UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of Earliest Event Reported): July 29, 2009
HESS
CORPORATION
(Exact
Name of Registrant as Specified in Its Charter)
|
DELAWARE |
No. 1-1204 |
No. 13-4921002 |
|
(State or Other |
(Commission File Number) |
(IRS Employer Identification No.) |
|
1185 Avenue of the Americas |
|
(Address of Principal Executive Offices) (Zip Code) |
Registrant's Telephone Number, Including Area Code: (212)
997-8500
N/A
(Former Name or Former Address, if
Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On July 29, 2009, Hess Corporation issued a news release reporting its results for the second quarter of 2009. A copy of this news release is attached hereto as Exhibit 99(1) and is hereby incorporated by reference.
Item
9.01. Financial Statements and Exhibits.
(c) Exhibits
99(1) News release dated July 29, 2009 reporting results for the second quarter of 2009.
99(2) Prepared remarks of John B. Hess, Chairman of the Board of Directors and Chief Executive Officer.
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date: July
29, 2009
|
|
HESS CORPORATION |
|
|
|
||
|
|
|
|
|
|
By: |
/s/ John P. Rielly |
|
Name: |
John P. Rielly |
|
|
Title: |
Senior Vice President and |
|
|
|
Chief Financial Officer |
|
EXHIBIT INDEX
|
Exhibit No. |
Description |
|
99(1) |
News release dated July 29, 2009 reporting results for the second quarter of 2009. |
|
99(2) |
Prepared remarks of John B. Hess, Chairman of the Board of Directors and Chief Executive Officer. |
4
Exhibit 99(1)
Hess Reports Estimated Results for the Second Quarter of 2009
Second Quarter Highlights:
- Net Income was $100 million compared with $900 million in second quarter 2008
- Oil and gas production was 407,000 barrels per day, up from 393,000 in second quarter 2008
- Capital and exploratory expenditures of $785 million, down from $1,240 million in the second quarter of 2008
NEW YORK--(BUSINESS WIRE)--July 29, 2009--Hess Corporation (NYSE: HES) reported net income of $100 million for the second quarter of 2009 compared with net income of $900 million for the second quarter of 2008. The after-tax results by major operating activity were as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||
|
June 30, (unaudited) |
June 30, (unaudited) | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||
| Exploration and Production | $ | 215 | $ | 1,025 | $ | 151 | $ | 1,849 | ||||||||
| Marketing and Refining | (30 | ) | (52 | ) | 72 | (36 | ) | |||||||||
| Corporate | (26 | ) | (33 | ) | (75 | ) | (72 | ) | ||||||||
| Interest expense | (59 | ) | (40 | ) | (107 | ) | (82 | ) | ||||||||
| Net income attributable to Hess Corporation | $ | 100 | $ | 900 | $ | 41 | $ | 1,659 | ||||||||
| Net income per share (diluted) | $ | .31 | $ | 2.76 | $ | .13 | $ | 5.11 | ||||||||
| Weighted average number of shares (diluted) | 325.8 | 326.2 | 325.7 | 325.0 | ||||||||||||
Exploration and Production earnings were $215 million in the second quarter of 2009 compared with $1,025 million in the second quarter of 2008. Second quarter 2009 results include dry hole costs of $153 million ($92 million after-tax), primarily associated with a well offshore Brazil and two wells in the Gulf of Mexico. The Corporation’s oil and gas production, on a barrel-of-oil equivalent basis, was 407,000 barrels per day in the second quarter of 2009, an increase of 4% from the second quarter of 2008. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $49.27 per barrel in the second quarter of 2009 compared with $104.29 per barrel in the second quarter of 2008. The Corporation’s average worldwide natural gas selling price was $4.56 per Mcf in the second quarter of 2009 compared with $7.81 per Mcf in the second quarter of 2008.
Marketing and Refining generated a loss of $30 million in the second quarter of 2009 compared with a loss of $52 million in the second quarter of 2008, primarily reflecting improved energy marketing and trading results. Refining operations generated a loss of $26 million in the second quarter of 2009 compared with income of $3 million in the second quarter of 2008, due to lower refining margins. Marketing results generated a loss of $13 million in the second quarter of 2009, compared with a loss of $40 million in the second quarter of 2008. Trading activities produced income of $9 million in the second quarter of 2009, an increase of $24 million from the second quarter of 2008.
The following table reflects the total after-tax impact of items affecting comparability of earnings between periods (in millions):
| Three Months Ended | Six Months Ended | ||||||||||||||
|
June 30, |
June 30, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Exploration and Production | $ | (31 | ) | $ | - | $ | (44 | ) | $ | - | |||||
|
Corporate |
- | - | (16 | ) | - | ||||||||||
| $ | (31 | ) | $ | - | $ | (60 | ) | $ | - | ||||||
In the second quarter of 2009, the Corporation recorded after-tax charges of $31 million to reduce the carrying value of production equipment in the United Kingdom North Sea and materials inventory in Equatorial Guinea and the United States.
Net cash provided by operating activities was $616 million in the second quarter of 2009 compared with $1,732 million in the second quarter of 2008. Capital and exploratory expenditures for the second quarter of 2009 amounted to $785 million, of which $770 million related to Exploration and Production operations. Capital and exploratory expenditures for the second quarter of 2008 amounted to $1,240 million, of which $1,205 million related to Exploration and Production operations.
At June 30, 2009, cash and cash equivalents totaled $1,063 million compared with $908 million at December 31, 2008. Total debt was $4,313 million at June 30, 2009 and $3,955 million at December 31, 2008. The Corporation’s debt to capitalization ratio at June 30, 2009 was 25.8 percent compared with 24.2 percent at the end of 2008.
Hess Corporation will review second quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details on the event, refer to the Investor Relations section of our website at www.hess.com.
Hess Corporation, with headquarters in New York, is a leading global independent energy company engaged in the exploration for and production of crude oil and natural gas, as well as in refining and marketing refined petroleum products, natural gas and electricity. More information on Hess Corporation is available at www.hess.com.
Forward Looking Statements
Certain statements in this release may constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, uncertainties inherent in the measurement and interpretation of geological, geophysical and other technical data.
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
|||||||||||||||
|
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
|||||||||||||||
|
(IN MILLIONS OF DOLLARS) |
|||||||||||||||
| Second | Second | First | |||||||||||||
| Quarter | Quarter | Quarter | |||||||||||||
| 2009 | 2008 | 2009 | |||||||||||||
|
Income Statement (*) |
|||||||||||||||
| Revenues and Non-operating Income | |||||||||||||||
| Sales (excluding excise taxes) and other operating revenues | $ | 6,751 | $ | 11,711 | $ | 6,915 | |||||||||
| Equity in income (loss) of HOVENSA L.L.C. | (75 | ) | (19 | ) | (41 | ) | |||||||||
| Other, net | 79 | 37 | (2 | ) | |||||||||||
| Total revenues and non-operating income | 6,755 | 11,729 | 6,872 | ||||||||||||
| Costs and Expenses | |||||||||||||||
| Cost of products sold (excluding items shown separately below) | 4,705 | 8,337 | 5,182 | ||||||||||||
| Production expenses | 444 | 494 | 409 | ||||||||||||
| Marketing expenses | 245 | 267 | 257 | ||||||||||||
| Exploration expenses, including dry holes | |||||||||||||||
| and lease impairment | 312 | 158 | 193 | ||||||||||||
| Other operating expenses | 43 | 47 | 48 | ||||||||||||
| General and administrative expenses | 136 | 156 | 160 | ||||||||||||
| Interest expense | 95 | 65 | 77 | ||||||||||||
| Depreciation, depletion and amortization | 558 | 482 | 486 | ||||||||||||
| Total costs and expenses | 6,538 | 10,006 | 6,812 | ||||||||||||
| Income before income taxes | 217 | 1,723 | 60 | ||||||||||||
| Provision for income taxes | 115 | 812 | 77 | ||||||||||||
| Net income (loss) | 102 | 911 | (17 | ) | |||||||||||
|
Less: Net income attributable to noncontrolling interests |
2 | 11 | 42 | ||||||||||||
| Net income (loss) attributable to Hess Corporation | $ | 100 | $ | 900 | $ | (59 | ) | ||||||||
|
Supplemental Income Statement Information |
|||||||||||||||
| Foreign currency gains (losses), after-tax | $ | 6 | $ | 1 | $ | (10 | ) | ||||||||
| Capitalized interest | 2 | 1 | 1 | ||||||||||||
|
Cash Flow Information (*) |
|||||||||||||||
|
Net cash provided by operating activities |
$ | 616 | $ | 1,732 | $ | 625 | |||||||||
|
Capital and Exploratory Expenditures |
|||||||||||||||
| Exploration and Production | |||||||||||||||
| United States | $ | 300 | $ | 721 | $ | 315 | |||||||||
| International | 470 | 484 | 444 | ||||||||||||
| Total Exploration and Production | 770 | 1,205 | 759 | ||||||||||||
| Marketing, Refining and Corporate | 15 | 35 | 46 | ||||||||||||
| Total Capital and Exploratory Expenditures | $ | 785 | $ | 1,240 | $ | 805 | |||||||||
| Exploration expenses charged to income included above | |||||||||||||||
| United States | $ | 52 | $ | 44 | $ | 53 | |||||||||
| International | 48 | 40 | 48 | ||||||||||||
| $ | 100 | $ | 84 | $ | 101 | ||||||||||
| (*) Reflects the retrospective adoption of Statement of Financial Accounting Standards 160, Accounting for Noncontrolling Interests | |||||||||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
|||||||||||
|
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
|||||||||||
|
(IN MILLIONS OF DOLLARS) |
|||||||||||
| First Half | |||||||||||
| 2009 | 2008 | ||||||||||
|
Income Statement (*) |
|||||||||||
| Revenues and Non-operating Income | |||||||||||
| Sales (excluding excise taxes) and other operating revenues | $ | 13,666 | $ | 22,358 | |||||||
| Equity in income (loss) of HOVENSA L.L.C. | (116 | ) | (29 | ) | |||||||
| Other, net | 77 | 100 | |||||||||
| Total revenues and non-operating income | 13,627 | 22,429 | |||||||||
| Costs and Expenses | |||||||||||
| Cost of products sold (excluding items shown separately below) | 9,887 | 16,042 | |||||||||
| Production expenses | 853 | 918 | |||||||||
| Marketing expenses | 502 | 500 | |||||||||
| Exploration expenses, including dry holes | |||||||||||
| and lease impairment | 505 | 310 | |||||||||
| Other operating expenses | 91 | 92 | |||||||||
| General and administrative expenses | 296 | 308 | |||||||||
| Interest expense | 172 | 132 | |||||||||
| Depreciation, depletion and amortization | 1,044 | 934 | |||||||||
| Total costs and expenses | 13,350 | 19,236 | |||||||||
| Income before income taxes | 277 | 3,193 | |||||||||
| Provision for income taxes | 192 | 1,530 | |||||||||
| Net income | 85 | 1,663 | |||||||||
| Less: Net income attributable to noncontrolling interests | 44 | 4 | |||||||||
| Net income attributable to Hess Corporation | $ | 41 | $ | 1,659 | |||||||
|
Supplemental Income Statement Information |
|||||||||||
| Foreign currency gains (losses), after-tax | $ | (4 | ) | $ | 12 | ||||||
| Capitalized interest | 3 | 2 | |||||||||
|
Cash Flow Information (*) |
|||||||||||
|
Net cash provided by operating activities |
$ | 1,241 | $ | 2,915 | |||||||
|
Capital and Exploratory Expenditures |
|||||||||||
| Exploration and Production | |||||||||||
| United States | $ | 615 | $ | 1,136 | |||||||
| International | 914 | 1,007 | |||||||||
| Total Exploration and Production | 1,529 | 2,143 | |||||||||
| Marketing, Refining and Corporate | 61 | 67 | |||||||||
| Total Capital and Exploratory Expenditures | $ | 1,590 | $ | 2,210 | |||||||
| Exploration expenses charged to income included above | |||||||||||
| United States | $ | 105 | $ | 106 | |||||||
| International | 96 | 99 | |||||||||
| $ | 201 | $ | 205 | ||||||||
| (*) Reflects the retrospective adoption of Statement of Financial Accounting Standards 160, Accounting for Noncontrolling Interests | |||||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||
|
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
||||||||||
|
(IN MILLIONS OF DOLLARS) |
||||||||||
|
|
June 30, | December 31, | ||||||||
| 2009 | 2008 | |||||||||
|
Balance Sheet Information (*) |
||||||||||
| Cash and cash equivalents | $ | 1,063 | $ | 908 | ||||||
| Other current assets | 6,445 | 6,424 | ||||||||
| Investments | 1,013 | 1,127 | ||||||||
| Property, plant and equipment – net | 16,421 | 16,271 | ||||||||
| Other long-term assets | 3,974 | 3,859 | ||||||||
| Total assets | $ | 28,916 | $ | 28,589 | ||||||
| Current maturities of long-term debt | $ | 135 | $ | 143 | ||||||
| Other current liabilities | 7,478 | 7,587 | ||||||||
| Long-term debt | 4,178 | 3,812 | ||||||||
| Other long-term liabilities | 4,747 | 4,656 | ||||||||
| Total equity excluding other comprehensive income (loss) | 14,478 | 14,399 | ||||||||
| Accumulated other comprehensive income (loss) | (2,100 | ) | (2,008 | ) | ||||||
| Total liabilities and equity | $ | 28,916 | $ | 28,589 | ||||||
| (*) Reflects the retrospective adoption of Statement of Financial Accounting Standards 160, Accounting for Noncontrolling Interests | ||||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||||
|
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) |
||||||||||||||
|
(IN MILLIONS OF DOLLARS) |
||||||||||||||
| Second Quarter 2009 | ||||||||||||||
| United | ||||||||||||||
| States | International | Total | ||||||||||||
| Sales and other operating revenues | $ | 358 | $ | 1,341 | $ | 1,699 | ||||||||
| Non-operating income (loss) | (3 | ) | 60 | 57 | ||||||||||
| Total revenues and non-operating income | 355 | 1,401 | 1,756 | |||||||||||
| Costs and expenses | ||||||||||||||
| Production expenses, including related taxes | 109 | 335 | 444 | |||||||||||
| Exploration expenses, including dry holes | ||||||||||||||
| and lease impairment | 139 | 173 | 312 | |||||||||||
| General, administrative and other expenses | 33 | 28 | 61 | |||||||||||
| Depreciation, depletion and amortization | 105 | 433 | 538 | |||||||||||
| Total costs and expenses | 386 | 969 | 1,355 | |||||||||||
| Results of operations before income taxes | (31 | ) | 432 | 401 | ||||||||||
| Provision (benefit) for income taxes | (11 | ) | 197 | 186 | ||||||||||
| Results of operations attributable to Hess Corporation | $ | (20 | ) | $ | 235 | $ | 215 | |||||||
| Second Quarter 2008 | ||||||||||||||
| United | ||||||||||||||
| States | International | Total | ||||||||||||
| Sales and other operating revenues | $ | 545 | $ | 2,530 | $ | 3,075 | ||||||||
| Non-operating income (loss) | - | 22 | 22 | |||||||||||
| Total revenues and non-operating income | 545 | 2,552 | 3,097 | |||||||||||
| Costs and expenses | ||||||||||||||
| Production expenses, including related taxes | 101 | 393 | 494 | |||||||||||
| Exploration expenses, including dry holes | ||||||||||||||
| and lease impairment | 62 | 96 | 158 | |||||||||||
| General, administrative and other expenses | 36 | 37 | 73 | |||||||||||
| Depreciation, depletion and amortization | 61 | 401 | 462 | |||||||||||
| Total costs and expenses | 260 | 927 | 1,187 | |||||||||||
| Results of operations before income taxes | 285 | 1,625 | 1,910 | |||||||||||
| Provision (benefit) for income taxes | 108 | 777 | 885 | |||||||||||
| Results of operations attributable to Hess Corporation | $ | 177 | $ | 848 | $ | 1,025 | ||||||||
| First Quarter 2009 | ||||||||||||||
| United | ||||||||||||||
| States | International | Total | ||||||||||||
| Sales and other operating revenues | $ | 167 | $ | 964 | $ | 1,131 | ||||||||
| Non-operating income (loss) | (2 | ) | 10 | 8 | ||||||||||
| Total revenues and non-operating income | 165 | 974 | 1,139 | |||||||||||
| Costs and expenses | ||||||||||||||
| Production expenses, including related taxes | 112 | 297 | 409 | |||||||||||
| Exploration expenses, including dry holes | ||||||||||||||
| and lease impairment | 111 | 82 | 193 | |||||||||||
| General, administrative and other expenses | 27 | 29 | 56 | |||||||||||
| Depreciation, depletion and amortization | 57 | 408 | 465 | |||||||||||
| Total costs and expenses | 307 | 816 | 1,123 | |||||||||||
| Results of operations before income taxes | (142 | ) | 158 | 16 | ||||||||||
| Provision (benefit) for income taxes | (53 | ) | 133 | 80 | ||||||||||
| Results of operations attributable to Hess Corporation | $ | (89 | ) | $ | 25 | $ | (64 | ) | ||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
|||||||||||||||||
|
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) |
|||||||||||||||||
|
(IN MILLIONS OF DOLLARS) |
|||||||||||||||||
| First Half 2009 | |||||||||||||||||
| United | |||||||||||||||||
| States | International | Total | |||||||||||||||
| Sales and other operating revenues | $ | 525 | $ | 2,305 | $ | 2,830 | |||||||||||
| Non-operating income (loss) | (5 | ) | 70 | 65 | |||||||||||||
| Total revenues and non-operating income | 520 | 2,375 | 2,895 | ||||||||||||||
| Costs and expenses | |||||||||||||||||
| Production expenses, including related taxes | 221 | 632 | 853 | ||||||||||||||
| Exploration expenses, including dry holes | |||||||||||||||||
| and lease impairment | 250 | 255 | 505 | ||||||||||||||
| General, administrative and other expenses | 60 | 57 | 117 | ||||||||||||||
| Depreciation, depletion and amortization | 162 | 841 | 1,003 | ||||||||||||||
| Total costs and expenses | 693 | 1,785 | 2,478 | ||||||||||||||
| Results of operations before income taxes | (173 | ) | 590 | 417 | |||||||||||||
| Provision (benefit) for income taxes | (64 | ) | 330 | 266 | |||||||||||||
| Results of operations attributable to Hess Corporation | $ | (109 | ) | $ | 260 | $ | 151 | ||||||||||
| First Half 2008 | |||||||||||||||||
| United | |||||||||||||||||
| States | International | Total | |||||||||||||||
| Sales and other operating revenues | $ | 993 | $ | 4,689 | $ | 5,682 | |||||||||||
| Non-operating income (loss) | 10 | 59 | 69 | ||||||||||||||
| Total revenues and non-operating income | 1,003 | 4,748 | 5,751 | ||||||||||||||
| Costs and expenses | |||||||||||||||||
| Production expenses, including related taxes | 171 | 747 | 918 | ||||||||||||||
| Exploration expenses, including dry holes | |||||||||||||||||
| and lease impairment | 145 | 165 | 310 | ||||||||||||||
| General, administrative and other expenses | 68 | 68 | 136 | ||||||||||||||
| Depreciation, depletion and amortization | 116 | 780 | 896 | ||||||||||||||
| Total costs and expenses | 500 | 1,760 | 2,260 | ||||||||||||||
| Results of operations before income taxes | 503 | 2,988 | 3,491 | ||||||||||||||
| Provision (benefit) for income taxes | 192 | 1,450 | 1,642 | ||||||||||||||
| Results of operations attributable to Hess Corporation | $ | 311 | $ | 1,538 | $ | 1,849 | |||||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
|||||||||||||
|
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED) |
|||||||||||||
|
|
Second | Second | First | ||||||||||
| Quarter | Quarter | Quarter | |||||||||||
| 2009 | 2008 | 2009 | |||||||||||
|
Operating Data |
|||||||||||||
|
Net Production Per Day (in thousands) |
|||||||||||||
| Crude oil - barrels | |||||||||||||
| United States | 58 | 36 | 32 | ||||||||||
| Europe | 76 | 83 | 88 | ||||||||||
| Africa | 124 | 128 | 126 | ||||||||||
| Asia and other | 16 | 12 | 15 | ||||||||||
| Total | 274 | 259 | 261 | ||||||||||
| Natural gas liquids - barrels | |||||||||||||
| United States | 10 | 11 | 9 | ||||||||||
| Europe | 3 | 4 | 4 | ||||||||||
| Asia and other | 1 | - | - | ||||||||||
| Total | 14 | 15 | 13 | ||||||||||
| Natural gas - mcf | |||||||||||||
| United States | 92 | 83 | 78 | ||||||||||
| Europe | 160 | 267 | 180 | ||||||||||
| Asia and other | 459 | 364 | 438 | ||||||||||
| Total | 711 | 714 | 696 | ||||||||||
| Barrels of oil equivalent | 407 | 393 | 390 | ||||||||||
|
Average Selling Price |
|||||||||||||
| Crude oil - per barrel (including hedging)* | |||||||||||||
| United States | $ | 55.53 | $ | 120.23 | $ | 38.58 | |||||||
| Europe | 47.41 | 104.98 | 35.31 | ||||||||||
| Africa | 47.16 | 97.32 | 31.15 | ||||||||||
| Asia and other | 55.84 | 120.59 | 45.86 | ||||||||||
| Worldwide | 49.27 | 104.29 | 34.42 | ||||||||||
| Crude oil - per barrel (excluding hedging) | |||||||||||||
| United States | $ | 55.53 | $ | 120.23 | $ | 38.58 | |||||||
| Europe | 47.41 | 104.98 | 35.31 | ||||||||||
| Africa | 57.13 | 117.49 | 44.20 | ||||||||||
| Asia and other | 55.84 | 120.59 | 45.86 | ||||||||||
| Worldwide | 54.03 | 113.79 | 40.19 | ||||||||||
| Natural gas liquids - per barrel | |||||||||||||
| United States | $ | 31.03 | $ | 76.60 | $ | 29.03 | |||||||
| Europe | 36.51 | 92.67 | 36.76 | ||||||||||
| Asia and other | 35.92 | - | - | ||||||||||
| Worldwide | 32.97 | 81.52 | 31.29 | ||||||||||
| Natural gas - per mcf (including hedging)* | |||||||||||||
| United States | $ | 3.26 | $ | 11.00 | $ | 4.03 | |||||||
| Europe | 4.53 | 10.33 | 6.49 | ||||||||||
| Asia and other | 4.82 | 5.23 | 4.70 | ||||||||||
| Worldwide | 4.56 | 7.81 | 5.08 | ||||||||||
| Natural gas - per mcf (excluding hedging) | |||||||||||||
| United States | $ | 3.26 | $ | 11.00 | $ | 4.03 | |||||||
| Europe | 4.53 | 10.84 | 6.49 | ||||||||||
| Asia and other | 4.82 | 5.23 | 4.70 | ||||||||||
| Worldwide | 4.56 | 8.01 | 5.08 | ||||||||||
| * | The after-tax losses from hedging activities were $83 million in the second quarter of 2009, $144 million in the second quarter of 2008 and $82 million in the first quarter of 2009. | ||||||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||
|
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED) |
||||||||||
|
|
First Half | |||||||||
| 2009 | 2008 | |||||||||
|
Operating Data |
||||||||||
|
Net Production Per Day (in thousands) |
||||||||||
| Crude oil - barrels | ||||||||||
| United States | 45 | 36 | ||||||||
| Europe | 82 | 83 | ||||||||
| Africa | 125 | 123 | ||||||||
| Asia and other | 16 | 15 | ||||||||
| Total | 268 | 257 | ||||||||
| Natural gas liquids - barrels | ||||||||||
| United States | 10 | 11 | ||||||||
| Europe | 3 | 4 | ||||||||
| Asia and other | - | - | ||||||||
| Total | 13 | 15 | ||||||||
| Natural gas - mcf | ||||||||||
| United States | 85 | 88 | ||||||||
| Europe | 170 | 282 | ||||||||
| Asia and other | 449 | 353 | ||||||||
| Total | 704 | 723 | ||||||||
| Barrels of oil equivalent | 398 | 392 | ||||||||
|
Average Selling Price |
||||||||||
| Crude oil - per barrel (including hedging)* | ||||||||||
| United States | $ | 49.56 | $ | 106.42 | ||||||
| Europe | 41.09 | 93.32 | ||||||||
| Africa | 40.29 | 88.44 | ||||||||
| Asia and other | 51.50 | 106.28 | ||||||||
| Worldwide | 42.62 | 93.75 | ||||||||
| Crude oil - per barrel (excluding hedging) | ||||||||||
| United States | $ | 49.56 | $ | 106.42 | ||||||
| Europe | 41.09 | 93.32 | ||||||||
| Africa | 51.58 | 105.98 | ||||||||
| Asia and other | 51.50 | 106.28 | ||||||||
| Worldwide | 47.84 | 101.66 | ||||||||
| Natural gas liquids - per barrel | ||||||||||
| United States | $ | 30.12 | $ | 70.71 | ||||||
| Europe | 36.61 | 85.78 | ||||||||
| Asia and other | 35.92 | - | ||||||||
| Worldwide | 32.25 | 74.90 | ||||||||
| Natural gas - per mcf (including hedging)* | ||||||||||
| United States | $ | 3.61 | $ | 9.69 | ||||||
| Europe | 5.56 | 9.61 | ||||||||
| Asia and other | 4.76 | 5.12 | ||||||||
| Worldwide | 4.82 | 7.43 | ||||||||
| Natural gas - per mcf (excluding hedging) | ||||||||||
| United States | $ | 3.61 | $ | 9.69 | ||||||
| Europe | 5.56 | 9.90 | ||||||||
| Asia and other | 4.76 | 5.12 | ||||||||
| Worldwide | 4.82 | 7.55 | ||||||||
| * | The after-tax losses from hedging activities were $165 million for the six months ended June 30, 2009 and $239 million for the six months ended June 30, 2008. | |||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
|||||||||||||||||||
|
MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED) |
|||||||||||||||||||
| Second | Second | First | |||||||||||||||||
| Quarter | Quarter | Quarter | |||||||||||||||||
| 2009 | 2008 | 2009 | |||||||||||||||||
|
Financial Information (in millions of dollars) |
|||||||||||||||||||
|
Marketing and Refining Results |
|||||||||||||||||||
| Income (loss) before income taxes | $ | (56 | ) | $ | (85 | ) | $ | 162 | |||||||||||
| Provision (benefit) for income taxes | (26 | ) | (33 | ) | 60 | ||||||||||||||
| Results of operations attributable to Hess Corporation | $ | (30 | ) | $ | (52 | ) | $ | 102 | |||||||||||
|
Summary of Marketing and Refining Results |
|||||||||||||||||||
| Refining | $ | (26 | ) | $ | 3 | $ | (18 | ) | |||||||||||
| Marketing | (13 | ) | (40 | ) | 101 | ||||||||||||||
| Trading | 9 | (15 | ) | 19 | |||||||||||||||
| Results of operations attributable to Hess Corporation | $ | (30 | ) | $ | (52 | ) | $ | 102 | |||||||||||
|
Operating Data (barrels and gallons in thousands) |
|||||||||||||||||||
|
Refined Product Sales (barrels per day) |
|||||||||||||||||||
| Gasoline | 223 | 236 | 227 | ||||||||||||||||
| Distillates | 126 | 129 | 150 | ||||||||||||||||
| Residuals | 65 | 49 | 85 | ||||||||||||||||
| Other | 41 | 40 | 39 | ||||||||||||||||
| Total | 455 | 454 | 501 | ||||||||||||||||
|
Refinery Throughput (barrels per day) |
|||||||||||||||||||
| HOVENSA - Crude runs | 442 | 471 | 410 | ||||||||||||||||
| HOVENSA - Hess 50% share | 221 | 235 | 205 | ||||||||||||||||
| Port Reading | 65 | 64 | 62 | ||||||||||||||||
|
Refinery Utilization |
Refinery Capacity |
||||||||||||||||||
| HOVENSA | (barrels per day) | ||||||||||||||||||
| Crude | 500 | 88.4 | % | 94.2 | % | 82.0 | % | ||||||||||||
| FCC | 150 | 71.2 | % | 73.1 | % | 71.4 | % | ||||||||||||
| Coker | 58 | 91.2 | % | 99.5 | % | 80.5 | % | ||||||||||||
| Port Reading | 70 | 93.0 | % | 91.3 | % | 88.2 | % | ||||||||||||
|
Retail Marketing |
|||||||||||||||||||
| Number of retail stations (a) | 1,355 | 1,363 | 1,358 | ||||||||||||||||
| Convenience store revenue (in millions of dollars) (b) | $ | 300 | $ | 275 | $ | 255 | |||||||||||||
| Average gasoline volume per station (gallons per month) (b) | 209 | 218 | 199 | ||||||||||||||||
|
|
|||||||||||||||||||
| (a) Includes company operated, Wilco-Hess, dealer and branded retailer. | |||||||||||||||||||
| (b) Company operated only. | |||||||||||||||||||
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
|||||||||||||||
|
MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED) |
|||||||||||||||
| First Half | |||||||||||||||
| 2009 | 2008 | ||||||||||||||
|
Financial Information (in millions of dollars) |
|||||||||||||||
|
Marketing and Refining Results |
|||||||||||||||
| Income (loss) before income taxes | $ | 106 | $ | (64 | ) | ||||||||||
| Provision (benefit) for income taxes | 34 | (28 | ) | ||||||||||||
| Results of operations attributable to Hess Corporation | $ | 72 | $ | (36 | ) | ||||||||||
|
Summary of Marketing and Refining Results |
|||||||||||||||
| Refining | $ | (44 | ) | $ | - | ||||||||||
| Marketing | 88 | (8 | ) | ||||||||||||
| Trading | 28 | (28 | ) | ||||||||||||
| Results of operations attributable to Hess Corporation | $ | 72 | $ | (36 | ) | ||||||||||
|
Operating Data (barrels and gallons in thousands) |
|||||||||||||||
| Refined Product Sales (barrels per day) | |||||||||||||||
| Gasoline | 225 | 229 | |||||||||||||
| Distillates | 138 | 149 | |||||||||||||
| Residuals | 75 | 58 | |||||||||||||
| Other | 40 | 39 | |||||||||||||
| Total | 478 | 475 | |||||||||||||
|
Refinery Throughput (barrels per day) |
|||||||||||||||
| HOVENSA - Crude runs | 426 | 458 | |||||||||||||
| HOVENSA - Hess 50% share | 213 | 229 | |||||||||||||
| Port Reading | 64 | 62 | |||||||||||||
|
Refinery Utilization |
Refinery Capacity |
||||||||||||||
| HOVENSA | (barrels per day) | ||||||||||||||
| Crude | 500 | 85.2 | % | 91.6 | % | ||||||||||
| FCC | 150 | 71.3 | % | 73.7 | % | ||||||||||
| Coker | 58 | 85.9 | % | 95.5 | % | ||||||||||
| Port Reading | 70 | 90.6 | % | 89.2 | % | ||||||||||
|
Retail Marketing |
|||||||||||||||
| Number of retail stations (a) | 1,355 | 1,363 | |||||||||||||
| Convenience store revenue (in millions of dollars) (b) | $ | 555 | $ | 514 | |||||||||||
| Average gasoline volume per station (gallons per month) (b) | 204 | 207 | |||||||||||||
|
|
|||||||||||||||
| (a) Includes company operated, Wilco-Hess, dealer and branded retailer. | |||||||||||||||
| (b) Company operated only. | |||||||||||||||
CONTACT:
Hess Corporation
Investor:
Jay
Wilson, 212-536-8940
or
Media:
Jon
Pepper, 212-536-8550
Exhibit 99(2)
2009 Second Quarter Earnings
Conference Call
Thank you Jay, and welcome to our second quarter conference call. I will make a few brief comments after which John Rielly will review our financial results.
Net income for the second quarter of 2009 was $100 million, versus $900 million a year ago. Our results were negatively impacted by lower crude oil and natural gas selling prices, which more than offset the impact of higher production volumes compared to the year ago quarter.
For the second quarter of 2009, Exploration and Production earned $215 million. Crude oil and natural gas production averaged 407 thousand barrels of oil equivalent per day, which was nearly 4 percent above the year ago period. Higher year-over-year production resulted primarily from the addition of Phase 2 volumes at the Malaysia-Thailand JDA and the ramp-up of the Shenzi Field in the deepwater Gulf of Mexico; each of which added about 20 thousand barrels of oil equivalent per day versus the same period last year.
As a result of strong year to date production performance, we have raised our full year 2009 production forecast to a range of 390 to 400 thousand barrels of oil equivalent per day, versus our previously forecasted range of 380 to 390 thousand barrels of oil equivalent per day.
With regard to exploration, as was announced in early July, the operator of the Guarani well on Block BM-S-22 offshore Brazil did not file a Notice of Discovery and our share of the well cost was expensed in the second quarter. The next steps are to analyze the significant amount of seismic, log and core data gathered from the first two wells, and to plan the location of a third well to help further evaluate the BM-S-22 license.
On Permit WA-390-P in the Northwest Shelf of Australia, we recently resumed exploration drilling. Over the next 12 months, we plan to execute a 12 well program designed to further appraise the block. Hess has a 100% interest in Permit WA-390-P.
Turning to Marketing and Refining, we reported a loss of $30 million for the second quarter of 2009. The weak economy continued to have a negative impact on both volumes and margins in our M&R business.
Refining margins at our Hovensa joint venture refinery were significantly lower than last year’s second quarter primarily as a result of lower distillate crack spreads and significantly narrower light / heavy crude differentials.
Marketing results, while negative, were better than the year ago quarter. Although retail marketing fuel volumes, on a per site basis, were down 4%, total convenience store sales were up 9%. In Energy Marketing, electricity sales were higher, while natural gas and fuel oil sales volumes declined year over year.
Capital and exploratory expenditures in the first half of 2009 were $1.6 billion, substantially all of which were related to Exploration and Production activities. For the full year 2009, our capital and exploratory expenditures forecast remains $3.2 billion.
We continue to control our capital expenditures and operating expenses in light of the weak economy and uncertain commodity price environment. As we mentioned on our last conference call, we are committed to maintaining our financial strength so that we will have the capability to fund our attractive investment opportunities to sustain growth in our reserves and production.
I will now turn the call over to John Rielly.
4