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Press release from Business Wire

Hess Reports Estimated Results for the Fourth Quarter of 2010

<p> <b>Fourth Quarter Highlights:</b> </p> <ul> <li class='bwlistitemmargb'> <i><b>Net income was $58 million compared with $358 million in the fourth quarter 2009</b></i> </li> <li class='bwlistitemmargb'> <i><b>Items affecting comparability include an after-tax charge of $289 million relating to the impairment of our equity investment in HOVENSA L.L.C.</b></i> </li> <li class='bwlistitemmargb'> <i><b>Capital and exploratory expenditures, including acquisitions, were $2,464 million, compared with $992 million in the fourth quarter 2009</b></i> </li> <li class='bwlistitemmargb'> <i><b>Oil and gas production was 420,000 barrels per day, an increase from 415,000 in the fourth quarter 2009</b></i> </li> <li class='bwlistitemmargb'> <i><b>Year end total proved reserves were 1,537 million barrels; reserve replacement for 2010 was 176 percent</b></i> </li> </ul>

Wednesday, January 26, 2011

Hess Reports Estimated Results for the Fourth Quarter of 201007:09 EST Wednesday, January 26, 2011 NEW YORK (Business Wire) -- Hess Corporation (NYSE: HES) reported net income of $58 million for the fourth quarter of 2010 compared with net income of $358 million for the fourth quarter of 2009. The after-tax income (loss) by major operating activity was as follows:     Three Months Ended     Year Ended December 31, (unaudited)December 31, (unaudited)2010     20092010     2009 (In millions, except per share amounts) Exploration and Production $ 420 $ 494 $ 2,736 $ 1,042 Marketing and Refining (261 ) 17 (231 ) 127 Corporate (43 ) (97 ) (159 ) (205 ) Interest expense   (58 )   (56 )   (221 )   (224 ) Net income attributable to Hess Corporation $58   $358   $2,125   $740     Net income per share (diluted) $.18   $1.10   $6.47   $2.27     Weighted average number of shares (diluted)   330.5     326.4     328.3     326.0     Note: See the following page for a table of items affecting the comparability of earnings between periods. Exploration and Production earnings were $420 million in the fourth quarter of 2010 compared with $494 million in the fourth quarter of 2009. Fourth quarter 2010 results included higher exploration expenses reflecting dry hole costs of $111 million ($72 million after-tax) associated with two exploration wells (Sabia and Azulão) located on Block BM-S-22 offshore Brazil. Fourth quarter oil and gas production was 420,000 barrels of oil equivalent per day, up from 415,000 barrels of oil equivalent per day in the fourth quarter a year ago. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $71.73 per barrel, an increase from $63.74 per barrel in the fourth quarter of 2009. The average worldwide natural gas selling price was $5.30 per Mcf in the fourth quarter of 2010 compared with $5.19 per Mcf in the same quarter a year ago. Oil and gas proved reserves were 1,537 million barrels of oil equivalent at the end of 2010, compared to 1,437 million barrels at the end of 2009. During 2010, the Corporation added 274 million barrels of oil equivalent to proved reserves. These additions, which are subject to final review, replaced approximately 176 percent of the Corporation's 2010 production, resulting in a reserve life of 9.9 years. Marketing and Refining results were a loss of $261 million in the fourth quarter of 2010 compared with income of $17 million in the same period of 2009. Refining operations incurred a loss of $308 million in the fourth quarter of 2010, including the impairment charge discussed below, and a loss of $40 million in the fourth quarter a year ago. Marketing earnings were $37 million compared with $45 million in the same quarter of 2009. Trading activities generated income of $10 million in the fourth quarter of 2010 and $12 million in the fourth 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     Year Ended December 31,December 31,2010     20092010     2009   Exploration and Production $ (51 ) $ -   $ 732   $ 45 Marketing and Refining (289 ) - (289 ) 12 Corporate   -     (44 )   (7 )     (60 ) $(340 ) $(44 ) $436   $(3 )   Fourth quarter 2010 results included an after-tax charge of $51 million related to dry hole costs associated with the Azulão exploration well located offshore Brazil, which was drilled in 2009. The results also included an after-tax charge of $289 million to reduce the carrying value of the Corporation's equity investment in HOVENSA L.L.C. Net cash provided by operating activities was $1,478 million in the fourth quarter of 2010, compared with $1,271 million in the same quarter of 2009. Capital and exploratory expenditures were $2,464 million, of which $2,438 million related to Exploration and Production operations including $1,067 million for the acquisition of 167,000 net acres in the Bakken oil play in North Dakota from TRZ Energy, LLC. Capital and exploratory expenditures for the fourth quarter of 2009 were $992 million, of which $957 million related to Exploration and Production operations. At December 31, 2010, cash and cash equivalents totaled $1,608 million compared with $1,362 million at December 31, 2009. Total debt was $5,583 million at December 31, 2010 and $4,467 million at December 31, 2009. The Corporation's debt to capitalization ratio at December 31, 2010 was 24.9 percent compared with 24.8 percent at the end of 2009. Hess Corporation will review fourth 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 global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. 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)   Fourth Fourth Third Quarter Quarter Quarter 201020092010Income Statement Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 9,007 $ 8,678 $ 7,864 Income (loss) from equity investment in HOVENSA L.L.C. (348 ) (64 ) (83 ) Other, net   31     (56 )   1,172   Total revenues and non-operating income   8,690     8,558     8,953     Costs and Expenses Cost of products sold (excluding items shown separately below) 6,221 6,005 5,330 Production expenses 532 492 475 Marketing expenses 291 266 232 Exploration expenses, including dry holes and lease impairment 317 157 225 Other operating expenses 42 49 39 General and administrative expenses 197 203 151 Interest expense 100 91 94 Depreciation, depletion and amortization 633 584 584 Asset impairments   -     -     532   Total costs and expenses   8,333     7,847     7,662   Income before income taxes 357 711 1,291 Provision for income taxes   274     341     200   Net income 83 370 1,091 Less: Net income (loss) attributable to noncontrolling interests   25     12     (63 ) Net income attributable to Hess Corporation $58   $358   $1,154     Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ 2 $ (10 ) $ (5 ) Capitalized interest 2 2 1   Cash Flow Information Net cash provided by operating activities (*) $ 1,478 $ 1,271 $ 1,246   Capital and Exploratory Expenditures Exploration and Production United States $ 1,820 $ 392 $ 379 International   618     565     1,169   Total Exploration and Production 2,438 957 1,548 Marketing, Refining and Corporate   26     35     19   Total Capital and Exploratory Expenditures $2,464   $992   $1,567     Exploration expenses charged to income included above United States $ 46 $ 22 $ 46 International   77     45     59   $123   $67   $105     (*) Includes changes in working capital         HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS OF DOLLARS)   Year Ended December 31,20102009Income Statement Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 33,862 $ 29,614 Income (loss) from equity investment in HOVENSA L.L.C. (522 ) (229 ) Other, net   1,273     184   Total revenues and non-operating income   34,613     29,569     Costs and Expenses Cost of products sold (excluding items shown separately below) 23,407 20,961 Production expenses 1,924 1,805 Marketing expenses 1,021 1,008 Exploration expenses, including dry holes and lease impairment 865   829 Other operating expenses 213 183 General and administrative expenses 662 647 Interest expense 361 360 Depreciation, depletion and amortization 2,317 2,200 Asset impairments   532     54   Total costs and expenses   31,302     28,047   Income before income taxes 3,311 1,522 Provision for income taxes   1,173     715   Net income 2,138 807 Less: Net income attributable to noncontrolling interests   13     67   Net income attributable to Hess Corporation $2,125   $740     Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ (8 ) $ (11 ) Capitalized interest 5 6   Cash Flow Information Net cash provided by operating activities (*) $ 4,530 $ 3,046   Capital and Exploratory Expenditures Exploration and Production United States $ 2,935 $ 1,200 International   2,822     1,927   Total Exploration and Production 5,757   3,127 Marketing, Refining and Corporate   98     118   Total Capital and Exploratory Expenditures $5,855   $3,245     Exploration expenses charged to income included above United States $ 154 $ 144 International   209     183     $363   $327     (*) Includes changes in working capital         HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS OF DOLLARS)   December 31, December 31, 20102009Balance Sheet Information   Cash and cash equivalents $ 1,608 $ 1,362 Other current assets 7,138 6,625 Investments 443 913 Property, plant and equipment – net 21,127 16,627 Other long-term assets   4,965     3,938   Total assets $35,281   $29,465     Short-term debt and current maturities of long-term debt $ 46 $ 148 Other current liabilities 7,533 6,702 Long-term debt 5,537 4,319 Other long-term liabilities 5,356 4,768 Total equity excluding other comprehensive income (loss) 17,968 15,203 Accumulated other comprehensive income (loss)   (1,159 )   (1,675 ) Total liabilities and equity $35,281   $29,465       HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS OF DOLLARS)   Fourth Quarter 2010 United         StatesInternationalTotal Sales and other operating revenues $     679 $ 1,613 $     2,292 Other, net       (5 )   13         8     Total revenues and non-operating income       674     1,626         2,300   Costs and expenses Production expenses, including related taxes 143 389 532 Exploration expenses, including dry holes and lease impairment 121 196 317 General, administrative and other expenses 56 24 80 Depreciation, depletion and amortization 184 425 609 Asset impairments       -     -         -     Total costs and expenses       504     1,034         1,538     Results of operations before income taxes 170 592 762 Provision for income taxes       72     270         342     Results of operations attributable to Hess Corporation $     98   $322   $     420     Fourth Quarter 2009 United StatesInternationalTotal Sales and other operating revenues $ 587 $ 1,626 $ 2,213 Other, net       -     (3 )       (3 )   Total revenues and non-operating income       587     1,623         2,210   Costs and expenses Production expenses, including related taxes 104 388 492 Exploration expenses, including dry holes and lease impairment 77 80 157 General, administrative and other expenses 33 40 73 Depreciation, depletion and amortization 165 397 562 Asset impairments       -     -         -     Total costs and expenses       379     905         1,284     Results of operations before income taxes 208 718 926 Provision for income taxes       79     353         432     Results of operations attributable to Hess Corporation $     129   $365   $     494     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     HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS OF DOLLARS)   Year Ended December 31, 2010 United StatesInternationalTotal Sales and other operating revenues $ 2,453 $ 6,291 $ 8,744 Other, net       (3 )   1,236         1,233     Total revenues and non-operating income       2,450     7,527         9,977   Costs and expenses Production expenses, including related taxes 489 1,435 1,924 Exploration expenses, including dry holes and lease impairment 364 501 865 General, administrative and other expenses 161 120 281 Depreciation, depletion and amortization 649 1,573 2,222 Asset impairments       -     532         532     Total costs and expenses       1,663     4,161         5,824     Results of operations before income taxes 787 3,366 4,153 Provision for income taxes       304     1,113         1,417     Results of operations attributable to Hess Corporation $     483   $2,253   $     2,736     Year Ended December 31, 2009 United StatesInternationalTotal Sales and other operating revenues $ 1,611 $ 5,224 $ 6,835 Other, net       132     75         207     Total revenues and non-operating income       1,743     5,299         7,042   Costs and expenses Production expenses, including related taxes 431 1,374 1,805 Exploration expenses, including dry holes and lease impairment 383 446 829 General, administrative and other expenses 130 125 255 Depreciation, depletion and amortization 503 1,610 2,113 Asset impairments       -     54         54     Total costs and expenses       1,447     3,609         5,056     Results of operations before income taxes 296 1,690 1,986 Provision for income taxes       114     830         944     Results of operations attributable to Hess Corporation $     182   $860   $     1,042               HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)     Fourth Fourth Third Quarter Quarter Quarter 201020092010Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 76 76 78 Europe 103 86 82 Africa 99 105 117 Asia   13   15   13 Total   291   282   290   Natural gas liquids - barrels United States 14 12 15 Europe 4 3 3 Asia   1   1   - Total   19   16   18   Natural gas - mcf United States 114 97 120 Europe 138 147 104 Asia and other   411   456   406 Total   663   700   630   Barrels of oil equivalent   420   415   413   Average Selling Price Crude oil - per barrel (including hedging)* United States $ 80.65 $ 70.61 $ 71.92 Europe 63.18 58.07 57.28 Africa 70.21 61.67 64.78 Asia 86.94 74.59 75.95 Worldwide 71.73 63.74 64.81   Crude oil - per barrel (excluding hedging) United States $ 80.65 $ 70.61 $ 71.92 Europe 63.18 58.07 57.28 Africa 86.40 74.41 75.70 Asia 86.94 74.59 75.95 Worldwide 77.17 68.50 69.47   Natural gas liquids - per barrel United States $ 51.89 $ 47.12 $ 43.20 Europe 64.65 59.31 57.69 Asia 70.22 57.40 53.60 Worldwide 55.00 50.21 46.10   Natural gas - per mcf United States $ 3.11 $ 3.83 $ 3.56 Europe 7.81 4.82 6.50 Asia and other 5.06 5.60 6.18 Worldwide 5.30 5.19 5.73   * The after-tax losses from crude oil hedging activities were $86 million in the fourth quarter of 2010, $88 million in the fourth quarter of 2009 and $85 million in the third quarter of 2010.     HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)     Year Ended December 31,2010     2009Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 75 60 Europe 88 83 Africa 113 120 Asia   13   16 Total   289   279   Natural gas liquids - barrels United States 14 11 Europe 3 3 Asia   1   - Total   18   14   Natural gas - mcf United States 108 93 Europe 134 151 Asia and other   427   446 Total   669   690   Barrels of oil equivalent   418   408   Average Selling Price Crude oil - per barrel (including hedging)* United States $ 75.02 $ 60.67 Europe 58.11 47.02 Africa 65.02 48.91 Asia 79.23 63.01 Worldwide 66.20 51.62   Crude oil - per barrel (excluding hedging) United States $ 75.02 $ 60.67 Europe 58.11 47.02 Africa 78.31 60.79 Asia 79.23 63.01 Worldwide 71.40 56.74   Natural gas liquids - per barrel United States $ 47.92 $ 36.57 Europe 59.23 43.23 Asia 63.50 46.48 Worldwide 50.49 38.47   Natural gas - per mcf United States $ 3.70 $ 3.36 Europe 6.23 5.15 Asia and other 5.93 5.06 Worldwide 5.63 4.85   * The after-tax losses from hedging activities were $338 million for the year ended December 31, 2010 and $337 million for the year ended December 31, 2009.             HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESMARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)   Fourth Fourth Third Quarter Quarter Quarter 201020092010Financial Information (in millions of dollars)   Marketing and Refining Results Income (loss) before income taxes $ (251) $ 16 $ (78) Provision (benefit) for income taxes   10   (1)   (40) Results of operations attributable to Hess Corporation $(261) $17$(38)   Summary of Marketing and Refining Results Refining $ (308) $ (40) $ (50) Marketing 37 45 40 Trading   10   12   (28) Results of operations attributable to Hess Corporation $(261) $17$(38)           Operating Data (barrels and gallons in thousands)   Refined Product Sales (barrels per day) Gasoline 225 241 253 Distillates 144 149 96 Residuals 78 67 56 Other   42   38   41 Total   489   495   446   Refinery Throughput (barrels per day) HOVENSA - Crude runs 384 371 408 HOVENSA - Hess 50% share 192 185 204 Port Reading 60 61 61       Refinery UtilizationRefinery Capacity HOVENSA (barrels per day) Crude 500 76.8% 74.1% 81.6% FCC 150 57.3% 55.5% 76.1% Coker 58 73.3% 75.8% 73.0% Port Reading 70 86.0% 87.3% 87.7%   Retail Marketing Number of retail stations (a) 1,362 1,357 1,360 Convenience store revenue (in millions of dollars) (b) $ 298 $ 296 $ 322 Average gasoline volume per station (gallons per month) (b) 201 196 204   (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)   Year Ended December 31,2010     2009   Financial Information (in millions of dollars)   Marketing and Refining Results Income (loss) before income taxes $ (227) $ 151 Provision (benefit) for income taxes   4   24 Results of operations attributable to Hess Corporation $(231) $127   Summary of Marketing and Refining Results Refining $ (445) $ (87) Marketing 215 168 Trading   (1)   46 Results of operations attributable to Hess Corporation $(231) $127           Operating Data (barrels and gallons in thousands)   Refined Product Sales (barrels per day) Gasoline 242 236 Distillates 120 134 Residuals 69 67 Other   40   36 Total   471   473   Refinery Throughput (barrels per day) HOVENSA - Crude runs 390 402 HOVENSA - Hess 50% share 195 201 Port Reading 55 63       Refinery UtilizationRefinery Capacity HOVENSA (barrels per day) Crude 500 78.0% 80.3% FCC 150 66.5% 70.2% Coker 58 78.3% 81.6% Port Reading 70 78.1% 90.2%   Retail Marketing Number of retail stations (a) 1,362 1,357 Convenience store revenue (in millions of dollars) (b) $ 1,213 $ 1,164 Average gasoline volume per station (gallons per month) (b) 199 201   (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