View:
HESS CORPORATION
1185 Avenue of the Americas
New York, New York 10036
GEORGE C. BARRY
Vice President, Secretary
and Deputy General Counsel
(212) 536-8599
Fax: (212) 536-8241
May 21, 2008
VIA EDGAR
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Mail Stop 7010
Washington, D.C. 20549
Attn: H. Roger Schwall, Assistant Director
Re: Hess Corporation
Form 10-K for Fiscal Year Ended December 31, 2007
Filed February 27, 2008
Definitive Proxy Statement on Schedule 14A
Filed on March 27, 2008
Response to Comment Letter Dated April 23, 2008
Commission File No. 1-01204
- --------------------------------------------------------------------------------
Dear Ladies and Gentlemen:
Enclosed are our responses to the comments of the staff of the Securities
and Exchange Commission (the "Commission") as transmitted to me by letter dated
April 23, 2008 in connection with the Form 10-K for Fiscal Year Ended December
31, 2007 filed by Hess Corporation (the "Company") with the Commission on
February 27, 2008 (the "Annual Report") and the Definitive Proxy Statement on
Schedule 14A filed by the Company with the Commission on March 27, 2008 (the
"Proxy Statement", and together with the Annual Report, the "Filings"). By
letter dated May 2, 2008, I confirmed that Mr. Sean Donahue of the staff had
agreed to grant the Company an additional 10 business days to respond to the
staff's letter of April 23, 2008. For convenience, the staff's comments are
reprinted below in bold, with the corresponding response set immediately below
the applicable comments.
Pursuant to Rule 83 of the Commission's Freedom of Information Act Rules,
17 C.F.R. ss.200.83, the Company hereby requests confidential treatment for the
entire second paragraph of our response to comment 2 of the staff.
This application for confidential treatment is based upon 5 U.S.C. ss.
552(b)(4), which provide an exemptions from the public availability requirements
of the Freedom of Information Act for trade secrets and commercial or financial
information which is privileged or confidential. This paragraph discusses the
potential competitive harm that could result from disclosure of the target for
the Company's corporate performance goal for its annual cash bonus. We
respectively request confidential treatment of this paragraph for a three-year
period ending May 21, 2011.
Proxy Statement filed March 27, 2008
- ------------------------------------
Compensation Discussion and Analysis, page 10
- ---------------------------------------------
1. We note your response to comment one. We further note that you attempt
to deliver "top-tier direct compensation..." In future filings, please
clarify the meaning of "top-tier direct compensation." For example,
does "top-tier direct compensation" mean that the Company pays more
than the comparator companies, less than some of the comparator
companies but more than others, or the same amount as comparator
companies.
We note the staff's comment. In future filings, we will clarify the
meaning of "top tier compensation" by explaining that generally the
Company targets to pay each named executive officer more than most of
the comparator companies pay for a comparable position, if performance
objectives are met.
2. We note your response to comment two. We further note that while you
disclose the amount of the corporate performance goal attained in 2007
and that you attained the maximum payout on this goal, you do not
disclose the actual target for the corporate performance goal. In
further filings, please revise to specifically disclose the actual
target versus the maximum payout amount of the corporate performance
goal. To the extent you believe that this disclosure is not required
because it would result in competitive harm such that you may omit the
disclosure under Instruction 4 to Item 401(b) of Regulation S-K,
please provide a detailed supplemental analysis supporting your
conclusion and provide appropriate disclosure under Instruction 4. In
discussing how difficult it will be for you to achieve the target
levels or other factors, provide as much detail as necessary without
disclosing information that poses a reasonable risk of competitive
harm.
We do not believe we are required to disclose the amount of our
corporate performance goal because we believe it constitutes trade
secrets or confidential commercial or financial information under 5
U.S.C. Sec. 552(b)(4), the disclosure of which would result in
competitive harm to the Company.
[This paragraph had been intentionally omitted from this EDGAR
correspondence pursuant to the abovementioned confidential treatment
request.]
For these reasons, we believe we should not be required to disclose
the corporate performance goal in future filings. We confirm that in
future filings, we will provide as much detail as necessary to show
how difficult it is to achieve the target level without disclosing
information that poses a reasonable risk of competitive harm.
3. We note your response to comment two. We further note that while you
make a competitive harm argument as to why your business unit
performance metrics do not need to be disclosed, you do not provide a
detailed supplemental analysis supporting your conclusion. Please
provide a more detailed supplemental analysis supporting your
conclusion and provide appropriate disclosure under Instruction 4. In
discussing how difficult it will be for you to achieve the target
levels or other factors, provide as much detail as necessary without
disclosing information that poses a reasonable risk of competitive
harm.
The basis for not disclosing actual targets for business unit metrics
was the Company's determination that disclosure of the target for each
of the approximately 30 metrics that comprise the business unit
component of the annual cash bonus plan was not material to an
understanding of any of the named executive officer's compensation for
2007 (and not otherwise material in the context of our Compensation
Discussion and Analysis), for the reasons stated in our letter to the
staff dated April 4, 2008. While we advised the staff that we treat
our internal financial and operational targets as confidential and
that competitors could use such information to compete more
successfully with Company, competitive harm was not the basis for the
Company's determination not to disclose business unit targets.
Therefore, we did not provide a detailed supplemental analysis
supporting a conclusion that disclosure of the targets would result in
competitive harm.
Form 10-K for the Fiscal Year Ended December 31, 2007
- -----------------------------------------------------
Engineering Comments
- --------------------
General
- -------
4. We note your response to comment four. Please provide us with a copy
of your reserve report as of December 31, 2007. Please provide this on
electronic media, such as CD-ROM, if possible. If you would like this
information to be returned to you, please follow the guidelines in
Rule 12b-4 under the Exchange Act of 1934. See also Rule 83 under the
Freedom of Information Act if you wish to request confidential
treatment of that information. Please send the report to James Murphy
at mail stop 7010.
On April 4, 2008, in response to comment 4 of the letter of the staff
dated March 20, 2008, a CD-ROM copy of the Report of DeGolyer and
MacNaughton, Registered Professional Engineers, as of December 31,
2007, on Proved Reserves attributable to the Company was provided to
Mr. James Murphy of the staff, together with an application for
confidential treatment.
Following that submission, on or about April 9, 2008 Mr. Murphy
notified me by telephone call that the staff was requesting a report
on proved reserves by field. On April 29, 2008 a CD-ROM copy of the
Report of DeGolyer and MacNaughton, Registered Professional Engineers,
as of December 31, 2007, on Proved Reserves presented by field was
provided to Mr. Murphy, together with an application for confidential
treatment.
On May 5, 2008, the Company received a letter from Mr. Murphy
requesting additional information on cash flows by proved reserve
category, presented by geographic area, including annual production,
oil and gas prices, total revenue operating costs and taxes, and
capital investment. In a telephone call on May 5, 2008 between John
Rielly, Chief Financial Officer, Kevin Wilcox, Controller, Scott Heck,
Senior Vice President and me of the Company and Mr. Murphy of the
staff, and in a subsequent telephone call on May 8, 2008 between the
same representatives of the Company and Mr. Roger Schwall, Mr. Ronald
Winfrey and Mr. Murphy of the staff, we advised the staff that we do
not in the regular course of business maintain the information
requested in a readily accessible format, that it is not required to
be disclosed in the manner requested in the Standardized Measure of
Discounted Future Net Cash Flows, that the Company does not use the
requested information in the management of its business and that it
would take many employee hours to compile this information. After the
staff declined to alter the
scope of the requested information, we advised the staff that we would
not be able to respond to the request within 10 business days from May
5, but that we would determine how long it would take to provide the
information. The Company continues to believe that this is an unduly
burdensome request that goes beyond what the staff requires to confirm
the adequacy of the Company's reserve reporting. Nevertheless, in a
telephone call on May 20, 2008 the Company advised Mr. Murphy that it
could provide the requested information by June 9, 2008, and Mr.
Murphy agreed to extend the date for our response to that date. This
is to confirm that the Company will provide the information requested
in the staff's letter of May 5, 2008, together with a request for
confidential treatment, by June 9, 2008.
The Company acknowledges that: (i) the Company is responsible for the
adequacy and accuracy of the disclosure in the Filings; (ii) staff comments or
changes to disclosure in response to staff comments do not foreclose the
Commission from taking any action with respect to the Filings; and (iii) the
Company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.
If you have any questions concerning the foregoing, please contact me at
(212) 536-8599.
Very truly yours,
/s/ George C. Barry
cc: Mr. James Murphy
Mr. Sean Donahue
Ms. Mellissa Campbell Duru
Division of Corporation Finance
Kevin Keogh, Esq. White & Case LLP