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Hess Reports Estimated Results for the Fourth Quarter of 2023

Key Development:

  • Commenced production from the Payara development at the Stabroek Block, offshore Guyana, in November; Payara reached its initial production capacity of approximately 220,000 gross barrels of oil per day (bopd) in January 2024

Fourth Quarter Financial and Operational Highlights:

  • Net income was $413 million, or $1.34 per share, compared with $497 million, or $1.61 per share, in the fourth quarter of 2022

  • Adjusted net income1 was $501 million, or $1.63 per share, compared with $522 million, or $1.69 per share, in the fourth quarter of 2022

  • Oil and gas net production was 418,000 barrels of oil equivalent per day (boepd), up 11% from 376,000 boepd, proforma for asset sold, in the fourth quarter of 2022

  • Bakken net production was 194,000 boepd, up 23% from 158,000 boepd in the fourth quarter of 2022; Guyana net production was 128,000 bopd, compared with 116,000 bopd in the prior-year quarter

  • E&P capital and exploratory expenditures were $1,480 million and included the purchase of the Liza Unity floating production, storage and offloading vessel (FPSO) for approximately $380 million, compared with $818 million in the prior-year quarter

  • Year-end proved reserves are estimated to be 1.37 billion barrels of oil equivalent (boe); organic reserve replacement was 178% at a finding and development cost of $16.00 per boe

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NEW YORK, January 31, 2024--(BUSINESS WIRE)--   Hess Corporation (NYSE: HES) today reported net income of $413 million, or $1.34 per share, in the fourth quarter of 2023, compared with net income of $497 million, or $1.61 per share, in the fourth quarter of 2022. On an adjusted basis, the Corporation reported net income of $501 million, or $1.63 per share in the fourth quarter of 2023, compared with $522 million, or $1.69 per share, in the prior-year quarter. The decrease in adjusted after-tax results compared with the prior-year quarter reflects lower realized gas and natural gas liquids (NGL) selling prices, partially offset by higher production volumes, in the fourth quarter of 2023.

1.

"Adjusted net income" is a non-GAAP financial measure. The reconciliation to its nearest GAAP equivalent measure, and its definition, appear on pages 6 and 7, respectively.

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

 

Three Months Ended

Year Ended

December 31,

December 31,

(unaudited)

(unaudited)

 

 

2023

 

2022

 

2023

 

2022

 

(In millions, except per share amounts)

Net Income Attributable to Hess Corporation

 

 

Exploration and Production

$

512

$

641

$

1,601

$

2,396

Midstream

 

63

 

64

 

252

 

269

Corporate, Interest and Other

 

(162)

 

(208)

 

(471)

 

(569)

Net income attributable to Hess Corporation

$

413

$

497

$

1,382

$

2,096

Net income per share (diluted)

$

1.34

$

1.61

$

4.49

$

6.77

Adjusted Net Income Attributable to Hess Corporation

 

 

Exploration and Production

$

531

$

565

$

1,702

$

2,374

Midstream

 

63

 

64

 

252

 

269

Corporate, Interest and Other

 

(93)

 

(107)

 

(402)

 

(467)

Adjusted net income attributable to Hess Corporation

$

501

$

522

$

1,552

$

2,176

Adjusted net income per share (diluted)

$

1.63

$

1.69

$

5.05

$

7.03

Weighted average number of shares (diluted)

 

307.9

 

308.1

 

307.6

 

309.6

Exploration and Production:

E&P net income was $512 million in the fourth quarter of 2023, compared with $641 million in the fourth quarter of 2022. On an adjusted basis, E&P fourth quarter 2023 net income was $531 million, compared with $565 million in the prior-year quarter. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $76.63 per barrel in the fourth quarter of 2023, compared with $76.07 per barrel in the prior-year quarter. The average realized NGL selling price in the fourth quarter of 2023 was $20.92 per barrel, compared with $26.93 per barrel in the prior-year quarter, while the average realized natural gas selling price was $4.51 per mcf, compared with $5.17 per mcf in the fourth quarter of 2022.

Net production was 418,000 boepd in the fourth quarter of 2023, compared with 376,000 boepd, proforma for asset sold, in the fourth quarter of 2022, primarily due to higher production in the Bakken and Guyana.

Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $13.29 per boe in the fourth quarter of 2023, compared with $12.72 per boe, proforma for asset sold, in the prior-year quarter.

Oil and Gas Reserves Estimates:

Oil and gas proved reserves at December 31, 2023, which are subject to final review, were 1.37 billion boe, compared with 1.26 billion boe at December 31, 2022. Proved reserve additions and net revisions in 2023 totaled 261 million boe, primarily from Guyana, which included sanctioning of the Uaru development, and from the Bakken. The Corporation replaced 178% of its 2023 production at a finding and development cost of $16.00 per boe.

Operational Highlights for the Fourth Quarter of 2023:

   Bakken (Onshore U.S.): Net production from the Bakken was 194,000 boepd in the fourth quarter of 2023, compared with 158,000 boepd in the prior-year quarter, reflecting increased drilling and completion activity, severe winter weather in the fourth quarter of 2022, and higher NGL and natural gas volumes received under percentage of proceeds contracts due to lower commodity prices. NGL and natural gas volumes received under percentage of proceeds contracts were 19,000 boepd in the fourth quarter of 2023, compared with 12,000 boepd in the fourth quarter of 2022, due to lower realized NGL and natural gas prices increasing volumes received as consideration for gas processing fees. During the fourth quarter of 2023, the Corporation operated four rigs and drilled 33 wells, completed 30 wells, and brought 33 new wells online. The Corporation plans to continue operating four drilling rigs in 2024.

   Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico in the fourth quarter of 2023 was 30,000 boepd, compared with 35,000 boepd in the prior-year quarter. In the fourth quarter, we were the high bidder on 20 leases in Lease Sale 261 for $88 million and we expect to be awarded these leases in the first quarter of 2024.

   Guyana (Offshore): At the Stabroek Block (Hess – 30%), net production totaled 128,0002 bopd in the fourth quarter of 2023, compared with 116,0002 bopd in the prior-year quarter. In November, production commenced from the Prosperity FPSO at Payara, which contributed 14,000 net bopd in the fourth quarter of 2023.

The fourth development on the block, Yellowtail, was sanctioned in April 2022 with a production capacity of approximately 250,000 gross bopd and first production expected in 2025. The fifth development, Uaru, was sanctioned in April 2023 with a production capacity of approximately 250,000 gross bopd and first production expected in 2026. The operator submitted the field development plan for the sixth development, Whiptail, to the Government of Guyana in October 2023.

   Southeast Asia (Offshore): Net production at North Malay Basin and JDA was 66,000 boepd in the fourth quarter of 2023, compared with 67,000 boepd in the prior-year quarter.

Midstream:

The Midstream segment had net income of $63 million in the fourth quarter of 2023, compared with net income of $64 million in the prior-year quarter.

In November 2023, Hess Midstream Operations LP (HESM Opco), a consolidated subsidiary of Hess Midstream LP (HESM), repurchased approximately 3.4 million HESM Opco Class B units held by Hess Corporation and Global Infrastructure Partners for $100 million, of which the Corporation received $37.8 million. The repurchase of the Class B units was financed by HESM Opco’s revolving credit facility. After giving effect to the transaction, the Corporation continues to own approximately 37.8% of HESM on a consolidated basis.

Corporate, Interest and Other:

After-tax expense for Corporate, Interest and Other was $162 million in the fourth quarter of 2023, compared with $208 million in the fourth quarter of 2022. On an adjusted basis, after-tax expense for Corporate, Interest and Other was $93 million in the fourth quarter of 2023, compared with $107 million in the fourth quarter of 2022, reflecting higher capitalized interest.

Capital and Exploratory Expenditures:

E&P capital and exploratory expenditures were $1,480 million in the fourth quarter of 2023, compared with $818 million in the prior-year quarter, reflecting the purchase of the Liza Unity FPSO in the fourth quarter of 2023 for approximately $380 million, higher development activities in Guyana, and higher drilling activity in the Bakken. Full year 2024 E&P capital and exploratory expenditures are expected to be approximately $4.2 billion, which includes the recent acquisition of leases from the Gulf of Mexico Lease Sale 261.

Midstream capital expenditures were $72 million in the fourth quarter of 2023 and $63 million in the prior-year quarter.

Liquidity:

Excluding the Midstream segment, Hess Corporation had cash and cash equivalents of $1.7 billion and debt and finance lease obligations totaling $5.6 billion at December 31, 2023. The Midstream segment had cash and cash equivalents of $6 million and total debt of $3.2 billion at December 31, 2023. The Corporation’s debt to capitalization ratio as defined in its debt covenants was 33.6% at December 31, 2023 and 36.1% at December 31, 2022.

Net cash provided by operating activities was $1,344 million in the fourth quarter of 2023, compared with $1,252 million in the fourth quarter of 2022. Net cash provided by operating activities before changes in operating assets and liabilities3 was $1,239 million in the fourth quarter of 2023, compared with $1,301 million in the prior-year quarter.

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

Year Ended

December 31,

December 31,

(unaudited)

(unaudited)

 

 

2023

 

2022

 

2023

 

2022

 

(In millions)

Exploration and Production

$

(19)

$

76

$

(101)

$

22

Midstream

 

 

 

 

Corporate, Interest and Other

 

(69)

 

(101)

 

(69)

 

(102)

Total items affecting comparability of earnings between periods

$

(88)

$

(25)

$

(170)

$

(80)

   Fourth Quarter 2023: E&P results included a pre-tax charge of $52 million ($52 million after income taxes) to write-off the Huron exploration well in the Gulf of Mexico which completed in 2022, based on the decision by the Corporation and its partners in the fourth quarter of 2023 to exit the project. E&P results also included a noncash income tax benefit of $33 million resulting from the reversal of a valuation allowance against net deferred tax assets in Malaysia.

Corporate and other results included a pre-tax charge of $52 million ($52 million after income taxes) for litigation related costs associated with the Corporation's former downstream business, HONX, Inc., which are included in General and administrative expenses in the income statement. Corporate and other results also included a noncash charge to recognize unamortized pension actuarial losses of $17 million ($17 million after income taxes) resulting from the payment of lump sums to certain participants in the pension plan. The charge is included in Other, net in the income statement.

   Fourth Quarter 2022: E&P results included a pre-tax gain of $76 million ($76 million after income taxes) associated with the sale of the Corporation's interest in the Waha Concession in Libya. Corporate and other results included a pre-tax charge of $101 million ($101 million after income taxes) for litigation related costs associated with the Corporation's former downstream business, HONX, Inc., which are included in General and administrative expenses in the income statement.

2.

Net production from Guyana included 16,000 bopd of tax barrels in the fourth quarter of 2023 and 22,000 bopd of tax barrels in the fourth quarter of 2022.

3.

"Net cash provided by (used in) operating activities before changes in operating assets and liabilities" is a non-GAAP financial measure. The reconciliation to its nearest GAAP equivalent measure, and its definition, appear on pages 6 and 7, respectively.

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

Year Ended

December 31,

December 31,

(unaudited)

(unaudited)

 

 

2023

 

2022

 

2023

 

2022

 

(In millions)

Net income attributable to Hess Corporation

$

413

$

497

$

1,382

$

2,096

Less: Total items affecting comparability of earnings between periods

 

(88)

 

(25)

 

(170)

 

(80)

Adjusted net income attributable to Hess Corporation

$

501

$

522

$

1,552

$

2,176

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

Year Ended

December 31,

December 31,

(unaudited)

(unaudited)

 

 

2023

 

2022

 

2023

 

2022

 

(In millions)

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

$

1,239

$

1,301

$

4,494

$

5,121

Changes in operating assets and liabilities

 

105

 

(49)

 

(552)

 

(1,177)

Net cash provided by (used in) operating activities

$

1,344

$

1,252

$

3,942

$

3,944

Investor Conference Call:

Due to the pending merger with Chevron Corporation (Chevron), the Corporation will not host a conference call to review its fourth quarter 2023 results.

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

Forward-looking Statements

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "estimate," "expect," "forecast," "guidance," "could," "may," "should," "would," "believe," "intend," "project," "plan," "predict," "will," "target" and similar expressions identify forward-looking statements, which are not historical in nature. Our forward-looking statements may include, without limitation: our future financial and operational results; our business strategy; estimates of our crude oil and natural gas reserves and levels of production; benchmark prices of crude oil, NGL and natural gas and our associated realized price differentials; our projected budget and capital and exploratory expenditures; expected timing and completion of our development projects; information about sustainability goals and targets and planned social, safety and environmental policies, programs and initiatives; future economic and market conditions in the oil and gas industry; and expected timing and completion of our proposed merger with Chevron.

Forward-looking statements are based on our current understanding, assessments, estimates and projections of relevant factors and reasonable assumptions about the future. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. The following important factors could cause actual results to differ materially from those in our forward-looking statements: fluctuations in market prices of crude oil, NGL and natural gas and competition in the oil and gas exploration and production industry; reduced demand for our products, including due to perceptions regarding the oil and gas industry, competing or alternative energy products and political conditions and events; potential failures or delays in increasing oil and gas reserves, including as a result of unsuccessful exploration activity, drilling risks and unforeseen reservoir conditions, and in achieving expected production levels; changes in tax, property, contract and other laws, regulations and governmental actions applicable to our business, including legislative and regulatory initiatives regarding environmental concerns, such as measures to limit greenhouse gas emissions and flaring, fracking bans as well as restrictions on oil and gas leases; operational changes and expenditures due to climate change and sustainability related initiatives; disruption or interruption of our operations due to catastrophic and other events, such as accidents, severe weather, geological events, shortages of skilled labor, cyber-attacks, public health measures, or climate change; the ability of our contractual counterparties to satisfy their obligations to us, including the operation of joint ventures under which we may not control and exposure to decommissioning liabilities for divested assets in the event the current or future owners are unable to perform; unexpected changes in technical requirements for constructing, modifying or operating exploration and production facilities and/or the inability to timely obtain or maintain necessary permits; availability and costs of employees and other personnel, drilling rigs, equipment, supplies and other required services; any limitations on our access to capital or increase in our cost of capital, including as a result of limitations on investment in oil and gas activities, rising interest rates or negative outcomes within commodity and financial markets; liability resulting from environmental obligations and litigation, including heightened risks associated with being a general partner of HESM; risks and uncertainties associated with our proposed merger with Chevron; and other factors described in Item 1A—Risk Factors in our Annual Report on Form 10-K and any additional risks described in our other filings with the Securities and Exchange Commission (SEC).

As and when made, we believe that our forward-looking statements are reasonable. However, given these risks and uncertainties, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur and actual results may differ materially from those contained in any forward-looking statement we make. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

Non-GAAP financial measures

The Corporation has used non-GAAP financial measures in this earnings release. "Adjusted net income" presented in this release is defined as reported net income attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. "Net cash provided by (used in) operating activities before changes in operating assets and liabilities" presented in this release is defined as Net cash provided by (used in) operating activities excluding changes in operating assets and liabilities. Management uses adjusted net income to evaluate the Corporation’s operating performance and believes that investors’ understanding of our performance is enhanced by disclosing this measure, which excludes certain items that management believes are not directly related to ongoing operations and are not indicative of future business trends and operations. Management believes that net cash provided by (used in) operating activities before changes in operating assets and liabilities demonstrates the Corporation’s ability to internally fund capital expenditures, pay dividends and service debt. These measures are not, and should not be viewed as, a substitute for U.S. GAAP net income or net cash provided by (used in) operating activities. A reconciliation of reported net income attributable to Hess Corporation (U.S. GAAP) to adjusted net income, and a reconciliation of net cash provided by (used in) operating activities (U.S. GAAP) to net cash provided by (used in) operating activities before changes in operating assets and liabilities are provided in the release.

Cautionary Note to Investors

We use certain terms in this release relating to resources other than proved reserves, such as unproved reserves or resources. Investors are urged to consider closely the oil and gas disclosures in Hess Corporation’s Form 10-K, File No. 1-1204, available from Hess Corporation, 1185 Avenue of the Americas, New York, New York 10036 c/o Corporate Secretary and on our website at www.hess.com. You can also obtain this form from the SEC on the EDGAR system.

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Fourth

Fourth

Third

Quarter

Quarter

Quarter

2023

2022

2023

Income Statement

 

 

 

Revenues and non-operating income

 

 

 

Sales and other operating revenues

$

3,011

$

2,934

$

2,800

Gains on asset sales, net

 

 

76

 

2

Other, net

 

24

 

44

 

35

Total revenues and non-operating income

 

3,035

 

3,054

 

2,837

Costs and expenses

 

 

 

Marketing, including purchased oil and gas

 

886

 

821

 

696

Operating costs and expenses

 

473

 

385

 

467

Production and severance taxes

 

61

 

55

 

61

Exploration expenses, including dry holes and lease impairment

 

87

 

74

 

65

General and administrative expenses

 

168

 

217

 

115

Interest expense

 

116

 

124

 

117

Depreciation, depletion and amortization

 

559

 

504

 

499

Total costs and expenses

 

2,350

 

2,180

 

2,020

Income before income taxes

 

685

 

874

 

817

Provision for income taxes

 

182

 

292

 

215

Net income

 

503

 

582

 

602

Less: Net income attributable to noncontrolling interests

 

90

 

85

 

98

Net income attributable to Hess Corporation

$

413

$

497

$

504

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Year Ended

December 31,

Income Statement

 

2023

 

2022

Revenues and non-operating income

 

 

Sales and other operating revenues

$

10,511

$

11,324

Gains on asset sales, net

 

2

 

101

Other, net

 

132

 

145

Total revenues and non-operating income

 

10,645

 

11,570

Costs and expenses

 

 

Marketing, including purchased oil and gas

 

2,732

 

3,328

Operating costs and expenses

 

1,776

 

1,452

Production and severance taxes

 

216

 

255

Exploration expenses, including dry holes and lease impairment

 

317

 

208

General and administrative expenses

 

527

 

531

Interest expense

 

478

 

493

Depreciation, depletion and amortization

 

2,046

 

1,703

Impairment and other

 

82

 

54

Total costs and expenses

 

8,174

 

8,024

Income before income taxes

 

2,471

 

3,546

Provision for income taxes

 

733

 

1,099

Net income

 

1,738

 

2,447

Less: Net income attributable to noncontrolling interests

 

356

 

351

Net income attributable to Hess Corporation

$

1,382

$

2,096

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

December 31,

 

December 31,

2023

 

2022

Balance Sheet Information

 

 

Assets

 

 

Cash and cash equivalents

$

1,688

$

2,486

Other current assets

 

1,742

 

1,445

Property, plant and equipment – net

 

17,432

 

15,098

Operating lease right-of-use assets – net

 

720

 

570

Finance lease right-of-use assets – net

 

108

 

126

Other long-term assets

 

2,317

 

1,970

Total assets

$

24,007

$

21,695

Liabilities and equity

 

 

Current portion of long-term debt

$

311

$

3

Current portion of operating and finance lease obligations

 

370

 

221

Other current liabilities

 

2,589

 

2,172

Long-term debt

 

8,302

 

8,278

Long-term operating lease obligations

 

459

 

469

Long-term finance lease obligations

 

156

 

179

Other long-term liabilities

 

2,218

 

1,877

Total equity excluding other comprehensive income (loss)

 

9,120

 

7,986

Accumulated other comprehensive income (loss)

 

(134)

 

(131)

Noncontrolling interests

 

616

 

641

Total liabilities and equity

$

24,007

$

21,695

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

December 31,

December 31,

2023

2022

Total Debt

 

 

Hess Corporation

$

5,402

$

5,395

Midstream (a)

 

3,211

 

2,886

Hess Consolidated

$

8,613

$

8,281

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

 

December 31,

 

December 31,

2023

 

2022

Debt to Capitalization Ratio (a)

 

 

 

Hess Consolidated

47.8 %

 

50.0 %

Hess Corporation as defined in debt covenants

33.6 %

 

36.1 %

(a) Includes finance lease obligations.

 

Three Months Ended

 

Year Ended

December 31,

 

December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Interest Expense

 

 

 

 

Gross interest expense – Hess Corporation

$

88

$

87

$

347

$

353

Less: Capitalized interest – Hess Corporation

 

(19)

 

(4)

 

(48)

 

(10)

Interest expense – Hess Corporation

 

69

 

83

 

299

 

343

Interest expense – Midstream (a)

 

47

 

41

 

179

 

150

Interest expense – Hess Consolidated

$

116

$

124

$

478

$

493

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

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Fourth

Fourth

Third

Quarter

Quarter

Quarter

2023

2022

2023

Cash Flow Information

 

 

 

Cash Flows from Operating Activities

 

 

 

Net income

$

503

$

582

$

602

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

 

 

 

(Gains) losses on asset sales, net

 

 

(76)

 

(2)

Depreciation, depletion and amortization

 

559

 

504

 

499

Exploratory dry hole costs

 

50

 

37

 

4

Exploration lease impairment

 

3

 

6

 

11

Pension settlement loss

 

17

 

 

Stock compensation expense

 

18

 

17

 

16

Noncash (gains) losses on commodity derivatives, net

 

52

 

165

 

52

Provision (benefit) for deferred income taxes and other tax accruals

 

37

 

66

 

67

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

 

1,239

 

1,301

 

1,249

Changes in operating assets and liabilities

 

105

 

(49)

 

(263)

Net cash provided by (used in) operating activities

 

1,344

 

1,252

 

986

Cash Flows from Investing Activities

 

 

 

Additions to property, plant and equipment - E&P

 

(1,380)

 

(732)

 

(953)

Additions to property, plant and equipment - Midstream

 

(64)

 

(61)

 

(53)

Proceeds from asset sales, net of cash sold

 

 

150

 

3

Other, net

 

(3)

 

(4)

 

(1)

Net cash provided by (used in) investing activities

 

(1,447)

 

(647)

 

(1,004)

Cash Flows from Financing Activities

 

 

 

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

 

64

 

(25)

 

78

Debt with maturities of greater than 90 days:

 

 

 

Borrowings

 

 

 

Repayments

 

(3)

 

 

Cash dividends paid

 

(134)

 

(115)

 

(134)

Common stock acquired and retired

 

 

(290)

 

Noncontrolling interests, net

 

(151)

 

(80)

 

(136)

Employee stock options exercised

 

 

8

 

6

Payments on finance lease obligations

 

(3)

 

(4)

 

(3)

Other, net

 

 

3

 

(1)

Net cash provided by (used in) financing activities

 

(227)

 

(503)

 

(190)

Net Increase (Decrease) in Cash and Cash Equivalents

 

(330)

 

102

 

(208)

Cash and Cash Equivalents at Beginning of Period

 

2,018

 

2,384

 

2,226

Cash and Cash Equivalents at End of Period

$

1,688

$

2,486

$

2,018

 

 

 

 

Additions to Property, Plant and Equipment included within Investing Activities

Capital expenditures incurred

$

(1,518)

$

(850)

$

(1,013)

Increase (decrease) in related liabilities

 

74

 

57

 

7

Additions to property, plant and equipment

$

(1,444)

$

(793)

$

(1,006)

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Year Ended

December 31,

 

 

2023

 

2022

Cash Flow Information

 

 

Cash Flows from Operating Activities

 

 

Net income

$

1,738

$

2,447

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

 

 

(Gains) losses on asset sales, net

 

(2)

 

(101)

Depreciation, depletion and amortization

 

2,046

 

1,703

Impairment and other

 

82

 

54

Exploratory dry hole costs

 

147

 

56

Exploration lease impairment

 

27

 

20

Pension settlement loss

 

17

 

2

Stock compensation expense

 

87

 

83

Noncash (gains) losses on commodity derivatives, net

 

156

 

548

Provision (benefit) for deferred income taxes and other tax accruals

 

196

 

309

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

 

4,494

 

5,121

Changes in operating assets and liabilities

 

(552)

 

(1,177)

Net cash provided by (used in) operating activities

 

3,942

 

3,944

Cash Flows from Investing Activities

 

 

Additions to property, plant and equipment - E&P

 

(3,884)

 

(2,487)

Additions to property, plant and equipment - Midstream

 

(224)

 

(238)

Proceeds from asset sales, net of cash sold

 

3

 

178

Other, net

 

(8)

 

(8)

Net cash provided by (used in) investing activities

 

(4,113)

 

(2,555)

Cash Flows from Financing Activities

 

 

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

 

322

 

(86)

Debt with maturities of greater than 90 days:

 

 

Borrowings

 

 

420

Repayments

 

(3)

 

(510)

Cash dividends paid

 

(539)

 

(465)

Common stock acquired and retired

 

(20)

 

(630)

Proceeds from sale of Class A shares of Hess Midstream LP

 

167

 

146

Noncontrolling interests, net

 

(550)

 

(510)

Employee stock options exercised

 

10

 

52

Payments on finance lease obligations

 

(10)

 

(9)

Other, net

 

(4)

 

(24)

Net cash provided by (used in) financing activities

 

(627)

 

(1,616)

Net Increase (Decrease) in Cash and Cash Equivalents

 

(798)

 

(227)

Cash and Cash Equivalents at Beginning of Year

 

2,486

 

2,713

Cash and Cash Equivalents at End of Year

$

1,688

$

2,486

 

 

 

Additions to Property, Plant and Equipment included within Investing Activities

Capital expenditures incurred

$

(4,279)

$

(2,821)

Increase (decrease) in related liabilities

 

171

 

96

Additions to property, plant and equipment

$

(4,108)

$

(2,725)

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

 

 

Fourth

Fourth

Third

Quarter

Quarter

Quarter

2023

2022

2023

Capital and Exploratory Expenditures

 

 

 

E&P Capital and exploratory expenditures

 

 

 

United States

 

 

 

North Dakota

$

313

$

258

$

329

Offshore and Other

 

64

 

39

 

115

Total United States

 

377

 

297

 

444

Guyana

 

1,047

 

439

 

509

Malaysia and JDA

 

55

 

58

 

43

Other (a)

 

1

 

24

 

2

E&P Capital and exploratory expenditures

$

1,480

$

818

$

998

 

 

 

 

Total exploration expenses charged to income included above

$

34

$

31

$

50

 

 

 

 

Midstream Capital expenditures

$

72

$

63

$

65

(a) Other includes capital and exploratory expenditures associated with Suriname in the fourth quarter of 2022.

 

Year Ended

December 31,

 

 

2023

 

2022

Capital and Exploratory Expenditures

 

 

E&P Capital and exploratory expenditures

 

 

United States

 

 

North Dakota

$

1,138

$

807

Offshore and Other

 

290

 

224

Total United States

 

1,428

 

1,031

Guyana

 

2,518

 

1,345

Malaysia and JDA

 

189

 

275

Other (a)

 

41

 

70

E&P Capital and exploratory expenditures

$

4,176

$

2,721

 

 

 

Total exploration expenses charged to income included above

$

143

$

132

 

 

 

Midstream Capital expenditures

$

246

$

232

(a) Other includes capital and exploratory expenditures associated with Canada in 2023 and Suriname in 2022.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

Fourth Quarter 2023

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

1,766

 

$

1,240

 

$

3,006

Other, net

 

11

 

 

5

 

 

16

Total revenues and non-operating income

 

1,777

 

 

1,245

 

 

3,022

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

 

867

 

 

40

 

 

907

Operating costs and expenses

 

229

 

 

159

 

 

388

Production and severance taxes

 

56

 

 

5

 

 

61

Midstream tariffs

 

328

 

 

 

 

328

Exploration expenses, including dry holes and lease impairment

 

82

 

 

5

 

 

87

General and administrative expenses

 

53

 

 

8

 

 

61

Depreciation, depletion and amortization

 

255

 

 

253

 

 

508

Total costs and expenses

 

1,870

 

 

470

 

 

2,340

Results of operations before income taxes

 

(93)

 

 

775

 

 

682

Provision for income taxes

 

 

 

170

 

 

170

Net income (loss) attributable to Hess Corporation

$

(93)

(b)

$

605

(c)

$

512

 

 

 

 

 

 

 

Fourth Quarter 2022

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

1,628

 

$

1,306

 

$

2,934

Gains on asset sales, net

 

 

 

76

 

 

76

Other, net

 

13

 

 

8

 

 

21

Total revenues and non-operating income

 

1,641

 

 

1,390

 

 

3,031

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

 

771

 

 

63

 

 

834

Operating costs and expenses

 

193

 

 

129

 

 

322

Production and severance taxes

 

52

 

 

3

 

 

55

Midstream tariffs

 

297

 

 

 

 

297

Exploration expenses, including dry holes and lease impairment

 

33

 

 

41

 

 

74

General and administrative expenses

 

55

 

 

11

 

 

66

Depreciation, depletion and amortization

 

215

 

 

243

 

 

458

Total costs and expenses

 

1,616

 

 

490

 

 

2,106

Results of operations before income taxes

 

25

 

 

900

 

 

925

Provision for income taxes

 

 

 

284

 

 

284

Net income (loss) attributable to Hess Corporation

$

25

(d)

$

616

(e)

$

641

(a) Includes amounts charged from the Midstream segment.
(b) Includes after-tax losses from realized crude oil hedging activities of $34 million (noncash premium amortization: $34 million; cash settlement: $0 million).
(c) Includes after-tax losses from realized crude oil hedging activities of $18 million (noncash premium amortization: $18 million; cash settlement: $0 million).
(d) Includes after-tax losses from realized crude oil hedging activities of $100 million (noncash premium amortization: $100 million; cash settlement: $0 million).
(e) Includes after-tax losses from realized crude oil hedging activities of $65 million (noncash premium amortization: $65 million; cash settlement: $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

Third Quarter 2023

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

1,651

 

$

1,147

 

$

2,798

Other, net

 

4

 

 

8

 

 

12

Total revenues and non-operating income

 

1,655

 

 

1,155

 

 

2,810

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

 

693

 

 

26

 

 

719

Operating costs and expenses

 

226

 

 

158

 

 

384

Production and severance taxes

 

59

 

 

2

 

 

61

Midstream tariffs

 

332

 

 

 

 

332

Exploration expenses, including dry holes and lease impairment

 

45

 

 

20

 

 

65

General and administrative expenses

 

56

 

 

10

 

 

66

Depreciation, depletion and amortization

 

234

 

 

217

 

 

451

Total costs and expenses

 

1,645

 

 

433

 

 

2,078

Results of operations before income taxes

 

10

 

 

722

 

 

732

Provision for income taxes

 

 

 

203

 

 

203

Net income (loss) attributable to Hess Corporation

$

10

(b)

$

519

(c)

$

529

(a) Includes amounts charged from the Midstream segment.
(b) Includes after-tax losses from realized crude oil hedging activities of $33 million (noncash premium amortization: $33 million; cash settlement: $0 million).
(c) Includes after-tax losses from realized crude oil hedging activities of $19 million (noncash premium amortization: $19 million; cash settlement: $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

 

 

Year Ended December 31, 2023

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

6,081

 

$

4,419

 

$

10,500

Other, net

 

30

 

 

20

 

 

50

Total revenues and non-operating income

 

6,111

 

 

4,439

 

 

10,550

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

 

2,681

 

 

128

 

 

2,809

Operating costs and expenses

 

901

 

 

578

 

 

1,479

Production and severance taxes

 

206

 

 

10

 

 

216

Midstream tariffs

 

1,245

 

 

 

 

1,245

Exploration expenses, including dry holes and lease impairment

 

170

 

 

147

 

 

317

General and administrative expenses

 

213

 

 

41

 

 

254

Depreciation, depletion and amortization

 

904

 

 

948

 

 

1,852

Impairment and other

 

82

 

 

 

 

82

Total costs and expenses

 

6,402

 

 

1,852

 

 

8,254

Results of operations before income taxes

 

(291)

 

 

2,587

 

 

2,296

Provision for income taxes

 

 

 

695

 

 

695

Net income (loss) attributable to Hess Corporation

$

(291)

(b)

$

1,892

(c)

$

1,601

 

Year Ended December 31, 2022

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

7,214

 

$

4,110

 

$

11,324

Gains on asset sales, net

 

 

 

76

 

 

76

Other, net

 

81

 

 

21

 

 

102

Total revenues and non-operating income

 

7,295

 

 

4,207

 

 

11,502

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

 

3,271

 

 

123

 

 

3,394

Operating costs and expenses

 

706

 

 

480

 

 

1,186

Production and severance taxes

 

242

 

 

13

 

 

255

Midstream tariffs

 

1,193

 

 

 

 

1,193

Exploration expenses, including dry holes and lease impairment

 

122

 

 

86

 

 

208

General and administrative expenses

 

189

 

 

35

 

 

224

Depreciation, depletion and amortization

 

810

 

 

710

 

 

1,520

Impairment and other

 

54

 

 

 

 

54

Total costs and expenses

 

6,587

 

 

1,447

 

 

8,034

Results of operations before income taxes

 

708

 

 

2,760

 

 

3,468

Provision for income taxes

 

 

 

1,072

 

 

1,072

Net income (loss) attributable to Hess Corporation

$

708

(d)

$

1,688

(e)

$

2,396

(a) Includes amounts charged from the Midstream segment.

(b) Includes after-tax losses from realized crude oil hedging activities of $128 million (noncash premium amortization: $128 million; cash settlement: $0 million).

(c) Includes after-tax losses from realized crude oil hedging activities of $62 million (noncash premium amortization: $62 million; cash settlement: $0 million).

(d) Includes after-tax losses from realized crude oil hedging activities of $356 million (noncash premium amortization: $333 million; cash settlement: $23 million).

(e) Includes after-tax losses from realized crude oil hedging activities of $229 million (noncash premium amortization: $215 million; cash settlement: $14 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Fourth

 

Fourth

 

Third

Quarter

Quarter

Quarter

2023

2022

2023

Net Production Per Day (in thousands)

 

 

 

 

 

Crude oil - barrels

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

89

 

74

 

87

Offshore

21

 

25

 

21

Total United States

110

 

99

 

108

Guyana (a)

128

 

116

 

108

Malaysia and JDA

6

 

4

 

5

Other (b)

 

9

 

Total

244

 

228

 

221

 

 

 

 

 

 

Natural gas liquids - barrels

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

71

 

60

 

70

Offshore

2

 

2

 

1

Total United States

73

 

62

 

71

 

 

 

 

 

 

Natural gas - mcf

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

204

 

143

 

195

Offshore

42

 

50

 

37

Total United States

246

 

193

 

232

Malaysia and JDA

362

 

377

 

383

Other (b)

 

6

 

Total

608

 

576

 

615

 

 

 

 

 

 

Barrels of oil equivalent

418

 

386

 

395

(a) Production from Guyana includes 16,000 bopd of tax barrels in the fourth quarter of 2023, 22,000 bopd of tax barrels in the fourth quarter of 2022 and 14,000 bopd of tax barrels in the third quarter of 2023.

(b) Other includes production from Libya. The Corporation sold its interest in the Waha Concession in Libya in November 2022. Libya net production was 10,000 boepd in the fourth quarter of 2022.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Year Ended

December 31,

 

2023

 

2022

Net Production Per Day (in thousands)

 

 

 

Crude oil - barrels

 

 

 

United States

 

 

 

North Dakota

83

 

75

Offshore

22

 

22

Total United States

105

 

97

Guyana (a)

115

 

78

Malaysia and JDA

5

 

4

Other (b)

 

15

Total

225

 

194

 

 

 

 

Natural gas liquids - barrels

 

 

 

United States

 

 

 

North Dakota

67

 

53

Offshore

2

 

2

Total United States

69

 

55

 

 

 

 

Natural gas - mcf

 

 

 

United States

 

 

 

North Dakota

191

 

156

Offshore

43

 

44

Total United States

234

 

200

Malaysia and JDA

368

 

360

Other (b)

 

10

Total

602

 

570

 

 

 

 

Barrels of oil equivalent

394

 

344

(a) Production from Guyana includes 14,000 bopd of tax barrels in 2023 and 7,000 bopd in 2022.

(b) Other includes production from Libya. The Corporation sold its interest in the Waha Concession in Libya in November 2022. Libya net production was 17,000 boepd in 2022.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Fourth

 

Fourth

 

Third

Quarter

Quarter

Quarter

2023

2022

2023

Sales Volumes Per Day (in thousands) (a)

 

 

 

 

 

Crude oil – barrels

245

 

242

 

223

Natural gas liquids – barrels

74

 

63

 

71

Natural gas – mcf

608

 

576

 

615

Barrels of oil equivalent

420

 

401

 

397

 

 

 

 

 

 

Sales Volumes (in thousands) (a)

 

 

 

 

 

Crude oil – barrels

22,521

 

22,218

 

20,519

Natural gas liquids – barrels

6,839

 

5,825

 

6,500

Natural gas – mcf

55,957

 

52,949

 

56,553

Barrels of oil equivalent

38,686

 

36,868

 

36,445

 

 

Year Ended

December 31,

 

2023

 

2022

Sales Volumes Per Day (in thousands) (a)

 

 

 

Crude oil – barrels

225

 

191

Natural gas liquids – barrels

69

 

54

Natural gas – mcf

602

 

570

Barrels of oil equivalent

394

 

340

 

 

 

 

Sales Volumes (in thousands) (a)

 

 

 

Crude oil – barrels

81,941

 

69,679

Natural gas liquids – barrels

25,184

 

19,843

Natural gas – mcf

219,750

 

208,001

Barrels of oil equivalent

143,750

 

124,189

(a) Sales volumes from purchased crude oil, natural gas liquids, and natural gas are not included in the sales volumes reported.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Fourth

Fourth

Third

Quarter

Quarter

Quarter

2023

2022

2023

Average Selling Prices

 

 

 

Crude oil - per barrel (including hedging)

 

 

 

United States

 

 

 

North Dakota

$

70.69

$

68.52

$

76.06

Offshore

 

73.68

 

69.07

 

78.50

Total United States

 

71.28

 

68.65

 

76.56

Guyana

 

81.50

 

80.77

 

86.24

Malaysia and JDA

 

73.44

 

80.41

 

87.21

Other (a)

 

 

86.83

 

Worldwide

 

76.63

 

76.07

 

81.53

 

 

 

 

Crude oil - per barrel (excluding hedging)

 

 

 

United States

 

 

 

North Dakota

$

74.03

$

79.47

$

79.43

Offshore

 

76.98

 

79.99

 

81.86

Total United States

 

74.62

 

79.60

 

79.92

Guyana

 

83.09

 

85.93

 

88.06

Malaysia and JDA

 

73.44

 

80.41

 

87.21

Other (a)

 

 

91.60

 

Worldwide

 

78.95

 

83.50

 

84.07

 

 

 

 

Natural gas liquids - per barrel

 

 

 

United States

 

 

 

North Dakota

$

20.95

$

26.95

$

20.17

Offshore

 

19.26

 

26.13

 

20.15

Worldwide

 

20.92

 

26.93

 

20.17

 

 

 

 

Natural gas - per mcf

 

 

 

United States

 

 

 

North Dakota

$

1.52

$

4.68

$

1.56

Offshore

 

2.26

 

4.98

 

2.35

Total United States

 

1.65

 

4.76

 

1.69

Malaysia and JDA

 

6.45

 

5.34

 

6.32

Other (a)

 

 

7.48

 

Worldwide

 

4.51

 

5.17

 

4.57

(a) Other includes prices related to production from Libya. The Corporation sold its interest in the Waha Concession in Libya in November 2022.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

 

 

Year Ended

December 31,

 

 

2023

 

 

2022

Average Selling Prices

 

 

Crude oil - per barrel (including hedging)

 

 

United States

 

 

North Dakota

$

70.44

$

81.06

Offshore

 

72.06

 

81.38

Total United States

 

70.80

 

81.14

Guyana

 

80.72

 

89.86

Malaysia and JDA

 

75.51

 

89.77

Other (a)

 

 

93.67

Worldwide

 

75.97

 

85.76

 

 

 

Crude oil - per barrel (excluding hedging)

 

 

United States

 

 

North Dakota

$

73.80

$

91.26

Offshore

 

75.39

 

91.51

Total United States

 

74.15

 

91.32

Guyana

 

82.20

 

96.52

Malaysia and JDA

 

75.51

 

89.77

Other (a)

 

 

101.92

Worldwide

 

78.29

 

94.15

 

 

 

Natural gas liquids - per barrel

 

 

United States

 

 

North Dakota

$

20.77

$

35.09

Offshore

 

20.87

 

35.24

Worldwide

 

20.77

 

35.09

 

 

 

Natural gas - per mcf

 

 

United States

 

 

North Dakota

$

1.68

$

5.50

Offshore

 

2.16

 

6.21

Total United States

 

1.76

 

5.66

Malaysia and JDA

 

5.95

 

5.62

Other (a)

 

 

5.93

Worldwide

 

4.32

 

5.64

(a) Other includes prices related to production from Libya. The Corporation sold its interest in the Waha Concession in Libya in November 2022.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240131222227/en/

Contacts

For Hess Corporation

Investor Contact:
Jay Wilson
(212) 536-8940

Media Contacts:
Lorrie Hecker
(212) 536-8250

Liz James
FGS Global
(281) 881-5170