Note: See the following page for a table of items affecting the comparability of earnings between periods.
Exploration and Production earnings were $488 million in the second quarter of 2010 compared with $215 million in the second quarter of 2009. The Corporation′s oil and gas production was 415,000 barrels of oil equivalent per day in the second quarter of 2010, an increase of 2 percent from the second quarter of 2009. The Corporation′s average worldwide crude oil selling price, including the effect of hedging, was $64.81 per barrel in the second quarter of 2010 compared with $49.27 per barrel in the second quarter of 2009. The Corporation′s average worldwide natural gas selling price was $5.57 per Mcf in the second quarter of 2010 compared with $4.56 per Mcf in the second quarter of 2009.
Marketing and Refining generated a loss of $19 million in the second quarter of 2010 compared with a loss of $30 million in the second quarter of 2009. Refining operations incurred a loss of $31 million compared with a loss of $26 million in the second quarter of 2009. During the second quarter of 2010, the Port Reading refining facility was shutdown for 41 days for a scheduled turnaround. The after-tax expenses for the Port Reading turnaround were approximately $27 million in the second quarter. Marketing earnings were $17 million, an increase of $30 million from the second quarter of 2009 primarily due to higher margins. Trading activities generated a loss of $5 million, compared with income of $9 million in the second quarter of 2009.
The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods (in millions):
Three Months Ended
Six Months Ended
June 30,
June 30,
2010
2009
2010
2009
Exploration and Production
$
-
$
(31
)
$
58
$
(44
)
Corporate
-
-
(7
)
(16
)
$
-
$
(31
)
$
(51
)
$
(60
)
Net cash provided by operating activities was $981 million compared with $616 million in the second quarter of 2009. Capital and exploratory expenditures were $963 million in the second quarter of 2010, of which $930 million related to Exploration and Production operations. Capital and exploratory expenditures for the second quarter of 2009 were $780 million, of which $765 million related to Exploration and Production operations.
At June 30, 2010, cash and cash equivalents totaled $1,363 million compared with $1,362 million at December 31, 2009. Total debt was $4,326 million at June 30, 2010 and $4,467 million at December 31, 2009. The Corporation′s debt to capitalization ratio at June 30, 2010 was 22.9 percent compared with 24.8 percent at the end of 2009.
Hess Corporation will review second quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details on the event, refer to the Investor Relations section of our website at
Hess Corporation, with headquarters in New York, is a leading global independent energy company engaged in the exploration for and production of crude oil and natural gas, as well as in refining and in marketing refined petroleum products, natural gas and electricity. More information on Hess Corporation is available at
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)
Second
Second
First
Quarter
Quarter
Quarter
2010
2009
2010
Income Statement
Revenues and Non-operating Income
Sales (excluding excise taxes) and other operating revenues
$
7,732
$
6,751
$
9,259
Equity in income (loss) of HOVENSA L.L.C.
(6
)
(75
)
(85
)
Other, net
24
79
46
Total revenues and non-operating income
7,750
6,755
9,220
Costs and Expenses
Cost of products sold (excluding items shown separately below)
5,316
4,705
6,540
Production expenses
440
444
477
Marketing expenses
245
245
253
Exploration expenses, including dry holes and lease impairment
172
312
151
Other operating expenses
80
43
52
General and administrative expenses
159
136
155
Interest expense
83
95
84
Depreciation, depletion and amortization
558
558
542
Total costs and expenses
7,053
6,538
8,254
Income before income taxes
697
217
966
Provision for income taxes
301
115
398
Net income
396
102
568
Less: Net income attributable to noncontrolling interests
21
2
30
Net income attributable to Hess Corporation
$
375
$
100
$
538
Supplemental Income Statement Information
Foreign currency gains (losses), after-tax
$
(4
)
$
6
$
(1
)
Capitalized interest
1
2
1
Cash Flow Information
Net cash provided by operating activities (*)
$
981
$
616
$
825
Capital and Exploratory Expenditures
Exploration and Production
United States
$
399
$
295
$
337
International
531
470
504
Total Exploration and Production
930
765
841
Marketing, Refining and Corporate
33
15
20
Total Capital and Exploratory Expenditures
$
963
$
780
$
861
Exploration expenses charged to income included above
United States
$
21
$
47
$
41
International
41
48
32
$
62
$
95
$
73
(*) Includes changes in working capital
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS OF DOLLARS)
First Half
2010
2009
Income Statement
Revenues and Non-operating Income
Sales (excluding excise taxes) and other operating revenues
$
16,991
$
13,666
Equity in income (loss) of HOVENSA L.L.C.
(91
)
(116
)
Other, net
70
77
Total revenues and non-operating income
16,970
13,627
Costs and Expenses
Cost of products sold (excluding items shown separately below)
11,856
9,887
Production expenses
917
853
Marketing expenses
498
502
Exploration expenses, including dry holes and lease impairment
323
505
Other operating expenses
132
91
General and administrative expenses
314
296
Interest expense
167
172
Depreciation, depletion and amortization
1,100
1,044
Total costs and expenses
15,307
13,350
Income before income taxes
1,663
277
Provision for income taxes
699
192
Net income
964
85
Less: Net income attributable to noncontrolling interests
51
44
Net income attributable to Hess Corporation
$
913
$
41
Supplemental Income Statement Information
Foreign currency gains (losses), after-tax
$
(5
)
$
(4
)
Capitalized interest
2
3
Cash Flow Information
Net cash provided by operating activities (*)
$
1,806
$
1,241
Capital and Exploratory Expenditures
Exploration and Production
United States
$
736
$
610
International
1,035
914
Total Exploration and Production
1,771
1,524
Marketing, Refining and Corporate
53
61
Total Capital and Exploratory Expenditures
$
1,824
$
1,585
Exploration expenses charged to income included above
United States
$
62
$
100
International
73
96
$
135
$
196
(*) Includes changes in working capital
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS OF DOLLARS)
June 30,
December 31,
2010
2009
Balance Sheet Information
Cash and cash equivalents
$
1,363
$
1,362
Other current assets
6,933
6,625
Investments
864
913
Property, plant and equipment ? net
16,535
16,627
Other long-term assets
3,805
3,938
Total assets
$
29,500
$
29,465
Current maturities of long-term debt
$
33
$
148
Other current liabilities
6,297
6,702
Long-term debt
4,293
4,319
Other long-term liabilities
4,347
4,768
Total equity excluding other comprehensive income (loss)
16,133
15,203
Accumulated other comprehensive income (loss)
(1,603
)
(1,675
)
Total liabilities and equity
$
29,500
$
29,465
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS OF DOLLARS)
Second Quarter 2010
United
States
International
Total
Sales and other operating revenues
$
570
$
1,489
$
2,059
Other, net
5
9
14
Total revenues and non-operating income
575
1,498
2,073
Costs and expenses
Production expenses, including related taxes
113
328
441
Exploration expenses, including dry holes and lease impairment
60
112
172
General, administrative and other expenses
32
32
64
Depreciation, depletion and amortization
157
377
534
Total costs and expenses
362
849
1,211
Results of operations before income taxes
213
649
862
Provision for income taxes
84
290
374
Results of operations attributable to Hess Corporation
$
129
$
359
$
488
Second Quarter 2009
United
States
International
Total
Sales and other operating revenues
$
358
$
1,341
$
1,699
Other, net
(3
)
60
57
Total revenues and non-operating income
355
1,401
1,756
Costs and expenses
Production expenses, including related taxes
109
335
444
Exploration expenses, including dry holes and lease impairment
139
173
312
General, administrative and other expenses
33
28
61
Depreciation, depletion and amortization
105
433
538
Total costs and expenses
386
969
1,355
Results of operations before income taxes
(31
)
432
401
Provision (benefit) for income taxes
(11
)
197
186
Results of operations attributable to Hess Corporation
$
(20
)
$
235
$
215
First Quarter 2010
United
States
International
Total
Sales and other operating revenues
$
582
$
1,532
$
2,114
Other, net
(1
)
55
54
Total revenues and non-operating income
581
1,587
2,168
Costs and expenses
Production expenses, including related taxes
116
361
477
Exploration expenses, including dry holes and lease impairment
78
73
151
General, administrative and other expenses
36
31
67
Depreciation, depletion and amortization
136
383
519
Total costs and expenses
366
848
1,214
Results of operations before income taxes
215
739
954
Provision for income taxes
77
326
403
Results of operations attributable to Hess Corporation
$
138
$
413
$
551
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS OF DOLLARS)
First Half 2010
United
States
International
Total
Sales and other operating revenues
$
1,152
$
3,021
$
4,173
Other, net
4
64
68
Total revenues and non-operating income
1,156
3,085
4,241
Costs and expenses
Production expenses, including related taxes
229
689
918
Exploration expenses, including dry holes and lease impairment
138
185
323
General, administrative and other expenses
68
63
131
Depreciation, depletion and amortization
293
760
1,053
Total costs and expenses
728
1,697
2,425
Results of operations before income taxes
428
1,388
1,816
Provision for income taxes
161
616
777
Results of operations attributable to Hess Corporation
$
267
$
772
$
1,039
First Half 2009
United
States
International
Total
Sales and other operating revenues
$
525
$
2,305
$
2,830
Other, net
(5
)
70
65
Total revenues and non-operating income
520
2,375
2,895
Costs and expenses
Production expenses, including related taxes
221
632
853
Exploration expenses, including dry holes and lease impairment
250
255
505
General, administrative and other expenses
60
57
117
Depreciation, depletion and amortization
162
841
1,003
Total costs and expenses
693
1,785
2,478
Results of operations before income taxes
(173
)
590
417
Provision (benefit) for income taxes
(64
)
330
266
Results of operations attributable to Hess Corporation
$
(109
)
$
260
$
151
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
Second
Second
First
Quarter
Quarter
Quarter
2010
2009
2010
Operating Data
Net Production Per Day (in thousands)
Crude oil - barrels
United States
73
58
71
Europe
81
76
86
Africa
118
124
118
Asia and other
14
16
14
Total
286
274
289
Natural gas liquids - barrels
United States
12
10
13
Europe
3
3
3
Asia and other
1
1
1
Total
16
14
17
Natural gas - mcf
United States
102
92
97
Europe
140
160
156
Asia and other
437
459
452
Total
679
711
705
Barrels of oil equivalent
415
407
423
Average Selling Price
Crude oil - per barrel (including hedging)*
United States
$
72.99
$
55.53
$
74.40
Europe
56.21
47.41
55.25
Africa
63.54
47.16
62.38
Asia and other
78.01
55.84
71.67
Worldwide
64.81
49.27
63.62
Crude oil - per barrel (excluding hedging)
United States
$
72.99
$
55.53
$
74.40
Europe
56.21
47.41
55.25
Africa
77.03
57.13
75.96
Asia and other
78.01
55.84
71.67
Worldwide
70.15
54.03
69.06
Natural gas liquids - per barrel
United States
$
45.84
$
31.03
$
51.11
Europe
54.61
36.51
59.38
Asia and other
60.89
35.92
63.92
Worldwide
48.10
32.97
52.93
Natural gas - per mcf
United States
$
3.65
$
3.26
$
4.63
Europe
5.35
4.53
5.41
Asia and other
6.09
4.82
6.37
Worldwide
5.57
4.56
5.92
* The after-tax losses from crude oil hedging activities were $84 million in the second quarter of 2010, $83 million in the second quarter of 2009 and first quarter of 2010.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)
First Half
2010
2009
Operating Data
Net Production Per Day (in thousands)
Crude oil - barrels
United States
72
45
Europe
83
82
Africa
118
125
Asia and other
14
16
Total
287
268
Natural gas liquids - barrels
United States
12
10
Europe
3
3
Asia and other
1
-
Total
16
13
Natural gas - mcf
United States
100
85
Europe
148
170
Asia and other
445
449
Total
693
704
Barrels of oil equivalent
419
398
Average Selling Price
Crude oil - per barrel (including hedging)*
United States
$
73.68
$
49.56
Europe
55.72
41.09
Africa
62.96
40.29
Asia and other
75.99
51.50
Worldwide
64.22
42.62
Crude oil - per barrel (excluding hedging)
United States
$
73.68
$
49.56
Europe
55.72
41.09
Africa
76.50
51.58
Asia and other
75.99
51.50
Worldwide
69.61
47.84
Natural gas liquids - per barrel
United States
$
48.50
$
30.12
Europe
57.00
36.61
Asia and other
62.11
35.92
Worldwide
50.51
32.25
Natural gas - per mcf
United States
$
4.12
$
3.61
Europe
5.38
5.56
Asia and other
6.23
4.76
Worldwide
5.75
4.82
* The after-tax losses from hedging activities were $167 million for the six months ended June 30, 2010 and $165 million for the six months ended June 30, 2009.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)
Second
Second
First
Quarter
Quarter
Quarter
2010
2009
2010
Financial Information (in millions of dollars)
Marketing and Refining Results
Income (loss) before income taxes
$
(37
)
$
(56
)
$
139
Provision (benefit) for income taxes
(18
)
(26
)
52
Results of operations attributable to Hess Corporation
$
(19
)
$
(30
)
$
87
Summary of Marketing and Refining Results
Refining
$
(31
)
$
(26
)
$
(56
)
Marketing
17
(13
)
121
Trading
(5
)
9
22
Results of operations attributable to Hess Corporation
$
(19
)
$
(30
)
$
87
Operating Data (barrels and gallons in thousands)
Refined Product Sales (barrels per day)
Gasoline
238
223
251
Distillates
112
126
126
Residuals
57
65
86
Other
28
41
51
Total
435
455
514
Refinery Throughput (barrels per day)
HOVENSA - Crude runs
392
442
375
HOVENSA - Hess 50% share
196
221
188
Port Reading
35
65
62
Refinery Utilization
Refinery Capacity
HOVENSA
(barrels per day)
Crude
500
78.5
%
88.4
%
75.1
%
FCC
150
86.8
%
71.2
%
41.2
%
Coker
58
81.9
%
91.2
%
85.0
%
Port Reading
70
49.7
%
93.0
%
88.8
%
Retail Marketing
Number of retail stations (a)
1,358
1,355
1,359
Convenience store revenue (in millions of dollars) (b)
$
317
$
300
$
276
Average gasoline volume per station (gallons per month) (b)
203
209
188
(a) Includes company operated, Wilco-Hess, dealer and branded retailer.
(b) Company operated only.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)
First Half
2010
2009
Financial Information (in millions of dollars)
Marketing and Refining Results
Income (loss) before income taxes
$
102
$
106
Provision for income taxes
34
34
Results of operations attributable to Hess Corporation
$
68
$
72
Summary of Marketing and Refining Results
Refining
$
(87
)
$
(44
)
Marketing
138
88
Trading
17
28
Results of operations attributable to Hess Corporation
$
68
$
72
Operating Data (barrels and gallons in thousands)
Refined Product Sales (barrels per day)
Gasoline
245
225
Distillates
119
138
Residuals
71
75
Other
39
40
Total
474
478
Refinery Throughput (barrels per day)
HOVENSA - Crude runs
384
426
HOVENSA - Hess 50% share
192
213
Port Reading
48
64
Refinery Utilization
Refinery Capacity
HOVENSA
(barrels per day)
Crude
500
76.8
%
85.2
%
FCC
150
64.1
%
71.3
%
Coker
58
83.4
%
85.9
%
Port Reading
70
69.1
%
90.6
%
Retail Marketing
Number of retail stations (a)
1,358
1,355
Convenience store revenue (in millions of dollars) (b)
$
593
$
555
Average gasoline volume per station (gallons per month) (b)
195
204
(a) Includes company operated, Wilco-Hess, dealer and branded retailer.
