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 October 28, 2015 - 7:30 AM EDT
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Hess Reports Estimated Results for the Third Quarter of 2015

Third Quarter Highlights:

  • Adjusted net loss was $291 million or $1.03 per share compared to net income of $377 million or $1.24 per share in the prior-year quarter; lower realized selling prices reduced third quarter 2015 adjusted net income by approximately $745 million, after-tax
  • Net loss was $279 million compared to net income of $1,008 million in the third quarter of 2014
  • Oil and gas production increased to 380,000 barrels of oil equivalent per day (boepd) compared to 318,000 boepd in the third quarter of 2014
  • Oil and gas production in the Bakken was 113,000 boepd, up from 86,000 boepd in the year-ago quarter
  • Completed sale of 50% interest in Bakken Midstream, resulting in $3 billion of cash proceeds
  • E&P capital and exploratory expenditures totaled $849 million in the third quarter, down from $1,371 million in the prior-year quarter

Preliminary 2016 Guidance:

  • E&P capital and exploratory expenditures are expected to be $2.9 billion to $3.1 billion, down approximately 27 percent from 2015 forecasted E&P capital and exploratory expenditures of $4.1 billion
  • Oil and gas production is forecast to be in the range of 330,000 to 350,000 boepd compared to projected production of 370,000 to 375,000 boepd in 2015, and 360,000 boepd in the fourth quarter of 2015

Hess Corporation (NYSE:HES) today reported an adjusted net loss, which excludes items affecting comparability, of $291 million or $1.03 per common share, for the third quarter of 2015 compared with adjusted net income of $377 million or $1.24 per share in the third quarter of 2014. Lower realized selling prices reduced adjusted net income by approximately $745 million after-tax compared with the prior-year quarter. Third quarter 2015 results benefitted from higher production and lower cash operating costs but were partially offset by higher depreciation, depletion, and amortization expense. On an unadjusted basis, the Corporation reported a net loss of $279 million for the third quarter of 2015 and net income of $1,008 million in the prior-year quarter, which included after-tax gains from asset sales totaling $635 million.

     “During the third quarter we delivered strong operating performance while maintaining a robust financial and liquidity position, with further significant spending reductions underway,” Chief Executive Officer John Hess said. “We are well positioned in the current low price environment and are taking a disciplined approach to preserve our financial strength, competitively advantaged capabilities and long term growth options.”

After-tax income (loss) by major operating activity was as follows:

             
Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)

    2015    

 

    2014    

    2015    

 

    2014    

(In millions, except per share amounts)

Net Income (Loss) Attributable to Hess Corporation

Exploration and Production $ (188 ) $ 433 $ (1,004 ) $ 2,003
Bakken Midstream 16 8 75 2
Corporate, Interest and Other   (94 )   (82 )   (266 )   (308 )
Net income (loss) from continuing operations (266 ) 359 (1,195 ) 1,697
Discontinued operations   (13 )   649   (40 )   628
Net income (loss) attributable to Hess Corporation $ (279 ) $ 1,008 $ (1,235 ) $ 2,325
 
Net income (loss) per share (diluted) $ (0.98 ) $ 3.31 $ (4.35 ) $ 7.44
 

Adjusted Net Income (Loss) Attributable to Hess Corporation

Exploration and Production $ (221 ) $ 404 $ (538 ) $ 1,406
Bakken Midstream 16 8 75 2
Corporate, Interest and Other   (86 )   (80 )   (254 )   (237 )
Adjusted net income (loss) from continuing operations (291 ) 332 (717 ) 1,171
Discontinued operations     45     84
Adjusted net income (loss) attributable to Hess Corporation $ (291 ) $ 377 $ (717 ) $ 1,255
 
Adjusted net income (loss) per share (diluted) $ (1.03 ) $ 1.24 $ (2.53 ) $ 4.01
 
Weighted average number of shares (diluted)   283.5   305.0   283.8   312.7
 

Exploration and Production:

     The Exploration and Production adjusted net loss in the third quarter of 2015 was $221 million compared with adjusted net income of $404 million in the third quarter of 2014. On an unadjusted basis, Exploration and Production activities had a net loss of $188 million in the third quarter of 2015, compared with net income of $433 million in the third quarter of 2014.

     The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was down 53 percent to $45.66 per barrel in the third quarter of 2015 from $96.78 per barrel in the third quarter of 2014. The average worldwide natural gas liquids selling price was $7.17 per barrel, down from $29.62 per barrel in the year-ago quarter while the average worldwide natural gas selling price was $4.02 per mcf in the third quarter of 2015 compared with $5.59 per mcf in the third quarter a year-ago.

     Oil and gas production was 380,000 boepd, up 19 percent from 318,000 boepd in the third quarter of 2014. Assets contributing to the volume growth were the Bakken shale play (27,000 boepd), the Utica shale play (17,000 boepd), the Gulf of Mexico (13,000 boepd) and Norway (10,000 boepd). Due to continued strong performance during 2015, the Corporation is increasing its 2015 production guidance to 370,000 to 375,000 boepd, which is up from previous full year guidance of 360,000 to 370,000 boepd. For the fourth quarter of 2015, the Corporation forecasts production to be approximately 360,000 boepd with the Bakken projected to contribute between 100,000 boepd to 105,000 boepd.

Operational Highlights for the Third Quarter of 2015:

     Bakken (Onshore U.S.): Net production from the Bakken increased approximately 31 percent to 113,000 boepd from the prior-year quarter due to continued drilling activities. The Corporation brought 48 gross operated wells on production in the third quarter of 2015 bringing the year-to-date total to 185 wells. Drilling and completion costs per operated well averaged $5.3 million in the third quarter of 2015, down 26 percent from the year-ago quarter. During the quarter, the Corporation operated 7 rigs.

     Utica (Onshore U.S.): On the Corporation’s joint venture acreage, 5 wells were drilled and net production averaged 28,000 boepd in the third quarter of 2015 compared with 11,000 boepd in the prior-year quarter. The Corporation completed the sale of an additional 13,000 dry gas exploration acres for a sale price of approximately $120 million, including a note in the amount of $37 million.

     Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 83,000 boepd compared to 70,000 boepd in the prior-year quarter, with higher volumes from Tubular Bells, which totaled 19,000 boepd in the third quarter of 2015, being primarily offset by lower production from the Llano Field. At the Hess-operated Stampede development project, drilling is expected to begin in early 2016.

     Guyana (Offshore): On the Stabroek Block (Hess 30 percent), the operator announced a significant oil discovery at the Liza #1 well in the second quarter of 2015. The operator is currently in the process of acquiring 17,000 square kilometers of 3D seismic and continues to evaluate the resource potential of the block.

Bakken Midstream:

     The Corporation’s Bakken Midstream segment had net income of $16 million in the third quarter of 2015 compared to $8 million in the prior-year quarter primarily due to higher throughput. In July 2015, the Corporation completed the sale of a 50 percent interest in its Bakken Midstream for cash consideration of $2.7 billion. In connection with this transaction, in July 2015, the Bakken Midstream joint venture incurred $600 million of debt with proceeds distributed equally to both Hess and its partner, resulting in total after-tax cash proceeds net to Hess of approximately $3.0 billion. Following the completion of this sale, the Corporation continues to fully consolidate the operating results, assets and liabilities of the Bakken Midstream segment in its consolidated financial statements, with its partner’s share being reflected as a noncontrolling interest.

Capital and Exploratory Expenditures:

     Exploration and Production capital and exploratory expenditures were $849 million in the third quarter of 2015 down from $1,371 million in the prior-year quarter driven by lower activities primarily in the United States (Bakken, Utica, and Tubular Bells), Norway and Equatorial Guinea, partly offset by continued development of the North Malay Basin project. Full year 2015 E&P capital and exploratory expenditures are forecast to be approximately $4.1 billion.

     Bakken Midstream capital expenditures were $88 million in the third quarter of 2015 and $47 million in the year-ago quarter.

Liquidity:

     Cash provided by operating activities before changes in working capital was $489 million in the third quarter of 2015, compared with $1,508 million in the third quarter of 2014. At September 30, 2015, cash and cash equivalents, excluding Bakken Midstream, were $3,004 million compared with $2,444 million at December 31, 2014. Total debt, excluding Bakken Midstream, was $5,952 million at September 30, 2015 compared with $5,987 million at December 31, 2014. The Corporation’s debt to capitalization ratio, excluding Bakken Midstream, at September 30, 2015 was 22.7 percent. The debt to capitalization ratio at December 31, 2014 was 21.2 percent.

Preliminary 2016 Guidance:

     The Corporation will finalize its 2016 budget by the end of this year. We currently project Exploration and Production 2016 capital and exploratory expenditures will be in a range of $2.9 billion to $3.1 billion, an approximate 27 percent decrease from the forecasted 2015 amount. As a result of the expected lower capital spend levels in 2016, we forecast production will decrease to a range of 330,000 boepd to 350,000 boepd. Bakken production is projected to be 95,000 boepd to 105,000 boepd in 2016. The Corporation expects to operate 4 rigs in the Bakken in 2016 compared to an average of 8.5 rigs in 2015.

Discontinued Operations:

     Losses from discontinued operations, which primarily related to pension settlement charges, amounted to $13 million in the third quarter of 2015. Net income of $671 million in the prior-year quarter included an after-tax gain of $602 million resulting from the sale of the retail business. The Corporation completed the sale of its energy trading partnership (HETCO) in the first quarter of 2015. Financial results for the third quarter of 2014 have been recast to report HETCO as discontinued operations in the consolidated income statement on page 8.

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 Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)

    2015    

 

    2014    

    2015    

 

     2014    

(In millions)
Exploration and Production $ 33 $ 29 $ (466 ) $ 597
Bakken Midstream
Corporate, Interest and Other (8 ) (2 ) (12 ) (71 )
Discontinued operations   (13 )   604   (40 )   544
Total items affecting comparability of earnings between periods $ 12 $ 631 $ (518 ) $ 1,070
 

     Exploration and Production third quarter results include an after-tax gain of $31 million ($49 million pre-tax) from the sale of dry gas acreage in the Utica shale play and a tax benefit of $50 million associated with an international investment incentive. Exploration and Production results also include an after-tax charge of $26 million ($41 million pre-tax) for undeveloped leasehold impairment, $17 million ($27 million pre-tax) associated with exit costs in Kurdistan and other charges of $5 million ($6 million pre-tax). Corporate, Interest and Other third quarter results include an after-tax charge of $8 million ($10 million pre-tax) related to the Hovensa LLC bankruptcy.

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 Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)

    2015    

 

    2014    

    2015    

 

    2014    

(In millions)
Net income (loss) attributable to Hess Corporation $ (279 ) $ 1,008 $ (1,235 ) $ 2,325
Less: Total items affecting comparability of earnings between periods   12   631   (518 )   1,070
Adjusted net income (loss) attributable to Hess Corporation $ (291 ) $ 377 $ (717 ) $ 1,255
 

The reconciliations of net cash flow provided by operating activities before working capital changes to net cash provided by (used in) operating activities are detailed on pages 8 and 9.

Hess Corporation will review third 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 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 Company’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 and other factors.

Non-GAAP financial measure

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. “Cash provided by operating activities before working capital change” is defined as Cash provided by operating activities excluding changes in working capital. We believe that investors’ understanding of our performance is enhanced by disclosing these measures. These measures are not, and should not be viewed as, a substitute for U.S. GAAP net income (loss) or cash provided by operating activities. A reconciliation of reported net income (loss) attributable to Hess Corporation (U.S. GAAP) to adjusted net income (loss) as well as a reconciliation of cash provided by operating activities (U.S. GAAP) to cash provided by operating activities before working capital change are provided in the release.

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 
            Third       Third       Second
Quarter Quarter Quarter

    2015    

    2014    

    2015    

Income Statement

 
Revenues and Non-operating Income
Sales and other operating revenues $ 1,671 $ 2,678 $ 1,953
Gains on asset sales, net 50 31
Other, net   (32 )   27   (18 )
Total revenues and non-operating income   1,689   2,736   1,935
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 356 423 356
Operating costs and expenses 508 511 503
Production and severance taxes 29 69 45
Exploration expenses, including dry holes and lease impairment 144 90 90
General and administrative expenses 119 139 151
Interest expense 84 75 86
Depreciation, depletion and amortization 988 838 1,028
Impairment       385
Total costs and expenses   2,228   2,145   2,644
 
Income (loss) from continuing operations before income taxes

(539

)

591

(709

)
Provision (benefit) for income taxes   (300 )   232   (156 )
Income (loss) from continuing operations (239 ) 359 (553 )
 
Income (loss) from discontinued operations, net of income taxes   (13

)

  671  

(14

)

 
Net income (loss) (252 ) 1,030 (567 )
Less: Net income (loss) attributable to noncontrolling interests   27   22  
Net income (loss) attributable to Hess Corporation $ (279 ) $ 1,008 $ (567 )
 

See "Discontinued Operations" on page 6 for basis of presentation.

 

Cash Flow Information

 
Net cash provided by operating activities before working capital changes $ 489 $ 1,508 $

711

Changes in working capital   (207 )   (186 )   (71 )
Net cash provided by (used in) operating activities 282 1,322 640
Net cash provided by (used in) investing activities (956 ) 1,585 (1,115 )
Net cash provided by (used in) financing activities   2,756   (992 )   (100 )
Net increase (decrease) in cash and cash equivalents $ 2,082 $ 1,915 $

(575

)
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 
                                            Nine Months Ended

    2015    

 

    2014    

Income Statement

 
Revenues and Non-operating Income
Sales and other operating revenues $ 5,162 $ 8,180
Gains on asset sales, net 50 820
Other, net   (38 )   (89 )
Total revenues and non-operating income   5,174   8,911
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 990 1,208
Operating costs and expenses 1,517 1,551
Production and severance taxes 110 209
Exploration expenses, including dry holes and lease impairment 503 669
General and administrative expenses 417 424
Interest expense 255 241
Depreciation, depletion and amortization 2,972 2,349
Impairment   385  
Total costs and expenses   7,149   6,651
 
Income (loss) from continuing operations before income taxes

(1,975

) 2,260
Provision (benefit) for income taxes   (807 )   563
Income (loss) from continuing operations (1,168 ) 1,697
 
Income (loss) from discontinued operations, net of income taxes   (40 )   684
 
Net income (loss) (1,208 ) 2,381
Less: Net income (loss) attributable to noncontrolling interests  

27

 

56

Net income (loss) attributable to Hess Corporation $ (1,235 ) $ 2,325
 

See "Discontinued Operations" on page 6 for basis of presentation.

 

Cash Flow Information

 
Net cash provided by operating activities before working capital changes $ 1,670 $ 4,228
Changes in working capital   (312 )   (845 )
Net cash provided by (used in) operating activities 1,358 3,383
Net cash provided by (used in) investing activities (3,297 ) 1,563
Net cash provided by (used in) financing activities   2,508   (2,640 )
Net increase (decrease) in cash and cash equivalents $ 569 $ 2,306
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 
September 30,   December 31,
2015 2014

Balance Sheet Information

 
Cash and cash equivalents $ 3,013 $ 2,444
Other current assets 2,584 4,243
Property, plant and equipment – net 26,883 27,517
Other long-term assets   3,976   4,374
Total assets $ 36,456 $ 38,578
 
Current maturities of long-term debt $ 78 $ 68
Other current liabilities 2,546 4,783
Long-term debt 6,474 5,919
Other long-term liabilities 4,995 5,488
Total equity excluding other comprehensive income (loss) and noncontrolling interests 22,913 23,615
Accumulated other comprehensive income (loss) (1,582 ) (1,410 )
Noncontrolling interests   1,032   115
Total liabilities and equity $ 36,456 $ 38,578
 
                                                                                                                          September 30, 2015

       Hess    

     

Bakken
Midstream 

     

Hess
Consolidated 

   
Total debt $ 5,952 $ 600 $ 6,552
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 
                                  Third     Third     Second
Quarter Quarter Quarter

    2015    

    2014    

    2015    

E&P Capital and Exploratory Expenditures

United States
Bakken $ 295 $ 525 $ 331
Other Onshore   70   191   110
Total Onshore 365 716 441
Offshore   199   205   188
Total United States   564   921   629
 
Europe 58 111 82
Africa 13 125 58
Asia and other   214   214   237
E&P Capital and Exploratory Expenditures $ 849 $ 1,371 $ 1,006
 
Total exploration expenses charged to income included above $ 79 $ 56 $ 58
 
Bakken Midstream Capital Expenditures $ 88 $ 47 $ 65
 
 
Nine Months Ended
2015 2014

E&P Capital and Exploratory Expenditures

United States
Bakken $ 1,060 $ 1,290
Other Onshore   260   546
Total Onshore 1,320 1,836
Offshore   666   524
Total United States   1,986   2,360
 
Europe 255 418
Africa 159 344
Asia and other   699   608
E&P Capital and Exploratory Expenditures $ 3,099 $ 3,730
 
Total exploration expenses charged to income included above $ 184 $ 188
 
Bakken Midstream Capital Expenditures $ 193 $ 168
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)

 
    Third Quarter 2015
United States International

     Total     

 
Sales and other operating revenues $ 1,022 $ 649 $ 1,671
Gains on asset sales, net 50 50
Other, net   (4 )   (19 )   (23 )
Total revenues and non-operating income   1,068   630   1,698
 
Costs and Expenses
Cost of products sold (excluding items shown separately below)(c) 350 36 386
Operating costs and expenses 193 250 443
Production and severance taxes 28 1 29
Bakken Midstream tariffs 117 117
Exploration expenses, including dry holes and lease impairment 87 57 144
General and administrative expenses 47 13 60
Depreciation, depletion and amortization   622   341   963
Total costs and expenses   1,444   698   2,142
 
Results of operations before income taxes (376 ) (68 ) (444 )
Provision (benefit) for income taxes   (129 )   (127 )   (256 )
Net income (loss) attributable to Hess Corporation $ (247 ) (a) $ 59 (b) $ (188 )
 
Third Quarter 2014
United States International Total
 
Sales and other operating revenues $ 1,629 $ 1,049 $ 2,678
Gains on asset sales, net 2 35 37
Other, net   (7 )   28   21
Total revenues and non-operating income   1,624   1,112   2,736
 
Costs and Expenses
Cost of products sold (excluding items shown separately below)(c) 427 20 447
Operating costs and expenses 185 272 457
Production and severance taxes 62 7 69
Bakken Midstream tariffs 65 65
Exploration expenses, including dry holes and lease impairment 34 56 90
General and administrative expenses 63 19 82
Depreciation, depletion and amortization   455   360   815
Total costs and expenses   1,291   734   2,025
 
Results of operations before income taxes 333 378 711
Provision (benefit) for income taxes   125   153   278
Net income (loss) attributable to Hess Corporation $ 208 (a) $ 225 (b) $ 433
 
(a)   The after-tax realized results from crude oil hedging activities amounted to a gain of $13 million in the third quarter of 2015 and a gain of $4 million in the third quarter of 2014. Unrealized changes in crude oil hedging contracts which are included in Other operating revenues, amounted to a loss of $5 million in the third quarter of 2015 and gain of $5 million in the third quarter of 2014.
(b)

The after-tax realized results from crude oil hedging activities amounted to a gain of $19 million in the third quarter of 2015 and a gain of $13 million in the third quarter of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a loss of $0.3 million in the third quarter of 2015 and amounted to a gain of $1 million in the third quarter of 2014.

(c) Includes amounts from the Bakken Midstream.
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)

 
    Second Quarter 2015
United States International

     Total     

 
Sales and other operating revenues $ 1,259 $ 694 $ 1,953
Other, net   (13 )   (4 )   (17 )
Total revenues and non-operating income   1,246   690   1,936
 
Costs and Expenses
Cost of products sold (excluding items shown separately below)(c) 382 4 386
Operating costs and expenses 181 254 435
Production and severance taxes 44 1 45
Bakken Midstream tariffs 116 116
Exploration expenses, including dry holes and lease impairment 48 42 90
General and administrative expenses 79 18 97
Depreciation, depletion and amortization 609 395 1,004
Goodwill impairment expense   385     385
Total costs and expenses   1,844   714   2,558
 
Results of operations before income taxes (598 ) (24 ) (622 )
Provision (benefit) for income taxes   (69 )   (51 )   (120 )
Net income (loss) attributable to Hess Corporation $ (529 ) (a) $ 27 (b) $ (502 )
 
(a)   The after-tax realized results from crude oil hedging activities amounted to a loss of $1 million in the second quarter of 2015. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a gain of $3 million in the second quarter of 2015.
(b) The after-tax realized results from crude oil hedging activities amounted to a loss of $8 million in the second quarter of 2015. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a loss of $16 million after-tax.
(c) Includes amounts from the Bakken Midstream.
 
    Nine Months 2015
United States International

     Total     

 
Sales and other operating revenues $ 3,218 $ 1,944 $ 5,162
Gains on asset sales, net 50 50
Other, net   (24 )   (5 )   (29 )
Total revenues and non-operating income   3,244   1,939   5,183
 
Costs and Expenses
Cost of products sold (excluding items shown separately below)(c) 1,076 2 1,078
Operating costs and expenses 587 734 1,321
Production and severance taxes 106 4 110
Bakken Midstream tariffs 335 335
Exploration expenses, including dry holes and lease impairment 171 332 503
General and administrative expenses 202 41 243
Depreciation, depletion and amortization 1,759 1,140 2,899

Goodwill impairment expense

  385     385
Total costs and expenses   4,621   2,253   6,874
 
Results of operations before income taxes (1,377 ) (314 ) (1,691 )
Provision (benefit) for income taxes   (340 )   (347 )   (687 )
Net income (loss) attributable to Hess Corporation $ (1,037 ) (a) $ 33 (b) $ (1,004 )
 
Nine Months 2014
United States International Total
 
Sales and other operating revenues $ 4,827 $ 3,353 $ 8,180
Gains on asset sales, net 64 749 813
Other, net   (21 )   8   (13 )
Total revenues and non-operating income   4,870   4,110   8,980
 
Costs and Expenses
Cost of products sold (excluding items shown separately below)(c) 1,253 31 1,284
Operating costs and expenses 556 837 1,393
Production and severance taxes 187 22 209
Bakken Midstream tariffs 142 142
Exploration expenses, including dry holes and lease impairment 289 380 669
General and administrative expenses 187 50 237
Depreciation, depletion and amortization   1,219   1,070   2,289
Total costs and expenses   3,833   2,390   6,223
 
Results of operations before income taxes 1,037 1,720 2,757
Provision for income taxes   403   351   754
Net income (loss) attributable to Hess Corporation $ 634 (a) $ 1,369 (b) $ 2,003
 
(a)   The after-tax realized gains from crude oil hedging activities amounted to $12 million in the first nine months of 2015 and a gain of $2 million in the first nine months of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a loss of $2 million after-tax in the first nine months of 2015 and a gain of $3 million after-tax in the first nine months of 2014.
(b) The after-tax realized gain from crude oil hedging activities amounted to $12 million in the first nine months of 2015 and a gain of $13 million in the first nine months of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a loss of $6 million after-tax in the first nine months of 2015 and gain of $4 million after-tax in the first nine months of 2014.
(c) Includes amounts from the Bakken Midstream.
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 
                                                                                Third     Third     Second
Quarter Quarter Quarter

    2015    

    2014    

    2015    

Operating Data

     

Net Production Per Day (in thousands)

Crude oil - barrels
United States
Bakken 82 63 85
Other Onshore   10   11   11
Total Onshore 92 74 96
Offshore   60   51   61
Total United States   152   125   157
 
Europe 40 31 39
Africa 50 53 48
Asia   2   2   2
Total   244   211   246
 
Natural gas liquids - barrels
United States
Bakken 20 15 22
Other Onshore   12   8   12
Total Onshore 32 23 34
Offshore   7   6   6
Total United States   39   29   40
 
Europe   1   1   2
Total   40   30   42
 
Natural gas - mcf
United States
Bakken 65 46 71
Other Onshore   125   52   95
Total Onshore 190 98 166
Offshore   93   76   98
Total United States   283   174   264
 
Europe 45 29 41
Asia and other   246   259   312
Total   574   462   617
 
Barrels of oil equivalent   380   318   391
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 
                                                                                                    Nine Months

    2015    

   

    2014    

Operating Data

   

Net Production Per Day (in thousands)

Crude oil - barrels
United States
Bakken 82 61
Other Onshore   11   10
Total Onshore 93 71
Offshore   57   52
Total United States   150   123
 
Europe 38 35
Africa 50 51
Asia   2   3
Total   240   212
 
Natural gas liquids - barrels
United States
Bakken 21 9
Other Onshore   11   5
Total Onshore 32 14
Offshore   6   6
Total United States   38   20
 
Europe   1   1
Total   39   21
 
Natural gas - mcf
United States
Bakken 65 36
Other Onshore   100   43
Total Onshore 165 79
Offshore   85   79
Total United States   250   158
 
Europe 41 33
Asia and other   297   316
Total   588   507
 
Barrels of oil equivalent   377   318
 

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 
                                                                                    Third     Third     Second
Quarter Quarter Quarter

    2015    

    2014    

    2015    

Sales Volumes Per Day (in thousands)

     
Crude oil - barrels 245 214 250
Natural gas liquids - barrels 40 30 42
Natural gas - mcf   574   462   617
Barrels of oil equivalent   381   321   395
 

Sales Volumes (in thousands)

Crude oil - barrels 22,592 19,719 22,729
Natural gas liquids - barrels 3,701 2,772 3,848
Natural gas - mcf   52,784   42,511   56,179
Barrels of oil equivalent   35,090   29,576   35,940
 
                                                                                                          Nine Months

    2015    

     

    2014    

Sales Volumes Per Day (in thousands)

   
Crude oil - barrels 238 211
Natural gas liquids - barrels 39 21
Natural gas - mcf   588   507
Barrels of oil equivalent   375   317
 

Sales Volumes (in thousands)

Crude oil - barrels 65,028 57,662
Natural gas liquids - barrels 10,668 5,836
Natural gas - mcf   160,604   138,530
Barrels of oil equivalent   102,463   86,586
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 
                                                                        Third     Third     Second
Quarter Quarter Quarter

    2015    

    2014    

    2015    

Operating Data

Average Selling Prices

Crude oil - per barrel (including hedging)
United States
Onshore $ 40.43 $ 87.29 $ 50.33
Offshore 42.70 97.50 57.82
Total United States 41.33 91.47 53.25
Europe 53.49 110.06 60.88
Africa 51.98 101.21 59.70
Asia 59.37
Worldwide 45.66 96.78 55.83
 
Crude oil - per barrel (excluding hedging)
United States
Onshore $ 37.91 $ 87.29 $ 50.54
Offshore 42.70 96.25 57.82
Total United States 39.81 90.95 53.38
Europe 50.12 106.40 62.39
Africa 48.60 99.21 61.00
Asia 59.37
Worldwide 43.43 95.41 56.40
 
Natural gas liquids - per barrel
United States
Onshore $ 5.45 $ 28.20 $ 9.47
Offshore 12.56 31.45 15.82
Total United States 6.69 28.84 10.46
Europe 21.44 49.37 27.53
Worldwide 7.17 29.62 11.06
 
Natural gas - per mcf
United States
Onshore $ 1.70 $ 2.25 $ 1.81
Offshore 2.37 3.64 2.13
Total United States 1.92 2.85 1.93
Europe 6.43 9.63 7.35
Asia and other 5.98 6.97 6.27
Worldwide 4.02 5.59 4.49
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

 
                                                                                                Nine Months

    2015    

   

    2014    

Operating Data

Average Selling Prices

Crude oil - per barrel (including hedging)
United States
Onshore $ 43.38 $ 90.14
Offshore 48.75 99.11
Total United States 45.43 93.92
Europe 55.87 110.09
Africa 54.99 105.68
Asia 56.85 104.66
Worldwide 49.14 99.53
 
Crude oil - per barrel (excluding hedging)
United States
Onshore $ 42.61 $ 90.14
Offshore 48.75 98.92
Total United States 44.95 93.84
Europe 55.01 109.01
Africa 54.26 104.86
Asia 56.85 104.66
Worldwide 48.55 99.11
 
Natural gas liquids - per barrel
United States
Onshore $ 9.47 $ 33.62
Offshore 14.60 32.63
Total United States 10.32 33.31
Europe 25.50 56.98
Worldwide 10.84 34.76
 
Natural gas - per mcf
United States
Onshore $ 1.78 $ 3.57
Offshore 2.26 4.01
Total United States 1.95 3.80
Europe 7.18 10.60
Asia and other 6.07 7.13
Worldwide 4.40 6.32
 

The following is summary of the Corporation’s commodity hedging program:

                                                      Brent    

West Texas
Intermediate

Q4 2015 Hedging program:

Daily production - barrels of oil per day (bopd) 50,000 20,000
Ceiling price $80 $80
Floor price $60 $60
Program finishing date December 31, 2015 December 31, 2015
 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
BAKKEN MIDSTREAM EARNINGS (UNAUDITED)
(IN MILLIONS)

 
                                            Third     Third     Second
Quarter Quarter Quarter

    2015    

    2014    

    2015    

Income Statement

 
Total revenues and non-operating income $ 148 $ 89 $ 145
 
Costs and Expenses
Operating costs and expenses 65 54 68
General and administrative expenses 4 3 3
Depreciation, depletion and amortization 22 19 22
Interest expense   4     1
Total costs and expenses   95   76   94
 
Results of operations before income taxes 53 13 51
Provision (benefit) for income taxes   10   5   19
Net Income 43 8 32
Less: Net income attributable to noncontrolling interests*   27    
Net income (loss) attributable to Hess Corporation $ 16 $ 8 $ 32
 

* - On July 1, 2015, the Corporation completed the sale of a 50 percent interest in its Bakken Midstream segment. Our partner’s 50 percent share of net income is presented as a noncontrolling interest charge in the Bakken Midstream income statements effective from the third quarter of 2015.

                                                             
Third Third Second
Quarter Quarter Quarter

    2015    

    2014    

    2015    

Bakken Midstream - Operating Volumes (in thousands)

 

Processing

Tioga gas plant - mcf of natural gas per day 210 139 202
 

Export

Terminal throughput - bopd (a)

72 62 82

Tioga rail terminal crude loading - bopd (b)

47 39 51

Rail services - bopd (c)

45 34 44
 

Pipelines

Oil gathering - bopd 41 28 35
Gas gathering - mcf of natural gas per day 226 167 227
 
(a)  

Volume of crude oil received at the Ramburg Truck Facility for transportation to the Tioga Rail Terminal or third party pipelines.

(b)

Volume of crude oil loaded to Hess Midstream and third party rail cars at the Tioga Rail Terminal.

(c)

Volume of crude oil transported by Hess Midstream rail cars from the Tioga Rail Terminal and third party terminals.

 
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
BAKKEN MIDSTREAM EARNINGS (UNAUDITED)
(IN MILLIONS)

 
                                                                  Nine Months

    2015    

   

    2014    

Income Statement

 
Total revenues and non-operating income $ 423 $ 218
 
Costs and Expenses
Operating costs and expenses 196 158
General and administrative expenses 9 7
Depreciation, depletion and amortization 65 48
Interest expense   6   1
Total costs and expenses   276   214
 
Results of operations before income taxes 147 4
Provision (benefit) for income taxes   45   2
Net Income 102 2
Less: Net income attributable to noncontrolling interests*   27  
Net income (loss) attributable to Hess Corporation $ 75 $ 2
 

* - On July 1, 2015, the Corporation completed the sale of a 50 percent interest in its Bakken Midstream segment. Our partner’s 50 percent share of net income is presented as a noncontrolling interest charge in the Bakken Midstream income statements effective from the third quarter of 2015.

 
                                                                            Nine Months

    2015    

   

    2014    

Bakken Midstream - Operating Volumes (in thousands)

 

Processing

Tioga gas plant - mcf of natural gas per day 197 89
 

Export

Terminal throughput - bopd (a)

78 57

Tioga rail terminal crude loading - bopd (b)

49 37

Rail services - bopd (c)

43 35
 

Pipelines

Oil gathering - bopd 35 24
Gas gathering - mcf of natural gas per day 219 113
 
 
(a)  

Volume of crude oil received at the Ramburg Truck Facility for transportation to the Tioga Rail Terminal or third party pipelines.

(b)

Volume of crude oil loaded to Hess Midstream and third party rail cars at the Tioga Rail Terminal.

(c)

Volume of crude oil transported by Hess Midstream rail cars from the Tioga Rail Terminal and third party terminals.

For Hess Corporation
Investor Contact:
Jay Wilson
212-536-8940
or
Media Contact:
Michael Henson/Patrick Scanlan
Sard Verbinnen & Co
212-687-8080


Source: Business Wire (October 28, 2015 - 7:30 AM EDT)

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