Key Development:
- On October 23rd the Corporation entered into an agreement to
merge with Chevron. The transaction is expected to close in the
first half of 2024
Third Quarter Financial and Operational Highlights:
- Net income was $504 million, or $1.64 per share, compared
with net income of $515 million, or $1.67 per share, in the third
quarter of 2022; adjusted net income1 in the third quarter of 2022
was $583 million, or $1.89 per share
- Oil and gas net production was 395,000 barrels of oil
equivalent per day (boepd), up 13% from 351,000
boepd, proforma for asset sold, in the third quarter of
2022
- Bakken net production was 190,000 boepd, up 14% from 166,000
boepd in the third quarter of 2022; Guyana net production was
108,000 barrels of oil per day (bopd), compared with 98,000 bopd in
the prior-year quarter
- E&P capital and exploratory expenditures were $998
million, compared with $701 million in the prior-year
quarter
Updated 2023 Full Year Guidance:
- Net production is now forecast to be approximately 390,000
boepd, which is at the upper end of the previous guidance range of
385,000 boepd to 390,000 boepd
- E&P capital and exploratory expenditures are expected to
be approximately $4.1 billion, up from previous guidance of $3.7
billion, reflecting the decision to purchase the Liza Unity
floating production, storage and offloading vessel (FPSO) in the
fourth quarter of 2023 instead of the first quarter of
2024
Hess Corporation (NYSE: HES) today reported
net income of $504 million, or $1.64 per share, in the third
quarter of 2023, compared with net income of $515 million, or $1.67
per share, in the third quarter of 2022. On an adjusted basis, the
Corporation reported net income of $583 million, or $1.89 per
share, in the third quarter of 2022. 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 third quarter of 2023.
1.
“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 7,
respectively.
After-tax income (loss) by major operating
activity was as follows:
Three Months Ended
September 30,
(unaudited)
Nine Months Ended
September 30,
(unaudited)
2023
2022
2023
2022
(In millions, except per share
amounts)
Net Income
Attributable to Hess Corporation
Exploration and Production
$
529
$
572
$
1,089
$
1,755
Midstream
66
68
189
205
Corporate, Interest and Other
(91)
(125)
(309)
(361)
Net income attributable to Hess
Corporation
$
504
$
515
$
969
$
1,599
Net income per share (diluted)
$
1.64
$
1.67
$
3.15
$
5.16
Adjusted Net Income
Attributable to Hess Corporation
Exploration and Production
$
529
$
626
$
1,171
$
1,809
Midstream
66
68
189
205
Corporate, Interest and Other
(91)
(111)
(309)
(360)
Adjusted net income attributable to Hess
Corporation
$
504
$
583
$
1,051
$
1,654
Adjusted net income per share
(diluted)
$
1.64
$
1.89
$
3.42
$
5.33
Weighted average number of shares
(diluted)
307.7
308.9
307.5
310.1
Exploration and Production:
E&P net income was $529 million in the
third quarter of 2023, compared with $572 million in the third
quarter of 2022. On an adjusted basis, E&P third quarter 2022
net income was $626 million. The Corporation’s average realized
crude oil selling price, including the effect of hedging, was
$81.53 per barrel in the third quarter of 2023, compared with
$85.32 per barrel in the prior-year quarter. The average realized
natural gas liquids (NGL) selling price in the third quarter of
2023 was $20.17 per barrel, compared with $35.44 per barrel in the
prior-year quarter, while the average realized natural gas selling
price was $4.57 per mcf, compared with $5.85 per mcf in the third
quarter of 2022.
Net production was 395,000 boepd in the third
quarter of 2023, compared with 351,000 boepd, proforma for asset
sold, in the third quarter of 2022, primarily due to higher
production in the Bakken, Guyana, and Southeast Asia.
Cash operating costs, which include operating
costs and expenses, production and severance taxes, and E&P
general and administrative expenses, were $14.04 per barrel of oil
equivalent (boe) in the third quarter of 2023, compared with $13.64
per boe, proforma for asset sold, in the prior-year quarter.
Operational Highlights for the Third Quarter of 2023:
Bakken (Onshore U.S.): Net production
from the Bakken was 190,000 boepd in the third quarter of 2023,
compared with 166,000 boepd in the prior-year quarter, reflecting
increased drilling and completion activity and higher NGL and
natural gas volumes received under percentage of proceeds contracts
due to lower commodity prices. NGL and natural gas volumes received
under percentage of proceeds contracts were 19,000 boepd in the
third quarter of 2023, compared with 11,000 boepd in the third
quarter of 2022, due to lower realized NGL and natural gas prices
increasing volumes received as consideration for gas processing
fees. During the third quarter of 2023, the Corporation drilled 28
wells, completed 41 wells, and brought 26 new wells online.
Gulf of Mexico (Offshore U.S.): Net
production from the Gulf of Mexico in the third quarter of 2023 was
28,000 boepd, compared with 30,000 boepd in the prior-year
quarter.
Guyana (Offshore): At the Stabroek
Block (Hess – 30%), net production from the Liza Destiny and the
Liza Unity FPSOs totaled 108,0002 bopd in the third quarter of
2023, compared with 98,0002 bopd in the prior-year quarter. In the
third quarter of 2023, we sold nine cargos of crude oil from
Guyana, compared with eight cargos in the prior-year quarter.
During the third quarter of 2023, a mechanical
issue on the Liza Destiny reduced production during the quarter.
Repairs were completed by the operator in October that resolved the
issue, and production is currently in the range of 150,000 gross
bopd to 160,000 gross bopd.
The third development, Payara, with a
production capacity of approximately 220,000 gross bopd, will
startup 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 operator submitted the field
development plan for the sixth development, Whiptail, to the
Government of Guyana in October.
The successful Lancetfish-2 appraisal well
encountered approximately 125 feet of net oil pay in appraisal
reservoirs and approximately 65 feet of net oil pay in a new
discovery interval. The well was drilled in 5,649 feet of water and
is located approximately 4 miles southeast of the Lancetfish-1
discovery well.
Southeast Asia (Offshore): Net
production at North Malay Basin and JDA was 69,000 boepd in the
third quarter of 2023, compared with 57,000 boepd in the prior-year
quarter, primarily due to planned maintenance at both North Malay
Basin and JDA during the third quarter of 2022.
Midstream:
The Midstream segment had net income of $66
million in the third quarter of 2023, compared with net income of
$68 million in the prior-year quarter.
In September 2023, Hess Midstream Operations
LP (HESM Opco), a consolidated subsidiary of Hess Midstream LP
(HESM), repurchased approximately 3.3 million HESM Opco Class B
units held by Hess Corporation and Global Infrastructure Partners
for $100 million, of which the Corporation received $50 million.
The repurchase of the Class B units was financed by HESM Opco’s
revolving credit facility. After giving effect to the transaction,
the Corporation owns approximately 38% of HESM on a consolidated
basis.
Corporate, Interest and Other:
After-tax expense for Corporate, Interest and
Other was $91 million in the third quarter of 2023, compared with
$125 million in the third quarter of 2022. On an adjusted basis,
after-tax expense for Corporate, Interest and Other was $111
million in the third quarter of 2022. Adjusted corporate and other
expenses decreased by $6 million in the third quarter of 2023,
primarily due to higher interest income. Interest expense decreased
by $14 million in the third quarter of 2023, reflecting higher
capitalized interest.
Capital and Exploratory Expenditures:
E&P capital and exploratory expenditures
were $998 million in the third quarter of 2023, compared with $701
million in the prior-year quarter, primarily due to development
activities in Guyana and higher drilling activity in the Bakken.
Full year 2023 E&P capital and exploratory expenditures are
expected to be approximately $4.1 billion, up from previous
guidance of $3.7 billion, reflecting the decision to purchase the
Liza Unity FPSO in the fourth quarter of 2023 instead of the first
quarter of 2024.
Midstream capital expenditures were $65
million in the third quarter of 2023 and $60 million in the
prior-year quarter.
Liquidity:
Excluding the Midstream segment, Hess
Corporation had cash and cash equivalents of $2.0 billion and debt
and finance lease obligations totaling $5.6 billion at September
30, 2023. The Midstream segment had cash and cash equivalents of $4
million and total debt of $3.1 billion at September 30, 2023. The
Corporation’s debt to capitalization ratio as defined in its debt
covenants was 34.3% at September 30, 2023 and 36.1% at December 31,
2022.
Net cash provided by operating activities was
$986 million in the third quarter of 2023, compared with $1,339
million in the third quarter of 2022. Net cash provided by
operating activities before changes in operating assets and
liabilities3 was $1,249 million in the third quarter of 2023,
compared with $1,405 million in the prior-year quarter. During the
third quarter of 2023 and the third quarter of 2022, changes in
operating assets and liabilities decreased cash flow from operating
activities by $263 million and $66 million, respectively.
2.
Net production from Guyana
included 14,000 bopd of tax barrels in the third quarter of 2023
and 7,000 bopd of tax barrels in the third quarter of 2022.
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 6 and 7, 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
September 30,
(unaudited)
Nine Months Ended
September 30,
(unaudited)
2023
2022
2023
2022
(In millions)
Exploration and Production
$
—
$
(54)
$
(82)
$
(54)
Midstream
—
—
—
—
Corporate, Interest and Other
—
(14)
—
(1)
Total items affecting comparability of
earnings between periods
$
—
$
(68)
$
(82)
$
(55)
Third Quarter 2022: E&P results included
impairment charges of $28 million ($28 million after income taxes)
that resulted from updates to the Corporation’s estimated
abandonment liabilities for non-producing properties in the Gulf of
Mexico and $26 million ($26 million after income taxes) related to
the Penn State Field in the Gulf of Mexico. Results for Corporate,
Interest and Other included a charge of $14 million ($14 million
after income taxes) for legal costs related to a former downstream
business.
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
September 30,
(unaudited)
Nine Months Ended
September 30,
(unaudited)
2023
2022
2023
2022
(In millions)
Net income attributable to Hess
Corporation
$
504
$
515
$
969
$
1,599
Less: Total items affecting comparability
of earnings between periods
—
(68)
(82)
(55)
Adjusted net income attributable to Hess
Corporation
$
504
$
583
$
1,051
$
1,654
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
September 30,
(unaudited)
Nine Months Ended
September 30,
(unaudited)
2023
2022
2023
2022
(In millions)
Net cash provided by (used in) operating
activities before changes in operating assets and liabilities
$
1,249
$
1,405
$
3,255
$
3,820
Changes in operating assets and
liabilities
(263)
(66)
(657)
(1,128)
Net cash provided by (used in) operating
activities
$
986
$
1,339
$
2,598
$
2,692
Investor Conference Call:
Due to the pending merger with Chevron, the Company will not
host a conference call to review its third quarter 2023
results.
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; future economic and market conditions in the oil and
gas industry; and expected timing and completion of our proposed
merger with Chevron.
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; risks and uncertainties associated with
our proposed merger with Chevron; 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)
Third
Quarter
2023
Third
Quarter
2022
Second
Quarter
2023
Income
Statement
Revenues and non-operating
income
Sales and other operating revenues
$
2,800
$
3,122
$
2,289
Gains on asset sales, net
2
—
—
Other, net
35
35
31
Total revenues and non-operating
income
2,837
3,157
2,320
Costs and expenses
Marketing, including purchased oil and
gas
696
982
547
Operating costs and expenses
467
398
454
Production and severance taxes
61
72
46
Exploration expenses, including dry holes
and lease impairment
65
58
99
General and administrative expenses
115
109
108
Interest expense
117
125
122
Depreciation, depletion and
amortization
499
471
497
Impairment and other
—
54
82
Total costs and expenses
2,020
2,269
1,955
Income before income taxes
817
888
365
Provision for income taxes
215
282
160
Net income
602
606
205
Less: Net income attributable to
noncontrolling interests
98
91
86
Net income attributable to Hess
Corporation
$
504
$
515
$
119
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Nine Months Ended
September 30,
Income
Statement
2023
2022
Revenues and non-operating
income
Sales and other operating revenues
$
7,500
$
8,390
Gains on asset sales, net
2
25
Other, net
108
101
Total revenues and non-operating
income
7,610
8,516
Costs and expenses
Marketing, including purchased oil and
gas
1,846
2,507
Operating costs and expenses
1,303
1,067
Production and severance taxes
155
200
Exploration expenses, including dry holes
and lease impairment
230
134
General and administrative expenses
359
314
Interest expense
362
369
Depreciation, depletion and
amortization
1,487
1,199
Impairment and other
82
54
Total costs and expenses
5,824
5,844
Income before income taxes
1,786
2,672
Provision for income taxes
551
807
Net income
1,235
1,865
Less: Net income attributable to
noncontrolling interests
266
266
Net income attributable to Hess
Corporation
$
969
$
1,599
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
September 30,
2023
December 31,
2022
Balance Sheet
Information
Assets
Cash and cash equivalents
$
2,018
$
2,486
Other current assets
1,898
1,445
Property, plant and equipment – net
16,421
15,098
Operating lease right-of-use assets –
net
481
570
Finance lease right-of-use assets –
net
113
126
Other long-term assets
2,270
1,970
Total assets
$
23,201
$
21,695
Liabilities and equity
Current portion of long-term debt
$
307
$
3
Current portion of operating and finance
lease obligations
200
221
Other current liabilities
2,489
2,172
Long-term debt
8,241
8,278
Long-term operating lease obligations
392
469
Long-term finance lease obligations
163
179
Other long-term liabilities
2,110
1,877
Total equity excluding accumulated other
comprehensive income (loss)
8,823
7,986
Accumulated other comprehensive income
(loss)
(192)
(131)
Noncontrolling interests
668
641
Total liabilities and equity
$
23,201
$
21,695
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
September 30,
2023
December 31,
2022
Total
Debt
Hess Corporation
$
5,400
$
5,395
Midstream (a)
3,148
2,886
Hess Consolidated
$
8,548
$
8,281
(a) Midstream debt is non-recourse to Hess
Corporation.
September 30,
2023
December 31,
2022
Debt to
Capitalization Ratio (a)
Hess Consolidated
48.4 %
50.0 %
Hess Corporation as defined in debt
covenants
34.3 %
36.1 %
(a) Includes finance lease
obligations.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Interest
Expense
Gross interest expense – Hess
Corporation
$
85
$
88
$
259
$
266
Less: Capitalized interest – Hess
Corporation
(14)
(3)
(29)
(6)
Interest expense – Hess Corporation
71
85
230
260
Interest expense – Midstream (a)
46
40
132
109
Interest expense – Hess
Consolidated
$
117
$
125
$
362
$
369
(a) Midstream interest expense is reported
in the Midstream operating segment.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Third
Quarter
2023
Third
Quarter
2022
Second
Quarter
2023
Cash Flow
Information
Cash Flows from Operating
Activities
Net income
$
602
$
606
$
205
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
(Gains) losses on asset sales, net
(2)
—
—
Depreciation, depletion and
amortization
499
471
497
Impairment and other
—
54
82
Exploratory dry hole costs
4
19
62
Exploration lease impairment
11
4
8
Stock compensation expense
16
17
18
Noncash (gains) losses on commodity
derivatives, net
52
165
52
Provision (benefit) for deferred income
taxes and other tax accruals
67
69
50
Net cash provided by (used in) operating
activities before changes in operating assets and liabilities
1,249
1,405
974
Changes in operating assets and
liabilities
(263)
(66)
—
Net cash provided by (used in) operating
activities
986
1,339
974
Cash Flows from Investing
Activities
Additions to property, plant and equipment
- E&P
(953)
(657)
(778)
Additions to property, plant and equipment
- Midstream
(53)
(66)
(43)
Proceeds from asset sales, net of cash
sold
3
—
—
Other, net
(1)
(4)
—
Net cash provided by (used in) investing
activities
(1,004)
(727)
(821)
Cash Flows from Financing
Activities
Net borrowings (repayments) of debt with
maturities of 90 days or less
78
(48)
77
Debt with maturities of greater than 90
days:
Borrowings
—
20
—
Repayments
—
—
—
Cash dividends paid
(134)
(115)
(134)
Common stock acquired and retired
—
(150)
—
Proceeds from sale of Class A shares of
Hess Midstream LP
—
—
167
Noncontrolling interests, net
(136)
(79)
(132)
Employee stock options exercised
6
4
1
Payments on finance lease obligations
(3)
(1)
(2)
Other, net
(1)
(18)
(4)
Net cash provided by (used in) financing
activities
(190)
(387)
(27)
Net Increase (Decrease) in Cash and
Cash Equivalents
(208)
225
126
Cash and Cash Equivalents at Beginning
of Period
2,226
2,159
2,100
Cash and Cash Equivalents at End of
Period
$
2,018
$
2,384
$
2,226
Additions to Property, Plant and Equipment included
within Investing Activities
Capital expenditures incurred
$
(1,013)
$
(726)
$
(956)
Increase (decrease) in related
liabilities
7
3
135
Additions to property, plant and
equipment
$
(1,006)
$
(723)
$
(821)
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Nine Months Ended
September 30,
2023
2022
Cash Flow
Information
Cash Flows from Operating
Activities
Net income
$
1,235
$
1,865
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
(Gains) losses on asset sales, net
(2)
(25)
Depreciation, depletion and
amortization
1,487
1,199
Impairment and other
82
54
Exploratory dry hole costs
97
19
Exploration lease impairment
24
14
Pension settlement loss
—
2
Stock compensation expense
69
66
Noncash (gains) losses on commodity
derivatives, net
104
383
Provision (benefit) for deferred income
taxes and other tax accruals
159
243
Net cash provided by (used in) operating
activities before changes in operating assets and liabilities
3,255
3,820
Changes in operating assets and
liabilities
(657)
(1,128)
Net cash provided by (used in) operating
activities
2,598
2,692
Cash Flows from Investing
Activities
Additions to property, plant and equipment
- E&P
(2,504)
(1,755)
Additions to property, plant and equipment
- Midstream
(160)
(177)
Proceeds from asset sales, net of cash
sold
3
28
Other, net
(5)
(4)
Net cash provided by (used in) investing
activities
(2,666)
(1,908)
Cash Flows from Financing
Activities
Net borrowings (repayments) of debt with
maturities of 90 days or less
258
(61)
Debt with maturities of greater than 90
days:
Borrowings
—
420
Repayments
—
(510)
Cash dividends paid
(405)
(350)
Common stock acquired and retired
(20)
(340)
Proceeds from sale of Class A shares of
Hess Midstream LP
167
146
Noncontrolling interests, net
(399)
(430)
Employee stock options exercised
10
44
Payments on finance lease obligations
(7)
(5)
Other, net
(4)
(27)
Net cash provided by (used in) financing
activities
(400)
(1,113)
Net Increase (Decrease) in Cash and
Cash Equivalents
(468)
(329)
Cash and Cash Equivalents at Beginning
of Period
2,486
2,713
Cash and Cash Equivalents at End of
Period
$
2,018
$
2,384
Additions to
Property, Plant and Equipment included within Investing
Activities
Capital expenditures incurred
$
(2,761)
$
(1,971)
Increase (decrease) in related
liabilities
97
39
Additions to property, plant and
equipment
$
(2,664)
$
(1,932)
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Third
Quarter
2023
Third
Quarter
2022
Second
Quarter
2023
Capital and
Exploratory Expenditures
E&P Capital and exploratory
expenditures
United States
North Dakota
$
329
$
226
$
264
Offshore and Other
115
57
82
Total United States
444
283
346
Guyana
509
301
508
Malaysia and JDA
43
92
44
Other (a)
2
25
35
E&P Capital and exploratory
expenditures
$
998
$
701
$
933
Total exploration expenses charged to
income included above
$
50
$
35
$
29
Midstream Capital expenditures
$
65
$
60
$
52
(a) Other includes capital and
exploratory expenditures associated with Suriname in the third
quarter of 2022 and Canada in the second quarter of 2023.
Nine Months Ended
September 30,
2023
2022
Capital and
Exploratory Expenditures
E&P Capital and exploratory
expenditures
United States
North Dakota
$
825
$
549
Offshore and Other
226
185
Total United States
1,051
734
Guyana
1,471
906
Malaysia and JDA
134
217
Other (a)
40
46
E&P Capital and exploratory
expenditures
$
2,696
$
1,903
Total exploration expenses charged to
income included above
$
109
$
101
Midstream Capital expenditures
$
174
$
169
(a) Other includes capital and
exploratory expenditures associated with Canada in the first nine
months of 2023 and Suriname in the first nine months of 2022.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
EARNINGS (UNAUDITED)
(IN MILLIONS)
Third Quarter 2023
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
1,651
$
1,147
$
2,798
Other, net
4
8
12
Total revenues and non-operating
income
1,655
1,155
2,810
Costs and expenses
Marketing, including purchased oil and gas
(a)
693
26
719
Operating costs and expenses
226
158
384
Production and severance taxes
59
2
61
Midstream tariffs
332
—
332
Exploration expenses, including dry holes
and lease impairment
45
20
65
General and administrative expenses
56
10
66
Depreciation, depletion and
amortization
234
217
451
Total costs and expenses
1,645
433
2,078
Results of operations before income
taxes
10
722
732
Provision for income taxes
—
203
203
Net income (loss) attributable to Hess
Corporation
$
10
(b)
$
519
(c)
$
529
Third Quarter 2022
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
2,022
$
1,100
$
3,122
Other, net
16
6
22
Total revenues and non-operating
income
2,038
1,106
3,144
Costs and expenses
Marketing, including purchased oil and gas
(a)
972
27
999
Operating costs and expenses
194
128
322
Production and severance taxes
67
5
72
Midstream tariffs
313
—
313
Exploration expenses, including dry holes
and lease impairment
33
25
58
General and administrative expenses
45
9
54
Depreciation, depletion and
amortization
208
217
425
Impairment and other
54
—
54
Total costs and expenses
1,886
411
2,297
Results of operations before income
taxes
152
695
847
Provision for income taxes
—
275
275
Net income (loss) attributable to Hess
Corporation
$
152
(d)
$
420
(e)
$
572
(a) Includes amounts charged from the
Midstream segment.
(b) Includes after-tax losses from
realized crude oil hedging activities of $33 million (noncash
premium amortization: $33 million; cash settlement: $0
million).
(c) Includes after-tax losses from
realized crude oil hedging activities of $19 million (noncash
premium amortization: $19 million; cash settlement: $0
million).
(d) Includes after-tax losses from
realized crude oil hedging activities of $100 million (noncash
premium amortization: $100 million; cash settlement: $0
million).
(e) Includes after-tax losses from
realized crude oil hedging activities of $65 million (noncash
premium amortization: $65 million; cash settlement: $0
million).
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
(a) Includes amounts charged from
the Midstream segment.
(b) Includes after-tax losses
from realized crude oil hedging activities of $34 million (noncash
premium amortization: $34 million; cash settlement: $0
million).
(c) Includes after-tax losses
from realized crude oil hedging activities of $18 million (noncash
premium amortization: $18 million; cash settlement: $0
million).
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
EARNINGS (UNAUDITED)
(IN MILLIONS)
Nine Months Ended September 30,
2023
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
4,315
$
3,179
$
7,494
Other, net
19
15
34
Total revenues and non-operating
income
4,334
3,194
7,528
Costs and expenses
Marketing, including purchased oil and gas
(a)
1,814
88
1,902
Operating costs and expenses
672
419
1,091
Production and severance taxes
150
5
155
Midstream tariffs
917
—
917
Exploration expenses, including dry holes
and lease impairment
88
142
230
General and administrative expenses
160
33
193
Depreciation, depletion and
amortization
649
695
1,344
Impairment and other
82
—
82
Total costs and expenses
4,532
1,382
5,914
Results of operations before income
taxes
(198)
1,812
1,614
Provision for income taxes
—
525
525
Net income (loss) attributable to Hess
Corporation
$
(198)
(b)
$
1,287
(c)
$
1,089
Nine Months Ended September 30,
2022
Income
Statement
United States
International
Total
Total revenues and non-operating
income
Sales and other operating revenues
$
5,586
$
2,804
$
8,390
Other, net
68
13
81
Total revenues and non-operating
income
5,654
2,817
8,471
Costs and expenses
Marketing, including purchased oil and gas
(a)
2,500
60
2,560
Operating costs and expenses
513
351
864
Production and severance taxes
190
10
200
Midstream tariffs
896
—
896
Exploration expenses, including dry holes
and lease impairment
89
45
134
General and administrative expenses
134
24
158
Depreciation, depletion and
amortization
595
467
1,062
Impairment and other
54
—
54
Total costs and expenses
4,971
957
5,928
Results of operations before income
taxes
683
1,860
2,543
Provision for income taxes
—
788
788
Net income (loss) attributable to Hess
Corporation
$
683
(d)
$
1,072
(e)
$
1,755
(a) Includes amounts charged from the
Midstream segment.
(b) Includes after-tax losses from
realized crude oil hedging activities of $94 million (noncash
premium amortization: $94 million; cash settlement: $0
million).
(c) Includes after-tax losses from
realized crude oil hedging activities of $44 million (noncash
premium amortization: $44 million; cash settlement: $0
million).
(d) Includes after-tax losses from
realized crude oil hedging activities of $256 million (noncash
premium amortization: $233 million; cash settlement: $23
million).
(e) Includes after-tax losses from
realized crude oil hedging activities of $164 million (noncash
premium amortization: $150 million; cash settlement: $14
million).
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
OPERATING DATA
Third
Quarter
2023
Third
Quarter
2022
Second
Quarter
2023
Net Production
Per Day (in thousands)
Crude oil - barrels
United States
North Dakota
87
79
79
Offshore
21
21
23
Total United States
108
100
102
Guyana (a)
108
98
110
Malaysia and JDA
5
4
4
Other (b)
—
15
—
Total
221
217
216
Natural gas liquids - barrels
United States
North Dakota
70
58
68
Offshore
1
2
1
Total United States
71
60
69
Natural gas - mcf
United States
North Dakota
195
176
206
Offshore
37
41
45
Total United States
232
217
251
Malaysia and JDA
383
320
359
Other (b)
—
10
—
Total
615
547
610
Barrels of oil equivalent
395
368
387
(a) Production from Guyana
includes 14,000 bopd of tax barrels in the third quarter of 2023,
7,000 bopd of tax barrels in the third quarter of 2022 and 13,000
bopd of tax barrels in the second quarter of 2023.
(b) Other includes production
from Libya. The Corporation sold its interest in the Waha
Concession in Libya in November 2022. Libya net production was
17,000 boepd in the third quarter of 2022.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
OPERATING DATA
Nine Months Ended
September 30,
2023
2022
Net Production
Per Day (in thousands)
Crude oil - barrels
United States
North Dakota
81
75
Offshore
22
20
Total United States
103
95
Guyana (a)
110
65
Malaysia and JDA
4
4
Other (b)
—
17
Total
217
181
Natural gas liquids - barrels
United States
North Dakota
66
51
Offshore
2
2
Total United States
68
53
Natural gas - mcf
United States
North Dakota
187
160
Offshore
43
42
Total United States
230
202
Malaysia and JDA
370
355
Other (b)
—
11
Total
600
568
Barrels of oil equivalent
385
329
(a) Production from Guyana
includes 14,000 bopd of tax barrels in the first nine months of
2023 and 2,000 bopd in the first nine months of 2022.
(b) 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 first nine months of 2022.
HESS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION
OPERATING DATA
Third
Quarter
2023
Third
Quarter
2022
Second
Quarter
2023
Sales Volumes Per
Day (in thousands) (a)
Crude oil – barrels
223
208
217
Natural gas liquids – barrels
71
58
67
Natural gas – mcf
615
547
610
Barrels of oil equivalent
397
357
386
Sales Volumes (in
thousands) (a)
Crude oil – barrels
20,519
19,118
19,740
Natural gas liquids – barrels
6,500
5,299
6,084
Natural gas – mcf
56,553
50,343
55,548
Barrels of oil equivalent
36,445
32,807
35,082
Nine Months Ended
September 30,
2023
2022
Sales Volumes Per
Day (in thousands) (a)
Crude oil – barrels
218
174
Natural gas liquids – barrels
67
51
Natural gas – mcf
600
568
Barrels of oil equivalent
385
320
Sales Volumes (in
thousands) (a)
Crude oil – barrels
59,420
47,461
Natural gas liquids – barrels
18,345
14,018
Natural gas – mcf
163,793
155,052
Barrels of oil equivalent
105,064
87,321
(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
Third
Quarter
2023
Third
Quarter
2022
Second
Quarter
2023
Average Selling
Prices
Crude oil - per barrel (including
hedging)
United States
North Dakota
$
76.06
$
79.04
$
65.67
Offshore
78.50
78.80
68.32
Total United States
76.56
79.00
66.24
Guyana
86.24
92.02
75.82
Malaysia and JDA
87.21
85.23
68.87
Other (a)
—
87.90
—
Worldwide
81.53
85.32
71.13
Crude oil - per barrel (excluding
hedging)
United States
North Dakota
$
79.43
$
89.80
$
69.22
Offshore
81.86
89.47
71.86
Total United States
79.92
89.74
69.79
Guyana
88.06
98.91
77.64
Malaysia and JDA
87.21
85.23
68.87
Other (a)
—
94.96
—
Worldwide
84.07
93.95
73.74
Natural gas liquids - per
barrel
United States
North Dakota
$
20.17
$
35.41
$
17.90
Offshore
20.15
36.30
20.17
Worldwide
20.17
35.44
17.95
Natural gas - per mcf
United States
North Dakota
$
1.56
$
6.67
$
1.29
Offshore
2.35
8.12
1.62
Total United States
1.69
6.94
1.35
Malaysia and JDA
6.32
5.07
5.56
Other (a)
—
7.03
—
Worldwide
4.57
5.85
3.82
(a) 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
Nine Months Ended
September 30,
2023
2022
Average Selling
Prices
Crude oil - per barrel (including
hedging)
United States
North Dakota
$
70.35
$
85.39
Offshore
71.55
86.13
Total United States
70.62
85.56
Guyana
80.41
96.24
Malaysia and JDA
76.84
93.16
Other (a)
—
95.49
Worldwide
75.72
90.30
Crude oil - per barrel (excluding
hedging)
United States
North Dakota
$
73.72
$
95.33
Offshore
74.89
95.96
Total United States
73.98
95.47
Guyana
81.86
103.94
Malaysia and JDA
76.84
93.16
Other (a)
—
104.67
Worldwide
78.04
99.14
Natural gas liquids - per
barrel
United States
North Dakota
$
20.70
$
38.51
Offshore
21.52
37.86
Worldwide
20.72
38.48
Natural gas - per mcf
United States
North Dakota
$
1.73
$
5.97
Offshore
2.12
6.71
Total United States
1.81
6.13
Malaysia and JDA
5.78
5.72
Other (a)
—
5.65
Worldwide
4.26
5.86
(a) 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/20231025363556/en/
For Hess Corporation
Investor Contact: Jay Wilson (212) 536-8940
Media Contacts: Lorrie Hecker (212) 536-8250
Jamie Tully Sard Verbinnen & Co (917) 679-7908
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