The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Business Wire

Hess Reports Estimated Results for the First Quarter of 2011

<p> <b>First Quarter Highlights:</b> </p> <ul> <li class='bwlistitemmargb'> <i><b>Net income was $929 million compared with $538 million in the first quarter of 2010</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net income included an after-tax gain of $310 million relating to asset sales</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net cash provided by operating activities was $1,135 million, compared with $825 million in the first quarter of 2010</b></i> </li> <li class='bwlistitemmargb'> <i><b>Oil and gas production was 399,000 barrels per day, compared with 423,000 in the first quarter of 2010</b></i> </li> </ul>

Wednesday, April 27, 2011

Hess Reports Estimated Results for the First Quarter of 201107:30 EDT Wednesday, April 27, 2011 NEW YORK (Business Wire) -- Hess Corporation (NYSE: HES) reported net income of $929 million for the first quarter of 2011 compared with $538 million for the first quarter of 2010. The after-tax income (loss) by major operating activity was as follows:   Three Months Ended   March 31, (unaudited)  2011     2010 (In millions, except   per share amounts) Exploration and Production $ 979 $ 551 Marketing and Refining 39 87 Corporate (28 ) (48 ) Interest expense   (61 )   (52 ) Net income attributable to Hess Corporation $929$538   Net income per share (diluted) $2.74$1.65   Weighted average number of shares (diluted)   339.2   327.0         Note: See the following page for a table of items affecting the comparability of earnings between periods. Exploration and Production earnings were $979 million in the first quarter of 2011 compared with $551 million in the first quarter of 2010. The Corporation's first quarter oil and gas production was 399,000 barrels of oil equivalent per day, down from 423,000 barrels of oil equivalent per day in the first quarter a year ago, primarily reflecting the suspension of production in Libya in early March due to civil unrest and the sale of certain natural gas producing assets in the United Kingdom North Sea. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $87.22 per barrel, an increase from $63.62 per barrel in the first quarter of 2010. The average worldwide natural gas selling price was $5.84 per Mcf in the first quarter of 2011 compared with $5.92 per Mcf in the same quarter a year ago. First quarter 2011 results included higher exploration expenses reflecting dry hole costs of $121 million ($77 million after-tax) associated with an exploration well located on Block 1 offshore Egypt in the North Red Sea. Marketing and Refining earnings were $39 million in the first quarter of 2011 compared with $87 million in the same period in 2010. Refining operations incurred a loss of $48 million in the first quarter of 2011 compared with a loss of $56 million in the first quarter a year ago. Marketing earnings were $68 million compared with $121 million in the first quarter of 2010. Trading activities generated income of $19 million in the first quarter of 2011 compared with $22 million in the first quarter of last year. The following table reflects the total after-tax income (expense) of items affecting the comparability of earnings between periods:   Three Months Ended   March 31, (unaudited)   (Millions of dollars) 2011         2010      Exploration and Production $ 310 $ 58 Corporate   -   (7 ) $310$51   First quarter 2011 results included an after-tax gain of $310 million related to the sale of the Corporation's interests in certain natural gas producing assets in the United Kingdom North Sea. Net cash provided by operating activities was $1,135 million in the first quarter of 2011, compared with $825 million in the same quarter of 2010. Capital and exploratory expenditures were $1,186 million, of which $1,173 million related to Exploration and Production operations. Capital and exploratory expenditures for the first quarter of 2010 were $861 million, of which $841 million related to Exploration and Production operations. At March 31, 2011, cash and cash equivalents totaled $1,968 million up from $1,608 million at December 31, 2010. Total debt was $5,552 million at March 31, 2011 and $5,583 million at December 31, 2010. The Corporation's debt to capitalization ratio at March 31, 2011 improved to 23.5 percent compared with 24.9 percent at the end of 2010. Hess Corporation will review first 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, 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)           First First Fourth Quarter Quarter Quarter 201120102010Income Statement Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 10,215 $ 9,259 $ 9,007 Income (loss) from equity investment in HOVENSA L.L.C. (48 ) (85 ) (348 ) Other, net   348   46   31   Total revenues and non-operating income   10,515   9,220   8,690   Costs and Expenses Cost of products sold (excluding items shown separately below) 7,040 6,540 6,221 Production expenses 531 477 532 Marketing expenses 283 253 291 Exploration expenses, including dry holes and lease impairment 313 151 317 Other operating expenses 42 52 42 General and administrative expenses 164 155 197 Interest expense 99 84 100 Depreciation, depletion and amortization   558   542   633   Total costs and expenses   9,030   8,254   8,333   Income before income taxes 1,485 966 357 Provision for income taxes   511   398   274   Net income 974 568 83 Less: Net income (loss) attributable to noncontrolling interests   45   30   25 Net income attributable to Hess Corporation $929$538$58   Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ (3 ) $ (1 ) $ 2 Capitalized interest 2 1 2   Cash Flow Information Net cash provided by operating activities (*) $ 1,135 $ 825 $ 1,478   Capital and Exploratory Expenditures Exploration and Production United States $ 540 $ 337 $ 1,820 International   633   504   618   Total Exploration and Production 1,173 841 2,438 Marketing, Refining and Corporate   13   20   26   Total Capital and Exploratory Expenditures $1,186$861$2,464   Exploration expenses charged to income included above United States $ 42 $ 41 $ 46 International   62   32   77$104$73$123   (*) Includes changes in working capital   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS OF DOLLARS)            March 31,    December 31, 20112010Balance Sheet Information   Cash and cash equivalents $ 1,968 $ 1,608 Other current assets 7,468 7,172 Investments 446 443 Property, plant and equipment – net 21,759 21,127 Other long-term assets   4,996   5,046 Total assets $36,637$35,396   Short-term debt and current maturities of long-term debt $ 35 $ 46 Other current liabilities 7,316 7,567 Long-term debt 5,517 5,537 Other long-term liabilities 5,652 5,437 Total equity excluding other comprehensive income (loss) 18,990 17,968 Accumulated other comprehensive income (loss)   (873 )   (1,159 ) Total liabilities and equity $36,637$35,396     HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS OF DOLLARS)   First Quarter 2011   United         StatesInternational  Total   Sales and other operating revenues $ 746 $ 1,867 $ 2,613 Other, net   (1)   345   344   Total revenues and non-operating income   745   2,212   2,957 Costs and expenses Production expenses, including related taxes 137 394 531 Exploration expenses, including dry holes and lease impairment 109 204 313 General, administrative and other expenses 48 36 84 Depreciation, depletion and amortization   152   385   537   Total costs and expenses   446   1,019   1,465   Results of operations before income taxes 299 1,193 1,492 Provision for income taxes   112   401   513   Results of operations attributable to Hess Corporation $187$792$979   First Quarter 2010 United StatesInternationalTotal Sales and other operating revenues $ 582 $ 1,532 $ 2,114 Other, net   (1 )   55   54   Total revenues and non-operating income   581   1,587   2,168 Costs and expenses Production expenses, including related taxes 116 361 477 Exploration expenses, including dry holes and lease impairment 78 73 151 General, administrative and other expenses 36 31 67 Depreciation, depletion and amortization   136   383   519   Total costs and expenses   366   848   1,214   Results of operations before income taxes 215 739 954 Provision for income taxes   77   326   403   Results of operations attributable to Hess Corporation $138$413$551   Fourth Quarter 2010 United States   InternationalTotal 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   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     HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)           First First Fourth Quarter Quarter Quarter 201120102010Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States   77   71   76 Europe 99 86 103 Africa 84 118 99 Asia     14     14     13 Total     274     289     291   Natural gas liquids - barrels United States 13 13 14 Europe 4 3 4 Asia     1     1     1 Total     18     17     19   Natural gas - mcf United States 106 97 114 Europe 107 156 138 Asia and other     430     452     411 Total     643     705     663 Barrels of oil equivalent     399     423     420   Average Selling Price Crude oil - per barrel (including hedging)* United States $ 91.56 $ 74.40 $ 80.65 Europe 84.17 55.25 63.18 Africa 82.32 62.38 70.21 Asia 110.80 71.67 86.94 Worldwide 87.22 63.62 71.73   Crude oil - per barrel (excluding hedging) United States $ 91.56 $ 74.40 $ 80.65 Europe 84.17 55.25 63.18 Africa 102.58 75.96 86.40 Asia 110.80 71.67 86.94 Worldwide 92.35 69.06 77.17   Natural gas liquids - per barrel United States $ 57.31 $ 51.11 $ 51.89 Europe 80.29 59.38 64.65 Asia 73.35 63.92 70.22 Worldwide 63.45 52.93 55.00   Natural gas - per mcf United States $ 3.82 $ 4.63 $ 3.11 Europe 8.25 5.41 7.81 Asia and other 5.75 6.37 5.06 Worldwide 5.84 5.92 5.30     * The after-tax losses from crude oil hedging activities were $81 million in the first quarter of 2011, $83 million in the first quarter of 2010 and $86 million in the fourth quarter of 2010.   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESMARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)       First First Fourth Quarter Quarter Quarter 201120102010Financial Information (in millions of dollars)   Marketing and Refining Results Income (loss) before income taxes $   96 $   139 $   (251 ) Provision (benefit) for income taxes     57     52     10 Results of operations attributable to Hess Corporation $   39$   87$   (261 )   Summary of Marketing and Refining Results Refining $ (48 ) $ (56 ) $ (308 ) Marketing 68 121 37 Trading     19     22     10 Results of operations attributable to Hess Corporation $   39$   87$   (261 )           Operating Data (barrels and gallons in thousands)   Refined Product Sales (barrels per day) Gasoline 226 251 225 Distillates 134 126 144 Residuals 87 86 78 Other     20     51     42 Total     467     514     489   Refinery Throughput (barrels per day) HOVENSA - Crude runs 263 375 384 HOVENSA - Hess 50% share 132 188 192 Port Reading 66 62 60         Refinery UtilizationRefinery Capacity HOVENSA (barrels per day) Crude 350  (a) 75.2% 75.1% 76.8% FCC 150 65.6% 41.2% 57.3% Coker 58 41.6% 85.0% 73.3% Port Reading 70   94.0% 88.8% 86.0%   Retail Marketing Number of retail stations (b) 1,350 1,359 1,362 Convenience store revenue (in millions of dollars) (c) $ 278 $ 276 $ 298 Average gasoline volume per station (gallons per month) (c) 185 188 201   (a) HOVENSA's refining crude capacity was reduced from 500,000 to 350,000 barrels per day in the first quarter of 2011. (b) Includes company operated, Wilco-Hess, dealer and branded retailer. (c) Company operated only. Hess CorporationInvestor Contact:Jay Wilson, 212-536-8940orMedia Contact:Jon Pepper, 212-536-8550