(Source: Business Wire)
Hess Corporation (NYSE: HES) reported net income of $100 million for the second quarter of 2009 compared with net income of $900 million for the second quarter of 2008. The after-tax results by major operating activity were as follows:
Three Months Ended Six Months Ended June 30, (unaudited) June 30, (unaudited) 2009 2008 2009 2008 (In millions, except per share amounts) Exploration and Production $ 215 $ 1,025 $ 151 $ 1,849 Marketing and Refining (30 ) (52 ) 72 (36 ) Corporate (26 ) (33 ) (75 ) (72 ) Interest expense (59 ) (40 ) (107 ) (82 ) Net income attributable to Hess Corporation $ 100 $ 900 $ 41 $ 1,659 Net income per share (diluted) $ .31 $ 2.76 $ .13 $ 5.11 Weighted average number of shares (diluted) 325.8 326.2 325.7 325.0 -------------------------------------------------------------------------------
Exploration and Production earnings were $215 million in the second quarter of 2009 compared with $1,025 million in the second quarter of 2008. Second quarter 2009 results include dry hole costs of $153 million ($92 million after-tax), primarily associated with a well offshore Brazil and two wells in the Gulf of Mexico. The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 407,000 barrels per day in the second quarter of 2009, an increase of 4% from the second quarter of 2008. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $49.27 per barrel in the second quarter of 2009 compared with $104.29 per barrel in the second quarter of 2008. The Corporation's average worldwide natural gas selling price was $4.56 per Mcf in the second quarter of 2009 compared with $7.81 per Mcf in the second quarter of 2008.
Marketing and Refining generated a loss of $30 million in the second quarter of 2009 compared with a loss of $52 million in the second quarter of 2008, primarily reflecting improved energy marketing and trading results. Refining operations generated a loss of $26 million in the second quarter of 2009 compared with income of $3 million in the second quarter of 2008, due to lower refining margins. Marketing results generated a loss of $13 million in the second quarter of 2009, compared with a loss of $40 million in the second quarter of 2008. Trading activities produced income of $9 million in the second quarter of 2009, an increase of $24 million from the second quarter of 2008.
The following table reflects the total after-tax impact of items affecting comparability of earnings between periods (in millions):
Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Exploration and Production $ (31 ) $ - $ (44 ) $ - Corporate - - (16 ) - $ (31 ) $ - $ (60 ) $ - -------------------------------------------------------------------------------
In the second quarter of 2009, the Corporation recorded after-tax charges of $31 million to reduce the carrying value of production equipment in the United Kingdom North Sea and materials inventory in Equatorial Guinea and the United States.
Net cash provided by operating activities was $616 million in the second quarter of 2009 compared with $1,732 million in the second quarter of 2008. Capital and exploratory expenditures for the second quarter of 2009 amounted to $785 million, of which $770 million related to Exploration and Production operations. Capital and exploratory expenditures for the second quarter of 2008 amounted to $1,240 million, of which $1,205 million related to Exploration and Production operations.
At June 30, 2009, cash and cash equivalents totaled $1,063 million compared with $908 million at December 31, 2008. Total debt was $4,313 million at June 30, 2009 and $3,955 million at December 31, 2008. The Corporation's debt to capitalization ratio at June 30, 2009 was 25.8 percent compared with 24.2 percent at the end of 2008.
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 www.hess.com.
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 marketing refined petroleum products, natural gas and electricity. 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) Second Second First Quarter Quarter Quarter 2009 2008 2009 Income Statement (*) Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 6,751 $ 11,711 $ 6,915 Equity in income (loss) of HOVENSA L.L.C. (75 ) (19 ) (41 ) Other, net 79 37 (2 ) Total revenues and non-operating income 6,755 11,729 6,872 Costs and Expenses Cost of products sold (excluding items shown separately below) 4,705 8,337 5,182 Production expenses 444 494 409 Marketing expenses 245 267 257 Exploration expenses, including dry holes and lease impairment 312 158 193 Other operating expenses 43 47 48 General and administrative expenses 136 156 160 Interest expense 95 65 77 Depreciation, depletion and amortization 558 482 486 Total costs and expenses 6,538 10,006 6,812 Income before income taxes 217 1,723 60 Provision for income taxes 115 812 77 Net income (loss) 102 911 (17 ) Less: Net income attributable to noncontrolling interests 2 11 42 Net income (loss) attributable to Hess Corporation $ 100 $ 900 $ (59 ) Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ 6 $ 1 $ (10 ) Capitalized interest 2 1 1 Cash Flow Information (*) Net cash provided by operating activities $ 616 $ 1,732 $ 625 Capital and Exploratory Expenditures Exploration and Production United States $ 300 $ 721 $ 315 International 470 484 444 Total Exploration and Production 770 1,205 759 Marketing, Refining and Corporate 15 35 46 Total Capital and Exploratory Expenditures $ 785 $ 1,240 $ 805 Exploration expenses charged to income included above United States $ 52 $ 44 $ 53 International 48 40 48 $ 100 $ 84 $ 101 (*) Reflects the retrospective adoption of Statement of Financial Accounting Standards 160, Accounting for Noncontrolling Interests -------------------------------------------------------------------------------
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS OF DOLLARS) First Half 2009 2008 Income Statement (*) Revenues and Non-operating Income Sales (excluding excise taxes) and other operating revenues $ 13,666 $ 22,358 Equity in income (loss) of HOVENSA L.L.C. (116 ) (29 ) Other, net 77 100 Total revenues and non-operating income 13,627 22,429 Costs and Expenses Cost of products sold (excluding items shown separately below) 9,887 16,042 Production expenses 853 918 Marketing expenses 502 500 Exploration expenses, including dry holes and lease impairment 505 310 Other operating expenses 91 92 General and administrative expenses 296 308 Interest expense 172 132 Depreciation, depletion and amortization 1,044 934 Total costs and expenses 13,350 19,236 Income before income taxes 277 3,193 Provision for income taxes 192 1,530 Net income 85 1,663 Less: Net income attributable to noncontrolling interests 44 4 Net income attributable to Hess Corporation $ 41 $ 1,659 Supplemental Income Statement Information Foreign currency gains (losses), after-tax $ (4 ) $ 12 Capitalized interest 3 2 Cash Flow Information (*) Net cash provided by operating activities $ 1,241 $ 2,915 Capital and Exploratory Expenditures Exploration and Production United States $ 615 $ 1,136 International 914 1,007 Total Exploration and Production 1,529 2,143 Marketing, Refining and Corporate 61 67 Total Capital and Exploratory Expenditures $ 1,590 $ 2,210 Exploration expenses charged to income included above United States $ 105 $ 106 International 96 99 $ 201 $ 205 (*) Reflects the retrospective adoption of Statement of Financial Accounting Standards 160, Accounting for Noncontrolling Interests -------------------------------------------------------------------------------
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS OF DOLLARS) June 30, December 31, 2009 2008 Balance Sheet Information (*) Cash and cash equivalents $ 1,063 $ 908 Other current assets 6,445 6,424 Investments 1,013 1,127 Property, plant and equipment -- net 16,421 16,271 Other long-term assets 3,974 3,859 Total assets $ 28,916 $ 28,589 Current maturities of long-term debt $ 135 $ 143 Other current liabilities 7,478 7,587 Long-term debt 4,178 3,812 Other long-term liabilities 4,747 4,656 Total equity excluding other comprehensive income (loss) 14,478 14,399 Accumulated other comprehensive income (loss) (2,100 ) (2,008 ) Total liabilities and equity $ 28,916 $ 28,589 (*) Reflects the retrospective adoption of Statement of Financial Accounting Standards 160, Accounting for Noncontrolling Interests -------------------------------------------------------------------------------
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS OF DOLLARS) Second Quarter 2009 United States International Total Sales and other operating revenues $ 358 $ 1,341 $ 1,699 Non-operating income (loss) (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 Second Quarter 2008 United States International Total Sales and other operating revenues $ 545 $ 2,530 $ 3,075 Non-operating income (loss) - 22 22 Total revenues and non-operating income 545 2,552 3,097 Costs and expenses Production expenses, including related taxes 101 393 494 Exploration expenses, including dry holes and lease impairment 62 96 158 General, administrative and other expenses 36 37 73 Depreciation, depletion and amortization 61 401 462 Total costs and expenses 260 927 1,187 Results of operations before income taxes 285 1,625 1,910 Provision (benefit) for income taxes 108 777 885 Results of operations attributable to Hess Corporation $ 177 $ 848 $ 1,025 First Quarter 2009 United States International Total Sales and other operating revenues $ 167 $ 964 $ 1,131 Non-operating income (loss) (2 ) 10 8 Total revenues and non-operating income 165 974 1,139 Costs and expenses Production expenses, including related taxes 112 297 409 Exploration expenses, including dry holes and lease impairment 111 82 193 General, administrative and other expenses 27 29 56 Depreciation, depletion and amortization 57 408 465 Total costs and expenses 307 816 1,123 Results of operations before income taxes (142 ) 158 16 Provision (benefit) for income taxes (53 ) 133 80 Results of operations attributable to Hess Corporation $ (89 ) $ 25 $ (64 ) -------------------------------------------------------------------------------
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS OF DOLLARS) First Half 2009 United States International Total Sales and other operating revenues $ 525 $ 2,305 $ 2,830 Non-operating income (loss) (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 First Half 2008 United States International Total Sales and other operating revenues $ 993 $ 4,689 $ 5,682 Non-operating income (loss) 10 59 69 Total revenues and non-operating income 1,003 4,748 5,751 Costs and expenses Production expenses, including related taxes 171 747 918 Exploration expenses, including dry holes and lease impairment 145 165 310 General, administrative and other expenses 68 68 136 Depreciation, depletion and amortization 116 780 896 Total costs and expenses 500 1,760 2,260 Results of operations before income taxes 503 2,988 3,491 Provision (benefit) for income taxes 192 1,450 1,642 Results of operations attributable to Hess Corporation $ 311 $ 1,538 $ 1,849 -------------------------------------------------------------------------------
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED) Second Second First Quarter Quarter Quarter 2009 2008 2009 Operating Data Net Production Per Day (in thousands) Crude oil - barrels United States 58 36 32 Europe 76 83 88 Africa 124 128 126 Asia and other 16 12 15 Total 274 259 261 Natural gas liquids - barrels United States 10 11 9 Europe 3 4 4 Asia and other 1 - - Total 14 15 13 Natural gas - mcf United States 92 83 78 Europe 160 267 180 Asia and other 459 364 438 Total 711 714 696 Barrels of oil equivalent 407 393 390 Average Selling Price Crude oil - per barrel (including hedging)* United States $ 55.53 $ 120.23 $ 38.58 Europe 47.41 104.98 35.31 Africa 47.16 97.32 31.15 Asia and other 55.84 120.59 45.86 Worldwide 49.27 104.29 34.42 Crude oil - per barrel (excluding hedging) United States $ 55.53 $ 120.23 $ 38.58 Europe 47.41 104.98 35.31 Africa 57.13 117.49 44.20 Asia and other 55.84 120.59 45.86 Worldwide 54.03 113.79 40.19 Natural gas liquids - per barrel United States $ 31.03 $ 76.60 $ 29.03 Europe 36.51 92.67 36.76 Asia and other 35.92 - - Worldwide 32.97 81.52 31.29 Natural gas - per mcf (including hedging)* United States $ 3.26 $ 11.00 $ 4.03 Europe 4.53 10.33 6.49 Asia and other 4.82 5.23 4.70 Worldwide 4.56 7.81 5.08 Natural gas - per mcf (excluding hedging) United States $ 3.26 $ 11.00 $ 4.03 Europe 4.53 10.84 6.49 Asia and other 4.82 5.23 4.70 Worldwide 4.56 8.01 5.08 * The after-tax losses from hedging activities were $83 million in the second quarter of 2009, $144 million in the second quarter of 2008 and $82 million in the first quarter of 2009. -------------------------------------------------------------------------------
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED) First Half 2009 2008 Operating Data Net Production Per Day (in thousands) Crude oil - barrels United States 45 36 Europe 82 83 Africa 125 123 Asia and other 16 15 Total 268 257 Natural gas liquids - barrels United States 10 11 Europe 3 4 Asia and other - - Total 13 15 Natural gas - mcf United States 85 88 Europe 170 282 Asia and other 449 353 Total 704 723 Barrels of oil equivalent 398 392 Average Selling Price Crude oil - per barrel (including hedging)* United States $ 49.56 $ 106.42 Europe 41.09 93.32 Africa 40.29 88.44 Asia and other 51.50 106.28 Worldwide 42.62 93.75 Crude oil - per barrel (excluding hedging) United States $ 49.56 $ 106.42 Europe 41.09 93.32 Africa 51.58 105.98 Asia and other 51.50 106.28 Worldwide 47.84 101.66 Natural gas liquids - per barrel A service of YellowBrix, Inc.
