HES
$44.50
Hess
$.87
1.99%
Earnings Details
2nd Quarter June 2017
Wednesday, July 26, 2017 7:30:06 AM
Tweet Share Watch
Summary

Hess (HES) Recent Earnings

Hess (HES) reported a 2nd Quarter June 2017 loss of $1.46 per share on revenue of $1.2 billion. The consensus estimate was a loss of $1.32 per share on revenue of $1.3 billion. Revenue fell 3.2% compared to the same quarter a year ago.

Hess Corp is a Exploration and Production (E&P) company that develops, produces, purchases, transports and sells crude oil and natural gas. The Company operates in two segments: E&P and Retail Marketing.

Results
Reported Earnings
($1.46)
Earnings Whisper
-
Consensus Estimate
($1.32)
Reported Revenue
$1.23 Bil
Revenue Estimate
$1.27 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Hess Reports Estimated Results for the Second Quarter of 2017

Second quarter 2017 pre-tax loss of $425 million reflects improved operating results compared to the pre-tax loss of $678 million in the year-ago quarter

Net loss was $449 million, or $1.46 per common share, compared with a net loss of $392 million, or $1.29 per common share, in the second quarter of 2016, reflecting a lower effective tax rate in 2017 from the required change in deferred tax accounting

Oil and gas production exceeded guidance; total production was 294,000 barrels of oil equivalent per day (boepd), excluding Libya; Bakken production was 108,000 boepd

Sanctioned the first phase of development for the Liza Field, one of the industry’s largest oil discoveries of the past decade, located on the Stabroek Block offshore Guyana (Hess 30 percent); first oil expected by 2020

Successfully completed Liza-4 well; the recently announced Payara-2 well confirms a second giant oil field in Guyana and increases the Payara gross discovered recoverable resources to approximately 500 million barrels of oil equivalent (boe); gross discovered recoverable resources for the Stabroek Block now estimated between 2.25 billion and 2.75 billion boe (Hess 30 percent)

Announced an agreement to sell our interests in enhanced oil recovery assets in the Permian Basin for total consideration of $600 million

Hess Midstream Partners LP sold common units representing limited partner interests in an initial public offering for net proceeds of $365.5 million, of which $175 million was distributed to Hess Corporation

E&P capital and exploratory expenditures were $528 million for the quarter and $921 million for the first half of 2017

Cash and cash equivalents were $2.5 billion at June 30, 2017; $2.7 billion at December 31, 2016

--2017 Revised Full Year Guidance:

Net production guidance, excluding Libya, increased to 305,000 to 310,000 boepd, the upper end of previous guidance, even with the loss of 8,000 boepd of production associated with the sale of our enhanced oil recovery assets in the Permian Basin scheduled to close August 1st

E&P capital and exploratory expenditures are projected to be $2.15 billion, down from original guidance of $2.25 billion

Hess Corporation (HES) today reported a net loss of $449 million, or $1.46 per common share, in the second quarter of 2017 compared with a net loss of $392 million, or $1.29 per common share, in the second quarter of 2016, reflecting a lower effective tax rate in 2017 from the required change in deferred tax accounting. Our loss before income taxes was $425 million in the second quarter of 2017, compared with a loss before income taxes of $678 million in the prior-year quarter. The improved second quarter 2017 pre-tax results reflect higher realized crude oil selling prices and lower operating costs and exploration expenses that were partially offset by lower sales volumes. On an adjusted basis, second quarter 2016 adjusted loss was $335 million, or $1.10 per common share.

"Our company delivered strong operational performance and achieved a number of major strategic milestones in the quarter," Chief Executive Officer John Hess said. "We continue to take steps to reinforce our outstanding value-driven growth outlook and drive improving returns and lower capital and operating costs across our portfolio."

After-tax income (loss) by major operating activity was as follows:

Three Months Ended
Six Months Ended
June 30,
June 30,
(unaudited)
(unaudited)
2017
2016
2017
2016
(In millions, except per share amounts)
Net Income (Loss) Attributable to Hess
Corporation
Exploration and Production
$
(354 )
$
(328 )
$
(587 )
$
(781 )
Midstream
16
11
34
27
Corporate, Interest and Other
(111 )
(75 )
(220 )
(147 )
Net income (loss) attributable to Hess Corporation
$
(449 )
$
(392 )
$
(773 )
$
(901 )
Net income (loss) per common share (diluted) (a)
$
(1.46 )
$
(1.29 )
$
(2.53 )
$
(3.00 )
Adjusted Net Income (Loss) Attributable to
Hess Corporation (b)
Exploration and Production
$
(354 )
$
(271 )
$
(587 )
$
(724 )
Midstream
16
11
34
27
Corporate, Interest and Other
(111 )
(75 )
(220 )
(147 )
Adjusted net income (loss) attributable to Hess Corporation
$
(449 )
$
(335 )
$
(773 )
$
(844 )
Adjusted net income (loss) per common share (diluted) (a)
$
(1.46 )
$
(1.10 )
$
(2.53 )
$
(2.81 )
Weighted average number of shares (diluted)
314.4
313.2
314.2
306.5
(a)
Calculated as net income (loss) attributable to Hess
Corporation less preferred stock dividends, divided by weighted
average number of diluted shares.
(b)
Adjusted net income (loss) attributable to Hess Corporation
excludes items affecting comparability summarized on page 5. A
reconciliation of net income (loss) attributable to Hess
Corporation to adjusted net income (loss) attributable to Hess
Corporation is provided on page 6.

Exploration and Production:

The Exploration and Production net loss in the second quarter of 2017 was $354 million, compared to a net loss of $328 million in the second quarter of 2016. On an adjusted basis, second quarter 2016 net loss was $271 million. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $45.95 per barrel in the second quarter of 2017, up from $41.95 per barrel in the year-ago quarter. The average realized natural gas liquids selling price in the second quarter of 2017 was $14.85 per barrel, versus $9.03 per barrel in the prior-year quarter, while the average realized natural gas selling price was $3.19 per mcf, compared with $3.58 per mcf in the second quarter of 2016.

Net production, excluding Libya, was 294,000 boepd in the second quarter of 2017, compared to 313,000 boepd in the prior-year quarter. Lower volumes were due to a reduced drilling program across our portfolio, natural field declines, and planned shut-downs in the Gulf of Mexico. Net production in Libya, which recommenced in the fourth quarter of 2016, was 6,000 boepd in the second quarter of 2017.

Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $14.68 per boe in the second quarter, down 8 percent from $15.91 per boe in the prior-year quarter. Second quarter 2017 results included a charge of $15 million related to crude oil hedge ineffectiveness. The E&P effective tax rate, excluding Libya, was a benefit of 8 percent in the second quarter of 2017, down from a benefit of 47 percent, excluding special items, in the second quarter of 2016. Commencing in 2017, we do not recognize deferred tax benefit or expense in the U.S., Denmark (hydrocarbon tax only), and Malaysia until deferred tax assets are re-established in these jurisdictions. This financial reporting requirement has no cash flow or economic impact.

Operational Highlights for the Second Quarter of 2017:

Bakken (Onshore U.S.): Net production from the Bakken averaged 108,000 boepd, compared to 106,000 boepd in the prior-year quarter. The Corporation operated an average of four rigs in the second quarter, drilling 23 wells and bringing 13 new wells online.

Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 51,000 boepd, compared to 54,000 boepd in the prior-year quarter, primarily reflecting lower production as a result of planned shut-downs, partially offset by higher production at the Tubular Bells Field. At the Stampede development (Hess operated - 25 percent), the tension leg platform (TLP) was installed in the field and hook-up activities commenced. One well has been drilled and completed, and completion operations are underway on the second and third wells. First production from the field is expected in the first half of 2018.

North Malay Basin Full-field Development (Offshore Malaysia): At the North Malay Basin project (Hess operated - 50 percent), hook-up of the topsides for the central processing platform was completed in the quarter and first production of natural gas commenced in mid-July with commissioning activities ongoing. The field is expected to ramp up net production to approximately 165 million cubic feet per day during the third quarter.

Guyana (Offshore): At the Stabroek Block (Hess - 30 percent), operated by Esso Exploration and Production Guyana Limited, the partners sanctioned the first phase of the Liza Field development. This phase is expected to have a gross capital cost of approximately $3.2 billion for drilling and subsea infrastructure and will develop approximately 450 million barrels of oil, with first production expected by 2020. The Corporation’s net share of development costs is forecast to be approximately $955 million, of which $110 million is already included in our 2017 capital and exploratory budget. Of the remaining net development costs, approximately $250 million is expected in 2018 and approximately $330 million in 2019, with the balance expected in 2020 and 2021.

In June, the operator confirmed positive results from the Liza-4 well that encountered more than 197 feet of high-quality, oil-bearing sandstone reservoirs. On July 25th, the operator announced the successful Payara-2 well, which encountered 59 feet of high-quality, oil bearing sandstone reservoirs and confirms a second giant field containing gross discovered recoverable resources of approximately 500 million boe. Gross discovered recoverable resources for the Stabroek Block are now estimated to be 2.25 billion to 2.75 billion barrels of oil equivalent.

Midstream:

The Midstream segment, which is comprised primarily of our 50/50 midstream joint venture, Hess Infrastructure Partners (HIP), had net income of $16 million in the second quarter of 2017, compared to $11 million in the prior-year quarter.

In April, Hess Midstream Partners LP (the "Partnership") successfully sold common units representing limited partner interests in an initial public offering for net proceeds of $365.5 million, of which $175 million was distributed to the Corporation. The Partnership owns an approximate 20 percent controlling interest in the operating assets that comprise HIP, while HIP retains ownership of the remaining 80 percent. The public unit holders own a 30.5 percent limited partner interest in the Partnership.

Capital and Exploratory Expenditures:

Exploration and Production capital and exploratory expenditures were $528 million in the second quarter of 2017, up from $484 million in the prior-year quarter, primarily reflecting increased drilling activity (Bakken, Stampede and Norway), partially offset by lower exploration activity and a reduction in development expenditures at North Malay Basin.

Liquidity:

Net cash provided by operating activities was $165 million in the second quarter of 2017, compared to $197 million in the second quarter of 2016. Net cash provided by operating activities before changes in working capital was $332 million in the second quarter of 2017, up from $257 million in the year-ago quarter. Changes in working capital during the second quarter of 2017 included non-recurring cash outflows totaling approximately $130 million related to crude oil provided to Dakota Access Pipeline as line fill, termination payments for an offshore drilling rig, premiums on crude oil hedging contracts, and prepayments for frac sand in North Dakota.

At June 30, 2017, the Corporation had cash and cash equivalents of $2,492 million and total debt, excluding the Midstream segment, of $6,035 million. The Corporation’s debt to capitalization ratio was 30.9 percent at June 30, 2017 and 30.4 percent at December 31, 2016.

In August, the Corporation expects to complete the sale of its enhanced oil recovery assets in the Permian Basin for total consideration of $600 million.

Items Affecting Comparability of Earnings Between Periods:

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,
June 30,
(unaudited)
(unaudited)
2017
2016
2017
2016
(In millions)
Exploration and Production
$
--
$
(57 )
$
--
$
(57 )
Midstream
--
--
--
--
Corporate, Interest and Other
--
--
--
--
Total items affecting comparability of earnings between periods
$
--
$
(57 )
$
--
$
(57 )

Second quarter 2016 Exploration and Production results included after-tax charges totaling $74 million ($119 million pre-tax) associated with dry-hole costs for a well completed in the prior year and termination of a drilling rig contract, partially offset by an after-tax gain of $17 million ($27 million pre-tax) related to the sale of undeveloped acreage, onshore United States.

Reconciliation of U.S. GAAP to Non-GAAP measures:

The following table reconciles reported net income (loss) attributable to Hess Corporation and adjusted net income (loss):

Three Months Ended
Six Months Ended
June 30,
June 30,
(unaudited)
(unaudited)
2017
2016
2017
2016
(In millions)
Net income (loss) attributable to Hess Corporation
$
(449 )
$
(392 )
$
(773 )
$
(901 )
Less: Total items affecting comparability of earnings between periods
--
(57 )
--
(57 )
Adjusted net income (loss) attributable to Hess Corporation
$
(449 )
$
(335 )
$
(773 )
$
(844 )

The following table reconciles reported net cash provided by (used in) operating activities to cash provided by operating activities before changes in operating assets and liabilities:

Three Months Ended
Six Months Ended
June 30,
June 30,
(unaudited)
(unaudited)
2017
2016
2017
2016
(In millions)
Cash provided by operating activities before changes in operating
$
332
$
257
$
775
$
405
assets
and liabilities
Changes in operating assets and liabilities
(167 )
(60 )
(261 )
(268 )
Net cash provided by (used in) operating activities
$
165
$
197
$
514
$
137

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 is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. 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. Estimates and projections contained in this release are based on the Corporation’s current understanding and assessment based on reasonable assumptions. Actual results may differ materially from these estimates and projections due to certain risk factors discussed in the Corporation’s periodic filings with the Securities and Exchange Commission and other factors.

Non-GAAP financial measure

The Corporation has used non-GAAP financial measures in this earnings release. "Adjusted net income (loss)" presented in this release is defined as reported net income (loss) attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. "Net cash provided by operating activities before changes in operating assets and liabilities" is defined as Cash provided by operating activities excluding changes in operating assets and liabilities. Management uses adjusted net income (loss) to evaluate the Corporation’s operating performance and believes that investors’ understanding of our performance is enhanced by disclosing this measure, which excludes certain items that management believes are not directly related to ongoing operations and are not indicative of future business trends and operations. Management believes that net cash provided by operating activities before changes in operating assets and liabilities demonstrates the Corporation’s ability to internally fund capital expenditures, pay dividends and service debt. These measures are not, and should not be viewed as, a substitute for U.S. GAAP net income (loss) or net cash provided by (used in) operating activities. A reconciliation of reported net income (loss) attributable to Hess Corporation (U.S. GAAP) to adjusted net income (loss) as well as a reconciliation of net cash provided by (used in) operating activities (U.S. GAAP) to net cash provided by operating activities before changes in operating assets and liabilities are provided in the release.

Cautionary Note to Investors

We use certain terms in this release relating to resources other than proved reserves, such as unproved reserves or resources. Investors are urged to consider closely the oil and gas disclosures in Hess’ Form 10-K, File No. 1-1204, available from Hess Corporation, 1185 Avenue of the Americas, New York, New York 10036 c/o Corporate Secretary and on our website at www.hess.com. You can also obtain this form from the SEC on the EDGAR system.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Second
Second
First
Quarter
Quarter
Quarter
2017
2016
2017
Income Statement
Revenues and non-operating income
Sales and other operating revenues
$
1,216
$
1,224
$
1,277
Other, net
12
45
(2 )
Total revenues and non-operating income
1,228
1,269
1,275
Costs and expenses
Cost of products sold (excluding items shown separately below)
272
277
219
Operating costs and expenses
375
455
359
Production and severance taxes
30
28
31
Exploration expenses, including dry holes and lease impairment
53
199
58
General and administrative expenses
100
106
96
Interest expense
82
85
84
Depreciation, depletion and amortization
741
797
737
Total costs and expenses
1,653
1,947
1,584
Income (loss) before income taxes
(425 )
(678 )
(309 )
Provision (benefit) for income taxes
(8 )
(305 )
(13 )
Net income (loss)
(417 )
(373 )
(296 )
Less: Net income (loss) attributable to noncontrolling interests
32
19
28
Net income (loss) attributable to Hess Corporation
(449 )
(392 )
(324 )
Less: Preferred stock dividends
11
12
12
Net income (loss) applicable to Hess Corporation common
$
(460 )
$
(404 )
$
(336 )
stockholders
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Six Months Ended June 30,
2017
2016
Income Statement
Revenues and non-operating income
Sales and other operating revenues
$
2,493
$
2,197
Other, net
10
65
Total revenues and non-operating income
2,503
2,262
Costs and expenses
Cost of products sold (excluding items shown separately below)
491
466
Operating costs and expenses
734
891
Production and severance taxes
61
47
Exploration expenses, including dry holes and lease impairment
111
331
General and administrative expenses
196
204
Interest expense
166
170
Depreciation, depletion and amortization
1,478
1,665
Total costs and expenses
3,237
3,774
Income (loss) before income taxes
(734 )
(1,512 )
Provision (benefit) for income taxes
(21 )
(651 )
Net income (loss)
(713 )
(861 )
Less: Net income (loss) attributable to noncontrolling interests
60
40
Net income (loss) attributable to Hess Corporation
(773 )
(901 )
Less: Preferred stock dividends
23
18
Net income (loss) applicable to Hess Corporation common
$
(796 )
$
(919 )
stockholders
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
June 30,
December 31,
2017
2016
Balance Sheet Information
Cash and cash equivalents
$
2,492
$
2,732
Other current assets
1,778
1,544
Property, plant and equipment - net
22,793
23,595
Other long-term assets
735
750
Total assets
$
27,798
$
28,621
Current maturities of long-term debt
$
121
$
112
Other current liabilities
1,997
2,139
Long-term debt
6,612
6,694
Other long-term liabilities
3,990
4,085
Total equity excluding other comprehensive income (loss)
15,298
16,238
Accumulated other comprehensive income (loss)
(1,518 )
(1,704 )
Noncontrolling interests
1,298
1,057
Total liabilities and equity
$
27,798
$
28,621
June 30,
December 31,
2017
2016
Total Debt
Hess
$
6,035
$
6,073
Midstream (a)
698
733
Hess Consolidated
$
6,733
$
6,806
(a)
Midstream debt is non-recourse to Hess Corporation.
June 30,
December 31,
2017
2016
Debt to Capitalization Ratio
Hess Consolidated
30.9 %
30.4 %
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Second
Second
First
Quarter
Quarter
Quarter
2017
2016
2017
Cash Flow Information
Cash Flows from Operating Activities
Net income (loss)
$
(417 )
$
(373 )
$
(296 )
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating
activities
(Gains) losses on asset sales, net
--
(27 )
--
Depreciation, depletion and amortization
741
797
737
Exploratory dry hole costs
--
133
--
Exploration lease and other impairment
8
15
7
Stock compensation expense
22
22
22
Provision (benefit) for deferred income taxes and other tax accruals
(22 )
(310 )
(27 )
332
257
443
Cash provided by operating activities before changes in operating
assets and
liabilities
Changes in operating assets and liabilities
(167 )
(60 )
(94 )
Net cash provided by (used in) operating activities
165
197
349
Cash Flows from Investing Activities
Additions to property, plant and equipment - E&P
(446 )
(547 )
(340 )
Additions to property, plant and equipment - Midstream
(34 )
(68 )
(50 )
Proceeds from asset sales
79
80
100
Other, net
--
8
--
Net cash provided by (used in) investing activities
(401 )
(527 )
(290 )
Cash Flows from Financing Activities
Net borrowings (repayments) of debt with maturities of 90 days or
(1 )
(25 )
5
less
Debt with maturities of greater than 90 days
Borrowings
--
--
--
Repayments
(51 )
(18 )
(26 )
Proceeds from issuance of Hess Midstream Partnership units
366
--
--
Cash dividends paid
(90 )
(89 )
(92 )
Noncontrolling interests, net
(175 )
--
--
Other, net
(7 )
--
8
Net cash provided by (used in) financing activities
42
(132 )
(105 )
Net Increase (Decrease) in Cash and Cash Equivalents
(194 )
(462 )
(46 )
Cash and Cash Equivalents at Beginning of Period
2,686
3,557
2,732
Cash and Cash Equivalents at End of Period
$
2,492
$
3,095
$
2,686
Additions to Property, Plant and Equipment included within
Investing Activities:
Capital expenditures incurred
$
(503 )
$
(501 )
$
(370 )
Increase (decrease) in related liabilities
23
(114 )
(20 )
Additions to property, plant and equipment
$
(480 )
$
(615 )
$
(390 )
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Six Months Ended June 30,
2017
2016
Cash Flow Information
Cash flows From Operating Activities
Net income (loss)
$
(713 )
$
(861 )
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities
(Gains) losses on asset sales, net
--
(27 )
Depreciation, depletion and amortization
1,478
1,665
Exploratory dry hole costs
--
218
Exploration lease and other impairment
15
24
Stock compensation expense
44
47
Provision (benefit) for deferred income taxes and other tax accruals
(49 )
(661 )
Cash provided by operating activities before changes in operating
775
405
assets and liabilities
Changes in operating assets and liabilities
(261 )
(268 )
Net cash provided by (used in) operating activities
514
137
Cash Flows from Investing Activities
Additions to property, plant and equipment - E&P
(786 )
(1,114 )
Additions to property, plant and equipment - Midstream
(84 )
(121 )
Proceeds from asset sales
179
80
Other, net
--
15
Net cash provided by (used in) investing activities
(691 )
(1,140 )
Cash Flows from Financing Activities
Net borrowings (repayments) of debt with maturities of 90 days or
4
(20 )
less
Debt with maturities of greater than 90 days
Borrowings
--
--
Repayments
(77 )
(35 )
Proceeds from issuance of Hess Midstream Partnership units
366
--
Proceeds from issuance of preferred stock
--
557
Proceeds from issuance of common stock
--
1,087
Cash dividends paid
(182 )
(169 )
Noncontrolling interests, net
(175 )
--
Other, net
1
(38 )
Net cash provided by (used in) financing activities
(63 )
1,382
Net Increase (Decrease) in Cash and Cash Equivalents
(240 )
379
Cash and Cash Equivalents at Beginning of Year
2,732
2,716
Cash and Cash Equivalents at End of Period
$
2,492
$
3,095
Additions to Property, Plant and Equipment included within
Investing Activities:
Capital expenditures incurred
$
(873 )
$
(1,041 )
Increase (decrease) in related liabilities
3
(194 )
Additions to property, plant and equipment
$
(870 )
$
(1,235 )
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Second
Second
First
Quarter
Quarter
Quarter
2017
2016
2017
Capital and Exploratory Expenditures
E&P Capital and exploratory expenditures
United States
Bakken
$
148
$
88
$
90
Other Onshore
9
21
8
Total Onshore
157
109
98
Offshore
191
168
158
Total United States
348
277
256
Europe
42
14
15
Africa
11
--
6
Asia and other
127
193
116
E&P Capital and exploratory expenditures
$
528
$
484
$
393
Total exploration expenses charged to income included above
$
45
$
51
$
51
Midstream Capital expenditures
$
20
$
68
$
28
Six Months Ended June 30,
2017
2016
Capital and Exploratory Expenditures
E&P Capital and exploratory expenditures
United States
Bakken
$
238
$
204
Other Onshore
17
42
Total Onshore
255
246
Offshore
349
373
Total United States
604
619
Europe
57
62
Africa
17
3
Asia and other
243
343
E&P Capital and exploratory expenditures
$
921
$
1,027
Total exploration expenses charged to income included above
$
96
$
90
Midstream Capital expenditures
$
48
$
104
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
Second Quarter 2017
Income Statement
United States
International
Total
Total revenues and non-operating income
Sales and other operating revenues
$
837
$
376
$
1,213
Other, net
(5 )
11
6
Total revenues and non-operating income
832
387
1,219
Costs and expenses
Cost of products sold (excluding items shown separately below) (a)
283
8
291
Operating costs and expenses
171
146
317
Production and severance taxes
29
1
30
Midstream tariffs
135
--
135
Exploration expenses, including dry holes and lease impairment
29
24
53
General and administrative expenses
50
3
53
Depreciation, depletion and amortization
484
224
708
Total costs and expenses
1,181
406
1,587
Results of operations before income taxes
(349 )
(19 )
(368 )
Provision (benefit) for income taxes
(9 )
(5 )
(14 )
Net income (loss) attributable to Hess Corporation
$
(340 )
(b)
$
(14 )
(c)
$
(354 )
Second Quarter 2016
Income Statement
United States
International
Total
Total revenues and non-operating income
Sales and other operating revenues
$
750
$
472
$
1,222
Other, net
22
15
37
Total revenues and non-operating income
772
487
1,259
Costs and expenses
Cost of products sold (excluding items shown separately below) (a)
238
57
295
Operating costs and expenses
221
179
400
Production and severance taxes
27
1
28
Midstream tariffs
113
--
113
Exploration expenses, including dry holes and lease impairment
164
35
199
General and administrative expenses
54
6
60
Depreciation, depletion and amortization
492
273
765
Total costs and expenses
1,309
551
1,860
Results of operations before income taxes
(537 )
(64 )
(601 )
Provision (benefit) for income taxes
(203 )
(70 )
(273 )
Net income (loss) attributable to Hess Corporation
$
(334 )
$
6
$
(328 )
(a)
Includes amounts charged from the Midstream.
(b)
After-tax results from crude oil hedging activities amounted to
realized gains of $1 million and unrealized losses of $7 million.
(c)
After-tax results from crude oil hedging activities amounted to
realized gains of $3 million and unrealized losses of $8 million.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
First Quarter 2017
Income Statement
United States
International
Total
Total revenues and non-operating income
Sales and other operating revenues
$
922
$
353
$
1,275
Other, net
(5 )
--
(5 )
Total revenues and non-operating income
917
353
1,270
Costs and expenses
Cost of products sold (excluding items shown separately below) (a)
295
(53 )
242
Operating costs and expenses
174
135
309
Production and severance taxes
31
--
31
Midstream tariffs
124
--
124
Exploration expenses, including dry holes and lease impairment
22
36
58
General and administrative expenses
51
5
56
Depreciation, depletion and amortization
445
258
703
Total costs and expenses
1,142
381
1,523
Results of operations before income taxes
(225 )
(28 )
(253 )
Provision (benefit) for income taxes
(14 )
(6 )
(20 )
Net income (loss) attributable to Hess Corporation
$
(211 )
$
(22 )
(b)
$
(233 )
(a)
Includes amounts charged from the Midstream.
(b)
After-tax results from crude oil hedging activities amounted to
realized losses of $1 million and unrealized gains of $1 million.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
Six Months Ended June 30, 2017
Income Statement
United States
International
Total
Total revenues and non-operating income
Sales and other operating revenues
$
1,759
$
729
$
2,488
Other, net
(10 )
11
1
Total revenues and non-operating income
1,749
740
2,489
Costs and expenses
Cost of products sold (excluding items shown separately below) (a)
578
(45 )
533
Operating costs and expenses
345
281
626
Production and severance taxes
60
1
61
Midstream tariffs
259
--
259
Exploration expenses, including dry holes and lease impairment
51
60
111
General and administrative expenses
101
8
109
Depreciation, depletion and amortization
929
482
1,411
Total costs and expenses
2,323
787
3,110
Results of operations before income taxes
(574 )
(47 )
(621 )
Provision (benefit) for income taxes
(23 )
(11 )
(34 )
Net income (loss) attributable to Hess Corporation
$
(551 )
(b)
$
(36 )
(c)
$
(587 )
Six Months Ended June 30, 2016
Income Statement
United States
International
Total
Total revenues and non-operating income
Sales and other operating revenues
$
1,347
$
846
$
2,193
Other, net
28
19
47
Total revenues and non-operating income
1,375
865
2,240
Costs and expenses
Cost of products sold (excluding items shown separately below) (a)
430
69
499
Operating costs and expenses
435
349
784
Production and severance taxes
44
3
47
Midstream tariffs
231
--
231
Exploration expenses, including dry holes and lease impairment
272
59
331
General and administrative expenses
104
11
115
Depreciation, depletion and amortization
1,024
578
1,602
Total costs and expenses
2,540
1,069
3,609
Results of operations before income taxes
(1,165 )
(204 )
(1,369 )
Provision (benefit) for income taxes
(445 )
(143 )
(588 )
Net income (loss) attributable to Hess Corporation
$
(720 )
$
(61 )
$
(781 )
(a)
Includes amounts charged from the Midstream.
(b)
After-tax results from crude oil hedging activities amounted to
realized gains of $1 million and unrealized losses of $7 million.
(c)
After-tax results from crude oil hedging activities amounted to
realized gains of $2 million and unrealized losses of $7 million.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA
Second
Second
First
Quarter
Quarter
Quarter
2017
2016
2017
Net Production Per Day (in thousands)
Crude oil - barrels
United States
Bakken
68
69
67
Other Onshore
9
8
8
Total Onshore
77
77
75
Offshore
38
41
47
Total United States
115
118
122
Europe
28
26
31
Africa (a)
32
33
35
Asia
2
2
2
Total
177
179
190
Natural gas liquids - barrels
United States
Bakken
29
27
23
Other Onshore
8
12
10
Total Onshore
37
39
33
Offshore
4
4
6
Total United States
41
43
39
Europe
1
1
1
Total
42
44
40
Natural gas - mcf
United States
Bakken
66
59
53
Other Onshore
99
134
106
Total Onshore
165
193
159
Offshore
51
52
75
Total United States
216
245
234
Europe
33
40
38
Asia
238
254
212
Total
487
539
484
Barrels of oil equivalent
300
313
311
(a)
Production from Libya recommenced in the fourth quarter of
2016. Production was 6,000 barrels of oil per day (bopd) in the
second quarter of 2017 and 4,000 bopd in the first quarter of 2017.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA
Six Months Ended June 30,
2017
2016
Net Production Per Day (in thousands)
Crude oil - barrels
United States
Bakken
68
71
Other Onshore
8
9
Total Onshore
76
80
Offshore
43
46
Total United States
119
126
Europe
30
30
Africa (a)
33
35
Asia
2
2
Total
184
193
Natural gas liquids - barrels
United States
Bakken
26
27
Other Onshore
9
12
Total Onshore
35
39
Offshore
5
5
Total United States
40
44
Europe
1
1
Total
41
45
Natural gas - mcf
United States
Bakken
59
63
Other Onshore
103
134
Total Onshore
162
197
Offshore
63
63
Total United States
225
260
Europe
36
43
Asia
225
252
Total
486
555
Barrels of oil equivalent
306
331
(a)
Production from Libya recommenced in the fourth quarter of
2016. Production was 5,000 bopd in the first six months of 2017.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA
Second
Second
First
Quarter
Quarter
Quarter
2017
2016
2017
Sales Volumes Per Day (in thousands)
Crude oil - barrels
174
198
175
Natural gas liquids - barrels
42
44
40
Natural gas - mcf
487
539
484
Barrels of oil equivalent
297
332
296
Sales Volumes (in thousands)
Crude oil - barrels
15,757
18,053
15,744
Natural gas liquids - barrels
3,848
3,968
3,623
Natural gas - mcf
44,390
48,998
43,544
Barrels of oil equivalent
27,003
30,187
26,624
Six Months Ended June 30,
2017
2016
Sales Volumes Per Day (in thousands)
Crude oil - barrels
174
206
Natural gas liquids - barrels
41
45
Natural gas - mcf
486
555
Barrels of oil equivalent
296
344
Sales Volumes (in thousands)
Crude oil - barrels
31,501
37,502
Natural gas liquids - barrels
7,471
8,222
Natural gas - mcf
87,934
100,968
Barrels of oil equivalent
53,628
62,552
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA
Second
Second
First
Quarter
Quarter
Quarter
2017
2016
2017
Average Selling Prices
Crude oil - per barrel (including hedging)
United States
Onshore
$
43.83
$
39.96
$
46.47
Offshore
44.60
40.15
47.18
Total United States
44.09
40.02
46.74
Europe
50.27
45.28
54.04
Africa
48.81
44.66
51.25
Asia
41.95
38.96
54.70
Worldwide
45.95
41.95
48.58
Crude oil - per barrel (excluding hedging)
United States
Onshore
$
43.72
$
39.96
$
46.47
Offshore
44.60
40.15
47.18
Total United States
44.01
40.02
46.74
Europe
49.72
45.28
54.18
Africa
48.40
44.66
51.37
Asia
41.95
38.96
54.70
Worldwide
45.74
41.95
48.61
Natural gas liquids - per barrel
United States
Onshore
$
14.25
$
8.34
$
18.07
Offshore
18.47
13.52
20.55
Total United States
14.64
8.84
18.43
Europe
23.95
19.23
28.06
Worldwide
14.85
9.03
18.71
Natural gas - per mcf
United States
Onshore
$
2.20
$
1.30
$
2.32
Offshore
2.29
1.50
2.40
Total United States
2.22
1.34
2.35
Europe
4.22
3.74
3.99
Asia
3.93
5.70
4.01
Worldwide
3.19
3.58
3.20
The following is a summary of the Corporation’s commodity hedging
program:
Brent
West Texas
Intermediate
Outstanding Hedging Contracts - Oil Price
Collars
Q3 and Q4 average barrels of oil per day
20,000
60,000
Ceiling price
$75
$70
Floor price
$55
$50
End date
December 31, 2017
December 31, 2017
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA
Six Months Ended June 30,
2017
2016
Average Selling Prices
Crude oil - per barrel (including hedging)
United States
Onshore
$
45.13
$
33.22
Offshore
46.01
32.84
Total United States
45.45
33.08
Europe
52.01
37.39
Africa
49.84
38.31
Asia
52.55
39.11
Worldwide
47.25
34.97
Crude oil - per barrel (excluding hedging)
United States
Onshore
$
45.07
$
33.22
Offshore
46.01
32.84
Total United States
45.41
33.08
Europe
51.78
37.39
Africa
49.66
38.31
Asia
52.55
39.11
Worldwide
47.16
34.97
Natural gas liquids - per barrel
United States
Onshore
$
16.04
$
7.59
Offshore
19.70
11.34
Total United States
16.47
8.00
Europe
26.19
17.40
Worldwide
16.72
8.21
Natural gas - per mcf
United States
Onshore
$
2.26
$
1.25
Offshore
2.35
1.48
Total United States
2.28
1.31
Europe
4.10
4.19
Asia
3.96
5.64
Worldwide
3.20
3.50

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170726005316r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170726005316/en/

SOURCE: Hess Corporation

For Hess Corporation
Investors:
Jay Wilson, (212) 536-8940
or
Media:
Sard Verbinnen & Co
Michael Henson/Patrick Scanlan
(212) 687-8080