Key Developments:
- Sanctioned development of Uaru, the fifth development on the
Stabroek Block, offshore Guyana, with a production capacity of
approximately 250,000 gross barrels of oil per day (bopd); first
oil is expected in 2026
- Extension granted for the Stabroek Block exploration license
by one year to October 2027
- Oil discovery at the Pickerel-1 exploration well in the Gulf
of Mexico, which will be a tie-back to the Tubular Bells production
facility with first oil expected in mid-2024
Second Quarter Financial and Operational Highlights:
- Net income was $119 million, or $0.39 per share, compared
with net income of $667 million, or $2.15 per share, in the second
quarter of 2022; adjusted net income1 in the second quarter of 2023
was $201 million, or $0.65 per share
- Oil and gas net production was 387,000 barrels of oil
equivalent per day (boepd), up 28% from 303,000
boepd, proforma for asset sold, in the second quarter of
2022
- Bakken net production was 181,000 boepd, up 29% from 140,000
boepd in the second quarter of 2022; Guyana net production was
110,000 bopd, compared with 67,000 bopd in the prior-year
quarter
- E&P capital and exploratory expenditures were $933
million compared with $622 million in the prior-year
quarter
2023 Updated Guidance:
- Full year net production is now forecast to be in the range
of 385,000 boepd to 390,000 boepd, compared with previous guidance
of 365,000 boepd to 375,000 boepd primarily due to strong
operational performance and the expected startup of the Payara
development early in the fourth quarter
Hess Corporation (NYSE: HES) today reported
net income of $119 million, or $0.39 per share, in the second
quarter of 2023, compared with net income of $667 million, or $2.15
per share, in the second quarter of 2022. On an adjusted basis, the
Corporation reported net income of $201 million or $0.65 per share
in the second quarter of 2023. The decrease in adjusted after-tax
results compared with the prior-year quarter reflects lower
realized selling prices, partially offset by the net impact of
higher production volumes in the second quarter of 2023.
- “Adjusted net income” is a non-GAAP financial measure. The
reconciliation to its nearest GAAP equivalent measure, and its
definition, appear on pages 6 and 8, respectively.
CEO John Hess said: "We continue to
successfully execute our strategy to deliver industry leading cash
flow growth and financial returns to our shareholders while safely
and responsibly producing oil and gas to help meet the world’s
growing energy needs.”
After-tax income (loss) by major operating
activity was as follows:
Three Months Ended June 30,
(unaudited)
Six Months Ended June 30,
(unaudited)
2023
2022
2023
2022
(In millions, except per share
amounts)
Net Income
Attributable to Hess Corporation
Exploration and Production
$
155
$
723
$
560
$
1,183
Midstream
62
65
123
137
Corporate, Interest and Other
(98)
(121)
(218)
(236)
Net income attributable to Hess
Corporation
$
119
$
667
$
465
$
1,084
Net income per share (diluted)
$
0.39
$
2.15
$
1.51
$
3.49
Adjusted Net Income
Attributable to Hess Corporation
Exploration and Production
$
237
$
723
$
642
$
1,183
Midstream
62
65
123
137
Corporate, Interest and Other
(98)
(121)
(218)
(249)
Adjusted net income attributable to Hess
Corporation
$
201
$
667
$
547
$
1,071
Adjusted net income per share
(diluted)
$
0.65
$
2.15
$
1.78
$
3.45
Weighted average number of shares
(diluted)
307.5
310.9
307.4
310.6
Exploration and Production:
E&P net income was $155 million in the
second quarter of 2023, compared with $723 million in the second
quarter of 2022. On an adjusted basis, E&P second quarter 2023
net income was $237 million. The Corporation’s average realized
crude oil selling price, including the effect of hedging, was
$71.13 per barrel in the second quarter of 2023, compared with
$99.16 per barrel in the prior-year quarter. The average realized
natural gas liquids (NGL) selling price in the second quarter of
2023 was $17.95 per barrel, compared with $40.92 per barrel in the
prior-year quarter, while the average realized natural gas selling
price was $3.82 per mcf, compared with $6.45 per mcf in the second
quarter of 2022.
Net production was 387,000 boepd in the second
quarter of 2023, compared with 303,000 boepd, proforma for asset
sold, in the second quarter of 2022, primarily due to higher
production in Guyana and the Bakken.
Cash operating costs, which include operating
costs and expenses, production and severance taxes, and E&P
general and administrative expenses, were $13.97 per barrel of oil
equivalent (boe) in the second quarter of 2023, compared with
$14.56 per boe, proforma for asset sold, in the prior-year quarter.
The decrease in cash operating costs reflects the higher production
volumes, partially offset by higher workover activity in the Gulf
of Mexico.
Operational Highlights for the Second Quarter of
2023:
Bakken (Onshore U.S.): Net production
from the Bakken was 181,000 boepd in the second quarter of 2023
compared with 140,000 boepd in the prior-year quarter, reflecting
increased drilling and completion activity, higher NGL and natural
gas volumes received under percentage of proceeds contracts due to
lower commodity prices, and higher uptime after weather related
shut-ins in the prior-year quarter. NGL and natural gas volumes
received under percentage of proceeds contracts were 22,000 boepd
in the second quarter of 2023 compared with 7,000 boepd in the
second quarter of 2022 due to lower realized NGL and natural gas
prices increasing volumes received as consideration for gas
processing fees. During the second quarter of 2023, the Corporation
drilled 32 wells, completed 28 wells, and brought 30 new wells
online. Bakken net production is forecast to be in the range of
175,000 boepd to 180,000 boepd for the full year 2023, up from our
previous guidance range of 165,000 boepd to 170,000 boepd.
Gulf of Mexico (Offshore U.S.): Net
production from the Gulf of Mexico in the second quarter of 2023
was 32,000 boepd, compared with 29,000 boepd in the prior-year
quarter.
In July 2023, the Pickerel-1 exploration well
(Hess – 100%) located in Mississippi Canyon Block 727 was an oil
discovery. The well encountered approximately 90 feet of net pay in
high quality, oil bearing, Miocene age reservoir. Planning is
underway to tie-back the well to the Tubular Bells production
facility with first oil expected in mid-2024.
Guyana (Offshore): At the Stabroek
Block (Hess – 30%), net production from the Liza Destiny and the
Liza Unity floating production, storage and offloading vessels
(FPSOs) totaled 110,0002 bopd in the second quarter of 2023
compared with 67,0002 bopd in the prior-year quarter. The Liza
Unity FPSO, which commenced production in February 2022, reached
its production capacity of approximately 220,000 gross bopd in July
2022. In the second quarter of 2023, we sold nine cargos of crude
oil from Guyana compared with six cargos in the prior-year quarter.
Net production guidance for Guyana for the full year 2023 is
expected to be approximately 115,0002 bopd, compared to our
previous guidance range of 105,000 bopd to 110,000 bopd.
The third development, Payara, with a
production capacity of approximately 220,000 gross bopd, remains on
track for startup early in the fourth quarter. The fourth
development, Yellowtail, was sanctioned in April 2022 with a
production capacity of approximately 250,000 gross bopd and first
production expected in 2025. The fifth development, Uaru, was
sanctioned in April 2023 with a production capacity of
approximately 250,000 gross bopd and first production expected in
2026.
The expiration of the exploration license for
the Stabroek Block was extended one year from October 2026 to
October 2027, and the end of the first renewal period of the
exploration license, which requires the relinquishment of 20% of
the acreage not held by discoveries, was extended one year from
October 2023 to October 2024, both as a result of force majeure due
to the COVID-19 pandemic.
Southeast Asia (Offshore): Net
production at North Malay Basin and JDA was 64,000 boepd in the
second quarter of 2023 compared with 67,000 boepd in the prior-year
quarter.
Canada (Offshore): The operator, BP
Canada, drilled the Ephesus exploration well, offshore Newfoundland
(Hess – 25%) in the second quarter of 2023. The well did not
encounter commercial quantities of hydrocarbons and well costs
incurred of $36 million were recorded to exploration expense.
Midstream:
The Midstream segment had net income of $62
million in the second quarter of 2023, compared with net income of
$65 million in the prior-year quarter.
During the second quarter of 2023, the
Corporation received total net proceeds of $217 million from the
public offering of approximately 6.4 million Hess Midstream LP
(HESM) Class A shares held by the Corporation in May 2023 and the
repurchase by Hess Midstream Operations LP (HESM Opco), a
consolidated subsidiary of HESM, of approximately 1.7 million HESM
Opco Class B units held by the Corporation in June 2023. The
repurchase of the Class B units was financed by HESM Opco’s
revolving credit facility. After giving effect to the above
transactions, the Corporation owns approximately 38% of HESM on a
consolidated basis.
Corporate, Interest and Other:
After-tax expense for Corporate, Interest and
Other was $98 million in the second quarter of 2023, compared with
$121 million in the second quarter of 2022. Corporate and other
expenses decreased by $18 million in the second quarter of 2023
primarily due to higher interest income. Interest expense decreased
by $5 million in the second quarter of 2023 reflecting higher
capitalized interest.
Capital and Exploratory Expenditures:
E&P capital and exploratory expenditures
were $933 million in the second quarter of 2023 compared with $622
million in the prior-year quarter, primarily due to development
activities in Guyana and higher drilling activity in the Bakken.
Midstream capital expenditures were $52 million in the second
quarter of 2023 and $72 million in the prior-year quarter.
Liquidity:
Excluding the Midstream segment, Hess
Corporation had cash and cash equivalents of $2.2 billion and debt
and finance lease obligations totaling $5.6 billion at June 30,
2023. The Midstream segment had cash and cash equivalents of $4
million and total debt of $3.1 billion at June 30, 2023. The
Corporation’s debt to capitalization ratio as defined in its debt
covenants was 35.1% at June 30, 2023 and 36.1% at December 31,
2022.
Net cash provided by operating activities was
$974 million in the second quarter of 2023, compared with $1,509
million in the second quarter of 2022. Net cash provided by
operating activities before changes in operating assets and
liabilities3 was $974 million in the second quarter of 2023,
compared with $1,463 million in the prior-year quarter.
2. Net production from Guyana in the second quarter of 2023
included 13,000 bopd of tax barrels. There were no tax barrels in
the second quarter of 2022. Net production guidance for Guyana for
the full year 2023 includes tax barrels of approximately 15,000
bopd.
3. “Net cash provided by (used in) operating activities before
changes in operating assets and liabilities” is a non-GAAP
financial measure. The reconciliation to its nearest GAAP
equivalent measure, and its definition, appear on pages 7 and 8,
respectively.
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 June 30,
(unaudited)
Six Months Ended June 30
(unaudited)
2023
2022
2023
2022
(In millions)
Exploration and Production
$
(82)
$
—
$
(82)
$
—
Midstream
—
—
—
—
Corporate, Interest and Other
—
—
—
13
Total items affecting comparability of
earnings between periods
$
(82)
$
—
$
(82)
$
13
Second Quarter 2023: E&P results include a
charge of $82 million ($82 million after income taxes) that
resulted from updates to the Corporation’s estimated abandonment
obligations in the West Delta Field in the Gulf of Mexico. These
abandonment obligations were assigned to the Corporation as a
former owner after they were discharged from Fieldwood Energy LLC
as part of its approved bankruptcy plan in 2021.
Reconciliation of U.S. GAAP to Non-GAAP Measures:
The following table reconciles reported net
income attributable to Hess Corporation and adjusted net
income:
Three Months Ended June 30,
(unaudited)
Six Months Ended June 30,
(unaudited)
2023
2022
2023
2022
(In millions)
Net income attributable to Hess
Corporation
$
119
$
667
$
465
$
1,084
Less: Total items affecting comparability
of earnings between periods
(82)
—
(82)
13
Adjusted net income attributable to Hess
Corporation
$
201
$
667
$
547
$
1,071
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 June 30,
(unaudited)
Six Months Ended June 30,
(unaudited)
2023
2022
2023
2022
(In millions)
Net cash provided by (used in) operating
activities before changes in operating assets and liabilities
$
974
$
1,463
$
2,006
$
2,415
Changes in operating assets and
liabilities
—
46
(394)
(1,062)
Net cash provided by (used in) operating
activities
$
974
$
1,509
$
1,612
$
1,353
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
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Words such as “anticipate,” “estimate,” “expect,” “forecast,”
“guidance,” “could,” “may,” “should,” “would,” “believe,” “intend,”
“project,” “plan,” “predict,” “will,” “target” and similar
expressions identify forward-looking statements, which are not
historical in nature. Our forward-looking statements may include,
without limitation: our future financial and operational results;
our business strategy; estimates of our crude oil and natural gas
reserves and levels of production; benchmark prices of crude oil,
NGL and natural gas and our associated realized price
differentials; our projected budget and capital and exploratory
expenditures; expected timing and completion of our development
projects; information about sustainability goals and targets and
planned social, safety and environmental policies, programs and
initiatives; and future economic and market conditions in the oil
and gas industry.
Forward-looking statements are based on our current
understanding, assessments, estimates and projections of relevant
factors and reasonable assumptions about the future.
Forward-looking statements are subject to certain known and unknown
risks and uncertainties that could cause actual results to differ
materially from our historical experience and our current
projections or expectations of future results expressed or implied
by these forward-looking statements. The following important
factors could cause actual results to differ materially from those
in our forward-looking statements: fluctuations in market prices of
crude oil, NGL and natural gas and competition in the oil and gas
exploration and production industry; reduced demand for our
products, including due to perceptions regarding the oil and gas
industry, competing or alternative energy products and political
conditions and events; potential failures or delays in increasing
oil and gas reserves, including as a result of unsuccessful
exploration activity, drilling risks and unforeseen reservoir
conditions, and in achieving expected production levels; changes in
tax, property, contract and other laws, regulations and
governmental actions applicable to our business, including
legislative and regulatory initiatives regarding environmental
concerns, such as measures to limit greenhouse gas emissions and
flaring, fracking bans as well as restrictions on oil and gas
leases; operational changes and expenditures due to climate change
and sustainability related initiatives; disruption or interruption
of our operations due to catastrophic and other events, such as
accidents, severe weather, geological events, shortages of skilled
labor, cyber-attacks, public health measures, or climate change;
the ability of our contractual counterparties to satisfy their
obligations to us, including the operation of joint ventures under
which we may not control and exposure to decommissioning
liabilities for divested assets in the event the current or future
owners are unable to perform; unexpected changes in technical
requirements for constructing, modifying or operating exploration
and production facilities and/or the inability to timely obtain or
maintain necessary permits; availability and costs of employees and
other personnel, drilling rigs, equipment, supplies and other
required services; any limitations on our access to capital or
increase in our cost of capital, including as a result of
limitations on investment in oil and gas activities, rising
interest rates or negative outcomes within commodity and financial
markets; liability resulting from environmental obligations and
litigation, including heightened risks associated with being a
general partner of HESM; and other factors described in Item
1A—Risk Factors in our Annual Report on Form 10-K and any
additional risks described in our other filings with the Securities
and Exchange Commission (SEC).
As and when made, we believe that our forward-looking statements
are reasonable. However, given these risks and uncertainties,
caution should be taken not to place undue reliance on any such
forward-looking statements since such statements speak only as of
the date when made and there can be no assurance that such
forward-looking statements will occur and actual results may differ
materially from those contained in any forward-looking statement we
make. Except as required by law, we undertake no obligation to
publicly update or revise any forward-looking statements, whether
because of new information, future events or otherwise.
Non-GAAP financial measures
The Corporation has used non-GAAP financial measures in this
earnings release. “Adjusted net income” presented in this release
is defined as reported net income 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 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 or net cash provided by (used
in) operating activities. A reconciliation of reported net income
attributable to Hess Corporation (U.S. GAAP) to adjusted net
income, 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 Corporation’s 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 Quarter 2023
Second Quarter 2022
First Quarter 2023
Income
Statement
Revenues and non-operating
income
Sales and other operating revenues
$
2,289
$
2,955
$
2,411
Gains on asset sales, net
—
3
—
Other, net
31
30
42
Total revenues and non-operating
income
2,320
2,988
2,453
Costs and expenses
Marketing, including purchased oil and
gas
547
843
603
Operating costs and expenses
454
356
382
Production and severance taxes
46
67
48
Exploration expenses, including dry holes
and lease impairment
99
33
66
General and administrative expenses
108
95
136
Interest expense
122
121
123
Depreciation, depletion and
amortization
497
391
491
Impairment and other
82
—
—
Total costs and expenses
1,955
1,906
1,849
Income before income taxes
365
1,082
604
Provision for income taxes
160
328
176
Net income
205
754
428
Less: Net income attributable to
noncontrolling interests
86
87
82
Net income attributable to Hess
Corporation
$
119
$
667
$
346
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Six Months Ended June 30,
Income
Statement
2023
2022
Revenues and non-operating
income
Sales and other operating revenues
$
4,700
$
5,268
Gains on asset sales, net
—
25
Other, net
73
66
Total revenues and non-operating
income
4,773
5,359
Costs and expenses
Marketing, including purchased oil and
gas
1,150
1,525
Operating costs and expenses
836
669
Production and severance taxes
94
128
Exploration expenses, including dry holes
and lease impairment
165
76
General and administrative expenses
244
205
Interest expense
245
244
Depreciation, depletion and
amortization
988
728
Impairment and other
82
—
Total costs and expenses
3,804
3,575
Income before income taxes
969
1,784
Provision for income taxes
336
525
Net income
633
1,259
Less: Net income attributable to
noncontrolling interests
168
175
Net income attributable to
Hess Corporation
$
465
$
1,084
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
June 30, 2023
December 31, 2022
Balance Sheet
Information
Assets
Cash and cash equivalents
$
2,226
$
2,486
Other current assets
1,478
1,445
Property, plant and equipment – net
15,741
15,098
Operating lease right-of-use assets –
net
515
570
Finance lease right-of-use assets –
net
117
126
Other long-term assets
2,153
1,970
Total assets
$
22,230
$
21,695
Liabilities and equity
Current portion of long-term debt
$
8
$
3
Current portion of operating and finance
lease obligations
222
221
Other current liabilities
2,173
2,172
Long-term debt
8,459
8,278
Long-term operating lease obligations
407
469
Long-term finance lease obligations
168
179
Other long-term liabilities
1,891
1,877
Total equity excluding accumulated other
comprehensive income (loss)
8,419
7,986
Accumulated other comprehensive income
(loss)
(147)
(131)
Noncontrolling interests
630
641
Total liabilities and equity
$
22,230
$
21,695
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
June 30, 2023
December 31, 2022
Total
Debt
Hess Corporation
$
5,398
$
5,395
Midstream (a)
3,069
2,886
Hess Consolidated
$
8,467
$
8,281
a. Midstream debt is non-recourse to Hess Corporation.
June 30, 2023
December 31, 2022
Debt to
Capitalization Ratio (a)
Hess Consolidated
49.3%
50.0%
Hess Corporation as defined in debt
covenants
35.1%
36.1%
- Includes finance lease obligations.
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Interest
Expense
Gross interest expense – Hess
Corporation
$
88
$
86
$
174
$
178
Less: Capitalized interest – Hess
Corporation
(10)
(3)
(15)
(3)
Interest expense – Hess Corporation
78
83
159
175
Interest expense – Midstream (a)
44
38
86
69
Interest expense – Hess
Consolidated
$
122
$
121
$
245
$
244
- Midstream interest expense is
reported in the Midstream operating segment.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Second Quarter 2023
Second Quarter 2022
First Quarter 2023
Cash Flow
Information
Cash Flows from Operating
Activities
Net income
$
205
$
754
$
428
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
(Gains) losses on asset sales, net
—
(3)
—
Depreciation, depletion and
amortization
497
391
491
Impairment and other
82
—
—
Exploratory dry hole costs
62
—
31
Exploration lease impairment
8
4
5
Pension settlement loss
—
2
—
Stock compensation expense
18
16
35
Noncash (gains) losses on commodity
derivatives, net
52
163
—
Provision (benefit) for deferred income
taxes and other tax accruals
50
136
42
Net cash provided by (used in) operating
activities before changes in operating assets and liabilities
974
1,463
1,032
Changes in operating assets and
liabilities
—
46
(394)
Net cash provided by (used in) operating
activities
974
1,509
638
Cash Flows from Investing
Activities
Additions to property, plant and equipment
- E&P
(778)
(607)
(773)
Additions to property, plant and equipment
- Midstream
(43)
(56)
(64)
Proceeds from asset sales, net of cash
sold
—
4
—
Other, net
—
—
(4)
Net cash provided by (used in) investing
activities
(821)
(659)
(841)
Cash Flows from Financing
Activities
Net borrowings (repayments) of debt with
maturities of 90 days or less
77
(14)
103
Debt with maturities of greater than 90
days:
Borrowings
—
400
—
Repayments
—
(5)
—
Cash dividends paid
(134)
(116)
(137)
Common stock acquired and retired
—
(190)
(20)
Proceeds from sale of Class A shares of
Hess Midstream LP
167
146
—
Noncontrolling interests, net
(132)
(277)
(131)
Employee stock options exercised
1
7
3
Payments on finance lease obligations
(2)
(2)
(2)
Other, net
(4)
(10)
1
Net cash provided by (used in) financing
activities
(27)
(61)
(183)
Net Increase (Decrease) in Cash and
Cash Equivalents
126
789
(386)
Cash and Cash Equivalents at Beginning
of Period
2,100
1,370
2,486
Cash and Cash Equivalents at End of
Period
$
2,226
$
2,159
$
2,100
Additions to
Property, Plant and Equipment included within Investing
Activities
Capital expenditures incurred
$
(956)
$
(665)
$
(792)
Increase (decrease) in related
liabilities
135
2
(45)
Additions to property, plant and
equipment
$
(821)
$
(663)
$
(837)
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Six Months Ended June 30,
2023
2022
Cash Flow
Information
Cash Flows from Operating
Activities
Net income
$
633
$
1,259
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
(Gains) losses on asset sales, net
—
(25)
Depreciation, depletion and
amortization
988
728
Impairment and other
82
—
Exploratory dry hole costs
93
—
Exploration lease impairment
13
10
Pension settlement loss
—
2
Stock compensation expense
53
49
Noncash (gains) losses on commodity
derivatives, net
52
218
Provision (benefit) for deferred income
taxes and other tax accruals
92
174
Net cash provided by (used in) operating
activities before changes in operating assets and liabilities
2,006
2,415
Changes in operating assets and
liabilities
(394)
(1,062)
Net cash provided by (used in) operating
activities
1,612
1,353
Cash Flows from Investing
Activities
Additions to property, plant and equipment
- E&P
(1,551)
(1,098)
Additions to property, plant and equipment
- Midstream
(107)
(111)
Proceeds from asset sales, net of cash
sold
—
28
Other, net
(4)
—
Net cash provided by (used in) investing
activities
(1,662)
(1,181)
Cash Flows from Financing
Activities
Net borrowings (repayments) of debt with
maturities of 90 days or less
180
(13)
Debt with maturities of greater than 90
days:
Borrowings
—
400
Repayments
—
(510)
Cash dividends paid
(271)
(235)
Common stock acquired and retired
(20)
(190)
Proceeds from sale of Class A shares of
Hess Midstream LP
167
146
Noncontrolling interests, net
(263)
(351)
Employee stock options exercised
4
40
Payments on finance lease obligations
(4)
(4)
Other, net
(3)
(9)
Net cash provided by (used in) financing
activities
(210)
(726)
Net Increase (Decrease) in Cash and
Cash Equivalents
(260)
(554)
Cash and Cash Equivalents at Beginning
of Period
2,486
2,713
Cash and Cash Equivalents at End of
Period
$
2,226
$
2,159
Additions to
Property, Plant and Equipment included within Investing
Activities
Capital expenditures incurred
$
(1,748)
$
(1,245)
Increase (decrease) in related
liabilities
90
36
Additions to property, plant and
equipment
$
(1,658)
$
(1,209)
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Second Quarter 2023
Second Quarter 2022
First Quarter 2023
Capital and
Exploratory Expenditures
E&P Capital and exploratory
expenditures
United States
North Dakota
$
264
$
188
$
232
Offshore and Other
82
72
29
Total United States
346
260
261
Guyana
508
286
454
Malaysia and JDA
44
66
47
Other (a)
35
10
3
E&P Capital and exploratory
expenditures
$
933
$
622
$
765
Total exploration expenses charged to
income included above
$
29
$
29
$
30
Midstream Capital expenditures
$
52
$
72
$
57
- Other includes capital and exploratory expenditures associated
with Canada.
Six Months Ended June 30,
2023
2022
Capital and
Exploratory Expenditures
E&P Capital and exploratory
expenditures
United States
North Dakota
$
496
$
323
Offshore and Other
111
128
Total United States
607
451
Guyana
962
605
Malaysia and JDA
91
125
Other (a)
38
21
E&P Capital and exploratory
expenditures
$
1,698
$
1,202
Total exploration expenses charged to
income included above
$
59
$
66
Midstream Capital expenditures
$
109
$
109
- Other includes capital and exploratory expenditures associated
with Canada.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
EARNINGS (UNAUDITED)
(IN MILLIONS)
Second Quarter 2023
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
1,299
$
988
$
2,287
Other, net
6
2
8
Total revenues and non-operating
income
1,305
990
2,295
Costs and expenses
Marketing, including purchased oil and gas
(a)
537
27
564
Operating costs and expenses
241
143
384
Production and severance taxes
45
1
46
Midstream tariffs
302
—
302
Exploration expenses, including dry holes
and lease impairment
23
76
99
General and administrative expenses
50
11
61
Depreciation, depletion and
amortization
212
238
450
Impairment and other
82
—
82
Total costs and expenses
1,492
496
1,988
Results of operations before income
taxes
(187)
494
307
Provision for income taxes
—
152
152
Net income (loss) attributable to Hess
Corporation
$
(187)
(b)
$
342
(c)
$
155
Second Quarter 2022
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
1,860
$
1,095
$
2,955
Other, net
25
1
26
Total revenues and non-operating
income
1,885
1,096
2,981
Costs and expenses
Marketing, including purchased oil and gas
(a)
827
31
858
Operating costs and expenses
175
116
291
Production and severance taxes
65
2
67
Midstream tariffs
296
—
296
Exploration expenses, including dry holes
and lease impairment
24
9
33
General and administrative expenses
40
7
47
Depreciation, depletion and
amortization
192
153
345
Total costs and expenses
1,619
318
1,937
Results of operations before income
taxes
266
778
1,044
Provision for income taxes
—
321
321
Net income (loss) attributable to Hess
Corporation
$
266
(d)
$
457
(e)
$
723
- Includes amounts charged from the Midstream segment.
- Includes after-tax losses from realized crude oil hedging
activities of $34 million (noncash premium amortization: $34
million; cash settlement: $0 million).
- Includes after-tax losses from realized crude oil hedging
activities of $18 million (noncash premium amortization: $18
million; cash settlement: $0 million).
- Includes after-tax losses from realized crude oil hedging
activities of $99 million (noncash premium amortization: $99
million; cash settlement: $0 million).
- Includes after-tax losses from realized crude oil hedging
activities of $64 million (noncash premium amortization: $64
million; cash settlement: $0 million).
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
EARNINGS (UNAUDITED)
(IN MILLIONS)
First Quarter 2023
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
1,365
$
1,044
$
2,409
Other, net
9
5
14
Total revenues and non-operating
income
1,374
1,049
2,423
Costs and expenses
Marketing, including purchased oil and gas
(a)
584
35
619
Operating costs and expenses
205
118
323
Production and severance taxes
46
2
48
Midstream tariffs
283
—
283
Exploration expenses, including dry holes
and lease impairment
20
46
66
General and administrative expenses
54
12
66
Depreciation, depletion and
amortization
203
240
443
Total costs and expenses
1,395
453
1,848
Results of operations before income
taxes
(21)
596
575
Provision for income taxes
—
170
170
Net income (loss) attributable to Hess
Corporation
$
(21)
(b)
$
426
(c)
$
405
- Includes amounts charged from the Midstream segment.
- Includes after-tax losses from realized crude oil hedging
activities of $27 million (noncash premium amortization: $27
million; cash settlement: $0 million).
- Includes after-tax losses from realized crude oil hedging
activities of $7 million (noncash premium amortization: $7 million;
cash settlement: $0 million).
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
EARNINGS (UNAUDITED)
(IN MILLIONS)
Six Months Ended June 30,
2023
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
2,664
$
2,032
$
4,696
Other, net
15
7
22
Total revenues and non-operating
income
2,679
2,039
4,718
Costs and expenses
Marketing, including purchased oil and gas
(a)
1,121
62
1,183
Operating costs and expenses
446
261
707
Production and severance taxes
91
3
94
Midstream tariffs
585
—
585
Exploration expenses, including dry holes
and lease impairment
43
122
165
General and administrative expenses
104
23
127
Depreciation, depletion and
amortization
415
478
893
Impairment and other
82
—
82
Total costs and expenses
2,887
949
3,836
Results of operations before income
taxes
(208)
1,090
882
Provision for income taxes
—
322
322
Net income (loss) attributable to Hess
Corporation
$
(208)
(b)
$
768
(c)
$
560
Six Months Ended June 30,
2022
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
3,564
$
1,704
$
5,268
Other, net
52
7
59
Total revenues and non-operating
income
3,616
1,711
5,327
Costs and expenses
Marketing, including purchased oil and gas
(a)
1,528
33
1,561
Operating costs and expenses
319
223
542
Production and severance taxes
123
5
128
Midstream tariffs
583
—
583
Exploration expenses, including dry holes
and lease impairment
56
20
76
General and administrative expenses
89
15
104
Depreciation, depletion and
amortization
387
250
637
Total costs and expenses
3,085
546
3,631
Results of operations before income
taxes
531
1,165
1,696
Provision for income taxes
—
513
513
Net income (loss) attributable to Hess
Corporation
$
531
(d)
$
652
(e)
$
1,183
- Includes amounts charged from the Midstream segment.
- Includes after-tax losses from realized crude oil hedging
activities of $61 million (noncash premium amortization: $61
million; cash settlement: $0 million).
- Includes after-tax losses from realized crude oil hedging
activities of $25 million (noncash premium amortization: $25
million; cash settlement: $0 million).
- Includes after-tax losses from realized crude oil hedging
activities of $156 million (noncash premium amortization: $133
million; cash settlement: $23 million).
- Includes after-tax losses from realized crude oil hedging
activities of $99 million (noncash premium amortization: $85
million; cash settlement: $14 million).
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
OPERATING DATA
Second Quarter 2023
Second Quarter 2022
First Quarter 2023
Net Production
Per Day (in thousands)
Crude oil - barrels
United States
North Dakota
79
68
76
Offshore
23
20
24
Total United States
102
88
100
Guyana (a)
110
67
112
Malaysia and JDA
4
4
4
Other (b)
—
17
—
Total
216
176
216
Natural gas liquids - barrels
United States
North Dakota
68
47
61
Offshore
1
2
1
Total United States
69
49
62
Natural gas - mcf
United States
North Dakota
206
147
158
Offshore
45
41
47
Total United States
251
188
205
Malaysia and JDA
359
381
369
Other (b)
—
11
—
Total
610
580
574
Barrels of oil equivalent
387
322
374
- Production from Guyana includes 13,000 bopd of tax barrels in
the second quarter of 2023 and 15,000 bopd of tax barrels in the
first quarter of 2023. There were no tax barrels in the second
quarter of 2022.
- Other includes production from Libya. The Corporation sold its
interest in the Waha Concession in Libya in November 2022. Libya
net production was 19,000 boepd in the second quarter of 2022.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
OPERATING DATA
Six Months Ended June 30,
2023
2022
Net Production
Per Day (in thousands)
Crude oil - barrels
United States
North Dakota
78
73
Offshore
23
20
Total United States
101
93
Guyana (a)
111
49
Malaysia and JDA
4
3
Other (b)
—
18
Total
216
163
Natural gas liquids - barrels
United States
North Dakota
64
48
Offshore
2
2
Total United States
66
50
Natural gas - mcf
United States
North Dakota
182
152
Offshore
47
41
Total United States
229
193
Malaysia and JDA
363
373
Other (b)
—
12
Total
592
578
Barrels of oil equivalent
381
309
- Production from Guyana includes 14,000 bopd of tax barrels in
the first six months of 2023. There were no tax barrels in the
first six months of 2022.
- Other includes production from Libya. The Corporation sold its
interest in the Waha Concession in Libya in November 2022. Libya
net production was 20,000 boepd in the first six months of
2022.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
OPERATING DATA
Second Quarter 2023
Second Quarter 2022
First Quarter 2023
Sales Volumes Per
Day (in thousands) (a)
Crude oil – barrels
217
173
213
Natural gas liquids – barrels
67
46
64
Natural gas – mcf
610
580
574
Barrels of oil equivalent
386
316
373
Sales Volumes (in
thousands) (a)
Crude oil – barrels
19,740
15,763
19,161
Natural gas liquids – barrels
6,084
4,180
5,761
Natural gas – mcf
55,548
52,811
51,692
Barrels of oil equivalent
35,082
28,745
33,537
Six Months Ended June 30,
2023
2022
Sales Volumes Per
Day (in thousands) (a)
Crude oil – barrels
215
157
Natural gas liquids – barrels
65
48
Natural gas – mcf
592
578
Barrels of oil equivalent
379
301
Sales Volumes (in
thousands) (a)
Crude oil – barrels
38,901
28,343
Natural gas liquids – barrels
11,845
8,719
Natural gas – mcf
107,240
104,709
Barrels of oil equivalent
68,619
54,514
- 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 Quarter 2023
Second Quarter 2022
First Quarter 2023
Average Selling
Prices
Crude oil - per barrel (including
hedging)
United States
North Dakota
$
65.67
$
93.60
$
68.63
Offshore
68.32
95.22
68.12
Total United States
66.24
93.96
68.50
Guyana
75.82
104.19
79.15
Malaysia and JDA
68.87
106.21
72.91
Other (a)
—
105.21
—
Worldwide
71.13
99.16
74.23
Crude oil - per barrel (excluding
hedging)
United States
North Dakota
$
69.22
$
106.01
$
71.78
Offshore
71.86
107.58
71.27
Total United States
69.79
106.37
71.65
Guyana
77.64
112.57
79.86
Malaysia and JDA
68.87
106.21
72.91
Other (a)
—
114.93
—
Worldwide
73.74
109.51
76.02
Natural gas liquids - per
barrel
United States
North Dakota
$
17.90
$
40.96
$
24.25
Offshore
20.17
39.88
24.28
Worldwide
17.95
40.92
24.25
Natural gas - per mcf
United States
North Dakota
$
1.29
$
6.89
$
2.54
Offshore
1.62
7.63
2.42
Total United States
1.35
7.06
2.51
Malaysia and JDA
5.56
6.18
5.44
Other (a)
—
5.36
—
Worldwide
3.82
6.45
4.39
- Other includes prices related to production from Libya. The
Corporation sold its interest in the Waha Concession in Libya in
November 2022.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
OPERATING DATA
Six Months Ended June 30,
2023
2022
Average Selling
Prices
Crude oil - per barrel (including
hedging)
United States
North Dakota
$
67.05
$
88.98
Offshore
68.22
90.21
Total United States
67.32
89.25
Guyana
77.50
100.55
Malaysia and JDA
71.02
97.73
Other (a)
—
98.14
Worldwide
72.66
93.65
Crude oil - per barrel (excluding
hedging)
United States
North Dakota
$
70.41
$
98.46
Offshore
71.55
99.58
Total United States
70.68
98.70
Guyana
78.76
109.06
Malaysia and JDA
71.02
97.73
Other (a)
—
108.06
Worldwide
74.87
102.65
Natural gas liquids - per
barrel
United States
North Dakota
$
20.99
$
40.40
Offshore
22.20
38.68
Worldwide
21.02
40.33
Natural gas - per mcf
United States
North Dakota
$
1.83
$
5.57
Offshore
2.03
6.02
Total United States
1.87
5.67
Malaysia and JDA
5.50
6.00
Other (a)
—
5.07
Worldwide
4.09
5.87
- Other includes prices related to production from Libya. The
Corporation sold its interest in the Waha Concession in Libya in
November 2022.
The following is a summary of the Corporation’s outstanding
commodity hedging program for the remainder of calendar 2023:
WTI
Brent
Barrels of oil per day
80,000
50,000
Average monthly floor price
$
70
$
75
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726096092/en/
For Hess Corporation
Investors: Jay Wilson (212) 536-8940
Media: Lorrie Hecker (212) 536-8250
Jamie Tully Sard Verbinnen & Co (917) 679-7908
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