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Press release from Business Wire

Hess Reports Estimated Results for the Third Quarter of 2010

<p> <b>Third Quarter Highlights:</b> </p> <ul> <li class='bwlistitemmargb'> <i><b>Net Income was $1,154 million, including after-tax income of $725 million from items affecting comparability, compared with $341 million in the third quarter 2009</b></i> </li> <li class='bwlistitemmargb'> <i><b>Items affecting comparability consist of an after-tax gain of $1,072 million relating to an asset exchange and an after-tax charge of $347 million relating to an asset impairment</b></i> </li> <li class='bwlistitemmargb'> <i><b>Oil and gas production was 413,000 barrels per day, compared with 420,000 in the third quarter 2009</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net cash provided by operating activities was $1,246 million, compared with $534 million in the third quarter 2009</b></i> </li> <li class='bwlistitemmargb'> <i><b>The Corporation completed the sale of $1.25 billion of 5.60% notes due February</b></i> <i><b>2041</b></i> </li> </ul>

Wednesday, October 27, 2010

Hess Reports Estimated Results for the Third Quarter of 201007:30 EDT Wednesday, October 27, 2010 NEW YORK (Business Wire) -- Hess Corporation (NYSE: HES) reported net income of $1,154 million for the third quarter of 2010 compared with net income of $341 million for the third quarter of 2009. The after-tax income (loss) by major operating activity was as follows:   Three Months Ended     Nine Months Ended September 30, (unaudited)September 30, (unaudited)   2010       2009     2010       2009   (In millions, except per share amounts) Exploration and Production $ 1,277 $ 397 $ 2,316 $ 548 Marketing and Refining (38 ) 38 30 110 Corporate (26 ) (33 ) (116 ) (108 ) Interest expense   (59 )   (61 )   (163 )   (168 ) Net income attributable to Hess Corporation $1,154   $341   $2,067   $382     Net income per share (diluted) $3.52   $1.05   $6.31   $1.17     Weighted average number of shares (diluted)   327.6     326.0     327.3     325.8   Note: See the following page for a table of items affecting the comparability of earnings between periods. Exploration and Production earnings were $1,277 million in the third quarter of 2010 up from $397 million in the third quarter of 2009. Third quarter oil and gas production was 413,000 barrels of oil equivalent per day, compared with 420,000 barrels of oil equivalent per day in the third quarter a year ago. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $64.81 per barrel compared with $56.07 per barrel in the third quarter of 2009. The average worldwide natural gas selling price was $5.73 per Mcf in the third quarter of 2010 compared with $4.60 per Mcf in the same quarter a year ago. Marketing and Refining generated a loss of $38 million in the third quarter of 2010 compared with income of $38 million in the same period of 2009. Refining operations incurred losses of $50 million compared with $3 million in the third quarter a year ago as a result of lower refining margins. Marketing earnings were $40 million, an increase of $5 million from the third quarter of 2009. Trading activities generated a loss of $28 million, compared with income of $6 million in the third quarter of last year. The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods (in millions):   Three Months Ended       Nine Months Ended September 30,September 30,   2010       2009   2010     2009 Exploration and Production $ 725 $ 89 $ 783 $ 45 Marketing and Refining - 12 - 12 Corporate   -   -   (7 )   (16 ) $725$101$776$41 Third quarter 2010 results included an after-tax gain of $1,072 million related to the exchange of the Corporation's interests in Gabon and the Clair Field in the United Kingdom for a 28.1 percent interest in the Valhall Field and a 25.0 percent interest in the Hod Field, both in Norway. The results also included an after-tax charge of $347 million to fully impair the carrying value of the Corporation's interests in the West Med Block 1 Concession, located offshore Egypt. Net cash provided by operating activities was $1,246 million in the third quarter of 2010, compared with $534 million in the same quarter of 2009. Capital and exploratory expenditures were $1,567 million, of which $1,548 million related to Exploration and Production operations. In September 2010, the Corporation acquired, for cash of $507 million, a 7.9 percent interest in the Valhall Field and a 12.5 percent in the Hod Field. Capital and exploratory expenditures for the third quarter of 2009 were $668 million, of which $646 million related to Exploration and Production operations. At September 30, 2010, cash and cash equivalents totaled $2,353 million compared with $1,362 million at December 31, 2009. Total debt was $5,584 million at September 30, 2010 and $4,467 million at December 31, 2009. In August 2010, the Corporation issued $1.25 billion of 30 year unsecured notes with a coupon of 5.60 percent. The Corporation's debt to capitalization ratio at September 30, 2010 was 26.1 percent compared with 24.8 percent at the end of 2009. Hess Corporation will review third 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 in 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 SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS OF DOLLARS)     Third     Third     Second Quarter Quarter Quarter   2010     2009     2010   Income Statement Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 7,864 $ 7,270 $ 7,732 Equity in income (loss) of HOVENSA L.L.C. (83 ) (49 ) (6 ) Other, net   1,172     163     24     Total revenues and non-operating income   8,953     7,384     7,750     Costs and Expenses Cost of products sold (excluding items shown separately below) 5,330 5,069 5,316 Production expenses 475 460 440 Marketing expenses 232 240 245 Exploration expenses, including dry holes and lease impairment 225 167 172 Other operating expenses 39 43 80 General and administrative expenses 151 148 159 Interest expense 94 97 83 Depreciation, depletion and amortization 584 626 558 Asset impairments   532     -     -     Total costs and expenses   7,662     6,850     7,053     Income before income taxes 1,291 534 697 Provision for income taxes   200     182     301     Net income 1,091 352 396 Less: Net income (loss) attributable to noncontrolling interests   (63 )   11     21   Net income attributable to Hess Corporation $1,154   $341   $375     Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ (5 ) $ 3 $ (4 ) Capitalized interest 1 1 1   Cash Flow Information Net cash provided by operating activities (*) $ 1,246 $ 534 $ 981   Capital and Exploratory Expenditures Exploration and Production United States $ 379 $ 198 $ 399 International   1,169     448     531     Total Exploration and Production 1,548 646 930 Marketing, Refining and Corporate   19     22     33     Total Capital and Exploratory Expenditures $1,567   $668   $963     Exploration expenses charged to income included above United States $ 46 $ 22 $ 21 International   59     42     41     $105   $64   $62     (*) Includes changes in working capital   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS OF DOLLARS)     Nine Months   2010         2009   Income Statement   Revenues and Non-operating Income   Sales (excluding excise taxes) and other operating revenues $ 24,855 $ 20,936 Equity in income (loss) of HOVENSA L.L.C. (174 ) (165 ) Other, net   1,242     240       Total revenues and non-operating income   25,923     21,011     Costs and Expenses Cost of products sold (excluding items shown separately below) 17,186 14,956 Production expenses 1,392 1,313 Marketing expenses 730 742 Exploration expenses, including dry holes and lease impairment 548 672 Other operating expenses 171 134 General and administrative expenses 465 444 Interest expense 261 269 Depreciation, depletion and amortization 1,684 1,616 Asset impairments   532     54     Total costs and expenses   22,969     20,200     Income before income taxes 2,954 811 Provision for income taxes   899     374     Net income 2,055 437 Less: Net income (loss) attributable to noncontrolling interests   (12 )   55   Net income attributable to Hess Corporation $2,067   $382     Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ (10 ) $ (1 ) Capitalized interest 3 4   Cash Flow Information Net cash provided by operating activities (*) $ 3,052 $ 1,775   Capital and Exploratory Expenditures Exploration and Production United States $ 1,115 $ 813 International   2,204     1,362     Total Exploration and Production 3,319   2,175 Marketing, Refining and Corporate   72     83     Total Capital and Exploratory Expenditures $3,391   $2,258     Exploration expenses charged to income included above United States $ 108 $ 127 International   132     138     $240   $265       (*) Includes changes in working capital   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS OF DOLLARS)     September 30,     December 31,   2010     2009   Balance Sheet Information   Cash and cash equivalents $ 2,353 $ 1,362 Other current assets 6,486 6,625 Investments 775 913 Property, plant and equipment – net 19,084 16,627 Other long-term assets   4,787     3,938   Total assets $33,485   $29,465     Current maturities of long-term debt $ 43 $ 148 Other current liabilities 6,524 6,702 Long-term debt 5,541 4,319 Other long-term liabilities 5,549 4,768 Total equity excluding other comprehensive income (loss) 17,205 15,203 Accumulated other comprehensive income (loss)   (1,377 )   (1,675 ) Total liabilities and equity $33,485   $29,465     HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS OF DOLLARS)     Third Quarter 2010 United         StatesInternationalTotal Sales and other operating revenues $ 622 $ 1,657 $ 2,279 Other, net   (2 )   1,159   1,157   Total revenues and non-operating income   620   2,816   3,436 Costs and expenses Production expenses, including related taxes 117 357 474 Exploration expenses, including dry holes and lease impairment 105 120 225 General, administrative and other expenses 37 33 70 Depreciation, depletion and amortization 172 388 560 Asset impairments   -   532   532   Total costs and expenses   431   1,430   1,861   Results of operations before income taxes 189 1,386 1,575 Provision for income taxes   71   227   298   Results of operations attributable to Hess Corporation $118$1,159$1,277   Third Quarter 2009 United StatesInternationalTotal Sales and other operating revenues $ 499 $ 1,293 $ 1,792 Other, net   137   8   145   Total revenues and non-operating income   636   1,301   1,937 Costs and expenses Production expenses, including related taxes 106 354 460 Exploration expenses, including dry holes and lease impairment 56 111 167 General, administrative and other expenses 37 28 65 Depreciation, depletion and amortization 176 426 602 Asset impairments   -   -   -   Total costs and expenses   375   919   1,294   Results of operations before income taxes 261 382 643 Provision for income taxes   99   147   246   Results of operations attributable to Hess Corporation $162$235$397   Second Quarter 2010 United StatesInternationalTotal Sales and other operating revenues $ 570 $ 1,489 $ 2,059 Other, net   5   9   14   Total revenues and non-operating income   575   1,498   2,073 Costs and expenses Production expenses, including related taxes 113 328 441 Exploration expenses, including dry holes and lease impairment 60 112 172 General, administrative and other expenses 32 32 64 Depreciation, depletion and amortization 157 377 534 Asset impairments   -   -   -   Total costs and expenses   362   849   1,211   Results of operations before income taxes 213 649 862 Provision for income taxes   84   290   374   Results of operations attributable to Hess Corporation $129$359$488   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS OF DOLLARS)     Nine Months 2010 United         StatesInternationalTotal Sales and other operating revenues $ 1,774 $ 4,678 $ 6,452 Other, net   2   1,223   1,225   Total revenues and non-operating income   1,776   5,901   7,677 Costs and expenses Production expenses, including related taxes 346 1,046 1,392 Exploration expenses, including dry holes and lease impairment 243 305 548 General, administrative and other expenses 105 96 201 Depreciation, depletion and amortization 465 1,148 1,613 Asset impairments   -   532   532   Total costs and expenses   1,159   3,127   4,286   Results of operations before income taxes 617 2,774 3,391 Provision for income taxes   232   843   1,075   Results of operations attributable to Hess Corporation $385$1,931$2,316   Nine Months 2009 United StatesInternationalTotal Sales and other operating revenues $ 1,024 $ 3,598 $ 4,622 Other, net   132   78   210   Total revenues and non-operating income   1,156   3,676   4,832 Costs and expenses Production expenses, including related taxes 327 986 1,313 Exploration expenses, including dry holes and lease impairment 306 366 672 General, administrative and other expenses 97 85 182 Depreciation, depletion and amortization 338 1,213 1,551 Asset impairments   -   54   54   Total costs and expenses   1,068   2,704   3,772   Results of operations before income taxes 88 972 1,060 Provision for income taxes   35   477   512   Results of operations attributable to Hess Corporation $53$495$548   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)       Third     Third     Second Quarter Quarter Quarter 201020092010Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 78 73 73 Europe 82 83 81 Africa 117 124 118 Asia and other   13   17   14 Total   290   297   286   Natural gas liquids - barrels United States 15 12 12 Europe 3 2 3 Asia and other   -   -   1 Total   18   14   16   Natural gas - mcf United States 120 105 102 Europe 104 120 140 Asia and other   406   429   437 Total   630   654   679 Barrels of oil equivalent   413   420   415   Average Selling Price Crude oil - per barrel (including hedging)* United States $ 71.92 $ 63.79 $ 72.99 Europe 57.28 47.34 56.21 Africa 64.78 54.97 63.54 Asia and other 75.95 67.49 78.01 Worldwide 64.81 56.07 64.81   Crude oil - per barrel (excluding hedging) United States $ 71.92 $ 63.79 $ 72.99 Europe 57.28 47.34 56.21 Africa 75.70 67.27 77.03 Asia and other 75.95 67.49 78.01 Worldwide 69.47 61.42 70.15   Natural gas liquids - per barrel United States $ 43.20 $ 36.05 $ 45.84 Europe 57.69 43.53 54.61 Asia and other 53.60 44.74 60.89 Worldwide 46.10 37.27 48.10   Natural gas - per mcf United States $ 3.56 $ 2.65 $ 3.65 Europe 6.50 4.38 5.35 Asia and other 6.18 5.12 6.09 Worldwide 5.73 4.60 5.57 * The after-tax losses from crude oil hedging activities were $85 million in the third quarter of 2010, $84 million in the third quarter of 2009 and second quarter of 2010.   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)             Nine Months2010     2009Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 74 54 Europe 83 82 Africa 117 125 Asia and other   14   16   Total   288   277   Natural gas liquids - barrels United States 13 10 Europe 3 3 Asia and other   1   1 Total   17   14   Natural gas - mcf United States 107 92 Europe 133 153 Asia and other   432   442 Total   672   687 Barrels of oil equivalent   417   406   Average Selling Price Crude oil - per barrel (including hedging)* United States $ 73.05 $ 56.02 Europe 56.29 42.80 Africa 63.67 44.98 Asia and other 75.97 56.63 Worldwide 64.44 47.09   Crude oil - per barrel (excluding hedging) United States $ 73.05 $ 56.02 Europe 56.29 42.80 Africa 76.19 56.59 Asia and other 75.97 56.63 Worldwide 69.56 52.35   Natural gas liquids - per barrel United States $ 46.49 $ 32.38 Europe 57.28 37.86 Asia and other 60.15 38.49 Worldwide 48.84 33.90   Natural gas - per mcf United States $ 3.91 $ 3.19 Europe 5.67 5.25 Asia and other 6.21 4.88 Worldwide 5.74 4.74 * The after-tax losses from hedging activities were $252 million for the nine months ended September 30, 2010 and $249 million for the nine months ended September 30, 2009.   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESMARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)     Third     Third     Second Quarter Quarter Quarter 201020092010Financial Information (in millions of dollars)   Marketing and Refining Results Income (loss) before income taxes $ (78 ) $ 29 $ (37 ) Provision (benefit) for income taxes   (40 )   (9 )   (18 ) Results of operations attributable to Hess Corporation $(38 ) $38   $(19 )   Summary of Marketing and Refining Results Refining $ (50 ) $ (3 ) $ (31 ) Marketing 40 35 17 Trading   (28 )   6     (5 ) Results of operations attributable to Hess Corporation $(38 ) $38   $(19 )     Operating Data (barrels and gallons in thousands)   Refined Product Sales (barrels per day) Gasoline 253 253 238 Distillates 96 113 112 Residuals 56 51 57 Other   41     26     28   Total   446     443     435     Refinery Throughput (barrels per day) HOVENSA - Crude runs 408 384 392 HOVENSA - Hess 50% share 204 192 196 Port Reading 61 65 35   Refinery Utilization   Refinery Capacity HOVENSA (barrels per day) Crude 500 81.6 % 76.9 % 78.5 % FCC 150 76.1 % 82.9 % 91.0 % Coker 58 73.0 % 78.9 % 81.9 % Port Reading 70 87.7 % 92.2 % 49.7 %   Retail Marketing Number of retail stations (a) 1,360 1,353 1,358 Convenience store revenue (in millions of dollars) (b) $ 322 $ 313 $ 317 Average gasoline volume per station (gallons per month) (b) 204 202 203   (a) Includes company operated, Wilco-Hess, dealer and branded retailer. (b) Company operated only.   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESMARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)     Nine Months2010     2009   Financial Information (in millions of dollars)   Marketing and Refining Results Income (loss) before income taxes $ 24 $ 135 Provision (benefit) for income taxes   (6 )   25   Results of operations attributable to Hess Corporation $30   $110     Summary of Marketing and Refining Results Refining $ (137 ) $ (47 ) Marketing 178 123 Trading   (11 )   34   Results of operations attributable to Hess Corporation $30   $110       Operating Data (barrels and gallons in thousands)   Refined Product Sales (barrels per day) Gasoline 247 234 Distillates 112 129 Residuals 66 67 Other   40     36   Total   465     466     Refinery Throughput (barrels per day) HOVENSA - Crude runs 392 412 HOVENSA - Hess 50% share 196 206 Port Reading 53 64   Refinery Utilization   Refinery Capacity HOVENSA (barrels per day) Crude 500 78.4 % 82.4 % FCC 150 69.5 % 75.2 % Coker 58 80.0 % 83.6 % Port Reading 70 75.4 % 91.1 %   Retail Marketing Number of retail stations (a) 1,360 1,353 Convenience store revenue (in millions of dollars) (b) $ 915 $ 868 Average gasoline volume per station (gallons per month) (b) 198 203   (a) Includes company operated, Wilco-Hess, dealer and branded retailer. (b) Company operated only. Hess CorporationInvestors:Jay Wilson, 212-536-8940orMedia:Jon Pepper, 212-536-8550