Hess Reports Estimated Results for the Third Quarter of 2023

Key Development:

  • On October 23rd the Corporation entered into an agreement to merge with Chevron. The transaction is expected to close in the first half of 2024

Third Quarter Financial and Operational Highlights:

  • Net income was $504 million, or $1.64 per share, compared with net income of $515 million, or $1.67 per share, in the third quarter of 2022; adjusted net income1 in the third quarter of 2022 was $583 million, or $1.89 per share

  • Oil and gas net production was 395,000 barrels of oil equivalent per day (boepd), up 13% from 351,000 boepd, proforma for asset sold, in the third quarter of 2022

  • Bakken net production was 190,000 boepd, up 14% from 166,000 boepd in the third quarter of 2022; Guyana net production was 108,000 barrels of oil per day (bopd), compared with 98,000 bopd in the prior-year quarter

  • E&P capital and exploratory expenditures were $998 million, compared with $701 million in the prior-year quarter

Updated 2023 Full Year Guidance:

  • Net production is now forecast to be approximately 390,000 boepd, which is at the upper end of the previous guidance range of 385,000 boepd to 390,000 boepd

  • E&P capital and exploratory expenditures are expected to be approximately $4.1 billion, up from previous guidance of $3.7 billion, reflecting the decision to purchase the Liza Unity floating production, storage and offloading vessel (FPSO) in the fourth quarter of 2023 instead of the first quarter of 2024

NEW YORK, October 25, 2023--(BUSINESS WIRE)-- Hess Corporation (NYSE: HES) today reported net income of $504 million, or $1.64 per share, in the third quarter of 2023, compared with net income of $515 million, or $1.67 per share, in the third quarter of 2022. On an adjusted basis, the Corporation reported net income of $583 million, or $1.89 per share, in the third quarter of 2022. The decrease in adjusted after-tax results compared with the prior-year quarter reflects lower realized selling prices, partially offset by the net impact of higher production volumes, in the third 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

September 30,

(unaudited)

Nine Months Ended

September 30,

(unaudited)

2023

2022

2023

2022

(In millions, except per share amounts)

Net Income Attributable to Hess Corporation

Exploration and Production

$

529

$

572

$

1,089

$

1,755

Midstream

66

68

189

205

Corporate, Interest and Other

(91)

(125)

(309)

(361)

Net income attributable to Hess Corporation

$

504

$

515

$

969

$

1,599

Net income per share (diluted)

$

1.64

$

1.67

$

3.15

$

5.16

Adjusted Net Income Attributable to Hess Corporation

Exploration and Production

$

529

$

626

$

1,171

$

1,809

Midstream

66

68

189

205

Corporate, Interest and Other

(91)

(111)

(309)

(360)

Adjusted net income attributable to Hess Corporation

$

504

$

583

$

1,051

$

1,654

Adjusted net income per share (diluted)

$

1.64

$

1.89

$

3.42

$

5.33

Weighted average number of shares (diluted)

307.7

308.9

307.5

310.1

Exploration and Production:

E&P net income was $529 million in the third quarter of 2023, compared with $572 million in the third quarter of 2022. On an adjusted basis, E&P third quarter 2022 net income was $626 million. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $81.53 per barrel in the third quarter of 2023, compared with $85.32 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the third quarter of 2023 was $20.17 per barrel, compared with $35.44 per barrel in the prior-year quarter, while the average realized natural gas selling price was $4.57 per mcf, compared with $5.85 per mcf in the third quarter of 2022.

Net production was 395,000 boepd in the third quarter of 2023, compared with 351,000 boepd, proforma for asset sold, in the third quarter of 2022, primarily due to higher production in the Bakken, Guyana, and Southeast Asia.

Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $14.04 per barrel of oil equivalent (boe) in the third quarter of 2023, compared with $13.64 per boe, proforma for asset sold, in the prior-year quarter.

Operational Highlights for the Third Quarter of 2023:

Bakken (Onshore U.S.): Net production from the Bakken was 190,000 boepd in the third quarter of 2023, compared with 166,000 boepd in the prior-year quarter, reflecting increased drilling and completion activity 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 third quarter of 2023, compared with 11,000 boepd in the third quarter of 2022, due to lower realized NGL and natural gas prices increasing volumes received as consideration for gas processing fees. During the third quarter of 2023, the Corporation drilled 28 wells, completed 41 wells, and brought 26 new wells online.

Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico in the third quarter of 2023 was 28,000 boepd, compared with 30,000 boepd in the prior-year quarter.

Guyana (Offshore): At the Stabroek Block (Hess – 30%), net production from the Liza Destiny and the Liza Unity FPSOs totaled 108,0002 bopd in the third quarter of 2023, compared with 98,0002 bopd in the prior-year quarter. In the third quarter of 2023, we sold nine cargos of crude oil from Guyana, compared with eight cargos in the prior-year quarter.

During the third quarter of 2023, a mechanical issue on the Liza Destiny reduced production during the quarter. Repairs were completed by the operator in October that resolved the issue, and production is currently in the range of 150,000 gross bopd to 160,000 gross bopd.

The third development, Payara, with a production capacity of approximately 220,000 gross bopd, will startup in the fourth quarter. The fourth development, 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.

The successful Lancetfish-2 appraisal well encountered approximately 125 feet of net oil pay in appraisal reservoirs and approximately 65 feet of net oil pay in a new discovery interval. The well was drilled in 5,649 feet of water and is located approximately 4 miles southeast of the Lancetfish-1 discovery well.

Southeast Asia (Offshore): Net production at North Malay Basin and JDA was 69,000 boepd in the third quarter of 2023, compared with 57,000 boepd in the prior-year quarter, primarily due to planned maintenance at both North Malay Basin and JDA during the third quarter of 2022.

Midstream:

The Midstream segment had net income of $66 million in the third quarter of 2023, compared with net income of $68 million in the prior-year quarter.

In September 2023, Hess Midstream Operations LP (HESM Opco), a consolidated subsidiary of Hess Midstream LP (HESM), repurchased approximately 3.3 million HESM Opco Class B units held by Hess Corporation and Global Infrastructure Partners for $100 million, of which the Corporation received $50 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 owns approximately 38% of HESM on a consolidated basis.

Corporate, Interest and Other:

After-tax expense for Corporate, Interest and Other was $91 million in the third quarter of 2023, compared with $125 million in the third quarter of 2022. On an adjusted basis, after-tax expense for Corporate, Interest and Other was $111 million in the third quarter of 2022. Adjusted corporate and other expenses decreased by $6 million in the third quarter of 2023, primarily due to higher interest income. Interest expense decreased by $14 million in the third quarter of 2023, reflecting higher capitalized interest.

Capital and Exploratory Expenditures:

E&P capital and exploratory expenditures were $998 million in the third quarter of 2023, compared with $701 million in the prior-year quarter, primarily due to development activities in Guyana and higher drilling activity in the Bakken. Full year 2023 E&P capital and exploratory expenditures are expected to be approximately $4.1 billion, up from previous guidance of $3.7 billion, reflecting the decision to purchase the Liza Unity FPSO in the fourth quarter of 2023 instead of the first quarter of 2024.

Midstream capital expenditures were $65 million in the third quarter of 2023 and $60 million in the prior-year quarter.

Liquidity:

Excluding the Midstream segment, Hess Corporation had cash and cash equivalents of $2.0 billion and debt and finance lease obligations totaling $5.6 billion at September 30, 2023. The Midstream segment had cash and cash equivalents of $4 million and total debt of $3.1 billion at September 30, 2023. The Corporation’s debt to capitalization ratio as defined in its debt covenants was 34.3% at September 30, 2023 and 36.1% at December 31, 2022.

Net cash provided by operating activities was $986 million in the third quarter of 2023, compared with $1,339 million in the third quarter of 2022. Net cash provided by operating activities before changes in operating assets and liabilities3 was $1,249 million in the third quarter of 2023, compared with $1,405 million in the prior-year quarter. During the third quarter of 2023 and the third quarter of 2022, changes in operating assets and liabilities decreased cash flow from operating activities by $263 million and $66 million, respectively.

2.

Net production from Guyana included 14,000 bopd of tax barrels in the third quarter of 2023 and 7,000 bopd of tax barrels in the third 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.

Items Affecting Comparability of Earnings Between Periods:

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

Three Months Ended

September 30,

(unaudited)

Nine Months Ended

September 30,

(unaudited)

2023

2022

2023

2022

(In millions)

Exploration and Production

$

$

(54)

$

(82)

$

(54)

Midstream

Corporate, Interest and Other

(14)

(1)

Total items affecting comparability of earnings between periods

$

$

(68)

$

(82)

$

(55)

Third Quarter 2022: E&P results included impairment charges of $28 million ($28 million after income taxes) that resulted from updates to the Corporation’s estimated abandonment liabilities for non-producing properties in the Gulf of Mexico and $26 million ($26 million after income taxes) related to the Penn State Field in the Gulf of Mexico. Results for Corporate, Interest and Other included a charge of $14 million ($14 million after income taxes) for legal costs related to a former downstream business.

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

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

Three Months Ended

September 30,

(unaudited)

Nine Months Ended

September 30,

(unaudited)

2023

2022

2023

2022

(In millions)

Net income attributable to Hess Corporation

$

504

$

515

$

969

$

1,599

Less: Total items affecting comparability of earnings between periods

(68)

(82)

(55)

Adjusted net income attributable to Hess Corporation

$

504

$

583

$

1,051

$

1,654

The following table reconciles reported net cash provided by (used in) operating activities from net cash provided by (used in) operating activities before changes in operating assets and liabilities:

Three Months Ended

September 30,

(unaudited)

Nine Months Ended

September 30,

(unaudited)

2023

2022

2023

2022

(In millions)

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

$

1,249

$

1,405

$

3,255

$

3,820

Changes in operating assets and liabilities

(263)

(66)

(657)

(1,128)

Net cash provided by (used in) operating activities

$

986

$

1,339

$

2,598

$

2,692

Investor Conference Call:

Due to the pending merger with Chevron, the Company will not host a conference call to review its third 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)

Third

Quarter

2023

Third

Quarter

2022

Second

Quarter

2023

Income Statement

Revenues and non-operating income

Sales and other operating revenues

$

2,800

$

3,122

$

2,289

Gains on asset sales, net

2

Other, net

35

35

31

Total revenues and non-operating income

2,837

3,157

2,320

Costs and expenses

Marketing, including purchased oil and gas

696

982

547

Operating costs and expenses

467

398

454

Production and severance taxes

61

72

46

Exploration expenses, including dry holes and lease impairment

65

58

99

General and administrative expenses

115

109

108

Interest expense

117

125

122

Depreciation, depletion and amortization

499

471

497

Impairment and other

54

82

Total costs and expenses

2,020

2,269

1,955

Income before income taxes

817

888

365

Provision for income taxes

215

282

160

Net income

602

606

205

Less: Net income attributable to noncontrolling interests

98

91

86

Net income attributable to Hess Corporation

$

504

$

515

$

119

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

Nine Months Ended

September 30,

Income Statement

2023

2022

Revenues and non-operating income

Sales and other operating revenues

$

7,500

$

8,390

Gains on asset sales, net

2

25

Other, net

108

101

Total revenues and non-operating income

7,610

8,516

Costs and expenses

Marketing, including purchased oil and gas

1,846

2,507

Operating costs and expenses

1,303

1,067

Production and severance taxes

155

200

Exploration expenses, including dry holes and lease impairment

230

134

General and administrative expenses

359

314

Interest expense

362

369

Depreciation, depletion and amortization

1,487

1,199

Impairment and other

82

54

Total costs and expenses

5,824

5,844

Income before income taxes

1,786

2,672

Provision for income taxes

551

807

Net income

1,235

1,865

Less: Net income attributable to noncontrolling interests

266

266

Net income attributable to Hess Corporation

$

969

$

1,599

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

September 30,

2023

December 31,

2022

Balance Sheet Information

Assets

Cash and cash equivalents

$

2,018

$

2,486

Other current assets

1,898

1,445

Property, plant and equipment – net

16,421

15,098

Operating lease right-of-use assets – net

481

570

Finance lease right-of-use assets – net

113

126

Other long-term assets

2,270

1,970

Total assets

$

23,201

$

21,695

Liabilities and equity

Current portion of long-term debt

$

307

$

3

Current portion of operating and finance lease obligations

200

221

Other current liabilities

2,489

2,172

Long-term debt

8,241

8,278

Long-term operating lease obligations

392

469

Long-term finance lease obligations

163

179

Other long-term liabilities

2,110

1,877

Total equity excluding accumulated other comprehensive income (loss)

8,823

7,986

Accumulated other comprehensive income (loss)

...

(192)

(131)

Noncontrolling interests

668

641

Total liabilities and equity

$

23,201

$

21,695

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

September 30,

2023

December 31,

2022

Total Debt

Hess Corporation

$

5,400

$

5,395

Midstream (a)

3,148

2,886

Hess Consolidated

$

8,548

$

8,281

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

September 30,

2023

December 31,

2022

Debt to Capitalization Ratio (a)

Hess Consolidated

48.4 %

50.0 %

Hess Corporation as defined in debt covenants

34.3 %

36.1 %

(a) Includes finance lease obligations.

Three Months Ended

September 30,

Nine Months Ended

September 30,

2023

2022

2023

2022

Interest Expense

Gross interest expense – Hess Corporation

$

85

$

88

$

259

$

266

Less: Capitalized interest – Hess Corporation

(14)

(3)

(29)

(6)

Interest expense – Hess Corporation

71

85

230

260

Interest expense – Midstream (a)

46

40

132

109

Interest expense – Hess Consolidated

$

117

$

125

$

362

$

369

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

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

Third

Quarter

2023

Third

Quarter

2022

Second

Quarter

2023

Cash Flow Information

Cash Flows from Operating Activities

Net income

$

602

$

606

$

205

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

(Gains) losses on asset sales, net

(2)

Depreciation, depletion and amortization

499

471

497

Impairment and other

54

82

Exploratory dry hole costs

4

19

62

Exploration lease impairment

11

4

8

Stock compensation expense

16

17

18

Noncash (gains) losses on commodity derivatives, net

52

165

52

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

67

69

50

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

1,249

1,405

974

Changes in operating assets and liabilities

(263)

(66)

Net cash provided by (used in) operating activities

986

1,339

974

Cash Flows from Investing Activities

Additions to property, plant and equipment - E&P

(953)

(657)

(778)

Additions to property, plant and equipment - Midstream

(53)

(66)

(43)

Proceeds from asset sales, net of cash sold

3

Other, net

(1)

(4)

Net cash provided by (used in) investing activities

(1,004)

(727)

(821)

Cash Flows from Financing Activities

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

78

(48)

77

Debt with maturities of greater than 90 days:

Borrowings

20

Repayments

Cash dividends paid

(134)

(115)

(134)

Common stock acquired and retired

(150)

Proceeds from sale of Class A shares of Hess Midstream LP

167

Noncontrolling interests, net

(136)

(79)

(132)

Employee stock options exercised

6

4

1

Payments on finance lease obligations

(3)

(1)

(2)

Other, net

(1)

(18)

(4)

Net cash provided by (used in) financing activities

(190)

(387)

(27)

Net Increase (Decrease) in Cash and Cash Equivalents

(208)

225

126

Cash and Cash Equivalents at Beginning of Period

2,226

2,159

2,100

Cash and Cash Equivalents at End of Period

$

2,018

$

2,384

$

2,226

Additions to Property, Plant and Equipment included within Investing Activities

Capital expenditures incurred

$

(1,013)

$

(726)

$

(956)

Increase (decrease) in related liabilities

7

3

135

Additions to property, plant and equipment

$

(1,006)

$

(723)

$

(821)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

Nine Months Ended

September 30,

2023

2022

Cash Flow Information

Cash Flows from Operating Activities

Net income

$

1,235

$

1,865

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

(Gains) losses on asset sales, net

(2)

(25)

Depreciation, depletion and amortization

1,487

1,199

Impairment and other

82

54

Exploratory dry hole costs

97

19

Exploration lease impairment

24

14

Pension settlement loss

2

Stock compensation expense

69

66

Noncash (gains) losses on commodity derivatives, net

104

383

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

159

243

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

3,255

3,820

Changes in operating assets and liabilities

(657)

(1,128)

Net cash provided by (used in) operating activities

2,598

2,692

Cash Flows from Investing Activities

Additions to property, plant and equipment - E&P

(2,504)

(1,755)

Additions to property, plant and equipment - Midstream

(160)

(177)

Proceeds from asset sales, net of cash sold

3

28

Other, net

(5)

(4)

Net cash provided by (used in) investing activities

(2,666)

(1,908)

Cash Flows from Financing Activities

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

258

(61)

Debt with maturities of greater than 90 days:

Borrowings

420

Repayments

(510)

Cash dividends paid

(405)

(350)

Common stock acquired and retired

(20)

(340)

Proceeds from sale of Class A shares of Hess Midstream LP

167

146

Noncontrolling interests, net

(399)

(430)

Employee stock options exercised

10

44

Payments on finance lease obligations

(7)

(5)

Other, net

(4)

(27)

Net cash provided by (used in) financing activities

(400)

(1,113)

Net Increase (Decrease) in Cash and Cash Equivalents

(468)

(329)

Cash and Cash Equivalents at Beginning of Period

2,486

2,713

Cash and Cash Equivalents at End of Period

$

2,018

$

2,384

Additions to Property, Plant and Equipment included within Investing Activities

Capital expenditures incurred

$

(2,761)

$

(1,971)

Increase (decrease) in related liabilities

97

39

Additions to property, plant and equipment

$

(2,664)

$

(1,932)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)

Third

Quarter

2023

Third

Quarter

2022

Second

Quarter

2023

Capital and Exploratory Expenditures

E&P Capital and exploratory expenditures

United States

North Dakota

$

329

$

226

$

264

Offshore and Other

115

57

82

Total United States

444

283

346

Guyana

509

301

508

Malaysia and JDA

43

92

44

Other (a)

2

25

35

E&P Capital and exploratory expenditures

$

998

$

701

$

933

Total exploration expenses charged to income included above

$

50

$

35

$

29

Midstream Capital expenditures

$

65

$

60

$

52

(a) Other includes capital and exploratory expenditures associated with Suriname in the third quarter of 2022 and Canada in the second quarter of 2023.

Nine Months Ended

September 30,

2023

2022

Capital and Exploratory Expenditures

E&P Capital and exploratory expenditures

United States

North Dakota

$

825

$

549

Offshore and Other

226

185

Total United States

1,051

734

Guyana

1,471

906

Malaysia and JDA

134

217

Other (a)

40

46

E&P Capital and exploratory expenditures

$

2,696

$

1,903

Total exploration expenses charged to income included above

$

109

$

101

Midstream Capital expenditures

$

174

$

169

(a) Other includes capital and exploratory expenditures associated with Canada in the first nine months of 2023 and Suriname in the first nine months of 2022.

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

Third Quarter 2022

Income Statement

United States

International

Total

Total revenues and non-operating income

Sales and other operating revenues

$

2,022

$

1,100

$

3,122

Other, net

16

6

22

Total revenues and non-operating income

2,038

1,106

3,144

Costs and expenses

Marketing, including purchased oil and gas (a)

972

27

999

Operating costs and expenses

194

128

322

Production and severance taxes

67

5

72

Midstream tariffs

313

313

Exploration expenses, including dry holes and lease impairment

33

25

58

General and administrative expenses

45

9

54

Depreciation, depletion and amortization

208

217

425

Impairment and other

54

54

Total costs and expenses

1,886

411

2,297

Results of operations before income taxes

152

695

847

Provision for income taxes

275

275

Net income (loss) attributable to Hess Corporation

$

152

(d)

$

420

(e)

$

572

(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).

(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)

Second Quarter 2023

Income Statement

United States

International

Total

Total revenues and non-operating income

Sales and other operating revenues

$

1,299

$

988

$

2,287

Other, net

6

2

8

Total revenues and non-operating income

1,305

990

2,295

Costs and expenses

Marketing, including purchased oil and gas (a)

537

27

564

Operating costs and expenses

241

143

384

Production and severance taxes

45

1

46

Midstream tariffs

302

302

Exploration expenses, including dry holes and lease impairment

23

76

99

General and administrative expenses

50

11

61

Depreciation, depletion and amortization

212

238

450

Impairment and other

82

82

Total costs and expenses

1,492

496

1,988

Results of operations before income taxes

(187)

494

307

Provision for income taxes

152

152

Net income (loss) attributable to Hess Corporation

$

(187)

(b)

$

342

(c)

$

155

(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).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)

Nine Months Ended September 30, 2023

Income Statement

United States

International

Total

Total revenues and non-operating income

Sales and other operating revenues

$

4,315

$

3,179

$

7,494

Other, net

19

15

34

Total revenues and non-operating income

4,334

3,194

7,528

Costs and expenses

Marketing, including purchased oil and gas (a)

1,814

88

1,902

Operating costs and expenses

672

419

1,091

Production and severance taxes

150

5

155

Midstream tariffs

917

917

Exploration expenses, including dry holes and lease impairment

88

142

230

General and administrative expenses

160

33

193

Depreciation, depletion and amortization

649

695

1,344

Impairment and other

82

82

Total costs and expenses

4,532

1,382

5,914

Results of operations before income taxes

(198)

1,812

1,614

Provision for income taxes

525

525

Net income (loss) attributable to Hess Corporation

$

(198)

(b)

$

1,287

(c)

$

1,089

Nine Months Ended September 30, 2022

Income Statement

United States

International

Total

Total revenues and non-operating income

Sales and other operating revenues

$

5,586

$

2,804

$

8,390

Other, net

68

13

81

Total revenues and non-operating income

5,654

2,817

8,471

Costs and expenses

Marketing, including purchased oil and gas (a)

2,500

60

2,560

Operating costs and expenses

513

351

864

Production and severance taxes

190

10

200

Midstream tariffs

896

896

Exploration expenses, including dry holes and lease impairment

89

45

134

General and administrative expenses

134

24

158

Depreciation, depletion and amortization

595

467

1,062

Impairment and other

54

54

Total costs and expenses

4,971

957

5,928

Results of operations before income taxes

683

1,860

2,543

Provision for income taxes

788

788

Net income (loss) attributable to Hess Corporation

$

683

(d)

$

1,072

(e)

$

1,755

(a) Includes amounts charged from the Midstream segment.

(b) Includes after-tax losses from realized crude oil hedging activities of $94 million (noncash premium amortization: $94 million; cash settlement: $0 million).

(c) Includes after-tax losses from realized crude oil hedging activities of $44 million (noncash premium amortization: $44 million; cash settlement: $0 million).

(d) Includes after-tax losses from realized crude oil hedging activities of $256 million (noncash premium amortization: $233 million; cash settlement: $23 million).

(e) Includes after-tax losses from realized crude oil hedging activities of $164 million (noncash premium amortization: $150 million; cash settlement: $14 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

Third

Quarter

2023

Third

Quarter

2022

Second

Quarter

2023

Net Production Per Day (in thousands)

Crude oil - barrels

United States

North Dakota

87

79

79

Offshore

21

21

23

Total United States

108

100

102

Guyana (a)

108

98

110

Malaysia and JDA

5

4

4

Other (b)

15

Total

221

217

216

Natural gas liquids - barrels

United States

North Dakota

70

58

68

Offshore

1

2

1

Total United States

71

60

69

Natural gas - mcf

United States

North Dakota

195

176

206

Offshore

37

41

45

Total United States

232

217

251

Malaysia and JDA

383

320

359

Other (b)

10

Total

615

547

610

Barrels of oil equivalent

395

368

387

(a) Production from Guyana includes 14,000 bopd of tax barrels in the third quarter of 2023, 7,000 bopd of tax barrels in the third quarter of 2022 and 13,000 bopd of tax barrels in the second 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 17,000 boepd in the third quarter of 2022.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

Nine Months Ended

September 30,

2023

2022

Net Production Per Day (in thousands)

Crude oil - barrels

United States

North Dakota

81

75

Offshore

22

20

Total United States

103

95

Guyana (a)

110

65

Malaysia and JDA

4

4

Other (b)

17

Total

217

181

Natural gas liquids - barrels

United States

North Dakota

66

51

Offshore

2

2

Total United States

68

53

Natural gas - mcf

United States

North Dakota

187

160

Offshore

43

42

Total United States

230

202

Malaysia and JDA

370

355

Other (b)

11

Total

600

568

Barrels of oil equivalent

385

329

(a) Production from Guyana includes 14,000 bopd of tax barrels in the first nine months of 2023 and 2,000 bopd in the first nine months of 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 19,000 boepd in the first nine months of 2022.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA

Third

Quarter

2023

Third

Quarter

2022

Second

Quarter

2023

Sales Volumes Per Day (in thousands) (a)

Crude oil – barrels

223

208

217

Natural gas liquids – barrels

71

58

67

Natural gas – mcf

615

547

610

Barrels of oil equivalent

397

357

386

Sales Volumes (in thousands) (a)

Crude oil – barrels

20,519

19,118

19,740

Natural gas liquids – barrels

6,500

5,299

6,084

Natural gas – mcf

56,553

50,343

55,548

Barrels of oil equivalent

36,445

32,807

35,082

Nine Months Ended

September 30,

2023

2022

Sales Volumes Per Day (in thousands) (a)

Crude oil – barrels

218

174

Natural gas liquids – barrels

67

51

Natural gas – mcf

600

568

Barrels of oil equivalent

385

320

Sales Volumes (in thousands) (a)

Crude oil – barrels

59,420

47,461

Natural gas liquids – barrels

18,345

14,018

Natural gas – mcf

163,793

155,052

Barrels of oil equivalent

105,064

87,321

(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

Third

Quarter

2023

Third

Quarter

2022

Second

Quarter

2023

Average Selling Prices

Crude oil - per barrel (including hedging)

United States

North Dakota

$

76.06

$

79.04

$

65.67

Offshore

78.50

78.80

68.32

Total United States

76.56

79.00

66.24

Guyana

86.24

92.02

75.82

Malaysia and JDA

87.21

85.23

68.87

Other (a)

87.90

Worldwide

81.53

85.32

71.13

Crude oil - per barrel (excluding hedging)

United States

North Dakota

$

79.43

$

89.80

$

69.22

Offshore

81.86

89.47

71.86

Total United States

79.92

89.74

69.79

Guyana

88.06

98.91

77.64

Malaysia and JDA

87.21

85.23

68.87

Other (a)

94.96

Worldwide

84.07

93.95

73.74

Natural gas liquids - per barrel

United States

North Dakota

$

20.17

$

35.41

$

17.90

Offshore

20.15

36.30

20.17

Worldwide

20.17

35.44

17.95

Natural gas - per mcf

United States

North Dakota

$

1.56

$

6.67

$

1.29

Offshore

2.35

8.12

1.62

Total United States

1.69

6.94

1.35

Malaysia and JDA

6.32

5.07

5.56

Other (a)

7.03

Worldwide

4.57

5.85

3.82

(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

Nine Months Ended

September 30,

2023

2022

Average Selling Prices

Crude oil - per barrel (including hedging)

United States

North Dakota

$

70.35

$

85.39

Offshore

71.55

86.13

Total United States

70.62

85.56

Guyana

80.41

96.24

Malaysia and JDA

76.84

93.16

Other (a)

95.49

Worldwide

75.72

90.30

Crude oil - per barrel (excluding hedging)

United States

North Dakota

$

73.72

$

95.33

Offshore

74.89

95.96

Total United States

73.98

95.47

Guyana

81.86

103.94

Malaysia and JDA

76.84

93.16

Other (a)

104.67

Worldwide

78.04

99.14

Natural gas liquids - per barrel

United States

North Dakota

$

20.70

$

38.51

Offshore

21.52

37.86

Worldwide

20.72

38.48

Natural gas - per mcf

United States

North Dakota

$

1.73

$

5.97

Offshore

2.12

6.71

Total United States

1.81

6.13

Malaysia and JDA

5.78

5.72

Other (a)

5.65

Worldwide

4.26

5.86

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

The following is a summary of the Corporation’s outstanding commodity hedging program for the remainder of calendar 2023:

WTI

Brent

Barrels of oil per day

80,000

50,000

Average monthly floor price

$70

$75

View source version on businesswire.com: https://www.businesswire.com/news/home/20231025363556/en/

Contacts

For Hess Corporation

Investor Contact:
Jay Wilson
(212) 536-8940

Media Contacts:
Lorrie Hecker
(212) 536-8250

Jamie Tully
Sard Verbinnen & Co
(917) 679-7908