Hess Corporation Issues Letter to Shareholders

Hess Corporation (NYSE: HES) ('Hess?) today issued the following letter
to all Hess shareholders in connection with the Company′s multi-year
transformation to a pure play exploration and production ('E&P?) company
and its 2013 Annual Meeting scheduled to be held on May 16, 2013.

For information about Hess′ transformation and the 2013 Annual Meeting,
please visit: www.transforminghess.com.

The text of the March 4 letter follows:

Dear Fellow Shareholder:

The 2013 Annual Meeting will be important for Hess and all our
shareholders.

Your Board and management have been transforming Hess into a more
focused, pure play exploration and production ('E&P?) company. The
strategy has been working well, creating near term value and positioning
us to drive returns over the long term.

Indeed, now more than halfway through our transformation, the market
has been recognizing our progress.Hess shares significantly
outperformed the peer index, rising from $43.93 to $58.90 per share, an
increase of 34% in the period between our mid-year strategy update on
July 25, 2012 and the January 28, 2013 announcement of our planned
terminals sale.On Friday, March 1, our shares closed at $66.54
per share.Operating performance has also been strong.2012
cash flow from operations was the highest in our 80 year history and
2012 net income was our third highest.

BECOMING A PURE PLAY E&P COMPANY

This morning we announced actions that represent the culmination of our
multi-year transformation into a pure play E&P company. The transformed
Hess will have a focused portfolio of higher growth, lower risk, oil
linked E&P assets that we anticipate will deliver a five year compound
average annual production growth rate ('CAGR?) of 5 to 8%, based off of
pro forma 2012 production, with aggregate mid-teens production growth
between pro forma 2012 and 2014, while increasing returns to all
shareholders. Specific announcements today include:

• 
  Fully exiting our downstream businesses, including retail, energy
  marketing, and energy trading
  
• 
  Further focusing our E&P portfolio by divesting Indonesia and Thailand
  
• 
  Pursuing monetization of Bakken midstream assets, expected in 2015
  
• 
  Returning capital directly to shareholders through an increase in the
  annual dividend to $1.00 per share commencing in the third quarter of
  2013 and a share repurchase program authorization of up to $4 billion,
  with amount and timing tied to proceeds from our asset sale program
  
• 
  Adding six new world class independent directors with the right mix of
  corporate leadership, operational and financial expertise, and top
  level E&P experience
  

HESS′ 5-YEAR TRANSFORMATION

Starting in 2010, we began taking decisive actions to grow the value of
our world class asset base by focusing on the exploration and
development of our most promising lower risk, higher growth, oil linked
E&P assets.

In the first phase of our
transformation, we invested significantly in our most promising assets,
substantially increasing our leadership in the Bakken oil shale, and
entering the Utica shale, while acquiring an additional ownership stake
in the Valhall Field (Norway). Furthermore, we closed our HOVENSA joint
venture refinery in the U.S. Virgin Islands and divested a number of
assets in the United Kingdom, Norway, and Indonesia totaling $1.7
billion.

We began our second phase on July
25, 2012 after providing shareholders with a comprehensive update on our
strategy. In the months since, we have:

• 
  Divested approximately $1.5 billion in non-core assets across Europe
  and Asia, and have announced that we are pursuing the sale of our
  Russian subsidiary, Samara-Nafta, and our Eagle Ford assets in Texas
  
• 
  Announced that we will sell our terminal network. In addition to the
  sale proceeds, this transaction will release approximately $1 billion
  of working capital
  
• 
  Exited the refinery business with the closure of our Port Reading, New
  Jersey refinery
  
• 
  Announced a 17% reduction in upstream capital expenditures and reduced
  exploration spending by 29% in 2013, with further capital expenditure
  reductions expected in 2014
  

These actions have positioned the Company well to enter this third
phase of our transformation, announced today, which will
create a pure play E&P company.

THE MARKET RECOGNIZES THE VALUE YOUR BOARD IS CREATING

Your existing Board and management have driven our strategic
transformation and built the world class asset base that we have today.
On January 30, we announced full year 2012 earnings results that
demonstrate the value of our plan. Net income for 2012 was $2.0 billion,
representing the third highest annual net income in Hess company
history. Cash flow from operations in 2012 grew to $5.7 billion, the
highest in the Company′s history.

These strong results reflect the hard work we have done to transform the
Company and, as noted above, the market has been recognizing the success
of our transformation. Hess shares significantly outperformed our peer
index from July 24, 2012, the last day of trading before we provided our
mid-year strategy update, to January 25, 2013, the last day of trading
prior to the announcement of the planned divestiture of our entire
terminal network, and the announcement of a new position taken by
Elliott Management, a hedge fund run by Paul Singer.

Elliott Management, a New Shareholder, Is
Seeking to Undermine the Value We Are Creating

As you may have seen, Elliott Management, a new shareholder, has made a
recommendation that would effectively dismantle Hess, disrupting the
progress we have made and foreclosing the prospect of real value
creation that would benefit all Hess shareholders.

In his 'reassessment? of Hess, Singer offers a seriously flawed analysis
of Hess′ stock price performance based on an arbitrary endpoint. Among
many other things, he fails to take into account the meaningful share
price appreciation that Hess′ stock had enjoyed in response to our
announcements of a series of transactions and initiatives along with our
indication that other steps were underway.

We are convinced that our transformation is driving superior value
creation far beyond Singer′s short term time horizon.

LOOK AT WHAT INDEPENDENT ANALYSTS HAVE TO SAY

In addition to the price appreciation of Hess′ shares since our mid-year
2012 strategy update, knowledgeable industry analysts noted Hess′
transformation.

HESS TRANSFORMED: A PURE PLAY E&P COMPANY DRIVING SHAREHOLDER VALUE

While we have accomplished a great deal, we are not finished. As noted
above, we have announced the culmination of our transformation into a
pure play E&P company. That includes:

• 
  Exploring strategic alternatives for our entire downstream business,
  including retail, energy marketing, and energy trading
  
• 
  Pursuing additional E&P asset sales by pruning our Asian portfolio to
  focus on the long lived, low risk Malaysia/Thailand Joint Development
  Area and the North Malay Basin
  
• 
  Reviewing potential alternatives to monetize our Bakken midstream
  assets, expected in 2015
  
• 
  Using the initial proceeds from both previously and newly announced
  asset sales to pay down short term debt, and retain financial
  flexibility to fund our growth
  
• 
  Returning capital directly to shareholders by increasing our quarterly
  common dividend 150% to $1.00 per share on an annual basis, beginning
  in third quarter of this year
  
• 
  Further returning capital by initiating a share repurchase program of
  up to $4 billion, with amount and timing tied to proceeds from our
  asset sale program
  
• 
  Returning additional capital to shareholders as a result of monetizing
  Bakken midstream assets, expected in 2015
  

A Focused, Higher Growth, Lower Risk, Oil
Linked Portfolio to Drive Growth

As a result of the steps already taken by your management and the
Board, and the announcements today, Hess will be a pure play E&P company
with a focused portfolio of higher growth, lower risk assets.

This portfolio will allow us to capitalize on our leadership position in
the Bakken oil shale, enhance production at our existing conventional
assets, and substantially focus our exploratory program by allocating
the majority of our exploration spend to our most promising prospects.

Production growth into 2013 and 2014 is expected to be driven by
currently producing assets and expected new production from Tubular
Bells and North Malay Basin. Importantly, our estimated 2013 pro forma
production will consist of 76% liquids and 85% of our crude oil
production is Brent linked. This allows us to deliver stronger cash
margins and returns than our peers.

The transformed Hess will have a focused portfolio of world class,
higher growth, lower risk E&P assets that we anticipate will deliver a
five year CAGR of 5 to 8%, based off of pro forma 2012 production, with
aggregate mid-teens production growth between pro forma 2012 and 2014.

Future Production growth is expected to be driven largely by six core
assets:

• 
  Bakken Shale (North Dakota)
  
• 
  Valhall Field (Norway)
  
• 
  Tubular Bells (Deepwater Gulf of Mexico)
  
• 
  North Malay Basin (Malaysia)
  
• 
  Utica Shale (Ohio)
  
• 
  Ghana
  

Leveraging Our High Quality Technical
Capabilities Across A Global Platform

Hess is also able to leverage its robust drilling, completion and
production platform across its asset base, allowing us to realize
synergies from the transfer of technical skills and operating
capabilities globally. For example:

• 
  Bakken hydraulic fracturing expertise is utilized in the
  Malaysia/Thailand Joint Development Area.
  
• 
  Managed pressure drilling expertise in South Arne (Denmark) is applied
  in the Utica shale play.
  
• 
  Gulf of Mexico deep water expertise has driven Hess′ recent drilling
  success in Ghana and Equatorial Guinea.
  
• 
  High pressure and high temperature experience in Gulf of Mexico is
  being deployed in the North Malay Basin and other international assets.
  

These capabilities are recognized by the world′s leading oil companies,
national oil companies, and host governments. It is not by accident that
in recent years, we have been chosen by Chevron and Petronas to develop
and operate important exploration and development projects in the
deepwater Gulf of Mexico (Tubular Bells) and the North Malay Basin (Gulf
of Thailand), respectively.

Efficiently Allocating Capital

While we are pursuing growth, we are also efficiently allocating capital
in order to maximize returns. We have recently announced substantial
reductions in capital and exploration expenditures. In 2013, we
decreased E&P capital expenditures by 17% and expect further reductions
in 2014. In terms of exploration, we have focused our budget by
decreasing allocated spending by 29% when compared to 2012.
Additionally, a program to further reduce costs is underway. With a
leaner organization and focused capital expenditure budget, we will be
well positioned to deliver growth and increase returns to all
shareholders.

THE RIGHT BOARD FOR A TRANSFORMED HESS; DRIVING LONG TERM SHAREHOLDER
VALUE

We are mindful of the role that corporate governance plays in
protecting and creating shareholder value.And, as we convert
into a pure play E&P company, we recognize the importance of adding
individuals to our Board who have directly relevant experience and
stature.

Our effort to identify the right people for the future has been underway
since last year and today we are pleased to nominate five new highly
qualified independent director candidates with the right mix of
corporate leadership, operational and financial expertise, and top level
E&P experience for election at this year′s Annual Meeting. We have also
appointed a sixth additional new independent director who will take the
seat of F. Borden Walker, who retired from the Board effective March 1,
2013. The addition of these six new directors to the Hess Board will
provide additional perspective, experience, and guidance to management
that will benefit all Hess shareholders and complement the strengths of
our existing Board. With these changes, 13 of the 14 Board members will
be independent.

John Krenicki Jr.

Former
Vice Chairman of GE; President and Chief Executive Officer of GE Energy

Mr. Krenicki recently joined private equity firm Clayton, Dubilier &
Rice in 2013 after 29 years in senior leadership roles at GE, including
as Vice Chairman. While leader of GE Energy, the unit doubled in size
and profitability and became GE's largest business ? with revenue
increasing from $22 billion in 2005 to over $50 billion in 2012. His
responsibilities included oversight of GE′s Oil & Gas, Power & Water,
and Energy management businesses, which employ more than 100,000 people
in over 165 countries. Mr. Krenicki is one of America's top corporate
executives with a strong track record of success, experience, and
leadership in operations, oil and gas, and energy. His experience
leading large scale initiatives and operations across a global energy
portfolio will add important perspective to the Hess Board as the
Company completes its transformation to a pure play E&P company.

Dr. Kevin Meyers

Former
Senior Vice President of E&P for the Americas, ConocoPhillips

Dr. Meyers ran Exploration and Production in the Americas for
ConocoPhillips, where he oversaw 6,000 employees and a $6 billion annual
capital program, and was responsible for reorganizing and driving
business value in the Americas E&P portfolio. Dr. Meyers drove the
reconfiguration of the company′s upstream portfolio in North America,
divesting $6 billion of low growth, low margin assets and focusing
capital into emerging unconventional plays. He spearheaded the company's
development of the Eagle Ford and increased investment in both the
Permian Basin, and the Bakken. Dr. Meyers has over 30 years of
experience in exploration and production, both domestic and
international. Based on this experience, Dr. Meyers will bring to the
Hess Board decades of managing cost-efficient E&P operations in
geographies directly relevant to Hess′ focused E&P portfolio.

James H. Quigley (2014)

Former
Chief Executive Officer, Deloitte

Mr. Quigley led Deloitte, one of the world's largest accounting and
consulting firms. During his 38 years at Deloitte, he was a trusted
consultant on strategic leadership and operating matters to senior
management teams of multinational companies across industries. As CEO,
he was responsible for the consulting, tax, audit, and financial
advisory practices of Deloitte, and as an advisor and consultant, helped
guide major strategic initiatives at many companies. In 2012, Mr.
Quigley was named Trustee of the International Financial Reporting
Standards (IFRS) Foundation, the oversight body of the International
Accounting Standards Board (IASB). He will bring to the Hess Board
significant global leadership experience and knowledge of financial, tax
and regulatory matters that are relevant to Hess operations.

Fredric Reynolds

Former
Executive Vice President and Chief Financial Officer, CBS Corporation

Mr. Reynolds was Executive Vice President and Chief Financial Officer of
CBS Corporation and its predecessors from January 1994 until his
retirement in August 2009. While at CBS, Mr. Reynolds managed the
company's transformation, beginning with the acquisition by Westinghouse
of CBS in 1995, followed by the Viacom-CBS merger of 2000 and the
subsequent spin-out of MTV Networks, since renamed Viacom. During his
tenure as CFO of CBS, shareholders experienced substantial share
appreciation and return of capital. Mr. Reynolds is also the lead
independent director at AOL Inc. Mr. Reynolds will bring to the Hess
Board his substantial experience as a CFO with a successful track record
of financial oversight, leading a successful transformation, returning
capital, and delivering long term returns.

William Schrader

Former
Chief Operating Officer, TNK-BP Russia

Mr. Schrader was a senior leader of many of BP's most important E&P
businesses, including serving as President of BP Azerbaijan ? one of
BP′s most valued assets ? and most recently served as COO of TNK-BP,
which comprised 27% of BP′s reserves and 29% of BP′s production. During
his tenure as President of BP Azerbaijan, production increased from
240,000 bpd to over 950,000 bpd while operating costs were reduced from
$7/bbl to $4/bbl. He also was responsible for all of BP′s E&P business
in Indonesia including the Tangguh LNG business. Mr. Schrader is an
outstanding E&P executive responsible for transforming BP′s best and
most valued E&P assets, and will bring to the Board his experience as a
disciplined E&P operator with expertise in production sharing
structures, government relations, and delivering returns.

Dr. Mark Williams

Former
Executive Committee Member, Royal Dutch Shell

Dr. Williams worked for over 35 years at Shell, including more than 17
years in Shell′s E&P and upstream business, serving most recently as a
member of the Executive Committee of Royal Dutch Shell, where he was of
the top three operating executives collectively responsible for all
strategic, capital, and operational matters. Most recently, as
Downstream Director, Dr. Williams oversaw $400 billion in revenues and
approximately 55,000 people, generating $5.3 billion in profit annually,
and redirected a $6 billion annual investment into the higher growth
markets of China and Brazil, while strengthening Shell′s position in key
hubs in the U.S. Gulf Coast and Singapore. His experience as part of
an executive group with ultimate strategic responsibilities for the
overall direction of one of the world′s largest oil & gas companies will
add invaluable insight to Hess′ Board.

We would like to thank our outgoing directors, who have served with
distinction and deserve significant credit for helping initiate the
transformation we began in 2010. The fact that we now possess some of
the most attractive oil assets in our industry is, in large part, due to
their commitment to our transformation.

ELLIOTT′S 'RECOMMENDATIONS? ARE SERIOUSLY FLAWED, IRRELEVANT

AND
UNDERMINE REAL VALUE CREATION

On January 29, Paul Singer′s Elliott Management ? a hedge fund with
almost no oil and gas experience and known for aggressive tactics ?
announced that it had taken a new stake in Hess. Without ever talking to
management or the Board (and they still haven′t), the hedge fund
proposed a so called 'reassessment,?? the central thesis of
which amounts to little more than financial engineering based on flawed
assumptions. Mr. Singer is also running a proxy contest to install a
dissident slate of directors ? all tethered to his unusual compensation
scheme and flawed agenda.

We think Singer′s proposals demonstrate no meaningful operational
insight into our business.For the most part, his proposals would
orphan our most promising assets and foreclose the potential for future
real value creation.We are convinced that Singer′s agenda would
destroy shareholder value.

There are points on which we agree with Singer, including the fact that
certain divestitures will help unlock the value of our world class asset
base. If Singer had taken the time to do his homework and meet with
management prior to launching his campaign, however, he might have
understood that we were already well down our transformation path to
build more value.

ResourceCo & InternationalCo: Singer′s Central
Thesis Is Wrong

We, like all our other shareholders, are acutely aware of the value of
our assets in the Bakken. In fact, Hess significantly increased our
acreage there in 2010 and today we enjoy a significant, low cost
leadership position in the play. The Board and senior management are
aligned with shareholders ? we collectively own approximately 11% of
common stock. Our top priority is increasing the value in these assets
for the benefit of all Hess shareholders. Elliott′s platform is
predicated almost entirely on Singer′s naive assumption that separating
our U.S. assets into a stand alone company will create value. It
won′t.

Neither the Bakken nor the Utica are currently self-funding. Spinning
them off now would leave them stranded, underfunded entities vulnerable
to a forced sale and, thereby, enabling Singer to shift value that
rightly belongs to Hess shareholders to another operator who acquires
this enormously valuable acreage on the cheap. To be clear,our
specific plan is to continue to realize the intrinsic value of our
assets for the benefit of all our shareholders, while Singer seems
intent to pursue a short term run in the stock that will effectively
prevent us from realizing this substantial upside.

The Singer proposal:

• Ignores Credit Implications ? Singer
  would break up Hess into two pieces ? both of which we believe would
  have higher financing costs and limited financial flexibility ?
  severely limiting our ability to realize the substantial value
  opportunity for Hess shareholders.
  
  
  • 
    Singer′s ResourceCo would have limited stand-alone debt capacity
    and substantial negative cash flow, creating an entity that could
    not fund Bakken development.
    
  • 
    Singer′s International Co would likely retain all of Hess′
    existing debt on a smaller asset base with fewer reserves and
    lower production growth, hampering its ability to retain an
    investment grade rating and severely limiting its ability to run
    efficient international E&P activities at attractive financing
    costs.
    
• Ignores Tax Consequences ? The Singer
  proposals assert without substantiation that midstream and downstream
  assets can be monetized or divested without tax leakage or
  inefficiencies. In fact,he ignores the significant tax
  consequences inherent in separating Hess into ResourceCo and
  InternationalCo, such as:
  
  
  • 
    Bakken capital spending generates substantial excess tax
    deductions that are used to offset taxable income generated by
    other U.S. assets.
    
  • 
    Singer′s ResourceCo would be generating unused tax deductions and
    InternationalCo would be paying taxes on otherwise shielded income.
    
  • 
    Singer′s InternationalCo would remain a U.S. domiciled entity with
    the majority of its cash flow generated from foreign assets.
    
• Uses Flawed Valuation Benchmarks ?
  Singer′s net asset value assumptions that are necessary predicates for
  the spin off are premised on significant multiple expansion for both
  entities, and are not analytically sound. They:
  
  
  • 
    Ignore the declining trend in valuation multiples for pure play
    Bakken companies; and
    
  • 
    Assume Singer′s InternationalCo achieves a 'premium multiple?
    despite being a more highly levered, less tax efficient company
    with lower production growth.
    

Further, Singer falsely asserts that we have failed to control costs in
the Bakken. This is simply not true, reflecting either willful
distortion or a failure to do his homework. The fact is that Hess is now
recognized as one of the most efficient operators in the Bakken, with
competitive drilling and completion costs below or in line with peers
and further efficiencies expected as a result of our shift to pad
drilling. This cost leadership is evidenced by the fact that in 2012
Hess wells enjoyed an 85% average participation rate with its partners,
and our exceptional production performance is evidenced by Hess
completing 3 of the top 5 producing wells in the play and 10 of the top
25.

Many independent analysts share our view of Elliott′s Flawed
Proposals:

***

The newly transformed Hess will be a pure play E&P company with a
focused, higher growth, lower risk portfolio of world class assets.
While retaining the financial flexibility to fund future growth, we will
also return capital to shareholders through a substantially enhanced
dividend and initiate a share repurchase program. Lastly, we have
identified an outstanding team of new directors with substantial E&P,
financial, and operational business expertise to lead us into the next
phase of our value plan.

As you can see, your Board and management team is decisively focused on
the continued successful execution of a strategic transformation well
underway that is creating superior value for all
Hess shareholders.

We urge all shareholders to make fully informed decisions as to whether
now is the right time to disrupt the completion of our plan. For
additional information and updates, including today′s investor
presentation, please go to www.transforminghess.com.
We look forward to continuing the dialogue with you.

Sincerely,

John B. Hess

Chairman and Chief Executive Officer

###

The Company will host a conference call today, Monday, March 4, at 9
a.m. Eastern Standard Time to discuss today′s announcements.

To phone into the conference call, parties in the United States should
dial 1-877-299-4454 and enter the pass code 17435465 after 8:45 a.m.
Outside the United States, parties should dial 1-617-597-5447 and enter
the pass code 17435465. This conference call will also be accessible by
webcast.

A replay of the conference call will be available by dialing
1-888-286-8010 and entering the pass code 21025193. Outside the United
States, parties should dial 1-617-801-6888 and enter the pass code
21025193.

For additional information and updates, including today′s investor
presentation, please go to www.transforminghess.com.
More information on Hess Corporation is available at www.hess.com.

Cautionary Statements

This document contains projections and other forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These projections
and statements reflect the Company′s current views with respect to
future events and financial performance. No assurances can be given,
however, that these events will occur or that these projections will be
achieved, and actual results could differ materially from those
projected as a result of certain risk factors. A discussion of these
risk factors is included in the Company′s periodic reports filed with
the Securities and Exchange Commission.

This document contains quotes and excerpts from certain previously
published material. Consent of the author and publication has not been
obtained to use the material as proxy soliciting material.

Important Additional Information

Hess Corporation, its directors and certain of its executive officers
may be deemed to be participants in the solicitation of proxies from
Hess shareholders in connection with the matters to be considered at
Hess′ 2013 Annual Meeting. Hess intends to file a proxy statement and
WHITE proxy card with the U.S. Securities and Exchange Commission (the
'SEC?) in connection with any such solicitation of proxies from Hess
shareholders. HESS SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY
SUCH PROXY STATEMENT AND ACCOMPANYING WHITE PROXY CARD WHEN THEY BECOME
AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information
regarding the ownership of Hess′ directors and executive officers in
Hess stock, restricted stock and options is included in their SEC
filings on Forms 3, 4, and 5, which can be found through the Company′s
website (www.hess.com)
in the section 'Investors? or through the SEC′s website at www.sec.gov.
Information can also be found in Hess′ other SEC filings, including
Hess′ definitive proxy statement for the 2012 Annual Meeting and its
Annual Report on Form 10-K for the year ended December 31, 2012. More
detailed and updated information regarding the identity of potential
participants, and their direct or indirect interests, by security
holdings or otherwise, will be set forth in the proxy statement and
other materials to be filed with the SEC in connection with Hess′ 2013
Annual Meeting. Shareholders will be able to obtain any proxy statement,
any amendments or supplements to the proxy statement and other documents
filed by Hess with the SEC for no charge at the SEC′s website at www.sec.gov.
Copies will also be available at no charge at Hess′ website at www.hess.com,
by writing to Hess Corporation at 1185 Avenue of the Americas, New York,
NY 10036, or by calling Hess′ proxy solicitor, MacKenzie Partners,
toll-free at (800) 322-2885.

Investors:

Jay Wilson, 212-536-8940

or

MacKenzie
Partners, Inc.

Dan Burch/Bob Marese, 212-929-5500

or

Media:

Jon
Pepper, 212-536-8550

or

Sard Verbinnen & Co

Michael
Henson/Patrick Scanlan, 212-687-8080