NEW YORK--(BUSINESS WIRE)--Hess Corporation (NYSE: HES) today reported a net loss of $6 million, or $0.02 per common share, in the second quarter of 2019, compared with a net loss of $130 million, or $0.48 per common share, in the second quarter of 2018. On an adjusted basis, the Corporation reported a net loss of $28 million, or $0.09 per common share, in the second quarter of 2019, compared with an adjusted net loss of $56 million, or $0.23 per common share, in the prior-year quarter. The improved after-tax adjusted results reflect increased U.S. crude oil production and reduced exploration expenses, partially offset by the impact of lower realized selling prices and higher depreciation, depletion and amortization expenses.
“Our production is now expected to come in at the upper end of our full year guidance range, while our capital and exploratory expenditures are projected to come in below our original full year guidance,” Chief Executive Officer John Hess said. “In Guyana, we have just increased the estimate of gross discovered recoverable resources for the Stabroek Block to more than 6 billion barrels of oil equivalent and continue to see multibillion barrels of additional exploration potential. Our portfolio is on track to generate industry leading cash flow growth and increasing returns to shareholders.”
After-tax income (loss) by major operating activity was as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
(unaudited) |
|
|
(unaudited) |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
|
(In millions, except per share amounts) |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to Hess Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration and Production |
|
$ |
68 |
|
|
$ |
31 |
|
|
$ |
177 |
|
|
$ |
6 |
|
Midstream |
|
|
35 |
|
|
|
30 |
|
|
|
72 |
|
|
|
58 |
|
Corporate, Interest and Other |
|
|
(109 |
) |
|
|
(191 |
) |
|
|
(223 |
) |
|
|
(300 |
) |
Net income (loss) attributable to Hess Corporation |
|
$ |
(6 |
) |
|
$ |
(130 |
) |
|
$ |
26 |
|
|
$ |
(236 |
) |
Net income (loss) per common share (diluted) (a) |
|
$ |
(0.02 |
) |
|
$ |
(0.48 |
) |
|
$ |
0.07 |
|
|
$ |
(0.85 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income (Loss) Attributable to Hess Corporation |
|
|||||||||||||||
Exploration and Production |
|
$ |
46 |
|
|
$ |
21 |
|
|
$ |
155 |
|
|
$ |
33 |
|
Midstream |
|
|
35 |
|
|
|
30 |
|
|
|
72 |
|
|
|
58 |
|
Corporate, Interest and Other |
|
|
(109 |
) |
|
|
(107 |
) |
|
|
(223 |
) |
|
|
(219 |
) |
Adjusted net income (loss) attributable to Hess Corporation |
|
$ |
(28 |
) |
|
$ |
(56 |
) |
|
$ |
4 |
|
|
$ |
(128 |
) |
Adjusted net income (loss) per common share (diluted) (a) |
|
$ |
(0.09 |
) |
|
$ |
(0.23 |
) |
|
$ |
— |
|
|
$ |
(0.50 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (diluted) |
|
|
302.2 |
|
|
|
297.5 |
|
|
|
302.1 |
|
|
|
303.5 |
|
(a) |
Calculated as net income (loss) attributable to Hess Corporation less preferred stock dividends, divided by weighted average number of diluted shares. |
Exploration and Production:
E&P net income was $68 million in the second quarter of 2019, compared with net income of $31 million in the second quarter of 2018. On an adjusted basis, second quarter 2019 net income was $46 million, compared with net income of $21 million in the prior-year quarter. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $60.45 per barrel in the second quarter of 2019, versus $62.65 per barrel in the prior-year quarter. The average realized natural gas liquids selling price in the second quarter of 2019 was $12.18 per barrel, versus $20.51 per barrel in the prior-year quarter, while the average realized natural gas selling price was $3.92 per mcf, compared with $4.12 per mcf in the second quarter of 2018.
Net production, excluding Libya, was 273,000 boepd in the second quarter of 2019, up from second quarter 2018 net production of 247,000 boepd, or 234,000 boepd excluding assets sold. The higher production was primarily driven by the Bakken and the Gulf of Mexico. Libya net production was 20,000 boepd in the second quarter of 2019, compared with 18,000 boepd in the prior-year quarter.
Excluding items affecting comparability of earnings between periods, cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $12.11 per boe in the second quarter, down 9 percent from $13.37 per boe in the prior-year quarter. Income tax expense is comprised primarily of taxes in Libya.
Operational Highlights for the Second Quarter of 2019:
Bakken (Onshore U.S.): Net production from the Bakken increased 23 percent to 140,000 boepd from 114,000 boepd in the prior-year quarter, due to increased drilling activity and improved well performance. The Corporation operated six rigs in the second quarter, drilling 39 wells and bringing 39 new wells online. Full year net production for the Bakken is expected to be in the range of 140,000 boepd to 145,000 boepd, which is at the upper end of previous guidance.
Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 65,000 boepd, compared with 47,000 boepd in the prior-year quarter, primarily reflecting increased production from the Conger Field which was shut-in in the prior-year quarter due to maintenance at the third-party operated Enchilada platform and higher production at the Penn State Field. In May, the Conger Field was temporarily shut-in for unplanned maintenance at the third-party operated Enchilada platform that reduced second quarter 2019 net production by approximately 4,000 boepd.
Guyana (Offshore): At the Stabroek Block (Hess - 30 percent), the second phase of development at the Liza Field was sanctioned by the partners following regulatory approval from the government of Guyana. Liza Phase 2 will utilize the Liza Unity FPSO, which will have the capacity to produce up to 220,000 gross bopd. Six drill centers are planned with a total of 30 wells, including 15 production wells, nine water injection wells and six gas injection wells. First oil is expected by mid-2022. The development is expected to have a gross capital cost of approximately $6 billion, including a lease capitalization cost of approximately $1.6 billion for the FPSO, and will develop approximately 600 million barrels of oil. Excluding pre-sanction and lease costs, the Corporation’s net share of development costs is forecast to be approximately $1.6 billion, of which $210 million is included in our 2019 capital and exploratory budget.
Liza Phase 1 remains on track to achieve first oil by the first quarter of 2020. It will produce up to 120,000 gross bopd at peak rates utilizing the Liza Destiny FPSO, which is expected to arrive offshore Guyana in September 2019.
Planning is underway for a third phase of development at the Payara Field, which is expected to produce between 180,000 and 220,000 gross bopd with first oil as early as 2023.
Exploration and appraisal activity on the Stabroek Block in the second quarter of 2019 was as follows:
Yellowtail: The Yellowtail-1 well encountered approximately 292 feet of high-quality oil-bearing sandstone reservoir and is located approximately 6 miles northwest of the Tilapia discovery. As the fifth discovery in the greater Turbot area, it underpins another potential major development hub.
Hammerhead: The Hammerhead-2 appraisal well, located approximately 0.9 miles from the Hammerhead-1 discovery well, and the Hammerhead-3 appraisal well, located approximately 1.9 miles from Hammerhead-1, were both successfully drilled and encountered high quality, oil bearing sandstone reservoir. A successful drill stem test was also performed on Hammerhead-3. The appraisal results will be evaluated for potential future development.
The Stena Carron drillship is currently drilling a second well at the Ranger discovery, while the Noble Bob Douglas and the Noble Tom Madden drillships are conducting drilling operations for the Liza Phase 1 development. The Noble Tom Madden is next expected to drill the Tripletail exploration well, which is in the greater Turbot area, beginning in August 2019. The operator, Esso Exploration and Production Guyana Limited, plans to add another drillship, the Noble Don Taylor, in the fourth quarter, bringing the number of drillships offshore Guyana to four.
Midstream:
The Midstream segment, comprised primarily of Hess Infrastructure Partners LP, our 50/50 midstream joint venture, had net income of $35 million in the second quarter of 2019, compared with net income of $30 million in the prior-year quarter.
Corporate, Interest and Other:
After-tax expense for Corporate, Interest and Other was $109 million in the second quarter of 2019, compared with $191 million in the second quarter of 2018. On an adjusted basis, second quarter 2018 after-tax expense was $107 million.
Capital and Exploratory Expenditures:
E&P capital and exploratory expenditures were $664 million in the second quarter of 2019, compared with $525 million in the prior-year quarter, reflecting increased drilling in the Bakken and greater development activity in Guyana. For full year 2019, our E&P capital and exploratory expenditures are projected to be $2.8 billion, down from original guidance of $2.9 billion.
Midstream capital expenditures were $69 million in the second quarter of 2019, down from $84 million in the prior-year quarter. Midstream investments in its 50/50 joint venture with Targa Resources were $16 million in the second quarter of 2019, compared with $17 million in the prior-year quarter.
Liquidity:
Excluding the Midstream segment, the Corporation had cash and cash equivalents of $2.2 billion and debt and finance lease obligations totaling $5.7 billion at June 30, 2019. The Midstream segment had cash and cash equivalents of $17 million and total debt of $1,137 million at June 30, 2019. The Corporation’s debt to capitalization ratio, including finance leases, was 39.2 percent at June 30, 2019 and 38.0 percent at December 31, 2018. In April 2019, the Corporation entered into a new fully undrawn $3.5 billion revolving credit facility maturing in May 2023 that replaced the Corporation’s previous credit facility that was scheduled to mature in January 2021.
Net cash provided by operating activities was $675 million in the second quarter of 2019, up from $425 million in the second quarter of 2018. Net cash provided by operating activities before changes in operating assets and liabilities2 was $560 million in the second quarter of 2019, compared with $463 million in the prior-year quarter. Changes in operating assets and liabilities during the second quarter of 2019 was a net inflow of $115 million due to an increase in accrued liabilities and a reduction in accounts receivable.
Items Affecting Comparability of Earnings Between Periods:
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, |
|
|
June 30, |
|
||||||||||
|
|
(unaudited) |
|
|
(unaudited) |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
|
(In millions) |
|
|||||||||||||
Exploration and Production |
|
$ |
22 |
|
|
$ |
10 |
|
|
$ |
22 |
|
|
$ |
(27 |
) |
Midstream |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Corporate, Interest and Other |
|
|
— |
|
|
|
(84 |
) |
|
|
— |
|
|
|
(81 |
) |
Total items affecting comparability of earnings between periods |
|
$ |
22 |
|
|
$ |
(74 |
) |
|
$ |
22 |
|
|
$ |
(108 |
) |
Second Quarter 2019: E&P results included an after-tax gain of $22 million ($22 million pre-tax) associated with the sale of our remaining acreage in the Utica shale play.
Second Quarter 2018: E&P results included an after-tax gain of $10 million ($10 million pre-tax) associated with the sale of our interests in Ghana. Corporate, Interest and Other results included an after-tax charge of $26 million ($26 million pre-tax) related to the premium paid for debt repurchases, and an after-tax charge of $58 million ($58 million pre-tax) resulting from the settlement of legal claims related to former downstream interests.
Reconciliation of U.S. GAAP to Non-GAAP measures:
The following table reconciles reported net income (loss) attributable to Hess Corporation and adjusted net income (loss):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
(unaudited) |
|
|
(unaudited) |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
|
(In millions) |
|
|||||||||||||
Net income (loss) attributable to Hess Corporation |
|
$ |
(6 |
) |
|
$ |
(130 |
) |
|
$ |
26 |
|
|
$ |
(236 |
) |
Less: Total items affecting comparability of earnings between periods |
|
|
22 |
|
|
|
(74 |
) |
|
|
22 |
|
|
|
(108 |
) |
Adjusted net income (loss) attributable to Hess Corporation |
|
$ |
(28 |
) |
|
$ |
(56 |
) |
|
$ |
4 |
|
|
$ |
(128 |
) |
The following table reconciles reported net cash provided by (used in) operating activities from net cash provided by (used in) operating activities before changes in operating assets and liabilities:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
(unaudited) |
|
|
(unaudited) |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
|
(In millions) |
|
|||||||||||||
Net cash provided by (used in) operating activities before changes in operating assets and liabilities |
|
$ |
560 |
|
|
$ |
463 |
|
|
$ |
1,195 |
|
|
$ |
860 |
|
Changes in operating assets and liabilities |
|
|
115 |
|
|
|
(38 |
) |
|
|
(282 |
) |
|
|
(225 |
) |
Net cash provided by (used in) operating activities |
|
$ |
675 |
|
|
$ |
425 |
|
|
$ |
913 |
|
|
$ |
635 |
|
Hess Corporation will review second quarter financial and operating results and other matters on a webcast at 10 a.m. today (EDT). For details about the event, refer to the Investor Relations section of our website at www.hess.com.
Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. 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. Estimates and projections contained in this release are based on the Corporation’s current understanding and assessment based on reasonable assumptions. Actual results may differ materially from these estimates and projections due to certain risk factors discussed in the Corporation’s periodic filings with the Securities and Exchange Commission (SEC) and other factors.
Non-GAAP financial measures
The Corporation has used non-GAAP financial measures in this earnings release. “Adjusted net income (loss)” presented in this release is defined as reported net income (loss) attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. “Net cash provided by (used in) operating activities before changes in operating assets and liabilities” presented in this release is defined as Net cash provided by (used in) operating activities excluding changes in operating assets and liabilities. Management uses adjusted net income (loss) to evaluate the Corporation’s operating performance and believes that investors’ understanding of our performance is enhanced by disclosing this measure, which excludes certain items that management believes are not directly related to ongoing operations and are not indicative of future business trends and operations. Management believes that net cash provided by (used in) operating activities before changes in operating assets and liabilities demonstrates the Corporation’s ability to internally fund capital expenditures, pay dividends and service debt. These measures are not, and should not be viewed as, a substitute for U.S. GAAP net income (loss) or net cash provided by (used in) operating activities. A reconciliation of reported net income (loss) attributable to Hess Corporation (U.S. GAAP) to adjusted net income (loss), and a reconciliation of net cash provided by (used in) operating activities (U.S. GAAP) to net cash provided by (used in) operating activities before changes in operating assets and liabilities are provided in the release.
Cautionary Note to Investors
We use certain terms in this release relating to resources other than proved reserves, such as unproved reserves or resources. Investors are urged to consider closely the oil and gas disclosures in Hess’ Form 10-K, File No. 1-1204, available from Hess Corporation, 1185 Avenue of the Americas, New York, New York 10036 c/o Corporate Secretary and on our website at www.hess.com. You can also obtain this form from the SEC on the EDGAR system.
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
||||||||||||
(IN MILLIONS) |
||||||||||||
|
|
Second |
|
|
Second |
|
|
First |
|
|||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|||
Income Statement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and non-operating income |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues |
|
$ |
1,660 |
|
|
$ |
1,534 |
|
|
$ |
1,572 |
|
Gains (losses) on asset sales, net |
|
|
22 |
|
|
|
11 |
|
|
|
— |
|
Other, net |
|
|
15 |
|
|
|
21 |
|
|
|
27 |
|
Total revenues and non-operating income |
|
|
1,697 |
|
|
|
1,566 |
|
|
|
1,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, including purchased oil and gas |
|
|
477 |
|
|
|
450 |
|
|
|
408 |
|
Operating costs and expenses |
|
|
285 |
|
|
|
288 |
|
|
|
266 |
|
Production and severance taxes |
|
|
46 |
|
|
|
42 |
|
|
|
39 |
|
Exploration expenses, including dry holes and lease impairment |
|
|
43 |
|
|
|
62 |
|
|
|
34 |
|
General and administrative expenses |
|
|
89 |
|
|
|
129 |
|
|
|
87 |
|
Interest expense |
|
|
97 |
|
|
|
98 |
|
|
|
98 |
|
Loss on debt extinguishment |
|
|
— |
|
|
|
26 |
|
|
|
— |
|
Depreciation, depletion and amortization |
|
|
494 |
|
|
|
444 |
|
|
|
498 |
|
Total costs and expenses |
|
|
1,531 |
|
|
|
1,539 |
|
|
|
1,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
|
166 |
|
|
|
27 |
|
|
|
169 |
|
Provision (benefit) for income taxes |
|
|
132 |
|
|
|
114 |
|
|
|
94 |
|
Net income (loss) |
|
|
34 |
|
|
|
(87 |
) |
|
|
75 |
|
Less: Net income (loss) attributable to noncontrolling interests |
|
|
40 |
|
|
|
43 |
|
|
|
43 |
|
Net income (loss) attributable to Hess Corporation |
|
|
(6 |
) |
|
|
(130 |
) |
|
|
32 |
|
Less: Preferred stock dividends |
|
|
— |
|
|
|
12 |
|
|
|
4 |
|
Net income (loss) attributable to Hess Corporation common stockholders |
|
$ |
(6 |
) |
|
$ |
(142 |
) |
|
$ |
28 |
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
||||||||
(IN MILLIONS) |
||||||||
|
|
Six Months Ended June 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Income Statement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and non-operating income |
|
|
|
|
|
|
|
|
Sales and other operating revenues |
|
$ |
3,232 |
|
|
$ |
2,880 |
|
Gains (losses) on asset sales, net |
|
|
22 |
|
|
|
18 |
|
Other, net |
|
|
42 |
|
|
|
58 |
|
Total revenues and non-operating income |
|
|
3,296 |
|
|
|
2,956 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
Marketing, including purchased oil and gas |
|
|
885 |
|
|
|
808 |
|
Operating costs and expenses |
|
|
551 |
|
|
|
576 |
|
Production and severance taxes |
|
|
85 |
|
|
|
81 |
|
Exploration expenses, including dry holes and lease impairment |
|
|
77 |
|
|
|
102 |
|
General and administrative expenses |
|
|
176 |
|
|
|
239 |
|
Interest expense |
|
|
195 |
|
|
|
201 |
|
Loss on debt extinguishment |
|
|
— |
|
|
|
53 |
|
Depreciation, depletion and amortization |
|
|
992 |
|
|
|
861 |
|
Total costs and expenses |
|
|
2,961 |
|
|
|
2,921 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
|
335 |
|
|
|
35 |
|
Provision (benefit) for income taxes |
|
|
226 |
|
|
|
187 |
|
Net income (loss) |
|
|
109 |
|
|
|
(152 |
) |
Less: Net income (loss) attributable to noncontrolling interests |
|
|
83 |
|
|
|
84 |
|
Net income (loss) attributable to Hess Corporation |
|
|
26 |
|
|
|
(236 |
) |
Less: Preferred stock dividends |
|
|
4 |
|
|
|
23 |
|
Net income (loss) attributable to Hess Corporation common stockholders |
|
$ |
22 |
|
|
$ |
(259 |
) |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
||||||||
(IN MILLIONS) |
||||||||
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2019 |
|
|
2018 |
|
||
Balance Sheet Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,208 |
|
|
$ |
2,694 |
|
Other current assets |
|
|
1,476 |
|
|
|
1,765 |
|
Property, plant and equipment – net |
|
|
16,107 |
|
|
|
16,083 |
|
Operating lease right-of-use assets – net |
|
|
615 |
|
|
|
— |
|
Finance lease right-of-use assets – net |
|
|
322 |
|
|
|
— |
|
Other long-term assets |
|
|
967 |
|
|
|
891 |
|
Total assets |
|
$ |
21,695 |
|
|
$ |
21,433 |
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
14 |
|
|
$ |
67 |
|
Current portion of operating and finance lease obligations |
|
|
329 |
|
|
|
— |
|
Other current liabilities |
|
|
1,989 |
|
|
|
2,136 |
|
Long-term debt |
|
|
6,511 |
|
|
|
6,605 |
|
Long-term operating lease obligations |
|
|
395 |
|
|
|
— |
|
Long-term finance lease obligations |
|
|
246 |
|
|
|
— |
|
Other long-term liabilities |
|
|
1,680 |
|
|
|
1,737 |
|
Total equity excluding other comprehensive income (loss) |
|
|
9,942 |
|
|
|
9,935 |
|
Accumulated other comprehensive income (loss) |
|
|
(648 |
) |
|
|
(306 |
) |
Noncontrolling interests |
|
|
1,237 |
|
|
|
1,259 |
|
Total liabilities and equity |
|
$ |
21,695 |
|
|
$ |
21,433 |
|
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2019 |
|
|
2018 (a) |
|
||
Total Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hess Corporation |
|
$ |
5,388 |
|
|
$ |
5,691 |
|
Midstream (b) |
|
|
1,137 |
|
|
|
981 |
|
Hess Consolidated |
|
$ |
6,525 |
|
|
$ |
6,672 |
|
(a) |
Prior to adoption of ASC 842, Leases, finance lease obligations were included in debt. |
(b) |
Midstream debt is non-recourse to Hess Corporation. |
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2019 |
|
|
2018 |
|
||
Debt to Capitalization Ratio (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hess Consolidated |
|
|
39.2 |
% |
|
|
38.0 |
% |
(a) |
Includes finance lease obligations. |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross interest expense – Hess Corporation |
|
$ |
89 |
|
|
$ |
88 |
|
|
$ |
179 |
|
|
$ |
180 |
|
Less: Capitalized interest – Hess Corporation |
|
|
(9 |
) |
|
|
(5 |
) |
|
|
(16 |
) |
|
|
(9 |
) |
Interest expense – Hess Corporation |
|
|
80 |
|
|
|
83 |
|
|
|
163 |
|
|
|
171 |
|
Interest expense – Midstream (a) |
|
|
17 |
|
|
|
15 |
|
|
|
32 |
|
|
|
30 |
|
Interest expense – Consolidated |
|
$ |
97 |
|
|
$ |
98 |
|
|
$ |
195 |
|
|
$ |
201 |
|
(a) |
Midstream interest expense is reported in the Midstream operating segment. |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
||||||||||||
(IN MILLIONS) |
||||||||||||
|
|
Second |
|
|
Second |
|
|
First |
|
|||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|||
Cash Flow Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
34 |
|
|
$ |
(87 |
) |
|
$ |
75 |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
(Gains) losses on asset sales, net |
|
|
(22 |
) |
|
|
(11 |
) |
|
|
— |
|
Depreciation, depletion and amortization |
|
|
494 |
|
|
|
444 |
|
|
|
498 |
|
Exploratory dry hole costs |
|
|
— |
|
|
|
13 |
|
|
|
— |
|
Exploration lease and other impairment |
|
|
4 |
|
|
|
10 |
|
|
|
7 |
|
Stock compensation expense |
|
|
21 |
|
|
|
19 |
|
|
|
27 |
|
Noncash (gains) losses on commodity derivatives, net |
|
|
29 |
|
|
|
47 |
|
|
|
29 |
|
Provision (benefit) for deferred income taxes and other tax accruals |
|
|
— |
|
|
|
2 |
|
|
|
(1 |
) |
Loss on debt extinguishment |
|
|
— |
|
|
|
26 |
|
|
|
— |
|
Net cash provided by (used in) operating activities before changes in operating assets and liabilities |
|
|
560 |
|
|
|
463 |
|
|
|
635 |
|
Changes in operating assets and liabilities |
|
|
115 |
|
|
|
(38 |
) |
|
|
(397 |
) |
Net cash provided by (used in) operating activities |
|
|
675 |
|
|
|
425 |
|
|
|
238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment - E&P |
|
|
(564 |
) |
|
|
(430 |
) |
|
|
(521 |
) |
Additions to property, plant and equipment - Midstream |
|
|
(60 |
) |
|
|
(63 |
) |
|
|
(150 |
) |
Payments for Midstream equity investments |
|
|
(16 |
) |
|
|
(17 |
) |
|
|
(7 |
) |
Proceeds from asset sales, net of cash sold |
|
|
22 |
|
|
|
27 |
|
|
|
— |
|
Other, net |
|
|
1 |
|
|
|
(1 |
) |
|
|
(2 |
) |
Net cash provided by (used in) investing activities |
|
|
(617 |
) |
|
|
(484 |
) |
|
|
(680 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings (repayments) of debt with maturities of 90 days or less |
|
|
(39 |
) |
|
|
— |
|
|
|
199 |
|
Debt with maturities of greater than 90 days: |
|
|
|
|
|
|
|
|
|
|
|
|
Repayments |
|
|
(2 |
) |
|
|
(157 |
) |
|
|
(3 |
) |
Payments on finance lease obligations |
|
|
(22 |
) |
|
|
— |
|
|
|
(23 |
) |
Common stock acquired and retired |
|
|
— |
|
|
|
(520 |
) |
|
|
(25 |
) |
Cash dividends paid |
|
|
(76 |
) |
|
|
(87 |
) |
|
|
(88 |
) |
Noncontrolling interests, net |
|
|
(14 |
) |
|
|
(11 |
) |
|
|
(13 |
) |
Other, net |
|
|
3 |
|
|
|
16 |
|
|
|
1 |
|
Net cash provided by (used in) financing activities |
|
|
(150 |
) |
|
|
(759 |
) |
|
|
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
|
(92 |
) |
|
|
(818 |
) |
|
|
(394 |
) |
Cash and Cash Equivalents at Beginning of Period |
|
|
2,300 |
|
|
|
3,726 |
|
|
|
2,694 |
|
Cash and Cash Equivalents at End of Period |
|
$ |
2,208 |
|
|
$ |
2,908 |
|
|
$ |
2,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to Property, Plant and Equipment included within Investing Activities: |
|
|||||||||||
Capital expenditures incurred |
|
$ |
(694 |
) |
|
$ |
(570 |
) |
|
$ |
(642 |
) |
Increase (decrease) in related liabilities |
|
|
70 |
|
|
|
77 |
|
|
|
(29 |
) |
Additions to property, plant and equipment |
|
$ |
(624 |
) |
|
$ |
(493 |
) |
|
$ |
(671 |
) |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
||||||||
(IN MILLIONS) |
||||||||
|
|
Six Months Ended June 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Cash Flow Information |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
109 |
|
|
$ |
(152 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
(Gains) losses on asset sales, net |
|
|
(22 |
) |
|
|
(18 |
) |
Depreciation, depletion and amortization |
|
|
992 |
|
|
|
861 |
|
Exploratory dry hole costs |
|
|
— |
|
|
|
13 |
|
Exploration lease and other impairment |
|
|
11 |
|
|
|
20 |
|
Stock compensation expense |
|
|
48 |
|
|
|
32 |
|
Noncash (gains) losses on commodity derivatives, net |
|
|
58 |
|
|
|
85 |
|
Provision (benefit) for deferred income taxes and other tax accruals |
|
|
(1 |
) |
|
|
(34 |
) |
Loss on debt extinguishment |
|
|
— |
|
|
|
53 |
|
Net cash provided by (used in) operating activities before changes in operating assets and liabilities |
|
|
1,195 |
|
|
|
860 |
|
Changes in operating assets and liabilities |
|
|
(282 |
) |
|
|
(225 |
) |
Net cash provided by (used in) operating activities |
|
|
913 |
|
|
|
635 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
Additions to property, plant and equipment - E&P |
|
|
(1,085 |
) |
|
|
(793 |
) |
Additions to property, plant and equipment - Midstream |
|
|
(210 |
) |
|
|
(100 |
) |
Payments for Midstream equity investments |
|
|
(23 |
) |
|
|
(41 |
) |
Proceeds from asset sales, net of cash sold |
|
|
22 |
|
|
|
33 |
|
Other, net |
|
|
(1 |
) |
|
|
(5 |
) |
Net cash provided by (used in) investing activities |
|
|
(1,297 |
) |
|
|
(906 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Net borrowings (repayments) of debt with maturities of 90 days or less |
|
|
160 |
|
|
|
— |
|
Debt with maturities of greater than 90 days: |
|
|
|
|
|
|
|
|
Repayments |
|
|
(5 |
) |
|
|
(591 |
) |
Payments on finance lease obligations |
|
|
(45 |
) |
|
|
— |
|
Common stock acquired and retired |
|
|
(25 |
) |
|
|
(890 |
) |
Cash dividends paid |
|
|
(164 |
) |
|
|
(176 |
) |
Noncontrolling interests, net |
|
|
(27 |
) |
|
|
(23 |
) |
Other, net |
|
|
4 |
|
|
|
12 |
|
Net cash provided by (used in) financing activities |
|
|
(102 |
) |
|
|
(1,668 |
) |
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
|
(486 |
) |
|
|
(1,939 |
) |
Cash and Cash Equivalents at Beginning of Period |
|
|
2,694 |
|
|
|
4,847 |
|
Cash and Cash Equivalents at End of Period |
|
$ |
2,208 |
|
|
$ |
2,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to Property, Plant and Equipment included within Investing Activities: |
|
|
|
|
|
|
|
|
Capital expenditures incurred |
|
$ |
(1,336 |
) |
|
$ |
(961 |
) |
Increase (decrease) in related liabilities |
|
|
41 |
|
|
|
68 |
|
Additions to property, plant and equipment |
|
$ |
(1,295 |
) |
|
$ |
(893 |
) |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) |
||||||||||||
(IN MILLIONS) |
||||||||||||
|
|
Second |
|
|
Second |
|
|
First |
|
|||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|||
Capital and Exploratory Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&P Capital and exploratory expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
North Dakota |
|
$ |
322 |
|
|
$ |
242 |
|
|
$ |
271 |
|
Offshore and Other |
|
|
139 |
|
|
|
117 |
|
|
|
52 |
|
Total United States |
|
|
461 |
|
|
|
359 |
|
|
|
323 |
|
Guyana |
|
|
167 |
|
|
|
71 |
|
|
|
181 |
|
Malaysia and JDA |
|
|
25 |
|
|
|
42 |
|
|
|
32 |
|
Other |
|
|
11 |
|
|
|
53 |
|
|
|
6 |
|
E&P Capital and exploratory expenditures |
|
$ |
664 |
|
|
$ |
525 |
|
|
$ |
542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total exploration expenses charged to income included above |
|
$ |
39 |
|
|
$ |
39 |
|
|
$ |
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midstream Capital expenditures |
|
$ |
69 |
|
|
$ |
84 |
|
|
$ |
127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Capital and Exploratory Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&P Capital and exploratory expenditures |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
North Dakota |
|
$ |
593 |
|
|
$ |
408 |
|
Offshore and Other |
|
|
191 |
|
|
|
210 |
|
Total United States |
|
|
784 |
|
|
|
618 |
|
Guyana |
|
|
348 |
|
|
|
145 |
|
Malaysia and JDA |
|
|
57 |
|
|
|
69 |
|
Other |
|
|
17 |
|
|
|
77 |
|
E&P Capital and exploratory expenditures |
|
$ |
1,206 |
|
|
$ |
909 |
|
|
|
|
|
|
|
|
|
|
Total exploration expenses charged to income included above |
|
$ |
66 |
|
|
$ |
69 |
|
|
|
|
|
|
|
|
|
|
Midstream Capital expenditures |
|
$ |
196 |
|
|
$ |
121 |
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) |
||||||||||||
(IN MILLIONS) |
||||||||||||
|
|
Second Quarter 2019 |
|
|||||||||
Income Statement |
|
United States |
|
|
International |
|
|
Total |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues and non-operating income |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues |
|
$ |
1,271 |
|
|
$ |
389 |
|
|
$ |
1,660 |
|
Gains (losses) on asset sales, net |
|
|
22 |
|
|
|
— |
|
|
|
22 |
|
Other, net |
|
|
(1 |
) |
|
|
8 |
|
|
|
7 |
|
Total revenues and non-operating income |
|
|
1,292 |
|
|
|
397 |
|
|
|
1,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, including purchased oil and gas (a) |
|
|
479 |
|
|
|
19 |
|
|
|
498 |
|
Operating costs and expenses |
|
|
159 |
|
|
|
72 |
|
|
|
231 |
|
Production and severance taxes |
|
|
43 |
|
|
|
3 |
|
|
|
46 |
|
Midstream tariffs |
|
|
165 |
|
|
|
— |
|
|
|
165 |
|
Exploration expenses, including dry holes and lease impairment |
|
|
24 |
|
|
|
19 |
|
|
|
43 |
|
General and administrative expenses |
|
|
41 |
|
|
|
7 |
|
|
|
48 |
|
Depreciation, depletion and amortization |
|
|
348 |
|
|
|
111 |
|
|
|
459 |
|
Total costs and expenses |
|
|
1,259 |
|
|
|
231 |
|
|
|
1,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of operations before income taxes |
|
|
33 |
|
|
|
166 |
|
|
|
199 |
|
Provision (benefit) for income taxes |
|
|
— |
|
|
|
131 |
|
|
|
131 |
|
Net income (loss) attributable to Hess Corporation |
|
$ |
33 |
|
(b) |
$ |
35 |
|
|
$ |
68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter 2018 |
|
|||||||||
Income Statement |
|
United States |
|
|
International |
|
|
Total |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues and non-operating income |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues |
|
$ |
1,181 |
|
|
$ |
353 |
|
|
$ |
1,534 |
|
Gains (losses) on asset sales, net |
|
|
— |
|
|
|
11 |
|
|
|
11 |
|
Other, net |
|
|
3 |
|
|
|
6 |
|
|
|
9 |
|
Total revenues and non-operating income |
|
|
1,184 |
|
|
|
370 |
|
|
|
1,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, including purchased oil and gas (a) |
|
|
462 |
|
|
|
1 |
|
|
|
463 |
|
Operating costs and expenses |
|
|
181 |
|
|
|
60 |
|
|
|
241 |
|
Production and severance taxes |
|
|
41 |
|
|
|
1 |
|
|
|
42 |
|
Midstream tariffs |
|
|
163 |
|
|
|
— |
|
|
|
163 |
|
Exploration expenses, including dry holes and lease impairment |
|
|
34 |
|
|
|
28 |
|
|
|
62 |
|
General and administrative expenses |
|
|
33 |
|
|
|
7 |
|
|
|
40 |
|
Depreciation, depletion and amortization |
|
|
298 |
|
|
|
109 |
|
|
|
407 |
|
Total costs and expenses |
|
|
1,212 |
|
|
|
206 |
|
|
|
1,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of operations before income taxes |
|
|
(28 |
) |
|
|
164 |
|
|
|
136 |
|
Provision (benefit) for income taxes |
|
|
(9 |
) |
|
|
114 |
|
|
|
105 |
|
Net income (loss) attributable to Hess Corporation |
|
$ |
(19 |
) |
(c) |
$ |
50 |
|
|
$ |
31 |
|
(a) |
Includes amounts charged from the Midstream segment. |
(b) |
After-tax losses from realized crude oil hedging activities totaled $14 million (noncash premium amortization: $29 million; cash received: $15 million). |
(c) |
After-tax losses from realized crude oil hedging activities totaled $49 million (noncash premium amortization: $44 million; cash paid $5 million). After-tax losses from unrealized crude oil hedging activities totaled $3 million. |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) |
||||||||||||
(IN MILLIONS) |
||||||||||||
|
|
First Quarter 2019 |
|
|||||||||
Income Statement |
|
United States |
|
|
International |
|
|
Total |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues and non-operating income |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues |
|
$ |
1,233 |
|
|
$ |
339 |
|
|
$ |
1,572 |
|
Other, net |
|
|
2 |
|
|
|
18 |
|
|
|
20 |
|
Total revenues and non-operating income |
|
|
1,235 |
|
|
|
357 |
|
|
|
1,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, including purchased oil and gas (a) |
|
|
440 |
|
|
|
(6 |
) |
|
|
434 |
|
Operating costs and expenses |
|
|
158 |
|
|
|
55 |
|
|
|
213 |
|
Production and severance taxes |
|
|
37 |
|
|
|
2 |
|
|
|
39 |
|
Midstream tariffs |
|
|
162 |
|
|
|
— |
|
|
|
162 |
|
Exploration expenses, including dry holes and lease impairment |
|
|
22 |
|
|
|
12 |
|
|
|
34 |
|
General and administrative expenses |
|
|
37 |
|
|
|
5 |
|
|
|
42 |
|
Depreciation, depletion and amortization |
|
|
337 |
|
|
|
127 |
|
|
|
464 |
|
Total costs and expenses |
|
|
1,193 |
|
|
|
195 |
|
|
|
1,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of operations before income taxes |
|
|
42 |
|
|
|
162 |
|
|
|
204 |
|
Provision (benefit) for income taxes |
|
|
— |
|
|
|
95 |
|
|
|
95 |
|
Net income (loss) attributable to Hess Corporation |
|
$ |
42 |
|
(b) |
$ |
67 |
|
|
$ |
109 |
|
(a) |
Includes amounts charged from the Midstream segment. |
(b) |
After-tax gains from realized crude oil hedging activities totaled $15 million (noncash premium amortization: $29 million; cash received: $44 million). |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) |
||||||||||||
(IN MILLIONS) |
||||||||||||
|
|
Six Months Ended June 30, 2019 |
|
|||||||||
Income Statement |
|
United States |
|
|
International |
|
|
Total |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues and non-operating income |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues |
|
$ |
2,504 |
|
|
$ |
728 |
|
|
$ |
3,232 |
|
Gains (losses) on asset sales, net |
|
|
22 |
|
|
|
— |
|
|
|
22 |
|
Other, net |
|
|
1 |
|
|
|
26 |
|
|
|
27 |
|
Total revenues and non-operating income |
|
|
2,527 |
|
|
|
754 |
|
|
|
3,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, including purchased oil and gas (a) |
|
|
919 |
|
|
|
13 |
|
|
|
932 |
|
Operating costs and expenses |
|
|
317 |
|
|
|
127 |
|
|
|
444 |
|
Production and severance taxes |
|
|
80 |
|
|
|
5 |
|
|
|
85 |
|
Midstream tariffs |
|
|
327 |
|
|
|
— |
|
|
|
327 |
|
Exploration expenses, including dry holes and lease impairment |
|
|
46 |
|
|
|
31 |
|
|
|
77 |
|
General and administrative expenses |
|
|
78 |
|
|
|
12 |
|
|
|
90 |
|
Depreciation, depletion and amortization |
|
|
685 |
|
|
|
238 |
|
|
|
923 |
|
Total costs and expenses |
|
|
2,452 |
|
|
|
426 |
|
|
|
2,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of operations before income taxes |
|
|
75 |
|
|
|
328 |
|
|
|
403 |
|
Provision (benefit) for income taxes |
|
|
— |
|
|
|
226 |
|
|
|
226 |
|
Net income (loss) attributable to Hess Corporation |
|
$ |
75 |
|
(b) |
$ |
102 |
|
|
$ |
177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018 |
|
|||||||||
Income Statement |
|
United States |
|
|
International |
|
|
Total |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues and non-operating income |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues |
|
$ |
2,175 |
|
|
$ |
705 |
|
|
$ |
2,880 |
|
Gains (losses) on asset sales, net |
|
|
— |
|
|
|
13 |
|
|
|
13 |
|
Other, net |
|
|
11 |
|
|
|
13 |
|
|
|
24 |
|
Total revenues and non-operating income |
|
|
2,186 |
|
|
|
731 |
|
|
|
2,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, including purchased oil and gas (a) |
|
|
809 |
|
|
|
28 |
|
|
|
837 |
|
Operating costs and expenses |
|
|
371 |
|
|
|
117 |
|
|
|
488 |
|
Production and severance taxes |
|
|
79 |
|
|
|
2 |
|
|
|
81 |
|
Midstream tariffs |
|
|
314 |
|
|
|
— |
|
|
|
314 |
|
Exploration expenses, including dry holes and lease impairment |
|
|
59 |
|
|
|
43 |
|
|
|
102 |
|
General and administrative expenses |
|
|
84 |
|
|
|
13 |
|
|
|
97 |
|
Depreciation, depletion and amortization |
|
|
584 |
|
|
|
208 |
|
|
|
792 |
|
Total costs and expenses |
|
|
2,300 |
|
|
|
411 |
|
|
|
2,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of operations before income taxes |
|
|
(114 |
) |
|
|
320 |
|
|
|
206 |
|
Provision (benefit) for income taxes |
|
|
(18 |
) |
|
|
218 |
|
|
|
200 |
|
Net income (loss) attributable to Hess Corporation |
|
$ |
(96 |
) |
(c) |
$ |
102 |
|
|
$ |
6 |
|
(a) |
Includes amounts charged from the Midstream segment. |
(b) |
After-tax gains from realized crude oil hedging activities totaled $1 million (noncash premium amortization: $58 million; cash received: $59 million). |
(c) |
After-tax losses from realized crude oil hedging activities totaled $80 million (noncash premium amortization: $75 million; cash paid: $5 million). After-tax losses from unrealized crude oil hedging activities totaled $10 million. |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
EXPLORATION AND PRODUCTION OPERATING DATA |
||||||||||||
|
|
Second |
|
|
Second |
|
|
First |
|
|||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|||
Net Production Per Day (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - barrels |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
North Dakota (a) |
|
|
87 |
|
|
|
74 |
|
|
|
86 |
|
Offshore |
|
|
46 |
|
|
|
34 |
|
|
|
49 |
|
Total United States |
|
|
133 |
|
|
|
108 |
|
|
|
135 |
|
Denmark |
|
|
6 |
|
|
|
5 |
|
|
|
6 |
|
Libya |
|
|
18 |
|
|
|
16 |
|
|
|
19 |
|
Malaysia and JDA |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
Total |
|
|
161 |
|
|
|
133 |
|
|
|
164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas liquids - barrels |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
North Dakota (a) |
|
|
38 |
|
|
|
32 |
|
|
|
34 |
|
Offshore |
|
|
5 |
|
|
|
4 |
|
|
|
6 |
|
Other (b) |
|
|
— |
|
|
|
4 |
|
|
|
— |
|
Total United States |
|
|
43 |
|
|
|
40 |
|
|
|
40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas - mcf |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
North Dakota (a) |
|
|
103 |
|
|
|
75 |
|
|
|
79 |
|
Offshore |
|
|
83 |
|
|
|
52 |
|
|
|
92 |
|
Other (b) |
|
|
— |
|
|
|
54 |
|
|
|
— |
|
Total United States |
|
|
186 |
|
|
|
181 |
|
|
|
171 |
|
Denmark |
|
|
6 |
|
|
|
6 |
|
|
|
7 |
|
Libya |
|
|
11 |
|
|
|
11 |
|
|
|
13 |
|
Malaysia and JDA |
|
|
332 |
|
|
|
355 |
|
|
|
381 |
|
Total |
|
|
535 |
|
|
|
553 |
|
|
|
572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barrels of oil equivalent |
|
|
293 |
|
|
|
265 |
|
|
|
299 |
|
(a) |
Net production from the Bakken was 140,000 boepd in the second quarter of 2019, 114,000 boepd in the second quarter of 2018 and 130,000 boepd in the first quarter of 2019. |
(b) |
The Corporation sold its joint venture interests in the Utica shale play in August 2018. Net production was 13,000 boepd in the second quarter of 2018. |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||
EXPLORATION AND PRODUCTION OPERATING DATA |
||||||||
|
|
Six Months Ended June 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
|
|
|
|
|
|
|
|
|
Net Production Per Day (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - barrels |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
North Dakota (a) |
|
|
86 |
|
|
|
73 |
|
Offshore |
|
|
47 |
|
|
|
33 |
|
Total United States |
|
|
133 |
|
|
|
106 |
|
Denmark |
|
|
6 |
|
|
|
6 |
|
Libya |
|
|
19 |
|
|
|
18 |
|
Malaysia and JDA |
|
|
4 |
|
|
|
4 |
|
Total |
|
|
162 |
|
|
|
134 |
|
|
|
|
|
|
|
|
|
|
Natural gas liquids - barrels |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
North Dakota (a) |
|
|
36 |
|
|
|
30 |
|
Offshore |
|
|
6 |
|
|
|
4 |
|
Other (b) |
|
|
— |
|
|
|
4 |
|
Total United States |
|
|
42 |
|
|
|
38 |
|
|
|
|
|
|
|
|
|
|
Natural gas - mcf |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
North Dakota (a) |
|
|
91 |
|
|
|
74 |
|
Offshore |
|
|
88 |
|
|
|
44 |
|
Other (b) |
|
|
— |
|
|
|
56 |
|
Total United States |
|
|
179 |
|
|
|
174 |
|
Denmark |
|
|
6 |
|
|
|
8 |
|
Libya |
|
|
12 |
|
|
|
12 |
|
Malaysia and JDA |
|
|
355 |
|
|
|
335 |
|
Total |
|
|
552 |
|
|
|
529 |
|
|
|
|
|
|
|
|
|
|
Barrels of oil equivalent |
|
|
296 |
|
|
|
260 |
|
(a) |
Net production from the Bakken was 135,000 boepd in the first six months of 2019 and 112,000 boepd in the first six months of 2018. |
(b) |
The Corporation sold its joint venture interests in the Utica shale play August 2018. Net production was 13,000 boepd in the first six months of 2018. |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
EXPLORATION AND PRODUCTION OPERATING DATA |
||||||||||||
|
|
Second |
|
|
Second |
|
|
First |
|
|||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|||
Sales Volumes Per Day (in thousands) (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - barrels |
|
|
166 |
|
|
|
135 |
|
|
|
155 |
|
Natural gas liquids - barrels |
|
|
43 |
|
|
|
40 |
|
|
|
40 |
|
Natural gas - mcf |
|
|
535 |
|
|
|
553 |
|
|
|
572 |
|
Barrels of oil equivalent |
|
|
298 |
|
|
|
267 |
|
|
|
290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Volumes (in thousands) (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - barrels |
|
|
15,061 |
|
|
|
12,259 |
|
|
|
13,940 |
|
Natural gas liquids - barrels |
|
|
3,931 |
|
|
|
3,620 |
|
|
|
3,631 |
|
Natural gas - mcf |
|
|
48,638 |
|
|
|
50,303 |
|
|
|
51,435 |
|
Barrels of oil equivalent |
|
|
27,098 |
|
|
|
24,263 |
|
|
|
26,144 |
|
|
|
Six Months Ended June 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Sales Volumes Per Day (in thousands) (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - barrels |
|
|
160 |
|
|
|
133 |
|
Natural gas liquids - barrels |
|
|
42 |
|
|
|
38 |
|
Natural gas - mcf |
|
|
552 |
|
|
|
529 |
|
Barrels of oil equivalent |
|
|
294 |
|
|
|
259 |
|
|
|
|
|
|
|
|
|
|
Sales Volumes (in thousands) (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - barrels |
|
|
29,001 |
|
|
|
24,070 |
|
Natural gas liquids - barrels |
|
|
7,562 |
|
|
|
6,928 |
|
Natural gas - mcf |
|
|
100,073 |
|
|
|
95,695 |
|
Barrels of oil equivalent |
|
|
53,242 |
|
|
|
46,947 |
|
(a) |
Sales volumes from purchased crude oil, natural gas liquids, and natural gas are not included in the sales volumes reported. |
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||||||
EXPLORATION AND PRODUCTION OPERATING DATA |
||||||||||||
|
|
Second |
|
|
Second |
|
|
First |
|
|||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|||
Average Selling Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - per barrel (including hedging) |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
Onshore |
|
$ |
56.08 |
|
|
$ |
59.03 |
|
|
$ |
52.16 |
|
Offshore |
|
|
62.23 |
|
|
|
62.80 |
|
|
|
59.30 |
|
Total United States |
|
|
58.22 |
|
|
|
60.25 |
|
|
|
54.76 |
|
Denmark |
|
|
70.27 |
|
|
|
75.26 |
|
|
|
67.26 |
|
Libya |
|
|
69.87 |
|
|
|
73.85 |
|
|
|
62.71 |
|
Malaysia and JDA |
|
|
66.88 |
|
|
|
72.55 |
|
|
|
59.38 |
|
Worldwide |
|
|
60.45 |
|
|
|
62.65 |
|
|
|
55.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - per barrel (excluding hedging) |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
Onshore |
|
$ |
57.19 |
|
|
$ |
63.47 |
|
|
$ |
50.91 |
|
Offshore |
|
|
63.42 |
|
|
|
67.14 |
|
|
|
58.05 |
|
Total United States |
|
|
59.36 |
|
|
|
64.66 |
|
|
|
53.51 |
|
Denmark |
|
|
70.27 |
|
|
|
75.26 |
|
|
|
67.26 |
|
Libya |
|
|
69.87 |
|
|
|
73.85 |
|
|
|
62.71 |
|
Malaysia and JDA |
|
|
66.88 |
|
|
|
72.55 |
|
|
|
59.38 |
|
Worldwide |
|
|
61.37 |
|
|
|
66.28 |
|
|
|
54.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas liquids - per barrel |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
Onshore |
|
$ |
12.16 |
|
|
$ |
20.08 |
|
|
$ |
18.69 |
|
Offshore |
|
|
12.32 |
|
|
|
24.54 |
|
|
|
17.21 |
|
Worldwide |
|
|
12.18 |
|
|
|
20.51 |
|
|
|
18.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas - per mcf |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
|
|
|
|
Onshore |
|
$ |
1.41 |
|
|
$ |
1.94 |
|
|
$ |
2.46 |
|
Offshore |
|
|
2.19 |
|
|
|
2.19 |
|
|
|
2.54 |
|
Total United States |
|
|
1.76 |
|
|
|
2.01 |
|
|
|
2.50 |
|
Denmark |
|
|
3.74 |
|
|
|
3.53 |
|
|
|
4.02 |
|
Libya |
|
|
5.78 |
|
|
|
6.91 |
|
|
|
5.14 |
|
Malaysia and JDA |
|
|
5.08 |
|
|
|
5.11 |
|
|
|
5.28 |
|
Worldwide |
|
|
3.92 |
|
|
|
4.12 |
|
|
|
4.43 |
|
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES |
||||||||
EXPLORATION AND PRODUCTION OPERATING DATA |
||||||||
|
|
Six Months Ended June 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Average Selling Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - per barrel (including hedging) |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
Onshore |
|
$ |
54.14 |
|
|
$ |
57.73 |
|
Offshore |
|
|
60.73 |
|
|
|
61.08 |
|
Total United States |
|
|
56.49 |
|
|
|
58.77 |
|
Denmark |
|
|
69.51 |
|
|
|
70.04 |
|
Libya |
|
|
66.72 |
|
|
|
70.06 |
|
Malaysia and JDA |
|
|
63.11 |
|
|
|
69.53 |
|
Worldwide |
|
|
58.25 |
|
|
|
60.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil - per barrel (excluding hedging) |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
Onshore |
|
$ |
54.09 |
|
|
$ |
61.56 |
|
Offshore |
|
|
60.68 |
|
|
|
64.87 |
|
Total United States |
|
|
56.43 |
|
|
|
62.59 |
|
Denmark |
|
|
69.51 |
|
|
|
70.04 |
|
Libya |
|
|
66.72 |
|
|
|
70.06 |
|
Malaysia and JDA |
|
|
63.11 |
|
|
|
69.53 |
|
Worldwide |
|
|
58.20 |
|
|
|
64.05 |
|
|
|
|
|
|
|
|
|
|
Natural gas liquids - per barrel |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
Onshore |
|
$ |
15.22 |
|
|
$ |
20.42 |
|
Offshore |
|
|
14.97 |
|
|
|
24.42 |
|
Worldwide |
|
|
15.19 |
|
|
|
20.80 |
|
|
|
|
|
|
|
|
|
|
Natural gas - per mcf |
|
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
|
Onshore |
|
$ |
1.86 |
|
|
$ |
2.20 |
|
Offshore |
|
|
2.37 |
|
|
|
2.15 |
|
Total United States |
|
|
2.11 |
|
|
|
2.19 |
|
Denmark |
|
|
3.89 |
|
|
|
3.47 |
|
Libya |
|
|
5.44 |
|
|
|
6.92 |
|
Malaysia and JDA |
|
|
5.19 |
|
|
|
4.84 |
|
Worldwide |
|
|
4.18 |
|
|
|
3.99 |
|
The following is a summary of the Corporation’s outstanding West Texas Intermediate hedging program:
|
|
2019 |
|
|
Barrels of oil per day |
|
95,000 |
|
|
Monthly floor price of put options |
|
$60 |
|
|
Contract Period |
|
July 1 – December 31 |
|
|
1 “Adjusted net income (loss)” is a non-GAAP financial measure. The definition of this non-GAAP measure and a reconciliation to its nearest GAAP equivalent measure appears on pages 7 and 8.
2 “Net cash provided by (used in) operating activities before changes in operating assets and liabilities” is a non-GAAP financial measure. The definition of this non-GAAP measure and a reconciliation to its nearest GAAP equivalent measure appears on pages 7 and 8.
