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Press release from Business Wire

Hess Reports Estimated Results for the Third Quarter of 2012

<p> <b>Third Quarter Highlights:</b> </p> <ul> <li class='bwlistitemmargb'> <i><b>Net income was $557 million, compared with $298 million in the third quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net income excluding items affecting comparability between periods was $495 million compared with $379 million in the third quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Oil and gas production increased to 402,000 barrels of oil equivalent per day, up from 344,000 in the third quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Production from the Bakken oil shale play in North Dakota increased to 62,000 barrels of oil equivalent per day, up from 32,000 in the third quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net cash provided by operating activities was $1,862 million, compared with $1,022 million in the third quarter of 2011</b></i> </li> </ul>

Friday, November 02, 2012

Hess Reports Estimated Results for the Third Quarter of 201207:30 EDT Friday, November 02, 2012 NEW YORK (Business Wire) -- Hess Corporation (NYSE: HES) reported net income of $557 million for the third quarter of 2012, compared with $298 million for the third quarter of 2011. The after-tax income (loss) by major operating activity was as follows:             Three Months Ended Nine Months Ended September 30, (unaudited) September 30, (unaudited) 2012       2011 2012       2011 (In millions, except per share amounts) Exploration and Production $ 608 $ 422 $ 1,887 $ 2,148 Marketing and Refining 53 (23) 72 (23) Corporate (38) (44) (115) (114) Interest expense   (66)   (57)   (193)   (177) Net income attributable to Hess Corporation $ 557 $ 298 $ 1,651 $ 1,834   Net income per share (diluted) $ 1.64 $ .88 $ 4.85 $ 5.40   Weighted average number of shares (diluted)   340.0   340.2   340.3   339.8   Note: See the following page for a table of items affecting comparability of earnings between periods. Exploration and Production earnings were $608 million in the third quarter of 2012, compared with $422 million in the third quarter of 2011. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $86.69 per barrel, up from $85.81 per barrel in the same quarter a year ago. The average worldwide natural gas selling price was $5.88 per mcf in the third quarter of 2012, up from $5.74 per mcf in the third quarter of 2011. Third quarter oil and gas production was 402,000 barrels of oil equivalent per day, up from 344,000 barrels of oil equivalent per day in the third quarter of 2011, primarily reflecting an increase in production from the Bakken oil shale play and the resumption of operations in Libya. Net production from the Bakken averaged 62,000 barrels of oil equivalent per day in the third quarter of 2012 compared to 32,000 barrels of oil equivalent per day in the same period last year. At the Waha concessions in Libya, net production averaged 23,000 barrels of oil equivalent per day in the third quarter of 2012. Due to civil unrest in the country, there was no production in Libya in the same period last year. Marketing and Refining generated income of $53 million in the third quarter of 2012, compared with a loss of $23 million in the same period in 2011. Marketing earnings were $17 million in the third quarter of 2012, down from $41 million in the third quarter of 2011 as a result of lower margins. Port Reading refining operations generated income of $18 million in the third quarter of 2012, compared with break even in the same quarter last year. Refining operations generated a loss of $38 million in the third quarter a year ago, almost entirely related to our share of HOVENSA's results. The HOVENSA refinery was shut down in the first quarter of 2012. Trading activities generated income of $18 million in the third quarter of 2012 and a loss of $26 million in the same 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 Nine Months Ended September 30, (unaudited) September 30, (unaudited) 2012       2011 2012       2011 (In millions) Exploration and Production $ 62 $ (81) $ 62 $ 244   Third quarter 2012 results included an after-tax gain of $349 million from the sale of the Corporation's interests in the Schiehallion Field and associated assets in the United Kingdom North Sea for $524 million. The results also included after-tax impairment charges of $116 million that resulted from increases to the Corporation's estimated abandonment liabilities related to non-producing properties. Additionally, the Corporation recorded a $56 million after-tax charge to write off its assets in Peru following a decision to cease future appraisal and development activities in the country. A one-time charge of $115 million was also recorded to reflect the third quarter change in the United Kingdom's supplementary income tax rate to 20 percent from 32 percent applicable to deductions for dismantlement expenditures. Net cash provided by operating activities was $1,862 million in the third quarter of 2012, compared with $1,022 million in the same quarter of 2011. Capital and exploratory expenditures were $2,287 million, of which $2,260 million related to Exploration and Production operations. Capital and exploratory expenditures for the third quarter of 2011 were $2,550 million, of which $2,517 million related to Exploration and Production operations. At September 30, 2012, cash and cash equivalents totaled $528 million, compared with $351 million at December 31, 2011. Total debt was $7,841 million at September 30, 2012 and $6,057 million at December 31, 2011. The Corporation's debt to capitalization ratio at September 30, 2012 was 27.5 percent, compared with 24.6 percent at the end of 2011. Hess Corporation will review third 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 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)   Third Third Second Quarter Quarter Quarter 2012 2011 2012 Income Statement Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 9,194 $ 8,665 $ 9,304 Income (loss) from equity investment in HOVENSA L.L.C. - (36) - Gains on asset sales 376 103 - Other, net   49   (6)   5   Total revenues and non-operating income   9,619   8,726   9,309   Costs and Expenses Cost of products sold (excluding items shown separately below) 6,019 6,181 5,969 Production expenses 712 609 677 Marketing expenses 259 266 265 Exploration expenses, including dry holes and lease impairment 259 199 196 Other operating expenses 41 43 41 General and administrative expenses 167 177 172 Interest expense 104 94 105 Depreciation, depletion and amortization 748 586 769 Asset impairments   208   358   59   Total costs and expenses   8,517   8,513   8,253   Income (loss) before income taxes 1,102 213 1,056 Provision (benefit) for income taxes   510   (54)   521   Net income (loss) 592 267 535 Less: Net income (loss) attributable to noncontrolling interests   35   (31)   (14) Net income (loss) attributable to Hess Corporation $ 557 $ 298 $ 549   Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ 7 $ (2) $ (5) Capitalized interest 8 4 5   Cash Flow Information Net cash provided by operating activities (a) $ 1,862 $ 1,022 $ 1,240   Capital and Exploratory Expenditures Exploration and Production United States $ 1,210 $ 1,600 $ 1,243 International   1,050   917   793   Total Exploration and Production 2,260 2,517 2,036 Marketing, Refining and Corporate   27   33   42   Total Capital and Exploratory Expenditures $ 2,287 $ 2,550 $ 2,078   Exploration expenses charged to income included above United States $ 39 $ 48 $ 33 International   88   68   67   $ 127 $ 116 $ 100   (a) Includes changes in working capital.       HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS)   Nine Months 2012     2011 Income Statement Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 28,180 $ 28,733 Income (loss) from equity investment in HOVENSA L.L.C. - (133) Gains on asset sales 412 446 Other, net   83   1   Total revenues and non-operating income   28,675   29,047   Costs and Expenses Cost of products sold (excluding items shown separately below) 18,667 20,062 Production expenses 2,062 1,739 Marketing expenses 775 796 Exploration expenses, including dry holes and lease impairment 708 769 Other operating expenses 123 127 General and administrative expenses 506 515 Interest expense 313 290 Depreciation, depletion and amortization 2,198 1,732 Asset impairments   267   358   Total costs and expenses   25,619   26,388   Income (loss) before income taxes 3,056 2,659 Provision (benefit) for income taxes   1,369   849   Net income (loss) 1,687 1,810 Less: Net income (loss) attributable to noncontrolling interests   36   (24) Net income (loss) attributable to Hess Corporation $ 1,651 $ 1,834   Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ 11 $ (7) Capitalized interest 18 8   Cash Flow Information Net cash provided by operating activities (a) $ 4,090 (b) $ 3,846   Capital and Exploratory Expenditures Exploration and Production United States $ 3,694 $ 2,933 International   2,565   2,226   Total Exploration and Production 6,259 5,159 Marketing, Refining and Corporate   92   67   Total Capital and Exploratory Expenditures $ 6,351 $ 5,226   Exploration expenses charged to income included above United States $ 109 $ 146 International   226   189   $ 335 $ 335   (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)   September 30, December 31, 2012 2011 Balance Sheet Information   Cash and cash equivalents $ 528 $ 351 Other current assets 7,629 7,988 Investments 401 384 Property, plant and equipment – net 28,144 24,712 Other long-term assets   5,510   5,701 Total assets $ 42,212 $ 39,136   Short-term debt and current maturities of long-term debt $ 621 $ 52 Other current liabilities 7,227 8,048 Long-term debt 7,220 6,005 Other long-term liabilities 6,492 6,439 Total equity excluding other comprehensive income (loss) 21,327 19,659 Accumulated other comprehensive income (loss)   (675)   (1,067) Total liabilities and equity $ 42,212 $ 39,136       HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS)   Third Quarter 2012 United States       International       Total Sales and other operating revenues $ 1,022 $ 1,685 $ 2,707 Gains on asset sales - 376 376 Other, net   18   26   44   Total revenues and non-operating income   1,040   2,087   3,127 Costs and expenses Production expenses, including related taxes 241 471 712 Exploration expenses, including dry holes and lease impairment 68 191 259 General, administrative and other expenses 49 30 79 Depreciation, depletion and amortization 393 332 725 Asset impairments   58   150   208   Total costs and expenses   809   1,174   1,983   Results of operations before income taxes 231 913 1,144 Provision (benefit) for income taxes   91   445   536   Results of operations attributable to Hess Corporation $ 140 (a) $ 468 (b) $ 608   Third Quarter 2011 United States International Total Sales and other operating revenues $ 830 $ 1,307 $ 2,137 Gains on asset sales - 103 103 Other, net   4   (10)   (6)   Total revenues and non-operating income   834   1,400   2,234 Costs and expenses Production expenses, including related taxes 174 435 609 Exploration expenses, including dry holes and lease impairment 120 79 199 General, administrative and other expenses 44 27 71 Depreciation, depletion and amortization 209 355 564 Asset impairments   16   342   358   Total costs and expenses   563   1,238   1,801   Results of operations before income taxes 271 162 433 Provision (benefit) for income taxes   108   (97)   11   Results of operations attributable to Hess Corporation $ 163 $ 259 (b) $ 422   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   (a) The after-tax losses from crude oil hedging activities were $5 million in the third quarter of 2012 and $3 million in the second quarter of 2012. (b) The after-tax losses from crude oil hedging activities were $89 million in the third quarter of 2012, $82 million in the third quarter of 2011 and $86 million in the second quarter of 2012.       HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS)   Nine Months 2012 United States       International       Total Sales and other operating revenues $ 2,988 $ 5,328 $ 8,316 Gains on asset sales - 412 412 Other, net   19   53   72   Total revenues and non-operating income   3,007   5,793   8,800 Costs and expenses Production expenses, including related taxes 725 1,337 2,062 Exploration expenses, including dry holes and lease impairment 221 487 708 General, administrative and other expenses 137 86 223 Depreciation, depletion and amortization 1,007 1,120 2,127 Asset impairments   117   150   267   Total costs and expenses   2,207   3,180   5,387   Results of operations before income taxes 800 2,613 3,413 Provision (benefit) for income taxes   313   1,213   1,526   Results of operations attributable to Hess Corporation $ 487 (a) $ 1,400 (b) $ 1,887   Nine Months 2011 United States International Total Sales and other operating revenues $ 2,434 $ 5,014 $ 7,448 Gains on asset sales - 446 446 Other, net   (10)   -   (10)   Total revenues and non-operating income   2,424   5,460   7,884 Costs and expenses Production expenses, including related taxes 490 1,249 1,739 Exploration expenses, including dry holes and lease impairment 357 412 769 General, administrative and other expenses 141 90 231 Depreciation, depletion and amortization 527 1,127 1,654 Asset impairments   16   342   358   Total costs and expenses   1,531   3,220   4,751   Results of operations before income taxes 893 2,240 3,133 Provision (benefit) for income taxes   340   645   985   Results of operations attributable to Hess Corporation $ 553 $ 1,595 (b) $ 2,148   (a) The after-tax losses from crude oil hedging activities were $34 million in the first nine months of 2012. (b) The after-tax losses from crude oil hedging activities were $300 million in the first nine months of 2012 and $244 million in the first nine months of 2011.                   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)   Third Third Second Quarter Quarter Quarter 2012 2011 2012 Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 109 82 109 Europe 80 68 98 Africa 75 59 79 Asia   17   15   18 Total   281   224   304   Natural gas liquids - barrels United States 16 13 15 Europe 2 3 3 Asia   1   1   1 Total   19   17   19   Natural gas - mcf United States 116 102 121 Europe 36 55 53 Asia and other   462   458   465 Total   614   615   639 Barrels of oil equivalent   402   344   429   Average Selling Price Crude oil - per barrel (including hedging) United States $ 90.17 $ 95.12 $ 91.97 Europe 75.08 65.92 76.20 Africa 90.78 89.41 89.01 Asia 102.85 112.31 105.89 Worldwide 86.69 85.81 86.86   Crude oil - per barrel (excluding hedging) United States $ 90.87 $ 95.12 $ 92.48 Europe 75.36 65.92 76.58 Africa 110.33 113.03 105.72 Asia 103.20 112.31 106.17 Worldwide 92.35 92.33 91.83   Natural gas liquids - per barrel United States $ 38.35 $ 57.72 $ 40.75 Europe 56.82 82.18 66.15 Asia 64.67 71.30 75.16 Worldwide 41.71 63.64 45.56   Natural gas - per mcf United States $ 2.18 $ 3.43 $ 1.55 Europe 9.15 8.93 9.98 Asia and other 6.56 5.86 6.61 Worldwide 5.88 5.74 5.94       HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)   Nine Months 2012       2011 Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 104 78 Europe 91 86 Africa 75 70 Asia   17   14 Total   287   248   Natural gas liquids - barrels United States 15 13 Europe 3 3 Asia   1   1 Total   19   17   Natural gas - mcf United States 112 103 Europe 50 78 Asia and other   459   453 Total   621   634 Barrels of oil equivalent   409   371   Average Selling Price Crude oil - per barrel (including hedging) United States $ 92.53 $ 97.71 Europe 77.13 81.19 Africa 89.56 89.85 Asia 107.88 112.03 Worldwide 87.71 90.22   Crude oil - per barrel (excluding hedging) United States $ 94.46 $ 97.71 Europe 78.18 81.19 Africa 111.28 111.20 Asia 109.92 112.03 Worldwide 94.58 95.89   Natural gas liquids - per barrel United States $ 42.60 $ 58.86 Europe 75.67 78.09 Asia 75.95 74.18 Worldwide 49.05 63.70   Natural gas - per mcf United States $ 1.83 $ 3.66 Europe 9.56 8.64 Asia and other 6.64 5.85 Worldwide 6.01 5.84                   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESMARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)   Third Third Second Quarter Quarter Quarter 2012 2011 2012 Financial Information (in millions)   Marketing and Refining Results Income (loss) before income taxes $ 84 $ (23) $ 7 Provision (benefit) for income taxes   31   -   (1) Results of operations attributable to Hess Corporation $ 53 $ (23) $ 8   Summary of Marketing and Refining Results Marketing $ 17 $ 41 $ 18 Refining 18 (38) 8 Trading   18   (26)   (18) Results of operations attributable to Hess Corporation $ 53 $ (23) $ 8                                   Operating Data   Sales VolumesRefined petroleum products (thousands of barrels per day) Gasoline 214 222 212 Distillates 102 100 108 Residuals 48 53 54 Other   10   14   17 Total   374   389   391   Natural gas (thousands of mcf per day)   1,900   1,800   1,860   Electricity (megawatts round the clock)   4,765   4,900   4,405   Retail Marketing Number of retail stations (a) 1,361 1,358 1,361 Convenience store revenue (in millions) (b) $ 295 $ 316 $ 288 Average gasoline volume per station (thousands of gallons per month) (b) 196 201 194   Port Reading Refinery throughput (thousands of barrels per day) 68 63 69 Refinery utilization (capacity - 70,000 barrels per day) 97.0% 90.0% 98.0%   (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 Months 2012 2011 Financial Information (in millions)   Marketing and Refining Results Income (loss) before income taxes $ 111 $ 28 Provision (benefit) for income taxes   39   51 Results of operations attributable to Hess Corporation $ 72 $ (23)   Summary of Marketing and Refining Results Marketing $ 57 $ 137 Refining 20 (130) Trading   (5)   (30) Results of operations attributable to Hess Corporation $ 72 $ (23)                         Operating Data   Sales VolumesRefined petroleum products (thousands of barrels per day) Gasoline 212 226 Distillates 109 116 Residuals 54 65 Other   15   20 Total   390   427   Natural gas (thousands of mcf per day)   2,105   2,200   Electricity (megawatts round the clock)   4,475   4,500   Retail Marketing Number of retail stations (a) 1,361 1,358 Convenience store revenue (in millions) (b) $ 855 $ 899 Average gasoline volume per station (thousands of gallons per month) (b) 192 195   Port Reading Refinery throughput (thousands of barrels per day) 61 65 Refinery utilization (capacity - 70,000 barrels per day) 87.6% 92.5%   (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