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): April 30, 2008
HESS
CORPORATION
(Exact
Name of Registrant as Specified in Its Charter)
______________
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DELAWARE |
No. 1-1204 |
No. 13-4921002 |
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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1185 Avenue of the Americas |
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(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 April 30, 2008, Hess Corporation issued a news release reporting its results for the first 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 April 30, 2008 reporting results for the
first 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:
April 30, 2008
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HESS CORPORATION |
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By: |
/s/ John P. Rielly |
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Name: |
John P. Rielly |
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Title: |
Senior Vice President and |
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EXHIBIT INDEX
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Exhibit No. |
Description | |
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99(1) |
News release dated April 30, 2008 reporting results for the |
Exhibit 99.1
Hess
Reports Estimated Results for the First Quarter of 2008
First Quarter Highlights:
- Net Income was $759 million compared with $370 million in first quarter 2007
- Cash flows from operations were $1,176 million compared with $639 million in first quarter 2007
- Oil and gas production was 391,000 barrels per day, up from 382,000 in first quarter 2007
- Debt to capitalization ratio decreased to 26.9 percent at March 31, 2008, from 28.9 percent at December 31, 2007
NEW YORK--(BUSINESS WIRE)--Hess Corporation (NYSE: HES) reported net income of $759 million for the first quarter of 2008 compared with net income of $370 million for the first quarter of 2007. The after-tax results by major operating activity were as follows:
| Three months ended | ||||||||
| March 31 (unaudited) | ||||||||
| 2008 | 2007 | |||||||
| (In millions, except per share amounts) | ||||||||
| Exploration and Production | $ | 824 | $ | 340 | ||||
| Marketing and Refining | 16 | 101 | ||||||
| Corporate | (39 | ) | (31 | ) | ||||
| Interest expense | (42 | ) | (40 | ) | ||||
| Net income | $ | 759 | $ | 370 | ||||
| Net income per share (diluted) | $ | 2.34 | $ | 1.17 | ||||
| Weighted average number of shares (diluted) | 323.8 | 317.3 | ||||||
Exploration and Production earnings were $824 million in the first quarter of 2008 compared with $340 million in the first quarter of 2007. The Corporation’s oil and gas production, on a barrel-of-oil equivalent basis, was 391,000 barrels per day in the first quarter of 2008, compared with 382,000 barrels per day in the first quarter of 2007. In the first quarter of 2008, the Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $83.28 per barrel, an increase of $32.54 per barrel from the first quarter of 2007. The Corporation’s average worldwide natural gas selling price, including the effect of hedging, was $7.06 per Mcf in the first quarter of 2008, an increase of $2.06 per Mcf from the first quarter of 2007.
Marketing and Refining earnings were $16 million in the first quarter of 2008 compared with $101 million in the first quarter of 2007, primarily reflecting lower refining margins and trading results. Refining operations generated a loss of $3 million in the first quarter of 2008 compared with earnings of $54 million in the first quarter of 2007. Marketing earnings were $32 million in the first quarter of 2008 compared with $43 million in the first quarter of 2007. Trading activities produced a loss of $13 million in the first quarter of 2008 compared with income of $4 million in the first quarter of 2007.
Net cash provided by operating activities was $1,176 million in the first quarter of 2008 compared with $639 million in the first quarter of 2007. Capital and exploratory expenditures for the first quarter of 2008 amounted to $970 million, of which $938 million related to Exploration and Production operations. Capital and exploratory expenditures for the first quarter of 2007 amounted to $1,181 million, of which $1,159 million related to Exploration and Production operations.
At March 31, 2008, cash and cash equivalents totaled $902 million compared with $607 million at December 31, 2007. Total debt was $3,960 million at March 31, 2008 and $3,980 million at December 31, 2007. The Corporation’s debt to capitalization ratio at March 31, 2008 was 26.9 percent compared with 28.9 percent at the end of 2007.
Hess Corporation will review first quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details on the event, refer to the Investor Relations section of our website at www.hess.com.
Hess Corporation, with headquarters in New York, is a leading global independent energy company engaged in the exploration for and production of crude oil and natural gas, as well as in refining and marketing refined petroleum products, natural gas and electricity. More information on Hess Corporation is available at www.hess.com.
Forward Looking Statements
Certain statements in this release may constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, uncertainties inherent in the measurement and interpretation of geological, geophysical and other technical data.
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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS OF DOLLARS) |
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| First | First | Fourth | |||||||||
| Quarter | Quarter | Quarter | |||||||||
| 2008 | 2007 | 2007 | |||||||||
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Income Statement |
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| Revenues and Non-operating Income | |||||||||||
| Sales (excluding excise taxes) and other operating revenues | $ | 10,667 | $ | 7,319 | $ | 9,456 | |||||
| Equity in income (loss) of HOVENSA L.L.C. | (10 | ) | 56 | 20 | |||||||
| Other, net | 63 | (1 | ) | 24 | |||||||
| Total revenues and non-operating income | 10,720 | 7,374 | 9,500 | ||||||||
| Costs and Expenses | |||||||||||
| Cost of products sold (excluding items shown separately below) | 7,718 | 5,410 | 6,651 | ||||||||
| Production expenses | 424 | 347 | 463 | ||||||||
| Marketing expenses | 233 | 222 | 243 | ||||||||
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Exploration expenses, including dry holes and lease impairment |
152 | 93 | 201 | ||||||||
| Other operating expenses | 45 | 33 | 46 | ||||||||
| General and administrative expenses | 152 | 131 | 208 | ||||||||
| Interest expense | 67 | 64 | 71 | ||||||||
| Depreciation, depletion and amortization | 452 | 327 | 530 | ||||||||
| Total costs and expenses | 9,243 | 6,627 | 8,413 | ||||||||
| Income before income taxes | 1,477 | 747 | 1,087 | ||||||||
| Provision for income taxes | 718 | 377 | 577 | ||||||||
| Net income | $ | 759 | $ | 370 | $ | 510 | |||||
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Supplemental Income Statement Information |
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| Foreign currency gains (losses), after-tax | $ | 11 | $ | (4 | ) | $ | 1 | ||||
| Capitalized interest | 1 | 15 | 1 | ||||||||
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Cash Flow Information |
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| Net cash provided by operating activities (*) | $ | 1,176 | $ | 639 | $ | 806 | |||||
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Capital and Exploratory Expenditures |
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| Exploration and Production | |||||||||||
| United States | $ | 415 | $ | 651 | $ | 291 | |||||
| International | 523 | 508 | 577 | ||||||||
| Total Exploration and Production | 938 | 1,159 | 868 | ||||||||
| Marketing, Refining and Corporate | 32 | 22 | 46 | ||||||||
| Total Capital and Exploratory Expenditures | $ | 970 | $ | 1,181 | $ | 914 | |||||
| Exploration expenses charged to income included above | |||||||||||
| United States | $ | 62 | $ | 40 | $ | 43 | |||||
| International | 59 | 35 | 66 | ||||||||
| $ | 121 | $ | 75 | $ | 109 | ||||||
| (*) Includes changes in working capital | |||||||||||
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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS OF DOLLARS) |
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March 31, | December 31, | ||||||
| 2008 | 2007 | |||||||
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Balance Sheet Information |
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| Cash and cash equivalents | $ | 902 | $ | 607 | ||||
| Other current assets | 6,392 | 6,319 | ||||||
| Investments | 1,082 | 1,117 | ||||||
| Property, plant and equipment – net | 15,132 | 14,634 | ||||||
| Other long-term assets | 3,505 | 3,454 | ||||||
| Total assets | $ | 27,013 | $ | 26,131 | ||||
| Current maturities of long-term debt | $ | 64 | $ | 62 | ||||
| Other current liabilities | 7,882 | 7,962 | ||||||
| Long-term debt | 3,896 | 3,918 | ||||||
| Other long-term liabilities | 4,416 | 4,415 | ||||||
| Stockholders' equity excluding other comprehensive income (loss) | 12,407 | 11,615 | ||||||
| Accumulated other comprehensive income (loss) | (1,652 | ) | (1,841 | ) | ||||
| Total liabilities and stockholders' equity | $ | 27,013 | $ | 26,131 | ||||
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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS OF DOLLARS) |
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| 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 | |||||||||
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Exploration expenses, including dry holes and lease impairment |
83 | 69 | 152 | |||||||||
| General, administrative and other expenses | 32 | 31 | 63 | |||||||||
| Depreciation, depletion and amortization | 55 | 379 | 434 | |||||||||
| Total costs and expenses | 240 | 833 | 1,073 | |||||||||
| Results of operations before income taxes | 218 | 1,363 | 1,581 | |||||||||
| Provision for income taxes | 84 | 673 | 757 | |||||||||
| Results of operations | $ | 134 | $ | 690 | $ | 824 | ||||||
| First Quarter 2007 | ||||||||||||
| United | ||||||||||||
| States | International | Total | ||||||||||
| Sales and other operating revenues | $ | 241 | $ | 1,270 | $ | 1,511 | ||||||
| Non-operating income (loss) | 8 | (14 | ) | (6 | ) | |||||||
| Total revenues and non-operating income | 249 | 1,256 | 1,505 | |||||||||
| Costs and expenses | ||||||||||||
| Production expenses, including related taxes | 59 | 288 | 347 | |||||||||
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Exploration expenses, including dry holes and lease impairment |
50 | 43 | 93 | |||||||||
| General, administrative and other expenses | 33 | 24 | 57 | |||||||||
| Depreciation, depletion and amortization | 37 | 272 | 309 | |||||||||
| Total costs and expenses | 179 | 627 | 806 | |||||||||
| Results of operations before income taxes | 70 | 629 | 699 | |||||||||
| Provision for income taxes | 26 | 333 | 359 | |||||||||
| Results of operations | $ | 44 | $ | 296 | $ | 340 | ||||||
| Fourth Quarter 2007 | ||||||||||||
| United | ||||||||||||
| States | International | Total | ||||||||||
| Sales and other operating revenues | $ | 401 | $ | 2,037 | $ | 2,438 | ||||||
| Non-operating income (loss) | (1 | ) | 14 | 13 | ||||||||
| Total revenues and non-operating income | 400 | 2,051 | 2,451 | |||||||||
| Costs and expenses | ||||||||||||
| Production expenses, including related taxes | 71 | 392 | 463 | |||||||||
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Exploration expenses, including dry holes and lease impairment |
122 | 79 | 201 | |||||||||
| General, administrative and other expenses | 36 | 38 | 74 | |||||||||
| Depreciation, depletion and amortization | 58 | 454 | 512 | |||||||||
| Total costs and expenses | 287 | 963 | 1,250 | |||||||||
| Results of operations before income taxes | 113 | 1,088 | 1,201 | |||||||||
| Provision for income taxes | 44 | 574 | 618 | |||||||||
| Results of operations | $ | 69 | $ | 514 | $ | 583 | ||||||
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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL OPERATING DATA (UNAUDITED) |
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| First | First | Fourth | |||||||
| Quarter | Quarter | Quarter | |||||||
| 2008 | 2007 | 2007 | |||||||
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Operating Data |
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Net Production Per Day (in thousands) |
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| Crude oil - barrels | |||||||||
| United States | 36 | 29 | 34 | ||||||
| Europe | 83 | 110 | 83 | ||||||
| Africa | 119 | 99 | 121 | ||||||
| Asia and other | 17 | 15 | 22 | ||||||
| Total | 255 | 253 | 260 | ||||||
| Natural gas liquids - barrels | |||||||||
| United States | 11 | 9 | 11 | ||||||
| Europe | 4 | 7 | 5 | ||||||
| Total | 15 | 16 | 16 | ||||||
| Natural gas - mcf | |||||||||
| United States | 93 | 90 | 91 | ||||||
| Europe | 296 | 348 | 290 | ||||||
| Asia and other | 342 | 243 | 300 | ||||||
| Total | 731 | 681 | 681 | ||||||
| Barrels of oil equivalent | 391 | 382 | 390 | ||||||
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Average Selling Price |
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| Crude oil - per barrel (including hedging) | |||||||||
| United States | $ | 92.59 | $ | 53.19 | $ | 86.22 | |||
| Europe | 82.29 | 51.32 | 74.00 | ||||||
| Africa | 78.83 | 48.17 | 72.85 | ||||||
| Asia and other | 96.53 | 56.44 | 86.30 | ||||||
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Worldwide |
83.28 | 50.74 | 76.11 | ||||||
| Crude oil - per barrel (excluding hedging) | |||||||||
| United States | $ | 92.59 | $ | 53.19 | $ | 86.22 | |||
| Europe | 82.29 | 51.32 | 74.00 | ||||||
| Africa | 93.52 | 56.09 | 84.84 | ||||||
| Asia and other | 96.53 | 56.44 | 86.30 | ||||||
| Worldwide | 89.62 | 53.75 | 81.87 | ||||||
| Natural gas liquids - per barrel | |||||||||
| United States | $ | 64.83 | $ | 42.44 | $ | 63.51 | |||
| Europe | 76.50 | 45.90 | 70.86 | ||||||
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Worldwide |
67.70 | 43.97 | 66.13 | ||||||
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Natural gas - per mcf (including hedging) |
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| United States | $ | 8.53 | $ | 7.21 | $ | 6.47 | |||
| Europe | 8.96 | 4.74 | 8.92 | ||||||
| Asia and other | 5.01 | 4.56 | 5.13 | ||||||
| Worldwide | 7.06 | 5.00 | 6.93 | ||||||
| Natural gas - per mcf (excluding hedging) | |||||||||
| United States | $ | 8.53 | $ | 7.21 | $ | 6.47 | |||
| Europe | 9.05 | 4.74 | 8.92 | ||||||
| Asia and other | 5.01 | 4.56 | 5.13 | ||||||
| Worldwide | 7.10 | 5.00 | 6.93 | ||||||
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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION SUPPLEMENTAL HEDGING INFORMATION (UNAUDITED) |
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The following is a summary of the Corporation’s outstanding crude oil hedges at March 31, 2008: |
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Brent Crude Oil(*) |
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| Average | Thousands | ||
| Selling | of Barrels | ||
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Price |
per Day |
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| Maturities | |||
| 2008 |
$25.56 |
24 | |
| 2009 |
25.54 |
24 | |
| 2010 |
25.78 |
24 | |
| 2011 |
26.37 |
24 | |
| 2012 |
26.90 |
24 | |
(*) There were no WTI crude oil hedges outstanding at March 31, 2008.
At March 31, 2008, the Corporation also had outstanding United Kingdom natural gas hedges of 50 thousand Mcf per day through October 2008 at an average selling price of approximately $10.65 per Mcf.
The after-tax losses from crude oil and natural gas hedges were $95 million in the first quarter of 2008. The after-tax losses from crude oil hedges were $39 million in the first quarter of 2007 and $89 million in the fourth quarter of 2007. At March 31, 2008, the after-tax deferred losses related to crude oil and natural gas hedges that were included in accumulated other comprehensive income amounted to $1.7 billion.
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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED) |
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| First | First | Fourth | ||||||||||||
| Quarter | Quarter | Quarter | ||||||||||||
| 2008 | 2007 | 2007 | ||||||||||||
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Financial Information (in millions of dollars) |
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Marketing and Refining Earnings |
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| Income before income taxes | $ | 21 | $ | 159 | $ | 51 | ||||||||
| Provision for income taxes | 5 | 58 | 20 | |||||||||||
| Marketing and Refining Earnings | $ | 16 | $ | 101 | $ | 31 | ||||||||
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Summary of Marketing and Refining Earnings |
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| Refining | $ | (3 | ) | $ | 54 | $ | 27 | |||||||
| Marketing | 32 | 43 | 19 | |||||||||||
| Trading | (13 | ) | 4 | (15 | ) | |||||||||
| Total Marketing and Refining Earnings | $ | 16 | $ | 101 | $ | 31 | ||||||||
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Operating Data (barrels and gallons in thousands) |
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Refined Product Sales (barrels per day) |
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| Gasoline | 223 | 194 | 205 | |||||||||||
| Distillates | 168 | 174 | 163 | |||||||||||
| Residuals | 67 | 94 | 57 | |||||||||||
| Other | 37 | 29 | 37 | |||||||||||
| Total | 495 | 491 | 462 | |||||||||||
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Refinery Throughput (barrels per day) |
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| HOVENSA - Crude runs | 446 | 470 | 488 | |||||||||||
| HOVENSA - Hess 50% share | 223 | 235 | 244 | |||||||||||
| Port Reading | 61 | 55 | 63 | |||||||||||
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Refinery Utilization |
Refinery Capacity | |||||||||||||
| HOVENSA | (barrels per day) | |||||||||||||
| Crude | 500 | 89.1 | % | 94.1 | % | 97.6 | % | |||||||
| FCC | 150 | 74.3 | % | 93.2 | % | 84.9 | % | |||||||
| Coker | 58 | 91.5 | % | 88.6 | % | 99.3 | % | |||||||
| Port Reading |
70(c) |
87.1 | % | 84.7 | % | 96.3 | % | |||||||
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Retail Marketing |
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| Number of retail stations (a) | 1,367 | 1,345 | 1,371 | |||||||||||
| Convenience store revenue (in millions of dollars) (b) | $ | 239 | $ | 244 | $ | 255 | ||||||||
| Average gasoline volume per station (gallons per month) (b) | 195 | 191 | 209 | |||||||||||
| (a) Includes company operated, Wilco-Hess, dealer and branded retailer. | ||||||||||||||
| (b) Company operated only. | ||||||||||||||
| (c) Refinery utilization in 2007 is based on capacity of 65 thousand barrels per day. | ||||||||||||||
CONTACT:
Hess Corporation
Investor:
Jay
Wilson, 212-536-8940
or
Media:
Jon
Pepper, 212-536-8550