UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

______________


FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): July 30, 2008

HESS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

DELAWARE

No. 1-1204

No. 13-4921002

(State or Other
Jurisdiction of
Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

1185 Avenue of the Americas
New York, New York   10036

(Address of Principal Executive Offices)   (Zip Code)


Registrant's Telephone Number, Including Area Code:  (212) 997-8500

N/A
(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02.     Results of Operations and Financial Condition.

On July 30, 2008, Hess Corporation issued a news release reporting its results for the second quarter of 2008.  A copy of this news release is attached hereto as Exhibit 99(1) and is hereby incorporated by reference.

Item 9.01.     Financial Statements and Exhibits.

(c)      Exhibits

 99(1)        News release dated July 30, 2008 reporting results for the second quarter of 2008.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 30, 2008

   

HESS CORPORATION

 

 

By:

/s/ John P. Rielly

Name:

John P. Rielly

Title:

Senior Vice President and
Chief Financial Officer


EXHIBIT INDEX

Exhibit No.

  Description
 

99(1)

News release dated July 30, 2008 reporting results for the
second quarter of 2008.

Exhibit 99.1

Hess Reports Estimated Results for the Second Quarter of 2008

Second Quarter Highlights:

NEW YORK--(BUSINESS WIRE)--Hess Corporation (NYSE: HES) reported net income of $900 million for the second quarter of 2008 compared with net income of $557 million for the second quarter of 2007. The after-tax results by major operating activity were as follows:

  Three Months Ended   Six Months Ended

June 30, (unaudited)

June 30, (unaudited)
2008   2007 2008   2007
(In millions, except per share amounts)
Exploration and Production $ 1,025 $ 505 $ 1,849 $ 845
Marketing and Refining (52 ) 122 (36 ) 223
Corporate (33 ) (32 ) (72 ) (63 )
Interest expense   (40 )   (38 )   (82 )   (78 )
 
Net income $ 900   $ 557   $ 1,659   $ 927  
 
Net income per share (diluted) $ 2.76   $ 1.75   $ 5.11   $ 2.92  
 
Weighted average number of shares (diluted)   326.2     318.6     325.0     317.9  

Note: See the following page for a table of items affecting the comparability of earnings between periods.

Exploration and Production earnings were $1,025 million in the second quarter of 2008 compared with $505 million in the second quarter of 2007. The Corporation’s oil and gas production, on a barrel-of-oil equivalent basis, was 393,000 barrels per day in the second quarter of 2008, an increase of 4% from the second quarter of 2007. In the second quarter of 2008, the Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $104.29 per barrel compared with $60.05 per barrel in the second quarter of 2007. The Corporation’s average worldwide natural gas selling price, including the effect of hedging, was $7.81 per Mcf in the second quarter of 2008 compared with $4.88 per Mcf in the second quarter of 2007.


Marketing and Refining generated a loss of $52 million in the second quarter of 2008 compared with income of $122 million in the second quarter of 2007, primarily reflecting lower margins and trading results. Refining earnings were $3 million in the second quarter of 2008 compared with $87 million in the second quarter of 2007. Marketing results were a loss of $40 million in the second quarter of 2008 compared with breakeven results in the second quarter of 2007. Trading operations generated a loss of $15 million in the second quarter of 2008 compared with income of $35 million in the second quarter of 2007.

The following items, on an after-tax basis, are included in net income (in millions):

 
  Three Months Ended   Six Months Ended

June 30,

June 30,
2008   2007 2008   2007

Exploration and Production

Gains from asset sales $ - $ 15 $ - $ 15

Net cash provided by operating activities was $1,691 million in the second quarter of 2008 compared with $1,199 million in the second quarter of 2007. Capital and exploratory expenditures for the second quarter of 2008 amounted to $1,240 million, of which $1,205 million related to Exploration and Production operations. Capital and exploratory expenditures for the second quarter of 2007 amounted to $993 million, of which $959 million related to Exploration and Production operations.

At June 30, 2008, cash and cash equivalents totaled $1,479 million compared with $607 million at December 31, 2007. Total debt was $3,945 million at June 30, 2008 and $3,980 million at December 31, 2007. The Corporation’s debt to capitalization ratio at June 30, 2008 was 26.2 percent compared with 28.9 percent at the end of 2007.

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

Hess Corporation, with headquarters in New York, is a leading global independent energy company engaged in the exploration for and production of crude oil and natural gas, as well as in refining and marketing refined petroleum products, natural gas and electricity. More information on Hess Corporation is available at www.hess.com.

 
Forward Looking Statements
 
Certain statements in this release may constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, uncertainties inherent in the measurement and interpretation of geological, geophysical and other technical data.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS OF DOLLARS)

 

 

 

 

 

 

Second Second First
Quarter Quarter Quarter
2008 2007 2008

Income Statement

  Revenues and Non-operating Income
  Sales (excluding excise taxes) and other operating revenues $ 11,717 $ 7,421 $ 10,667
Equity in income (loss) of HOVENSA L.L.C. (19 ) 81 (10 )
Gain on asset sales - 21 -
Other, net   37     23     63  
 
  Total revenues and non-operating income   11,735     7,546     10,720  
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 8,354 5,190 7,718
Production expenses 494 377 424
Marketing expenses 267 241 233

Exploration expenses, including dry holes and lease impairment

158 90 152
Other operating expenses 47 37 45
General and administrative expenses 156 142 152
Interest expense 65 62 67
Depreciation, depletion and amortization   482     354     452  
 
Total costs and expenses   10,023     6,493     9,243  
 
Income before income taxes 1,712 1,053 1,477
Provision for income taxes   812     496     718  
 
Net income $ 900   $ 557   $ 759  
 

Supplemental Income Statement Information

Foreign currency gains (losses), after-tax $ 1 $ (7 ) $ 11
Capitalized interest 1 16 1
 

Cash Flow Information

Net cash provided by operating activities (*) $ 1,691 $ 1,199 $ 1,176
 

Capital and Exploratory Expenditures

Exploration and Production
United States $ 721 $ 391 $ 415
International   484     568     523  
 
Total Exploration and Production 1,205 959 938
Marketing, Refining and Corporate   35     34     32  
 
Total Capital and Exploratory Expenditures $ 1,240   $ 993   $ 970  
 
Exploration expenses charged to income included above
United States $ 44 $ 42 $ 62
International   40     19     59  
 
$ 84   $ 61   $ 121  
 
(*) Includes changes in working capital

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS OF DOLLARS)

   
First Half
2008 2007

Income Statement

  Revenues and Non-operating Income
  Sales (excluding excise taxes) and other operating revenues $ 22,384 $ 14,740
Equity in income (loss) of HOVENSA L.L.C. (29 ) 137
Gain on asset sales - 21
Other, net   100     22  
 
  Total revenues and non-operating income   22,455     14,920  
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 16,072 10,600
Production expenses 918 724
Marketing expenses 500 463

Exploration expenses, including dry holes and lease impairment

310 183
Other operating expenses 92 70
General and administrative expenses 308 273
Interest expense 132 126
Depreciation, depletion and amortization   934     681  
 
Total costs and expenses   19,266     13,120  
 
Income before income taxes 3,189 1,800
Provision for income taxes   1,530     873  
 
Net income $ 1,659   $ 927  
 

Supplemental Income Statement Information

Foreign currency gains (losses), after-tax $ 12 $ (11 )
Capitalized interest 2 31
 

Cash Flow Information

Net cash provided by operating activities (*) $ 2,867 $ 1,838
 

Capital and Exploratory Expenditures

Exploration and Production
United States $ 1,136 $ 1,042
International   1,007     1,076  
 
Total Exploration and Production 2,143 2,118
Marketing, Refining and Corporate   67     56  
 
Total Capital and Exploratory Expenditures $ 2,210   $ 2,174  
 
Exploration expenses charged to income included above
United States $ 106 $ 82
International   99     54  
 
$ 205   $ 136  
 
(*) Includes changes in working capital

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS OF DOLLARS)

         

 

 

June 30,

December 31,

2008 2007

Balance Sheet Information

 
Cash and cash equivalents $ 1,479 $ 607
Other current assets 8,213 6,319
Investments 1,038 1,117
Property, plant and equipment – net 15,754 14,634
Other long-term assets   4,255     3,454  
Total assets $ 30,739   $ 26,131  
 
Current maturities of long-term debt $ 68 $ 62
Other current liabilities 11,169 7,962
Long-term debt 3,877 3,918
Other long-term liabilities 4,523 4,415
Stockholders' equity excluding other comprehensive income (loss) 13,370 11,615
Accumulated other comprehensive income (loss)   (2,268 )   (1,841 )
Total liabilities and stockholders' equity $ 30,739   $ 26,131  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS OF DOLLARS)

 
Second Quarter 2008

United States

  International   Total
Sales and other operating revenues $

545

$ 2,530 $ 3,075
Non-operating income   -   22   22
 
    Total revenues and non-operating income   545   2,552   3,097
Costs and expenses
Production expenses, including related taxes 101 393 494

Exploration expenses, including dry holes and lease impairment

62 96 158
General, administrative and other expenses 36 37 73
Depreciation, depletion and amortization   61   401   462
 
Total costs and expenses   260   927   1,187
 
Results of operations before income taxes 285 1,625 1,910
Provision for income taxes   108   777   885
 
Results of operations $ 177 $ 848 $ 1,025
 
Second Quarter 2007

United States

International Total
Sales and other operating revenues $ 273 $ 1,529 $ 1,802
Non-operating income   -   28   28
 
Total revenues and non-operating income   273   1,557   1,830
Costs and expenses
Production expenses, including related taxes 70 307 377

Exploration expenses, including dry holes and lease impairment

51 39 90
General, administrative and other expenses 34 28 62
Depreciation, depletion and amortization   44   293   337
 
Total costs and expenses   199   667   866
 
Results of operations before income taxes 74 890 964
Provision for income taxes   30   429   459
 
Results of operations $ 44 $ 461 $ 505
 
First Quarter 2008

United States

International Total
Sales and other operating revenues $ 448 $ 2,159 $ 2,607
Non-operating income   10   37   47
 
Total revenues and non-operating income   458   2,196   2,654
Costs and expenses
Production expenses, including related taxes 70 354 424

Exploration expenses, including dry holes and lease impairment

83 69 152
General, administrative and other expenses 32 31 63
Depreciation, depletion and amortization   55   379   434
 
Total costs and expenses   240   833   1,073
 
Results of operations before income taxes 218 1,363 1,581
Provision for income taxes   84   673   757
 
Results of operations $ 134 $ 690 $ 824

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS OF DOLLARS)

           
First Half 2008

 

   

United States

International Total
Sales and other operating revenues $ 993 $ 4,689 $ 5,682
Non-operating income   10   59   69
 
Total revenues and non-operating income   1,003   4,748   5,751
Costs and expenses
Production expenses, including related taxes 171 747 918

Exploration expenses, including dry holes and lease impairment

145 165 310
General, administrative and other expenses 68 68 136
Depreciation, depletion and amortization   116   780   896
 
Total costs and expenses   500   1,760   2,260
 
Results of operations before income taxes 503 2,988 3,491
Provision for income taxes   192   1,450   1,642
 
Results of operations $ 311 $ 1,538 $ 1,849
 
First Half 2007

 

United States

International Total
Sales and other operating revenues $ 514 $ 2,799 $ 3,313
Non-operating income   8   14   22
 
Total revenues and non-operating income   522   2,813   3,335
Costs and expenses
Production expenses, including related taxes 129 595 724

Exploration expenses, including dry holes and lease impairment

101 82 183
General, administrative and other expenses 67 52 119
Depreciation, depletion and amortization   81   565   646
 
Total costs and expenses   378   1,294   1,672
 
Results of operations before income taxes 144 1,519 1,663
Provision for income taxes   56   762   818
 
Results of operations $ 88 $ 757 $ 845

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

           

 

Second Second First
Quarter Quarter Quarter
2008 2007 2008

Operating Data

Net Production Per Day (in thousands)

Crude oil - barrels
United States 36 31 36
Europe 83 96 83
Africa 128 115 119
Asia and other   12   26   17
  Total   259   268   255
 
Natural gas liquids - barrels
United States 11 10 11
Europe   4   4   4
Total   15   14   15
 
Natural gas - mcf
United States 83 86 93
Europe 267 212 296
Asia and other   364   277   342
Total   714   575   731
Barrels of oil equivalent   393   378   391
 

Average Selling Price

Crude oil - per barrel (including hedging)
United States $ 120.23 $ 61.41 $ 92.59
Europe 104.98 58.94 82.29
Africa 97.32 58.02 78.83
Asia and other 120.59 70.73 96.53
Worldwide 104.29 60.05 83.28
 
Crude oil - per barrel (excluding hedging)
United States $ 120.23 $ 61.41 $ 92.59
Europe 104.98 58.94 82.29
Africa 117.49 67.04 93.52
Asia and other 120.59 70.73 96.53
Worldwide 113.79 63.94 89.62
 
Natural gas liquids - per barrel
United States $ 76.60 $ 47.97 $ 64.83
Europe 92.67 58.26 76.50
Worldwide 81.52 51.68 67.70
 
Natural gas - per mcf (including hedging)
United States $ 11.00 $ 7.24 $ 8.53
Europe 10.33 4.54 8.96
Asia and other 5.23 4.42 5.01
Worldwide 7.81 4.88 7.06
 
Natural gas - per mcf (excluding hedging)
United States $ 11.00 $ 7.24 $ 8.53
Europe 10.84 4.54 9.05
Asia and other 5.23 4.42 5.01
Worldwide 8.01 4.88 7.10

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

       

 

First Half
2008   2007

Operating Data

 

 

Net Production Per Day (in thousands)

Crude oil - barrels
United States 36 30
Europe 83 103
Africa 123 107
Asia and other   15   20
  Total   257   260
 
Natural gas liquids - barrels
United States 11 10
Europe   4   5
Total   15   15
 
Natural gas - mcf
United States 88 88
Europe 282 280
Asia and other   353   260
Total   723   628
Barrels of oil equivalent   392   380
 

Average Selling Price

Crude oil - per barrel (including hedging)
United States $ 106.42 $ 57.46
Europe 93.32 54.98
Africa 88.44 53.68
Asia and other 106.28 65.08
Worldwide 93.75 55.66
 
Crude oil - per barrel (excluding hedging)
United States $ 106.42 $ 57.46
Europe 93.32 54.98
Africa 105.98 62.22
Asia and other 106.28 65.08
Worldwide 101.66 59.13
 
Natural gas liquids - per barrel
United States $ 70.71 $ 45.36
Europe 85.78 52.44
Worldwide 74.90 48.06
 
Natural gas - per mcf (including hedging)
United States $ 9.69 $ 7.22
Europe 9.61 4.66
Asia and other 5.12 4.49
Worldwide 7.43 4.95
 
Natural gas - per mcf (excluding hedging)
United States $ 9.69 $ 7.22
Europe 9.90 4.66
Asia and other 5.12 4.49
Worldwide 7.55 4.95

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL HEDGING INFORMATION (UNAUDITED)
 
The following is a summary of the Corporation's outstanding crude oil hedges at June 30, 2008:
 

 

Brent Crude Oil(*)
Average   Thousands
Selling of Barrels
Price per Day
Maturities

 

 

2008 $ 25 .56 24
2009 25 .54 24
2010 25 .78 24
2011 26 .37 24
2012 26 .90 24

----------------------------------

(*) There were no WTI crude oil hedges outstanding at June 30, 2008.

At June 30, 2008, the Corporation also had outstanding United Kingdom natural gas hedges of 50 thousand Mcf per day through October 2008 at an average selling price of approximately $11.05 per Mcf.

The after-tax losses from crude oil and natural gas hedges were $144 million in the second quarter of 2008 and $56 million in the second quarter of 2007. The after-tax losses from crude oil and natural gas hedges were $239 million in the first half of 2008 compared with $95 million in the first half of 2007. At June 30, 2008, the after-tax deferred losses related to crude oil and natural gas hedges that were included in accumulated other comprehensive income amounted to $2.5 billion.


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)

     
Second Second First
Quarter Quarter Quarter
2008 2007 2008

Financial Information (in millions of dollars)

 
   

Marketing and Refining Results

  Income (loss) before income taxes $ (85 ) $ 196 $ 21
Provision (benefit) for income taxes   (33 )   74     5  
Marketing and Refining Earnings (Loss) $ (52 ) $ 122   $ 16  
 

Summary of Marketing and Refining Results

Refining $ 3 $ 87 $ (3 )
Marketing (40 ) - 32
Trading   (15 )   35     (13 )
Total Marketing and Refining Earnings (Loss) $ (52 ) $ 122   $ 16  
     
 

Operating Data (barrels and gallons in thousands)

 

Refined Product Sales (barrels per day)

Gasoline 236 224 223
Distillates 129 119 168
Residuals 49 52 67
Other   40     19     37  
Total   454     414     495  
 

Refinery Throughput (barrels per day)

HOVENSA - Crude runs 471 397 446
HOVENSA - Hess 50% share 235 199 223
Port Reading 64 64 61
 

Refinery Utilization

 

Refinery Capacity

HOVENSA (barrels per day)
Crude 500 94.2 % 79.4 % 89.1 %
FCC 150 73.1 % 87.9 % 74.3 %
Coker

58

99.5 % 53.3 % 91.5 %
Port Reading

70

(c)

91.3 % 97.9 % 87.1 %
 

Retail Marketing

Number of retail stations (a) 1,363 1,351 1,367
Convenience store revenue (in millions of dollars) (b) $ 275 $ 274 $ 239
Average gasoline volume per station (gallons per month) (b) 218 228 195

 

(a) Includes company operated, Wilco-Hess, dealer and branded retailer.
(b) Company operated only.
(c) Refinery utilization in 2007 is based on capacity of 65 thousand barrels per day.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)

 
First Half
2008   2007

Financial Information (in millions of dollars)

 
   

Marketing and Refining Results

  Income (loss) before income taxes $ (64 ) $ 355
Provision (benefit) for income taxes   (28 )   132  
Marketing and Refining Earnings (Loss) $ (36 ) $ 223  
 

Summary of Marketing and Refining Results

Refining $ - $ 141
Marketing (8 ) 43
Trading   (28 )   39  
Total Marketing and Refining Earnings (Loss) $ (36 ) $ 223  
     
 

Operating Data (barrels and gallons in thousands)

 

Refined Product Sales (barrels per day)

Gasoline 229 209
Distillates 149 146
Residuals 58 73
Other   39     24  
Total   475     452  
 

Refinery Throughput (barrels per day)

HOVENSA - Crude runs 458 434
HOVENSA - Hess 50% share 229 217
Port Reading 62 59
 

Refinery Utilization

 

Refinery Capacity

HOVENSA (barrels per day)
Crude 500 91.6 % 86.7 %
FCC 150 73.7 % 90.5 %
Coker 58 95.5 % 70.8 %
Port Reading

70

(c)

89.2 % 91.4 %
 

Retail Marketing

Number of retail stations (a) 1,363 1,351
Convenience store revenue (in millions of dollars) (b) $ 514 $ 518
Average gasoline volume per station (gallons per month) (b) 207 210

 

(a) Includes company operated, Wilco-Hess, dealer and branded retailer.
(b) Company operated only.
(c) Refinery utilization in 2007 is based on capacity of 65 thousand barrels per day.

CONTACT:
Hess Corporation
Investors:
Jay Wilson, 212-536-8940
or
Media:
Jon Pepper, 212-536-8550