Financial News

Hess Reports Estimated Results for the Third Quarter of 2022

Key Developments:

  • Announced Yarrow-1 and Sailfin-1 as the 8th and 9th discoveries this year on the Stabroek Block, offshore Guyana; adds to the previous gross discovered recoverable resource estimate for the Block of approximately 11 billion barrels of oil equivalent (boe)
  • Total cash returned to stockholders in the quarter through share repurchases and dividends amounted to $265 million; approximately 1.4 million shares of common stock were repurchased for $150 million in the quarter

Third Quarter Financial and Operational Highlights:

  • Net income was $515 million, or $1.67 per common share, compared with net income of $115 million, or $0.37 per common share, in the third quarter of 2021
  • Adjusted net income1 was $583 million or $1.89 per common share, compared with net income of $86 million, or $0.28 per common share in the prior-year quarter
  • Oil and gas net production, excluding Libya, was 351,000 barrels of oil equivalent per day (boepd), up 32 percent from 265,000 boepd in the third quarter of 2021
  • Bakken net production was 166,000 boepd, up 12 percent from 148,000 boepd in the third quarter of 2021; Guyana net production was 98,000 barrels of oil per day (bopd), compared with 32,000 bopd in the prior-year quarter
  • E&P capital and exploratory expenditures were $701 million compared with $498 million in the prior-year quarter
  • Cash and cash equivalents, excluding Midstream, were $2.38 billion at September 30, 2022

2022 Updated Guidance:

  • Net production, excluding Libya, is forecast to be approximately 370,000 boepd in the fourth quarter and approximately 325,000 boepd for the full year
  • Full year E&P capital and exploratory expenditures are expected to be approximately $2.7 billion, unchanged from previous guidance

   Hess Corporation (NYSE: HES) today reported net income of $515 million, or $1.67 per common share, in the third quarter of 2022, compared with net income of $115 million, or $0.37 per common share, in the third quarter of 2021. On an adjusted basis, the Corporation had net income of $583 million or $1.89 per common share, compared with $86 million, or $0.28 per common share, in the third quarter of 2021. The improvement in adjusted after-tax earnings compared with the prior-year period was primarily due to higher realized selling prices and sales volumes in the third quarter of 2022.

   “We continue to successfully execute our strategy and deliver strong operational and ESG performance,” CEO John Hess said. “We offer a unique value proposition – to grow both our intrinsic value and our cash returns by increasing our resource base, delivering a lower cost of supply and generating industry leading cash flow growth. As our portfolio becomes increasingly free cash flow positive, we will continue to prioritize the return of capital to our shareholders through further dividend increases and share repurchases.”

1.

“Adjusted net income” is a non-GAAP financial measure. The definition of this non-GAAP measure and a reconciliation to its nearest GAAP equivalent measure appears on pages 6 and 7 .

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

 

Three Months Ended

September 30,

(unaudited)

 

Nine Months Ended

September 30,

(unaudited)

 

2022

 

2021

 

2022

 

2021

 

 

(In millions, except per share amounts)

Net Income Attributable to Hess Corporation

 

 

 

 

 

 

Exploration and Production

$

572

 

$

178

 

$

1,755

 

$

461

Midstream

 

68

 

 

61

 

 

205

 

 

212

Corporate, Interest and Other

 

(125)

 

 

(124)

 

 

(361)

 

 

(379)

Net income attributable to Hess Corporation

$

515

 

$

115

 

$

1,599

 

$

294

Net income per common share (diluted)

$

1.67

 

$

0.37

 

$

$ 5.16

 

$

0.95

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income Attributable to Hess Corporation

 

 

 

 

 

 

Exploration and Production

$

626

 

$

149

 

$

1,809

 

$

579

Midstream

 

68

 

 

61

 

 

205

 

 

212

Corporate, Interest and Other

 

(111)

 

 

(124)

 

 

(360)

 

 

(379)

Adjusted net income attributable to Hess Corporation

$

583

 

$

86

 

$

1,654

 

$

412

Adjusted net income per common share (diluted)

$

1.89

 

$

0.28

 

$

5.33

 

$

1.33

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares (diluted)

 

308.9

 

 

309.9

 

 

310.1

 

 

309.1

Exploration and Production:

   E&P net income was $572 million in the third quarter of 2022, compared with $178 million in the third quarter of 2021. On an adjusted basis, third quarter 2022 E&P net income was $626 million, compared with $149 million in the prior-year quarter. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $85.32 per barrel in the third quarter of 2022, compared with $63.17 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the third quarter of 2022 was $35.44 per barrel, compared with $32.88 per barrel in the prior-year quarter, while the average realized natural gas selling price was $5.85 per mcf, compared with $4.71 per mcf in the third quarter of 2021.

   Net production, excluding Libya, was 351,000 boepd in the third quarter of 2022, compared with 265,000 boepd in the third quarter of 2021, 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 $13.19 per boe (excluding Libya: $13.64 per boe) in the third quarter of 2022, compared with $12.76 per boe (excluding Libya: $13.45 per boe) in the prior-year quarter. The increase in cash operating costs in the third quarter of this year, compared with the third quarter of last year, reflects higher production and severance taxes in North Dakota due to higher realized selling prices, and increased workover activity in the Gulf of Mexico.

Operational Highlights for the Third Quarter of 2022:

   Bakken (Onshore U.S.): Net production from the Bakken was 166,000 boepd compared with 148,000 boepd in the prior-year quarter, primarily due to increased drilling and completion activity and a curtailment of production in the third quarter of 2021 resulting from a planned maintenance turnaround at the Tioga Gas Plant. The Corporation added a third drilling rig in September 2021 and a fourth drilling rig in July 2022. During the third quarter of 2022, the Corporation drilled 20 wells, completed 20 wells, and brought 22 new wells online. Bakken net production is forecast to be in the range of 165,000 boepd to 170,000 boepd in the fourth quarter and approximately 155,000 boepd for the full year 2022.

   Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 30,000 boepd, compared with 32,000 boepd in the prior-year quarter.

   Guyana (Offshore): At the Stabroek Block (Hess – 30%), net production from the Liza Destiny and the Liza Unity floating production, storage and offloading vessels (FPSOs) totaled 98,000 bopd in the third quarter of 2022 compared with 32,000 bopd in the prior-year quarter. Net production from Guyana in the third quarter of 2022 included 7,000 bopd of tax barrels. There were no tax barrels in the third quarter of 2021. The Liza Unity FPSO, which commenced production in February 2022, reached its production capacity of 220,000 gross bopd in July 2022. In the third quarter, we sold eight cargos of crude oil from Guyana compared with three cargos in the prior year quarter. In the fourth quarter of 2022, we expect to sell nine cargos of crude oil. Guyana net production is forecast to be approximately 110,000 bopd in the fourth quarter, which includes approximately 20,000 bopd of tax barrels. For the full year 2022, Guyana net production is forecast to be approximately 77,000 bopd, which includes approximately 7,000 bopd of tax barrels.

   The third development, Payara, will utilize the Prosperity FPSO with an expected capacity of 220,000 gross bopd, with first production expected at the end of 2023. The fourth development, Yellowtail, was sanctioned in April 2022 and will utilize the ONE GUYANA FPSO with an expected capacity of 250,000 gross bopd, with first production expected in 2025.

   The eighth and ninth discoveries of this year were announced at Yarrow-1 and Sailfin-1, which adds to the previously announced gross discovered recoverable resource estimate for the Stabroek Block of approximately 11 billion boe. The Yarrow-1 well encountered approximately 75 feet of high quality oil bearing sandstone reservoirs. The well was drilled in 3,560 feet of water and is located approximately 9 miles southeast of the Barreleye-1 discovery. The Sailfin-1 well encountered approximately 312 feet of high quality hydrocarbon bearing sandstone reservoirs. The well was drilled in 4,616 feet of water and is located approximately 15 miles southeast of the Turbot-1 discovery.

   The Banjo-1 exploration well was drilled during the quarter and did not encounter commercial quantities of hydrocarbons.

   Southeast Asia (Offshore): Net production at North Malay Basin and JDA was 57,000 boepd in the third quarter of 2022 compared with 50,000 boepd in the prior-year quarter, primarily due to higher buyer nominations.

Midstream:

   The Midstream segment had net income of $68 million in the third quarter of 2022, compared with net income of $61 million in the prior-year quarter.

Corporate, Interest and Other:

   After-tax expense for Corporate, Interest and Other was $125 million in the third quarter of 2022, compared with $124 million in the third quarter of 2021.

Capital and Exploratory Expenditures:

   E&P capital and exploratory expenditures were $701 million in the third quarter of 2022 compared with $498 million in the prior-year quarter, primarily due to higher drilling and development activities in the Bakken, Malaysia and JDA, Gulf of Mexico and Guyana. Midstream capital expenditures were $60 million in the third quarter of 2022 and $59 million in the prior-year quarter.

Liquidity:

   Excluding the Midstream segment, Hess Corporation had cash and cash equivalents of $2.38 billion and debt and finance lease obligations totaling $5.60 billion at September 30, 2022. The Midstream segment had cash and cash equivalents of $3 million and total debt of $2.9 billion at September 30, 2022. The Corporation’s debt to capitalization ratio as defined in its debt covenants was 36.8% at September 30, 2022 and 42.3% at December 31, 2021.

   Net cash provided by operating activities was $1,339 million in the third quarter of 2022, up from $615 million in the third quarter of 2021. Net cash provided by operating activities before changes in operating assets and liabilities2 was $1,405 million in the third quarter of 2022, compared with $631 million in the prior-year quarter primarily due to higher realized selling prices and sales volumes.

   Total cash returned to stockholders in the third quarter through common stock repurchases and dividends amounted to $265 million. The Corporation repurchased approximately 1.4 million shares of common stock for $150 million during the third quarter and intends to acquire the remaining available Board authorized amount of $310 million in the fourth quarter.

2.

“Net cash provided by (used in) operating activities before changes in operating assets and liabilities” is a non-GAAP financial measure. The definition of this non-GAAP measure and a reconciliation to its nearest GAAP equivalent measure appears on pages 6 and 7 .

   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)

 

2022

 

2021

 

2022

2021

 

(In millions)

Exploration and Production

$

(54)

 

$

29

 

$

(54)

$

(118)

Midstream

 

 

 

Corporate, Interest and Other

(14)

 

 

(1)

 

Total items affecting comparability of earnings between periods

$

(68)

 

$

29

 

$

(55)

$

(118)

   Third Quarter 2022: E&P results include 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 include a charge of $14 million ($14 million after income taxes) for legal costs related to a former downstream business.

   Third Quarter 2021: E&P results include a pre-tax gain of $29 million ($29 million after income taxes) associated with the sale of the Corporation's interests in Denmark.

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)

 

2022

 

2021

 

2022

 

2021

 

(In millions)

Net income attributable to Hess Corporation

$

515

 

$

115

 

$

1,599

 

$

294

Less: Total items affecting comparability of earnings

between periods

(68)

 

29

 

(55)

 

(118)

Adjusted net income attributable to Hess Corporation

$

583

 

$

86

 

$

1,654

 

$

412

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)

 

2022

 

2021

 

2022

 

2021

 

(In millions)

Net cash provided by (used in) operating activities before changes in operating assets and liabilities

$

1,405

 

$

631

 

$

3,820

 

$

2,105

Changes in operating assets and liabilities

(66)

 

(16)

 

(1,128)

 

(114)

Net cash provided by (used in) operating activities

$

1,339

 

$

615

 

$

2,692

 

$

1,991

   Hess Corporation will review third 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; 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, including as a result of COVID-19; reduced demand for our products, including due to COVID-19, 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 events, such as accidents, severe weather, geological events, shortages of skilled labor, cyber-attacks, health measures related to COVID-19, 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 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 Hess Midstream LP; 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

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Income Statement

 

 

 

 

 

Revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

3,122

 

$

1,759

 

$

2,955

Gains on asset sales, net

 

29

 

3

Other, net

35

 

23

 

30

Total revenues and non-operating income

3,157

 

1,811

 

2,988

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas

982

 

522

 

843

Operating costs and expenses

398

 

333

 

356

Production and severance taxes

72

 

42

 

67

Exploration expenses, including dry holes and lease impairment

58

 

36

 

33

General and administrative expenses

109

 

76

 

95

Interest expense

125

 

125

 

121

Depreciation, depletion and amortization

471

 

349

 

391

Impairment and other

54

 

 

Total costs and expenses

2,269

 

1,483

 

1,906

Income before income taxes

888

 

328

 

1,082

Provision for income taxes

282

 

143

 

328

Net income

606

 

185

 

754

Less: Net income attributable to noncontrolling interests

91

 

70

 

87

Net income attributable to Hess Corporation

$

515

 

$

115

 

$

667

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Nine Months Ended

September 30,

 

2022

 

2021

Income Statement

 

 

 

Revenues and non-operating income

 

 

 

Sales and other operating revenues

$

8,390

 

$

5,236

Gains on asset sales, net

25

 

29

Other, net

101

 

63

Total revenues and non-operating income

8,516

 

5,328

Costs and expenses

 

 

 

Marketing, including purchased oil and gas

2,507

 

1,362

Operating costs and expenses

1,067

 

913

Production and severance taxes

200

 

123

Exploration expenses, including dry holes and lease impairment

134

 

117

General and administrative expenses

314

 

254

Interest expense

369

 

360

Depreciation, depletion and amortization

1,199

 

1,130

Impairment and other

54

 

147

Total costs and expenses

5,844

 

4,406

Income before income taxes

2,672

 

922

Provision for income taxes

807

 

388

Net income

1,865

 

534

Less: Net income attributable to noncontrolling interests

266

 

240

Net income attributable to Hess Corporation

$

1,599

 

$

294

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

September 30,

2022

 

December 31,

2021

Balance Sheet Information

 

 

 

Assets

 

 

 

Cash and cash equivalents

$

2,384

 

$

2,713

Other current assets

1,739

 

1,633

Property, plant and equipment – net

15,092

 

14,182

Operating lease right-of-use assets – net

461

 

352

Finance lease right-of-use assets – net

131

 

144

Other long-term assets

1,836

 

1,491

Total assets

$

21,643

 

$

20,515

Liabilities and equity

 

 

 

Current maturities of long-term debt

$

 

$

517

Current portion of operating and finance lease obligations

121

 

89

Other current liabilities

2,191

 

2,458

Long-term debt

8,303

 

7,941

Long-term operating lease obligations

461

 

394

Long-term finance lease obligations

185

 

200

Other long-term liabilities

2,188

 

1,890

Total equity excluding other comprehensive loss

7,889

 

6,706

Accumulated other comprehensive loss

(330)

 

(406)

Noncontrolling interests

635

 

726

Total liabilities and equity

$

21,643

 

$

20,515

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

September 30,

2022

December 31,

2021

Total Debt

 

 

 

Hess Corporation

$

5,394

$

5,894

Midstream (a)

2,909

 

2,564

Hess Consolidated

$

8,303

$

8,458

(a) Midstream debt is non-recourse to Hess Corporation.

 

 

September 30,

2022

December 31,

2021

Debt to Capitalization Ratio (a)

 

 

 

Hess Consolidated

50.9 %

 

55.3 %

Hess Corporation as defined in debt covenants

36.8 %

 

42.3 %

(a) Includes finance lease obligations.

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2022

 

2021

 

2022

2021

Interest Expense

 

 

 

 

 

 

 

Gross interest expense – Hess Corporation

$

88

 

$

97

 

$

266

$

286

Less: Capitalized interest – Hess Corporation

(3)

 

 

(6)

 

Interest expense – Hess Corporation

85

 

97

 

260

 

286

Interest expense – Midstream (a)

40

 

28

 

109

 

74

Interest expense – Hess Consolidated

$

125

 

$

125

 

$

369

$

360

(a) Midstream interest expense is reported in the Midstream operating segment.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Cash Flow Information

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

 

Net income

$

606

 

$

185

 

$

754

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

(Gains) losses on asset sales, net

 

(29)

 

(3)

Depreciation, depletion and amortization

471

 

349

 

391

Impairment and other

54

 

 

Exploratory dry hole costs

19

 

2

 

Exploration lease and other impairment

4

 

5

 

4

Pension settlement loss

 

1

 

2

Stock compensation expense

17

 

17

 

16

Noncash (gains) losses on commodity derivatives, net

165

 

64

 

163

Provision for deferred income taxes and other tax accruals

69

 

37

 

136

Net cash provided by (used in) operating activities before changes in operating assets and liabilities

1,405

 

631

 

1,463

Changes in operating assets and liabilities

(66)

 

(16)

 

46

Net cash provided by (used in) operating activities

1,339

 

615

 

1,509

Cash Flows from Investing Activities

 

 

 

 

 

Additions to property, plant and equipment - E&P

(657)

 

(431)

 

(607)

Additions to property, plant and equipment - Midstream

(66)

 

(67)

 

(56)

Proceeds from asset sales, net of cash sold

 

130

 

4

Other, net

(4)

 

(2)

 

Net cash provided by (used in) investing activities

(727)

 

(370)

 

(659)

Cash Flows from Financing Activities

 

 

 

 

 

Net borrowings (repayments) of debt with maturities of 90 days or less

(48)

 

43

 

(14)

Debt with maturities of greater than 90 days:

 

 

 

 

 

Borrowings

20

 

750

 

400

Repayments

 

(503)

 

(5)

Cash dividends paid

(115)

 

(77)

 

(116)

Common stock acquired and retired

(150)

 

 

(190)

Proceeds from sale of Class A shares of Hess Midstream LP

 

 

146

Noncontrolling interests, net

(79)

 

(452)

 

(277)

Employee stock options exercised

4

 

 

7

Payments on finance lease obligations

(1)

 

(3)

 

(2)

Other, net

(18)

 

(14)

 

(10)

Net cash provided by (used in) financing activities

(387)

 

(256)

 

(61)

Net Increase (Decrease) in Cash and Cash Equivalents

225

 

(11)

 

789

Cash and Cash Equivalents at Beginning of Period

2,159

 

2,430

 

1,370

Cash and Cash Equivalents at End of Period

$

2,384

 

$

2,419

 

$

2,159

 

 

 

 

 

 

Additions to Property, Plant and Equipment included within Investing Activities

Capital expenditures incurred

$

(726)

 

$

(528)

 

$

(665)

Increase (decrease) in related liabilities

3

 

30

 

2

Additions to property, plant and equipment

$

(723)

 

$

(498)

 

$

(663)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Nine Months Ended

September 30,

 

2022

 

2021

Cash Flow Information

 

 

 

Cash Flows from Operating Activities

 

 

 

Net income

$

1,865

 

$

534

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

(Gains) losses on asset sales, net

(25)

 

(29)

Depreciation, depletion and amortization

1,199

 

1,130

Impairment and other

54

 

147

Exploratory dry hole costs

19

 

11

Exploration lease and other impairment

14

 

15

Pension settlement loss

2

 

5

Stock compensation expense

66

 

61

Noncash (gains) losses on commodity derivatives, net

383

 

152

Provision for deferred income taxes and other tax accruals

243

 

79

Net cash provided by (used in) operating activities before changes in operating assets and liabilities

3,820

 

2,105

Changes in operating assets and liabilities

(1,128)

 

(114)

Net cash provided by (used in) operating activities

2,692

 

1,991

Cash Flows from Investing Activities

 

 

 

Additions to property, plant and equipment - E&P

(1,755)

 

(1,118)

Additions to property, plant and equipment - Midstream

(177)

 

(120)

Proceeds from asset sales, net of cash sold

28

 

427

Other, net

(4)

 

(4)

Net cash provided by (used in) investing activities

(1,908)

 

(815)

Cash Flows from Financing Activities

 

 

 

Net borrowings (repayments) of debt with maturities of 90 days or less

(61)

 

(32)

Debt with maturities of greater than 90 days:

 

 

 

Borrowings

420

 

750

Repayments

(510)

 

(508)

Cash dividends paid

(350)

 

(234)

Common stock acquired and retired

(340)

 

Proceeds from sale of Class A shares of Hess Midstream LP

146

 

70

Noncontrolling interests, net

(430)

 

(589)

Employee stock options exercised

44

 

75

Payments on finance lease obligations

(5)

 

(7)

Other, net

(27)

 

(21)

Net cash provided by (used in) financing activities

(1,113)

 

(496)

Net Increase (Decrease) in Cash and Cash Equivalents

(329)

 

680

Cash and Cash Equivalents at Beginning of Period

2,713

 

1,739

Cash and Cash Equivalents at End of Period

$

2,384

 

$

2,419

 

 

 

 

Additions to Property, Plant and Equipment included within Investing Activities

Capital expenditures incurred

$

(1,971)

 

$

(1,274)

Increase (decrease) in related liabilities

39

 

36

Additions to property, plant and equipment

$

(1,932)

 

$

(1,238)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Capital and Exploratory Expenditures

 

 

 

 

 

E&P Capital and exploratory expenditures

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

226

 

$

169

 

$

188

Offshore and Other

57

 

16

 

72

Total United States

283

 

185

 

260

Guyana

301

 

264

 

286

Malaysia and JDA

92

 

42

 

66

Other

25

 

7

 

10

E&P Capital and exploratory expenditures

$

701

 

$

498

 

$

622

 

 

 

 

 

 

Total exploration expenses charged to income included above

$

35

 

$

29

 

$

29

 

 

 

 

 

 

Midstream Capital expenditures

$

60

 

$

59

 

$

72

 
 

 

Nine Months Ended

September 30,

 

2022

 

2021

Capital and Exploratory Expenditures

 

 

 

E&P Capital and exploratory expenditures

 

 

 

United States

 

 

 

North Dakota

$

549

 

$

369

Offshore and Other

185

 

72

Total United States

734

 

441

Guyana

906

 

686

Malaysia and JDA

217

 

91

Other

46

 

18

E&P Capital and exploratory expenditures

$

1,903

 

$

1,236

 

 

 

 

Total exploration expenses charged to income included above

$

101

 

$

91

 

 

 

 

Midstream Capital expenditures

$

169

 

$

129

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

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 attributable to Hess Corporation

$ 152

(b)

$

420

(c)

$

572

 

 

 

 

 

 

 

Third Quarter 2021

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

1,280

 

$

479

 

$

1,759

Gains on asset sales, net

 

29

 

29

Other, net

12

 

7

 

19

Total revenues and non-operating income

1,292

 

515

 

1,807

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

542

 

 

542

Operating costs and expenses

150

 

99

 

249

Production and severance taxes

41

 

1

 

42

Midstream tariffs

270

 

 

270

Exploration expenses, including dry holes and lease impairment

21

 

15

 

36

General and administrative expenses

35

 

7

 

42

Depreciation, depletion and amortization

229

 

79

 

308

Total costs and expenses

1,288

 

201

 

1,489

Results of operations before income taxes

4

 

314

 

318

Provision for income taxes

 

140

 

140

Net income attributable to Hess Corporation

$

4

(d)

$

174

(e)

$

178

  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $100 million (noncash premium amortization: $100 million; cash settlement: $0 million).
  3. Includes after-tax losses from realized crude oil hedging activities of $65 million (noncash premium amortization: $65 million; cash settlement: $0 million).
  4. Includes after-tax losses from realized crude oil hedging activities of $50 million (noncash premium amortization: $50 million; cash settlement: $0 million).
  5. Includes after-tax losses from realized crude oil hedging activities of $14 million (noncash premium amortization: $14 million; cash settlement: $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

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 attributable to Hess Corporation

$

266

(b) $

457

(c)

$

723

  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $99 million (noncash premium amortization: $99 million; cash settlement: $0 million).
  3. 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)

 

 

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 attributable to Hess Corporation

$

683

(b)

 

$

1,072

(c)

 

$

1,755

 

 

 

 

 

 

 

Nine Months Ended September 30, 2021

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

3,766

 

$

1,470

 

$

5,236

Gains on asset sales, net

 

29

 

29

Other, net

35

 

14

 

49

Total revenues and non-operating income

3,801

 

1,513

 

5,314

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

1,397

 

30

 

1,427

Operating costs and expenses

443

 

268

 

711

Production and severance taxes

119

 

4

 

123

Midstream tariffs

802

 

 

802

Exploration expenses, including dry holes and lease impairment

77

 

40

 

117

General and administrative expenses

118

 

22

 

140

Depreciation, depletion and amortization

757

 

250

 

1,007

Impairment and other

147

 

 

147

Total costs and expenses

3,860

 

614

 

4,474

Results of operations before income taxes

(59)

 

899

 

840

Provision for income taxes

 

379

 

379

Net income (loss) attributable to Hess Corporation

$

(59)

(d)

 

$

520

(e)

 

$

461

  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $256 million (noncash premium amortization: $233 million; cash settlement: $23 million).
  3. Includes after-tax losses from realized crude oil hedging activities of $164 million (noncash premium amortization: $150 million; cash settlement: $14 million).
  4. Includes after-tax losses from realized crude oil hedging activities of $140 million (noncash premium amortization: $140 million; cash settlement: $0 million).
  5. Includes after-tax losses from realized crude oil hedging activities of $35 million (noncash premium amortization: $35 million; cash settlement: $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Net Production Per Day (in thousands)

 

 

 

 

 

Crude oil - barrels

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

79

 

78

 

68

Offshore

21

 

20

 

20

Total United States

100

 

98

 

88

Guyana (a)

98

 

32

 

67

Malaysia and JDA

4

 

3

 

4

Other (b)

15

 

20

 

17

Total

217

 

153

 

176

 

 

 

 

 

 

Natural gas liquids - barrels

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

58

 

44

 

47

Offshore

2

 

3

 

2

Total United States

60

 

47

 

49

 

 

 

 

 

 

Natural gas - mcf

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

176

 

158

 

147

Offshore

41

 

52

 

41

Total United States

217

 

210

 

188

Malaysia and JDA

320

 

284

 

381

Other (b)

10

 

9

 

11

Total

547

 

503

 

580

 

 

 

 

 

 

Barrels of oil equivalent

368

 

284

 

322

  1. Production from Guyana includes 7,000 bopd of tax barrels in the third quarter of 2022. There were no tax barrels in the third quarter of 2021 or the second quarter of 2022.
  2. Other includes production from Libya and the Corporation's former interests in Denmark, which were sold in the third quarter of 2021. Libya net production was 17,000 boepd in the third quarter of 2022, 19,000 boepd in the third quarter of 2021 and 19,000 boepd in the second quarter of 2022. Denmark net production was 3,000 boepd in the third quarter of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Nine Months Ended

September 30,

 

2022

 

2021

Net Production Per Day (in thousands)

 

 

 

Crude oil - barrels

 

 

 

United States

 

 

 

North Dakota

75

 

80

Offshore

20

 

30

Total United States

95

 

110

Guyana (a)

65

 

30

Malaysia and JDA

4

 

4

Other (b)

17

 

22

Total

181

 

166

 

 

 

 

Natural gas liquids - barrels

 

 

 

United States

 

 

 

North Dakota

51

 

48

Offshore

2

 

4

Total United States

53

 

52

 

 

 

 

Natural gas - mcf

 

 

 

United States

 

 

 

North Dakota

160

 

159

Offshore

42

 

77

Total United States

202

 

236

Malaysia and JDA

355

 

339

Other (b)

11

 

9

Total

568

 

584

 

 

 

 

Barrels of oil equivalent

329

 

315

  1. Production from Guyana includes 2,000 bopd of tax barrels in the first nine months of 2022. There were no tax barrels in the first nine months of 2021.
  2. Other includes production from Libya and the Corporation's former interests in Denmark, which were sold in the third quarter of 2021. Libya net production was 19,000 boepd in the first nine months of 2022 and 19,000 boepd in the first nine months of 2021. Denmark net production was 4,000 boepd in the first nine months of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Third

Quarter

2022

Third

Quarter

2021

Second

Quarter

2022

Sales Volumes Per Day (in thousands) (a)

 

 

Crude oil – barrels

208

148

173

Natural gas liquids – barrels

58

47

46

Natural gas – mcf

547

503

580

Barrels of oil equivalent

357

279

316

 

 

 

Sales Volumes (in thousands) (a)

 

 

Crude oil – barrels

19,118

13,627

15,763

Natural gas liquids – barrels

5,299

4,338

4,180

Natural gas – mcf

50,343

46,317

52,811

Barrels of oil equivalent

32,807

25,685

28,745

 
 

 

Nine Months Ended

September 30,

 

2022

2021

Sales Volumes Per Day (in thousands) (a)

Crude oil – barrels

174

177

Natural gas liquids – barrels

51

52

Natural gas – mcf

568

584

Barrels of oil equivalent

320

326

 

 

Sales Volumes (in thousands) (a)

 

Crude oil – barrels (b)

47,461

48,315

Natural gas liquids – barrels

14,018

14,282

Natural gas – mcf

155,052

159,387

Barrels of oil equivalent

87,321

89,162

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Average Selling Prices

 

 

 

 

 

Crude oil - per barrel (including hedging)

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

79.04

 

$

59.65

 

$

93.60

Offshore

78.80

 

62.23

 

95.22

Total United States

79.00

 

60.14

 

93.96

Guyana

92.02

 

70.05

 

104.19

Malaysia and JDA

85.23

 

69.87

 

106.21

Other (a)

87.90

 

68.36

 

105.21

Worldwide

85.32

 

63.17

 

99.16

 

 

 

 

 

 

Crude oil - per barrel (excluding hedging)

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

89.80

 

$

65.11

 

$

106.01

Offshore

89.47

 

67.88

 

107.58

Total United States

89.74

 

65.64

 

106.37

Guyana

98.91

 

73.12

 

112.57

Malaysia and JDA

85.23

 

69.87

 

106.21

Other (a)

94.96

 

71.43

 

114.93

Worldwide

93.95

 

67.88

 

109.51

 

 

 

 

 

 

Natural gas liquids - per barrel

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

35.41

 

$

32.94

 

$

40.96

Offshore

36.30

 

32.00

 

39.88

Worldwide

35.44

 

32.88

 

40.92

 

 

 

 

 

 

Natural gas - per mcf

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

6.67

 

$

3.75

 

$

6.89

Offshore

8.12

 

3.76

 

7.63

Total United States

6.94

 

3.75

 

7.06

Malaysia and JDA

5.07

 

5.45

 

6.18

Other (a)

7.03

 

3.62

 

5.36

Worldwide

5.85

 

4.71

 

6.45

  1. Other includes prices related to production from Libya and the Corporation's former interests in Denmark, which were sold in the third quarter of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Nine Months Ended

September 30,

 

2022

 

2021

Average Selling Prices

 

 

 

Crude oil - per barrel (including hedging)

 

 

 

United States

 

 

 

North Dakota (a)

$

85.39

 

$

52.27

Offshore

86.13

 

57.36

Total United States

85.56

 

53.46

Guyana

96.24

 

65.31

Malaysia and JDA

93.16

 

64.94

Other (b)

95.49

 

62.93

Worldwide

90.30

 

56.62

 

 

 

 

Crude oil - per barrel (excluding hedging)

 

 

 

United States

 

 

 

North Dakota (a)

$

95.33

 

$

56.37

Offshore

95.96

 

61.91

Total United States

95.47

 

57.66

Guyana

103.94

 

67.72

Malaysia and JDA

93.16

 

64.94

Other (b)

104.67

 

65.91

Worldwide

99.14

 

60.33

 

 

 

 

Natural gas liquids - per barrel

 

 

 

United States

 

 

 

North Dakota

$

38.51

 

$

28.59

Offshore

37.86

 

24.08

Worldwide

38.48

 

28.23

 

 

 

 

Natural gas - per mcf

 

 

 

United States

 

 

 

North Dakota

$

5.97

 

$

3.96

Offshore

6.71

 

2.91

Total United States

6.13

 

3.62

Malaysia and JDA

5.72

 

5.22

Other (b)

5.65

 

3.05

Worldwide

5.86

 

4.54

  1. Excluding the two VLCC cargo sales totaling 4.2 million barrels sold in the first quarter of 2021, the North Dakota crude oil price excluding hedging was $59.99 per barrel and $55.29 per barrel including hedging.
  2. Other includes prices related to production from Libya and the Corporation's former interests in Denmark, which were sold in the third quarter of 2021.

   The following is a summary of the Corporation’s outstanding commodity hedging program for the remainder of calendar 2022:

 

WTI

 

Brent

Barrels of oil per day

90,000

 

60,000

Average monthly floor price

$

60

 

$

65

 

Contacts

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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