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 28, 2010
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 |
(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 28, 2010, Hess Corporation issued a news release reporting estimated results for the first quarter of 2010. 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 28, 2010 reporting estimated results for the first quarter of 2010. | |
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
28, 2010
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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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Chief Financial Officer |
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EXHIBIT INDEX
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Exhibit No. |
Description |
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99(1) |
News release dated April 28, 2010 reporting estimated results for the first quarter of 2010. |
4
Exhibit 99(1)
Hess Reports Estimated Results for the First Quarter of 2010
First Quarter Highlights:
- Net Income was $538 million compared with a loss of $59 million in the first quarter 2009
- Oil and gas production was 423,000 barrels per day, compared with 390,000 in the first quarter 2009
- Capital and exploratory expenditures were $861 million, up from $805 million in the first quarter 2009
NEW YORK--(BUSINESS WIRE)--April 28, 2010--Hess Corporation (NYSE: HES) reported net income of $538 million for the first quarter of 2010 compared with a net loss of $59 million for the first quarter of 2009. The after-tax results by major operating activity were as follows:
| Three Months Ended | |||||||||||
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March 31, (unaudited) |
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| 2010 | 2009 | ||||||||||
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(In millions, except
per share amounts) |
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| Exploration and Production | $ | 551 | $ | (64 | ) | ||||||
| Marketing and Refining | 87 | 102 | |||||||||
| Corporate | (48 | ) | (49 | ) | |||||||
| Interest expense | (52 | ) | (48 | ) | |||||||
| Net income (loss) attributable to Hess Corporation | $ | 538 | $ | (59 | ) | ||||||
| Net income (loss) per share (diluted) | $ | 1.65 | $ | (.18 | ) | ||||||
| Weighted average number of shares (diluted) | 327.0 | 323.4 | |||||||||
| Note: See the following page for a table of items affecting the comparability of earnings between periods. |
Exploration and Production earnings, including a gain on an asset sale, were $551 million in the first quarter of 2010 compared with a loss of $64 million in the first quarter of 2009. The Corporation’s oil and gas production was 423,000 barrels of oil equivalent per day in the first quarter of 2010, an increase of 8 percent from the first quarter of 2009. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $63.62 per barrel in the first quarter of 2010 compared with $34.42 per barrel in the first quarter of 2009. The Corporation’s average worldwide natural gas selling price was $5.92 per Mcf in the first quarter of 2010 compared with $5.08 per Mcf in the first quarter of 2009.
Marketing and Refining earnings were $87 million in the first quarter of 2010 compared with $102 million in the first quarter of 2009. Refining operations generated a loss of $56 million compared with a loss of $18 million in the first quarter of 2009. During the first quarter of 2010, the fluid catalytic cracking unit at HOVENSA was shut down for a scheduled turnaround. Marketing earnings were $121 million, an increase of $20 million from the first quarter of 2009 primarily due to higher margins. Income from trading activities was $22 million, up from $19 million in the first quarter of 2009.
The following table reflects the total after-tax impact of items affecting comparability of earnings between periods (in millions):
| Three Months Ended | ||||||||||
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March 31, |
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| 2010 | 2009 | |||||||||
| Exploration and Production | $ | 58 | $ | (13 | ) | |||||
| Corporate | (7 | ) | (16 | ) | ||||||
| $ | 51 | $ | (29 | ) | ||||||
First quarter 2010 results included a gain of $58 million related to the sale of the Corporation’s interest in the Jambi Merang natural gas development project in Indonesia. In addition, the Corporation recorded an after-tax charge of $7 million related to the previously announced repurchase of the remaining $116 million of bonds that were scheduled to mature in 2011.
Net cash provided by operating activities was $825 million compared with $625 million in the first quarter of 2009. Capital and exploratory expenditures were $861 million in the first quarter of 2010, of which $841 million related to Exploration and Production operations. Capital and exploratory expenditures for the first quarter of 2009 were $805 million, of which $759 million related to Exploration and Production operations.
At March 31, 2010, cash and cash equivalents totaled $1,370 million compared with $1,362 million at December 31, 2009. Total debt was $4,335 million at March 31, 2010 and $4,467 million at December 31, 2009. The Corporation’s debt to capitalization ratio at March 31, 2010 was 23.6 percent compared with 24.8 percent at the end of 2009.
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 in 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 | |||||||||||||
| 2010 | 2009 | 2009 | |||||||||||||
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Income Statement |
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| Revenues and Non-operating Income | |||||||||||||||
| Sales (excluding excise taxes) and other operating revenues | $ | 9,259 | $ | 6,915 | $ | 8,678 | |||||||||
| Equity in income (loss) of HOVENSA L.L.C. | (85 | ) | (41 | ) | (64 | ) | |||||||||
| Other, net | 46 | (2 | ) | (56 | ) | ||||||||||
| Total revenues and non-operating income | 9,220 | 6,872 | 8,558 | ||||||||||||
| Costs and Expenses | |||||||||||||||
| Cost of products sold (excluding items shown separately below) | 6,540 | 5,182 | 6,005 | ||||||||||||
| Production expenses | 477 | 409 | 492 | ||||||||||||
| Marketing expenses | 253 | 257 | 266 | ||||||||||||
| Exploration expenses, including dry holes | |||||||||||||||
| and lease impairment | 151 | 193 | 157 | ||||||||||||
| Other operating expenses | 52 | 48 | 49 | ||||||||||||
| General and administrative expenses | 155 | 160 | 203 | ||||||||||||
| Interest expense | 84 | 77 | 91 | ||||||||||||
| Depreciation, depletion and amortization | 542 | 486 | 584 | ||||||||||||
| Total costs and expenses | 8,254 | 6,812 | 7,847 | ||||||||||||
| Income before income taxes | 966 | 60 | 711 | ||||||||||||
| Provision for income taxes | 398 | 77 | 341 | ||||||||||||
| Net income (loss) | 568 | (17 | ) | 370 | |||||||||||
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Less: Net income attributable to noncontrolling interests |
30 | 42 | 12 | ||||||||||||
| Net income (loss) attributable to Hess Corporation | $ | 538 | $ | (59 | ) | $ | 358 | ||||||||
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Supplemental Income Statement Information |
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| Foreign currency gains (losses), after-tax | $ | (1 | ) | $ | (10 | ) | $ | (10 | ) | ||||||
| Capitalized interest | 1 | 1 | 2 | ||||||||||||
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Cash Flow Information |
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| Net cash provided by operating activities (*) | $ | 825 | $ | 625 | $ | 1,271 | |||||||||
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Capital and Exploratory Expenditures |
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| Exploration and Production | |||||||||||||||
| United States | $ | 337 | $ | 315 | $ | 392 | |||||||||
| International | 504 | 444 | 565 | ||||||||||||
| Total Exploration and Production | 841 | 759 | 957 | ||||||||||||
| Marketing, Refining and Corporate | 20 | 46 | 35 | ||||||||||||
| Total Capital and Exploratory Expenditures | $ | 861 | $ | 805 | $ | 992 | |||||||||
| Exploration expenses charged to income included above | |||||||||||||||
| United States | $ | 41 | $ | 53 | $ | 22 | |||||||||
| International | 32 | 48 | 45 | ||||||||||||
| $ | 73 | $ | 101 | $ | 67 | ||||||||||
| (*) 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, | |||||||||
| 2010 | 2009 | ||||||||||
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Balance Sheet Information |
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| Cash and cash equivalents | $ | 1,370 | $ | 1,362 | |||||||
| Other current assets | 7,410 | 6,625 | |||||||||
| Investments | 847 | 913 | |||||||||
| Property, plant and equipment – net | 16,536 | 16,627 | |||||||||
| Other long-term assets | 3,786 | 3,938 | |||||||||
| Total assets | $ | 29,949 | $ | 29,465 | |||||||
| Current maturities of long-term debt | $ | 32 | $ | 148 | |||||||
| Other current liabilities | 7,133 | 6,702 | |||||||||
| Long-term debt | 4,303 | 4,319 | |||||||||
| Other long-term liabilities | 4,454 | 4,768 | |||||||||
| Total equity excluding other comprehensive income (loss) | 15,776 | 15,203 | |||||||||
| Accumulated other comprehensive income (loss) | (1,749 | ) | (1,675 | ) | |||||||
| Total liabilities and equity | $ | 29,949 | $ | 29,465 | |||||||
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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS OF DOLLARS) |
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| First Quarter 2010 | |||||||||||||||
| United | |||||||||||||||
| States | International | Total | |||||||||||||
| Sales and other operating revenues | $ | 582 | $ | 1,532 | $ | 2,114 | |||||||||
| Other, net | (1 | ) | 55 | 54 | |||||||||||
| Total revenues and non-operating income | 581 | 1,587 | 2,168 | ||||||||||||
| Costs and expenses | |||||||||||||||
| Production expenses, including related taxes | 116 | 361 | 477 | ||||||||||||
| Exploration expenses, including dry holes | |||||||||||||||
| and lease impairment | 78 | 73 | 151 | ||||||||||||
| General, administrative and other expenses | 36 | 31 | 67 | ||||||||||||
| Depreciation, depletion and amortization | 136 | 383 | 519 | ||||||||||||
| Total costs and expenses | 366 | 848 | 1,214 | ||||||||||||
| Results of operations before income taxes | 215 | 739 | 954 | ||||||||||||
| Provision for income taxes | 77 | 326 | 403 | ||||||||||||
| Results of operations attributable to Hess Corporation | $ | 138 | $ | 413 | $ | 551 | |||||||||
| First Quarter 2009 | |||||||||||||||
| United | |||||||||||||||
| States | International | Total | |||||||||||||
| Sales and other operating revenues | $ | 167 | $ | 964 | $ | 1,131 | |||||||||
| Other, net | (2 | ) | 10 | 8 | |||||||||||
| Total revenues and non-operating income | 165 | 974 | 1,139 | ||||||||||||
| Costs and expenses | |||||||||||||||
| Production expenses, including related taxes | 112 | 297 | 409 | ||||||||||||
| Exploration expenses, including dry holes | |||||||||||||||
| and lease impairment | 111 | 82 | 193 | ||||||||||||
| General, administrative and other expenses | 27 | 29 | 56 | ||||||||||||
| Depreciation, depletion and amortization | 57 | 408 | 465 | ||||||||||||
| Total costs and expenses | 307 | 816 | 1,123 | ||||||||||||
| Results of operations before income taxes | (142 | ) | 158 | 16 | |||||||||||
| Provision (benefit) for income taxes | (53 | ) | 133 | 80 | |||||||||||
| Results of operations attributable to Hess Corporation | $ | (89 | ) | $ | 25 | $ | (64 | ) | |||||||
| Fourth Quarter 2009 | |||||||||||||||
| United | |||||||||||||||
| States | International | Total | |||||||||||||
| Sales and other operating revenues | $ | 587 | $ | 1,626 | $ | 2,213 | |||||||||
| Other, net | - | (3 | ) | (3 | ) | ||||||||||
| Total revenues and non-operating income | 587 | 1,623 | 2,210 | ||||||||||||
| Costs and expenses | |||||||||||||||
| Production expenses, including related taxes | 104 | 388 | 492 | ||||||||||||
| Exploration expenses, including dry holes | |||||||||||||||
| and lease impairment | 77 | 80 | 157 | ||||||||||||
| General, administrative and other expenses | 33 | 40 | 73 | ||||||||||||
| Depreciation, depletion and amortization | 165 | 397 | 562 | ||||||||||||
| Total costs and expenses | 379 | 905 | 1,284 | ||||||||||||
| Results of operations before income taxes | 208 | 718 | 926 | ||||||||||||
| Provision for income taxes | 79 | 353 | 432 | ||||||||||||
| Results of operations attributable to Hess Corporation | $ | 129 | $ | 365 | $ | 494 | |||||||||
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HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED) |
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First | First | Fourth | |||||||||
| Quarter | Quarter | Quarter | ||||||||||
| 2010 | 2009 | 2009 | ||||||||||
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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 | 71 | 32 | 76 | |||||||||
| Europe | 86 | 88 | 86 | |||||||||
| Africa | 118 | 126 | 105 | |||||||||
| Asia and other | 14 | 15 | 15 | |||||||||
| Total | 289 | 261 | 282 | |||||||||
| Natural gas liquids - barrels | ||||||||||||
| United States | 13 | 9 | 12 | |||||||||
| Europe | 3 | 4 | 3 | |||||||||
| Asia and other | 1 | - | 1 | |||||||||
| Total | 17 | 13 | 16 | |||||||||
| Natural gas - mcf | ||||||||||||
| United States | 97 | 78 | 97 | |||||||||
| Europe | 156 | 180 | 147 | |||||||||
| Asia and other | 452 | 438 | 456 | |||||||||
| Total | 705 | 696 | 700 | |||||||||
| Barrels of oil equivalent | 423 | 390 | 415 | |||||||||
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Average Selling Price |
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| Crude oil - per barrel (including hedging)* | ||||||||||||
| United States | $ | 74.40 | $ | 38.58 | $ | 70.61 | ||||||
| Europe | 55.25 | 35.31 | 58.07 | |||||||||
| Africa | 62.38 | 31.15 | 61.67 | |||||||||
| Asia and other | 71.67 | 45.86 | 74.59 | |||||||||
| Worldwide | 63.62 | 34.42 | 63.74 | |||||||||
| Crude oil - per barrel (excluding hedging) | ||||||||||||
| United States | $ | 74.40 | $ | 38.58 | $ | 70.61 | ||||||
| Europe | 55.25 | 35.31 | 58.07 | |||||||||
| Africa | 75.96 | 44.20 | 74.41 | |||||||||
| Asia and other | 71.67 | 45.86 | 74.59 | |||||||||
| Worldwide | 69.06 | 40.19 | 68.50 | |||||||||
| Natural gas liquids - per barrel | ||||||||||||
| United States | $ | 51.11 | $ | 29.03 | $ | 47.12 | ||||||
| Europe | 59.38 | 36.76 | 59.31 | |||||||||
| Asia and other | 63.92 | - | 57.40 | |||||||||
| Worldwide | 52.93 | 31.29 | 50.21 | |||||||||
| Natural gas - per mcf | ||||||||||||
| United States | $ | 4.63 | $ | 4.03 | $ | 3.83 | ||||||
| Europe | 5.41 | 6.49 | 4.82 | |||||||||
| Asia and other | 6.37 | 4.70 | 5.60 | |||||||||
| Worldwide | 5.92 | 5.08 | 5.19 | |||||||||
* The after-tax losses from crude oil hedging activities were $83 million in the first quarter of 2010, $82 million in the first quarter of 2009 and $88 million in the fourth quarter of 2009.
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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 | ||||||||||||||
| 2010 | 2009 | 2009 | ||||||||||||||
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Financial Information (in millions of dollars) |
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Marketing and Refining Results |
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| Income before income taxes | $ | 139 | $ | 162 | $ | 16 | ||||||||||
| Provision (benefit) for income taxes | 52 | 60 | (1 | ) | ||||||||||||
| Results of operations attributable to Hess Corporation | $ | 87 | $ | 102 | $ | 17 | ||||||||||
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Summary of Marketing and Refining Results |
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| Refining | $ | (56 | ) | $ | (18 | ) | $ | (40 | ) | |||||||
| Marketing | 121 | 101 | 45 | |||||||||||||
| Trading | 22 | 19 | 12 | |||||||||||||
| Results of operations attributable to Hess Corporation | $ | 87 | $ | 102 | $ | 17 | ||||||||||
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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 | 251 | 227 | 241 | |||||||||||||
| Distillates | 126 | 150 | 149 | |||||||||||||
| Residuals | 86 | 85 | 67 | |||||||||||||
| Other | 51 | 39 | 38 | |||||||||||||
| Total | 514 | 501 | 495 | |||||||||||||
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Refinery Throughput (barrels per day) |
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| HOVENSA - Crude runs | 375 | 410 | 371 | |||||||||||||
| HOVENSA - Hess 50% share | 188 | 205 | 185 | |||||||||||||
| Port Reading | 62 | 62 | 61 | |||||||||||||
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Refinery Utilization |
Refinery Capacity |
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| HOVENSA | (barrels per day) | |||||||||||||||
| Crude | 500 | 75.1 | % | 82.0 | % | 74.1 | % | |||||||||
| FCC | 150 | 41.2 | % | 71.4 | % | 55.5 | % | |||||||||
| Coker | 58 | 85.0 | % | 80.5 | % | 75.8 | % | |||||||||
| Port Reading | 70 | 88.8 | % | 88.2 | % | 87.3 | % | |||||||||
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Retail Marketing |
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| Number of retail stations (a) | 1,359 | 1,358 | 1,357 | |||||||||||||
| Convenience store revenue (in millions of dollars) (b) | $ | 276 | $ | 255 | $ | 296 | ||||||||||
| Average gasoline volume per station (gallons per month) (b) | 188 | 199 | 196 | |||||||||||||
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| (a) Includes company operated, Wilco-Hess, dealer and branded retailer. | ||||||||||||||||
| (b) Company operated only. | ||||||||||||||||
CONTACT:
Hess Corporation
Investors:
Jay Wilson, 212-536-8940
or
Media:
Jon
Pepper, 212-536-8550