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 2012

<p> <b>First Quarter Highlights:</b> </p> <ul> <li class='bwlistitemmargb'> <i><b>Net income was $545 million, compared with $929 million in the first quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net income excluding items affecting comparability between periods was $509 million, compared with $619 million in the first quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Oil and gas production was 397,000 barrels of oil equivalent</b></i> <i><b>per day, compared with 399,000 in the first quarter of 2011</b></i> </li> </ul>

Wednesday, April 25, 2012

Hess Reports Estimated Results for the First Quarter of 201207:30 EDT Wednesday, April 25, 2012 NEW YORK (Business Wire) -- Hess Corporation (NYSE: HES) reported net income of $545 million for the first quarter of 2012 compared with $929 million for the first quarter of 2011. The after-tax income (loss) by major operating activity was as follows:                       Three Months Ended March 31, (unaudited) 2012   2011 (In millions, except per share amounts) Exploration and Production $       635 $       979 Marketing and Refining 11 39 Corporate (38) (28) Interest expense   (63)   (61) Net income attributable to Hess Corporation $       545 $       929   Net income per share (diluted) $      1.60 $      2.74   Weighted average number of shares (diluted)   340.3   339.2   Note: See the following page for a table of items affecting comparability of earnings between periods. Exploration and Production earnings were $635 million in the first quarter of 2012 compared with $979 million in the first quarter of 2011. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $89.92 per barrel, up from $87.22 per barrel in the same quarter a year ago. The average worldwide natural gas selling price was $6.23 per mcf in the first quarter of 2012, up from $5.84 per mcf in the first quarter of 2011. First quarter oil and gas production was 397,000 barrels of oil equivalent per day compared with 399,000 barrels of oil equivalent per day in the first quarter a year ago. Marketing and Refining earnings were $11 million in the first quarter of 2012 compared with $39 million in the same period in 2011. Marketing earnings, reflecting the impact of a mild winter on energy marketing operations, were $22 million in the first quarter of 2012 compared with $68 million in the first quarter of 2011. Refining operations incurred a loss of $6 million in the first quarter of 2012, compared with a loss of $48 million in the first quarter a year ago. Trading results were a loss of $5 million in the first quarter of 2012, compared with income of $19 million in the first quarter of last year. The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods:                                                     Three Months Ended March 31, (unaudited) 2012     2011 (Millions of dollars) Exploration and Production $       36  $       310  First quarter 2012 results included a gain of $36 million related to the sale of the Corporation's interest in the Snohvit Field, offshore Norway. Net cash provided by operating activities was $988 million in the first quarter of 2012, compared with $1,135 million in the same quarter of 2011. Capital and exploratory expenditures were $1,986 million, of which $1,963 million related to Exploration and Production operations. Capital and exploratory expenditures for the first quarter of 2011 were $1,186 million, of which $1,173 million related to Exploration and Production operations. At March 31, 2012, cash and cash equivalents totaled $396 million compared with $351 million at December 31, 2011. Total debt was $6,978 million at March 31, 2012 and $6,057 million at December 31, 2011. The Corporation's debt to capitalization ratio at March 31, 2012 was 26.7 percent compared with 24.6 percent at the end of 2011. 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  Quarter  2012 First  Quarter  2011 Fourth  Quarter  2011 Income Statement   Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $     9,682 $    10,215 $     9,733 Income (loss) from equity investment in HOVENSA L.L.C. - (48) (940) Other, net   65   348   31   Total revenues and non-operating income   9,747   10,515   8,824   Costs and Expenses Cost of products sold (excluding items shown separately below) 6,679 7,040 6,712 Production expenses 673 531 613 Marketing expenses 251 283 273 Exploration expenses, including dry holes and lease impairment 253 313 426 Other operating expenses 41 42 44 General and administrative expenses 167 164 187 Interest expense 104 99 93 Depreciation, depletion and amortization   681   558   674   Total costs and expenses   8,849   9,030   9,022   Income (loss) before income taxes 898 1,485 (198) Provision (benefit) for income taxes   338   511   (64)   Net income (loss) 560 974 (134) Less: Net income (loss) attributable to noncontrolling interests   15   45   (3) Net income (loss) attributable to Hess Corporation $       545 $       929 $     (131)   Supplemental Income Statement Information Foreign currency gains (losses), after-tax $         9 $       (3) $       (8) Capitalized interest 5 2 5   Cash Flow Information Net cash provided by operating activities (a) $       988 (b) $     1,135 $     1,138   Capital and Exploratory Expenditures Exploration and Production United States $     1,241 $       540 $     1,372 International   722   633   813   Total Exploration and Production 1,963 1,173 2,185 Marketing, Refining and Corporate   23   13   51   Total Capital and Exploratory Expenditures $     1,986 $     1,186 $     2,236   Exploration expenses charged to income included above United States $        37 $        42 $        51 International   71   62   70   $       108 $       104 $       121 (a)   Includes changes in working capital. (b) Net of payments to HOVENSA L.L.C. totaling $487 million to fully fund our share of previously accrued refining shutdown costs. HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS OF DOLLARS)                                        March 31,     2012 December 31,2011 Balance Sheet Information   Cash and cash equivalents $         396 $         351 Other current assets 7,816 7,988 Investments 415 384 Property, plant and equipment – net 26,052 24,712 Other long-term assets   5,968   5,701 Total assets $      40,647 $      39,136   Short-term debt and current maturities of long-term debt $          38 $          52 Other current liabilities 8,153 8,048 Long-term debt 6,940 6,005 Other long-term liabilities 6,359 6,439 Total equity excluding other comprehensive income (loss) 20,214 19,659 Accumulated other comprehensive income (loss)   (1,057)   (1,067) Total liabilities and equity $      40,647 $      39,136   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS OF DOLLARS)       First Quarter 2012 United    States       International       Total       Sales and other operating revenues $           923 $ 1,697 $ 2,620 Other, net   -   63   63   Total revenues and non-operating income   923   1,760   2,683 Costs and expenses Production expenses, including related taxes 231 442 673 Exploration expenses, including dry holes and lease impairment 78 175 253 General, administrative and other expenses 38 27 65 Depreciation, depletion and amortization   279   380   659   Total costs and expenses   626   1,024   1,650   Results of operations before income taxes 297 736 1,033 Provision (benefit) for income taxes   110   288   398   Results of operations attributable to Hess Corporation $           187 (a) $ 448 (b) $         635   First Quarter 2011 UnitedStates International 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 (benefit) for income taxes   112   401   513   Results of operations attributable to Hess Corporation $           187 $ 792 (b) $         979   Fourth Quarter 2011 UnitedStates International Total   Sales and other operating revenues $           937 $  1,662 $       2,599 Other, net   3   25   28   Total revenues and non-operating income   940   1,687   2,627 Costs and expenses Production expenses, including related taxes 170 443 613 Exploration expenses, including dry holes and lease impairment 118 308 426 General, administrative and other expenses 49 33 82 Depreciation, depletion and amortization   273   378   651   Total costs and expenses   610   1,162   1,772   Results of operations before income taxes 330 525 855 Provision (benefit) for income taxes   130   198   328   Results of operations attributable to Hess Corporation $           200 $          327 (b) $         527 (a)   The after-tax losses from crude oil hedging activities were $26 million. (b) The after-tax losses from crude oil hedging activities were $125 million in the first quarter of 2012, $81 million in the first quarter of 2011 and $83 million in the fourth quarter of 2011.     HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)               First  Quarter  2012 First  Quarter  2011 Fourth  Quarter  2011 Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 95 77 89 Europe 94 99 95 Africa (a) 71 84 54 Asia   16   14   13 Total   276   274   251   Natural gas liquids - barrels United States 14 13 13 Europe 3 4 4 Asia   2   1   1 Total   19   18   18   Natural gas - mcf United States 100 106 90 Europe 61 107 92 Asia and other   449   430   408 Total   610   643   590 Barrels of oil equivalent   397   399   367   Average Selling Price Crude oil - per barrel (including hedging) United States $ 95.92 $ 91.56 $ 100.76 Europe 80.18 84.17 77.18 Africa 88.75 82.32 85.49 Asia 117.13 110.80 111.08 Worldwide 89.92 87.22 89.70   Crude oil - per barrel (excluding hedging) United States $ 100.87 $ 91.56 $ 100.76 Europe 82.77 84.17 77.18 Africa 120.59 102.58 109.28 Asia 123.72 110.80 111.08 Worldwide 100.50 92.35 95.16   Natural gas liquids - per barrel United States $ 49.26 $ 57.31 $ 57.86 Europe 90.43 80.29 66.47 Asia 86.50 73.35 66.18 Worldwide 59.53 63.45 59.81   Natural gas - per mcf United States $ 1.75 $ 3.82 $ 2.50 Europe 9.44 8.25 8.88 Asia and other 6.77 5.75 6.57 Worldwide 6.23 5.84 6.32   (a) Includes Libyan production of 18 thousand barrels of oil per day (bopd) in the first quarter of 2012, 14 thousand bopd in the first quarter of 2011 and 2 thousand bopd in the fourth quarter of 2011.   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESMARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)               First  Quarter  2012 First  Quarter  2011 Fourth  Quarter  2011 Financial Information (in millions of dollars)   Marketing and Refining Results Income (loss) before income taxes $ 20 $ 96 $ (885) Provision (benefit) for income taxes   9   57   (324) Results of operations attributable to Hess Corporation $ 11 $ 39 $ (561)   Summary of Marketing and Refining Results Marketing $ 22 $ 68 $ 48 Refining (6) (48) (598) Trading   (5)   19   (11) Results of operations attributable to Hess Corporation $ 11 $ 39 $ (561)                                     Operating Data   Sales Volumes Refined petroleum products (thousands of barrels per day) Gasoline 210 226 214 Distillates 115 134 143 Residuals 61 87 65 Other   18   20   19 Total   404   467   441   Natural gas (thousands of mcf per day)   2,560 2,875 2,170   Electricity (megawatts round the clock)   4,350 4,345 4,110   Retail Marketing Number of retail stations (a) 1,361 1,350 1,360 Convenience store revenue (in millions of dollars) (b) $ 272 $ 278 $ 290 Average gasoline volume per station (thousands of gallons per month) (b) 185 185 195   Port Reading Refinery throughput (thousands of barrels per day) 47 66 58 Refinery utilization (capacity - 70,000 barrels per day) 67.4 % 94.0 % 82.9 % (a) Includes company operated, Wilco-Hess, dealer and branded retailer. (b) Company operated only. Hess CorporationInvestor Contact:Jay Wilson, 212-536-8940orMedia Contact:Jon Pepper, 212-536-8550