UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): October 29, 2014
HESS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE
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No. 1-1204
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No. 13-4921002
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(State or Other
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(Commission
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(IRS Employer
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Jurisdiction of
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File Number)
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Identification No.)
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Incorporation)
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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 October 29, 2014, Hess Corporation issued a news release reporting estimated results for the third quarter of 2014. 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.
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(c)
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Exhibit
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99(1)
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News release dated October 29, 2014 reporting estimated results for the third quarter of 2014.
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2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 29, 2014
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HESS CORPORATION
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By:
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/s/ John P. Rielly | |
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Name:
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John P. Rielly
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Title:
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Senior Vice President and
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Chief Financial Officer
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3
EXHIBIT INDEX
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Exhibit No.
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Description
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99(1)
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News release dated October 29, 2014 reporting estimated results for the third quarter of 2014.
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4
Exhibit 99(1)
HESS CORPORATION
News Release
HESS REPORTS ESTIMATED RESULTS FOR THE THIRD QUARTER OF 2014
Third Quarter Highlights:
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●
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Net income was $1,008 million compared to $420 million in the third quarter of 2013
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●
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Adjusted net income was $377 million or $1.24 per share compared to $405 million or $1.18 per share in the third quarter of 2013
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●
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Oil and gas production was 318,000 barrels of oil equivalent per day (boepd) in the third quarter of 2014, compared with 310,000 boepd in the year-ago quarter. Pro forma production was 314,000 boepd in the third quarter of 2014, up 17 percent from 269,000 boepd in 2013
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●
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Net cash provided by operating activities was $1.3 billion
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●
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Oil and gas production in the Bakken increased 21 percent from the year-ago quarter to 86,000 boepd, while well costs were reduced by 8 percent to an average of $7.2 million per operated well in the third quarter of 2014
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●
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The Corporation completed the sale of its retail business for $2.8 billion. Third quarter-end cash and cash equivalents were $4.1 billion
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The Corporation returned $979 million to shareholders during the quarter through share repurchases of $903 million and dividends of $76 million. Cumulative shares repurchased under the program through September 30, 2014 total 49.4 million at a total cost of approximately $4.2 billion
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●
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Hess Midstream Partners LP filed a registration statement with the U.S. Securities and Exchange Commission for a proposed 2015 initial public offering
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NEW YORK, October 29, 2014 — Hess Corporation (NYSE: HES) today reported net income of $1,008 million for the quarter ended September 30, 2014. Adjusted net income, which excludes items affecting comparability, was $377 million or $1.24 per common share, compared with $405 million or $1.18 per share in the year-ago quarter. Lower realized crude oil selling prices and higher depreciation expense in the third quarter of 2014 were the primary drivers for the decrease in adjusted net income. However, adjusted net income per share in the third quarter of 2014 increased over the third quarter of last year due to an 11 percent decrease in the weighted average number of diluted shares outstanding primarily as a result of the Corporation’s stock repurchase program.
1
After-tax net income (loss) by major operating activity was as follows:
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Three Months Ended
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Nine Months Ended | |||||||||||||||
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September 30,
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September 30,
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|||||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
| 2014 |
2013
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2014
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2013
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|||||||||||||
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(In millions, except per share amounts)
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||||||||||||||||
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Net Income (Loss) Attributable to Hess Corporation
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||||||||||||||||
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Exploration and Production
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$ | 441 | $ | 455 | $ | 2,006 | $ | 3,274 | ||||||||
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Corporate and Interest
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(80 | ) | (88 | ) | (260 | ) | (325 | ) | ||||||||
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Downstream Businesses
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647 | 53 | 579 | 178 | ||||||||||||
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Net income attributable to Hess Corporation
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$ | 1,008 | $ | 420 | $ | 2,325 | $ | 3,127 | ||||||||
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Net income per share (diluted)
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$ | 3.31 | $ | 1.23 | $ | 7.44 | $ | 9.11 | ||||||||
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Adjusted Net Income (Loss)
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||||||||||||||||
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Exploration and Production
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$ | 412 | $ | 458 | $ | 1,409 | $ | 1,756 | ||||||||
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Corporate and Interest
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(78 | ) | (83 | ) | (241 | ) | (308 | ) | ||||||||
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Downstream Businesses
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43 | 30 | 87 | 146 | ||||||||||||
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Adjusted net income attributable to Hess Corporation
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$ | 377 | $ | 405 | $ | 1,255 | $ | 1,594 | ||||||||
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Adjusted net income per share (diluted)
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$ | 1.24 | $ | 1.18 | $ | 4.01 | $ | 4.64 | ||||||||
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Weighted average number of shares (diluted)
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305.0 | 343.3 | 312.7 | 343.3 | ||||||||||||
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Note: See page 6 for a table of items affecting comparability of earnings between periods.
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||||||||||||||||
“We are delivering strong performance and executing our plan,” Chief Executive Officer John Hess said. “With our focused, balanced portfolio and strong balance sheet, we are well positioned in the current price environment to drive cash generative growth and sustainable returns for our shareholders.”
Exploration and Production:
Exploration and Production earnings were $441 million in the third quarter of 2014, compared with $455 million in the third quarter of 2013. Adjusted net income was $412 million in the third quarter of 2014 and $458 million in the third quarter of 2013.
Oil and gas production of 318,000 boepd was up 3 percent from the third quarter a year-ago. Production from the Llano Field in the Gulf of Mexico was up 16,000 boepd due to maintenance in the third quarter of 2013 and first production from the Llano #4 well in the fourth
2
quarter of 2013. Higher production in the Bakken shale play contributed 15,000 boepd versus the year-ago quarter and ongoing development of Utica wet gas acreage increased production by an additional 10,000 boepd. The North Malay Basin Early Production System, which commenced production in October 2013 contributed 7,000 boepd in the quarter. Asset sales reduced third quarter 2014 production by 30,000 boepd while scheduled maintenance at the Valhall Field, offshore Norway reduced production by 12,000 boepd. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was down 8 percent from $104.95 per barrel in the year-ago quarter to $96.36 per barrel in the third quarter of 2014. The average worldwide natural gas selling price was $5.59 per mcf in the third quarter of 2014, down from $6.52 per mcf in the third quarter a year-ago.
Excluding production from assets sold and Libya, pro forma production was 314,000 boepd in the third quarter of 2014, an increase of 17 percent from 269,000 boepd in the third quarter of 2013. The Corporation expects pro forma production to average near the top end of the range of 305,000 boepd and 315,000 boepd for the full year of 2014 driven by continued growth in the Bakken, higher production from the Valhall Field and the start-up of the Tubular Bells Field in the Gulf of Mexico.
Operational Highlights for the Third Quarter of 2014:
Bakken (Onshore U.S.): Production from the Bakken increased 21 percent from the prior year quarter to 86,000 boepd due to continued development activities and the completion of the Tioga gas plant expansion project. Hess brought 59 gross operated wells on production in the quarter, bringing the year-to-date total to 142 wells. Drilling and completion costs per operated well averaged $7.2 million in the third quarter of 2014, a reduction of 8 percent from the third quarter of 2013.
Tubular Bells (Offshore U.S.): The offshore hook-up and final commissioning activities progressed in the third quarter and we expect first production to commence within the next week. Net production is expected to ramp up through the remainder of 2014 to 25,000 boepd.
Utica (Onshore U.S.): On the Corporation’s joint venture acreage, ten wells were drilled in the third quarter of 2014. Production increased to approximately 11,000 boepd for the quarter.
3
Valhall (Offshore Norway): Net production averaged 25,000 boepd during the third quarter, compared with 37,000 boepd in the year-ago quarter, reflecting scheduled maintenance downtime in the third quarter of 2014.
North Malay Basin (Offshore Malaysia): Production averaged 7,000 boepd in the third quarter of 2014 from the Early Production System. Progress continued on the full field development project.
Ghana (Offshore): The Corporation completed drilling of the Almond 2 well, the last of a three well appraisal program, in the third quarter of 2014.
Libya: Civil unrest continues in Libya, however during the third quarter, the operator recommenced production at a reduced rate and the Corporation sold one cargo of crude oil. Hess net production from Libya averaged 4,000 boepd for the third quarter of 2014 and 11,000 boepd in the year-ago quarter.
Capital and Exploratory Expenditures:
Capital and exploratory expenditures in the third quarter of 2014 were $1,418 million, down from $1,503 million in the prior year quarter.
Hess Midstream Partners LP:
On September 24, 2014 the Corporation’s wholly owned subsidiary, Hess Midstream Partners LP, filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) related to its proposed initial public offering of common units representing limited partner interests. The offering is expected to occur in 2015.
Asset Sales:
In September 2014, the Corporation completed the sale of its retail marketing business for cash proceeds of $2.8 billion and its interest in an exploration asset in the United Kingdom North Sea for $53 million. In October, the Corporation signed an agreement to sell its interest in HETCO, its energy trading joint venture.
4
Liquidity:
Net cash provided by operating activities was $1,338 million in the third quarter of 2014, compared with $1,254 million in the same quarter of 2013. At September 30, 2014, cash and cash equivalents totaled $4,120 million, compared with $1,814 million at December 31, 2013, primarily reflecting the collection of proceeds from the sale of the retail business. Total debt was $5,996 million at September 30, 2014 compared with $5,798 million at December 31, 2013. The Corporation’s debt to capitalization ratio at September 30, 2014 was 19.7 percent, and 19.0 percent at the end of 2013.
Returning Capital to Shareholders:
In the third quarter of 2014, the Corporation repurchased 9.2 million shares of common stock at a cost of $903 million. Since initiation of the buyback program in August 2013, total shares repurchased through September 30, 2014 amounted to 49.4 million at a total cost of approximately $4.2 billion for an average cost per share of $85.14.
Dividends paid to shareholders amounted to $232 million in the first nine months of 2014 and $154 million in the first nine months of 2013.
Downstream Businesses:
The downstream businesses reported income of $647 million in the third quarter of 2014, compared with income of $53 million in the same period in 2013. Adjusted net income was $43 million in the third quarter of 2014, up from $30 million in the third quarter of 2013 reflecting higher retail earnings and improved energy trading results. The Corporation’s divested downstream businesses, including the retail marketing business, are reported as discontinued operations in the consolidated income statements on pages 9 and 10. The energy trading joint venture will be classified as discontinued operations beginning in the fourth quarter of 2014.
5
Items Affecting Comparability of Earnings Between Periods:
The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods:
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
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September 30,
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September 30,
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|||||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
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2014
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2013
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2014
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2013
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(In millions)
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Exploration and Production
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$ | 29 | $ | (3 | ) | $ | 597 | $ | 1,518 | |||||||
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Corporate and Interest
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(2 | ) | (5 | ) | (19 | ) | (17 | ) | ||||||||
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Downstream Businesses
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604 | 23 | 492 | 32 | ||||||||||||
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Total items affecting comparability of
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||||||||||||||||
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earnings between periods
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$ | 631 | $ | 15 | $ | 1,070 | $ | 1,533 | ||||||||
Exploration and Production: Third quarter 2014 Exploration and Production results included an after-tax gain of $33 million from the sale of the Corporation’s interest in the Cambo Field in the United Kingdom North Sea. This gain was partially offset by severance and other charges totaling $4 million after-tax.
Corporate and Interest: Third quarter 2014 results included after-tax charges of $2 million for severance and other charges.
Downstream Businesses: Third quarter 2014 results included an after-tax gain of $602 million related to the sale of the Corporation’s retail business. In addition, the Corporation realized an after-tax gain of $114 million on the liquidation of last-in, first-out (LIFO) inventories, which was largely offset by impairment and other charges associated with the continued divestiture of the downstream businesses.
6
Reconciliation of U.S. GAAP to Non-GAAP measures:
The following table reconciles reported net income attributable to Hess Corporation and adjusted net income:
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
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September 30,
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September 30,
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|||||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
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2014
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2013
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2014
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2013
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(In millions)
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Net income attributable to Hess Corporation
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$ | 1,008 | $ | 420 | $ | 2,325 | $ | 3,127 | ||||||||
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Less: Total items affecting comparability of earnings
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||||||||||||||||
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between periods
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631 | 15 | 1,070 | 1,533 | ||||||||||||
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Adjusted net income attributable to Hess Corporation
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$ | 377 | $ | 405 | $ | 1,255 | $ | 1,594 | ||||||||
The following table reconciles reported net cash provided by operating activities to cash flows from operations before changes in working capital:
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
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September 30,
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September 30,
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|||||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
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2014
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2013
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2014
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2013
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(In millions)
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||||||||||||||||
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Net cash provided by operating activities
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$ | 1,338 | $ | 1,254 | $ | 3,407 | $ | 3,320 | ||||||||
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Add back: Increases in working capital
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170 | 143 | 821 | 1,070 | ||||||||||||
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Cash flows from operations, before
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||||||||||||||||
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working capital changes
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$ | 1,508 | $ | 1,397 | $ | 4,228 | $ | 4,390 | ||||||||
Hess Corporation will review third quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details about the event, refer to the Investor Relations section of our website at www.hess.com.
Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. 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. Estimates and projections contained in this release are based on the Company’s current understanding and assessment based on reasonable assumptions. Actual results may differ materially from these estimates and projections due to certain risk factors discussed in the Corporation’s periodic filings with the Securities and Exchange Commission and other factors.
7
Non-GAAP financial measures
The Corporation has used two non-GAAP financial measures in this earnings release. “Adjusted net income” presented in this release is defined as reported net income attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. “Cash flows from operations, excluding working capital changes” is defined as net cash provided by operating activities before adjustments for changes in working capital. We believe that investors’ understanding of our performance is enhanced by disclosing these measures. These measures are not, and should not be viewed as, a substitute for U.S. GAAP net income or cash flow. Reconciliations of both reported net income attributable to Hess Corporation (U.S. GAAP) to adjusted net income and net cash provided by operating activities (U.S. GAAP) to cash flows from operations excluding working capital changes, are provided in the release.
For Hess Corporation
Investor Contact:
Jay Wilson
(212) 536-8940
Media Contact:
Michael Henson/Patrick Scanlan
Sard Verbinnen & Co
(212) 687-8080
8
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
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Third
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Third
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Second
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Quarter
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Quarter
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Quarter
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2014
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2013
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2014
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Income Statement
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Revenues and Non-operating Income
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Sales and other operating revenues
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$ | 2,745 | $ | 2,720 | $ | 2,846 | ||||||
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Gains (losses) on asset sales
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31 | (5 | ) | 779 | ||||||||
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Other, net
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26 | (1 | ) | (25 | ) | |||||||
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Total revenues and non-operating income
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2,802 | 2,714 | 3,600 | |||||||||
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Costs and Expenses
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Cost of products sold (excluding items shown separately below)
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447 | 375 | 444 | |||||||||
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Operating costs and expenses
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487 | 475 | 522 | |||||||||
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Production and severance taxes
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69 | 84 | 78 | |||||||||
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Marketing expenses
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34 | 27 | 25 | |||||||||
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Exploration expenses, including dry holes and lease impairment
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90 | 154 | 460 | |||||||||
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General and administrative expenses
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139 | 152 | 143 | |||||||||
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Interest expense
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75 | 86 | 85 | |||||||||
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Depreciation, depletion and amortization
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837 | 681 | 787 | |||||||||
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Total costs and expenses
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2,178 | 2,034 | 2,544 | |||||||||
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Income from continuing operations before income taxes
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624 | 680 | 1,056 | |||||||||
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Provision for income taxes
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237 | 324 | 89 | |||||||||
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Income from continuing operations
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387 | 356 | 967 | |||||||||
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Income (loss) from discontinued operations
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643 | 62 | (37 | ) | ||||||||
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Net income
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1,030 | 418 | 930 | |||||||||
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Less: Net income (loss) attributable to noncontrolling interests
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22 | (2 | ) | (1 | ) | |||||||
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Net income attributable to Hess Corporation
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$ | 1,008 | $ | 420 | $ | 931 | ||||||
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See "Downstream Businesses" on page 5 for basis of presentation.
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Cash Flow Information
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Net cash provided by operating activities (*)
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$ | 1,338 | $ | 1,254 | $ | 911 | ||||||
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Net cash provided by (used in) investing activities
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1,569 | (1,487 | ) | 232 | ||||||||
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Net cash provided by (used in) financing activities
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(992 | ) | (171 | ) | (226 | ) | ||||||
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Net increase (decrease) in cash and cash equivalents
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$ | 1,915 | $ | (404 | ) | $ | 917 | |||||
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(*)
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Includes changes in working capital.
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9
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
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Nine Months
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||||||||
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2014
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2013
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|||||||
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Income Statement
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||||||||
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Revenues and Non-operating Income
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||||||||
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Sales and other operating revenues
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$ | 8,363 | $ | 9,257 | ||||
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Gains (losses) on asset sales
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820 | 1,794 | ||||||
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Other, net
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(89 | ) | (56 | ) | ||||
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Total revenues and non-operating income
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9,094 | 10,995 | ||||||
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Costs and Expenses
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||||||||
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Cost of products sold (excluding items shown separately below)
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1,284 | 1,392 | ||||||
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Operating costs and expenses
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1,475 | 1,570 | ||||||
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Production and severance taxes
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209 | 311 | ||||||
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Marketing expenses
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99 | 87 | ||||||
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Exploration expenses, including dry holes and lease impairment
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669 | 573 | ||||||
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General and administrative expenses
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424 | 469 | ||||||
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Interest expense
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241 | 309 | ||||||
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Depreciation, depletion and amortization
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2,349 | 1,974 | ||||||
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Total costs and expenses
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6,750 | 6,685 | ||||||
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Income from continuing operations before income taxes
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2,344 | 4,310 | ||||||
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Provision for income taxes
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575 | 1,192 | ||||||
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Income from continuing operations
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1,769 | 3,118 | ||||||
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Income (loss) from discontinued operations
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612 | 189 | ||||||
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Net income
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2,381 | 3,307 | ||||||
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Less: Net income attributable to noncontrolling interests
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56 | 180 | ||||||
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Net income attributable to Hess Corporation
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$ | 2,325 | $ | 3,127 | ||||
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See "Downstream Businesses" on page 5 for basis of presentation.
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||||||||
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Cash Flow Information
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||||||||
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Net cash provided by operating activities (*)
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$ | 3,407 | $ | 3,320 | ||||
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Net cash provided by (used in) investing activities
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1,539 | (812 | ) | |||||
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Net cash provided by (used in) financing activities
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(2,640 | ) | (2,829 | ) | ||||
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Net increase (decrease) in cash and cash equivalents
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$ | 2,306 | $ | (321 | ) | |||
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(*)
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Includes changes in working capital.
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10
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
|
September 30,
|
December 31,
|
|||||||
|
2014
|
2013
|
|||||||
|
Balance Sheet Information
|
||||||||
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Cash and cash equivalents
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$ | 4,120 | $ | 1,814 | ||||
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Other current assets
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4,745 | 6,785 | ||||||
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Investments
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145 | 687 | ||||||
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Property, plant and equipment – net
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27,667 | 28,771 | ||||||
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Other long-term assets
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4,298 | 4,697 | ||||||
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Total assets
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$ | 40,975 | $ | 42,754 | ||||
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Short-term debt and current maturities of long-term debt
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$ | 67 | $ | 378 | ||||
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Other current liabilities
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4,948 | 6,180 | ||||||
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Long-term debt
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5,929 | 5,420 | ||||||
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Other long-term liabilities
|
5,666 | 5,992 | ||||||
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Total equity excluding other comprehensive income (loss)
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24,852 | 25,122 | ||||||
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Accumulated other comprehensive income (loss)
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(487 | ) | (338 | ) | ||||
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Total liabilities and equity
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$ | 40,975 | $ | 42,754 | ||||
11
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
|
Third
|
Third
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Second
|
||||||||||
|
Quarter
|
Quarter
|
Quarter
|
||||||||||
|
2014
|
2013
|
2014
|
||||||||||
|
Capital and Exploratory Expenditures
|
||||||||||||
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Exploration and Production
|
||||||||||||
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United States
|
||||||||||||
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Bakken
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$ | 579 | $ | 579 | $ | 429 | ||||||
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Other Onshore
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184 | 173 | 190 | |||||||||
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Total Onshore
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763 | 752 | 619 | |||||||||
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Offshore
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205 | 208 | 157 | |||||||||
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Total United States
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968 | 960 | 776 | |||||||||
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Europe
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111 | 159 | 162 | |||||||||
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Africa
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125 | 106 | 119 | |||||||||
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Asia and other
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214 | 278 | 199 | |||||||||
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Total Capital and Exploratory Expenditures
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$ | 1,418 | $ | 1,503 | $ | 1,256 | ||||||
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Total exploration expenses charged to income included above
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$ | 56 | $ | 96 | $ | 54 | ||||||
|
Nine Months
|
||||||||||||
| 2014 | 2013 | |||||||||||
|
Capital and Exploratory Expenditures
|
||||||||||||
|
Exploration and Production
|
||||||||||||
|
United States
|
||||||||||||
|
Bakken
|
$ | 1,459 | $ | 1,660 | ||||||||
|
Other Onshore
|
545 | 565 | ||||||||||
|
Total Onshore
|
2,004 | 2,225 | ||||||||||
|
Offshore
|
524 | 653 | ||||||||||
|
Total United States
|
2,528 | 2,878 | ||||||||||
|
Europe
|
418 | 550 | ||||||||||
|
Africa
|
344 | 498 | ||||||||||
|
Asia and other
|
608 | 782 | ||||||||||
|
Total Capital and Exploratory Expenditures
|
$ | 3,898 | $ | 4,708 | ||||||||
|
Total exploration expenses charged to income included above
|
$ | 188 | $ | 319 | ||||||||
12
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
|
Third Quarter 2014
|
||||||||||||
|
United States
|
International
|
Total
|
||||||||||
|
Sales and other operating revenues
|
$
|
1,629
|
$
|
1,049
|
$
|
2,678
|
||||||
|
Gains (losses) on asset sales
|
2
|
35
|
37
|
|||||||||
|
Other, net
|
(7
|
) |
28
|
21
|
||||||||
|
Total revenues and non-operating income
|
1,624
|
1,112
|
2,736
|
|||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
427
|
20
|
447
|
|||||||||
|
Operating costs and expenses
|
215
|
272
|
487
|
|||||||||
|
Production and severance taxes
|
62
|
7
|
69
|
|||||||||
|
Exploration expenses, including dry holes and lease impairment
|
34
|
56
|
90
|
|||||||||
|
General and administrative expenses
|
66
|
19
|
85
|
|||||||||
|
Depreciation, depletion and amortization
|
474
|
360
|
834
|
|||||||||
|
Total costs and expenses
|
1,278
|
734
|
2,012
|
|||||||||
|
Results of operations before income taxes
|
346
|
378
|
724
|
|||||||||
|
Provision for income taxes
|
130
|
153
|
283
|
|||||||||
|
Net income
|
216
|
225
|
441
|
|||||||||
|
Less: Net income attributable to noncontrolling interests
|
-
|
-
|
-
|
|||||||||
|
Net income attributable to Hess Corporation
|
$
|
216
|
(a)
|
$
|
225
|
(b)
|
$
|
441
|
||||
|
Third Quarter 2013
|
||||||||||||
|
United States
|
International
|
Total
|
||||||||||
|
Sales and other operating revenues
|
$
|
1,472
|
$
|
1,234
|
$
|
2,706
|
||||||
|
Gains (losses) on asset sales
|
(1
|
) |
(7
|
) |
(8
|
) | ||||||
|
Other, net
|
(1
|
) |
(2
|
) |
(3
|
) | ||||||
|
Total revenues and non-operating income
|
1,470
|
1,225
|
2,695
|
|||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
398
|
(24
|
) |
374
|
||||||||
|
Operating costs and expenses
|
191
|
284
|
475
|
|||||||||
|
Production and severance taxes
|
64
|
20
|
84
|
|||||||||
|
Exploration expenses, including dry holes and lease impairment
|
71
|
83
|
154
|
|||||||||
|
General and administrative expenses
|
58
|
38
|
96
|
|||||||||
|
Depreciation, depletion and amortization
|
346
|
330
|
676
|
|||||||||
|
Total costs and expenses
|
1,128
|
731
|
1,859
|
|||||||||
|
Results of operations before income taxes
|
342
|
494
|
836
|
|||||||||
|
Provision for income taxes
|
134
|
247
|
381
|
|||||||||
|
Net income
|
208
|
247
|
455
|
|||||||||
|
Less: Net income attributable to noncontrolling interests
|
-
|
-
|
-
|
|||||||||
|
Net income attributable to Hess Corporation
|
$
|
208
|
(a)
|
$
|
247
|
(b)
|
$
|
455
|
||||
|
(a)
|
The results of crude oil hedging activities were after-tax realized gains of $4 million in the third quarter of 2014, and gains of $0.3 million in the third quarter of 2013.
|
|
(b)
|
The results of crude oil hedging activities were after-tax realized gains of $13 million in the third quarter of 2014, and gains of $0.5 million in the third quarter of 2013.
|
13
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
|
Second Quarter 2014
|
||||||||||||
|
United States
|
International
|
Total
|
||||||||||
|
Sales and other operating revenues
|
$
|
1,653
|
$
|
1,176
|
$
|
2,829
|
||||||
|
Gains (losses) on asset sales
|
62
|
704
|
766
|
|||||||||
|
Other, net
|
(12
|
) |
(16
|
) |
(28
|
) | ||||||
|
Total revenues and non-operating income
|
1,703
|
1,864
|
3,567
|
|||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
412
|
32
|
444
|
|||||||||
|
Operating costs and expenses
|
214
|
308
|
522
|
|||||||||
|
Production and severance taxes
|
67
|
11
|
78
|
|||||||||
|
Exploration expenses, including dry holes and lease impairment
|
208
|
252
|
460
|
|||||||||
|
General and administrative expenses
|
70
|
9
|
79
|
|||||||||
|
Depreciation, depletion and amortization
|
433
|
349
|
782
|
|||||||||
|
Total costs and expenses
|
1,404
|
961
|
2,365
|
|||||||||
|
Results of operations before income taxes
|
299
|
903
|
1,202
|
|||||||||
|
Provision for income taxes
|
118
|
27
|
145
|
|||||||||
|
Net income
|
181
|
876
|
1,057
|
|||||||||
|
Less: Net income attributable to noncontrolling interests
|
-
|
-
|
-
|
|||||||||
|
Net income attributable to Hess Corporation
|
$
|
181
|
(a)
|
$
|
876
|
(b)
|
$
|
1,057
|
||||
|
(a)
|
The after-tax realized losses from crude oil hedging activities were $2 million in the second quarter of 2014.
|
|
(b)
|
The after-tax realized losses from crude oil hedging activities were $2 million in the second quarter of 2014.
|
14
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
|
Nine Months 2014
|
||||||||||||
|
United States
|
International
|
Total
|
||||||||||
|
Sales and other operating revenues
|
$
|
4,827
|
$
|
3,353
|
$
|
8,180
|
||||||
|
Gains (losses) on asset sales
|
64
|
749
|
813
|
|||||||||
|
Other, net
|
(21
|
) |
8
|
(13
|
) | |||||||
|
Total revenues and non-operating income
|
4,870
|
4,110
|
8,980
|
|||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
1,253
|
31
|
1,284
|
|||||||||
|
Operating costs and expenses
|
638
|
837
|
1,475
|
|||||||||
|
Production and severance taxes
|
187
|
22
|
209
|
|||||||||
|
Exploration expenses, including dry holes and lease impairment
|
289
|
380
|
669
|
|||||||||
|
General and administrative expenses
|
194
|
50
|
244
|
|||||||||
|
Depreciation, depletion and amortization
|
1,267
|
1,070
|
2,337
|
|||||||||
|
Total costs and expenses
|
3,828
|
2,390
|
6,218
|
|||||||||
|
Results of operations before income taxes
|
1,042
|
1,720
|
2,762
|
|||||||||
|
Provision for income taxes
|
405
|
351
|
756
|
|||||||||
|
Net income
|
637
|
1,369
|
2,006
|
|||||||||
|
Less: Net income attributable to noncontrolling interests
|
-
|
-
|
-
|
|||||||||
|
Net income attributable to Hess Corporation
|
$
|
637
|
(a)
|
$
|
1,369
|
(b)
|
$
|
2,006
|
||||
|
Nine Months 2013
|
||||||||||||
|
United States
|
International
|
Total
|
||||||||||
|
Sales and other operating revenues
|
$
|
4,680
|
$
|
4,503
|
$
|
9,183
|
||||||
|
Gains (losses) on asset sales
|
(18
|
) |
1,809
|
1,791
|
||||||||
|
Other, net
|
(11
|
) |
(45
|
) |
(56
|
) | ||||||
|
Total revenues and non-operating income
|
4,651
|
6,267
|
10,918
|
|||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
1,346
|
45
|
1,391
|
|||||||||
|
Operating costs and expenses
|
582
|
988
|
1,570
|
|||||||||
|
Production and severance taxes
|
176
|
135
|
311
|
|||||||||
|
Exploration expenses, including dry holes and lease impairment
|
242
|
331
|
573
|
|||||||||
|
General and administrative expenses
|
146
|
122
|
268
|
|||||||||
|
Depreciation, depletion and amortization
|
1,046
|
915
|
1,961
|
|||||||||
|
Total costs and expenses
|
3,538
|
2,536
|
6,074
|
|||||||||
|
Results of operations before income taxes
|
1,113
|
3,731
|
4,844
|
|||||||||
|
Provision for income taxes
|
450
|
944
|
1,394
|
|||||||||
|
Net income
|
663
|
2,787
|
3,450
|
|||||||||
|
Less: Net income attributable to noncontrolling interests
|
-
|
176
|
176
|
|||||||||
|
Net income attributable to Hess Corporation
|
$
|
663
|
(a)
|
$
|
2,611
|
(b)
|
$
|
3,274
|
||||
|
(a)
|
The results of crude oil hedging activities were after-tax realized gains of $2 million in the first nine months of 2014, and gains of $9 million in the first nine months of 2013.
|
|
(b)
|
The results of crude oil hedging activities were after-tax realized gains of $13 million in the first nine months of 2014, and gains of $14 million in the first nine months of 2013.
|
15
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Third
|
Third
|
Second
|
||||||||||
|
Quarter
|
Quarter
|
Quarter
|
||||||||||
|
2014
|
2013
|
2014
|
||||||||||
|
Operating Data
|
||||||||||||
|
Net Production Per Day (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
||||||||||||
|
United States
|
||||||||||||
|
Bakken
|
63 | 57 | 64 | |||||||||
|
Other Onshore
|
11 | 9 | 9 | |||||||||
|
Total Onshore
|
74 | 66 | 73 | |||||||||
|
Offshore
|
51 | 37 | 54 | |||||||||
|
Total United States
|
125 | 103 | 127 | |||||||||
|
Europe
|
31 | 38 | 36 | |||||||||
|
Africa
|
53 | 57 | 51 | |||||||||
|
Asia
|
2 | 9 | 2 | |||||||||
|
Total
|
211 | 207 | 216 | |||||||||
|
Natural gas liquids - barrels
|
||||||||||||
|
United States
|
||||||||||||
|
Bakken
|
15 | 7 | 8 | |||||||||
|
Other Onshore
|
8 | 4 | 5 | |||||||||
|
Total Onshore
|
23 | 11 | 13 | |||||||||
|
Offshore
|
6 | 4 | 7 | |||||||||
|
Total United States
|
29 | 15 | 20 | |||||||||
|
Europe
|
1 | 1 | 1 | |||||||||
|
Asia
|
- | 1 | - | |||||||||
|
Total
|
30 | 17 | 21 | |||||||||
|
Natural gas - mcf
|
||||||||||||
|
United States
|
||||||||||||
|
Bakken
|
46 | 44 | 48 | |||||||||
|
Other Onshore
|
52 | 24 | 50 | |||||||||
|
Total Onshore
|
98 | 68 | 98 | |||||||||
|
Offshore
|
76 | 42 | 83 | |||||||||
|
Total United States
|
174 | 110 | 181 | |||||||||
|
Europe
|
29 | 29 | 35 | |||||||||
|
Asia and other
|
259 | 380 | 275 | |||||||||
|
Total
|
462 | 519 | 491 | |||||||||
|
Barrels of oil equivalent
|
318 | 310 | 319 | |||||||||
16
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Nine Months
|
||||||||
|
2014
|
2013
|
|||||||
|
Operating Data
|
||||||||
|
Net Production Per Day (in thousands)
|
||||||||
|
Crude oil - barrels
|
||||||||
|
United States
|
||||||||
|
Bakken
|
61 | 54 | ||||||
|
Other Onshore
|
10 | 11 | ||||||
|
Total Onshore
|
71 | 65 | ||||||
|
Offshore
|
52 | 44 | ||||||
|
Total United States
|
123 | 109 | ||||||
|
Europe
|
35 | 46 | ||||||
|
Africa
|
51 | 69 | ||||||
|
Asia
|
3 | 11 | ||||||
|
Total
|
212 | 235 | ||||||
|
Natural gas liquids - barrels
|
||||||||
|
United States
|
||||||||
|
Bakken
|
9 | 6 | ||||||
|
Other Onshore
|
5 | 4 | ||||||
|
Total Onshore
|
14 | 10 | ||||||
|
Offshore
|
6 | 6 | ||||||
|
Total United States
|
20 | 16 | ||||||
|
Europe
|
1 | 1 | ||||||
|
Asia
|
- | 1 | ||||||
|
Total
|
21 | 18 | ||||||
|
Natural gas - mcf
|
||||||||
|
United States
|
||||||||
|
Bakken
|
36 | 39 | ||||||
|
Other Onshore
|
43 | 26 | ||||||
|
Total Onshore
|
79 | 65 | ||||||
|
Offshore
|
79 | 63 | ||||||
|
Total United States
|
158 | 128 | ||||||
|
Europe
|
33 | 19 | ||||||
|
Asia and other
|
316 | 418 | ||||||
|
Total
|
507 | 565 | ||||||
|
Barrels of oil equivalent
|
318 | 347 | ||||||
17
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Third
|
Third
|
Second
|
||||||||||
|
Quarter
|
Quarter
|
Quarter
|
||||||||||
|
2014
|
2013
|
2014
|
||||||||||
|
Sales Volumes Per Day (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
214 | 194 | 222 | |||||||||
|
Natural gas liquids - barrels
|
30 | 17 | 21 | |||||||||
|
Natural gas - mcf
|
462 | 515 | 491 | |||||||||
|
Barrels of oil equivalent
|
321 | 296 | 325 | |||||||||
|
Sales Volumes (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
19,719 | 17,857 | 20,193 | |||||||||
|
Natural gas liquids - barrels
|
2,772 | 1,519 | 1,942 | |||||||||
|
Natural gas - mcf
|
42,511 | 47,406 | 44,662 | |||||||||
|
Barrels of oil equivalent
|
29,576 | 27,277 | 29,578 | |||||||||
|
Nine Months
|
||||||||||||
| 2014 | 2013 | |||||||||||
|
Sales Volumes Per Day (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
211 | 234 | ||||||||||
|
Natural gas liquids - barrels
|
21 | 17 | ||||||||||
|
Natural gas - mcf
|
507 | 564 | ||||||||||
|
Barrels of oil equivalent
|
317 | 345 | ||||||||||
|
Sales Volumes (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
57,662 | 63,804 | ||||||||||
|
Natural gas liquids - barrels
|
5,836 | 4,759 | ||||||||||
|
Natural gas - mcf
|
138,530 | 154,037 | ||||||||||
|
Barrels of oil equivalent
|
86,586 | 94,236 | ||||||||||
18
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Third
|
Third
|
Second
|
||||||||||
|
Quarter
|
Quarter
|
Quarter
|
||||||||||
|
2014
|
2013
|
2014
|
||||||||||
|
Operating Data
|
||||||||||||
|
Average Selling Prices
|
||||||||||||
|
Crude oil - per barrel (including hedging)
|
||||||||||||
|
United States
|
||||||||||||
|
Onshore
|
$ | 86.07 | $ | 96.01 | $ | 92.44 | ||||||
|
Offshore
|
97.50 | 106.66 | 100.42 | |||||||||
|
Total United States
|
90.74 | 99.80 | 95.82 | |||||||||
|
Europe
|
110.06 | 113.18 | 111.03 | |||||||||
|
Africa
|
101.21 | 110.71 | 108.83 | |||||||||
|
Asia
|
- | 104.27 | 106.33 | |||||||||
|
Worldwide
|
96.36 | 104.95 | 101.70 | |||||||||
|
Crude oil - per barrel (excluding hedging)
|
||||||||||||
|
United States
|
||||||||||||
|
Onshore
|
$ | 86.07 | $ | 95.98 | $ | 92.44 | ||||||
|
Offshore
|
96.25 | 106.56 | 101.09 | |||||||||
|
Total United States
|
90.23 | 99.75 | 96.10 | |||||||||
|
Europe
|
106.40 | 112.51 | 111.39 | |||||||||
|
Africa
|
99.21 | 110.95 | 109.10 | |||||||||
|
Asia
|
- | 104.27 | 106.33 | |||||||||
|
Worldwide
|
94.99 | 104.88 | 101.99 | |||||||||
|
Natural gas liquids - per barrel
|
||||||||||||
|
United States
|
||||||||||||
|
Onshore
|
$ | 28.20 | $ | 44.59 | $ | 36.99 | ||||||
|
Offshore
|
31.45 | 32.14 | 32.21 | |||||||||
|
Total United States
|
28.84 | 41.03 | 35.39 | |||||||||
|
Europe
|
49.37 | 58.67 | 55.77 | |||||||||
|
Asia
|
- | 70.05 | - | |||||||||
|
Worldwide
|
29.62 | 43.67 | 36.59 | |||||||||
|
Natural gas - per mcf
|
||||||||||||
|
United States
|
||||||||||||
|
Onshore
|
$ | 2.25 | $ | 2.91 | $ | 4.36 | ||||||
|
Offshore
|
3.64 | 2.56 | 4.01 | |||||||||
|
Total United States
|
2.85 | 2.78 | 4.22 | |||||||||
|
Europe
|
9.63 | 12.13 | 10.51 | |||||||||
|
Asia and other
|
6.97 | 7.19 | 7.24 | |||||||||
|
Worldwide
|
5.59 | 6.52 | 6.35 | |||||||||
19
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Nine Months
|
||||||||
|
2014
|
2013
|
|||||||
|
Operating Data
|
||||||||
|
Average Selling Prices
|
||||||||
|
Crude oil - per barrel (including hedging)
|
||||||||
|
United States
|
||||||||
|
Onshore
|
$ | 88.86 | $ | 91.87 | ||||
|
Offshore
|
99.11 | 106.99 | ||||||
|
Total United States
|
93.18 | 97.97 | ||||||
|
Europe
|
110.09 | 79.60 | ||||||
|
Africa
|
105.68 | 108.57 | ||||||
|
Asia
|
104.66 | 107.77 | ||||||
|
Worldwide
|
99.09 | 98.55 | ||||||
|
Crude oil - per barrel (excluding hedging)
|
||||||||
|
United States
|
||||||||
|
Onshore
|
$ | 88.86 | $ | 91.64 | ||||
|
Offshore
|
98.92 | 106.18 | ||||||
|
Total United States
|
93.10 | 97.51 | ||||||
|
Europe
|
109.01 | 79.01 | ||||||
|
Africa
|
104.86 | 107.81 | ||||||
|
Asia
|
104.66 | 107.77 | ||||||
|
Worldwide
|
98.67 | 97.99 | ||||||
|
Natural gas liquids - per barrel
|
||||||||
|
United States
|
||||||||
|
Onshore
|
$ | 33.62 | $ | 42.35 | ||||
|
Offshore
|
32.63 | 28.84 | ||||||
|
Total United States
|
33.31 | 37.50 | ||||||
|
Europe
|
56.98 | 57.02 | ||||||
|
Asia
|
- | 71.70 | ||||||
|
Worldwide
|
34.76 | 39.46 | ||||||
|
Natural gas - per mcf
|
||||||||
|
United States
|
||||||||
|
Onshore
|
$ | 3.57 | $ | 2.99 | ||||
|
Offshore
|
4.01 | 2.79 | ||||||
|
Total United States
|
3.80 | 2.89 | ||||||
|
Europe
|
10.60 | 10.62 | ||||||
|
Asia and other
|
7.13 | 7.46 | ||||||
|
Worldwide
|
6.32 | 6.53 | ||||||
20