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Form 8-K HESS CORP For: Jul 29

July 29, 2015 10:16 AM EDT

 

 

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, 2015

 

HESS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

 

 

DELAWARE

 

No. 1-1204

 

No. 13-4921002

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

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 July 29, 2015, Hess Corporation issued a news release reporting estimated results for the second quarter of 2015.  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.

(d)

Exhibit

99(1)News release dated July 29, 2015 reporting estimated results for the second quarter of 2015.

 

 

 

 


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, 2015

 

 

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, 2015 reporting estimated results for the second quarter of 2015.

 

 

 

 

Exhibit 99.1

 

 

 

HESS CORPORATION

 

 

HESS REPORTS ESTIMATED RESULTS FOR THE SECOND QUARTER OF 2015

 

Second Quarter Highlights:

Adjusted net loss was $147 million or $0.52 per share compared to net income of $432 million or $1.38 per share in the prior-year quarter; lower hydrocarbon prices reduced second quarter 2015 adjusted net income by approximately $740 million, after-tax

Net loss was $567 million compared to net income of $931 million in the second quarter of 2014

Oil and gas production increased to 391,000 barrels of oil equivalent per day (boepd) compared to 319,000 boepd in the second quarter of 2014

Oil and gas production in the Bakken was 119,000 boepd, up from 80,000 boepd in the year-ago quarter

Announced sale of 50% interest in Bakken Midstream, resulting in $3 billion of cash proceeds

Capital and exploratory expenditures totaled $1.1 billion in the second quarter down from $1.3 billion in the prior-year quarter

Liza-1 well completed on the Stabroek Block, offshore Guyana; announced as a significant discovery by the operator

 

NEW YORK, July 29, 2015, — Hess Corporation (NYSE: HES) today reported an adjusted net loss, which excludes items affecting comparability, of $147 million or $0.52 per common share, for the second quarter of 2015 compared with adjusted net income of $432 million or $1.38 per share in the second quarter of 2014.  Lower realized selling prices reduced adjusted net income by approximately $740 million after-tax compared with the prior-year quarter.  In addition, second quarter 2015 results benefitted from higher production, lower cash operating costs and reduced exploration expenses that were partially offset by higher depreciation, depletion, and amortization expense.  On an unadjusted

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basis, the Corporation reported a net loss of $567 million for the second quarter of 2015, including a noncash goodwill impairment charge of $385 million, and net income of $931 million in the prior-year quarter.

“We achieved strong operating performance in the quarter and delivered significant and immediate value to our shareholders with the sale of a 50 percent interest in our Bakken midstream assets,” Chief Executive Officer John Hess said. “We remain confident that our financial strength, resilient portfolio and proven operating capabilities position us well in the current low oil price environment as well as for a future price recovery.”

 

After-tax income (loss) by major operating activity was as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

(In millions, except per share amounts)

 

Net Income (Loss) Attributable to Hess Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration and Production

 

$

(502

)

 

$

1,049

 

 

$

(816

)

 

$

1,570

 

Bakken Midstream

 

 

32

 

 

 

7

 

 

 

59

 

 

 

(6

)

Corporate, Interest and Other

 

 

(83

)

 

 

(82

)

 

 

(172

)

 

 

(226

)

Net income (loss) from continuing operations

 

 

(553

)

 

 

974

 

 

 

(929

)

 

 

1,338

 

Discontinued operations

 

 

(14

)

 

 

(43

)

 

 

(27

)

 

 

(21

)

Net income (loss) attributable to Hess Corporation

 

$

(567

)

 

$

931

 

 

$

(956

)

 

$

1,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share (diluted)

 

$

(1.99

)

 

$

2.96

 

 

$

(3.37

)

 

$

4.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income (Loss) Attributable to Hess Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration and Production

 

$

(96

)

 

$

475

 

 

$

(317

)

 

$

1,002

 

Bakken Midstream

 

 

32

 

 

 

7

 

 

 

59

 

 

 

(6

)

Corporate, Interest and Other

 

 

(83

)

 

 

(73

)

 

 

(168

)

 

 

(157

)

Adjusted net income (loss) from continuing operations

 

 

(147

)

 

 

409

 

 

 

(426

)

 

 

839

 

Discontinued operations

 

 

 

 

 

23

 

 

 

 

 

 

39

 

Adjusted net income (loss) attributable to Hess Corporation

 

$

(147

)

 

$

432

 

 

$

(426

)

 

$

878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (loss) per share (diluted)

 

$

(0.52

)

 

$

1.38

 

 

$

(1.50

)

 

$

2.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares (diluted)

 

284.3

 

 

 

314.1

 

 

 

283.9

 

 

 

318.7

 

2

 


 

Exploration and Production:

The Corporation’s Exploration and Production activities had a net loss of $502 million in the second quarter of 2015, compared with net income of $1,049 million in the second quarter of 2014.  Adjusted net loss was $96 million in the second quarter of 2015 compared with adjusted net income of $475 million in the second quarter of 2014.

The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was down 45 percent to $55.83 per barrel in the second quarter of 2015 from $102.16 per barrel in the second quarter of last year.  The average worldwide natural gas liquids selling price was $11.06 per barrel, down from $36.59 per barrel in the year-ago quarter while the average worldwide natural gas selling price was $4.49 per mcf in the second quarter of 2015 compared with $6.35 per mcf in the second quarter a year-ago.

Oil and gas production was 391,000 boepd, up 23 percent from 319,000 boepd in the second quarter of 2014.  Assets contributing to the volume growth were primarily the Bakken shale play (39,000 boepd), the Utica shale play (19,000 boepd), the Joint Development Area of Malaysia/Thailand (11,000 boepd) and the Gulf of Mexico (9,000 boepd).  Asset sales reduced production by 9,000 boepd.

Operational Highlights for the Second Quarter of 2015:

Bakken (Onshore U.S.):  Net production from the Bakken increased approximately 49 percent to 119,000 boepd from the prior-year quarter due to continued drilling activities. The Corporation brought 67 gross operated wells on production in the second quarter of 2015 bringing the year-to-date total to 137 wells. Drilling and completion costs per operated well averaged $5.6 million in the second quarter of 2015, down 24 percent from the year-ago quarter. During the second quarter, the Corporation operated 8 rigs.

Utica (Onshore U.S.):  On the Corporation’s joint venture acreage, 10 wells were drilled and net production averaged 22,000 boepd in the second quarter of 2015 compared with 3,000 boepd in the prior-year quarter.

Gulf of Mexico (Offshore U.S.):  Net production from the Gulf of Mexico was up compared to the prior-year quarter with higher volumes from Tubular Bells, which totaled 23,000 boepd in the second quarter of 2015, being partially offset by lower production from the Conger and Llano Fields.

3

 


 

At the Corporation’s non-operated Sicily exploration prospect in the Keathley Canyon area (Hess 25 percent), the operator successfully completed drilling and logging activities in the second quarter.  The well was drilled to a depth of 30,214 feet and is being evaluated.  The drilling of an appraisal well to further evaluate the discovery is expected late this year or in early 2016.

Guyana (Offshore):  On the Stabroek Block (Hess 30 percent), the operator announced a significant oil discovery at the Liza #1 well and is now in the process of evaluating the resource potential on the block.  The operator recently commenced the acquisition of 17,000 square kilometers of 3D seismic.

Bakken Midstream:

The Corporation’s Bakken Midstream activities had net income of $32 million in the second quarter of 2015 compared to $7 million in the prior-year quarter primarily due to higher throughput throughout the system.  In July 2015, the Corporation completed the sale of a 50 percent interest in its Bakken Midstream assets for cash consideration of $2.7 billion.  The joint venture incurred $600 million of debt in July with proceeds distributed equally to both partners, resulting in total after-tax cash proceeds net to Hess of approximately $3.0 billion.  These transactions will be reflected in the Corporation’s third quarter results.  As a result of the joint venture transaction, Hess has reported its Bakken-related midstream operations as a separate Midstream segment in its consolidated financial statements and will begin disclosing certain historical and forward-looking financial information for this segment.

Capital and Exploratory Expenditures:

Capital and exploratory expenditures were $1,071 million in the second quarter of 2015 down from $1,256 million in the prior-year quarter of which $1,006 million and $1,208 million, respectively, relate to Exploration and Production activities. Second quarter 2015 Exploration and Production expenditures reflect reduced activity in assets including the Bakken, the Utica, Norway and Equatorial Guinea, partly offset by expenditures associated with development of the North Malay Basin project and exploratory activities in the Gulf of Mexico and Guyana.

Liquidity:

Net cash provided by operating activities was $541 million in the second quarter of 2015, compared with $911 million in the second quarter of 2014.  At June 30, 2015, cash and cash

4

 


 

equivalents totaled $931 million compared with $2,444 million at December 31, 2014. Total debt was $5,957 million at June 30, 2015 compared with $5,987 million at December 31, 2014.  The Corporation’s debt to capitalization ratio at June 30, 2015 was 22.0 percent, compared with 21.2 percent at December 31, 2014.  In July 2015, the Corporation received after-tax cash proceeds of approximately $3 billion from the Bakken Midstream joint venture transaction described above.

During the second quarter, the Corporation hedged an additional 20,000 barrels per day of crude oil production for the remainder of 2015 by entering into West Texas Intermediate crude collars with a floor price of $60 per barrel and a ceiling price of $80 per barrel.  The Corporation’s crude oil hedging program for the remainder of 2015 is detailed on page 18.

Discontinued Operations:

Losses from discontinued operations amounted to $14 million in the second quarter of 2015 compared to $44 million in the prior-year quarter.  The Corporation completed the sale of its energy trading partnership (HETCO) in the first quarter of 2015. Financial results for the second quarter of 2014 have been recast to report HETCO as discontinued operations in the consolidated income statement on page 7.

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:

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

(In millions)

 

Exploration and Production

 

$

(406

)

 

$

574

 

 

$

(499

)

 

$

568

 

Bakken Midstream

 

 

 

 

 

 

 

 

 

 

 

 

Corporate, Interest and Other

 

 

 

 

 

(9

)

 

 

(4

)

 

 

(69

)

Discontinued operations

 

 

(14

)

 

 

(66

)

 

 

(27

)

 

 

(60

)

Total items affecting comparability of earnings between periods

 

$

(420

)

 

$

499

 

 

$

(530

)

 

$

439

 

Second quarter 2015 results include a goodwill impairment charge of $385 million associated with the Corporation’s onshore reporting unit.  As a result of establishing the Bakken Midstream business as a separate operating segment in the second quarter of 2015, U.S. GAAP required the reallocation of goodwill to the Bakken Midstream segment and a goodwill impairment test for each of the Corporation’s reporting units.  The nontaxable impairment charge for the onshore reporting unit

5

 


 

caused the Corporation’s effective tax rate in the quarter to be substantially less than normal.  In addition, the Corporation recognized after-tax charges totaling $21 million ($21 million pre-tax) associated with terminated international office space.    

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 (loss):

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

(In millions)

 

Net income (loss) attributable to Hess Corporation

 

$

(567

)

 

$

931

 

 

$

(956

)

 

$

1,317

 

Less: Total items affecting comparability of earnings between periods

 

 

(420

)

 

 

499

 

 

 

(530

)

 

 

439

 

Adjusted net income (loss) attributable to Hess Corporation

 

$

(147

)

 

$

432

 

 

$

(426

)

 

$

878

 

Hess Corporation will review second 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 (loss)” presented in this release is defined as reported net income (loss) 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 (loss). A reconciliation of reported net income (loss) attributable to Hess Corporation (U.S. GAAP) to adjusted net income (loss) is provided in the release.

For Hess Corporation

Investor Contact:

Jay Wilson

(212) 536-8940

Media Contact:

Michael Henson/Patrick Scanlan

Sard Verbinnen & Co

(212) 687-8080


6

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

 

 

Second

 

 

Second

 

 

First

 

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

 

2015

 

 

2014

 

 

2015

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues and Non-operating Income

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

1,953

 

 

$

2,829

 

 

$

1,538

 

Gains on asset sales, net

 

 

 

 

 

779

 

 

 

 

Other, net

 

 

(18

)

 

 

(25

)

 

 

12

 

Total revenues and non-operating income

 

 

1,935

 

 

 

3,583

 

 

 

1,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold (excluding items shown separately below)

 

 

356

 

 

 

421

 

 

 

278

 

Operating costs and expenses

 

 

503

 

 

 

545

 

 

 

506

 

Production and severance taxes

 

 

45

 

 

 

78

 

 

 

36

 

Exploration expenses, including dry holes and lease impairment

 

 

90

 

 

 

460

 

 

 

269

 

General and administrative expenses

 

 

151

 

 

 

143

 

 

 

147

 

Interest expense

 

 

86

 

 

 

85

 

 

 

85

 

Depreciation, depletion and amortization

 

 

1,028

 

 

 

785

 

 

 

956

 

Impairment

 

 

385

 

 

 

 

 

 

 

Total costs and expenses

 

 

2,644

 

 

 

2,517

 

 

 

2,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

 

(709

)

 

 

1,066

 

 

 

(727

)

Provision (benefit) for income taxes

 

 

(156

)

 

 

92

 

 

 

(351

)

Income (loss) from continuing operations

 

 

(553

)

 

 

974

 

 

 

(376

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net of income taxes

 

 

(14

)

 

 

(44

)

 

 

(13

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(567

)

 

 

930

 

 

 

(389

)

Less: Net income (loss) attributable to noncontrolling interests

 

 

 

 

 

(1

)

 

 

 

Net income (loss) attributable to Hess Corporation

 

$

(567

)

 

$

931

 

 

$

(389

)

 

 

 

 

 

 

 

 

 

 

 

 

 

See "Discontinued Operations" on page 5 for basis of presentation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities (*)

 

$

541

 

 

$

911

 

 

$

362

 

Net cash provided by (used in) investing activities

 

 

(1,016

)

 

 

232

 

 

 

(1,152

)

Net cash provided by (used in) financing activities

 

 

(100

)

 

 

(226

)

 

 

(148

)

Net increase (decrease) in cash and cash equivalents

 

$

(575

)

 

$

917

 

 

$

(938

)

 

(*)

Includes changes in working capital.

7

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

 

First half

 

 

 

2015

 

 

2014

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues and Non-operating Income

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

3,491

 

 

$

5,502

 

Gains on asset sales, net

 

 

 

 

 

789

 

Other, net

 

 

(6

)

 

 

(116

)

Total revenues and non-operating income

 

 

3,485

 

 

 

6,175

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

Cost of products sold (excluding items shown separately below)

 

 

634

 

 

 

785

 

Operating costs and expenses

 

 

1,009

 

 

 

1,040

 

Production and severance taxes

 

 

81

 

 

 

140

 

Exploration expenses, including dry holes and lease impairment

 

 

359

 

 

 

579

 

General and administrative expenses

 

 

298

 

 

 

285

 

Interest expense

 

 

171

 

 

 

166

 

Depreciation, depletion and amortization

 

 

1,984

 

 

 

1,511

 

Impairment

 

 

385

 

 

 

 

Total costs and expenses

 

 

4,921

 

 

 

4,506

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

 

(1,436

)

 

 

1,669

 

Provision (benefit) for income taxes

 

 

(507

)

 

 

331

 

Income (loss) from continuing operations

 

 

(929

)

 

 

1,338

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net of income taxes

 

 

(27

)

 

 

13

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(956

)

 

 

1,351

 

Less: Net income (loss) attributable to noncontrolling interests

 

 

 

 

 

34

 

Net income (loss) attributable to Hess Corporation

 

$

(956

)

 

$

1,317

 

 

 

 

 

 

 

 

 

 

See "Discontinued Operations" on page 5 for basis of presentation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities (*)

 

$

903

 

 

$

2,069

 

Net cash provided by (used in) investing activities

 

 

(2,168

)

 

 

(30

)

Net cash provided by (used in) financing activities

 

 

(248

)

 

 

(1,648

)

Net increase (decrease) in cash and cash equivalents

 

$

(1,513

)

 

$

391

 

 

(*)

Includes changes in working capital.


8

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

 

June 30,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

931

 

 

$

2,444

 

Other current assets

 

 

2,995

 

 

 

4,243

 

Property, plant and equipment – net

 

 

27,298

 

 

 

27,517

 

Other long-term assets

 

 

4,334

 

 

 

4,374

 

Total assets

 

$

35,558

 

 

$

38,578

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

69

 

 

$

68

 

Other current liabilities

 

 

3,424

 

 

 

4,783

 

Long-term debt

 

 

5,888

 

 

 

5,919

 

Other long-term liabilities

 

 

5,074

 

 

 

5,488

 

Total equity excluding other comprehensive income (loss)

 

 

22,539

 

 

 

23,730

 

Accumulated other comprehensive income (loss)

 

 

(1,436

)

 

 

(1,410

)

Total liabilities and equity

 

$

35,558

 

 

$

38,578

 

 

 

 

9

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

 

Second

 

 

Second

 

 

First

 

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

 

2015

 

 

2014

 

 

2015

 

Capital and Exploratory Expenditures

 

 

 

 

 

 

 

 

 

 

 

 

Exploration and Production

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Bakken

 

$

331

 

 

$

385

 

 

$

434

 

Other Onshore

 

 

110

 

 

 

186

 

 

 

80

 

Total Onshore

 

 

441

 

 

 

571

 

 

 

514

 

Offshore

 

 

188

 

 

 

157

 

 

 

279

 

Total United States

 

 

629

 

 

 

728

 

 

 

793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

 

82

 

 

 

162

 

 

 

115

 

Africa

 

 

58

 

 

 

119

 

 

 

88

 

Asia and other

 

 

237

 

 

 

199

 

 

 

248

 

Capital and Exploratory Expenditures - Exploration and Production

 

 

1,006

 

 

 

1,208

 

 

 

1,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bakken Midstream

 

 

65

 

 

 

48

 

 

 

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Capital and Exploratory Expenditures

 

$

1,071

 

 

$

1,256

 

 

$

1,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total exploration expenses charged to income included above

 

$

58

 

 

$

54

 

 

$

47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First half

 

 

 

 

 

 

 

2015

 

 

2014

 

Capital and Exploratory Expenditures

 

 

 

 

 

 

 

 

 

 

 

 

Exploration and Production

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Bakken

 

 

 

 

 

$

765

 

 

$

765

 

Other Onshore

 

 

 

 

 

 

190

 

 

 

355

 

Total Onshore

 

 

 

 

 

 

955

 

 

 

1,120

 

Offshore

 

 

 

 

 

 

467

 

 

 

319

 

Total United States

 

 

 

 

 

 

1,422

 

 

 

1,439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

 

 

 

 

 

197

 

 

 

307

 

Africa

 

 

 

 

 

 

146

 

 

 

219

 

Asia and other

 

 

 

 

 

 

485

 

 

 

394

 

Capital and Exploratory Expenditures - Exploration and Production

 

 

 

 

 

 

2,250

 

 

 

2,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bakken Midstream

 

 

 

 

 

 

105

 

 

 

121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Capital and Exploratory Expenditures

 

 

 

 

 

$

2,355

 

 

$

2,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total exploration expenses charged to income included above

 

 

 

 

 

$

105

 

 

$

132

 


10

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

 

Second Quarter 2015

 

 

 

United States

 

 

International

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

1,259

 

 

$

694

 

 

$

1,953

 

Other, net

 

 

(13

)

 

 

(4

)

 

 

(17

)

Total revenues and non-operating income

 

 

1,246

 

 

 

690

 

 

 

1,936

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold (excluding items shown separately below)

 

 

382

 

 

 

4

 

 

 

386

 

Operating costs and expenses

 

 

181

 

 

 

254

 

 

 

435

 

Production and severance taxes

 

 

44

 

 

 

1

 

 

 

45

 

Bakken Midstream tariffs

 

 

116

 

 

 

 

 

 

116

 

Exploration expenses, including dry holes and lease impairment

 

 

48

 

 

 

42

 

 

 

90

 

General and administrative expenses

 

 

79

 

 

 

18

 

 

 

97

 

Depreciation, depletion and amortization

 

 

609

 

 

 

395

 

 

 

1,004

 

Impairment

 

 

385

 

 

 

 

 

 

385

 

Total costs and expenses

 

 

1,844

 

 

 

714

 

 

 

2,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of operations before income taxes

 

 

(598

)

 

 

(24

)

 

 

(622

)

Provision (benefit) for income taxes

 

 

(69

)

 

 

(51

)

 

 

(120

)

Net income (loss) attributable to Hess Corporation

 

$

(529

)

(a)

$

27

 

(b)

$

(502

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second Quarter 2014

 

 

 

United States

 

 

International

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

1,653

 

 

$

1,176

 

 

$

2,829

 

Gains on asset sales, net

 

 

62

 

 

 

704

 

 

 

766

 

Other, net

 

 

(12

)

 

 

(16

)

 

 

(28

)

Total revenues and non-operating income

 

 

1,703

 

 

 

1,864

 

 

 

3,567

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold (excluding items shown separately below)

 

 

412

 

 

 

32

 

 

 

444

 

Operating costs and expenses

 

 

190

 

 

 

308

 

 

 

498

 

Production and severance taxes

 

 

67

 

 

 

11

 

 

 

78

 

Bakken Midstream tariffs

 

 

58

 

 

 

 

 

 

58

 

Exploration expenses, including dry holes and lease impairment

 

 

208

 

 

 

252

 

 

 

460

 

General and administrative expenses

 

 

68

 

 

 

9

 

 

 

77

 

Depreciation, depletion and amortization

 

 

413

 

 

 

349

 

 

 

762

 

Total costs and expenses

 

 

1,416

 

 

 

961

 

 

 

2,377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of operations before income taxes

 

 

287

 

 

 

903

 

 

 

1,190

 

Provision (benefit) for income taxes

 

 

114

 

 

 

27

 

 

 

141

 

Net income (loss) attributable to Hess Corporation

 

$

173

 

(a)

$

876

 

(b)

$

1,049

 

 

(a)

The after-tax realized results from crude oil hedging activities amounted to a loss of $1 million in the second quarter of 2015 and a loss of $2 million in the second quarter of 2014. Unrealized changes in crude oil hedging contracts which are included in Other operating revenues, amounted to a gain of $3 million in the second quarter of 2015 and loss of $2 million in the second quarter of 2014.

(b)

The after‑tax realized loss from crude oil hedging activities amounted to $8 million in the second quarter of 2015 and loss of $2 million in the second quarter of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a loss of $16 million after-tax in the second quarter of 2015 and was immaterial in the second quarter of  2014.

 


11

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

 

First Quarter 2015

 

 

 

United States

 

 

International

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

937

 

 

$

601

 

 

$

1,538

 

Other, net

 

 

(7

)

 

 

18

 

 

 

11

 

Total revenues and non-operating income

 

 

930

 

 

 

619

 

 

 

1,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold (excluding items shown separately below)

 

 

344

 

 

 

(38

)

 

 

306

 

Operating costs and expenses

 

 

213

 

 

 

230

 

 

 

443

 

Production and severance taxes

 

 

34

 

 

 

2

 

 

 

36

 

Bakken Midstream tariffs

 

 

102

 

 

 

 

 

 

102

 

Exploration expenses, including dry holes and lease impairment

 

 

36

 

 

 

233

 

 

 

269

 

General and administrative expenses

 

 

76

 

 

 

10

 

 

 

86

 

Depreciation, depletion and amortization

 

 

528

 

 

 

404

 

 

 

932

 

Total costs and expenses

 

 

1,333

 

 

 

841

 

 

 

2,174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of operations before income taxes

 

 

(403

)

 

 

(222

)

 

 

(625

)

Provision (benefit) for income taxes

 

 

(142

)

 

 

(169

)

 

 

(311

)

Net income (loss) attributable to Hess Corporation

 

$

(261

)

 

$

(53

)

(a)

$

(314

)

 

(a)

The after‑tax realized gains from crude oil hedging activities amounted to $1 million in the first quarter of 2015.  Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to gain of $10 million after-tax.


12

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

 

First Half 2015

 

 

 

United States

 

 

International

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

2,196

 

 

$

1,295

 

 

$

3,491

 

Other, net

 

 

(20

)

 

 

14

 

 

 

(6

)

Total revenues and non-operating income

 

 

2,176

 

 

 

1,309

 

 

 

3,485

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold (excluding items shown separately below)

 

 

726

 

 

 

(34

)

 

 

692

 

Operating costs and expenses

 

 

394

 

 

 

484

 

 

 

878

 

Production and severance taxes

 

 

78

 

 

 

3

 

 

 

81

 

Bakken Midstream tariffs

 

 

218

 

 

 

 

 

 

218

 

Exploration expenses, including dry holes and lease impairment

 

 

84

 

 

 

275

 

 

 

359

 

General and administrative expenses

 

 

155

 

 

 

28

 

 

 

183

 

Depreciation, depletion and amortization

 

 

1,137

 

 

 

799

 

 

 

1,936

 

Impairment

 

 

385

 

 

 

 

 

 

385

 

Total costs and expenses

 

 

3,177

 

 

 

1,555

 

 

 

4,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of operations before income taxes

 

 

(1,001

)

 

 

(246

)

 

 

(1,247

)

Provision (benefit) for income taxes

 

 

(211

)

 

 

(220

)

 

 

(431

)

Net income (loss) attributable to Hess Corporation

 

$

(790

)

(a)

$

(26

)

(b)

$

(816

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Half 2014

 

 

 

United States

 

 

International

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

3,198

 

 

$

2,304

 

 

$

5,502

 

Gains on asset sales, net

 

 

62

 

 

 

714

 

 

 

776

 

Other, net

 

 

(14

)

 

 

(20

)

 

 

(34

)

Total revenues and non-operating income

 

 

3,246

 

 

 

2,998

 

 

 

6,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold (excluding items shown separately below)

 

 

826

 

 

 

11

 

 

 

837

 

Operating costs and expenses

 

 

371

 

 

 

565

 

 

 

936

 

Production and severance taxes

 

 

125

 

 

 

15

 

 

 

140

 

Bakken Midstream tariffs

 

 

77

 

 

 

 

 

 

77

 

Exploration expenses, including dry holes and lease impairment

 

 

255

 

 

 

324

 

 

 

579

 

General and administrative expenses

 

 

124

 

 

 

31

 

 

 

155

 

Depreciation, depletion and amortization

 

 

764

 

 

 

710

 

 

 

1,474

 

Total costs and expenses

 

 

2,542

 

 

 

1,656

 

 

 

4,198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of operations before income taxes

 

 

704

 

 

 

1,342

 

 

 

2,046

 

Provision for income taxes

 

 

278

 

 

 

198

 

 

 

476

 

Net income (loss) attributable to Hess Corporation

 

$

426

 

(a)

$

1,144

 

(b)

$

1,570

 

 

(a)

The after-tax realized loss from crude oil hedging activities amounted to $1 million in the first six months of 2015 and a loss of $2 million in the first six months of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to gains of $3 million after-tax in the first six months of 2015 and a  loss of $2 million after-tax in the first six months of 2014.

(b)

The after‑tax realized loss from crude oil hedging activities amounted to $7 million in the first six months of 2015 and was immaterial in the first six months of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a loss of $6 million after-tax in the first six months of 2015 and gain of $3 million after-tax in the first six months of  2014.

 

 

 

13

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 


 

 

Second

 

 

Second

 

 

First

 

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

 

2015

 

 

2014

 

 

2015

 

Operating Data

 

 

 

 

 

 

 

 

 

 

 

 

Net Production Per Day (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil - barrels

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Bakken

 

 

85

 

 

 

64

 

 

 

79

 

Other Onshore

 

 

11

 

 

 

9

 

 

 

11

 

Total Onshore

 

 

96

 

 

 

73

 

 

 

90

 

Offshore

 

 

61

 

 

 

54

 

 

 

50

 

Total United States

 

 

157

 

 

 

127

 

 

 

140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

 

39

 

 

 

36

 

 

 

36

 

Africa

 

 

48

 

 

 

51

 

 

 

52

 

Asia

 

 

2

 

 

 

2

 

 

 

2

 

Total

 

 

246

 

 

 

216

 

 

 

230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas liquids - barrels

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Bakken

 

 

22

 

 

 

8

 

 

 

19

 

Other Onshore

 

 

12

 

 

 

5

 

 

 

9

 

Total Onshore

 

 

34

 

 

 

13

 

 

 

28

 

Offshore

 

 

6

 

 

 

7

 

 

 

6

 

Total United States

 

 

40

 

 

 

20

 

 

 

34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

 

2

 

 

 

1

 

 

 

1

 

Total

 

 

42

 

 

 

21

 

 

 

35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas - mcf

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Bakken

 

 

71

 

 

 

48

 

 

 

58

 

Other Onshore

 

 

95

 

 

 

50

 

 

 

79

 

Total Onshore

 

 

166

 

 

 

98

 

 

 

137

 

Offshore

 

 

98

 

 

 

83

 

 

 

65

 

Total United States

 

 

264

 

 

 

181

 

 

 

202

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

 

41

 

 

 

35

 

 

 

36

 

Asia and other

 

 

312

 

 

 

275

 

 

 

336

 

Total

 

 

617

 

 

 

491

 

 

 

574

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barrels of oil equivalent

 

 

391

 

 

 

319

 

 

 

361

 

 

 

 

 

 

 

 

 

 

 

14

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 

 

 

 

First half

 

 

 

2015

 

 

2014

 

Operating Data

 

 

 

 

 

 

 

 

Net Production Per Day (in thousands)

 

 

 

 

 

 

 

 

Crude oil - barrels

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

Bakken

 

 

82

 

 

 

61

 

Other Onshore

 

 

11

 

 

 

9

 

Total Onshore

 

 

93

 

 

 

70

 

Offshore

 

 

55

 

 

 

53

 

Total United States

 

 

148

 

 

 

123

 

 

 

 

 

 

 

 

 

 

Europe

 

 

38

 

 

 

37

 

Africa

 

 

50

 

 

 

49

 

Asia

 

 

2

 

 

 

4

 

Total

 

 

238

 

 

 

213

 

 

 

 

 

 

 

 

 

 

Natural gas liquids - barrels

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

Bakken

 

 

21

 

 

 

5

 

Other Onshore

 

 

10

 

 

 

4

 

Total Onshore

 

 

31

 

 

 

9

 

Offshore

 

 

6

 

 

 

7

 

Total United States

 

 

37

 

 

 

16

 

 

 

 

 

 

 

 

 

 

Europe

 

 

1

 

 

 

1

 

Total

 

 

38

 

 

 

17

 

 

 

 

 

 

 

 

 

 

Natural gas - mcf

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

Bakken

 

 

65

 

 

 

31

 

Other Onshore

 

 

87

 

 

 

38

 

Total Onshore

 

 

152

 

 

 

69

 

Offshore

 

 

82

 

 

 

81

 

Total United States

 

 

234

 

 

 

150

 

 

 

 

 

 

 

 

 

 

Europe

 

 

39

 

 

 

36

 

Asia and other

 

 

324

 

 

 

345

 

Total

 

 

597

 

 

 

531

 

 

 

 

 

 

 

 

 

 

Barrels of oil equivalent

 

 

376

 

 

 

319

 

 

 

 

 

 

 

 

 

 

15

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 

 

 

Second

 

 

Second

 

 

First

 

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

 

2015

 

 

2014

 

 

2015

 

Sales Volumes Per Day (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil - barrels

 

 

250

 

 

 

222

 

 

 

219

 

Natural gas liquids - barrels

 

 

42

 

 

 

21

 

 

 

35

 

Natural gas - mcf

 

 

617

 

 

 

491

 

 

 

574

 

Barrels of oil equivalent

 

 

395

 

 

 

325

 

 

 

349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Volumes (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil - barrels

 

 

22,729

 

 

 

20,193

 

 

 

19,708

 

Natural gas liquids - barrels

 

 

3,848

 

 

 

1,942

 

 

 

3,119

 

Natural gas - mcf

 

 

56,179

 

 

 

44,662

 

 

 

51,641

 

Barrels of oil equivalent

 

 

35,940

 

 

 

29,578

 

 

 

31,434

 

 

 

 

 

First half

 

 

 

2015

 

 

2014

 

Sales Volumes Per Day (in thousands)

 

 

 

 

 

 

 

 

Crude oil - barrels

 

 

234

 

 

 

210

 

Natural gas liquids - barrels

 

 

38

 

 

 

17

 

Natural gas - mcf

 

 

596

 

 

 

530

 

Barrels of oil equivalent

 

 

372

 

 

 

315

 

 

 

 

 

 

 

 

 

 

Sales Volumes (in thousands)

 

 

 

 

 

 

 

 

Crude oil - barrels

 

 

42,436

 

 

 

37,943

 

Natural gas liquids - barrels

 

 

6,967

 

 

 

3,064

 

Natural gas - mcf

 

 

107,820

 

 

 

96,019

 

Barrels of oil equivalent

 

 

67,373

 

 

 

57,010

 

 

 

 

 

 

 

 

 

 

16

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 

 

 

Second

 

 

Second

 

 

First

 

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

 

2015

 

 

2014

 

 

2015

 

Operating Data

 

 

 

 

 

 

 

 

 

 

 

 

Average Selling Prices

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil - per barrel (including hedging)

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Onshore

 

$

50.33

 

 

$

93.84

 

 

$

39.01

 

Offshore

 

 

57.82

 

 

 

100.42

 

 

 

43.55

 

Total United States

 

 

53.25

 

 

 

96.62

 

 

 

40.62

 

Europe

 

 

60.88

 

 

 

111.03

 

 

 

53.31

 

Africa

 

 

59.70

 

 

 

108.83

 

 

 

52.93

 

Asia

 

 

59.37

 

 

 

106.33

 

 

 

48.44

 

Worldwide

 

 

55.83

 

 

 

102.16

 

 

 

45.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil - per barrel (excluding hedging)

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Onshore

 

$

50.54

 

 

$

93.84

 

 

$

39.01

 

Offshore

 

 

57.82

 

 

 

101.09

 

 

 

43.55

 

Total United States

 

 

53.38

 

 

 

96.90

 

 

 

40.62

 

Europe

 

 

62.39

 

 

 

111.39

 

 

 

53.17

 

Africa

 

 

61.00

 

 

 

109.10

 

 

 

52.82

 

Asia

 

 

59.37

 

 

 

106.33

 

 

 

48.44

 

Worldwide

 

 

56.40

 

 

 

102.45

 

 

 

45.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas liquids - per barrel

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Onshore

 

$

9.47

 

 

$

36.99

 

 

$

14.22

 

Offshore

 

 

15.82

 

 

 

32.21

 

 

 

15.71

 

Total United States

 

 

10.46

 

 

 

35.39

 

 

 

14.47

 

Europe

 

 

27.53

 

 

 

55.77

 

 

 

27.58

 

Worldwide

 

 

11.06

 

 

 

36.59

 

 

 

14.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas - per mcf

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

Onshore

 

$

1.81

 

 

$

4.36

 

 

$

2.07

 

Offshore

 

 

2.13

 

 

 

4.01

 

 

 

2.31

 

Total United States

 

 

1.93

 

 

 

4.22

 

 

 

2.15

 

Europe

 

 

7.35

 

 

 

10.51

 

 

 

7.95

 

Asia and other

 

 

6.27

 

 

 

7.24

 

 

 

5.95

 

Worldwide

 

 

4.49

 

 

 

6.35

 

 

 

4.74

 

 

 


17

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 

 

 

First half

 

 

 

2015

 

 

2014

 

Operating Data

 

 

 

 

 

 

 

 

Average Selling Prices

 

 

 

 

 

 

 

 

Crude oil - per barrel (including hedging)

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

Onshore

 

$

44.85

 

 

$

91.67

 

Offshore

 

 

52.11

 

 

 

99.89

 

Total United States

 

 

47.56

 

 

 

95.19

 

Europe

 

 

57.42

 

 

 

110.10

 

Africa

 

 

56.54

 

 

 

108.65

 

Asia

 

 

56.85

 

 

 

104.66

 

Worldwide

 

 

50.99

 

 

 

100.96

 

 

 

 

 

 

 

 

 

 

Crude oil - per barrel (excluding hedging)

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

Onshore

 

$

44.97

 

 

$

91.67

 

Offshore

 

 

52.11

 

 

 

100.24

 

Total United States

 

 

47.63

 

 

 

95.33

 

Europe

 

 

58.18

 

 

 

110.06

 

Africa

 

 

57.18

 

 

 

108.62

 

Asia

 

 

56.85

 

 

 

104.66

 

Worldwide

 

 

51.28

 

 

 

101.03

 

 

 

 

 

 

 

 

 

 

Natural gas liquids - per barrel

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

Onshore

 

$

11.58

 

 

$

40.91

 

Offshore

 

 

15.77

 

 

 

33.14

 

Total United States

 

 

12.26

 

 

 

37.54

 

Europe

 

 

27.56

 

 

 

60.16

 

Worldwide

 

 

12.78

 

 

 

39.41

 

 

 

 

 

 

 

 

 

 

Natural gas - per mcf

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

Onshore

 

$

1.93

 

 

$

4.87

 

Offshore

 

 

2.20

 

 

 

4.18

 

Total United States

 

 

2.03

 

 

 

4.52

 

Europe

 

 

7.63

 

 

 

11.01

 

Asia and other

 

 

6.11

 

 

 

7.23

 

Worldwide

 

 

4.61

 

 

 

6.72

 

 

The following is summary of the Corporation’s commodity hedging program:

 

 

 

Brent

 

West Texas

Intermediate

Q3 and Q4 2015 Hedging program:

 

 

 

 

       Daily production(bopd)

 

50,000

 

20,000

       Ceiling price

 

$80

 

$80

       Floor price

 

$60

 

$60

       Program finishing date

 

December 31, 2015

 

December 31, 2015

 

 

18

 


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

BAKKEN MIDSTREAM EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

 

Second

 

 

Second

 

 

First

 

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

 

2015

 

 

2014

 

 

2015

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues and Non-operating Income

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues and non-operating income

 

$

145

 

 

$

81

 

 

$

130

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

68

 

 

 

47

 

 

 

63

 

General and administrative expenses

 

 

3

 

 

 

2

 

 

 

2

 

Depreciation, depletion and amortization

 

 

22

 

 

 

20

 

 

 

21

 

Interest expense

 

 

1

 

 

 

1

 

 

 

1

 

Total costs and expenses

 

 

94

 

 

 

70

 

 

 

87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of operations before income taxes

 

 

51

 

 

 

11

 

 

 

43

 

Provision (benefit) for income taxes

 

 

19

 

 

 

4

 

 

 

16

 

Net income (loss) attributable to Hess Corporation

 

$

32

 

 

$

7

 

 

$

27

 

 

 

 

First half

 

 

 

2015

 

 

2014

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues and Non-operating Income

 

 

 

 

 

 

 

 

Total revenues and non-operating income

 

$

275

 

 

$

129

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

131

 

 

 

104

 

General and administrative expenses

 

 

5

 

 

 

4

 

Depreciation, depletion and amortization

 

 

43

 

 

 

29

 

Interest expense

 

 

2

 

 

 

1

 

Total costs and expenses

 

 

181

 

 

 

138

 

 

 

 

 

 

 

 

 

 

Results of operations before income taxes

 

 

94

 

 

 

(9

)

Provision (benefit) for income taxes

 

 

35

 

 

 

(3

)

Net income (loss) attributable to Hess Corporation

 

$

59

 

 

$

(6

)

 

The reported amounts above represent 100 percent of the Bakken Midstream operating segment.  On July 1, 2015, the Corporation completed the sale of a 50 percent interest in its Bakken Midstream segment.  Our partner’s 50 percent share of net income will be presented as a noncontrolling interest charge in the Bakken Midstream income statements beginning in the third quarter of 2015.

19

 



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