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Press release from Business Wire

Hess Reports Estimated Results for the Fourth Quarter of 2012

<p> <b>Fourth Quarter Highlights:</b> </p> <ul> <li class='bwlistitemmargb'> <i><b>Net income was $566 million, compared with a net loss of $131 million in the fourth quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net income excluding items affecting comparability between periods was $409 million compared with $394 million in the fourth quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Oil and gas production increased to 396,000 barrels of oil equivalent</b></i> <i><b>per day, up from 367,000 in the fourth quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Net cash provided by operating activities was $1,570 million, compared with $1,138 million in the fourth quarter of 2011</b></i> </li> <li class='bwlistitemmargb'> <i><b>Year-end total proved reserves were 1,553 million barrels of oil equivalent; reserve replacement for 2012 was 141 percent</b></i> </li> </ul>

Wednesday, January 30, 2013

Hess Reports Estimated Results for the Fourth Quarter of 201207:30 EST Wednesday, January 30, 2013 NEW YORK (Business Wire) -- Hess Corporation (NYSE: HES) reported net income of $566 million for the fourth quarter of 2012, compared with a net loss of $131 million for the fourth quarter of 2011. The after-tax income (loss) by major operating activity was as follows:     Three Months Ended Years Ended December 31, (unaudited) December 31, (unaudited) 2012   2011 2012   2011 (In millions, except per share amounts) Exploration and Production $ 517 $ 527 $ 2,404 $ 2,675 Marketing and Refining 159 (561) 231 (584) Corporate (43) (40) (158) (154) Interest expense   (67)   (57)   (260)   (234) Net income (loss) attributable to Hess Corporation $ 566 $ (131) $ 2,217 $ 1,703   Net income (loss) per share (diluted) $ 1.66 $ (.39) $ 6.52 $ 5.01   Weighted average number of shares (diluted)   340.5   337.5   340.3   339.9   Note: See page 3 for a table of items affecting comparability of earnings between periods.   Exploration and Production earnings were $517 million in the fourth quarter of 2012, compared with $527 million in the fourth quarter of 2011. Fourth quarter oil and gas production was 396,000 barrels of oil equivalent per day, up from 367,000 barrels of oil equivalent per day in the fourth quarter a year ago, primarily reflecting an increase in production from the Bakken oil shale play and the resumption of operations in Libya, partly offset by the shut-in of the Valhall Field in Norway for the quarter due to the redevelopment project. Net production from the Bakken oil shale play averaged 64,000 barrels of oil equivalent per day in the fourth quarter of 2012, an increase of 68% from 38,000 barrels of oil equivalent per day in the same period last year. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $84.46 per barrel, down from $89.70 per barrel in the same quarter a year ago. The average worldwide natural gas selling price was $6.60 per mcf in the fourth quarter of 2012, up from $6.32 per mcf in the fourth quarter of 2011. Fourth quarter 2012 exploration expenses included total dry hole expenses of $167 million ($102 million after-tax), primarily associated with two exploration wells, Ness Deep in the Gulf of Mexico and Ajek-1 offshore, Indonesia. In 2012, the Corporation announced divestitures totaling $2.4 billion as part of the strategic reshaping of its Exploration and Production asset portfolio. The sale of the Corporation's interest in the Bittern Field in the United Kingdom North Sea was completed in the fourth quarter of 2012 and follows the completion of the sales of the Schiehallion Field, offshore United Kingdom, and the Snohvit Field, offshore Norway, earlier in the year. The sale of the Corporation's interest in the Beryl Field in the United Kingdom North Sea was completed in January 2013 and the divestiture of our assets in Azerbaijan is expected to be completed by the end of March 2013. In addition, as previously announced, the Corporation has commenced a sales process for its Russian subsidiary, Samara-Nafta, and its Eagle Ford assets in Texas. Oil and gas proved reserves were 1,553 million barrels of oil equivalent at the end of 2012, compared with 1,573 million barrels at the end of 2011. During 2012, the Corporation added 214 million barrels of oil equivalent to proved reserves and sold 83 million barrels of oil equivalent of proved reserves through asset dispositions. The additions, which are subject to final review, replaced approximately 141 percent of the Corporation's 2012 production, resulting in a reserve life of 10.3 years. Marketing and Refining generated income of $159 million in the fourth quarter of 2012, compared with a loss of $561 million in the same period in 2011. Marketing earnings were $152 million, up from $48 million in the same quarter of 2011 primarily as a result of income from the partial liquidation of LIFO inventories, and higher margins. Operations at our Port Reading refining facility in New Jersey generated income of $8 million in the fourth quarter of 2012, compared with a loss of $6 million in the fourth quarter of 2011, principally due to higher margins. Trading activities generated a loss of $1 million in the fourth quarter of 2012 and a loss of $11 million in the fourth quarter of last year. Earlier this week, the Corporation announced that the Port Reading refinery will be closed in February. Upon closure of Port Reading, which follows the shutdown of the HOVENSA L.L.C. refinery in St. Croix, U.S. Virgin Islands in early 2012, the Corporation will have completely exited the refining business. The Corporation also announced that it will commence a process to sell its terminal network. Following these actions, over 90 percent of Hess' capital employed will be in its Exploration and Production business. The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods:                           Three Months Ended Years Ended December 31, (unaudited) December 31, (unaudited) 2012   2011 2012   2011 (In millions) Exploration and Production $ 86 $ - $ 148 $ 244 Marketing and Refining   71   (525)   71   (525) $ 157 $ (525) $ 219 $ (281)   Fourth quarter 2012 Exploration and Production results included an after-tax gain of $172 million relating to the sale of the Corporation's interest in the Bittern Field in the United Kingdom North Sea. The results also included an income tax charge of $86 million for a disputed application of an international tax treaty. Fourth quarter 2012 Marketing and Refining results included after-tax income of $104 million from the partial liquidation of LIFO inventories and after-tax charges totaling $33 million for asset impairments and other charges. Fourth quarter 2011 results included an after-tax charge of $525 million related to the shutdown of the HOVENSA refinery. Net cash provided by operating activities was $1,570 million in the fourth quarter of 2012, compared with $1,138 million in the same quarter of 2011. Capital and exploratory expenditures were $1,914 million, of which $1,887 million related to Exploration and Production operations. Capital and exploratory expenditures for the fourth quarter of 2011 were $2,236 million, of which $2,185 million related to Exploration and Production operations. At December 31, 2012, cash and cash equivalents totaled $642 million, compared with $351 million at December 31, 2011. Total debt was $8,111 million at December 31, 2012 and $6,057 million at December 31, 2011. The Corporation's debt to capitalization ratio at December 31, 2012 was 27.5 percent, compared with 24.6 percent at the end of 2011. Hess Corporation will review fourth 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 http://www.hess.com. Hess Corporation is a leading global independent energy company primarily engaged in the exploration and production of crude oil and natural gas, and the marketing of refined petroleum products, natural gas and electricity. More information on Hess Corporation is available at http://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)   Fourth Fourth Third Quarter Quarter Quarter 2012 2011 2012 Income Statement Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 9,511 $ 9,733 $ 9,194 Income (loss) from equity investment in HOVENSA L.L.C. - (940) - Gains on asset sales 172 - 376 Other, net   15     31     49     Total revenues and non-operating income   9,698     8,824     9,619     Costs and Expenses Cost of products sold (excluding items shown separately below) 6,250 6,712 6,019 Production expenses 690 613 712 Marketing expenses 282 273 259 Exploration expenses, including dry holes and lease impairment 362 426 259 Other operating expenses 43 44 41 General and administrative expenses 201 187 167 Interest expense 106 93 104 Depreciation, depletion and amortization 751 674 748 Asset impairments   16     -     208     Total costs and expenses   8,701     9,022     8,517     Income (loss) before income taxes 997 (198) 1,102 Provision (benefit) for income taxes   429     (64)     510     Net income (loss) 568 (134) 592 Less: Net income (loss) attributable to noncontrolling interests   2     (3)     35   Net income (loss) attributable to Hess Corporation $ 566   $ (131)   $ 557     Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ 7 $ (8) $ 7 Capitalized interest 10 5 8   Cash Flow Information Net cash provided by operating activities (a) $ 1,570 $ 1,138 $ 1,862   Capital and Exploratory Expenditures Exploration and Production United States $ 1,069 $ 1,372 $ 1,210 International   818     813     1,050     Total Exploration and Production 1,887 2,185 2,260   Marketing, Refining and Corporate   27     51     27     Total Capital and Exploratory Expenditures $ 1,914   $ 2,236   $ 2,287     Exploration expenses charged to income included above United States $ 33 $ 51 $ 39 International   102     70     88     $ 135   $ 121   $ 127     (a) Includes changes in working capital.         HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS)   Years Ended December 31, 2012   2011 Income Statement Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 37,691 $ 38,466 Income (loss) from equity investment in HOVENSA L.L.C. - (1,073) Gains on asset sales 584 446 Other, net   98   32   Total revenues and non-operating income   38,373   37,871   Costs and Expenses Cost of products sold (excluding items shown separately below) 24,917 26,774 Production expenses 2,752 2,352 Marketing expenses 1,057 1,069 Exploration expenses, including dry holes and lease impairment 1,070 1,195 Other operating expenses 166 171 General and administrative expenses 707 702 Interest expense 419 383 Depreciation, depletion and amortization 2,949 2,406 Asset impairments   283   358   Total costs and expenses   34,320   35,410   Income (loss) before income taxes 4,053 2,461 Provision (benefit) for income taxes   1,798   785   Net income (loss) 2,255 1,676 Less: Net income (loss) attributable to noncontrolling interests   38   (27) Net income (loss) attributable to Hess Corporation $ 2,217 $ 1,703   Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ 18 $ (15) Capitalized interest 28 13   Cash Flow Information Net cash provided by operating activities (a) $ 5,660 $ 4,984   Capital and Exploratory Expenditures Exploration and Production United States $ 4,763 $ 4,305 International   3,383   3,039   Total Exploration and Production 8,146 7,344   Marketing, Refining and Corporate   119   118   Total Capital and Exploratory Expenditures $ 8,265 $ 7,462   Exploration expenses charged to income included above United States $ 142 $ 197 International   328   259   $ 470 $ 456   (a) Includes changes in working capital.         HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESSUPPLEMENTAL FINANCIAL DATA (UNAUDITED)(IN MILLIONS)   December 31, 2012   2011 Balance Sheet Information   Cash and cash equivalents $ 642 $ 351 Other current assets 7,667 7,988 Investments 443 384 Property, plant and equipment – net 29,122 24,712 Other long-term assets   5,720   5,701 Total assets $ 43,594 $ 39,136   Short-term debt and current maturities of long-term debt $ 787 $ 52 Other current liabilities 7,556 8,048 Long-term debt 7,324 6,005 Other long-term liabilities 6,532 6,439 Total equity excluding other comprehensive income (loss) 21,888 19,659 Accumulated other comprehensive income (loss)   (493)   (1,067) Total liabilities and equity $ 43,594 $ 39,136           HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS)   Fourth Quarter 2012 United States International Total Sales and other operating revenues $ 1,116 $ 1,461 $         2,577 Gains on asset sales - 172 172 Other, net   (1)   28           27   Total revenues and non-operating income   1,115   1,661           2,776   Costs and expenses Production expenses, including related taxes 232 458 690 Exploration expenses, including dry holes and lease impairment 205 157 362 General, administrative and other expenses 59 32 91 Depreciation, depletion and amortization 399 327 726 Asset impairments   -   -           -   Total costs and expenses   895   974           1,869   Results of operations before income taxes 220 687 907 Provision (benefit) for income taxes   77   313           390   Results of operations attributable to Hess Corporation $ 143 (a) $ 374 (b) $         517   Fourth Quarter 2011 United States International Total Sales and other operating revenues $ 937 $ 1,662 $ 2,599 Gains on asset sales - - - 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 Asset impairments   -   -           - 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   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   (a) The after-tax losses from crude oil hedging activities were $5 million in both the third and fourth quarter of 2012. (b) The after-tax losses from crude oil hedging activities were $92 million in the fourth quarter of 2012, $83 million in the fourth quarter of 2011 and $89 million in the third quarter of 2012.   HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)(IN MILLIONS)   Year Ended December 31, 2012 United States International Total Sales and other operating revenues $ 4,104 $ 6,789 $       10,893 Gains on asset sales - 584 584 Other, net   18   81         99   Total revenues and non-operating income   4,122   7,454         11,576   Costs and expenses Production expenses, including related taxes 957 1,795 2,752 Exploration expenses, including dry holes and lease impairment 426 644 1,070 General, administrative and other expenses 196 118 314 Depreciation, depletion and amortization 1,406 1,447 2,853 Asset impairments   117   150         267   Total costs and expenses   3,102   4,154         7,256   Results of operations before income taxes 1,020 3,300 4,320 Provision (benefit) for income taxes   390   1,526         1,916   Results of operations attributable to Hess Corporation $ 630 (a) $ 1,774 (b) $       2,404   Year Ended December 31, 2011 United States International Total Sales and other operating revenues $ 3,371 $ 6,676 $ 10,047 Gains on asset sales - 446 446 Other, net   (7)   25         18   Total revenues and non-operating income   3,364   7,147         10,511   Costs and expenses Production expenses, including related taxes 660 1,692 2,352 Exploration expenses, including dry holes and lease impairment 475 720 1,195 General, administrative and other expenses 190 123 313 Depreciation, depletion and amortization 800 1,505 2,305 Asset impairments   16   342         358   Total costs and expenses   2,141   4,382         6,523   Results of operations before income taxes 1,223 2,765 3,988 Provision (benefit) for income taxes   470   843         1,313   Results of operations attributable to Hess Corporation $ 753 $ 1,922 (b) $       2,675   (a) The after-tax losses from crude oil hedging activities were $39 million for the year ended December 31, 2012. (b) The after-tax losses from crude oil hedging activities were $392 million for the year ended December 31, 2012 and $327 million for the corresponding period of 2011.             HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)   Fourth Fourth Third Quarter Quarter Quarter 2012 2011 2012 Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 118 89 109 Europe 64 95 80 Africa 77 54 75 Asia   16   13   17 Total   275   251   281   Natural gas liquids - barrels United States 18 13 16 Europe 2 4 2 Asia   1   1   1 Total   21   18   19   Natural gas - mcf United States 138 90 116 Europe 22 92 36 Asia and other   441   408   462 Total   601   590   614 Barrels of oil equivalent   396   367   402   Average Selling Price Crude oil - per barrel (including hedging) United States $ 91.74 $ 100.76 $ 90.17 Europe 61.01 77.18 75.08 Africa 87.27 85.49 90.78 Asia 106.28 111.08 102.85 Worldwide 84.46 89.70 86.69   Crude oil - per barrel (excluding hedging) United States $ 92.63 $ 100.76 $ 90.87 Europe 61.29 77.18 75.36 Africa 109.76 109.28 110.33 Asia 107.86 111.08 103.20 Worldwide 90.86 95.16 92.35   Natural gas liquids - per barrel United States $ 36.21 $ 57.86 $ 38.35 Europe 85.62 66.47 56.82 Asia 85.24 66.18 64.67 Worldwide 44.66 59.81 41.71   Natural gas - per mcf United States $ 2.72 $ 2.50 $ 2.18 Europe 9.06 8.88 9.15 Asia and other 7.68 6.57 6.56 Worldwide 6.60 6.32 5.88           HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESEXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)   Years Ended December 31, 2012   2011 Operating DataNet Production Per Day (in thousands) Crude oil - barrels United States 108 81 Europe 84 89 Africa 75 66 Asia   17   13 Total   284   249   Natural gas liquids - barrels United States 16 13 Europe 2 3 Asia   1   1 Total   19   17   Natural gas - mcf United States 119 100 Europe 43 81 Asia and other   454   442 Total   616   623 Barrels of oil equivalent   406   370   Average Selling Price Crude oil - per barrel (including hedging) United States $ 92.32 $ 98.56 Europe 74.14 80.18 Africa 89.02 88.46 Asia 107.45 111.71 Worldwide 86.94 89.99   Crude oil - per barrel (excluding hedging) United States $ 93.96 $ 98.56 Europe 75.06 80.18 Africa 110.92 110.28 Asia 109.35 111.71 Worldwide 93.70 95.60   Natural gas liquids - per barrel United States $ 40.75 $ 58.59 Europe 78.43 75.49 Asia 77.92 72.29 Worldwide 47.81 62.72   Natural gas - per mcf United States $ 2.09 $ 3.39 Europe 9.50 8.79 Asia and other 6.90 6.02 Worldwide 6.16 5.96             HESS CORPORATION AND CONSOLIDATED SUBSIDIARIESMARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)   Fourth Fourth Third Quarter Quarter Quarter 2012 2011 2012 Financial Information (in millions)   Marketing and Refining Results Income (loss) before income taxes $ 265 $ (885) $ 84 Provision (benefit) for income taxes   106     (324)     31   Results of operations attributable to Hess Corporation $ 159   $ (561)   $ 53     Summary of Marketing and Refining Results Marketing $ 152 $ 48 $ 17 Refining 8 (598) 18 Trading   (1)     (11)     18   Results of operations attributable to Hess Corporation $ 159   $ (561)   $ 53             Operating Data   Sales Volumes Refined petroleum products (thousands of barrels per day) Gasoline 201 214 214 Distillates 126 143 102 Residuals 49 65 48 Other   10     19     10   Total   386     441     374     Natural gas (thousands of mcf per day)   2,700     2,200     1,900     Electricity (megawatts round the clock)   4,400     4,100     4,800     Retail Marketing Number of retail stations (a) 1,361 1,360 1,361 Convenience store revenue (in millions) (b) $ 268 $ 290 $ 295 Average gasoline volume per station (thousands of gallons per month) (b) 194 195 196   Port Reading Refinery throughput (thousands of barrels per day) 50 58 68 Refinery utilization (capacity - 70,000 barrels per day) 72.0% 82.9% 97.0%   (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)   Years Ended December 31, 2012 2011 Financial Information (in millions)   Marketing and Refining Results Income (loss) before income taxes $ 376 $ (857) Provision (benefit) for income taxes   145   (273) Results of operations attributable to Hess Corporation $ 231 $ (584)   Summary of Marketing and Refining Results Marketing $ 209 $ 185 Refining 28 (728) Trading   (6)   (41) Results of operations attributable to Hess Corporation $ 231 $ (584)                       Operating Data   Sales Volumes Refined petroleum products (thousands of barrels per day) Gasoline 209 222 Distillates 113 123 Residuals 53 65 Other   14   20 Total     389   430   Natural gas (thousands of mcf per day)   2,300   2,200   Electricity (megawatts round the clock)   4,500   4,400   Retail Marketing Number of retail stations (a) 1,361 1,360 Convenience store revenue (in millions) (b) $ 1,123 $ 1,189 Average gasoline volume per station (thousands of gallons per month) (b) 192 195   Port Reading Refinery throughput (thousands of barrels per day) 59 63 Refinery utilization (capacity - 70,000 barrels per day) 83.6% 90.0%   (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