field (AHL 85%), operated by Amerada Hess Limited,
continued in 1993. Development plans for the Fife Field are being finalized.
On Block 21/16 (AHL 28%), the first well drilled by Amerada Hess Limited
on acreage acquired in 1993 discovered oil. Additional appraisal is underway.
On Block 47/2, Amerada Hess Limited made its first operated natural gas
discovery in the York Field (AHL 64.08%). Further appraisal and consideration
of development options are underway.
Development planning for two natural gas fields, the Davy Field (AHL
27.78%) and the Bessemer Field (AHL 23.08%), has begun.
In the United Kingdom Fourteenth Round of Licensing, Amerada Hess Limited
received 11 awards covering 19 blocks, which both strengthen the Company's
portfolio in core areas and provide further opportunities in the frontier area
West of Shetland. The Company will operate four of the blocks.
AMERADA HESS
BECAME AN OPERATOR
IN THE NORWEGIAN
NORTH SEA IN 1993.
NORWAY Amerada Hess Norge A/S, the Corporation's Norwegian subsidiary, was
awarded its first operatorship on the Norwegian Continental Shelf in 1993.
Amerada Hess Norge received the operatorship and a 20% interest in Blocks 25/8
and 25/9 in the Norwegian North Sea. The Company also received 15% interests in
Blocks 17/3, 6306/2 and 6306/5 and 25% interests in Blocks 7227/11, 7227/12,
7228/7 and 7228/10.
Production is scheduled to begin late in 1994 from the Statfjord East
Field (AHN 0.52%) and in 1996 from the Statfjord North Field (AHN 1.04%) with
peak production for Amerada Hess Norge estimated at an aggregate rate of
approximately 1,000 barrels of oil per day.
14
5
CANADA Amerada Hess Canada Ltd., the Corporation's Canadian subsidiary,
achieved record natural gas production of 167,839 Mcf per day in 1993, up from
137,680 Mcf of natural gas per day in 1992. Continued development of the
Bearberry and Boundary Lake areas and successful exploration drilling at
Boundary Lake, Clark Lake and Bezanson contributed to the increase.
SUCCESSFUL
EXPLORATION DRILLING
IN CANADA DURING
1993 HAS
INCREASED NATURAL
GAS PRODUCTION.
At Bearberry, well tie-ins and additional compression increased average
natural gas production to 40,000 Mcf per day in 1993 from 28,000 Mcf per day in
1992. At Boundary Lake, a well (AHCL 100%) tested at 20,000 Mcf of natural gas
per day and commenced production late in 1993. At Bezanson, a 20,000 Mcf per
day gas plant project (AHCL 100%) has begun.
Natural gas prices improved in 1993 because of growth in demand and
expanded pipeline capacity into the United States. Amerada Hess Canada has
diversified its marketing arrangements and increased natural gas sales to the
United States and local distribution companies.
In response to a Province of Alberta royalty reduction incentive program,
Amerada Hess Canada drilled several successful oil exploration wells in 1993
and maintained oil production at 1992 levels. These wells were drilled in
Sturgeon Lake, Bezanson and Willesden Green.
GABON The Corporation's share of production from the Rabi Kounga Field (AHC
5.50%) averaged 8,136 barrels of oil per day in 1993 compared with 6,660
barrels per day in 1992. The Corporation holds various rights in exploration
acreage in Gabon, including a 55% interest in a block that it operates.
THAILAND Discussions regarding the development of the Pailin natural gas field
offshore Thailand, in which Amerada Hess has a 15% interest, have begun.
Approximately twenty appraisal and development wells are planned over the next
four years, with initial production scheduled for 1998.
17
6
REFINING AND MARKETING
Amerada Hess completed the construction of the Fluid Catalytic Cracking Unit
and various related processing units at its Virgin Islands refinery in 1993.
The Corporation also began marketing low-sulfur diesel fuel and constructed a
retail outlet to market compressed natural gas for vehicles.
THE MAJOR UPGRADING
OF THE VIRGIN ISLANDS
REFINERY HAS BEEN
COMPLETED AND
THE FACILITIES ARE
OPERATING SMOOTHLY.
REFINING In the fourth quarter of 1993, the Corporation's Virgin Islands
subsidiary, Hess Oil Virgin Islands Corp. (HOVIC), completed construction of
the Fluid Catalytic Cracking Unit at its refinery in St. Croix, United States
Virgin Islands. By year-end, most of the associated gasoline upgrading
facilities also had been completed. In the first quarter of 1994, HOVIC
completed construction of the MTBE and TAME units. The Fluid Catalytic Cracking
Unit, construction of which began in December 1990, came on stream in October
and has run at levels in excess of 90,000 barrels per day.
The alkylation unit, the Dimersol unit, the catalytic cracker naphtha
Merox treating unit and the LPG treating and fractionation facilities also have
been running smoothly. The successful completion of the Virgin Islands facility
as well as the operation of the Fluid Catalytic Cracking Unit at Port Reading,
New Jersey, which has a capacity of 54,000 barrels per day, has allowed the
Corporation to reduce its exposure to the residual fuel oil markets when prices
for that product are weak. The Corporation is able to make gasolines that meet
all environmental standards, including reformulated gasoline and California
standard gasoline.
The Virgin Islands refinery has a 60-foot-deep harbor and docking
facilities for 10 ocean-going tankers, facilitating the loading of cargoes for
shipments throughout the Caribbean, to the United States East and Gulf Coast
markets, to California and to certain international markets.
The Port Reading facility operated at a rate of nearly 50,000 barrels per
day in 1993. It processes feedstock that generally is shipped from the Virgin
Islands refinery.
19
7
In the fourth quarter of 1993, Amerada Hess announced that it would
mothball its Purvis, Mississippi refinery, which had a capacity of 30,000
barrels per day. The refinery ceased operations in January 1994. The completion
of the Virgin Islands facility, with its more modern technology and its ability
to make low-sulfur products, permitted the Corporation to mothball its Purvis
facility while continuing to meet its customers' requirements.
MARKETING Amerada Hess began marketing premium low-sulfur diesel fuel that
meets the Federal Clean Air Act requirement of 0.05% sulfur prior to the
October 1, 1993 deadline. The refinery in the United States Virgin Islands
manufactures significant volumes of premium low-sulfur diesel fuel.
HESS Premium Diesel with Super Detergency was introduced throughout the
Corporation's retail marketing network late in 1993. The fuel meets or exceeds
newly-mandated federal standards and also provides improved detergency to
enhance diesel engine performance.
In Colonie, New York, the Corporation reopened a modernized HESS retail
outlet that was rebuilt to market compressed natural gas for vehicles in
addition to gasoline, diesel and kerosene fuels. The facility also has a HESS
MART convenience store. The project was developed in conjunction with Niagara
Mohawk Power Corp., the New York State Energy Research and Development
Authority and the New York Gas Group.
AMERADA HESS HAS
OPENED ITS FIRST HESS
GASOLINE STATION
THAT ALSO MARKETS
COMPRESSED NATURAL
GAS FOR VEHICLES.
Amerada Hess constructed and opened five new HESS gasoline stations during
1993. Four of the new stations also include HESS MART convenience stores.
Product sales averaged 386,000 barrels per day in 1993, compared with
377,000 barrels per day in 1992. Sales of gasoline, distillates and other light
products increased to 291,000 barrels per day in 1993 from 275,000 barrels per
day in 1992. In 1993, sales of residual fuel oils declined to 95,000 barrels
per day from 102,000 barrels per day in 1992.
20
8
FINANCIAL REVIEW
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
CONSOLIDATED RESULTS OF OPERATIONS
The results of operations for 1993 amounted to a net loss of $268
million ($2.90 per share), compared with net income of $8 million ($.09 per
share) in 1992 and $84 million ($1.04 per share) in 1991.
The net loss for 1993 includes after-tax charges aggregating $55
million ($.59 per share) for the mothballing of the Purvis, Mississippi
refinery, consolidating U.S. exploration and production activities and offices,
reducing the carrying value of certain North Sea oil fields and surrendering an
operated joint venture in Abu Dhabi (see Note 2 to the financial statements).
The results for 1993 also include a refinancing charge of $11 million ($.11 per
share) and income of $29 million ($.32 per share) from the cumulative effect of
the change in accounting for income taxes required by Statement of Financial
Accounting Standards (FAS) No. 109, Accounting for Income Taxes. Net income in
1992 included income of $25 million ($.29 per share) from the refund
of prior years' income taxes and related interest. Results for 1991 reflected
income tax refunds and related interest of $54 million ($.67 per share) and the
favorable settlement of litigation relating to natural gas sales contracts of
$46 million ($.57 per share).
Sales and other operating revenues amounted to $5,852 million in 1993
compared with $5,875 million in 1992. Sales and other operating revenues in
1992 declined $392 million or 6% from 1991. In 1993, foreign crude oil revenues
and refined product revenues were lower, reflecting lower selling prices,
substantially offset by increased natural gas revenues, including sales of
purchased gas. In 1992, the decrease was principally due to lower refined
product selling prices and volumes. Non-operating revenues were also lower in
1993 and 1992 primarily because of the effect of the 1993 refinancing charge,
lower interest income (including interest on the income tax refunds mentioned
above) and the natural gas litigation settlement in 1991.
In each of the three years ended December 31, 1993, the Corporation's
effective income tax rates were high, including a provision for income taxes in
1993 on a consolidated pre-tax loss. In 1992 and 1991, excluding the effects of
the income tax refunds, the effective income tax rates were 103% and 62%,
respectively. This resulted from recording income taxes, including special
foreign taxes on petroleum earnings, in jurisdictions in which the Corporation
had profitable operations and not recording income tax benefits on the losses
of a refining subsidiary.
Following is a summary of net income (loss) by major operating activity
(in millions):
============================================================================
1993 1992 1991
- ----------------------------------------------------------------------------
Exploration and production $ 116 $219 $268
Refining and marketing (293) (129) (101)
Corporate administration, including
interest expense, and other operating activities (91) (82) (83)
- ----------------------------------------------------------------------------
Total $(268) $ 8 $ 84
============================================================================
COMPARISON OF RESULTS
Exploration and Production
Exploration and production earnings decreased by $103 million in 1993 compared
with 1992. The 1993 results include $40 million in after-tax charges relating
to the consolidation of U.S. operations and fixed asset write-downs mentioned
above. Earnings from exploration and production activities in 1992 decreased
by $49 million from 1991. The results for 1991 included income of $46 million
from the settlement of natural gas sales litigation.
Worldwide average crude oil selling prices declined in each of the
three years. The Corporation's average selling prices, including the effects of
forward sales, were as follows:
============================================================================
1993 1992 1991
- ----------------------------------------------------------------------------
Crude oil and natural gas liquids (per barrel)
United States $17.40 $17.94 $22.59
Foreign 16.89 19.40 19.40
Natural gas (per Mcf)
United States 2.06 1.69 1.62
Foreign 1.66 1.59 1.53
============================================================================
The selling price of United States 1993 production was fixed by forward
sales to a greater extent than the selling price of foreign production,
resulting in less of a decline from 1992 selling prices in the falling 1993
crude oil markets. A substantial portion of United States 1991 production
was sold forward at the relatively high prices prevailing in the latter half of
1990. Partially offsetting lower crude oil prices was an increase in the
selling price of natural gas, principally in the United States and Canada.
23
9
The Corporation's net daily worldwide crude oil and natural gas
production was as follows:
================================================================================
1993 1992 1991
- --------------------------------------------------------------------------------
Crude oil and natural gas liquids
(barrels per day)
United States 71,971 73,580 76,110
Foreign 143,419 150,607 123,897
- --------------------------------------------------------------------------------
Total 215,390 224,187 200,007
================================================================================
Natural gas (Mcf per day)
United States 502,459 601,824 583,740
Foreign 384,850 323,137 259,112
- --------------------------------------------------------------------------------
Total 887,309 924,961 842,852
================================================================================
Overall foreign crude oil production declined in 1993 because of the
scheduled depletion of the North Sea Angus Field, which came on stream in 1992
and averaged over 23,000 barrels per day. Production commenced from the Scott
Field in the third quarter of 1993 and is expected to average approximately
60,000 barrels per day in 1994. The decrease in U.S. natural gas production was
due to natural field decline. Also, United States exploration drilling has been
restrained due to the allocation of capital to the Corporation's major
construction projects. The Corporation does not anticipate a similar decrease
in U.S. natural gas production in 1994. Foreign natural gas production
increased in 1993 due to the commencement of production from the Everest and
Lomond Fields and a full year's production of natural gas from the Beryl Field,
all in the United Kingdom North Sea.
Exploration expenses were higher in 1993 compared to 1992 reflecting
increased exploration drilling, principally because of improvement in the
market for natural gas in the United States and Canada. Depreciation,
depletion and amortization charges were lower in 1993, resulting from
decreased United States natural gas production, as well as the effect of
positive oil and gas reserve revisions at year-end 1992. Depreciation and
related charges will increase in 1994, principally reflecting the full year
effect of production from the Scott Field. Selling, general and administrative
expenses include the charge for the personnel related costs of consolidating
U.S. operations.
The effective income tax rate on exploration and production activities
increased in 1993 and 1992, primarily because of the Petroleum Revenue Tax
("PRT") in the United Kingdom and Special Tax in Norway. Tax legislation in the
United Kingdom during 1993 eliminated deductibility for PRT of exploration and
appraisal expenditures, which will increase the after-tax cost of exploration.
This factor will be partially offset by the lower PRT rate on production from
existing fields.
Although the Corporation's overall crude oil production will likely be
higher in 1994 than in 1993, principally due to production from the Scott
Field, the Corporation's exploration and production earnings will be depressed
as long as crude oil prices remain at the low levels experienced in late 1993
and early 1994.
REFINING AND MARKETING
Refining and marketing losses amounted to $293 million in 1993, $129 million in
1992 and $101 million in 1991. Average refined product selling prices declined
in 1993 by approximately $1.30 per barrel compared with 1992, principally as a
result of a decrease in gasoline prices. Refined product selling prices in
1992 declined by approximately $1.25 from 1991. While the cost of crude oil
declined in both years, the decrease was not as great as the decline in
product prices, and therefore, margins were reduced. The decline in margins
was greater in 1993 than in 1992. Refinery operating expenses, including
depreciation, increased in both 1993 and 1992. In each of the three years
ended December 31, 1993, income tax benefits have not been recorded on a
substantial portion of refining and marketing losses.
Total refined product sales volumes amounted to 141 million barrels in
1993, 138 million barrels in 1992 and 151 million barrels in 1991. Residual
fuel oil sales volumes were lower in each year.
In the fourth quarter of 1993, the Corporation's fluid catalytic
cracking unit at the Virgin Islands refinery commenced production. The new
facilities have increased gasoline production. In the fourth quarter, the
Corporation announced the mothballing of its 30,000 barrel per day Purvis,
Mississippi refinery, resulting in an after-tax charge of approximately $15
million.
While the effect of the new fluid catalytic cracking unit at the Virgin
Islands refinery will be to improve refining margins over previous years, the
degree of improvement will be a function of the price of gasoline. Refining and
marketing earnings are impacted by supply and demand conditions, including the
effects of weather, and will be negatively affected in the future if conditions
comparable to those prevailing in 1993 exist.
24
10
CORPORATE AND OTHER
Corporate administration, including interest expense, and other operating
activities (principally transportation), had net expenses of $91 million in
1993 compared with $82 million in 1992 and $83 million in 1991. The results
for 1993 include a benefit of $29 million from the adoption of FAS No. 109 and
a charge of $11 million in connection with a refinancing. The 1992 results
included income tax refunds and related interest of $25 million compared with
similar refunds in 1991 of $54 million. Excluding special items, net expenses
were comparable in 1993 and 1992. In 1992, net expenses decreased compared to
1991. In both 1993 and 1992, corporate overhead expenses were reduced. The
decrease in net expenses in 1992 primarily reflected higher interest
capitalization. Upon the completion of the Scott Field and upgrading of the
Virgin Islands refinery in the fourth quarter of 1993, interest capitalization
ceased. Therefore, interest expense will be significantly higher in 1994, even
though the Corporation anticipates that total debt will be reduced.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities, including changes in operating
assets and liabilities, amounted to $819 million in 1993 compared with $1,138
million in 1992 and $1,364 million in 1991. The decreases in 1993 and 1992 are
due to lower results of operations and the effects of changes in operating
assets and liabilities. Capital expenditures exceeded net cash provided by
operating activities in each year, principally reflecting spending by the
Corporation on its major North Sea projects and the upgrading of the Virgin
Islands refinery. The additional spending was financed principally by long-term
borrowings and the issuance of 11,500,000 shares of common stock in 1992.
Working capital was $245 million at December 31, 1993 compared with
$551 million at year-end 1992. Total debt was $3,688 million at December 31,
1993 compared with $3,186 million at December 31, 1992. The debt to total
capitalization ratio was 55% at December 31, 1993 compared with 48% at December
31, 1992. The Corporation anticipates that total borrowings will decline in
1994 because of lower capital expenditures and increased cash flow from its
major projects.
At December 31, 1993, the Corporation had additional borrowing capacity
available under existing revolving credit agreements of $441 million and
additional unused lines of credit under uncommitted arrangements with banks of
$607 million. The Corporation's borrowing arrangements, including restrictive
covenants, are more fully described in the notes to financial statements.
In June 1993, the Corporation refinanced $135 million of long-term
notes with an insurance company, extending the maturity from 1999 to 2013. The
effective interest rate, excluding the refinancing charge, has been reduced
from 9.55% to 7.21%.
The Corporation uses futures, forward, option and swap contracts with
maturities of one year or less to mitigate the effect on its business of
volatility in the prices of crude oil, natural gas and refined products. The
use of these instruments is an integral part of the pricing of crude oil and
natural gas and of the cost and selling price of refined products. The effects
of hedging are recorded as part of the transactions being hedged. At December
31, 1993, the Corporation had sold forward approximately 30% of its
anticipated 1994 worldwide crude oil production and 60% of its anticipated
1994 United States and Canadian natural gas production at average prices of
approximately $18.00 per barrel and $2.00 per Mcf, respectively. At December
31, 1993, an additional 15% of 1994 anticipated worldwide crude oil production
can be sold under option contracts at approximately $1.50 per barrel over
year-end market prices. At year-end 1992, the Corporation had outstanding
forward sales for approximately 40% of both its worldwide 1993 crude oil and
its domestic natural gas production at average prices of approximately $20.40
per barrel and $1.70 per Mcf, respectively. At December 31, 1993, the
Corporation also had hedges (primarily short futures and options) covering
approximately 65% of its refining and marketing inventories at an average
price of approximately $1.20 per barrel over year-end market prices. At
year-end 1992, approximately 30% of refining and marketing inventories were
hedged at approximately $.80 per barrel over year-end market prices.
The Corporation's management of price risk considers market conditions.
As market conditions change in 1994, the Corporation will adjust its crude oil
and natural gas forward sales positions and refining and marketing hedges.
Year-end hedge positions are not necessarily indicative of future results of
operations.
25
11
At December 31, 1993, the Corporation also has outstanding interest
rate conversion agreements which reduced the percentage of its floating rate
debt to total debt by approximately 10%, to 54%. The effect of these agreements
is accounted for as a part of interest expense. The Corporation also
periodically hedges foreign currency transactions. A description of the
instruments used in hedging activities and the amounts of unrealized gains at
December 31, 1993 and 1992 are included in Note 12 to the financial statements.
The Corporation conducts foreign exploration and production activities,
principally in the United Kingdom, Norway, Canada and Gabon, and, therefore, is
subject to business risks associated with foreign operations, including the
effect of foreign currency gains and losses on reported earnings. However,
foreign crude oil sales revenue generally is denominated in United States
dollars, which tends to mitigate economic exposure to the Corporation. Most
expenditures, including income taxes, are denominated in the foreign
currencies.
The Corporation records foreign currency gains and losses on the net
monetary liabilities of certain foreign subsidiaries, most significantly on
U.S. dollar denominated debt, in accordance with FAS No. 52. Such gains or
losses have not been material to consolidated net income. Also, as required by
FAS No. 52, the effect of a stronger U.S. dollar over a number of years,
principally on the translation of property, plant and equipment, has been
recorded as a reduction of stockholders' equity. This equity adjustment has not
affected the Company's liquidity or ability to raise capital. The magnitude of
any such adjustments in the future depends on the degree of fluctuation in
exchange rates.
CAPITAL EXPENDITURES
The Corporation's capital expenditures in each of the last three years have
included spending on its three major projects. These projects are the
development of the Scott oil field, the Everest and Lomond natural gas fields
and Central Area Transmission System in the United Kingdom North Sea, and the
construction of the fluid catalytic cracking complex and associated gasoline
upgrading facilities at the Virgin Islands refinery. These projects are
completed and are in operation.
The following table summarizes the Corporation's capital expenditures
in 1993, 1992 and 1991 (in millions):
============================================================================
1993 1992 1991
- ----------------------------------------------------------------------------
Major projects
Exploration and production $ 236 $ 473 $ 527
Refining and marketing 486 570 184
- ----------------------------------------------------------------------------
722 1,043 711
- ----------------------------------------------------------------------------
All other
Exploration and production
Lease acquisitions 40 26 67
Purchases of oil and gas reserves 16 12 50
Intangible drilling costs,
equipment, etc. 463 405 649
- ----------------------------------------------------------------------------
519 443 766
Refining and marketing 105 69 226
Transportation and other 2 3 9
- ----------------------------------------------------------------------------
626 515 1,001
- ----------------------------------------------------------------------------
Total $1,348 $1,558 $1,712
============================================================================
One of the Corporation's primary objectives is to reduce debt in 1994.
Accordingly, capital expenditures in 1994 are budgeted to be significantly
lower than in each of the last three years. In addition, the Corporation's 1994
capital program has been adjusted downward as a result of lower oil prices.
Capital expenditures in 1994 are presently expected to be approximately $500
million and will be financed by internally generated funds.
ENVIRONMENT, HEALTH AND SAFETY
The Corporation's awareness of its environmental responsibilities, along with
increasing environmental regulations at the federal, state and local levels,
have led to programs requiring higher operating costs and capital investments
by the Corporation. The Corporation believes that environmental, health and
safety expenditures will increase in the future, as 1990 Clean Air Act
Amendments and other pollution prevention and remediation laws are
implemented.
26
12
The Corporation continues to implement and improve its environment,
health and safety program. This program includes pollution control and
reduction, waste minimization and treatment, compliance evaluation, and
employee training to monitor operational activities and conditions and to
prevent non-compliant activities that might threaten the environment.
The Corporation has also been taking steps to produce gasolines that
meet the requirements for oxygenated and reformulated gasolines under the
Clean Air Act of 1990. At its Port Reading facility, the Corporation has a
methyl tertiary butyl ether (MTBE) unit with the capacity to produce 1,700
barrels of MTBE per day. In the first quarter of 1994, the Corporation
completed construction of an MTBE unit and a tertiary amyl methyl ether (TAME)
unit at its Virgin Islands refinery. MTBE and TAME are blending components for
oxygenated and reformulated gasolines. Oxygenates, such as MTBE and TAME, are
required in gasoline sold during the winter months in areas designated by the
Environmental Protection Agency. Since 1992, the Corporation has been
producing oxygenated gasolines, which are formulated specifically to reduce
carbon monoxide emissions. The Corporation's Virgin Islands refinery also has
desulfurization capabilities enabling it to produce low-sulfur diesel fuel
that meets the October 1993 requirements of the Clean Air Act.
Reformulated gasolines, which decrease emissions of volatile and toxic
organic compounds, will be required in designated areas commencing in January
1995. The Corporation has the ability to produce reformulated gasolines that
meet these requirements at both the Virgin Islands and Port Reading facilities.
The Corporation expects that there will continue to be future
expenditures for assessment and remediation. Sites where corrective action may
be necessary include gasoline stations, terminals, refineries (including solid
waste management units under permits issued pursuant to the Resource
Conservation and Recovery Act) and, although not significant, Superfund sites
where the Corporation has been named a potentially responsible party under the
Superfund legislation. The Corporation expects that existing reserves for
environmental liabilities will adequately cover costs of assessing and
remediating known environmental sites.
The Corporation expended $14 million in 1993, $16 million in 1992 and
$22 million in 1991 for remediation, mostly in its refining and marketing
activity. In addition, capital expenditures for facilities, primarily to
comply with federal, state and local environmental standards, were $28 million
in 1993, $10 million in 1992 and $42 million in 1991.
DIVIDENDS
Cash dividends on common stock totaled $.60 per share ($.15 per quarter) during
1993 and 1992.
STOCK MARKET INFORMATION
The common stock of Amerada Hess Corporation is traded principally on the New
York Stock Exchange (ticker symbol: AHC). High and low sales prices in 1993 and
1992 were as follows:
=========================================================================
1993 1992
-------------- ---------------
Quarter ended High Low High Low
- -------------------------------------------------------------------------
March 31 53-3/8 43-5/8 49-7/8 37
June 30 56-3/8 48 48-1/8 36-5/8
September 30 54-1/2 46-5/8 50-5/8 44-5/8
December 31 54-3/4 42-3/8 51-1/4 43-1/2
=========================================================================
QUARTERLY FINANCIAL DATA
Quarterly results of operations for the years ended December 31, 1993 and 1992
follow (millions of dollars, except per share data):
=========================================================================
Sales and Net
other Net income
operating Gross income (loss)
Quarter revenues profit(a) (loss) per share
- -------------------------------------------------------------------------
1993
First $1,566 $273 $ 33 (b) $ .36
Second 1,410 135 (145)(c) (1.57)
Third 1,245 262 (22) (.24)
Fourth 1,631 153 (134)(d) (1.45)
- -------------------------------------------------------------------------
Total $5,852 $823 $(268) $(2.90)
=========================================================================
1992
First $1,430 $213 $ (23)(e) $ (.29)
Second 1,458 272 4 (e) .06
Third 1,412 290 9 .11
Fourth 1,575 271 18 .21
- -------------------------------------------------------------------------
Total $5,875 $1,046 $ 8 $ .09
=========================================================================
(a) Gross profit represents sales and other operating revenues less cost of
products sold and operating expenses and depreciation, depletion and
amortization.
(b) Includes income of $29 million from the cumulative effect of the change in
accounting for income taxes required by FAS No. 109.
(c) Includes charges of $11 million in connection with a refinancing and $80
million for the write-down to market value of refining and marketing
inventories.
(d) Reflects special charges aggregating $55 million (see Note 2 to the
financial statements).
(e) Includes refunds of prior years' income taxes plus interest of $13 million
and $12 million in the first and second quarters of 1992, respectively.
The results of operations for the periods reported herein should not be
considered as indicative of future operating results.
27
13
CONSOLIDATED BALANCE SHEET
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
===========================================================================
At December 31
---------------------------
Thousands of dollars 1993 1992
- ---------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 79,635 $ 141,014
Accounts receivable
Trade 506,825 702,346
Other 48,162 55,056
Inventories 853,393 981,743
Prepaid expenses 200,151 188,159
- ---------------------------------------------------------------------------
Total current assets 1,688,166 2,068,318
- ---------------------------------------------------------------------------
INVESTMENTS AND ADVANCES 137,161 133,716
- ---------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Exploration and production 9,227,937 9,071,396
Refining 2,994,881 2,483,357
Marketing 839,793 811,601
Transportation 685,818 685,067
Other 38,811 39,344
- ---------------------------------------------------------------------------
Total--at cost 13,787,240 13,090,765
Less reserves for depreciation, depletion,
amortization and lease impairment 7,052,328 6,646,801
- ---------------------------------------------------------------------------
Property, plant and equipment--net 6,734,912 6,443,964
- ---------------------------------------------------------------------------
OTHER ASSETS 81,307 75,758
- ---------------------------------------------------------------------------
TOTAL ASSETS $ 8,641,546 $ 8,721,756
===========================================================================
28
14
================================================================================
At December 31
------------------------
1993 1992
- --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable--trade $ 329,648 $ 710,073
Accrued liabilities 613,791 497,033
Deferred revenue 128,566 16,717
Notes payable 117,900 --
Taxes payable 106,893 144,610
Current maturities of long-term debt 146,342 148,426
- --------------------------------------------------------------------------------
Total current liabilities 1,443,140 1,516,859
- --------------------------------------------------------------------------------
LONG-TERM DEBT 3,423,680 3,037,773
- --------------------------------------------------------------------------------
CAPITALIZED LEASE OBLIGATIONS 91,094 103,265
- --------------------------------------------------------------------------------
DEFERRED LIABILITIES AND CREDITS
Deferred income taxes 462,273 517,821
Other 192,448 158,439
- --------------------------------------------------------------------------------
Total deferred liabilities and credits 654,721 676,260
- --------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock, par value $1.00
Authorized--20,000,000 shares for issuance in
series -- --
Common stock, par value $1.00
Authorized--200,000,000 shares
Issued--92,586,855 shares in 1993; 92,583,702
shares in 1992 92,587 92,584
Capital in excess of par value 725,443 725,668
Retained earnings 2,449,325 2,773,018
Equity adjustment from foreign currency translation (238,444) (203,671)
- --------------------------------------------------------------------------------
Total stockholders' equity 3,028,911 3,387,599
- --------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,641,546 $8,721,756
================================================================================
The consolidated financial statements reflect the successful efforts method of
accounting for oil and gas exploration and producing activities. See
accompanying notes to consolidated financial statements.
29
15
STATEMENT OF CONSOLIDATED INCOME
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
===========================================================================================================
For the Years Ended December 31
------------------------------------------
Thousands of dollars, except per share data 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------
REVENUES
Sales (excluding excise taxes) and other operating revenues $5,851,588 $5,875,000 $6,266,845
Interest, dividends and other revenues 21,153 95,352 149,496
- -----------------------------------------------------------------------------------------------------------
Total revenues 5,872,741 5,970,352 6,416,341
- -----------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Cost of products sold and operating expenses 4,259,206 4,055,823 4,409,832
Exploration expenses, including dry holes 258,826 228,998 301,183
Selling, general and administrative expenses 596,919 581,542 582,549
Interest expense 156,615 147,099 177,850
Depreciation, depletion and amortization 769,390 773,507 765,877
Lease impairment 55,261 59,898 62,888
Provision for income taxes 74,186 115,940 31,854
- -----------------------------------------------------------------------------------------------------------
Total costs and expenses 6,170,403 5,962,807 6,332,033
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (297,662) 7,545 84,308
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 29,459 -- --
- -----------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (268,203) $ 7,545 $ 84,308
===========================================================================================================
NET INCOME (LOSS) PER SHARE BEFORE ACCOUNTING CHANGE $(3.22) $.09 $1.04
===========================================================================================================
NET INCOME (LOSS) PER SHARE $(2.90) $.09 $1.04
===========================================================================================================
STATEMENT OF CONSOLIDATED RETAINED EARNINGS
===========================================================================================================
For the Years Ended December 31
-------------------------------------------
Thousands of dollars, except per share data 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------
BALANCE AT BEGINNING OF YEAR $2,773,018 $2,817,507 $2,781,827
Net income (loss) (268,203) 7,545 84,308
Dividends declared-common stock
($.60 per share in 1993, 1992 and 1991) (55,490) (52,034) (48,628)
- -----------------------------------------------------------------------------------------------------------
BALANCE AT END OF YEAR $2,449,325 $2,773,018 $2,817,507
===========================================================================================================
See accompanying notes to consolidated financial statements.
30
16
STATEMENT OF CONSOLIDATED CASH FLOWS
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
=================================================================================================================
For the Years Ended December 31
-----------------------------------------
Thousands of dollars 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(268,203) $7,545 $84,308
Adjustments to reconcile net income
(loss) to net cash provided by operating activities
Depreciation, depletion, amortization and lease impairment 824,651 833,405 828,765
Exploratory dry hole costs 155,725 135,067 189,344
Decrease in accounts receivable 201,290 397,975 583,222
(Increase) decrease in inventories 127,990 (16,735) 369,581
Decrease in accounts payable, accrued liabilities
and deferred revenue (154,257) (220,604) (507,749)
Increase (decrease) in taxes payable (8,980) 28,749 (137,526)
Changes in deferred income taxes and other (58,793) (27,695) (45,677)
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 819,423 1,137,707 1,364,268
- -----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures
Exploration and production (754,876) (915,476) (1,292,935)
Refining and marketing (591,545) (639,365) (410,645)
Transportation and other (1,620) (2,953) (8,735)
- -----------------------------------------------------------------------------------------------------------------
Total capital expenditures (1,348,041) (1,557,794) (1,712,315)
Other, including proceeds from sales of property,
plant and equipment 12,436 25,423 37,788
- ----------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,335,605) (1,532,371) (1,674,527)
- ----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance (repayment) of notes 117,791 (159,756) (183,351)
Long-term borrowings 547,704 675,016 786,280
Repayment of long-term debt and capitalized lease obligations (167,769) (524,384) (269,414)
Issuance of common stock -- 497,360 --
Cash dividends paid (41,603) (64,194) (36,468)
- ----------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 456,123 424,042 297,047
- ----------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,320) (8,534) 3,468
- ----------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (61,379) 20,844 (9,744)
- ----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 141,014 120,170 129,914
- ----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $79,635 $141,014 $120,170
================================================================================================================
See accompanying notes to consolidated financial statements.
31
17
STATEMENT OF CONSOLIDATED CHANGES IN
COMMON STOCK AND CAPITAL IN EXCESS OF PAR VALUE
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
====================================================================================================
Common stock
------------------------ Capital in
Number of excess of
Thousands of dollars shares Amount par value
- ----------------------------------------------------------------------------------------------------
BALANCE AT JANUARY 1, 1991 81,019,051 $81,019 $231,499
Distribution to trustee under executive incentive
compensation and stock ownership plan (net) 5,000 5 433
Issuance of warrants -- -- 6,862
Employee stock options exercised 43,784 44 902
- ----------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1991 81,067,835 81,068 239,696
Issuance of common stock 11,500,000 11,500 485,860
Cancellations under executive incentive compensation
and stock ownership plan (net) (8,500) (8) (391)
Employee stock options exercised 24,367 24 503
- ----------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1992 92,583,702 92,584 725,668
Cancellations under executive incentive compensation
and stock ownership plan (net) (17,000) (17) (589)
Employee stock options exercised 20,153 20 364
- ----------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1993 92,586,855 $92,587 $725,443
====================================================================================================
See accompanying notes to consolidated financial statements.
32
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
1. Summary of Significant Accounting Policies
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of Amerada Hess Corporation and all significant subsidiaries
(the "Corporation"). The Corporation's interests in oil and gas
exploration and production ventures are proportionately consolidated.
Investments in affiliated companies, owned 20% to 50% inclusive, are
stated at cost of acquisition plus the Corporation's equity in undistributed
net income since acquisition. The change in the equity in net income of these
companies is included in other revenues in the Statement of Consolidated
Income.
Intercompany transactions and accounts are eliminated in consolidation.
CASH AND CASH EQUIVALENTS: Cash equivalents consist of highly liquid
investments, which are readily convertible into cash and have maturities of
three months or less.
INVENTORIES: Crude oil and refined product inventories are valued at the lower
of cost or market value. Cost is determined on the first-in, first-out method
for approximately two-thirds of the inventories and the average cost method
for the remainder.
Inventories of materials and supplies are valued at or below cost.
EXPLORATION AND DEVELOPMENT COSTS: Oil and gas exploration and producing
activities are accounted for on the successful efforts method. Costs of
acquiring undeveloped oil and gas leasehold acreage, including lease bonuses,
brokers' fees and other related costs, are capitalized. Provisions for
impairment of undeveloped oil and gas leases are based on periodic evaluations
and other factors.
Annual lease rentals and exploration expenses, including geological and
geophysical expenses and exploratory dry hole costs, are charged against
income as incurred.
Costs of drilling and equipping productive wells, including development
dry holes, and related production facilities are capitalized.
DEPRECIATION, DEPLETION AND AMORTIZATION: Depreciation, depletion and
amortization of oil and gas production equipment, properties and wells are
determined on the unit-of-production method based on estimated recoverable oil
and gas reserves. Depreciation of refinery facilities is determined on the
unit-of-production method based on estimated thruput volumes. Depreciation of
all other plant and equipment is determined on the straight-line method based
on estimated useful lives.
The estimated costs of dismantlement, restoration and abandonment, less
estimated salvage values, of offshore oil and gas production platforms and
certain other facilities are taken into account in determining depreciation
charges.
RETIREMENT OF PROPERTY, PLANT AND EQUIPMENT: Costs of property, plant and
equipment retired or otherwise disposed of, less accumulated reserves, are
reflected in net income.
MAINTENANCE AND REPAIRS: The estimated costs of major maintenance at refineries
(turnarounds) are accrued. Other expenditures for maintenance and repairs are
charged against income as incurred. Renewals and improvements are treated as
additions to property, plant and equipment, and items replaced are treated as
retirements.
ENVIRONMENTAL EXPENDITURES: The Corporation capitalizes environmental
expenditures that increase the life or efficiency of property or that reduce or
prevent environmental contamination that has yet to occur. The Corporation
accrues for environmental expenses resulting from existing conditions that
relate to past operations when the costs are probable and reasonably estimable.
FOREIGN CURRENCY TRANSLATION: The local currency is the functional currency
(primary currency in which business is conducted) for the Corporation's North
Sea and Canadian operations. The U.S. dollar is the functional currency for
other foreign operations. Adjustments resulting from translating foreign
functional currency assets and liabilities into U.S. dollars are recorded in a
separate component of stockholders' equity entitled "Equity adjustment from
foreign currency translation." Gains or losses resulting from transactions in
other than the functional currency are reflected in net income.
33
19
HEDGING: The Corporation periodically hedges the effects of fluctuations in the
prices of crude oil, natural gas and refined products, interest rates and the
exchange rates of foreign currencies. The resulting gain or loss is accounted
for as part of the transaction being hedged.
INCOME TAXES: Deferred income taxes are determined on the liability method in
accordance with Statement of Financial Accounting Standards (FAS) No.
109.
No provision is made for U.S. income taxes applicable to undistributed
earnings of foreign subsidiaries that are indefinitely reinvested in foreign
operations.
2. 1993 SPECIAL CHARGES
During the fourth quarter of 1993, the Corporation recorded special charges,
including asset write-downs, amounting to $78,900,000 ($54,500,000 after income
taxes). Of this amount, $56,600,000 ($40,000,000 after income taxes) relates to
consolidating U.S. exploration and production activities and offices, reducing
the carrying value of certain North Sea oil properties and surrendering an
operated joint venture in Abu Dhabi. The remainder represents costs associated
with mothballing the Purvis, Mississippi refinery. In total, fixed assets have
been reduced by $39,200,000. The charges other than fixed asset reductions are
primarily for relocation, severance, and related expenses, substantially all of
which are included in selling, general and administrative expenses.
3. INVENTORIES
Inventories at December 31 are as follows:
=================================================================
Thousands of dollars 1993 1992
- -----------------------------------------------------------------
Crude oil and other charge stocks $299,015 $353,005
Refined and other finished products 436,633 519,159
- -----------------------------------------------------------------
735,648 872,164
Materials and supplies 117,745 109,579
- -----------------------------------------------------------------
Total inventories $853,393 $981,743
=================================================================
4. SHORT-TERM NOTES PAYABLE AND RELATED LINES OF CREDIT
Short-term notes payable to banks at December 31, 1993 amount to $117,900,000.
There were no short-term notes payable to banks at December 31, 1992. At
December 31, 1993, the Corporation has unused lines of credit under uncommitted
arrangements with several banks aggregating approximately $607,000,000. No
compensating balances or fees are required for such lines of credit.
5. LONG-TERM DEBT
Long-term debt at December 31 consists of the following:
==============================================================================
Thousands of dollars 1993 1992
- ------------------------------------------------------------------------------
7% Marine Terminal Revenue Bonds-Series
1978--City of Valdez, Alaska, due 2003 $20,000 $20,000
Pollution Control Revenue Bonds with sinking
fund requirements, weighted average rate
6.2%,* due through 2022 52,686 52,675
Fixed rate notes, payable principally to
insurance companies, weighted average rate
9.0%, due through 2013 1,219,979 1,268,257
Revolving Credit Agreements with banks,
weighted average rate 4.6%,* due through 1997 1,157,789 795,714
Revolving Credit Agreements with banks,
weighted average rate 6.4%,* due through 2000 939,710 829,479
Revolving Credit Agreement with banks,
weighted average rate 4.1%, due through 1998 126,000 158,000
Other loans, weighted average rate 8.3%,
due through 2007 53,858 62,074
- ------------------------------------------------------------------------------
3,570,022 3,186,199
Less amount included in current maturities 146,342 148,426
- ------------------------------------------------------------------------------
Total $3,423,680 $3,037,773
*Includes effect of interest rate conversion agreements.
34
20
The aggregate long-term debt maturing during the next five years is as
follows (in thousands): 1994--$146,342 (included in current liabilities);
1995--$481,359; 1996--$784,701; 1997--$1,083,842 and 1998--$223,765.
Of the total long-term debt at December 31, 1993, including current
maturities, $327,090,000 is secured by assets with a net book value of
$312,218,000.
The Corporation's long-term debt agreements contain various
restrictions and conditions, including the requirement to maintain a ratio of
current assets to current liabilities of not less than 1 to 1. There are also
limitations on total borrowings under the agreements. In addition, the
cumulative amount of cash dividends and stock distributions (as defined) may
not exceed consolidated net income (as defined) subsequent to December 31,
1990, plus $600,000,000. At December 31, 1993, the ratio of current assets to
current liabilities is 1.2 to 1 and the Corporation has additional allowable
borrowing capacity for the construction or acquisition of assets of
$441,000,000. Retained earnings free of restrictions at December 31, 1993
amount to $267,000,000.
At December 31, 1993, the Corporation has Revolving Credit Agreements
(the "Agreements") with banks aggregating $1,560,000,000 ($1,157,789,000
outstanding at December 31, 1993). Borrowing capacity under the Agreements
declines each year through 1997, with $1,440,000,000 of the capacity
terminating in 1996 and 1997. Interest is based on various money market rates
chosen by the Corporation. The Corporation also pays facility fees ranging from
.125% to .15% per annum on the entire credit line and commitment fees of .25%
to .3% per annum on the unused portion.
A wholly-owned subsidiary of the Corporation operating in the United
Kingdom has two multi-currency revolving credit agreements (the "United Kingdom
Facilities") with banks aggregating approximately $1,040,000,000. The first
Facility provides for revolving credit of $750,000,000 ($650,000,000
outstanding at December 31, 1993), which declines each year from 1994 through
1998. Borrowings bear interest at .625% above the London Interbank Offered
Rate. The second Facility provides for limited recourse revolving credit of
195,500,000 pounds ($289,710,000), which was fully drawn at December 31, 1993.
Amounts outstanding under the agreement decline each year through 2000.
Borrowings bear interest at 1% above the London Interbank Offered Rate. The
United Kingdom Facilities provide for commitment fees of .188% and .20% per
annum, respectively, on the unused portions of the credit lines.
A wholly-owned subsidiary of the Corporation operating in Canada has a
dual-currency Revolving Credit Facility (the "Canada Facility") with banks
aggregating $190,000,000 ($126,000,000 outstanding at December 31, 1993). The
amount available under the Canada Facility declines ratably each year through
1998. Interest is based on various money market rates chosen by the subsidiary.
Commitment fees of .25% per annum are payable on the unused credit lines.
A wholly-owned subsidiary of the Corporation operating in Norway has a
Revolving Credit Facility (the "Norway Facility") with banks aggregating
$40,000,000. No borrowings are outstanding at December 31, 1993. The amount
available under the Norway Facility declines ratably in 1994 and 1995.
Commitment fees of .25% per annum are payable on the unused credit lines.
At December 31, 1993, the Corporation has interest rate conversion
agreements, the net effect of which is to reduce the percentage of its floating
rate debt to total debt from 64% to 54%.
The total amount of interest paid (net of amounts capitalized) on
short-term and long-term debt, in 1993, 1992 and 1991 was $183,047,000,
$139,705,000 and $186,450,000, respectively.
35
21
6. STOCKHOLDERS' EQUITY
At December 31, 1993, the number of shares of common stock reserved for
issuance is as follows:
==================================================================
Future grants under the Long-Term Incentive
Compensation and Stock Ownership Plan 641,400
Warrants* 1,044,354
- ------------------------------------------------------------------
Total 1,685,754
==================================================================
*Exercisable through June 27, 2001 at $65.11 per share.
7. FOREIGN CURRENCY TRANSLATION
Foreign currency exchange transactions reflected in net income (after income
tax effect) amounted to losses of $1,788,000 in 1993 and $707,000 in 1992 and a
gain of $6,375,000 in 1991.
The equity adjustment from foreign currency translation, reflected as a
component of stockholders' equity, decreased by $34,773,000 in 1993 and
$197,382,000 in 1992. The cumulative translation adjustments at December 31
consist of:
=========================================================================
Thousands of dollars 1993 1992
- -------------------------------------------------------------------------
Working capital $40,786 $33,804
Property, plant and equipment, net (490,033) (421,328)
Long-term debt 91,749 86,880
Deferred income taxes 45,874 31,381
Other items 73,180 65,592
- -------------------------------------------------------------------------
Total $(238,444) $(203,671)
=========================================================================
8. PENSION PLANS
The Corporation has non-contributory defined benefit pension plans covering
substantially all employees, except those covered by union pension plans.
Retirement benefits are based on credited service and final average
compensation. The Corporation's policy is to fund pension costs accrued, except
where funding limitations are imposed under income tax regulations.
Pension expense consisted of:
=================================================================================================
Thousands of dollars 1993 1992 1991
- -------------------------------------------------------------------------------------------------
Cost of benefits earned $21,540 $14,890 $10,871
Accrued interest on projected benefit obligation 21,859 21,106 18,357
Return on plan assets (35,053) (19,384) (41,759)
Net amortization and deferral 10,082 (4,812) 19,669
- -------------------------------------------------------------------------------------------------
Total $18,428 $11,800 $7,138
=================================================================================================
Plan assets include fixed income and equity securities, including
investments in commingled funds. A summary of the funded status of the
Corporation's pension plans at December 31 follows:
===============================================================================
Thousands of dollars 1993 1992
- -------------------------------------------------------------------------------
Market value of plan assets $308,683 $282,530
- -------------------------------------------------------------------------------
Actuarial present value of benefit obligation
Vested 264,076 228,082
Non-vested 3,112 3,683
- -------------------------------------------------------------------------------
Total 267,188 231,765
Effect of projected future salary increases 63,101 62,137
- -------------------------------------------------------------------------------
Projected benefit obligation 330,289 293,902
- -------------------------------------------------------------------------------
Projected benefit obligation in excess of plan assets $(21,606) $(11,372)
===============================================================================
Components of projected benefit obligation in
excess of plan assets
Unrecognized prior service costs $(7,960) $(8,969)
Unrecognized net experience losses (4,387) (9,565)
Unrecognized net transitional asset 11,494 14,653
Accrued pension cost (20,753) (7,491)
- -------------------------------------------------------------------------------
Total $(21,606) $(11,372)
===============================================================================
36
22
The discount rate and assumed rate of future salary increases used in
determining the actuarial present value of the projected benefit obligation
were 7% and 6%, respectively, in 1993 and 7.5% and 6%, respectively, in 1992.
The expected long-term rate of return on plan assets in 1993 and 1992 was 8%.
The Corporation has non-qualified supplemental pension plans covering
certain employees, which provide for incremental pension payments from the
Corporation's funds so that total pension payments equal amounts that would
have been payable from the Corporation's principal pension plans if it were not
for limitations imposed by income tax regulations. The projected benefit
obligation relating to these unfunded plans totals $17,025,000 at December 31,
1993. Pension expense for the plans was $1,823,000 in 1993, $1,771,000 in 1992
and $1,809,000 in 1991.
9. CAPITALIZATION OF INTEREST
Interest costs related to certain long-term construction projects are
capitalized to comply with FAS No. 34, Capitalization of Interest Cost.
Capitalized interest amounted to $92,228,000 in 1993, $108,095,000 in 1992 and
$60,579,000 in 1991.
10. PROVISION FOR INCOME TAXES
On January 1, 1993, the Corporation changed its method of accounting for income
taxes in accordance with FAS No. 109, Accounting for Income Taxes. The
cumulative effect of this accounting change at January 1, 1993 was to increase
net income by $29,459,000.
The provision for income taxes consisted of:
=============================================================================
Thousands of dollars 1993 1992 1991
- -----------------------------------------------------------------------------
United States Federal
Current $ 15,380 $ 5,352** $(39,020)**
Deferred (72,040) (21,701) 31,657
State 1,552 1,891 2,894
- -----------------------------------------------------------------------------
(55,108) (14,458) (4,469)
- ----------------------------------------------------------------------------
Foreign
Current 93,895 109,406 43,450
Deferred 41,272 31,772 1,717
- ----------------------------------------------------------------------------
135,167 141,178 45,167
- ----------------------------------------------------------------------------
Adjustment of deferred tax
liability for income tax
rate changes (5,873) (10,780) (8,844)
- ----------------------------------------------------------------------------
Total $ 74,186* $115,940 $ 31,854
============================================================================
*Excludes the benefit of $29,459 from the cumulative effect of the accounting
change.
**Includes $11,220 in 1992 and $39,991 in 1991 from refunds of prior years'
income taxes and related adjustments.
Income (loss) before income taxes consisted of the following:
===============================================================================
Thousands of dollars 1993 1992 1991
- -------------------------------------------------------------------------------
United States $(190,726) $12,482 $43,865
Foreign* (32,750) 111,003 72,297
- -------------------------------------------------------------------------------
Total $(223,476) $123,485 $116,162
===============================================================================
*Foreign income includes the Corporation's Virgin Islands, shipping and other
operations located outside of the United States.
37
23
Deferred income taxes arise from temporary differences between the tax
basis of assets and liabilities and their reported amounts in the financial
statements. A summary of the components of deferred tax liabilities and
assets at December 31 follows (in thousands):
===========================================================================
Thousands of dollars 1993 1992
- ---------------------------------------------------------------------------
Deferred tax liabilities
Fixed assets $549,328 $488,850
Foreign petroleum taxes 135,483 125,119
Investments and advances 16,175 18,007
Other items 77,609 57,745
- ---------------------------------------------------------------------------
Total deferred tax liabilities 778,595 689,721
- ---------------------------------------------------------------------------
Deferred tax assets
Accrued liabilities 133,682 94,286
Net operating and other loss carryforwards 358,291 34,984
Tax credit carryforwards 113,856 61,123
Other items 29,820 30,469
- ---------------------------------------------------------------------------
Total deferred tax assets 635,649 220,862
Valuation allowance (262,389) --
- ---------------------------------------------------------------------------
Net deferred tax assets 373,260 220,862
- ---------------------------------------------------------------------------
Net deferred tax liabilities $405,335 $468,859
===========================================================================
The difference between the Corporation's effective income tax rate and
the United States statutory rate is reconciled below:
==================================================================================================
Thousands of dollars 1993 1992 1991
- -------------------------------------------------------------------------------------------------
United States statutory rate (35.0)% 34.0% 34.0%
Effect of foreign operations, including foreign tax credits 71.6 97.4 23.2
State income taxes, net of Federal income tax benefit .5 1.0 1.6
Alternative minimum tax (2.9) (25.5) 2.5
Tax credits (2.6) (2.1) (14.8)
Losses for which no U.S. tax benefit was recorded -- -- 20.8
Refund of prior years' income taxes and related adjustments -- (9.1) (34.4)
Other items 1.6 (1.8) (5.5)
- -------------------------------------------------------------------------------------------------
Total 33.2% 93.9% 27.4%
=================================================================================================
The Corporation has not recorded deferred income taxes applicable to
undistributed earnings of foreign subsidiaries that are indefinitely reinvested
in foreign operations. Undistributed earnings amounted to approximately $750
million at December 31, 1993, excluding amounts which, if remitted, generally
would not result in any additional U.S. income taxes because of available
foreign tax credits. If the earnings of such foreign subsidiaries were not
indefinitely reinvested, a deferred tax liability of approximately $200 million
would have been required.
For income tax reporting at December 31, 1993, the Corporation has
general business credit carryforwards of approximately $19 million, expiring
in 1999 through 2001. In addition, the Corporation has alternative minimum tax
credit carryforwards of approximately $84 million. The Corporation also has
net operating loss carryforwards of approximately $700 million relating to a
refining subsidiary, expiring through 2008, and approximately $125 million
relating to a foreign exploration and production subsidiary, which can be
carried forward indefinitely.
Income taxes paid (net of refunds) in 1993, 1992 and 1991 amounted to
$117,849,000, $48,091,000 and $155,161,000, respectively.
38
24
11. NET INCOME PER SHARE
Net income per share was computed on the weighted average number of shares of
common stock and common stock equivalents outstanding during each year
(92,594,871 shares in 1993, 87,316,950 shares in 1992 and 81,087,735 shares in
1991). Such fully diluted weighted average number of shares reflected the
exercise of outstanding stock options.
12. FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
At December 31, 1993, the Corporation has $444,500,000 of notional value
interest rate conversion agreements with a weighted average maturity of two
years, $511,900,000 of notional value over-the-counter contracts (principally
petroleum options) maturing in 1994, $35,000,000 of notional value foreign
currency exchange contracts maturing in 1994 and $89,000,000 in letters of
credit outstanding. Notional amounts do not quantify risk or represent assets
or liabilities of the Corporation, but are used in the calculation of cash
settlements under the contracts. These financial instruments are with major
financial institutions and, along with cash and cash equivalents and accounts
receivable, expose the Corporation to market and credit risks and may at times
be concentrated with certain counterparties or groups of counterparties. The
credit worthiness of counterparties is subject to continuing review and full
performance is anticipated. Interest rate conversion agreements and foreign
currency exchange contracts protect the Corporation from fluctuations in
interest and exchange rates. The over-the-counter contracts, the majority of
which are offsetting, are part of the Corporation's production hedging
activities and provide partial protection against price changes.
The Corporation values financial instruments as required by FAS No.
107, Disclosures about Fair Values of Financial Instruments. The carrying
amounts of cash and cash equivalents, short-term debt and long-term
variable-rate debt approximate fair value. The Corporation estimates the fair
value of its long-term, fixed-rate debt generally using discounted cash flow
analysis based on the Corporation's current borrowing rates for similar types
of debt. Interest rate conversion agreements and foreign currency exchange
contracts are valued based on current termination values or quoted market
prices of comparable contracts. The Corporation's valuation of
over-the-counter contracts considers time value, volatility of the underlying
commodities and other factors.
The carrying amounts of the Corporation's financial instruments
generally approximate their fair values at December 31, except as follows:
=======================================================================================================
1993 1992
---------------------- -----------------------
CARRYING FAIR CARRYING FAIR
Millions of dollars VALUE VALUE VALUE VALUE
- -------------------------------------------------------------------------------------------------------
Long-term, fixed-rate debt $1,321 $1,446 $1,375 $1,465
Petroleum option contracts -- 10 -- --
Interest rate conversion agreements -- (19) -- (32)
Foreign currency exchange agreements -- (3) -- (28)
=======================================================================================================
The Corporation also used futures, forward, option and swap contracts
to reduce price volatility of crude oil, natural gas and refined products.
These contracts permit settlement by delivery of commodities and, therefore,
are not financial instruments, as defined. The Corporation uses these contracts
and the financial instruments discussed above in its hedging activities. At
December 31, 1993, the Corporation's hedging activities had contracts maturing
through 1994 covering 62,000,000 barrels of crude oil and refined products and
137,000,000 Mcf of natural gas. At December 31, 1992, 38,000,000 barrels of
crude oil and refined products and 73,700,000 Mcf of natural gas were hedged
with contracts maturing in 1993. The Corporation produced 78,600,000 barrels of
crude oil (including natural gas liquids) and 323,900,000 Mcf of natural gas in
1993 and had approximately 40,000,000 barrels of crude oil and petroleum
products in its refining and marketing inventories at December 31, 1993. Since
these contracts qualify as hedges and correlate to price movements of inventory
and crude oil and natural gas production, any gains or losses resulting from
market changes will be offset by losses or gains on the Corporation's hedged
inventory or production. Total unrealized gains for the Corporation's petroleum
and natural gas hedging activities were approximately $126,000,000 at December
31, 1993 ($45,000,000 at December 31, 1992).
39
25
13. LEASED ASSETS
The Corporation and certain of its subsidiaries lease tankers, gasoline
stations, office space and other assets for varying periods. Leases that expire
generally are expected to be renewed or replaced by other leases. Certain
leases are classified as capital leases in accordance with the provisions of
FAS No. 13. At December 31, 1993, net capital lease assets of $98,689,000,
principally natural gas production and transportation facilities in the United
Kingdom, are included in property, plant and equipment in the Consolidated
Balance Sheet.
At December 31, 1993, future minimum rental payments applicable to
capital and noncancelable operating leases (other than oil and gas leases) are
as follows:
=================================================================
Operating Capital
Thousands of dollars Leases Leases
- -----------------------------------------------------------------
1994 $92,762 $17,112
1995 75,844 18,181
1996 69,763 19,226
1997 54,686 20,336
1998 35,250 21,531
Remaining years 329,942 25,638
- -----------------------------------------------------------------
Total minimum lease payments 658,247 122,024
Less: Imputed interest -- 19,532
Income from subleases 17,450 --
- -----------------------------------------------------------------
Net minimum lease payments $640,797 $102,492
=================================================================
Capitalized lease obligations--
Current $ 11,398
Long-term 91,094
- -----------------------------------------------------------------
Total $102,492
=================================================================
Rental expense for all operating leases, other than rentals applicable
to oil and gas leases, was as follows:
=========================================================================
Thousands of dollars 1993 1992 1991
- -------------------------------------------------------------------------
Total rental expense $180,459 $164,170 $162,477
Less income from subleases 855 1,431 1,357
- -------------------------------------------------------------------------
Net rental expense $179,604 $162,739 $161,120
=========================================================================
14. INFORMATION ON MAJOR OPERATING ACTIVITIES
The Corporation operates principally in the petroleum industry. Exploration and
production operations include the exploration for, and production and
processing of, crude oil and natural gas. Refining and marketing operations
include the manufacture, purchase, transportation and marketing of petroleum
products.
Financial data by major geographic area for each of the three years
ended December 31, 1993 follow:
====================================================================================================
Consol-
Millions of dollars United States(a) Europe Other idated(b)
- ----------------------------------------------------------------------------------------------------
1993
Operating revenues
Unaffiliated customers $4,715 $ 929 $ 208 $5,852
Intergeographic transfers -- -- 147
Operating profit (loss) (330) 147 116 (67)
Identifiable assets 5,401 2,412 829 8,642
====================================================================================================
1992
Operating revenues
Unaffiliated customers $4,703 $ 978 $ 194 $5,875
Intergeographic transfers -- 1 152
Operating profit (loss) (38) 236 73 271
Identifiable assets 5,350 2,459 913 8,722
====================================================================================================
1991
Operating revenues
Unaffiliated customers $5,173 $ 888 $ 206 $6,267
Intergeographic transfers -- -- 142
Operating profit 118 105 71 294
Identifiable assets 5,404 2,420 1,017 8,841
====================================================================================================
(a)Includes U.S. Virgin Islands and shipping operations.
(b)After elimination of transactions between affiliates, which are valued at
approximate market prices.
40
26
Financial data by major operating activity for each of the three years ended
December 31, 1993 follow:
=================================================================================================================================
Exploration and Refining and Corporate
Millions of dollars Production Marketing and Other Consolidated(a)
- ---------------------------------------------------------------------------------------------------------------------------------
1993
Operating revenues
Total operating revenues $2,541 $3,512 $ 578
Less: Transfers between affiliates 248 59 472
- ---------------------------------------------------------------------------------------------------------------------------------
Operating revenues from unaffiliated customers $2,293 $3,453 $ 106 $5,852
=================================================================================================================================
Operating profit (loss) $ 260 $ (318) $ (9) $ (67)
Interest expense -- -- (156) (156)
(Provision) benefit for income taxes (144) 25 74(b) (45)
- --------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 116 $ (293) $ (91) $ (268)
================================================================================================================================
Depreciation, depletion and amortization $ 639 $ 101 $ 29 $ 769
Identifiable assets 4,446 3,597 599 8,642
Capital expenditures 755 591 2 1,348
================================================================================================================================
1992
Operating revenues
Total operating revenues $2,399 $3,739 $ 617
Less: Transfers between affiliates 281 107 492
- --------------------------------------------------------------------------------------------------------------------------------
Operating revenues from unaffiliated customers $2,118 $3,632 $ 125 $5,875
================================================================================================================================
Operating profit (loss) $ 373 $ (121) $ 19 $ 271
Interest expense -- -- (147) (147)
(Provision) benefit for income taxes (154) (8) 46 (116)
- --------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 219 $ (129) $ (82) $ 8
================================================================================================================================
Depreciation, depletion and amortization $ 677 $ 66 $ 31 $ 774
Identifiable assets 4,703 3,417 602 8,722
Capital expenditures 916 639 3 1,558
================================================================================================================================
1991
Operating revenues
Total operating revenues $2,226 $4,317 $ 601
Less: Transfers between affiliates 329 64 484
- --------------------------------------------------------------------------------------------------------------------------------
Operating revenues from unaffiliated customers $1,897 $4,253 $ 117 $6,267
================================================================================================================================
Operating profit (loss) $ 361 $ (102) $ 35 $ 294
Interest expense -- -- (178) (178)
(Provision) benefit for income taxes (93) 1 60 (32)
- --------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 268 $ (101) $ (83) $ 84
================================================================================================================================
Depreciation, depletion and amortization $ 670 $ 64 $ 32 $ 766
Identifiable assets 5,071 3,203 567 8,841
Capital expenditures 1,293 410 9 1,712
================================================================================================================================
(a) After elimination of transactions between affiliates, which are valued at
approximate market prices.
(b) Includes a benefit of $29 million from the cumulative effect of the change
in accounting for income taxes required by FAS No. 109.
41
27
REPORT OF MANAGEMENT
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
The consolidated financial statements of Amerada Hess Corporation and
consolidated subsidiaries were prepared by and are the responsibility of
management. These financial statements conform with generally accepted
accounting principles and are, in part, based on estimates and judgements of
management. Other information included in this Annual Report is consistent with
that in the consolidated financial statements.
The Corporation maintains a system of internal controls designed to
provide reasonable assurance that assets are safeguarded and that
transactions are properly executed and recorded. Judgements are
required to balance the relative costs and benefits of the system of
internal controls.
The Corporation's consolidated financial statements have been audited
by Ernst & Young, independent auditors, who have been selected by the Audit
Committee of the Board of Directors and approved by the stockholders. Ernst &
Young assesses the Corporation's system of internal controls and performs tests
and procedures that they consider necessary to arrive at an opinion on the
fairness of the consolidated financial statements.
The Audit Committee of the Board of Directors, which consists solely
of nonemployee directors, meets periodically with the independent auditors,
internal auditors and management to review and discuss the Corporation's
financial information, the system of internal controls and the results of
internal and external audits. Ernst & Young and the Corporation's internal
auditors have unrestricted access to the Audit Committee to discuss audit
findings and other financial matters.
LEON HESS JOHN Y. SCHREYER
Chairman of the Board Executive Vice President
and Chief Executive Officer Chief Financial Officer
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
AMERADA HESS CORPORATION
We have audited the accompanying consolidated balance sheet of Amerada Hess
Corporation and consolidated subsidiaries as of December 31, 1993 and 1992 and
the related consolidated statements of income, retained earnings, changes in
common stock and capital in excess of par value and cash flows for each of the
three years in the period ended December 31, 1993. These financial statements
are the responsibility of the Corporation's management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Amerada Hess Corporation and consolidated subsidiaries at December 31, 1993 and
1992 and the consolidated results of their operations and their consolidated
cash flows for each of the three years in the period ended December 31, 1993,
in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG
New York, N.Y.
February 14, 1994
42
28
SUPPLEMENTARY OIL AND GAS DATA
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
The supplementary oil and gas data which follows is presented in accordance
with Statement of Financial Accounting Standards (FAS) No. 69, Disclosures
about Oil and Gas Producing Activities, and includes (1) costs incurred,
capitalized costs and results of operations relating to oil and gas producing
activities, (2) net proved oil and gas reserves, and (3) a standardized measure
of discounted future net cash flows relating to proved oil and gas reserves,
including a reconciliation of changes therein.
COSTS INCURRED IN OIL AND GAS PRODUCING ACTIVITIES
===============================================================================================================================
United Other
For the Years Ended December 31 (Millions of dollars) Total States Canada Europe Areas
- -------------------------------------------------------------------------------------------------------------------------------
1993
Property acquisitions $ 56 $ 48 $ 5 $ 2 $ 1
Exploration 274 147 27 98 2
Development 527 151 22 345 9
1992
Property acquisitions $ 38 $ 31 $ 2 $ -- $ 5
Exploration 229 104 17 89 19
Development 742 116 10 608 8
1991
Property acquisitions $117 $102 $ 4 $ -- $ 11
Exploration 326 157 22 130 17
Development 962 188 55 705 14
===============================================================================================================================
CAPITALIZED COSTS RELATING TO OIL AND GAS PRODUCING ACTIVITIES
================================================================================
At December 31 (Millions of dollars) 1993 1992
- --------------------------------------------------------------------------------
Unproved properties $ 484 $ 499
Proved properties 2,057 2,083
Wells, equipment and related facilities 6,687 6,489
- --------------------------------------------------------------------------------
Total costs 9,228 9,071
Less: Reserves for depreciation, depletion,
amortization and lease impairment 5,266 4,939
- --------------------------------------------------------------------------------
Net capitalized costs $3,962 $4,132
================================================================================
43
29
The results of operations for oil and gas producing activities shown below
exclude sales of purchased crude oil and natural gas, non-operating revenues,
interest expense and gains and losses resulting from foreign currency exchange
transactions. Therefore, these results differ from the net income from
exploration and production operations in Note 14 to the financial statements.
RESULTS OF OPERATIONS FOR OIL AND GAS PRODUCING ACTIVITIES
==================================================================================================================================
United Other
For the Years Ended December 31 (Millions of dollars) Total States Canada Europe Areas
- ---------------------------------------------------------------------------------------------------------------------------------
1993
Sales and other operating revenues
Unaffiliated customers $1,790 $704 $176 $890 $ 20
Inter-company 227 119 -- -- 108
- --------------------------------------------------------------------------------------------------------------------------------
Total revenues 2,017 823 176 890 128
- --------------------------------------------------------------------------------------------------------------------------------
Costs and expenses
Production expenses, including related taxes 607 233 49 294 31
Exploration expenses, including dry holes 259 150 18 89 2
Other operating expenses 218 79 12 109 18
Depreciation, depletion, amortization and lease impairment 694 332 54 271 37
Provision for income taxes 133 9 23 82 19
- --------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,911 803 156 845 107
- --------------------------------------------------------------------------------------------------------------------------------
Results of operations $ 106 $ 20 $ 20 $ 45 $ 21
================================================================================================================================
1992
Sales and other operating revenues
Unaffiliated customers $1,846 $701 $161 $963 $ 21
Inter-company 257 141 -- 2 114
- --------------------------------------------------------------------------------------------------------------------------------
Total revenues 2,103 842 161 965 135
- --------------------------------------------------------------------------------------------------------------------------------
Costs and expenses
Production expenses, including related taxes 603 223 48 310 22
Exploration expenses, including dry holes 229 100 14 95 20
Other operating expenses 230 55 14 137 24
Depreciation, depletion, amortization and lease impairment 736 398 61 241 36
Provision for income taxes 122 12 17 59 34
- --------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,920 788 154 842 136
- --------------------------------------------------------------------------------------------------------------------------------
Results of operations $ 183 $ 54 $ 7 $123 $ (1)
================================================================================================================================
1991
Sales and other operating revenues
Unaffiliated customers $1,790 $779 $156 $824 $ 31
Inter-company 306 199 -- -- 107
- --------------------------------------------------------------------------------------------------------------------------------
Total revenues 2,096 978 156 824 138
- --------------------------------------------------------------------------------------------------------------------------------
Costs and expenses
Production expenses, including related taxes 589 244 50 267 28
Exploration expenses, including dry holes 301 143 21 120 17
Other operating expenses 215 72 14 108 21
Depreciation, depletion, amortization and lease impairment 733 371 52 262 48
Provision for income taxes 58 36 12 (16) 26
- --------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,896 866 149 741 140
- --------------------------------------------------------------------------------------------------------------------------------
Results of operations $ 200 $112 $ 7 $ 83 $ (2)
================================================================================================================================
44
30
The Corporation's net oil and gas reserves have been estimated by DeGolyer and
MacNaughton, independent consultants. The reserves in the tabulation below
include proved undeveloped crude oil and natural gas reserves that will require
substantial future development expenditures. The estimates of the Corporation's
proved reserves of crude oil and natural gas (after deducting royalties and
operating interests owned by others) follow:
OIL AND GAS RESERVES
==================================================================================================================================
United Other
Total States Canada Europe Areas
- ----------------------------------------------------------------------------------------------------------------------------------
NET PROVED DEVELOPED AND UNDEVELOPED RESERVES
CRUDE OIL, INCLUDING CONDENSATE AND NATURAL GAS
LIQUIDS (MILLIONS OF BARRELS)
At January 1, 1991 611 197 45 337 32
Revisions of previous estimates 50 14 4 27 5
Improved recovery 12 12 -- -- --
Extensions, discoveries and other additions 25 5 -- 17 3
Purchases of minerals in-place 13 1 -- 1 11
Production (73) (28) (5) (33) (7)
- ----------------------------------------------------------------------------------------------------------------------------------
At December 31, 1991 638 201 44 349 44
Revisions of previous estimates 58 25 -- 32 1
Extensions, discoveries and other additions 37 4 1 32 --
Purchases of minerals in-place 1 -- -- 1 --
Production (82) (27) (5) (43) (7)
- ----------------------------------------------------------------------------------------------------------------------------------
At December 31, 1992 652 203 40 371 38
Revisions of previous estimates 66 16 -- 43 7
Extensions, discoveries and other additions 28 5 3 20 --
Purchases of minerals in-place 3 -- 1 2 --
Production (79) (26) (5) (41) (7)
- ----------------------------------------------------------------------------------------------------------------------------------
At December 31, 1993 670 198 39 395 38
==================================================================================================================================
NATURAL GAS (MILLIONS OF MCF)
AT JANUARY 1, 1991 2,683 1,152 555 976 --
Revisions of previous estimates 80 66 22 (8) --
Extensions, discoveries and other additions 85 46 16 23 --
Purchases of minerals in-place 10 7 3 -- --
Production (307) (213) (38) (56) --
- ----------------------------------------------------------------------------------------------------------------------------------
At December 31, 1991 2,551 1,058 558 935 --
Revisions of previous estimates 166 90 74 2 --
Extensions, discoveries and other additions 224 70 16 138 --
Purchases of minerals in-place 38 11 -- 27 --
Production (339) (220) (51) (68) --
- ----------------------------------------------------------------------------------------------------------------------------------
At December 31, 1992 2,640 1,009 597 1,034 --
Revisions of previous estimates 127 30 (5) 102 --
Extensions, discoveries and other additions 189 82 65 42 --
Purchases of minerals in-place 20 11 4 5 --
Production (323) (183) (61) (79) --
- ----------------------------------------------------------------------------------------------------------------------------------
At December 31, 1993 2,653 949* 600 1,104 --
====================================================================================================================================
NET PROVED DEVELOPED RESERVES
CRUDE OIL, INCLUDING CONDENSATE AND NATURAL GAS
LIQUIDS (MILLIONS OF BARRELS)
At January 1, 1991 446 182 44 188 32
At December 31, 1991 443 172 43 186 42
At December 31, 1992 436 173 40 191 32
At December 31, 1993 514 169 38 271 36
NATURAL GAS (MILLIONS OF MCF)
At January 1, 1991 1,906 953 523 430 --
At December 31, 1991 1,872 915 529 428 --
At December 31, 1992 2,002 851 576 575 --
At December 31, 1993 2,260 794 579 887 --
====================================================================================================================================
*Excludes 503 million Mcf of carbon dioxide gas for sale or use in company
operations.
45
31
The standardized measure of discounted future net cash flows relating to proved
oil and gas reserves required to be disclosed by FAS No. 69 is based on
assumptions and judgements. As a result, the future net cash flow estimates are
highly subjective and could be materially different if other assumptions were
used. Therefore, caution should be exercised in the use of the data presented
below.
Future net cash flows are calculated by applying year-end oil and gas
selling prices (adjusted for price changes provided by contractual
arrangements, including hedges) to estimated future production of proved oil
and gas reserves, less estimated future development and production costs and
future income tax expenses. Future net cash flows are discounted at the
prescribed rate of 10%. No recognition is given in the discounted future net
cash flow estimates to depreciation, depletion, amortization and lease
impairment, exploration expenses, interest expense, general and administrative
expenses and changes in future prices and costs. The selling prices of crude
oil and natural gas are highly volatile.
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
RELATING TO PROVED OIL AND GAS RESERVES
=================================================================================================================================
United Other
At December 31 (Millions of dollars) Total States Canada Europe Areas
- ---------------------------------------------------------------------------------------------------------------------------------
1993
Future revenues $13,484 $4,135 $1,714 $7,059 $576
- ---------------------------------------------------------------------------------------------------------------------------------
Less:
Future development and production costs 6,505 2,258 704 3,360 183
Future income tax expenses 2,235 407 308 1,380 140
- ---------------------------------------------------------------------------------------------------------------------------------
8,740 2,665 1,012 4,740 323
- ---------------------------------------------------------------------------------------------------------------------------------
Future net cash flows 4,744 1,470 702 2,319 253
Less: Discount at 10% annual rate 1,705 556 266 797 86
- ---------------------------------------------------------------------------------------------------------------------------------
Standardized measure of discounted future net
cash flows $ 3,039 $914 $ 436 $1,522 $167
=================================================================================================================================
1992
Future revenues $15,802 $5,035 $1,497 $8,475 $795
- ---------------------------------------------------------------------------------------------------------------------------------
Less:
Future development and production costs 6,870 2,505 604 3,570 191
Future income tax expenses 3,330 606 320 2,235 169
- ---------------------------------------------------------------------------------------------------------------------------------
10,200 3,111 924 5,805 360
- ---------------------------------------------------------------------------------------------------------------------------------
Future net cash flows 5,602 1,924 573 2,670 435
Less: Discount at 10% annual rate 2,106 777 213 949 167
- ---------------------------------------------------------------------------------------------------------------------------------
Standardized measure of discounted future net
cash flows $ 3,496 $1,147 $ 360 $1,721 $268
=================================================================================================================================
1991
Future revenues $16,074 $5,025 $1,596 $8,607 $846
- ---------------------------------------------------------------------------------------------------------------------------------
Less:
Future development and production costs 8,040 2,511 505 4,782 242
Future income tax expenses 2,191 526 388 1,097 180
- ---------------------------------------------------------------------------------------------------------------------------------
10,231 3,037 893 5,879 422
- ---------------------------------------------------------------------------------------------------------------------------------
Future net cash flows 5,843 1,988 703 2,728 424
Less: Discount at 10% annual rate 2,442 740 294 1,272 136
- ---------------------------------------------------------------------------------------------------------------------------------
Standardized measure of discounted future net
cash flows $ 3,401 $1,248 $ 409 $1,456 $288
=================================================================================================================================
46
32
CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET
CASH FLOWS RELATING TO PROVED OIL AND GAS RESERVES
==================================================================================================================================
For the years ended December 31 (Millions of dollars) 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
Standardized measure of discounted future net cash flows at beginning of year $3,496 $3,401 $4,622
- ----------------------------------------------------------------------------------------------------------------------------------
Changes during the year
Sales and transfers of oil and gas produced during year, net of production costs (1,410) (1,500) (1,507)
Development costs incurred during year 527 742 962
Net changes in prices and production costs applicable to future production (1,569) 62 (4,083)
Net change in estimated future development costs (68) (13) (454)
Extensions and discoveries (including improved recovery) of oil and
gas reserves, less related costs 167 284 301
Revisions of previous oil and gas reserve estimates 288 623 316
Purchases of minerals in-place 23 35 66
Accretion of discount 539 475 832
Net change in income taxes 547 (513) 2,331
Revision in rate or timing of future production and other changes 499 (100) 15
- ----------------------------------------------------------------------------------------------------------------------------------
Total (457) 95 (1,221)
- ----------------------------------------------------------------------------------------------------------------------------------
Standardized measure of discounted future net cash flows at end of year $3,039 $3,496 $3,401
==================================================================================================================================
47
33
TEN-YEAR SUMMARY OF FINANCIAL DATA
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
==================================================================================================================
Thousands of dollars, except per share data 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------
STATEMENT OF CONSOLIDATED INCOME
Revenues
Sales (excluding excise taxes) and other operating revenues
Crude oil (including sales of purchased oil) $1,219,750 $1,362,118 $1,448,793
Natural gas (including sales of purchased gas) 1,020,563 787,996 574,004
Petroleum products 3,348,900 3,428,702 3,897,748
Other operating revenues 262,375 296,184 346,300
- ------------------------------------------------------------------------------------------------------------------
Total 5,851,588 5,875,000 6,266,845
Non-operating revenues 21,153 95,352 149,496
- ------------------------------------------------------------------------------------------------------------------
Total revenues 5,872,741 5,970,352 6,416,341
- ------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of products sold and operating expenses 4,259,206 4,055,823 4,409,832
Exploration expenses, including dry holes 258,826 228,998 301,183
Selling, general and administrative expenses 596,919 581,542 582,549
Interest expense 156,615 147,099 177,850
Depreciation, depletion and amortization 769,390 773,507 765,877
Lease impairment 55,261 59,898 62,888
Special charge for marine transportation costs -- -- --
Provision for income taxes 44,727(*) 115,940 31,854
- ------------------------------------------------------------------------------------------------------------------
Total costs and expenses 6,140,944 5,962,807 6,332,033
- ------------------------------------------------------------------------------------------------------------------
Net income (loss) $(268,203) $7,545 $84,308
==================================================================================================================
Net income (loss) per share (**) $(2.90) $.09 $1.04
==================================================================================================================
DIVIDENDS PER SHARE
Common stock $ .60 $.60 $.60
Preferred stock (redeemed in 1987) -- -- --
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
(in thousands) 92,595 87,317 81,088
==================================================================================================================
*Includes a benefit of $29,459 ($.32 per share) from the cumulative effect of
the change in accounting for income taxes required by FAS No. 109.
**For a description of the basis of computing earnings per share, see Note 11
to consolidated financial statements.
48
34
TEN-YEAR SUMMARY OF FINANCIAL DATA (CONTINUED)
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
===========================================================================================================================
Thousands of dollars, except per share data 1990 1989 1988 1987
- ---------------------------------------------------------------------------------------------------------------------------
STATEMENT OF CONSOLIDATED INCOME
Revenues
Sales (excluding excise taxes) and other operating revenues
Crude oil (including sales of purchased oil) $1,248,193 $ 904,233 $ 872,757 $ 886,504
Natural gas (including sales of purchased gas) 458,615 315,578 288,915 284,610
Petroleum products 4,587,646 4,107,770 2,864,342 3,347,242
Other operating revenues 653,051 261,373 179,997 195,209
- ---------------------------------------------------------------------------------------------------------------------------
Total 6,947,505 5,588,954 4,206,011 4,713,565
Non-operating revenues 133,593 90,373 57,533 71,024
- ---------------------------------------------------------------------------------------------------------------------------
Total revenues 7,081,098 5,679,327 4,263,544 4,784,589
- ---------------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of products sold and operating expenses 4,708,925 3,837,800 2,964,534 3,521,552
Exploration expenses, including dry holes 276,200 164,925 182,205 106,440
Selling, general and administrative expenses 512,805 422,491 380,169 328,118
Interest expense 224,200 187,811 145,439 144,147
Depreciation, depletion and amortization 687,064 492,510 373,661 359,825
Lease impairment 56,403 53,424 67,753 71,657
Special charge for marine transportation costs -- -- -- --
Provision for income taxes 132,788 44,017 25,566 22,990
- ---------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 6,598,385 5,202,978 4,139,327 4,554,729
- ---------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 482,713 $ 476,349 $ 124,217 $ 229,860
===========================================================================================================================
Net income (loss) per share (**) $5.96 $5.87 $1.51 $2.73
===========================================================================================================================
DIVIDENDS PER SHARE
Common stock $.60 $ .60 $ .60 $ .45
Preferred stock (redeemed in 1987) -- -- -- $2.63
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
(in thousands) 81,023 81,147 82,031 84,136
===========================================================================================================================
=====================================================================================================================
Thousands of dollars, except per share data 1986 1985 1984
- ---------------------------------------------------------------------------------------------------------------------
STATEMENT OF CONSOLIDATED INCOME
Revenues
Sales (excluding excise taxes) and other operating revenues
Crude oil (including sales of purchased oil) $ 806,927 $2,150,919 $2,266,698
Natural gas (including sales of purchased gas) 284,533 336,552 358,184
Petroleum products 2,649,197 4,877,005 5,391,132
Other operating revenues 270,525 307,776 254,633
- ---------------------------------------------------------------------------------------------------------------------
Total 4,011,182 7,672,252 8,270,647
Non-operating revenues 51,073 50,290 83,105
- ---------------------------------------------------------------------------------------------------------------------
Total revenues 4,062,255 7,722,542 8,353,752
- ---------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of products sold and operating expenses 3,155,868 5,829,095 6,371,046
Exploration expenses, including dry holes 148,506 229,753 212,161
Selling, general and administrative expenses 315,199 300,542 371,323
Interest expense 164,275 189,263 193,628
Depreciation, depletion and amortization 382,273 373,734 326,754
Lease impairment 85,971 110,297 118,623
Special charge for marine transportation costs -- 536,692 --
Provision for income taxes (7,267) 375,277 589,575
- ---------------------------------------------------------------------------------------------------------------------
Total costs and expenses 4,244,825 7,944,653 8,183,110
- ---------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (182,570) $ (222,111) $ 170,642
=====================================================================================================================
Net income (loss) per share (**) $(2.16) $(2.63) $2.02
=====================================================================================================================
DIVIDENDS PER SHARE
Common stock -- $1.10 $1.10
Preferred stock (redeemed in 1987) $3.50 $3.50 $3.50
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
(in thousands) 84,440 84,536 84,618
=====================================================================================================================
*Includes a benefit of $29,459 ($.32 per share) from the cumulative effect of
the change in accounting for income taxes required by FAS No. 109.
**For a description of the basis of computing earnings per share, see Note 11
to consolidated financial statements.
49
35
TEN-YEAR SUMMARY OF FINANCIAL DATA
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
==========================================================================================================
Thousands of dollars, except per share data 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------
SELECTED BALANCE SHEET DATA AT YEAR-END
Cash and cash equivalents $79,635 $141,014 $120,170
Working capital 245,026 551,459 625,370
Property, plant and equipment
Exploration and production $9,227,937 $9,071,396 $9,174,705
Refining and marketing 3,834,674 3,294,958 2,632,026
Transportation and other 724,629 724,411 723,101
- ----------------------------------------------------------------------------------------------------------
Total-at cost 13,787,240 13,090,765 12,529,832
Less reserves 7,052,328 6,646,801 6,339,232
- ----------------------------------------------------------------------------------------------------------
Property, plant and equipment-net $6,734,912 $6,443,964 $6,190,600
- ----------------------------------------------------------------------------------------------------------
Total assets $8,641,546 $8,721,756 $8,841,435
Long-term debt 3,423,680 3,037,773 3,022,652
Stockholders' equity 3,028,911 3,387,599 3,131,982
Stockholders' equity per share $32.71 $36.59 $38.63
==========================================================================================================
SUMMARIZED STATEMENT OF CASH FLOWS
Net cash provided by operating activities $819,423 $1,137,707 $1,364,268
- ----------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Capital expenditures
Exploration and production (754,876) (915,476) (1,292,935)
Refining and marketing (591,545) (639,365) (410,645)
Transportation and other (1,620) (2,953) (8,735)
- ----------------------------------------------------------------------------------------------------------
Total capital expenditures (1,348,041) (1,557,794) (1,712,315)
Other, including proceeds from sales of
property, plant and equipment 12,436 25,423 37,788
- ----------------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,335,605) (1,532,371) (1,674,527)
- ----------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Issuance (repayment) of notes 117,791 (159,756) (183,351)
Long-term borrowings 547,704 675,016 786,280
Repayment of long-term debt and capitalized
lease obligations (167,769) (524,384) (269,414)
Issuance of common stock -- 497,360 --
Cash dividends paid (41,603) (64,194) (36,468)
Common and preferred stock retired -- -- --
- ----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 456,123 424,042 297,047
- ----------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash (1,320) (8,534) 3,468
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents $(61,379) $20,844 $(9,744)
==========================================================================================================
STOCKHOLDER DATA AT YEAR-END
Number of common shares outstanding (in thousands)* 92,587 92,584 81,068
Number of stockholders
(based on number of holders of record) 12,000 13,088 13,732
Market price of common stock $45.13 $46.00 $47.50
==========================================================================================================
*Assuming conversion of preferred prior to 1987.
50
36
TEN-YEAR SUMMARY OF FINANCIAL DATA (CONTINUED)
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
==========================================================================================================================
Thousands of dollars, except per share data 1990 1989 1988 1987
- --------------------------------------------------------------------------------------------------------------------------
SELECTED BALANCE SHEET DATA AT YEAR-END
Cash and cash equivalents $ 129,914 $ 120,300 $ 213,184 $ 226,513
Working capital 603,244 493,168 285,074 161,764
Property, plant and equipment
Exploration and production $ 8,210,531 $6,403,799 $5,360,817 $5,010,724
Refining and marketing 2,230,000 2,053,018 1,973,782 1,922,620
Transportation and other 717,452 710,439 703,862 680,257
- --------------------------------------------------------------------------------------------------------------------------
Total-at cost 11,157,983 9,167,256 8,038,461 7,613,601
Less reserves 5,594,399 4,688,142 4,358,765 4,064,227
- --------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment-net $ 5,563,584 $4,479,114 $3,679,696 $3,549,374
- --------------------------------------------------------------------------------------------------------------------------
Total assets $ 9,056,636 $6,867,411 $5,371,979 $5,304,808
Long-term debt 2,531,974 2,348,483 1,313,981 1,064,268
Stockholders' equity 3,106,029 2,560,628 2,215,154 2,158,544
Stockholders' equity per share $38.34 $31.69 $27.02 $26.30
==========================================================================================================================
SUMMARIZED STATEMENT OF CASH FLOWS
Net cash provided by operating activities $ 1,326,444 $ 805,848 $ 747,393 $ 452,158
- --------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Capital expenditures
Exploration and production (1,265,168) (1,729,357) (652,600) (304,462)
Refining and marketing (182,090) (86,645) (60,084) (36,018)
Transportation and other (14,169) (12,667) (17,245) (7,663)
- --------------------------------------------------------------------------------------------------------------------------
Total capital expenditures (1,461,427) (1,828,669) (729,929) (348,143)
Other, including proceeds from sales of
property, plant and equipment (12,012) 6,644 16,401 4,845
- --------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,473,439) (1,822,025) (713,528) (343,298)
- --------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Issuance (repayment) of notes 46,744 13,823 (205,414) 398,889
Long-term borrowings 461,413 1,203,994 416,161 63,000
Repayment of long-term debt and capitalized
lease obligations (287,531) (194,870) (191,159) (372,115)
Issuance of common stock -- -- -- --
Cash dividends paid (60,681) (48,785) (49,248) (25,857)
Common and preferred stock retired (6,213) (43,632) (7,420) (62,138)
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 153,732 930,530 (37,080) 1,779
- --------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash 2,877 (7,237) (10,114) 23,193
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents $ 9,614 $ (92,884) $ (13,329) $ 133,832
==========================================================================================================================
STOCKHOLDER DATA AT YEAR-END
Number of common shares outstanding (in thousands)* 81,019 80,804 81,979 82,089
Number of stockholders
(based on number of holders of record) 14,669 16,638 18,031 19,343
Market price of common stock $46.38 $48.75 $31.50 $24.88
==========================================================================================================================
*Assuming conversion of preferred prior to 1987.
===========================================================================================================
Thousands of dollars, except per share data 1986 1985 1984
- -----------------------------------------------------------------------------------------------------------
SELECTED BALANCE SHEET DATA AT YEAR-END
Cash and cash equivalents $ 92,681 $ 171,074 $ 152,526
Working capital 231,602 434,049 636,630
Property, plant and equipment
Exploration and production $4,508,499 $4,468,310 $3,915,954
Refining and marketing 1,900,919 1,901,371 1,859,462
Transportation and other 721,743 789,781 787,401
- -----------------------------------------------------------------------------------------------------------
Total-at cost 7,131,161 7,159,462 6,562,817
Less reserves 3,601,978 3,220,824 2,681,236
- -----------------------------------------------------------------------------------------------------------
Property, plant and equipment-net $3,529,183 $3,938,638 $3,881,581
- -----------------------------------------------------------------------------------------------------------
Total assets $4,904,710 $6,213,662 $6,345,128
Long-term debt 1,347,848 1,670,292 1,848,321
Stockholders' equity 1,938,793 2,114,757 2,403,390
Stockholders' equity per share $22.97 $25.04 $28.47
===========================================================================================================
SUMMARIZED STATEMENT OF CASH FLOWS
Net cash provided by operating activities $ 560,063 $1,230,925 $ 645,495
- -----------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Capital expenditures
Exploration and production (207,374) (611,848) (585,367)
Refining and marketing (7,511) (83,989) (281,883)
Transportation and other (2,545) (3,445) (32,869)
- -----------------------------------------------------------------------------------------------------------
Total capital expenditures (217,430) (699,282) (900,119)
Other, including proceeds from sales of
property, plant and equipment 13,895 19,627 69,501
- -----------------------------------------------------------------------------------------------------------
Net cash used in investing activities (203,535) (679,655) (830,618)
- -----------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Issuance (repayment) of notes (95,314) (108,257) 296,042
Long-term borrowings 21,102 940 158,995
Repayment of long-term debt and capitalized
lease obligations (336,224) (333,964) (140,664)
Issuance of common stock -- -- --
Cash dividends paid (23,757) (92,268) (92,347)
Common and preferred stock retired -- -- (3,336)
- -----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (434,193) (533,549) 218,690
- -----------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash (728) 827 (2,014)
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents $ (78,393) $ 18,548 $ 31,553
===========================================================================================================
STOCKHOLDER DATA AT YEAR-END
Number of common shares outstanding (in thousands)* 84,408 84,439 84,410
Number of stockholders
(based on number of holders of record) 23,696 25,497 27,602
Market price of common stock $23.75 $27.25 $24.38
===========================================================================================================
51
37
TEN-YEAR SUMMARY OF OPERATING DATA
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
====================================================================================================
1993 1992 1991
- ----------------------------------------------------------------------------------------------------
PRODUCTION PER DAY (NET)
Crude oil (barrels)
United States 60,173 62,517 66,063
Canada 11,536 11,528 11,966
United Kingdom (North Sea) 80,019 86,265 59,979
Norway (North Sea) 26,388 29,598 28,619
Abu Dhabi 10,004 11,150 9,866
Africa* 8,301 6,910 8,952
- ----------------------------------------------------------------------------------------------------
Total 196,421 207,968 185,445
====================================================================================================
Natural gas liquids (barrels)
United States 11,798 11,063 10,047
Canada 1,956 1,981 1,997
United Kingdom (North Sea) 3,783 1,468 766
Norway (North Sea) 1,432 1,707 1,752
- ----------------------------------------------------------------------------------------------------
Total 18,969 16,219 14,562
====================================================================================================
Natural gas (Mcf)
United States 502,459 601,824 583,740
Canada 167,839 137,680 104,151
United Kingdom (North Sea) 188,024 153,599 128,014
Norway (North Sea) 28,987 31,858 26,947
- ----------------------------------------------------------------------------------------------------
Total 887,309 924,961 842,852
====================================================================================================
WELL COMPLETIONS (NET)
Oil wells 48 33 45
Gas wells 49 20 41
Dry holes 37 22 36
PRODUCTIVE WELLS AT YEAR-END (NET)
Oil wells 2,189 2,082 2,103
Gas wells 1,115 966 927
- ----------------------------------------------------------------------------------------------------
Total 3,304 3,048 3,030
UNDEVELOPED NET ACREAGE (HELD AT END OF YEAR)
United States 1,854,000 1,819,000 1,802,000
Canada 788,000 840,000 842,000
Other international 3,522,000 2,328,000 2,638,000
- ----------------------------------------------------------------------------------------------------
Total 6,164,000 4,987,000 5,282,000
====================================================================================================
SHIPPING
Vessels owned or under charter at year-end 15 21 21
Total deadweight tons 2,398,000 3,223,000 2,825,000
REFINING (BARRELS DAILY)
Refinery crude runs 351,000 335,000 320,000
PETROLEUM PRODUCTS SOLD (BARRELS DAILY)
Gasoline, distillates and other light products 291,000 275,000 285,000
Residual fuel oils 95,000 102,000 128,000
- ----------------------------------------------------------------------------------------------------
Total 386,000 377,000 413,000
====================================================================================================
STORAGE CAPACITY AT YEAR-END (BARRELS) 94,380,000 95,199,000 94,879,000
NUMBER OF EMPLOYEES (AVERAGE) 10,173 10,263 10,317
====================================================================================================
*PRINCIPALLY PRODUCTION FROM GABON AFTER 1990 AND FROM LIBYA PRIOR TO JUNE 30,
1986, WHEN THE CORPORATION CEASED OPERATIONS IN ACCORDANCE WITH UNITED STATES
GOVERNMENT REGULATIONS.
52
38
TEN-YEAR SUMMARY OF OPERATING DATA (CONTINUED)
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
==============================================================================================================
1990 1989 1988 1987
- --------------------------------------------------------------------------------------------------------------
PRODUCTION PER DAY (NET)
Crude oil (barrels)
United States 62,434 60,992 60,782 62,635
Canada 9,494 9,178 9,251 8,592
United Kingdom (North Sea) 56,027 38,707 32,223 27,709
Norway (North Sea) 24,351 24,135 21,782 20,937
Abu Dhabi 8,475 7,230 9,374 6,903
Africa* -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Total 160,781 140,242 133,412 126,776
==============================================================================================================
Natural gas liquids (barrels)
United States 9,436 9,986 7,183 5,913
Canada 1,704 1,732 1,529 1,306
United Kingdom (North Sea) 805 466 295 402
Norway (North Sea) 2,004 2,016 1,884 1,847
- --------------------------------------------------------------------------------------------------------------
Total 13,949 14,200 10,891 9,468
==============================================================================================================
Natural gas (Mcf)
United States 457,042 335,112 283,114 282,906
Canada 76,768 72,855 61,653 49,229
United Kingdom (North Sea) 145,921 126,643 141,139 180,594
Norway (North Sea) 25,656 24,371 20,389 18,771
- --------------------------------------------------------------------------------------------------------------
Total 705,387 558,981 506,295 531,500
==============================================================================================================
WELL COMPLETIONS (NET)
Oil wells 17 19 39 35
Gas wells 33 19 8 13
Dry holes 38 31 35 28
PRODUCTIVE WELLS AT YEAR-END (NET)
Oil wells 2,111 2,048 2,014 2,058
Gas wells 905 714 612 620
- --------------------------------------------------------------------------------------------------------------
Total 3,016 2,762 2,626 2,678
UNDEVELOPED NET ACREAGE (HELD AT END OF YEAR)
United States 1,716,000 1,589,000 1,556,000 1,566,000
Canada 835,000 582,000 786,000 787,000
Other international 2,494,000 2,501,000 3,936,000 3,875,000
- --------------------------------------------------------------------------------------------------------------
Total 5,045,000 4,672,000 6,278,000 6,228,000
==============================================================================================================
SHIPPING
Vessels owned or under charter at year-end 23 22 21 21
Total deadweight tons 3,012,000 3,081,000 2,719,000 2,903,000
REFINING (BARRELS DAILY)
Refinery crude runs 383,000 397,000 296,000 371,000
PETROLEUM PRODUCTS SOLD (BARRELS DAILY)
Gasoline, distillates and other light products 296,000 299,000 222,000 257,000
Residual fuel oils 132,000 171,000 157,000 154,000
- --------------------------------------------------------------------------------------------------------------
Total 428,000 470,000 379,000 411,000
==============================================================================================================
STORAGE CAPACITY AT YEAR-END (BARRELS) 93,867,000 91,794,000 90,798,000 88,047,000
NUMBER OF EMPLOYEES (AVERAGE) 9,645 8,740 8,151 7,890
==============================================================================================================
=====================================================================================================
1986 1985 1984
- -----------------------------------------------------------------------------------------------------
PRODUCTION PER DAY (NET)
Crude oil (barrels)
United States 65,877 67,109 66,983
Canada 8,548 8,268 8,992
United Kingdom (North Sea) 32,955 32,212 29,368
Norway (North Sea) 17,088 17,896 16,262
Abu Dhabi 9,673 9,819 9,570
Africa* 15,375 26,878 28,088
- -----------------------------------------------------------------------------------------------------
Total 149,516 162,182 159,263
=====================================================================================================
Natural gas liquids (barrels)
United States 2,944 4,932 5,712
Canada 1,627 1,576 1,697
United Kingdom (North Sea) 734 710 738
Norway (North Sea) 1,690 1,654 1,231
- -----------------------------------------------------------------------------------------------------
Total 6,995 8,872 9,378
=====================================================================================================
Natural gas (Mcf)
United States 228,827 244,062 267,282
Canada 46,248 57,297 54,405
United Kingdom (North Sea) 168,926 164,443 149,876
Norway (North Sea) 15,230 15,765 15,181
- -----------------------------------------------------------------------------------------------------
Total 459,231 481,567 486,744
=====================================================================================================
WELL COMPLETIONS (NET)
Oil wells 23 45 85
Gas wells 6 21 17
Dry holes 25 47 42
PRODUCTIVE WELLS AT YEAR-END (NET)
Oil wells 2,056 2,149 2,160
Gas wells 616 626 620
- -----------------------------------------------------------------------------------------------------
Total 2,672 2,775 2,780
UNDEVELOPED NET ACREAGE (HELD AT END OF YEAR)
United States 1,949,000 2,543,000 2,661,000
Canada 851,000 1,933,000 2,645,000
Other international 3,626,000 3,567,000 2,785,000
- -----------------------------------------------------------------------------------------------------
Total 6,426,000 8,043,000 8,091,000
=====================================================================================================
SHIPPING
Vessels owned or under charter at year-end 22 23 24
Total deadweight tons 2,953,000 2,978,000 3,035,000
REFINING (BARRELS DAILY)
Refinery crude runs 293,000 337,000 368,000
PETROLEUM PRODUCTS SOLD (BARRELS DAILY)
Gasoline, distillates and other light products 207,000 270,000 248,000
Residual fuel oils 151,000 147,000 192,000
- -----------------------------------------------------------------------------------------------------
Total 358,000 417,000 440,000
=====================================================================================================
STORAGE CAPACITY AT YEAR-END (BARRELS) 87,746,000 88,839,000 88,960,000
NUMBER OF EMPLOYEES (AVERAGE) 7,776 8,290 8,806
=====================================================================================================
*PRINCIPALLY PRODUCTION FROM GABON AFTER 1990 AND FROM LIBYA PRIOR TO JUNE 30,
1986, WHEN THE CORPORATION CEASED OPERATIONS IN ACCORDANCE WITH UNITED STATES
GOVERNMENT REGULATIONS.
53
1
EXHIBIT 21
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
Organized under
Name of Subsidiary the laws of
------------------ ---------------
Amerada Hess Canada Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Canada
Amerada Hess Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
Amerada Hess Norge A/S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Norway
Amerada Hess Oil Corporation of Abu Dhabi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delaware
Amerada Hess Pipeline Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delaware
Amerada Hess (Port Reading) Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delaware
Amerada Hess Production Gabon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gabon
Amerada Hess Shipping Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liberia
Hess Oil St. Lucia Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . St. Lucia
Hess Oil Virgin Islands Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.S. Virgin Islands
Hess Pipeline Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delaware
Tug New York Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delaware
Jamestown Insurance Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bermuda
Other subsidiaries (names omitted because such unnamed subsidiaries, considered
in the aggregate as a single subsidiary, would not constitute a single
subsidiary)
Each of the foregoing subsidiaries conducts business under the name listed, and
is 100% owned by the Registrant, except for Amerada Hess Production Gabon,
which is 55% owned by the Registrant.
