Hess Corporation (NYSE: HES) reported a net loss of $131 million for the fourth quarter of 2011 compared with net income of $58 million for the fourth quarter of 2010. The after-tax income (loss) by major operating activity was as follows:

      Three Months Ended     Year Ended
December 31, (unaudited) December 31, (unaudited)
2011   2010 2011   2010
(In millions, except per share amounts)
Exploration and Production $ 527 $ 420 $ 2,675 $ 2,736
Marketing and Refining (561) (261) (584) (231)
Corporate (40) (43) (154) (159)
Interest expense   (57)   (58)   (234)   (221)
Net income (loss) attributable to Hess Corporation $ (131) $ 58 $ 1,703 $ 2,125
 
Net income (loss) per share (diluted) $ (.39) $ .18 $ 5.01 $ 6.47
 
Weighted average number of shares (diluted)   337.5   330.5   339.9   328.3
 

Note: See the following page for a table of items affecting comparability of earnings between periods.

Exploration and Production earnings were $527 million in the fourth quarter of 2011 compared with $420 million in the fourth quarter of 2010. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $89.70 per barrel, up from $71.73 per barrel in the same quarter a year ago. The average worldwide natural gas selling price was $6.32 per Mcf in the fourth quarter of 2011, up from $5.30 per Mcf in the fourth quarter of 2010. Fourth quarter oil and gas production was 367,000 barrels of oil equivalent per day, compared with 420,000 barrels of oil equivalent per day in the fourth quarter a year ago, largely due to production interruptions and asset sales. Fourth quarter 2011 results included higher exploration expenses reflecting total dry hole costs of $236 million ($143 million after-tax), primarily associated with two exploration wells on the Semai V Block, offshore Indonesia.

Oil and gas proved reserves were 1,573 million barrels of oil equivalent at the end of 2011, compared with 1,537 million barrels at the end of 2010. During 2011, the Corporation added 203 million barrels of oil equivalent to proved reserves. These additions, which are subject to final review, replaced approximately 147 percent of the Corporation's 2011 production, resulting in a reserve life of 11.4 years.

Marketing and Refining generated a loss of $561 million in the fourth quarter of 2011 compared with a loss of $261 million in the same period in 2010. Refining operations incurred a loss of $598 million in the fourth quarter of 2011, including the HOVENSA L.L.C. shutdown charge discussed below, and a loss of $308 million in the fourth quarter a year ago. Marketing earnings were $48 million compared with $37 million in the same quarter of 2010. Trading activities generated a loss of $11 million in the fourth quarter of 2011 and income of $10 million in the fourth quarter of last year.

The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods:

          Three Months Ended         Year Ended
December 31, (unaudited) December 31, (unaudited)
2011   2010 2011   2010
(Millions of dollars)
Exploration and Production $ - $ (51) $ 244 $ 732
Marketing and Refining (525) (289) (525) (289)
Corporate   -   -   -   (7)
$ (525) $ (340) $ (281) $ 436
 

Fourth quarter 2011 results included an after-tax charge of $525 million related to the Corporation's investment in HOVENSA L.L.C. and the shutdown of the refinery in St. Croix, U.S. Virgin Islands.

Net cash provided by operating activities was $1,138 million in the fourth quarter of 2011, compared with $1,478 million in the same quarter of 2010. Capital and exploratory expenditures were $2,236 million, of which $2,185 million related to Exploration and Production operations. Capital and exploratory expenditures for the fourth quarter of 2010 were $2,464 million, of which $2,438 million related to Exploration and Production operations.

At December 31, 2011, cash and cash equivalents totaled $351 million compared with $1,608 million at December 31, 2010. Total debt was $6,057 million at December 31, 2011 and $5,583 million at December 31, 2010. The Corporation's debt to capitalization ratio at December 31, 2011 was 24.6 percent compared with 24.9 percent at the end of 2010.

Hess Corporation will review fourth 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, with headquarters in New York, is a global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. 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.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS OF DOLLARS)

 
      Fourth   Fourth   Third

  Quarter  

  Quarter  

  Quarter  

2011 2010 2011

Income Statement

Revenues and Non-operating Income
Sales (excluding excise taxes) and other operating revenues $ 9,733 $ 9,007 $ 8,665
Income (loss) from equity investment in HOVENSA L.L.C. (940) (348) (36)
Other, net   31   31   97
 

Total revenues and non-operating income

  8,824   8,690   8,726
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 6,712 6,221 6,181
Production expenses 613 532 609
Marketing expenses 273 291 266
Exploration expenses, including dry holes and lease impairment 426 317 199
Other operating expenses 44 42 43
General and administrative expenses 187 197 177
Interest expense 93 100 94
Depreciation, depletion and amortization 674 633 586
Asset impairments   -   -   358
 
Total costs and expenses   9,022   8,333   8,513
 
Income (loss) before income taxes (198) 357 213
Provision (benefit) for income taxes   (64)   274   (54)
 
Net income (loss) (134) 83 267
Less: Net income (loss) attributable to noncontrolling interests   (3)   25   (31)

Net income (loss) attributable to Hess Corporation

$ (131) $ 58 $ 298
 

Supplemental Income Statement Information

Foreign currency gains (losses), after-tax $ (8) $ 2 $ (2)
Capitalized interest 5 2 4
 

Cash Flow Information

Net cash provided by operating activities (*) $ 1,138 $ 1,478 $ 1,022
 

Capital and Exploratory Expenditures

Exploration and Production
United States $ 1,372 $ 1,820 $ 1,600
International   813   618   917
 
Total Exploration and Production 2,185 2,438 2,517
Marketing, Refining and Corporate   51   26   33
 
Total Capital and Exploratory Expenditures $ 2,236 $ 2,464 $ 2,550
 
Exploration expenses charged to income included above
United States $ 51 $ 46 $ 48
International   70   77   68
 
$ 121 $ 123 $ 116
 

(*) Includes changes in working capital.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS OF DOLLARS)

            Year Ended December 31,
2011   2010

Income Statement

Revenues and Non-operating Income
Sales (excluding excise taxes) and other operating revenues $ 38,466 $ 33,862
Income (loss) from equity investment in HOVENSA L.L.C. (1,073) (522)
Other, net   478   1,273
 
Total revenues and non-operating income   37,871   34,613
 
Costs and Expenses
Cost of products sold (excluding items shown separately below) 26,774 23,407
Production expenses 2,352 1,924
Marketing expenses 1,069 1,021
Exploration expenses, including dry holes and lease impairment 1,195 865
Other operating expenses 171 213
General and administrative expenses 702 662
Interest expense 383 361
Depreciation, depletion and amortization 2,406 2,317
Asset impairments   358   532
 
Total costs and expenses   35,410   31,302
 
Income (loss) before income taxes 2,461 3,311
Provision (benefit) for income taxes   785   1,173
 
Net income (loss) 1,676 2,138
Less: Net income (loss) attributable to noncontrolling interests   (27)   13
Net income (loss) attributable to Hess Corporation $ 1,703 $ 2,125
 

Supplemental Income Statement Information

Foreign currency gains (losses), after-tax $ (15) $ (8)
Capitalized interest 13 5
 

Cash Flow Information

Net cash provided by operating activities (*) $ 4,984 $ 4,530
 

Capital and Exploratory Expenditures

Exploration and Production
United States $ 4,305 $ 2,935
International   3,039   2,822
 
Total Exploration and Production 7,344 5,757
Marketing, Refining and Corporate   118   98
 
Total Capital and Exploratory Expenditures $ 7,462 $ 5,855
 
Exploration expenses charged to income included above
United States $ 197 $ 154
International   259   209
 
$ 456 $ 363

 

(*) Includes changes in working capital.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS OF DOLLARS)

                   
December 31, December 31,
2011 2010

Balance Sheet Information

Cash and cash equivalents $ 351 $ 1,608
Other current assets 7,965 7,172
Investments 384 443
Property, plant and equipment - net 24,550 21,127
Other long-term assets   5,688   5,046
Total assets $ 38,938 $ 35,396
 
Short-term debt and current maturities of long-term debt $ 52 $ 46
Other current liabilities 8,025 7,567
Long-term debt 6,005 5,537
Other long-term liabilities 6,294 5,437
Total equity excluding other comprehensive income (loss) 19,659 17,968
Accumulated other comprehensive income (loss)   (1,097)   (1,159)
Total liabilities and equity $ 38,938 $ 35,396
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS OF DOLLARS)

   
Fourth Quarter 2011

 United

     

    States   

International

    Total   

Sales and other operating revenues $ 937 $ 1,662 $ 2,599
Other, net   3   25   28
 
Total revenues and non-operating income   940   1,687   2,627
Costs and expenses
Production expenses, including related taxes 170 443 613
Exploration expenses, including dry holes and lease impairment 118 308 426
General, administrative and other expenses 49 33 82
Depreciation, depletion and amortization 273 378 651
Asset impairments   -   -   -
 
Total costs and expenses   610   1,162   1,772
 
Results of operations before income taxes 330 525 855
Provision (benefit) for income taxes   130   198   328
 
Results of operations attributable to Hess Corporation $ 200 $ 327 $ 527
 
Fourth Quarter 2010
United
States International Total
Sales and other operating revenues $ 679 $ 1,613 $ 2,292
Other, net   (5)   13   8
 
Total revenues and non-operating income   674   1,626   2,300
Costs and expenses
Production expenses, including related taxes 143 389 532
Exploration expenses, including dry holes and lease impairment 121 196 317
General, administrative and other expenses 56 24 80
Depreciation, depletion and amortization 184 425 609
Asset impairments   -   -   -
 
Total costs and expenses   504   1,034   1,538
 
Results of operations before income taxes 170 592 762
Provision (benefit) for income taxes   72   270   342
 
Results of operations attributable to Hess Corporation $ 98 $ 322 $ 420
 
Third Quarter 2011
United
States International Total
Sales and other operating revenues $ 830 $ 1,307 $ 2,137
Other, net   4   93   97
 
Total revenues and non-operating income   834   1,400   2,234
Costs and expenses
Production expenses, including related taxes 174 435 609
Exploration expenses, including dry holes and lease impairment 120 79 199
General, administrative and other expenses 44 27 71
Depreciation, depletion and amortization 209 355 564
Asset impairments   16   342   358
 
Total costs and expenses   563   1,238   1,801
 
Results of operations before income taxes 271 162 433
Provision (benefit) for income taxes   108   (97)   11
 
Results of operations attributable to Hess Corporation $ 163 $ 259 $ 422
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS OF DOLLARS)

 
    Year Ended December 31, 2011
United    

   States   

International

   Total   

Sales and other operating revenues $ 3,371 $ 6,676 $ 10,047
Other, net   (7)   471   464
 
Total revenues and non-operating income   3,364   7,147   10,511
Costs and expenses
Production expenses, including related taxes 660 1,692 2,352
Exploration expenses, including dry holes and lease impairment 475 720 1,195
General, administrative and other expenses 190 123 313
Depreciation, depletion and amortization 800 1,505 2,305
Asset impairments   16   342   358
 
Total costs and expenses   2,141   4,382   6,523
 
Results of operations before income taxes 1,223 2,765 3,988
Provision (benefit) for income taxes   470   843   1,313
 
Results of operations attributable to Hess Corporation $ 753 $ 1,922 $ 2,675
 
Year Ended December 31, 2010
United
States International Total
Sales and other operating revenues $ 2,453 $ 6,291 $ 8,744
Other, net   (3)   1,236   1,233
 
Total revenues and non-operating income   2,450   7,527   9,977
Costs and expenses
Production expenses, including related taxes 489 1,435 1,924
Exploration expenses, including dry holes and lease impairment 364 501 865
General, administrative and other expenses 161 120 281
Depreciation, depletion and amortization 649 1,573 2,222
Asset impairments   -   532   532
 
Total costs and expenses   1,663   4,161   5,824
 
Results of operations before income taxes 787 3,366 4,153
Provision (benefit) for income taxes   304   1,113   1,417
 
Results of operations attributable to Hess Corporation $ 483 $ 2,253 $ 2,736
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

                                           
Fourth Fourth Third

  Quarter 

  Quarter 

  Quarter 

  2011  

  2010  

  2011  

Operating Data

Net Production Per Day (in thousands)

Crude oil - barrels
United States 89 76 82
Europe 95 103 68
Africa 54 99 59
Asia   13   13   15
Total   251   291   224
 
Natural gas liquids - barrels
United States 13 14 13
Europe 4 4 3
Asia   1   1   1
Total   18   19   17
 
Natural gas - mcf
United States 90 114 102
Europe 92 138 55
Asia and other   408   411   458
Total   590   663   615
Barrels of oil equivalent   367   420   344
 

Average Selling Price

Crude oil - per barrel (including hedging)*
United States $ 100.76 $ 80.65 $ 95.12
Europe 77.18 63.18 65.92
Africa 85.49 70.21 89.41
Asia 111.08 86.94 112.31
Worldwide 89.70 71.73 85.81
 
Crude oil - per barrel (excluding hedging)
United States $ 100.76 $ 80.65 $ 95.12
Europe 77.18 63.18 65.92
Africa 109.28 86.40 113.03
Asia 111.08 86.94 112.31
Worldwide 95.16 77.17 92.33
 
Natural gas liquids - per barrel
United States $ 57.86 $ 51.89 $ 57.72
Europe 66.47 64.65 82.18
Asia 66.18 70.22 71.30
Worldwide 59.81 55.00 63.64
 
Natural gas - per mcf
United States $ 2.50 $ 3.11 $ 3.43
Europe 8.88 7.81 8.93
Asia and other 6.57 5.06 5.86
Worldwide 6.32 5.30 5.74
 
*

The realized after-tax losses from crude oil hedging activities were $83 million in the fourth quarter of 2011, $86 million in the fourth quarter of 2010 and $82 million in the third quarter of 2011.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION SUPPLEMENTAL OPERATING DATA (UNAUDITED)

                                     
Year Ended December 31,
2011             2010

Operating Data

Net Production Per Day (in thousands)

Crude oil - barrels
United States 81 75
Europe 89 88
Africa 66 113
Asia   13   13
Total   249   289
 
Natural gas liquids - barrels
United States 13 14
Europe 3 3
Asia   1   1
Total   17   18
 
Natural gas - mcf
United States 100 108
Europe 81 134
Asia and other   442   427
Total   623   669
Barrels of oil equivalent   370   418
 

Average Selling Price

Crude oil - per barrel (including hedging)*
United States $ 98.56 $ 75.02
Europe 80.18 58.11
Africa 88.46 65.02
Asia 111.71 79.23
Worldwide 89.99 66.20
 
Crude oil - per barrel (excluding hedging)
United States $ 98.56 $ 75.02
Europe 80.18 58.11
Africa 110.28 78.31
Asia 111.71 79.23
Worldwide 95.60 71.40
 
Natural gas liquids - per barrel
United States $ 58.59 $ 47.92
Europe 75.49 59.23
Asia 72.29 63.50
Worldwide 62.72 50.49
 
Natural gas - per mcf
United States $ 3.39 $ 3.70
Europe 8.79 6.23
Asia and other 6.02 5.93
Worldwide 5.96 5.63
*  

The realized after-tax losses from crude oil hedging activities were $327 million for the year ended December 31, 2011 and $338 million for the year ended December 31, 2010.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)

                         
Fourth Fourth Third

  Quarter  

  Quarter  

  Quarter  

2011

2010 2011

Financial Information (in millions of dollars)

 

Marketing and Refining Results

Income (loss) before income taxes $ (885) $ (251) $ (23)
Provision (benefit) for income taxes   (324)   10   -
Results of operations attributable to Hess Corporation $ (561) $ (261) $ (23)
 

Summary of Marketing and Refining Results

Refining $ (598) $ (308) $ (38)
Marketing 48 37 41
Trading   (11)   10   (26)
Results of operations attributable to Hess Corporation $ (561) $ (261) $ (23)
     
 

Operating Data (barrels and gallons in thousands)

 

Refined Product Sales (barrels per day)

Gasoline 214 225 222
Distillates 143 144 100
Residuals 65 78 53
Other   19   42   14
Total   441   489   389
 

Refinery Throughput (barrels per day)

HOVENSA - Crude runs 271 384 297
HOVENSA - Hess 50% share 136 192 149
Port Reading 58 60 63

 

Refinery Utilization

Refinery Capacity

HOVENSA

(barrels per day)

Crude

    350 (a)

77.5

%

 

76.8

%

 

84.9 %
FCC

150

64.0

%

 

57.3

%

 

79.2 %
Coker

 58

80.4

%

 

73.3

%

 

91.0 %
Port Reading

 70

82.9

%

 

86.0

%

 

90.0 %
 

Retail Marketing

Number of retail stations (b) 1,361 1,362 1,358
Convenience store revenue (in millions of dollars) (c) $ 290 $ 298 $ 316
Average gasoline volume per station (gallons per month) (c) 195 201 201
 
(a)   HOVENSA's refining crude capacity was reduced to 350,000 from 500,000 barrels per day in the first quarter of 2011.
(b) Includes company operated, Wilco-Hess, dealer and branded retailer.
(c) Company operated only.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

MARKETING AND REFINING SUPPLEMENTAL FINANCIAL AND OPERATING DATA (UNAUDITED)

                           

 

Year Ended December 31,
2011       2010
 

Financial Information (in millions of dollars)

 

Marketing and Refining Results

Income (loss) before income taxes $ (857) $ (227)
Provision (benefit) for income taxes   (273)   4
Results of operations attributable to Hess Corporation $ (584) $ (231)
 

Summary of Marketing and Refining Results

Refining $ (728) $ (445)
Marketing 185 215
Trading   (41)   (1)
Results of operations attributable to Hess Corporation $ (584) $ (231)
     
 

Operating Data (barrels and gallons in thousands)

 

Refined Product Sales (barrels per day)

Gasoline 222 242
Distillates 123 120
Residuals 65 69
Other   20   40
Total   430   471
 

Refinery Throughput (barrels per day)

HOVENSA - Crude runs 284 390
HOVENSA - Hess 50% share 142 195
Port Reading 63 55
 

Refinery Utilization

Refinery Capacity

HOVENSA (barrels per day)
Crude

     350 (a)

81.1

%

 

78.0 %
FCC 150 71.7

%

 

66.5 %
Coker

 58

77.4

%

 

78.3 %
Port Reading

 70

90.0

%

 

78.1 %
 

Retail Marketing

Number of retail stations (b) 1,361 1,362
Convenience store revenue (in millions of dollars) (c) $ 1,189 $ 1,213
Average gasoline volume per station (gallons per month) (c) 195 199
(a)   HOVENSA's refining crude capacity was reduced to 350,000 from 500,000 barrels per day in the first quarter of 2011.
(b) Includes company operated, Wilco-Hess, dealer and branded retailer.
(c) Company operated only.

Hess Corporation
Investor Contact:
Jay Wilson, (212) 536-8940
or
Media Contact:
Jon Pepper, (212) 536-8550