HES Hess Corporation

Second Quarter Highlights:

• Adjusted net loss was $147 million or $0.52 per share compared to net income of $432 million or $1.38 per share in the prior-year quarter; lower hydrocarbon prices reduced second quarter 2015 adjusted net income by approximately $740 million, after-tax
• Net loss was $567 million compared to net income of $931 million in the second quarter of 2014
• Oil and gas production increased to 391,000 barrels of oil equivalent per day (boepd) compared to 319,000 boepd in the second quarter of 2014
• Oil and gas production in the Bakken was 119,000 boepd, up from 80,000 boepd in the year-ago quarter
• Announced sale of 50% interest in Bakken Midstream, resulting in $3 billion of cash proceeds
• Capital and exploratory expenditures totaled $1.1 billion in the second quarter down from $1.3 billion in the prior-year quarter
• Liza-1 well completed on the Stabroek Block, offshore Guyana; announced as a significant discovery by the operator

Hess Corporation (NYSE:HES) today reported an adjusted net loss, which excludes items affecting comparability, of $147 million or $0.52 per common share, for the second quarter of 2015 compared with adjusted net income of $432 million or $1.38 per share in the second quarter of 2014. Lower realized selling prices reduced adjusted net income by approximately $740 million after-tax compared with the prior-year quarter. In addition, second quarter 2015 results benefitted from higher production, lower cash operating costs and reduced exploration expenses that were partially offset by higher depreciation, depletion, and amortization expense. On an unadjusted basis, the Corporation reported a net loss of $567 million for the second quarter of 2015, including a noncash goodwill impairment charge of $385 million, and net income of $931 million in the prior-year quarter.

     “We achieved strong operating performance in the quarter and delivered significant and immediate value to our shareholders with the sale of a 50 percent interest in our Bakken midstream assets,” Chief Executive Officer John Hess said. “We remain confident that our financial strength, resilient portfolio and proven operating capabilities position us well in the current low oil price environment as well as for a future price recovery.”

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

  Three Months Ended     Six Months Ended June 30, June 30, (unaudited) (unaudited)

    2015    

   

    2014    

    2015    

   

    2014    

(In millions, except per share amounts)

Net Income (Loss) Attributable to Hess Corporation

Exploration and Production $ (502 ) $ 1,049 $ (816 ) $ 1,570 Bakken Midstream 32 7 59 (6 ) Corporate, Interest and Other   (83 )   (82 )   (172 )   (226 ) Net income (loss) from continuing operations (553 ) 974 (929 ) 1,338 Discontinued operations   (14 )   (43 )   (27 )   (21 ) Net income (loss) attributable to Hess Corporation $ (567 ) $ 931 $ (956 ) $ 1,317   Net income (loss) per share (diluted) $ (1.99 ) $ 2.96 $ (3.37 ) $ 4.13  

Adjusted Net Income (Loss) Attributable to Hess Corporation

Exploration and Production $ (96 ) $ 475 $ (317 ) $ 1,002 Bakken Midstream 32 7 59 (6 ) Corporate, Interest and Other   (83 )   (73 )   (168 )   (157 ) Adjusted net income (loss) from continuing operations (147 ) 409 (426 ) 839 Discontinued operations   —   23   —   39 Adjusted net income (loss) attributable to Hess Corporation $ (147 ) $ 432 $ (426 ) $ 878   Adjusted net income (loss) per share (diluted) $ (0.52 ) $ 1.38 $ (1.50 ) $ 2.75   Weighted average number of shares (diluted)   284.3   314.1   283.9   318.7  

Exploration and Production:

     The Corporation’s Exploration and Production activities had a net loss of $502 million in the second quarter of 2015, compared with net income of $1,049 million in the second quarter of 2014. Adjusted net loss was $96 million in the second quarter of 2015 compared with adjusted net income of $475 million in the second quarter of 2014.

     The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was down 45 percent to $55.83 per barrel in the second quarter of 2015 from $102.16 per barrel in the second quarter of last year. The average worldwide natural gas liquids selling price was $11.06 per barrel, down from $36.59 per barrel in the year-ago quarter while the average worldwide natural gas selling price was $4.49 per mcf in the second quarter of 2015 compared with $6.35 per mcf in the second quarter a year-ago.

     Oil and gas production was 391,000 boepd, up 23 percent from 319,000 boepd in the second quarter of 2014. Assets contributing to the volume growth were primarily the Bakken shale play (39,000 boepd), the Utica shale play (19,000 boepd), the Joint Development Area of Malaysia/Thailand (11,000 boepd) and the Gulf of Mexico (9,000 boepd). Asset sales reduced production by 9,000 boepd.

Operational Highlights for the Second Quarter of 2015:

     Bakken (Onshore U.S.): Net production from the Bakken increased approximately 49 percent to 119,000 boepd from the prior-year quarter due to continued drilling activities. The Corporation brought 67 gross operated wells on production in the second quarter of 2015 bringing the year-to-date total to 137 wells. Drilling and completion costs per operated well averaged $5.6 million in the second quarter of 2015, down 24 percent from the year-ago quarter. During the second quarter, the Corporation operated 8 rigs.

     Utica (Onshore U.S.): On the Corporation’s joint venture acreage, 10 wells were drilled and net production averaged 22,000 boepd in the second quarter of 2015 compared with 3,000 boepd in the prior-year quarter.

     Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was up compared to the prior-year quarter with higher volumes from Tubular Bells, which totaled 23,000 boepd in the second quarter of 2015, being partially offset by lower production from the Conger and Llano Fields. At the Corporation’s non-operated Sicily exploration prospect in the Keathley Canyon area (Hess 25 percent), the operator successfully completed drilling and logging activities in the second quarter. The well was drilled to a depth of 30,214 feet and is being evaluated. The drilling of an appraisal well to further evaluate the discovery is expected late this year or in early 2016.

     Guyana (Offshore): On the Stabroek Block (Hess 30 percent), the operator announced a significant oil discovery at the Liza #1 well and is now in the process of evaluating the resource potential on the block. The operator recently commenced the acquisition of 17,000 square kilometers of 3D seismic.

Bakken Midstream:

     The Corporation’s Bakken Midstream activities had net income of $32 million in the second quarter of 2015 compared to $7 million in the prior-year quarter primarily due to higher throughput throughout the system. In July 2015, the Corporation completed the sale of a 50 percent interest in its Bakken Midstream assets for cash consideration of $2.7 billion. The joint venture incurred $600 million of debt in July with proceeds distributed equally to both partners, resulting in total after-tax cash proceeds net to Hess of approximately $3.0 billion. These transactions will be reflected in the Corporation’s third quarter results. As a result of the joint venture transaction, Hess has reported its Bakken-related midstream operations as a separate Midstream segment in its consolidated financial statements and will begin disclosing certain historical and forward-looking financial information for this segment.

Capital and Exploratory Expenditures:

     Capital and exploratory expenditures were $1,071 million in the second quarter of 2015 down from $1,256 million in the prior-year quarter of which $1,006 million and $1,208 million, respectively, relate to Exploration and Production activities. Second quarter 2015 Exploration and Production expenditures reflect reduced activity in assets including the Bakken, the Utica, Norway and Equatorial Guinea, partly offset by expenditures associated with development of the North Malay Basin project and exploratory activities in the Gulf of Mexico and Guyana.

Liquidity:

     Net cash provided by operating activities was $541 million in the second quarter of 2015, compared with $911 million in the second quarter of 2014. At June 30, 2015, cash and cash equivalents totaled $931 million compared with $2,444 million at December 31, 2014. Total debt was $5,957 million at June 30, 2015 compared with $5,987 million at December 31, 2014. The Corporation’s debt to capitalization ratio at June 30, 2015 was 22.0 percent, compared with 21.2 percent at December 31, 2014. In July 2015, the Corporation received after-tax cash proceeds of approximately $3 billion from the Bakken Midstream joint venture transaction described above.

During the second quarter, the Corporation hedged an additional 20,000 barrels per day of crude oil production for the remainder of 2015 by entering into West Texas Intermediate crude collars with a floor price of $60 per barrel and a ceiling price of $80 per barrel. The Corporation’s crude oil hedging program for the remainder of 2015 is detailed on page 18.

Discontinued Operations:

     Losses from discontinued operations amounted to $14 million in the second quarter of 2015 compared to $44 million in the prior-year quarter. The Corporation completed the sale of its energy trading partnership (HETCO) in the first quarter of 2015. Financial results for the second quarter of 2014 have been recast to report HETCO as discontinued operations in the consolidated income statement on page 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     Six Months Ended June 30, June 30, (unaudited) (unaudited)

    2015    

   

    2014    

    2015    

   

    2014    

(In millions) Exploration and Production $ (406 ) $ 574 $ (499 ) $ 568 Bakken Midstream — — — — Corporate, Interest and Other — (9 ) (4 ) (69 ) Discontinued operations   (14 )   (66 )   (27 )   (60 ) Total items affecting comparability of earnings between periods $ (420 ) $ 499 $ (530 ) $ 439  

     Second quarter 2015 results include a goodwill impairment charge of $385 million associated with the Corporation’s onshore reporting unit. As a result of establishing the Bakken Midstream business as a separate operating segment in the second quarter of 2015, U.S. GAAP required the reallocation of goodwill to the Bakken Midstream segment and a goodwill impairment test for each of the Corporation’s reporting units. The nontaxable impairment charge for the onshore reporting unit caused the Corporation’s effective tax rate in the quarter to be substantially less than normal. In addition, the Corporation recognized after-tax charges totaling $21 million ($21 million pre-tax) associated with terminated international office space.

Reconciliation of U.S. GAAP to Non-GAAP measures:

The following table reconciles reported net income (loss) attributable to Hess Corporation and adjusted net income (loss):

  Three Months Ended       Six Months Ended June 30, June 30, (unaudited) (unaudited)

    2015    

   

    2014    

    2015    

   

    2014    

(In millions) Net income (loss) attributable to Hess Corporation $ (567 ) $ 931 $ (956 ) $ 1,317 Less: Total items affecting comparability of earnings between periods   (420 )   499   (530 )   439 Adjusted net income (loss) attributable to Hess Corporation $ (147 ) $ 432 $ (426 ) $ 878  

Hess Corporation will review second quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details about the event, refer to the Investor Relations section of our website at www.hess.com.

Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at www.hess.com.

Forward-looking Statements

Certain statements in this release may constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, uncertainties inherent in the measurement and interpretation of geological, geophysical and other technical data. Estimates and projections contained in this release are based on the Company’s current understanding and assessment based on reasonable assumptions. Actual results may differ materially from these estimates and projections due to certain risk factors discussed in the Corporation’s periodic filings with the Securities and Exchange Commission and other factors.

Non-GAAP financial measure

The Corporation has used a non-GAAP financial measure in this earnings release. “Adjusted net income (loss)” presented in this release is defined as reported net income (loss) attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. We believe that investors’ understanding of our performance is enhanced by disclosing this measure. This measure is not, and should not be viewed as, a substitute for U.S. GAAP net income (loss). A reconciliation of reported net income (loss) attributable to Hess Corporation (U.S. GAAP) to adjusted net income (loss) is provided in the release.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

                    Second     Second     First Quarter Quarter Quarter

    2015    

    2014    

    2015    

Income Statement

  Revenues and Non-operating Income Sales and other operating revenues

$ 

1,953

$ 

2,829

$ 

1,538 Gains on asset sales, net — 779 — Other, net   (18 )   (25 )   12 Total revenues and non-operating income   1,935   3,583   1,550   Costs and Expenses Cost of products sold (excluding items shown separately below) 356 421 278 Operating costs and expenses 503 545 506 Production and severance taxes 45 78 36 Exploration expenses, including dry holes and lease impairment 90 460 269 General and administrative expenses 151 143 147 Interest expense 86 85 85 Depreciation, depletion and amortization 1,028 785 956 Impairment   385   —   — Total costs and expenses   2,644   2,517   2,277   Income (loss) from continuing operations before income taxes (709 ) 1,066 (727 ) Provision (benefit) for income taxes   (156 )   92   (351 ) Income (loss) from continuing operations (553 ) 974 (376 )   Income (loss) from discontinued operations, net of income taxes   (14 )   (44 )   (13 )   Net income (loss) (567 ) 930 (389 ) Less: Net income (loss) attributable to noncontrolling interests   —   (1 )   — Net income (loss) attributable to Hess Corporation $ (567 ) $ 931 $ (389 )   See "Discontinued Operations" on page 5 for basis of presentation.  

Cash Flow Information

  Net cash provided by (used in) operating activities (*) $ 541 $ 911 $ 362 Net cash provided by (used in) investing activities (1,016 ) 232 (1,152 ) Net cash provided by (used in) financing activities   (100 )   (226 )   (148 ) Net increase (decrease) in cash and cash equivalents $ (575 ) $ 917 $ (938 )  

(*) Includes changes in working capital.

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

                                          First half

    2015    

   

    2014    

Income Statement

  Revenues and Non-operating Income Sales and other operating revenues

$ 

3,491

$ 

5,502 Gains on asset sales, net — 789 Other, net   (6 )   (116 ) Total revenues and non-operating income   3,485   6,175   Costs and Expenses Cost of products sold (excluding items shown separately below) 634 785 Operating costs and expenses 1,009 1,040 Production and severance taxes 81 140 Exploration expenses, including dry holes and lease impairment 359 579 General and administrative expenses 298 285 Interest expense 171 166 Depreciation, depletion and amortization 1,984 1,511 Impairment   385   — Total costs and expenses   4,921   4,506   Income (loss) from continuing operations before income taxes (1,436 ) 1,669 Provision (benefit) for income taxes   (507 )   331 Income (loss) from continuing operations (929 ) 1,338   Income (loss) from discontinued operations, net of income taxes   (27 )   13   Net income (loss) (956 ) 1,351 Less: Net income (loss) attributable to noncontrolling interests   —   34 Net income (loss) attributable to Hess Corporation $ (956 ) $ 1,317   See "Discontinued Operations" on page 5 for basis of presentation.  

Cash Flow Information

  Net cash provided by (used in) operating activities (*) $ 903 $ 2,069 Net cash provided by (used in) investing activities (2,168 ) (30 ) Net cash provided by (used in) financing activities   (248 )   (1,648 ) Net increase (decrease) in cash and cash equivalents $ (1,513 ) $ 391  

(*) Includes changes in working capital.

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

                                            June 30,     December 31,

      2015      

    2014    

Balance Sheet Information

        Cash and cash equivalents

$ 

931

$ 

2,444 Other current assets 2,995 4,243 Property, plant and equipment – net 27,298 27,517 Other long-term assets         4,334   4,374 Total assets $       35,558 $ 38,578   Current maturities of long-term debt $ 69 $ 68 Other current liabilities 3,424 4,783 Long-term debt 5,888 5,919 Other long-term liabilities 5,074 5,488 Total equity excluding other comprehensive income (loss) 22,539 23,730 Accumulated other comprehensive income (loss)         (1,436 )   (1,410 ) Total liabilities and equity $       35,558 $ 38,578  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

            Second       Second       First Quarter Quarter Quarter

    2015    

    2014    

    2015    

Capital and Exploratory Expenditures

Exploration and Production United States Bakken

$ 

331

$ 

385

$ 

434 Other Onshore   110   186   80 Total Onshore 441 571 514 Offshore   188   157   279 Total United States   629   728   793   Europe 82 162 115 Africa 58 119 88 Asia and other   237   199   248 Capital and Exploratory Expenditures - Exploration and Production   1,006   1,208   1,244   Bakken Midstream 65 48 40             Total Capital and Exploratory Expenditures $ 1,071 $ 1,256 $ 1,284   Total exploration expenses charged to income included above $ 58 $ 54 $ 47   First half

    2015    

    2014    

Capital and Exploratory Expenditures

Exploration and Production United States Bakken $ 765 $ 765 Other Onshore   190   355 Total Onshore 955 1,120 Offshore   467   319 Total United States   1,422   1,439   Europe 197 307 Africa 146 219 Asia and other   485   394 Capital and Exploratory Expenditures - Exploration and Production   2,250   2,359   Bakken Midstream 105 121         Total Capital and Exploratory Expenditures $ 2,355 $ 2,480   Total exploration expenses charged to income included above $ 105 $ 132  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

    Second Quarter 2015 United States  

 International 

 

      Total      

  Sales and other operating revenues $ 1,259 $ 694 $ 1,953 Other, net   (13 )   (4 )   (17 ) Total revenues and non-operating income   1,246   690   1,936   Costs and Expenses Cost of products sold (excluding items shown separately below) 382 4 386 Operating costs and expenses 181 254 435 Production and severance taxes 44 1 45 Bakken Midstream tariffs 116 — 116 Exploration expenses, including dry holes and lease impairment 48 42 90 General and administrative expenses 79 18 97 Depreciation, depletion and amortization 609 395 1,004

Impairment

  385   —   385 Total costs and expenses   1,844   714   2,558   Results of operations before income taxes (598 ) (24 ) (622 ) Provision (benefit) for income taxes   (69 )   (51 )   (120 ) Net income (loss) attributable to Hess Corporation $ (529 )

 (a)

$ 27

 (b)

$ (502 )   Second Quarter 2014 United States

 International 

      Total      

  Sales and other operating revenues $ 1,653 $ 1,176 $ 2,829 Gains on asset sales, net 62 704 766 Other, net   (12 )   (16 )   (28 ) Total revenues and non-operating income   1,703   1,864   3,567   Costs and Expenses Cost of products sold (excluding items shown separately below) 412 32 444 Operating costs and expenses 190 308 498 Production and severance taxes 67 11 78 Bakken Midstream tariffs 58 — 58 Exploration expenses, including dry holes and lease impairment 208 252 460 General and administrative expenses 68 9 77 Depreciation, depletion and amortization   413   349   762 Total costs and expenses   1,416   961   2,377   Results of operations before income taxes 287 903 1,190 Provision (benefit) for income taxes   114   27   141 Net income (loss) attributable to Hess Corporation $ 173

 (a)

$ 876

 (b)

$ 1,049   (a)   The after-tax realized results from crude oil hedging activities amounted to a loss of $1 million in the second quarter of 2015 and a loss of $2 million in the second quarter of 2014. Unrealized changes in crude oil hedging contracts which are included in Other operating revenues, amounted to a gain of $3 million in the second quarter of 2015 and loss of $2 million in the second quarter of 2014.   (b) The after-tax realized loss from crude oil hedging activities amounted to $8 million in the second quarter of 2015 and loss of $2 million in the second quarter of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a loss of $16 million after-tax in the second quarter of 2015 and was immaterial in the second quarter of 2014.  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

    First Quarter 2015 United States      

 International 

 

      Total      

  Sales and other operating revenues $ 937 $ 601 $ 1,538 Other, net   (7 )   18   11 Total revenues and non-operating income   930   619   1,549   Costs and Expenses Cost of products sold (excluding items shown separately below) 344 (38 ) 306 Operating costs and expenses 213 230 443 Production and severance taxes 34 2 36 Bakken Midstream tariffs 102 — 102 Exploration expenses, including dry holes and lease impairment 36 233 269 General and administrative expenses 76 10 86 Depreciation, depletion and amortization   528   404   932 Total costs and expenses   1,333   841   2,174   Results of operations before income taxes (403 ) (222 ) (625 ) Provision (benefit) for income taxes   (142 )   (169 )   (311 ) Net income (loss) attributable to Hess Corporation $ (261 ) $ (53 )

 (a)

$ (314 )   (a)   The after-tax realized gains from crude oil hedging activities amounted to $1 million in the first quarter of 2015. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to gain of $10 million after-tax.  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

    First Half 2015 United States  

 International 

 

      Total      

  Sales and other operating revenues $ 2,196 $ 1,295 $ 3,491 Other, net   (20 )   14   (6 ) Total revenues and non-operating income   2,176   1,309   3,485   Costs and Expenses Cost of products sold (excluding items shown separately below) 726 (34 ) 692 Operating costs and expenses 394 484 878 Production and severance taxes 78 3 81 Bakken Midstream tariffs 218

—

218 Exploration expenses, including dry holes and lease impairment 84 275 359 General and administrative expenses 155 28 183 Depreciation, depletion and amortization 1,137 799 1,936

Impairment

  385  

—

  385 Total costs and expenses   3,177   1,555   4,732   Results of operations before income taxes (1,001 ) (246 ) (1,247 ) Provision (benefit) for income taxes   (211 )   (220 )   (431 ) Net income (loss) attributable to Hess Corporation $ (790 )

 (a)

$ (26 )

 (b)

$ (816 )   First Half 2014 United States

 International 

      Total      

  Sales and other operating revenues $ 3,198 $ 2,304 $ 5,502 Gains on asset sales, net 62 714 776 Other, net   (14 )   (20 )   (34 ) Total revenues and non-operating income   3,246   2,998   6,244   Costs and Expenses Cost of products sold (excluding items shown separately below) 826 11 837 Operating costs and expenses 371 565 936 Production and severance taxes 125 15 140 Bakken Midstream tariffs 77 — 77 Exploration expenses, including dry holes and lease impairment 255 324 579 General and administrative expenses 124 31 155 Depreciation, depletion and amortization   764   710   1,474 Total costs and expenses   2,542   1,656   4,198   Results of operations before income taxes 704 1,342 2,046 Provision for income taxes   278   198   476 Net income (loss) attributable to Hess Corporation $ 426

 (a)

$ 1,144

 (b)

$ 1,570   (a)   The after-tax realized loss from crude oil hedging activities amounted to $1 million in the first six months of 2015 and a loss of $2 million in the first six months of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to gains of $3 million after-tax in the first six months of 2015 and a loss of $2 million after-tax in the first six months of 2014.   (b) The after-tax realized loss from crude oil hedging activities amounted to $7 million in the first six months of 2015 and was immaterial in the first six months of 2014. Unrealized changes in crude oil hedging contracts, which are included in Other operating revenues, amounted to a loss of $6 million after-tax in the first six months of 2015 and gain of $3 million after-tax in the first six months of 2014.  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

                                                                        Second     Second     First

  Quarter  

  Quarter  

  Quarter  

    2015    

    2014    

    2015    

Operating Data

     

Net Production Per Day (in thousands)

Crude oil - barrels United States Bakken 85 64 79 Other Onshore   11   9   11 Total Onshore 96 73 90 Offshore   61   54   50 Total United States   157   127   140   Europe 39 36 36 Africa 48 51 52 Asia   2   2   2 Total   246   216   230   Natural gas liquids - barrels United States Bakken 22 8 19 Other Onshore   12   5   9 Total Onshore 34 13 28 Offshore   6   7   6 Total United States   40   20   34   Europe   2   1   1 Total   42   21   35   Natural gas - mcf United States Bakken 71 48 58 Other Onshore   95   50   79 Total Onshore 166 98 137 Offshore   98   83   65 Total United States   264   181   202   Europe 41 35 36 Asia and other   312   275   336 Total   617   491   574   Barrels of oil equivalent   391   319   361  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

                                                                                            First half

    2015    

   

    2014    

Operating Data

   

Net Production Per Day (in thousands)

Crude oil - barrels United States Bakken 82 61 Other Onshore   11   9 Total Onshore 93 70 Offshore   55   53 Total United States   148   123   Europe 38 37 Africa 50 49 Asia   2   4 Total   238   213   Natural gas liquids - barrels United States Bakken 21 5 Other Onshore   10   4 Total Onshore 31 9 Offshore   6   7 Total United States   37   16   Europe   1   1 Total   38   17   Natural gas - mcf United States Bakken 65 31 Other Onshore   87   38 Total Onshore 152 69 Offshore   82   81 Total United States   234   150   Europe 39 36 Asia and other   324   345 Total   597   531   Barrels of oil equivalent   376   319  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

                                                                              Second Second First Quarter Quarter Quarter

    2015    

    2014    

    2015    

Sales Volumes Per Day (in thousands)

  Crude oil - barrels 250 222 219 Natural gas liquids - barrels 42 21 35 Natural gas - mcf   617 491 574 Barrels of oil equivalent   395 325 349  

Sales Volumes (in thousands)

Crude oil - barrels 22,729 20,193 19,708 Natural gas liquids - barrels 3,848 1,942 3,119 Natural gas - mcf   56,179 44,662 51,641 Barrels of oil equivalent   35,940 29,578 31,434   First half

    2015    

    2014    

Sales Volumes Per Day (in thousands)

Crude oil - barrels 234 210 Natural gas liquids - barrels 38 17 Natural gas - mcf 596 530 Barrels of oil equivalent 372 315  

Sales Volumes (in thousands)

Crude oil - barrels 42,436 37,943 Natural gas liquids - barrels 6,967 3,064 Natural gas - mcf 107,820 96,019 Barrels of oil equivalent 67,373 57,010  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

                                                      Second     Second     First

   Quarter   

   Quarter   

   Quarter   

    2015    

    2014    

    2015    

Operating Data

Average Selling Prices

Crude oil - per barrel (including hedging) United States Onshore $ 50.33 $ 93.84 $ 39.01 Offshore 57.82 100.42 43.55 Total United States 53.25 96.62 40.62 Europe 60.88 111.03 53.31 Africa 59.70 108.83 52.93 Asia 59.37 106.33 48.44 Worldwide 55.83 102.16 45.08   Crude oil - per barrel (excluding hedging) United States Onshore $ 50.54 $ 93.84 $ 39.01 Offshore 57.82 101.09 43.55 Total United States 53.38 96.90 40.62 Europe 62.39 111.39 53.17 Africa 61.00 109.10 52.82 Asia 59.37 106.33 48.44 Worldwide 56.40 102.45 45.04   Natural gas liquids - per barrel United States Onshore $ 9.47 $ 36.99 $ 14.22 Offshore 15.82 32.21 15.71 Total United States 10.46 35.39 14.47 Europe 27.53 55.77 27.58 Worldwide 11.06 36.59 14.91   Natural gas - per mcf United States Onshore $ 1.81 $ 4.36 $ 2.07 Offshore 2.13 4.01 2.31 Total United States 1.93 4.22 2.15 Europe 7.35 10.51 7.95 Asia and other 6.27 7.24 5.95 Worldwide 4.49 6.35 4.74  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

                                                                                        First half

    2015    

   

    2014    

Operating Data

Average Selling Prices

Crude oil - per barrel (including hedging) United States Onshore $ 44.85 $ 91.67 Offshore 52.11 99.89 Total United States 47.56 95.19 Europe 57.42 110.10 Africa 56.54 108.65 Asia 56.85 104.66 Worldwide 50.99 100.96   Crude oil - per barrel (excluding hedging) United States Onshore $ 44.97 $ 91.67 Offshore 52.11 100.24 Total United States 47.63 95.33 Europe 58.18 110.06 Africa 57.18 108.62 Asia 56.85 104.66 Worldwide 51.28 101.03   Natural gas liquids - per barrel United States Onshore $ 11.58 $ 40.91 Offshore 15.77 33.14 Total United States 12.26 37.54 Europe 27.56 60.16 Worldwide 12.78 39.41   Natural gas - per mcf United States Onshore $ 1.93 $ 4.87 Offshore 2.20 4.18 Total United States 2.03 4.52 Europe 7.63 11.01 Asia and other 6.11 7.23 Worldwide 4.61 6.72  

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

                                                                    Brent     West Texas

Intermediate

Q3 and Q4 2015 Hedging program:

Daily production(bopd) 50,000 20,000 Ceiling price $80 $80 Floor price $60 $60 Program finishing date December 31, 2015 December 31, 2015  

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

BAKKEN MIDSTREAM EARNINGS (UNAUDITED)

(IN MILLIONS)

                                                          Second Second First Quarter Quarter Quarter

    2015    

    2014    

    2015    

Income Statement

  Revenues and Non-operating Income Total revenues and non-operating income $ 145 $ 81 $ 130   Costs and Expenses Operating costs and expenses 68 47 63 General and administrative expenses 3 2 2 Depreciation, depletion and amortization 22 20 21 Interest expense   1   1   1 Total costs and expenses   94   70   87   Results of operations before income taxes 51 11 43 Provision (benefit) for income taxes   19   4   16 Net income (loss) attributable to Hess Corporation $ 32 $ 7 $ 27   First half

    2015    

    2014    

Income Statement

  Revenues and Non-operating Income Total revenues and non-operating income $ 275 $ 129   Costs and Expenses Operating costs and expenses 131 104 General and administrative expenses 5 4 Depreciation, depletion and amortization 43 29 Interest expense   2   1 Total costs and expenses   181   138   Results of operations before income taxes 94 (9 ) Provision (benefit) for income taxes   35   (3 ) Net income (loss) attributable to Hess Corporation $ 59 $ (6 )  

The reported amounts above represent 100 percent of the Bakken Midstream operating segment. On July 1, 2015, the Corporation completed the sale of a 50 percent interest in its Bakken Midstream segment. Our partner’s 50 percent share of net income will be presented as a noncontrolling interest charge in the Bakken Midstream income statements beginning in the third quarter of 2015.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150729005488/en/

For Hess CorporationInvestor Contact:Jay Wilson212-536-8940orMedia Contact:Sard Verbinnen & CoMichael Henson/Patrick Scanlan212-687-8080