Hess Corporation (NYSE: HES) reported net income of $545 million for the first quarter of 2012 compared with $929 million for the first quarter of 2011. The after-tax income (loss) by major operating activity was as follows:
| Three Months Ended | ||||||||||||||||
| March 31, (unaudited) | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
|
(In millions, except
per share amounts) | ||||||||||||||||
| Exploration and Production | $ | 635 | $ | 979 | ||||||||||||
| Marketing and Refining | 11 | 39 | ||||||||||||||
| Corporate | (38) | (28) | ||||||||||||||
| Interest expense | (63) | (61) | ||||||||||||||
| Net income attributable to Hess Corporation | $ | 545 | $ | 929 | ||||||||||||
| Net income per share (diluted) | $ | 1.60 | $ | 2.74 | ||||||||||||
| Weighted average number of shares (diluted) | 340.3 | 339.2 | ||||||||||||||
Note: See the following page for a table of items affecting comparability of earnings between periods.
Exploration and Production earnings were $635 million in the first quarter of 2012 compared with $979 million in the first quarter of 2011. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $89.92 per barrel, up from $87.22 per barrel in the same quarter a year ago. The average worldwide natural gas selling price was $6.23 per mcf in the first quarter of 2012, up from $5.84 per mcf in the first quarter of 2011. First quarter oil and gas production was 397,000 barrels of oil equivalent per day compared with 399,000 barrels of oil equivalent per day in the first quarter a year ago.
Marketing and Refining earnings were $11 million in the first quarter of 2012 compared with $39 million in the same period in 2011. Marketing earnings, reflecting the impact of a mild winter on energy marketing operations, were $22 million in the first quarter of 2012 compared with $68 million in the first quarter of 2011. Refining operations incurred a loss of $6 million in the first quarter of 2012, compared with a loss of $48 million in the first quarter a year ago. Trading results were a loss of $5 million in the first quarter of 2012, compared with income of $19 million in the first quarter of last year.
The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods:
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, (unaudited) | ||||||||||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||||||||||||||
| (Millions of dollars) | ||||||||||||||||||||||||||||||||
| Exploration and Production | $ | 36 | $ | 310 | ||||||||||||||||||||||||||||
First quarter 2012 results included a gain of $36 million related to the sale of the Corporation’s interest in the Snohvit Field, offshore Norway.
Net cash provided by operating activities was $988 million in the first quarter of 2012, compared with $1,135 million in the same quarter of 2011. Capital and exploratory expenditures were $1,986 million, of which $1,963 million related to Exploration and Production operations. Capital and exploratory expenditures for the first quarter of 2011 were $1,186 million, of which $1,173 million related to Exploration and Production operations.
At March 31, 2012, cash and cash equivalents totaled $396 million compared with $351 million at December 31, 2011. Total debt was $6,978 million at March 31, 2012 and $6,057 million at December 31, 2011. The Corporation’s debt to capitalization ratio at March 31, 2012 was 26.7 percent compared with 24.6 percent at the end of 2011.
Hess Corporation will review first quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details about the event, refer to the Investor Relations section of our website at www.hess.com.
Hess Corporation, with headquarters in New York, is a global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. More information on Hess Corporation is available at www.hess.com.
Forward-looking Statements
Certain statements in this release may constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, uncertainties inherent in the measurement and interpretation of geological, geophysical and other technical data.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS OF DOLLARS) | ||||||||||||||
First |
First |
Fourth | ||||||||||||
Income Statement | ||||||||||||||
| Revenues and Non-operating Income | ||||||||||||||
| Sales (excluding excise taxes) and other operating revenues | $ | 9,682 | $ | 10,215 | $ | 9,733 | ||||||||
| Income (loss) from equity investment in HOVENSA L.L.C. | - | (48) | (940) | |||||||||||
| Other, net | 65 | 348 | 31 | |||||||||||
| Total revenues and non-operating income | 9,747 | 10,515 | 8,824 | |||||||||||
| Costs and Expenses | ||||||||||||||
| Cost of products sold (excluding items shown separately below) | 6,679 | 7,040 | 6,712 | |||||||||||
| Production expenses | 673 | 531 | 613 | |||||||||||
| Marketing expenses | 251 | 283 | 273 | |||||||||||
| Exploration expenses, including dry holes and lease impairment | 253 | 313 | 426 | |||||||||||
| Other operating expenses | 41 | 42 | 44 | |||||||||||
| General and administrative expenses | 167 | 164 | 187 | |||||||||||
| Interest expense | 104 | 99 | 93 | |||||||||||
| Depreciation, depletion and amortization | 681 | 558 | 674 | |||||||||||
| Total costs and expenses | 8,849 | 9,030 | 9,022 | |||||||||||
| Income (loss) before income taxes | 898 | 1,485 | (198) | |||||||||||
| Provision (benefit) for income taxes | 338 | 511 | (64) | |||||||||||
| Net income (loss) | 560 | 974 | (134) | |||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 15 | 45 | (3) | |||||||||||
| Net income (loss) attributable to Hess Corporation | $ | 545 | $ | 929 | $ | (131) | ||||||||
Supplemental Income Statement Information | ||||||||||||||
| Foreign currency gains (losses), after-tax | $ | 9 | $ | (3) | $ | (8) | ||||||||
| Capitalized interest | 5 | 2 | 5 | |||||||||||
Cash Flow Information | ||||||||||||||
| Net cash provided by operating activities (a) | $ | 988 | (b) | $ | 1,135 | $ | 1,138 | |||||||
Capital and Exploratory Expenditures | ||||||||||||||
| Exploration and Production | ||||||||||||||
| United States | $ | 1,241 | $ | 540 | $ | 1,372 | ||||||||
| International | 722 | 633 | 813 | |||||||||||
| Total Exploration and Production | 1,963 | 1,173 | 2,185 | |||||||||||
| Marketing, Refining and Corporate | 23 | 13 | 51 | |||||||||||
| Total Capital and Exploratory Expenditures | $ | 1,986 | $ | 1,186 | $ | 2,236 | ||||||||
| Exploration expenses charged to income included above | ||||||||||||||
| United States | $ | 37 | $ | 42 | $ | 51 | ||||||||
| International | 71 | 62 | 70 | |||||||||||
$ | 108 | $ | 104 | $ | 121 | |||||||||
(a) | Includes changes in working capital. | |
(b) | Net of payments to HOVENSA L.L.C. totaling $487 million to fully fund our share of previously accrued refining shutdown | |
costs. |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS OF DOLLARS) | |||||||||||||||||||||
March 31, |
December 31, 2011 | ||||||||||||||||||||
Balance Sheet Information | |||||||||||||||||||||
| Cash and cash equivalents | $ | 396 | $ | 351 | |||||||||||||||||
| Other current assets | 7,816 | 7,988 | |||||||||||||||||||
| Investments | 415 | 384 | |||||||||||||||||||
| Property, plant and equipment – net | 26,052 | 24,712 | |||||||||||||||||||
| Other long-term assets | 5,968 | 5,701 | |||||||||||||||||||
| Total assets | $ | 40,647 | $ | 39,136 | |||||||||||||||||
| Short-term debt and current maturities of long-term debt | $ | 38 | $ | 52 | |||||||||||||||||
| Other current liabilities | 8,153 | 8,048 | |||||||||||||||||||
| Long-term debt | 6,940 | 6,005 | |||||||||||||||||||
| Other long-term liabilities | 6,359 | 6,439 | |||||||||||||||||||
| Total equity excluding other comprehensive income (loss) | 20,214 | 19,659 | |||||||||||||||||||
| Accumulated other comprehensive income (loss) | (1,057) | (1,067) | |||||||||||||||||||
| Total liabilities and equity | $ | 40,647 | $ | 39,136 | |||||||||||||||||
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS OF DOLLARS) | |||||||||||||
First Quarter 2012 | |||||||||||||
United | International | Total | |||||||||||
| Sales and other operating revenues | $ | 923 | $ | 1,697 | $ | 2,620 | |||||||
| Other, net | - | 63 | 63 | ||||||||||
| Total revenues and non-operating income | 923 | 1,760 | 2,683 | ||||||||||
| Costs and expenses | |||||||||||||
| Production expenses, including related taxes | 231 | 442 | 673 | ||||||||||
| Exploration expenses, including dry holes and lease impairment | 78 | 175 | 253 | ||||||||||
| General, administrative and other expenses | 38 | 27 | 65 | ||||||||||
| Depreciation, depletion and amortization | 279 | 380 | 659 | ||||||||||
| Total costs and expenses | 626 | 1,024 | 1,650 | ||||||||||
| Results of operations before income taxes | 297 | 736 | 1,033 | ||||||||||
| Provision (benefit) for income taxes | 110 | 288 | 398 | ||||||||||
| Results of operations attributable to Hess Corporation | $ | 187 | (a) | $ | 448 | (b) | $ | 635 | |||||
| First Quarter 2011 | |||||||||||||
|
United States | International | Total | |||||||||||
| Sales and other operating revenues | $ | 746 | $ | 1,867 | $ | 2,613 | |||||||
| Other, net | (1) | 345 | 344 | ||||||||||
| Total revenues and non-operating income | 745 | 2,212 | 2,957 | ||||||||||
| Costs and expenses | |||||||||||||
| Production expenses, including related taxes | 137 | 394 | 531 | ||||||||||
| Exploration expenses, including dry holes and lease impairment | 109 | 204 | 313 | ||||||||||
| General, administrative and other expenses | 48 | 36 | 84 | ||||||||||
| Depreciation, depletion and amortization | 152 | 385 | 537 | ||||||||||
| Total costs and expenses | 446 | 1,019 | 1,465 | ||||||||||
| Results of operations before income taxes | 299 | 1,193 | 1,492 | ||||||||||
| Provision (benefit) for income taxes | 112 | 401 | 513 | ||||||||||
| Results of operations attributable to Hess Corporation | $ | 187 | $ | 792 | (b) | $ | 979 | ||||||
| Fourth Quarter 2011 | |||||||||||||
|
United States | International | Total | |||||||||||
| Sales and other operating revenues | $ | 937 | $ | 1,662 | $ | 2,599 | |||||||
| Other, net | 3 | 25 | 28 | ||||||||||
| Total revenues and non-operating income | 940 | 1,687 | 2,627 | ||||||||||
| Costs and expenses | |||||||||||||
| Production expenses, including related taxes | 170 | 443 | 613 | ||||||||||
| Exploration expenses, including dry holes and lease impairment | 118 | 308 | 426 | ||||||||||
| General, administrative and other expenses | 49 | 33 | 82 | ||||||||||
| Depreciation, depletion and amortization | 273 | 378 | 651 | ||||||||||
| Total costs and expenses | 610 | 1,162 | 1,772 | ||||||||||
| Results of operations before income taxes | 330 | 525 | 855 | ||||||||||
| Provision (benefit) for income taxes | 130 | 198 | 328 | ||||||||||
| Results of operations attributable to Hess Corporation | $ | 200 | $ | 327 | (b) | $ | 527 | ||||||
(a) | The after-tax losses from crude oil hedging activities were $26 million. | |
(b) | The after-tax losses from crude oil hedging activities were $125 million in the first quarter of 2012, $81 million in the first quarter of 2011 and $83 million in the fourth quarter of 2011. | |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED) | |||||||||||||
First |
First |
Fourth | |||||||||||
Operating Data | |||||||||||||
Net Production Per Day (in thousands) | |||||||||||||
| Crude oil - barrels | |||||||||||||
| United States | 95 | 77 | 89 | ||||||||||
| Europe | 94 | 99 | 95 | ||||||||||
| Africa (a) | 71 | 84 | 54 | ||||||||||
| Asia | 16 | 14 | 13 | ||||||||||
| Total | 276 | 274 | 251 | ||||||||||
| Natural gas liquids - barrels | |||||||||||||
| United States | 14 | 13 | 13 | ||||||||||
| Europe | 3 | 4 | 4 | ||||||||||
| Asia | 2 | 1 | 1 | ||||||||||
| Total | 19 | 18 | 18 | ||||||||||
| Natural gas - mcf | |||||||||||||
| United States | 100 | 106 | 90 | ||||||||||
| Europe | 61 | 107 | 92 | ||||||||||
| Asia and other | 449 | 430 | 408 | ||||||||||
| Total | 610 | 643 | 590 | ||||||||||
| Barrels of oil equivalent | 397 | 399 | 367 | ||||||||||
Average Selling Price | |||||||||||||
| Crude oil - per barrel (including hedging) | |||||||||||||
| United States | $ | 95.92 | $ | 91.56 | $ | 100.76 | |||||||
| Europe | 80.18 | 84.17 | 77.18 | ||||||||||
| Africa | 88.75 | 82.32 | 85.49 | ||||||||||
| Asia | 117.13 | 110.80 | 111.08 | ||||||||||
| Worldwide | 89.92 | 87.22 | 89.70 | ||||||||||
| Crude oil - per barrel (excluding hedging) | |||||||||||||
| United States | $ | 100.87 | $ | 91.56 | $ | 100.76 | |||||||
| Europe | 82.77 | 84.17 | 77.18 | ||||||||||
| Africa | 120.59 | 102.58 | 109.28 | ||||||||||
| Asia | 123.72 | 110.80 | 111.08 | ||||||||||
| Worldwide | 100.50 | 92.35 | 95.16 | ||||||||||
| Natural gas liquids - per barrel | |||||||||||||
| United States | $ | 49.26 | $ | 57.31 | $ | 57.86 | |||||||
| Europe | 90.43 | 80.29 | 66.47 | ||||||||||
| Asia | 86.50 | 73.35 | 66.18 | ||||||||||
| Worldwide | 59.53 | 63.45 | 59.81 | ||||||||||
| Natural gas - per mcf | |||||||||||||
| United States | $ | 1.75 | $ | 3.82 | $ | 2.50 | |||||||
| Europe | 9.44 | 8.25 | 8.88 | ||||||||||
| Asia and other | 6.77 | 5.75 | 6.57 | ||||||||||
| Worldwide | 6.23 | 5.84 | 6.32 | ||||||||||
| (a) | Includes Libyan production of 18 thousand barrels of oil per day (bopd) in the first quarter of 2012, 14 thousand bopd in the first quarter of 2011 and 2 thousand bopd in the fourth quarter of 2011. |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED) | ||||||||||||||||
First |
First |
Fourth | ||||||||||||||
Financial Information (in millions of dollars) | ||||||||||||||||
Marketing and Refining Results | ||||||||||||||||
| Income (loss) before income taxes | $ | 20 | $ | 96 | $ | (885) | ||||||||||
| Provision (benefit) for income taxes | 9 | 57 | (324) | |||||||||||||
| Results of operations attributable to Hess Corporation | $ | 11 | $ | 39 | $ | (561) | ||||||||||
Summary of Marketing and Refining Results | ||||||||||||||||
| Marketing | $ | 22 | $ | 68 | $ | 48 | ||||||||||
| Refining | (6) | (48) | (598) | |||||||||||||
| Trading | (5) | 19 | (11) | |||||||||||||
| Results of operations attributable to Hess Corporation | $ | 11 | $ | 39 | $ | (561) | ||||||||||
Operating Data | ||||||||||||||||
Sales Volumes | ||||||||||||||||
| Refined petroleum products (thousands of barrels per day) | ||||||||||||||||
| Gasoline | 210 | 226 | 214 | |||||||||||||
| Distillates | 115 | 134 | 143 | |||||||||||||
| Residuals | 61 | 87 | 65 | |||||||||||||
| Other | 18 | 20 | 19 | |||||||||||||
| Total | 404 | 467 | 441 | |||||||||||||
| Natural gas (thousands of mcf per day) | 2,560 | 2,875 | 2,170 | |||||||||||||
| Electricity (megawatts round the clock) | 4,350 | 4,345 | 4,110 | |||||||||||||
Retail Marketing | ||||||||||||||||
| Number of retail stations (a) | 1,361 | 1,350 | 1,360 | |||||||||||||
| Convenience store revenue (in millions of dollars) (b) | $ | 272 | $ | 278 | $ | 290 | ||||||||||
| Average gasoline volume per station (thousands of gallons per month) (b) | 185 | 185 | 195 | |||||||||||||
Port Reading | ||||||||||||||||
| Refinery throughput (thousands of barrels per day) | 47 | 66 | 58 | |||||||||||||
| Refinery utilization (capacity - 70,000 barrels per day) | 67.4 | % | 94.0 | % | 82.9 | % | ||||||||||
| (a) | Includes company operated, Wilco-Hess, dealer and branded retailer. |
| (b) | Company operated only. |
Investor Contact:
Jay Wilson, 212-536-8940
or
Media Contact:
Jon Pepper, 212-536-8550