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): January 28, 2015
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 January 28, 2015, Hess Corporation issued a news release reporting estimated results for the fourth 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 January 28, 2015 reporting estimated results for the fourth 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: January 28, 2015
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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 January 28, 2015 reporting estimated results for the fourth quarter of 2014.
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4
Exhibit 99.1
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HESS CORPORATION |
News Release
HESS REPORTS ESTIMATED RESULTS FOR THE FOURTH QUARTER OF 2014
Fourth Quarter Highlights:
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●
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Adjusted net income was $53 million or $0.18 per share compared to $319 million or $0.96 per share in the fourth quarter of 2013; declining hydrocarbon prices reduced fourth quarter 2014 adjusted net income by approximately $340 million, after-tax and net of hedging gains.
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●
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Net loss was $8 million compared to net income of $1,925 million in the fourth quarter of 2013, which included after-tax gains on asset sales totaling $1,338 million.
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●
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Oil and gas production was 362,000 barrels of oil equivalent per day (boepd) compared with 307,000 boepd in the fourth quarter of 2013. Bakken oil and gas production was 102,000 boepd, up approximately 50 percent from the fourth quarter of 2013.
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●
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Net cash provided by operating activities was $1.1 billion.
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Capital and exploratory expenditures were $1.7 billion. Full year 2014 capital and exploratory expenditures from continuing operations were $5.6 billion, down 10 percent from last year.
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●
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The Corporation returned $1,124 million to shareholders during the quarter through share repurchases of $1,053 million and dividends of $71 million. Cumulative shares repurchased under the program through December 31, 2014 total 62.7 million at a total cost of approximately $5.26 billion.
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●
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Year-end 2014 cash balance was $2.4 billion; debt to capitalization ratio was 21.2%.
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●
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Year-end total proved reserves amounted to 1,431 million barrels of oil equivalent (boe); reserve replacement was 158 percent for 2014 at a finding and development cost of approximately $28.75 per boe.
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NEW YORK, January 28, 2015 — Hess Corporation (NYSE: HES) today reported adjusted net income, which excludes items affecting comparability, of $53 million or $0.18 per common share, for the fourth quarter of 2014 compared with $319 million or $0.96 per share in the fourth quarter of 2013. Lower realized selling prices reduced adjusted net income by approximately $340 million, after-tax, net of crude oil hedging gains, compared with the prior year period. Fourth quarter adjusted net income benefited from higher crude oil and natural gas liquids sales volumes and lower cash operating costs that were partially offset by higher depreciation,
1
depletion and amortization expenses. On an unadjusted basis, the Corporation reported a net loss of $8 million for the fourth quarter of 2014 and net income of $1,925 million in the prior year quarter.
After-tax income (loss) by major operating activity was as follows:
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Three Months Ended
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Years Ended
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|||||||||||||||
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December 31,
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December 31,
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|||||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
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2014
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2013
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2014
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2013
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(In millions, except per share amounts)
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||||||||||||||||
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Net Income (Loss) Attributable to Hess Corporation
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Exploration and Production
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$ | 92 | $ | 1,029 | $ | 2,098 | $ | 4,303 | ||||||||
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Corporate, Interest and Other
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(97 | ) | (118 | ) | (406 | ) | (442 | ) | ||||||||
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Net income (loss) from continuing operations
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(5 | ) | 911 | 1,692 | 3,861 | |||||||||||
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Discontinued operations
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(3 | ) | 1,014 | 625 | 1,191 | |||||||||||
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Net income (loss) attributable to Hess Corporation
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$ | (8 | ) | $ | 1,925 | $ | 2,317 | $ | 5,052 | |||||||
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Continuing operations
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$ | (0.02 | ) | $ | 2.73 | $ | 5.50 | $ | 11.33 | |||||||
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Discontinued operations
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(0.01 | ) | 3.03 | 2.03 | 3.49 | |||||||||||
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Net income (loss) per share (diluted)
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$ | (0.03 | ) | $ | 5.76 | $ | 7.53 | $ | 14.82 | |||||||
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Adjusted Net Income (Loss)
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Exploration and Production
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$ | 147 | $ | 436 | $ | 1,556 | $ | 2,192 | ||||||||
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Corporate, Interest and Other
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(94 | ) | (109 | ) | (332 | ) | (416 | ) | ||||||||
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Net income from continuing operations
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53 | 327 | 1,224 | 1,776 | ||||||||||||
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Discontinued operations
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- | (8 | ) | 84 | 116 | |||||||||||
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Adjusted net income attributable to Hess Corporation
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$ | 53 | $ | 319 | $ | 1,308 | $ | 1,892 | ||||||||
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Continuing operations
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$ | 0.18 | $ | 0.98 | $ | 3.98 | $ | 5.21 | ||||||||
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Discontinued operations
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- | (0.02 | ) | 0.27 | 0.34 | |||||||||||
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Adjusted net income per share (diluted)
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$ | 0.18 | $ | 0.96 | $ | 4.25 | $ | 5.55 | ||||||||
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Weighted average number of shares (diluted)
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289.0 | 334.3 | 307.7 | 340.9 | ||||||||||||
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Note: See page 6 for a table of items affecting comparability of earnings between periods.
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“2014 was a year of outstanding execution and strong results, with industry leading performance in our onshore and offshore businesses,” CEO John Hess said. “We are taking prudent steps in 2015 to reduce our spending and maintain our financial flexibility. Given our strong balance sheet and resilient portfolio, we are confident in our ability to manage the current pricing environment and remain very optimistic about the company’s long term growth potential.”
2
Exploration and Production:
Exploration and Production earnings were $92 million in the fourth quarter of 2014, compared with $1,029 million in the fourth quarter of 2013. Adjusted net income was $147 million in the fourth quarter of 2014 and $436 million in the fourth quarter of 2013.
The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was down 24 percent to $74.97 per barrel in the fourth quarter of 2014 from $98.27 per barrel in the fourth quarter of 2013 reflecting the decline in benchmark crude oil prices. Excluding fourth quarter pre-tax hedging gains of $169 million, the realized crude oil selling price was $67.68 per barrel. The average worldwide natural gas liquids selling price was $22.37 per barrel, down from $44.59 per barrel in the year-ago quarter while the average worldwide natural gas selling price was $5.24 per mcf in the fourth quarter of 2014 compared with $6.97 per mcf in the fourth quarter a year-ago. The Corporation has not entered into any commodity price hedges for 2015.
Oil and gas production was 362,000 boepd, up 18 percent from 307,000 boepd in the fourth quarter of 2013. Assets contributing to the increase in production were the Bakken shale play (35,000 boepd), our Utica wet gas acreage (12,000 boepd), Gulf of Mexico (12,000 boepd), Denmark (10,000 boepd) and Libya (10,000 boepd). Asset sales reduced fourth quarter 2014 production by approximately 30,000 boepd.
Excluding production from assets sold and Libya, pro forma net production was 352,000 boepd in the fourth quarter of 2014, an increase of 28 percent from 275,000 boepd in the fourth quarter of 2013. The Corporation expects production, excluding Libya, to average between 350,000 boepd to 360,000 boepd in 2015, an increase of 10 percent to 13 percent from pro forma production of 318,000 boepd in 2014. The increased production in 2015 will be driven by a full year of production from the Tubular Bells Field in the Gulf of Mexico following first production in late 2014.
3
Oil and Gas Reserve Estimates:
Oil and gas proved reserves were 1,431 million barrels of oil equivalent (boe) at December 31, 2014, compared with 1,437 million boe at December 31, 2013. During 2014, the Corporation added 193 million boe to proved reserves, net of revisions, primarily relating to the Bakken, Gulf of Mexico, Utica, and North Malay Basin. These net additions, which are subject to final review, replaced approximately 158 percent of the Corporation’s 2014 production at a finding and development cost of approximately $28.75 per boe. Asset sales in 2014 reduced proved reserves by 77 million boe, resulting in a year-end 2014 reserve life of 11.7 years.
Operational Highlights for the Fourth Quarter of 2014:
Bakken (Onshore U.S.): Net production from the Bakken increased approximately 50 percent to 102,000 boepd from the prior year quarter due to continued drilling activities and the first quarter of 2014 completion of the Tioga gas plant expansion project. The Corporation brought 96 gross operated wells on production in the fourth quarter of 2014, bringing the year-to-date total to 238 wells. Drilling and completion costs per operated well averaged $7.1 million in the fourth quarter of 2014, down from $7.6 million in the year-ago quarter.
Utica (Onshore U.S.): On the Corporation’s joint venture acreage, ten wells were drilled in the fourth quarter of 2014. Net production averaged approximately 13,000 boepd in the fourth quarter.
Tubular Bells (Offshore U.S.): First production commenced in November 2014 and averaged 2,000 boepd for the quarter reflecting start-up activities. The Corporation forecasts 2015 net production will be in the range of 30,000 to 35,000 boepd.
Stampede (Offshore U.S.): The Corporation and its partners sanctioned plans to proceed with the development of Stampede, an oil and gas project operated by Hess in the deepwater Gulf of Mexico. The plan initially calls for six subsea production wells and four water injection wells from two subsea drilling centers tied back to a Tension Leg Platform. A two-rig drilling program is planned, with the first rig commencing operations in the fourth quarter of 2015. First production is expected in 2018.
4
Libya: During the fourth quarter, the operator produced at a reduced rate with Hess net production averaging 11,000 boepd. Fourth quarter 2013 production was 1,000 boepd. Civil unrest continues to impact operations in Libya which are currently shut-in.
Capital and Exploratory Expenditures:
Capital and exploratory expenditures in the fourth quarter of 2014 were $1.7 billion, up from $1.5 billion in the fourth quarter of 2013, as a result of increased drilling activity in the Bakken. For the year, capital and exploratory expenditures from continuing operations were $5.6 billion, which is down 10 percent from 2013. In response to the decline in crude oil prices, the Corporation reduced 2014 capital expenditures below its planned capital budget of $5.8 billion. The Corporation’s 2015 capital and exploratory expenditures budget is $4.7 billion which represents a 16% decrease from 2014.
Liquidity:
Net cash provided by operating activities was $1,057 million in the fourth quarter of 2014, compared with $1,550 million in the fourth quarter of 2013. At December 31, 2014, cash and cash equivalents totaled $2,444 million, compared with $1,814 million at December 31, 2013. Total debt was $5,987 million at December 31, 2014 compared with $5,798 million at December 31, 2013. The Corporation’s debt to capitalization ratio at December 31, 2014 was 21.2 percent, compared with 19.0 percent at the end of 2013.
Returning Capital to Shareholders:
In the fourth quarter of 2014, the Corporation repurchased 13.3 million shares of common stock at a cost of $1,053 million. Since initiation of the buyback program in August 2013, total shares repurchased through December 31, 2014 amounted to 62.7 million at a total cost of approximately $5.26 billion for an average cost per share of $83.93.
Dividends paid to shareholders amounted to $303 million and $235 million for the years ended December 31, 2014 and 2013, respectively.
5
Discontinued Operations:
The Corporation’s divested downstream businesses, including its energy marketing, terminals, retail marketing, and refining operations, as well as its energy trading partnership (HETCO) that is scheduled to be sold in early 2015, are reported as discontinued operations in the consolidated income statements on pages 8 and 9. Results from discontinued operations attributable to Hess Corporation were losses of $3 million in the fourth quarter of 2014 compared with income of $1,014 million in the fourth quarter of 2013, which included after-tax gains on asset sales totaling $995 million.
Items Affecting Comparability of Earnings Between Periods:
The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods:
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Three Months Ended
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Years Ended
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December 31,
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December 31,
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|||||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
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2014
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2013
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2014
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2013
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(In millions)
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Exploration and Production
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$ | (55 | ) | $ | 593 | $ | 542 | $ | 2,111 | |||||||
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Corporate, Interest and Other
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(3 | ) | (9 | ) | (74 | ) | (26 | ) | ||||||||
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Discontinued operations
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(3 | ) | 1,022 | 541 | 1,075 | |||||||||||
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Total items affecting comparability of
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||||||||||||||||
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earnings between periods
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$ | (61 | ) | $ | 1,606 | $ | 1,009 | $ | 3,160 | |||||||
Exploration and Production: Fourth quarter 2014 results included a charge of $48 million for remeasurement of deferred taxes resulting from legal entity restructurings. Excluding this charge, the effective tax rate for Exploration and Production operations was 58 percent for the quarter, which reflects the impact of higher Libyan production. When the Libyan operations are also excluded, the effective tax rate was 41 percent. In addition, fourth quarter 2014 results included severance, exit costs and other charges totaling $7 million.
6
Reconciliation of U.S. GAAP to Non-GAAP measures:
The following table reconciles reported net income (loss) attributable to Hess Corporation and adjusted net income:
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Three Months Ended
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Years Ended
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December 31,
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December 31,
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|||||||||||||||
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(unaudited)
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(unaudited)
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|||||||||||||||
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2014
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2013
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2014
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2013
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(In millions)
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Net income (loss) attributable to Hess Corporation
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$ | (8 | ) | $ | 1,925 | $ | 2,317 | $ | 5,052 | |||||||
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Less: Total items affecting comparability of earnings
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between periods
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(61 | ) | 1,606 | 1,009 | 3,160 | |||||||||||
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Adjusted net income attributable to Hess Corporation
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$ | 53 | $ | 319 | $ | 1,308 | $ | 1,892 | ||||||||
Hess Corporation will review fourth 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.
Non-GAAP financial measure
The Corporation has used a non-GAAP financial measure 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. We believe that investors’ understanding of our performance is enhanced by disclosing this measure. This measure is not, and should not be viewed as, a substitute for U.S. GAAP net income. A reconciliation of reported net income attributable to Hess Corporation (U.S. GAAP) to adjusted net income is provided in the release.
Other information
The Corporation has disclosed finding and development costs per barrel of oil equivalent for 2014 which is defined as costs incurred in oil and gas producing activities divided by proved reserve additions, net of reserve revisions.
For Hess Corporation
| Investor Contact: | Media Contact: |
| Jay Wilson | Michael Henson/Patrick Scanlan |
| (212) 536-8940 | Sard Verbinnen & Co |
| (212) 687-8080 |
7
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
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Fourth
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Fourth
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Third
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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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$ | 2,557 | $ | 2,722 | $ | 2,678 | ||||||
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Gains (losses) on asset sales
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3 | 380 | 31 | |||||||||
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Other, net
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(32 | ) | 6 | 27 | ||||||||
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Total revenues and non-operating income
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2,528 | 3,108 | 2,736 | |||||||||
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Costs and Expenses
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Cost of products sold (excluding items shown separately below)
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542 | 461 | 447 | |||||||||
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Operating costs and expenses
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452 | 546 | 487 | |||||||||
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Production and severance taxes
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66 | 61 | 69 | |||||||||
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Exploration expenses, including dry holes and lease impairment
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171 | 458 | 90 | |||||||||
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General and administrative expenses
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164 | 204 | 139 | |||||||||
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Interest expense
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82 | 97 | 75 | |||||||||
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Depreciation, depletion and amortization
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875 | 714 | 838 | |||||||||
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Asset impairments
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- | 289 | - | |||||||||
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Total costs and expenses
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2,352 | 2,830 | 2,145 | |||||||||
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Income from continuing operations before income taxes
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176 | 278 | 591 | |||||||||
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Provision (benefit) for income taxes
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181 | (633 | ) | 232 | ||||||||
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Income (loss) from continuing operations
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(5 | ) | 911 | 359 | ||||||||
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Income (loss) from discontinued operations
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(2 | ) | 1,004 | 671 | ||||||||
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Net income (loss)
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(7 | ) | 1,915 | 1,030 | ||||||||
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Less: Net income (loss) attributable to noncontrolling interests
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1 | (10 | ) | 22 | ||||||||
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Net income (loss) attributable to Hess Corporation
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$ | (8 | ) | $ | 1,925 | $ | 1,008 | |||||
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See "Discontinued Operations" on page 6 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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$ | 1,057 | $ | 1,550 | $ | 1,338 | ||||||
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Net cash provided by (used in) investing activities
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(1,538 | ) | 1,390 | 1,569 | ||||||||
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Net cash provided by (used in) financing activities
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(1,195 | ) | (1,447 | ) | (992 | ) | ||||||
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Net increase (decrease) in cash and cash equivalents
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$ | (1,676 | ) | $ | 1,493 | $ | 1,915 | |||||
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(*) Includes changes in working capital.
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8
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
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Years Ended December 31,
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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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$ | 10,737 | $ | 11,905 | ||||
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Gains (losses) on asset sales
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823 | 2,174 | ||||||
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Other, net
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(121 | ) | (51 | ) | ||||
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Total revenues and non-operating income
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11,439 | 14,028 | ||||||
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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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1,826 | 1,853 | ||||||
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Operating costs and expenses
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1,927 | 2,116 | ||||||
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Production and severance taxes
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275 | 372 | ||||||
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Exploration expenses, including dry holes and lease impairment
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840 | 1,031 | ||||||
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General and administrative expenses
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588 | 673 | ||||||
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Interest expense
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323 | 406 | ||||||
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Depreciation, depletion and amortization
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3,224 | 2,687 | ||||||
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Asset impairments
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- | 289 | ||||||
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Total costs and expenses
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9,003 | 9,427 | ||||||
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Income from continuing operations before income taxes
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2,436 | 4,601 | ||||||
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Provision for income taxes
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744 | 565 | ||||||
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Income from continuing operations
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1,692 | 4,036 | ||||||
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Income from discontinued operations
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682 | 1,186 | ||||||
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Net income
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2,374 | 5,222 | ||||||
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Less: Net income attributable to noncontrolling interests
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57 | 170 | ||||||
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Net income attributable to Hess Corporation
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$ | 2,317 | $ | 5,052 | ||||
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See "Discontinued Operations" on page 6 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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$ | 4,464 | $ | 4,870 | ||||
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Net cash provided by (used in) investing activities
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(1 | ) | 578 | |||||
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Net cash provided by (used in) financing activities
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(3,835 | ) | (4,276 | ) | ||||
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Net increase (decrease) in cash and cash equivalents
|
$ | 630 | $ | 1,172 | ||||
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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)
|
December 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Balance Sheet Information
|
||||||||
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Cash and cash equivalents
|
$ | 2,444 | $ | 1,814 | ||||
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Other current assets
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4,243 | 6,785 | ||||||
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Property, plant and equipment – net
|
27,517 | 28,771 | ||||||
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Other long-term assets
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4,374 | 5,384 | ||||||
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Total assets
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$ | 38,578 | $ | 42,754 | ||||
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Short-term debt and current maturities of long-term debt
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$ | 68 | $ | 378 | ||||
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Other current liabilities
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4,783 | 6,180 | ||||||
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Long-term debt
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5,919 | 5,420 | ||||||
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Other long-term liabilities
|
5,488 | 5,992 | ||||||
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Total equity excluding other comprehensive income (loss)
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23,730 | 25,122 | ||||||
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Accumulated other comprehensive income (loss)
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(1,410 | ) | (338 | ) | ||||
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Total liabilities and equity
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$ | 38,578 | $ | 42,754 | ||||
10
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
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Fourth
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Fourth
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Third
|
||||||||||
|
Quarter
|
Quarter
|
Quarter
|
||||||||||
|
2014
|
2013
|
2014
|
||||||||||
|
Capital and Exploratory Expenditures
|
||||||||||||
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Exploration and Production
|
||||||||||||
|
United States
|
||||||||||||
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Bakken
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$ | 691 | $ | 571 | $ | 579 | ||||||
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Other Onshore
|
186 | 202 | 184 | |||||||||
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Total Onshore
|
877 | 773 | 763 | |||||||||
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Offshore
|
241 | 212 | 205 | |||||||||
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Total United States
|
1,118 | 985 | 968 | |||||||||
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Europe
|
208 | 174 | 111 | |||||||||
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Africa
|
91 | 132 | 125 | |||||||||
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Asia and other
|
292 | 211 | 214 | |||||||||
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Total Capital and Exploratory Expenditures
|
$ | 1,709 | $ | 1,502 | $ | 1,418 | ||||||
|
Total exploration expenses charged to income included above
|
$ | 144 | $ | 123 | $ | 56 | ||||||
|
Years Ended December 31,
|
||||||||||||
| 2014 | 2013 | |||||||||||
|
Capital and Exploratory Expenditures
|
||||||||||||
|
Exploration and Production
|
||||||||||||
|
United States
|
||||||||||||
|
Bakken
|
$ | 2,149 | $ | 2,231 | ||||||||
|
Other Onshore
|
731 | 766 | ||||||||||
|
Total Onshore
|
2,880 | 2,997 | ||||||||||
|
Offshore
|
765 | 865 | ||||||||||
|
Total United States
|
3,645 | 3,862 | ||||||||||
|
Europe
|
626 | 724 | ||||||||||
|
Africa
|
435 | 630 | ||||||||||
|
Asia and other
|
900 | 993 | ||||||||||
|
Total Capital and Exploratory Expenditures
|
$ | 5,606 | $ | 6,209 | ||||||||
|
Total exploration expenses charged to income included above
|
$ | 332 | $ | 442 | ||||||||
11
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
|
Fourth Quarter 2014
|
||||||||||||
| United States | International | Total | ||||||||||
|
Sales and other operating revenues
|
$ | 1,443 | $ | 1,114 | $ | 2,557 | ||||||
|
Gains (losses) on asset sales
|
5 | (1 | ) | 4 | ||||||||
|
Other, net
|
(5 | ) | (28 | ) | (33 | ) | ||||||
|
Total revenues and non-operating income
|
1,443 | 1,085 | 2,528 | |||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
484 | 58 | 542 | |||||||||
|
Operating costs and expenses
|
205 | 247 | 452 | |||||||||
|
Production and severance taxes
|
53 | 13 | 66 | |||||||||
|
Exploration expenses, including dry holes and lease impairment
|
70 | 101 | 171 | |||||||||
|
General and administrative expenses
|
87 | 5 | 92 | |||||||||
|
Depreciation, depletion and amortization
|
484 | 389 | 873 | |||||||||
|
Total costs and expenses
|
1,383 | 813 | 2,196 | |||||||||
|
Results of operations before income taxes
|
60 | 272 | 332 | |||||||||
|
Provision for income taxes
|
41 | 199 | 240 | |||||||||
|
Net income
|
19 | 73 | 92 | |||||||||
|
Less: Net income attributable to noncontrolling interests
|
- | - | - | |||||||||
|
Net income attributable to Hess Corporation
|
$ | 19 | (a) | $ | 73 | (b) | $ | 92 | ||||
|
Fourth Quarter 2013
|
||||||||||||
| United States | International | Total | ||||||||||
|
Sales and other operating revenues
|
$ | 1,396 | $ | 1,326 | $ | 2,722 | ||||||
|
Gains (losses) on asset sales
|
(6 | ) | 386 | 380 | ||||||||
|
Other, net
|
(1 | ) | - | (1 | ) | |||||||
|
Total revenues and non-operating income
|
1,389 | 1,712 | 3,101 | |||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
413 | 48 | 461 | |||||||||
|
Operating costs and expenses
|
213 | 333 | 546 | |||||||||
|
Production and severance taxes
|
56 | 5 | 61 | |||||||||
|
Exploration expenses, including dry holes and lease impairment
|
129 | 329 | 458 | |||||||||
|
General and administrative expenses
|
72 | 38 | 110 | |||||||||
|
Depreciation, depletion and amortization
|
347 | 363 | 710 | |||||||||
|
Asset impairments
|
- | 289 | 289 | |||||||||
|
Total costs and expenses
|
1,230 | 1,405 | 2,635 | |||||||||
|
Results of operations before income taxes
|
159 | 307 | 466 | |||||||||
|
Provision for income taxes
|
45 | (608 | ) | (563 | ) | |||||||
|
Net income
|
114 | 915 | 1,029 | |||||||||
|
Less: Net income attributable to noncontrolling interests
|
- | - | - | |||||||||
|
Net income attributable to Hess Corporation
|
$ | 114 | (a) | $ | 915 | (b) | $ | 1,029 | ||||
|
(a)
|
The results of crude oil hedging activities were after-tax realized gains of $31 million in the fourth quarter of 2014, and gains of $1 million in the fourth quarter of 2013.
|
|
(b)
|
The results of crude oil hedging activities were after-tax realized gains of $75 million in the fourth quarter of 2014, and gains of $1 million in the fourth quarter of 2013.
|
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 | ||||
|
(a)
|
The after-tax realized gains from crude oil hedging activities were $4 million in the third quarter of 2014.
|
|
(b)
|
The after-tax realized gains from crude oil hedging activities were $13 million in the third quarter of 2014.
|
13
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
|
Year Ended December 31, 2014
|
||||||||||||
|
United States
|
International
|
Total
|
||||||||||
|
Sales and other operating revenues
|
$ | 6,270 | $ | 4,467 | $ | 10,737 | ||||||
|
Gains (losses) on asset sales
|
69 | 748 | 817 | |||||||||
|
Other, net
|
(26 | ) | (20 | ) | (46 | ) | ||||||
|
Total revenues and non-operating income
|
6,313 | 5,195 | 11,508 | |||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
1,737 | 89 | 1,826 | |||||||||
|
Operating costs and expenses
|
843 | 1,084 | 1,927 | |||||||||
|
Production and severance taxes
|
240 | 35 | 275 | |||||||||
|
Exploration expenses, including dry holes and lease impairment
|
359 | 481 | 840 | |||||||||
|
General and administrative expenses
|
281 | 55 | 336 | |||||||||
|
Depreciation, depletion and amortization
|
1,751 | 1,459 | 3,210 | |||||||||
|
Total costs and expenses
|
5,211 | 3,203 | 8,414 | |||||||||
|
Results of operations before income taxes
|
1,102 | 1,992 | 3,094 | |||||||||
|
Provision for income taxes
|
446 | 550 | 996 | |||||||||
|
Net income
|
656 | 1,442 | 2,098 | |||||||||
|
Less: Net income attributable to noncontrolling interests
|
- | - | - | |||||||||
|
Net income attributable to Hess Corporation
|
$ | 656 | (a) | $ | 1,442 | (b) | $ | 2,098 | ||||
|
Year Ended December 31, 2013
|
||||||||||||
|
United States
|
International
|
Total
|
||||||||||
|
Sales and other operating revenues
|
$ | 6,076 | $ | 5,829 | $ | 11,905 | ||||||
|
Gains (losses) on asset sales
|
(24 | ) | 2,195 | 2,171 | ||||||||
|
Other, net
|
(12 | ) | (45 | ) | (57 | ) | ||||||
|
Total revenues and non-operating income
|
6,040 | 7,979 | 14,019 | |||||||||
|
Costs and Expenses
|
||||||||||||
|
Cost of products sold (excluding items shown separately below)
|
1,759 | 94 | 1,853 | |||||||||
|
Operating costs and expenses
|
795 | 1,321 | 2,116 | |||||||||
|
Production and severance taxes
|
232 | 140 | 372 | |||||||||
|
Exploration expenses, including dry holes and lease impairment
|
371 | 660 | 1,031 | |||||||||
|
General and administrative expenses
|
218 | 159 | 377 | |||||||||
|
Depreciation, depletion and amortization
|
1,393 | 1,278 | 2,671 | |||||||||
| Asset impairments | - | 289 | 289 | |||||||||
|
Total costs and expenses
|
4,768 | 3,941 | 8,709 | |||||||||
|
Results of operations before income taxes
|
1,272 | 4,038 | 5,310 | |||||||||
|
Provision for income taxes
|
495 | 336 | 831 | |||||||||
|
Net income
|
777 | 3,702 | 4,479 | |||||||||
|
Less: Net income attributable to noncontrolling interests
|
- | 176 | 176 | |||||||||
|
Net income attributable to Hess Corporation
|
$ | 777 | (a) | $ | 3,526 | (b) | $ | 4,303 | ||||
|
(a)
|
The results of crude oil hedging activities were after-tax realized gains of $33 million for the year ended December 31, 2014, and gains of $10 million for the year ended December 31, 2013.
|
|
(b)
|
The results of crude oil hedging activities were after-tax realized gains of $88 million for the year ended December 31, 2014, and gains of $15 million for the year ended December 31, 2013.
|
14
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Fourth
|
Fourth
|
Third
|
||||||||||
|
Quarter
|
Quarter
|
Quarter
|
||||||||||
|
2014
|
2013
|
2014
|
||||||||||
|
Operating Data
|
||||||||||||
|
Net Production Per Day (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
||||||||||||
|
United States
|
||||||||||||
|
Bakken
|
78 | 57 | 63 | |||||||||
|
Other Onshore
|
10 | 9 | 11 | |||||||||
|
Total Onshore
|
88 | 66 | 74 | |||||||||
|
Offshore
|
48 | 41 | 51 | |||||||||
|
Total United States
|
136 | 107 | 125 | |||||||||
|
Europe
|
40 | 39 | 31 | |||||||||
|
Africa
|
63 | 42 | 53 | |||||||||
|
Asia
|
2 | 9 | 2 | |||||||||
|
Total
|
241 | 197 | 211 | |||||||||
|
Natural gas liquids - barrels
|
||||||||||||
|
United States
|
||||||||||||
|
Bakken
|
16 | 5 | 15 | |||||||||
|
Other Onshore
|
9 | 3 | 8 | |||||||||
|
Total Onshore
|
25 | 8 | 23 | |||||||||
|
Offshore
|
6 | 5 | 6 | |||||||||
|
Total United States
|
31 | 13 | 29 | |||||||||
|
Europe
|
1 | 2 | 1 | |||||||||
|
Asia
|
- | 1 | - | |||||||||
|
Total
|
32 | 16 | 30 | |||||||||
|
Natural gas - mcf
|
||||||||||||
|
United States
|
||||||||||||
|
Bakken
|
50 | 33 | 46 | |||||||||
|
Other Onshore
|
60 | 23 | 52 | |||||||||
|
Total Onshore
|
110 | 56 | 98 | |||||||||
|
Offshore
|
74 | 58 | 76 | |||||||||
|
Total United States
|
184 | 114 | 174 | |||||||||
|
Europe
|
43 | 33 | 29 | |||||||||
|
Asia and other
|
304 | 418 | 259 | |||||||||
|
Total
|
531 | 565 | 462 | |||||||||
|
Barrels of oil equivalent
|
362 | 307 | 318 | |||||||||
15
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Years Ended December 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Operating Data
|
||||||||
|
Net Production Per Day (in thousands)
|
||||||||
|
Crude oil - barrels
|
||||||||
|
United States
|
||||||||
|
Bakken
|
66 | 55 | ||||||
|
Other Onshore
|
10 | 10 | ||||||
|
Total Onshore
|
76 | 65 | ||||||
|
Offshore
|
51 | 43 | ||||||
|
Total United States
|
127 | 108 | ||||||
|
Europe
|
36 | 44 | ||||||
|
Africa
|
54 | 62 | ||||||
|
Asia
|
3 | 11 | ||||||
|
Total
|
220 | 225 | ||||||
|
Natural gas liquids - barrels
|
||||||||
|
United States
|
||||||||
|
Bakken
|
10 | 6 | ||||||
|
Other Onshore
|
7 | 4 | ||||||
|
Total Onshore
|
17 | 10 | ||||||
|
Offshore
|
6 | 5 | ||||||
|
Total United States
|
23 | 15 | ||||||
|
Europe
|
1 | 1 | ||||||
|
Asia
|
- | 1 | ||||||
|
Total
|
24 | 17 | ||||||
|
Natural gas - mcf
|
||||||||
|
United States
|
||||||||
|
Bakken
|
40 | 38 | ||||||
|
Other Onshore
|
47 | 25 | ||||||
|
Total Onshore
|
87 | 63 | ||||||
|
Offshore
|
78 | 61 | ||||||
|
Total United States
|
165 | 124 | ||||||
|
Europe
|
36 | 23 | ||||||
|
Asia and other
|
312 | 418 | ||||||
|
Total
|
513 | 565 | ||||||
|
Barrels of oil equivalent
|
329 | 336 | ||||||
16
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Fourth
|
Fourth
|
Third
|
||||||||||
|
Quarter
|
Quarter
|
Quarter
|
||||||||||
|
2014
|
2013
|
2014
|
||||||||||
|
Sales Volumes Per Day (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
252 | 202 | 214 | |||||||||
|
Natural gas liquids - barrels
|
32 | 16 | 30 | |||||||||
|
Natural gas - mcf
|
531 | 566 | 462 | |||||||||
|
Barrels of oil equivalent
|
373 | 313 | 321 | |||||||||
|
Sales Volumes (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
23,207 | 18,598 | 19,719 | |||||||||
|
Natural gas liquids - barrels
|
2,957 | 1,485 | 2,772 | |||||||||
|
Natural gas - mcf
|
48,851 | 52,085 | 42,511 | |||||||||
|
Barrels of oil equivalent
|
34,306 | 28,764 | 29,576 | |||||||||
|
Years Ended December 31,
|
||||||||||||
| 2014 | 2013 | |||||||||||
|
Sales Volumes Per Day (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
222 | 226 | ||||||||||
|
Natural gas liquids - barrels
|
24 | 17 | ||||||||||
|
Natural gas - mcf
|
513 | 565 | ||||||||||
|
Barrels of oil equivalent
|
331 | 337 | ||||||||||
|
Sales Volumes (in thousands)
|
||||||||||||
|
Crude oil - barrels
|
80,869 | 82,402 | ||||||||||
|
Natural gas liquids - barrels
|
8,793 | 6,244 | ||||||||||
|
Natural gas - mcf
|
187,381 | 206,122 | ||||||||||
|
Barrels of oil equivalent
|
120,892 | 123,000 | ||||||||||
17
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Fourth
|
Fourth
|
Third
|
||||||||||
|
Quarter
|
Quarter
|
Quarter
|
||||||||||
|
2014
|
2013
|
2014
|
||||||||||
|
Operating Data
|
||||||||||||
|
Average Selling Prices
|
||||||||||||
|
Crude oil - per barrel (including hedging)
|
||||||||||||
|
United States
|
||||||||||||
|
Onshore
|
$ |
60.90
|
$ | 84.54 | $ | 86.07 | ||||||
|
Offshore
|
82.22
|
93.62 | 97.50 | |||||||||
|
Total United States
|
68.51 | 87.98 | 90.74 | |||||||||
|
Europe
|
89.44 | 110.73 | 110.06 | |||||||||
|
Africa
|
79.55 | 109.34 | 101.21 | |||||||||
|
Asia
|
63.91 | 105.20 | - | |||||||||
|
Worldwide
|
74.97 | 98.27 | 96.36 | |||||||||
|
Crude oil - per barrel (excluding hedging)
|
||||||||||||
|
United States
|
||||||||||||
|
Onshore
|
$ |
60.90
|
$ | 84.47 | $ | 86.07 | ||||||
|
Offshore
|
70.99
|
93.34 | 96.25 | |||||||||
|
Total United States
|
64.51 | 87.83 | 90.23 | |||||||||
|
Europe
|
74.58 | 110.20 | 106.40 | |||||||||
|
Africa
|
69.99 | 109.32 | 99.21 | |||||||||
|
Asia
|
63.91 | 105.20 | - | |||||||||
|
Worldwide
|
67.68 | 98.07 | 94.99 | |||||||||
|
Natural gas liquids - per barrel
|
||||||||||||
|
United States
|
||||||||||||
|
Onshore
|
$ | 21.26 | $ | 46.02 | $ | 28.20 | ||||||
|
Offshore
|
23.25 | 30.29 | 31.45 | |||||||||
|
Total United States
|
21.64 | 40.08 | 28.84 | |||||||||
|
Europe
|
39.69 | 59.78 | 49.37 | |||||||||
|
Asia
|
- | 81.11 | - | |||||||||
|
Worldwide
|
22.37 | 44.59 | 29.62 | |||||||||
|
Natural gas - per mcf
|
||||||||||||
|
United States
|
||||||||||||
|
Onshore
|
$ | 2.34 | $ | 3.39 | $ | 2.25 | ||||||
|
Offshore
|
3.09
|
2.96 | 3.64 | |||||||||
|
Total United States
|
2.62 | 3.17 | 2.85 | |||||||||
|
Europe
|
8.63 | 11.82 | 9.63 | |||||||||
|
Asia and other
|
6.34 | 7.62 | 6.97 | |||||||||
|
Worldwide
|
5.24 | 6.97 | 5.59 | |||||||||
18
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
|
Years Ended December 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Operating Data
|
||||||||
|
Average Selling Prices
|
||||||||
|
Crude oil - per barrel (including hedging)
|
||||||||
|
United States
|
||||||||
|
Onshore
|
$ |
80.67
|
$ | 90.00 | ||||
|
Offshore
|
95.05
|
103.83 | ||||||
|
Total United States
|
86.48 | 95.50 | ||||||
|
Europe
|
104.21 | 88.03 | ||||||
|
Africa
|
97.31 | 108.70 | ||||||
|
Asia
|
89.71 | 107.40 | ||||||
|
Worldwide
|
92.17 | 98.48 | ||||||
|
Crude oil - per barrel (excluding hedging)
|
||||||||
|
United States
|
||||||||
|
Onshore
|
$ |
80.67
|
$ | 89.81 | ||||
|
Offshore
|
92.22
|
103.15 | ||||||
|
Total United States
|
85.34 | 95.11 | ||||||
|
Europe
|
99.20 | 87.45 | ||||||
|
Africa
|
93.70 | 108.07 | ||||||
|
Asia
|
89.71 | 107.40 | ||||||
|
Worldwide
|
89.78 | 98.01 | ||||||
|
Natural gas liquids - per barrel
|
||||||||
|
United States
|
||||||||
|
Onshore
|
$ | 28.92 | $ | 43.14 | ||||
|
Offshore
|
30.40 | 29.18 | ||||||
|
Total United States
|
29.32 | 38.07 | ||||||
|
Europe
|
52.66 | 58.31 | ||||||
|
Asia
|
- | 74.94 | ||||||
|
Worldwide
|
30.59 | 40.68 | ||||||
|
Natural gas - per mcf
|
||||||||
|
United States
|
||||||||
|
Onshore
|
$ | 3.18 | $ | 3.08 | ||||
|
Offshore
|
3.79 | 2.83 | ||||||
|
Total United States
|
3.47 | 2.96 | ||||||
|
Europe
|
10.00 | 11.06 | ||||||
|
Asia and other
|
6.94 | 7.50 | ||||||
|
Worldwide
|
6.04 | 6.64 | ||||||
19