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Press release from Business Wire

Hess Reports Estimated Results for the Second Quarter of 2012

<p> <b>Second Quarter Highlights:</b> </p> <ul> <li class='bwlistitemmargb'> <i><b>Net income was $549 million, compared with $607 million in the second quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Oil and gas production increased to 429,000 barrels of oil equivalent</b></i> <i><b>per day, up from 372,000 in the second quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Oil and gas production from the Bakken increased to 55,000 barrels of oil equivalent per day, up from 25,000 in the second quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net cash provided by operating activities was $1,240 million, compared with $1,689 million in the second quarter of 2011</b></i> </li> </ul>

Wednesday, July 25, 2012

Hess Reports Estimated Results for the Second Quarter of 201207:30 EDT Wednesday, July 25, 2012 NEW YORK (Business Wire) -- Hess Corporation (NYSE: HES) reported net income of $549 million for the second quarter of 2012, compared with $607 million for the second quarter of 2011. The after-tax income (loss) by major operating activity was as follows:           Three Months Ended Six Months Ended June 30, (unaudited) June 30, (unaudited) 2012   2011 2012   2011 (In millions, except per share amounts) Exploration and Production $   644 $   747 $   1,279 $   1,726 Marketing and Refining 8 (39) 19 - Corporate (39) (42) (77) (70) Interest expense     (64)     (59)     (127)     (120) Net income attributable to Hess Corporation $   549 $   607 $   1,094 $   1,536   Net income per share (diluted) $   1.61 $   1.78 $   3.21 $   4.52   Weighted average number of shares (diluted)     340.4     340.4     340.4     339.7     Note: See the following page for a table of items affecting comparability of earnings between periods. Exploration and Production earnings were $644 million in the second quarter of 2012, compared with $747 million in the second quarter of 2011. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $86.86 per barrel, down from $97.20 per barrel in the same quarter a year ago. The average worldwide natural gas selling price of $5.94 per mcf in the second quarter of 2012 was comparable with the same quarter a year ago. Second quarter oil and gas production was 429,000 barrels of oil equivalent per day, up from 372,000 barrels of oil equivalent per day in the second quarter of 2011, primarily reflecting an increase in production from the Bakken oil shale play and the resumption of operations in Libya. Marketing and Refining generated earnings of $8 million in the second quarter of 2012, compared with a loss of $39 million in the same period in 2011. Marketing earnings were $18 million in the second quarter of 2012 and $28 million in the second quarter of 2011. Refining operations generated income of $8 million in the second quarter of 2012, compared with a loss of $44 million in the second quarter a year ago. Trading activities generated a loss of $18 million in the second quarter of 2012 and a loss of $23 million in the second 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 Six Months Ended June 30, (unaudited) June 30, (unaudited) 2012   2011 2012   2011 (In millions of dollars) Exploration and Production $   (36) $       - $       - $   310                 Results for the second quarter of 2012 included an after-tax charge of $36 million for certain exploration properties in the Eagle Ford shale in the United States that are expected to be divested in an asset exchange with a joint venture partner. Net cash provided by operating activities was $1,240 million in the second quarter of 2012, compared with $1,689 million in the same quarter of 2011. Capital and exploratory expenditures were $2,078 million, of which $2,036 million related to Exploration and Production operations. Capital and exploratory expenditures for the second quarter of 2011 were $1,490 million, of which $1,469 million related to Exploration and Production operations. At June 30, 2012, cash and cash equivalents totaled $409 million, compared with $351 million at December 31, 2011. Total debt was $7,845 million at June 30, 2012 and $6,057 million at December 31, 2011. The Corporation's debt to capitalization ratio at June 30, 2012 was 28.2 percent, compared with 24.6 percent at the end of 2011. 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, 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)   Second Second First Quarter Quarter Quarter 2012 2011 2012 Income Statement       Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 9,304 $ 9,853 $ 9,682 Income (loss) from equity investment in HOVENSA L.L.C. - (49) - Gains on asset sales - - 36 Other, net     5     2     29   Total revenues and non-operating income     9,309     9,806     9,747   Costs and Expenses Cost of products sold (excluding items shown separately below) 5,969 6,841 6,679 Production expenses 677 599 673 Marketing expenses 265 247 251 Exploration expenses, including dry holes and lease impairment 196 257 253 Other operating expenses 41 42 41 General and administrative expenses 172 174 167 Interest expense 105 97 104 Depreciation, depletion and amortization 769 588 681 Asset impairments     59     -     -   Total costs and expenses     8,253     8,845     8,849   Income (loss) before income taxes 1,056 961 898 Provision (benefit) for income taxes     521     392     338   Net income (loss) 535 569 560 Less: Net income (loss) attributable to noncontrolling interests     (14)     (38)     15 Net income (loss) attributable to Hess Corporation $   549 $   607 $   545   Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ (5) $ (2) $ 9 Capitalized interest 5 2 5   Cash Flow Information Net cash provided by operating activities (a) $ 1,240 $ 1,689 $ 988 (b)   Capital and Exploratory Expenditures Exploration and Production United States $ 1,243 $ 793 $ 1,241 International     793     676     722   Total Exploration and Production 2,036 1,469 1,963 Marketing, Refining and Corporate     42     21     23   Total Capital and Exploratory Expenditures $   2,078 $   1,490 $   1,986   Exploration expenses charged to income included above United States $ 33 $ 56 $ 37 International     67     59     71   $   100 $   115 $   108   (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)   First Half 2012 2011 Income Statement     Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 18,986 $ 20,068 Income (loss) from equity investment in HOVENSA L.L.C. - (97) Gains on asset sales 36 343 Other, net     34     7   Total revenues and non-operating income     19,056     20,321   Costs and Expenses Cost of products sold (excluding items shown separately below) 12,648 13,881 Production expenses 1,350 1,130 Marketing expenses 516 530 Exploration expenses, including dry holes and lease impairment 449 570 Other operating expenses 82 84 General and administrative expenses 339 338 Interest expense 209 196 Depreciation, depletion and amortization 1,450 1,146 Asset impairments     59     -   Total costs and expenses     17,102     17,875   Income (loss) before income taxes 1,954 2,446 Provision (benefit) for income taxes     859     903   Net income (loss) 1,095 1,543 Less: Net income (loss) attributable to noncontrolling interests     1     7 Net income (loss) attributable to Hess Corporation $   1,094 $   1,536   Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ 4 $ (5) Capitalized interest 10 4   Cash Flow Information Net cash provided by operating activities (a) $ 2,228 (b) $ 2,824   Capital and Exploratory Expenditures Exploration and Production United States $ 2,484 $ 1,333 International     1,515     1,309   Total Exploration and Production 3,999 2,642 Marketing, Refining and Corporate     65     34   Total Capital and Exploratory Expenditures $   4,064 $   2,676   Exploration expenses charged to income included above United States $ 70 $ 98 International     138     121   $   208 $   219   (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)   June 30, December 31, 2012 2011 Balance Sheet Information       Cash and cash equivalents $ 409 $ 351 Other current assets 7,516 7,988 Investments 450 384 Property, plant and equipment – net 26,556 24,712 Other long-term assets     5,683     5,701 Total assets $   40,614 $   39,136   Short-term debt and current maturities of long-term debt $ 299 $ 52 Other current liabilities 6,785 8,048 Long-term debt 7,546 6,005 Other long-term liabilities 6,025 6,439 Total equity excluding other comprehensive income (loss) 20,738 19,659 Accumulated other comprehensive income (loss)     (779)     (1,067) Total liabilities and equity $   40,614 $   39,136           HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS OF DOLLARS)   Second Quarter 2012 United States     International     Total Sales and other operating revenues $   1,043 $   1,946 $   2,989 Gains on asset sales - - - Other, net     1     -     1   Total revenues and non-operating income     1,044     1,946     2,990 Costs and expenses Production expenses, including related taxes 253 424 677 Exploration expenses, including dry holes and lease impairment 75 121 196 General, administrative and other expenses 50 29 79 Depreciation, depletion and amortization 335 408 743 Asset impairments     59     -     59   Total costs and expenses     772     982     1,754   Results of operations before income taxes 272 964 1,236 Provision (benefit) for income taxes     112     480     592   Results of operations attributable to Hess Corporation $   160 (a) $   484 (b) $   644   Second Quarter 2011 United States International Total Sales and other operating revenues $ 858 $ 1,840 $ 2,698 Gains on asset sales - - - Other, net     (13)     8     (5)   Total revenues and non-operating income     845     1,848     2,693 Costs and expenses Production expenses, including related taxes 179 420 599 Exploration expenses, including dry holes and lease impairment 128 129 257 General, administrative and other expenses 49 27 76 Depreciation, depletion and amortization 166 387 553 Asset impairments     -     -     -   Total costs and expenses     522     963     1,485   Results of operations before income taxes 323 885 1,208 Provision (benefit) for income taxes     120     341     461   Results of operations attributable to Hess Corporation $   203 $   544 (b) $   747   First Quarter 2012 United States International Total Sales and other operating revenues $ 923 $ 1,697 $ 2,620 Gains on asset sales - 36 36 Other, net     -     27     27   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 Asset impairments     -     -     -   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   (a)   The after-tax losses from crude oil hedging activities were $3 million in the second quarter of 2012 and $26 million in the first quarter of 2012. (b) The after-tax losses from crude oil hedging activities were $86 million in the second quarter of 2012, $81 million in the second quarter of 2011 and $125 million in the first quarter of 2012.       HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS OF DOLLARS)   First Half 2012 United States     International     Total Sales and other operating revenues $   1,966 $   3,643 $   5,609 Gains on asset sales - 36 36 Other, net     1     27     28   Total revenues and non-operating income     1,967     3,706     5,673 Costs and expenses Production expenses, including related taxes 484 866 1,350 Exploration expenses, including dry holes and lease impairment 153 296 449 General, administrative and other expenses 88 56 144 Depreciation, depletion and amortization 614 788 1,402 Asset impairments     59     -     59   Total costs and expenses     1,398     2,006     3,404   Results of operations before income taxes 569 1,700 2,269 Provision (benefit) for income taxes     222     768     990   Results of operations attributable to Hess Corporation $   347 (a) $   932 (b) $   1,279   First Half 2011 United States International Total Sales and other operating revenues $ 1,604 $ 3,707 $ 5,311 Gains on asset sales - 343 343 Other, net     (14)     10     (4)   Total revenues and non-operating income     1,590     4,060     5,650 Costs and expenses Production expenses, including related taxes 316 814 1,130 Exploration expenses, including dry holes and lease impairment 237 333 570 General, administrative and other expenses 97 63 160 Depreciation, depletion and amortization 318 772 1,090 Asset impairments     -     -     -   Total costs and expenses     968     1,982     2,950   Results of operations before income taxes 622 2,078 2,700 Provision (benefit) for income taxes     232     742     974   Results of operations attributable to Hess Corporation $   390 $   1,336 (b) $   1,726   (a)   The after-tax losses from crude oil hedging activities were $29 million in the first half of 2012. (b) The after-tax losses from crude oil hedging activities were $211 million in the first half of 2012 and $162 million in the first half of 2011.           HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)   Second Second First Quarter Quarter Quarter 2012 2011 2012 Operating Data     Net Production Per Day (in thousands) Crude oil - barrels United States 109 77 95 Europe 98 93 94 Africa 79 66 71 Asia     18     12   16 Total     304     248   276   Natural gas liquids - barrels United States 15 13 14 Europe 3 3 3 Asia     1     1   2 Total     19     17   19   Natural gas - mcf United States 121 100 100 Europe 53 72 61 Asia and other     465     471   449 Total     639     643   610 Barrels of oil equivalent     429     372   397   Average Selling Price Crude oil - per barrel (including hedging) United States $ 91.97 $ 106.62 $ 95.92 Europe 76.20 87.75 80.18 Africa 89.01 97.74 88.75 Asia 105.89 113.44 117.13 Worldwide 86.86 97.20 89.92   Crude oil - per barrel (excluding hedging) United States $ 92.48 $ 106.62 $ 100.87 Europe 76.58 87.75 82.77 Africa 105.72 118.19 120.59 Asia 106.17 113.44 123.72 Worldwide 91.83 102.73 100.50   Natural gas liquids - per barrel United States $ 40.75 $ 61.57 $ 49.26 Europe 66.15 69.99 90.43 Asia 75.16 79.63 86.50 Worldwide 45.56 64.05 59.53   Natural gas - per mcf United States $ 1.55 $ 3.71 $ 1.75 Europe 9.98 8.97 9.44 Asia and other 6.61 5.94 6.77 Worldwide 5.94 5.93 6.23         HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)   First Half 2012   2011 Operating Data     Net Production Per Day (in thousands) Crude oil - barrels United States 102 77 Europe 96 96 Africa 75 75 Asia     17     13 Total     290     261   Natural gas liquids - barrels United States 15 13 Europe 3 3 Asia     1     1 Total     19     17   Natural gas - mcf United States 110 103 Europe 57 89 Asia and other     458     451 Total     625     643 Barrels of oil equivalent     413     385   Average Selling Price Crude oil - per barrel (including hedging) United States $ 93.81 $ 99.12 Europe 78.05 85.84 Africa 88.91 90.04 Asia 110.70 111.91 Worldwide 88.23 92.05   Crude oil - per barrel (excluding hedging) United States $ 96.39 $ 99.12 Europe 79.45 85.84 Africa 111.78 110.39 Asia 113.67 111.91 Worldwide 95.72 97.37   Natural gas liquids - per barrel United States $ 44.92 $ 59.43 Europe 81.20 76.01 Asia 82.02 76.23 Worldwide 52.78 63.74   Natural gas - per mcf United States $ 1.64 $ 3.77 Europe 9.69 8.55 Asia and other 6.69 5.85 Worldwide 6.08 5.89                 HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESMARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)   Second Second First Quarter Quarter Quarter 2012 2011 2012 Financial Information (in millions of dollars)   Marketing and Refining Results Income (loss) before income taxes $ 7 $ (45) $ 20 Provision (benefit) for income taxes     (1)     (6)     9 Results of operations attributable to Hess Corporation $   8 $   (39) $   11   Summary of Marketing and Refining Results Marketing $ 18 $ 28 $ 22 Refining 8 (44) (6) Trading     (18)     (23)     (5) Results of operations attributable to Hess Corporation $   8 $   (39) $   11                                 Operating Data   Sales Volumes Refined petroleum products (thousands of barrels per day) Gasoline 212 228 210 Distillates 108 114 115 Residuals 54 56 61 Other     17     28     18 Total     391     426     404   Natural gas (thousands of mcf per day)     1,860     1,900     2,560   Electricity (megawatts round the clock)     4,405     4,100     4,350   Retail Marketing Number of retail stations (a) 1,361 1,356 1,361 Convenience store revenue (in millions of dollars) (b) $ 288 $ 305 $ 272 Average gasoline volume per station (thousands of gallons per month) (b) 194 199 185   Port Reading Refinery throughput (thousands of barrels per day) 69 66 47 Refinery utilization (capacity - 70,000 barrels per day) 98.0% 93.6% 67.4%   (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)   First Half 2012 2011 Financial Information (in millions of dollars)   Marketing and Refining Results Income (loss) before income taxes $ 27 $ 51 Provision (benefit) for income taxes     8     51 Results of operations attributable to Hess Corporation $   19 $   -   Summary of Marketing and Refining Results Marketing $ 40 $ 96 Refining 2 (92) Trading     (23)     (4) Results of operations attributable to Hess Corporation $   19 $   -                           Operating Data   Sales Volumes Refined petroleum products (thousands of barrels per day) Gasoline 210 227 Distillates 112 124 Residuals 58 71 Other     18     24 Total     398     446   Natural gas (thousands of mcf per day)     2,205     2,400   Electricity (megawatts round the clock)     4,390     4,200   Retail Marketing Number of retail stations (a) 1,361 1,356 Convenience store revenue (in millions of dollars) (b) $ 560 $ 583 Average gasoline volume per station (thousands of gallons per month) (b) 190 192   Port Reading Refinery throughput (thousands of barrels per day) 58 66 Refinery utilization (capacity - 70,000 barrels per day) 82.7% 93.8%   (a)   Includes company operated, Wilco-Hess, dealer and branded retailer. (b) Company operated only. Hess CorporationInvestor:Jay Wilson, 212-536-8940orMedia:Jon Pepper, 212-536-8550