HESS CORP - FORM 8-K - EX-99.(1) - EXHIBIT 99(1)

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8-K - HESS CORPORATION 8-K - HESS CORP	a50350522.htm
EX-99.(2) - EXHIBIT 99(2) - HESS CORP	a50350522ex992.htm
EX-99.(3) - EXHIBIT 99(3) - HESS CORP	a50350522ex993.htm

Exhibit 99(1)

HESS CORPORATION

Investor Contact: Jay Wilson

(212) 536-8940

Media Contact: Jon Pepper

(212) 536-8550

News Release

HESS REPORTS ESTIMATED RESULTS FOR THE SECOND QUARTER OF 2012

Second Quarter Highlights:

●	Net income was $549 million, compared with $607 million in the second quarter of 2011

●	Oil and gas production increased to 429,000 barrels of oil equivalent per day, up from 372,000 in the second quarter of 2011

●	Oil and gas production from the Bakken increased to 55,000 barrels of oil equivalent per day, up from 25,000 in the second quarter of 2011

●	Net cash provided by operating activities was $1,240 million, compared with $1,689 million in the second quarter of 2011

NEW YORK, July 25, 2012 -- Hess Corporation (NYSE: HES) reported net income of $549 million for the second quarter of 2012, compared with $607 million for the second quarter of 2011. The after-tax income (loss) by major operating activity was as follows:

	Three Months Ended						Six Months Ended
	June 30, (unaudited)						June 30, (unaudited)
	2012			2011			2012			2011
	(In millions, except per share amounts)

Exploration and Production	$	644		$	747		$	1,279		$	1,726
Marketing and Refining		8			(39	)		19			-
Corporate		(39	)		(42	)		(77	)		(70	)
Interest expense		(64	)		(59	)		(127	)		(120	)
Net income attributable to Hess Corporation	$	549		$	607		$	1,094		$	1,536

Net income per share (diluted)	$	1.61		$	1.78		$	3.21		$	4.52

Weighted average number of shares (diluted)		340.4			340.4			340.4			339.7

Note: See the following page for a table of items affecting comparability of earnings between periods.

Exploration and Production earnings were $644 million in the second quarter of 2012, compared with $747 million in the second quarter of 2011. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $86.86 per barrel, down from $97.20 per barrel in the same quarter a year ago. The average worldwide natural gas

selling price of $5.94 per mcf in the second quarter of 2012 was comparable with the same quarter a year ago. Second quarter oil and gas production was 429,000 barrels of oil equivalent per day, up from 372,000 barrels of oil equivalent per day in the second quarter of 2011, primarily reflecting an increase in production from the Bakken oil shale play and the resumption of operations in Libya.

Marketing and Refining generated earnings of $8 million in the second quarter of 2012, compared with a loss of $39 million in the same period in 2011. Marketing earnings were $18 million in the second quarter of 2012 and $28 million in the second quarter of 2011. Refining operations generated income of $8 million in the second quarter of 2012, compared with a loss of $44 million in the second quarter a year ago. Trading activities generated a loss of $18 million in the second quarter of 2012 and a loss of $23 million in the second 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					Six Months Ended
	June 30, (unaudited)					June 30, (unaudited)
	2012			2011		2012		2011
	(In millions of dollars)
Exploration and Production	$	(36	)	$	-	$	-	$	310

Results for the second quarter of 2012 included an after-tax charge of $36 million for certain exploration properties in the Eagle Ford shale in the United States that are expected to be divested in an asset exchange with a joint venture partner.

Net cash provided by operating activities was $1,240 million in the second quarter of 2012, compared with $1,689 million in the same quarter of 2011. Capital and exploratory expenditures were $2,078 million, of which $2,036 million related to Exploration and Production operations. Capital and exploratory expenditures for the second quarter of 2011 were $1,490 million, of which $1,469 million related to Exploration and Production operations.

At June 30, 2012, cash and cash equivalents totaled $409 million, compared with $351 million at December 31, 2011. Total debt was $7,845 million at June 30, 2012 and $6,057 million at

December 31, 2011. The Corporation’s debt to capitalization ratio at June 30, 2012 was 28.2 percent, compared with 24.6 percent at the end of 2011.

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, 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)

	Second			Second			First
	Quarter			Quarter			Quarter
	2012			2011			2012
Income Statement
Revenues and Non-operating Income
Sales (excluding excise taxes) and other operating revenues	$	9,304		$	9,853		$	9,682
Income (loss) from equity investment in HOVENSA L.L.C.		-			(49	)		-
Gains on asset sales		-			-			36
Other, net		5			2			29

Total revenues and non-operating income		9,309			9,806			9,747

Costs and Expenses
Cost of products sold (excluding items shown separately below)		5,969			6,841			6,679
Production expenses		677			599			673
Marketing expenses		265			247			251
Exploration expenses, including dry holes and lease impairment		196			257			253
Other operating expenses		41			42			41
General and administrative expenses		172			174			167
Interest expense		105			97			104
Depreciation, depletion and amortization		769			588			681
Asset impairments		59			-			-

Total costs and expenses		8,253			8,845			8,849

Income (loss) before income taxes		1,056			961			898
Provision (benefit) for income taxes		521			392			338

Net income (loss)		535			569			560
Less: Net income (loss) attributable to noncontrolling interests		(14	)		(38	)		15
Net income (loss) attributable to Hess Corporation	$	549		$	607		$	545

Supplemental Income Statement Information
Foreign currency gains (losses), after-tax	$	(5	)	$	(2	)	$	9
Capitalized interest		5			2			5

Cash Flow Information
Net cash provided by operating activities (a)	$	1,240		$	1,689		$	988	(b)

Capital and Exploratory Expenditures
Exploration and Production
United States	$	1,243		$	793		$	1,241
International		793			676			722

Total Exploration and Production		2,036			1,469			1,963
Marketing, Refining and Corporate		42			21			23

Total Capital and Exploratory Expenditures	$	2,078		$	1,490		$	1,986

Exploration expenses charged to income included above
United States	$	33		$	56		$	37
International		67			59			71

	$	100		$	115		$	108

(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)

	First Half
	2012			2011
Income Statement
Revenues and Non-operating Income
Sales (excluding excise taxes) and other operating revenues	$	18,986		$	20,068
Income (loss) from equity investment in HOVENSA L.L.C.		-			(97	)
Gains on asset sales		36			343
Other, net		34			7

Total revenues and non-operating income		19,056			20,321

Costs and Expenses
Cost of products sold (excluding items shown separately below)		12,648			13,881
Production expenses		1,350			1,130
Marketing expenses		516			530
Exploration expenses, including dry holes and lease impairment		449			570
Other operating expenses		82			84
General and administrative expenses		339			338
Interest expense		209			196
Depreciation, depletion and amortization		1,450			1,146
Asset impairments		59			-

Total costs and expenses		17,102			17,875

Income (loss) before income taxes		1,954			2,446
Provision (benefit) for income taxes		859			903

Net income (loss)		1,095			1,543
Less: Net income (loss) attributable to noncontrolling interests		1			7
Net income (loss) attributable to Hess Corporation	$	1,094		$	1,536

Supplemental Income Statement Information
Foreign currency gains (losses), after-tax	$	4		$	(5	)
Capitalized interest		10			4

Cash Flow Information
Net cash provided by operating activities (a)	$	2,228	(b)	$	2,824

Capital and Exploratory Expenditures
Exploration and Production
United States	$	2,484		$	1,333
International		1,515			1,309

Total Exploration and Production		3,999			2,642
Marketing, Refining and Corporate		65			34

Total Capital and Exploratory Expenditures	$	4,064		$	2,676

Exploration expenses charged to income included above
United States	$	70		$	98
International		138			121

	$	208		$	219

(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)

	June 30,			December 31,
	2012			2011
Balance Sheet Information

Cash and cash equivalents	$	409		$	351
Other current assets		7,516			7,988
Investments		450			384
Property, plant and equipment – net		26,556			24,712
Other long-term assets		5,683			5,701
Total assets	$	40,614		$	39,136

Short-term debt and current maturities of long-term debt	$	299		$	52
Other current liabilities		6,785			8,048
Long-term debt		7,546			6,005
Other long-term liabilities		6,025			6,439
Total equity excluding other comprehensive income (loss)		20,738			19,659
Accumulated other comprehensive income (loss)		(779	)		(1,067	)
Total liabilities and equity	$	40,614		$	39,136

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS OF DOLLARS)

	Second Quarter 2012
	United States				International			Total
Sales and other operating revenues	$	1,043			$	1,946		$	2,989
Gains on asset sales		-				-			-
Other, net		1				-			1

Total revenues and non-operating income		1,044				1,946			2,990
Costs and expenses
Production expenses, including related taxes		253				424			677
Exploration expenses, including dry holes and lease impairment		75				121			196
General, administrative and other expenses		50				29			79
Depreciation, depletion and amortization		335				408			743
Asset impairments		59				-			59

Total costs and expenses		772				982			1,754

Results of operations before income taxes		272				964			1,236
Provision (benefit) for income taxes		112				480			592

Results of operations attributable to Hess Corporation	$	160		(a)	$	484	(b)	$	644

	Second Quarter 2011
	United States				International			Total
Sales and other operating revenues	$	858			$	1,840		$	2,698
Gains on asset sales		-				-			-
Other, net		(13	)			8			(5	)

Total revenues and non-operating income		845				1,848			2,693
Costs and expenses
Production expenses, including related taxes		179				420			599
Exploration expenses, including dry holes and lease impairment		128				129			257
General, administrative and other expenses		49				27			76
Depreciation, depletion and amortization		166				387			553
Asset impairments		-				-			-

Total costs and expenses		522				963			1,485

Results of operations before income taxes		323				885			1,208
Provision (benefit) for income taxes		120				341			461

Results of operations attributable to Hess Corporation	$	203			$	544	(b)	$	747

	First Quarter 2012
	United States				International			Total
Sales and other operating revenues	$	923			$	1,697		$	2,620
Gains on asset sales		-				36			36
Other, net		-				27			27

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
Asset impairments		-				-			-

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

(a)	The after-tax losses from crude oil hedging activities were $3 million in the second quarter of 2012 and $26 million in the first quarter of 2012.
(b)	The after-tax losses from crude oil hedging activities were $86 million in the second quarter of 2012, $81 million in the second quarter of 2011 and $125 million in the first quarter of 2012.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS OF DOLLARS)

	First Half 2012
	United States				International			Total
Sales and other operating revenues	$	1,966			$	3,643		$	5,609
Gains on asset sales		-				36			36
Other, net		1				27			28

Total revenues and non-operating income		1,967				3,706			5,673
Costs and expenses
Production expenses, including related taxes		484				866			1,350
Exploration expenses, including dry holes and lease impairment		153				296			449
General, administrative and other expenses		88				56			144
Depreciation, depletion and amortization		614				788			1,402
Asset impairments		59				-			59

Total costs and expenses		1,398				2,006			3,404

Results of operations before income taxes		569				1,700			2,269
Provision (benefit) for income taxes		222				768			990

Results of operations attributable to Hess Corporation	$	347		(a)	$	932	(b)	$	1,279

	First Half 2011
	United States				International			Total
Sales and other operating revenues	$	1,604			$	3,707		$	5,311
Gains on asset sales		-				343			343
Other, net		(14	)			10			(4	)

Total revenues and non-operating income		1,590				4,060			5,650
Costs and expenses
Production expenses, including related taxes		316				814			1,130
Exploration expenses, including dry holes and lease impairment		237				333			570
General, administrative and other expenses		97				63			160
Depreciation, depletion and amortization		318				772			1,090
Asset impairments		-				-			-

Total costs and expenses		968				1,982			2,950

Results of operations before income taxes		622				2,078			2,700
Provision (benefit) for income taxes		232				742			974

Results of operations attributable to Hess Corporation	$	390			$	1,336	(b)	$	1,726

(a)	The after-tax losses from crude oil hedging activities were $29 million in the first half of 2012.
(b)	The after-tax losses from crude oil hedging activities were $211 million in the first half of 2012 and $162 million in the first half of 2011.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

	Second		Second		First
	Quarter		Quarter		Quarter
	2012		2011		2012
Operating Data
Net Production Per Day (in thousands)
Crude oil - barrels
United States		109		77		95
Europe		98		93		94
Africa		79		66		71
Asia		18		12		16
Total		304		248		276

Natural gas liquids - barrels
United States		15		13		14
Europe		3		3		3
Asia		1		1		2
Total		19		17		19

Natural gas - mcf
United States		121		100		100
Europe		53		72		61
Asia and other		465		471		449
Total		639		643		610
Barrels of oil equivalent		429		372		397

Average Selling Price
Crude oil - per barrel (including hedging)
United States	$	91.97	$	106.62	$	95.92
Europe		76.20		87.75		80.18
Africa		89.01		97.74		88.75
Asia		105.89		113.44		117.13
Worldwide		86.86		97.20		89.92

Crude oil - per barrel (excluding hedging)
United States	$	92.48	$	106.62	$	100.87
Europe		76.58		87.75		82.77
Africa		105.72		118.19		120.59
Asia		106.17		113.44		123.72
Worldwide		91.83		102.73		100.50

Natural gas liquids - per barrel
United States	$	40.75	$	61.57	$	49.26
Europe		66.15		69.99		90.43
Asia		75.16		79.63		86.50
Worldwide		45.56		64.05		59.53

Natural gas - per mcf
United States	$	1.55	$	3.71	$	1.75
Europe		9.98		8.97		9.44
Asia and other		6.61		5.94		6.77
Worldwide		5.94		5.93		6.23

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

	First Half
	2012		2011
Operating Data
Net Production Per Day (in thousands)
Crude oil - barrels
United States		102		77
Europe		96		96
Africa		75		75
Asia		17		13
Total		290		261

Natural gas liquids - barrels
United States		15		13
Europe		3		3
Asia		1		1
Total		19		17

Natural gas - mcf
United States		110		103
Europe		57		89
Asia and other		458		451
Total		625		643
Barrels of oil equivalent		413		385

Average Selling Price
Crude oil - per barrel (including hedging)
United States	$	93.81	$	99.12
Europe		78.05		85.84
Africa		88.91		90.04
Asia		110.70		111.91
Worldwide		88.23		92.05

Crude oil - per barrel (excluding hedging)
United States	$	96.39	$	99.12
Europe		79.45		85.84
Africa		111.78		110.39
Asia		113.67		111.91
Worldwide		95.72		97.37

Natural gas liquids - per barrel
United States	$	44.92	$	59.43
Europe		81.20		76.01
Asia		82.02		76.23
Worldwide		52.78		63.74

Natural gas - per mcf
United States	$	1.64	$	3.77
Europe		9.69		8.55
Asia and other		6.69		5.85
Worldwide		6.08		5.89

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)



	Second			Second			First
	Quarter			Quarter			Quarter
	2012			2011			2012
Financial Information (in millions of dollars)

Marketing and Refining Results
Income (loss) before income taxes	$	7		$	(45	)	$	20
Provision (benefit) for income taxes		(1	)		(6	)		9
Results of operations attributable to Hess Corporation	$	8		$	(39	)	$	11

Summary of Marketing and Refining Results
Marketing	$	18		$	28		$	22
Refining		8			(44	)		(6	)
Trading		(18	)		(23	)		(5	)
Results of operations attributable to Hess Corporation	$	8		$	(39	)	$	11


Operating Data

Sales Volumes
Refined petroleum products (thousands of barrels per day)
Gasoline		212			228			210
Distillates		108			114			115
Residuals		54			56			61
Other		17			28			18
Total		391			426			404

Natural gas (thousands of mcf per day)		1,860			1,900			2,560

Electricity (megawatts round the clock)		4,405			4,100			4,350

Retail Marketing
Number of retail stations (a)		1,361			1,356			1,361
Convenience store revenue (in millions of dollars) (b)	$	288		$	305		$	272
Average gasoline volume per station (thousands of gallons per month) (b)		194			199			185

Port Reading
Refinery throughput (thousands of barrels per day)		69			66			47
Refinery utilization (capacity - 70,000 barrels per day)		98.0%			93.6%			67.4%

(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
	2012			2011
Financial Information (in millions of dollars)

Marketing and Refining Results
Income (loss) before income taxes	$	27		$	51
Provision (benefit) for income taxes		8			51
Results of operations attributable to Hess Corporation	$	19		$	-

Summary of Marketing and Refining Results
Marketing	$	40		$	96
Refining		2			(92	)
Trading		(23	)		(4	)
Results of operations attributable to Hess Corporation	$	19		$	-


Operating Data

Sales Volumes
Refined petroleum products (thousands of barrels per day)
Gasoline		210			227
Distillates		112			124
Residuals		58			71
Other		18			24
Total		398			446

Natural gas (thousands of mcf per day)		2,205			2,400

Electricity (megawatts round the clock)		4,390			4,200

Retail Marketing
Number of retail stations (a)		1,361			1,356
Convenience store revenue (in millions of dollars) (b)	$	560		$	583
Average gasoline volume per station (thousands of gallons per month) (b)		190			192

Port Reading
Refinery throughput (thousands of barrels per day)		58			66
Refinery utilization (capacity - 70,000 barrels per day)		82.7%			93.8%

(a)	Includes company operated, Wilco-Hess, dealer and branded retailer.
(b)	Company operated only.

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