SECURITIES AND EXCHANGE COMMISSION
HESS CORPORATION
HESS REPORTS ESTIMATED RESULTS FOR THE THIRD QUARTER OF 2015
Third Quarter Highlights:
NEW YORK, October 28, 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.