Hess Reports Estimated Results for the Second Quarter of 2023

Source Press Release
Company Hess Corporation 
Tags Production/Development, Exploration, Upstream Activities, Capital Spending, Guidance, Strategy - Corporate, Financial & Operating Data
Date July 26, 2023

Key Developments:

  • Sanctioned development of Uaru, the fifth development on the Stabroek Block, offshore Guyana, with a production capacity of approximately 250,000 gross barrels of oil per day (bopd); first oil is expected in 2026
  • Extension granted for the Stabroek Block exploration license by one year to October 2027
  • Oil discovery at the Pickerel-1 exploration well in the Gulf of Mexico, which will be a tie-back to the Tubular Bells production facility with first oil expected in mid-2024

Second Quarter Financial and Operational Highlights:

  • Net income was $119 million, or $0.39 per share, compared with net income of $667 million, or $2.15 per share, in the second quarter of 2022; adjusted net income1 in the second quarter of 2023 was $201 million, or $0.65 per share
  • Oil and gas net production was 387,000 barrels of oil equivalent per day (boepd), up 28% from 303,000 boepd, proforma for asset sold, in the second quarter of 2022
  • Bakken net production was 181,000 boepd, up 29% from 140,000 boepd in the second quarter of 2022; Guyana net production was 110,000 bopd, compared with 67,000 bopd in the prior-year quarter
  • E&P capital and exploratory expenditures were $933 million compared with $622 million in the prior-year quarter

2023 Updated Guidance:

  • Full year net production is now forecast to be in the range of 385,000 boepd to 390,000 boepd, compared with previous guidance of 365,000 boepd to 375,000 boepd primarily due to strong operational performance and the expected startup of the Payara development early in the fourth quarter

Hess Corporation (NYSE: HES) today reported net income of $119 million, or $0.39 per share, in the second quarter of 2023, compared with net income of $667 million, or $2.15 per share, in the second quarter of 2022. On an adjusted basis, the Corporation reported net income of $201 million or $0.65 per share in the second quarter of 2023. 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 second 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 8, respectively.

   CEO John Hess said: "We continue to successfully execute our strategy to deliver industry leading cash flow growth and financial returns to our shareholders while safely and responsibly producing oil and gas to help meet the world’s growing energy needs.”

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

    Three Months Ended
June 30,
(unaudited) 
  Six Months Ended
June 30,
(unaudited) 
    2023    2022    2023    2022 
    (In millions, except per share amounts) 
Net Income Attributable to Hess Corporation         
Exploration and Production      155      723      560      1,183 
Midstream        62        65        123        137 
Corporate, Interest and Other        (98)        (121)        (218)        (236) 
Net income attributable to Hess Corporation      119      667      465      1,084 
Net income per share (diluted)      0.39      2.15      1.51      3.49 
                 
Adjusted Net Income Attributable to Hess Corporation         
Exploration and Production      237      723      642      1,183 
Midstream        62        65        123        137 
Corporate, Interest and Other        (98)        (121)        (218)        (249) 
Adjusted net income attributable to Hess Corporation      201      667      547      1,071 
Adjusted net income per share (diluted)      0.65      2.15      1.78      3.45 
                 
Weighted average number of shares (diluted)        307.5        310.9        307.4        310.6 
                 

Exploration and Production:

   E&P net income was $155 million in the second quarter of 2023, compared with $723 million in the second quarter of 2022. On an adjusted basis, E&P second quarter 2023 net income was $237 million. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $71.13 per barrel in the second quarter of 2023, compared with $99.16 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the second quarter of 2023 was $17.95 per barrel, compared with $40.92 per barrel in the prior-year quarter, while the average realized natural gas selling price was $3.82 per mcf, compared with $6.45 per mcf in the second quarter of 2022.

   Net production was 387,000 boepd in the second quarter of 2023, compared with 303,000 boepd, proforma for asset sold, in the second quarter of 2022, primarily due to higher production in Guyana and the Bakken.

   Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $13.97 per barrel of oil equivalent (boe) in the second quarter of 2023, compared with $14.56 per boe, proforma for asset sold, in the prior-year quarter. The decrease in cash operating costs reflects the higher production volumes, partially offset by higher workover activity in the Gulf of Mexico.

Operational Highlights for the Second Quarter of 2023:

   Bakken (Onshore U.S.): Net production from the Bakken was 181,000 boepd in the second quarter of 2023 compared with 140,000 boepd in the prior-year quarter, reflecting increased drilling and completion activity, higher NGL and natural gas volumes received under percentage of proceeds contracts due to lower commodity prices, and higher uptime after weather related shut-ins in the prior-year quarter. NGL and natural gas volumes received under percentage of proceeds contracts were 22,000 boepd in the second quarter of 2023 compared with 7,000 boepd in the second quarter of 2022 due to lower realized NGL and natural gas prices increasing volumes received as consideration for gas processing fees. During the second quarter of 2023, the Corporation drilled 32 wells, completed 28 wells, and brought 30 new wells online. Bakken net production is forecast to be in the range of 175,000 boepd to 180,000 boepd for the full year 2023, up from our previous guidance range of 165,000 boepd to 170,000 boepd.

   Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico in the second quarter of 2023 was 32,000 boepd, compared with 29,000 boepd in the prior-year quarter.

   In July 2023, the Pickerel-1 exploration well (Hess – 100%) located in Mississippi Canyon Block 727 was an oil discovery. The well encountered approximately 90 feet of net pay in high quality, oil bearing, Miocene age reservoir. Planning is underway to tie-back the well to the Tubular Bells production facility with first oil expected in mid-2024.

   Guyana (Offshore): At the Stabroek Block (Hess – 30%), net production from the Liza Destiny and the Liza Unity floating production, storage and offloading vessels (FPSOs) totaled 110,0002 bopd in the second quarter of 2023 compared with 67,0002 bopd in the prior-year quarter. The Liza Unity FPSO, which commenced production in February 2022, reached its production capacity of approximately 220,000 gross bopd in July 2022. In the second quarter of 2023, we sold nine cargos of crude oil from Guyana compared with six cargos in the prior-year quarter. Net production guidance for Guyana for the full year 2023 is expected to be approximately 115,0002 bopd, compared to our previous guidance range of 105,000 bopd to 110,000 bopd.

   The third development, Payara, with a production capacity of approximately 220,000 gross bopd, remains on track for startup early 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 expiration of the exploration license for the Stabroek Block was extended one year from October 2026 to October 2027, and the end of the first renewal period of the exploration license, which requires the relinquishment of 20% of the acreage not held by discoveries, was extended one year from October 2023 to October 2024, both as a result of force majeure due to the COVID-19 pandemic.

   Southeast Asia (Offshore): Net production at North Malay Basin and JDA was 64,000 boepd in the second quarter of 2023 compared with 67,000 boepd in the prior-year quarter.

   Canada (Offshore): The operator, BP Canada, drilled the Ephesus exploration well, offshore Newfoundland (Hess – 25%) in the second quarter of 2023. The well did not encounter commercial quantities of hydrocarbons and well costs incurred of $36 million were recorded to exploration expense.

Midstream:

   The Midstream segment had net income of $62 million in the second quarter of 2023, compared with net income of $65 million in the prior-year quarter.

   During the second quarter of 2023, the Corporation received total net proceeds of $217 million from the public offering of approximately 6.4 million  Hess Midstream LP (HESM) Class A shares held by the Corporation in May 2023 and the repurchase by Hess Midstream Operations LP (HESM Opco), a consolidated subsidiary of HESM, of approximately 1.7 million HESM Opco Class B units held by the Corporation in June 2023. The repurchase of the Class B units was financed by HESM Opco’s revolving credit facility. After giving effect to the above transactions, the Corporation owns approximately 38% of HESM on a consolidated basis.

Corporate, Interest and Other:

   After-tax expense for Corporate, Interest and Other was $98 million in the second quarter of 2023, compared with $121 million in the second quarter of 2022. Corporate and other expenses decreased by $18 million in the second quarter of 2023 primarily due to higher interest income. Interest expense decreased by $5 million in the second quarter of 2023 reflecting higher capitalized interest.

Capital and Exploratory Expenditures:

   E&P capital and exploratory expenditures were $933 million in the second quarter of 2023 compared with $622 million in the prior-year quarter, primarily due to development activities in Guyana and higher drilling activity in the Bakken. Midstream capital expenditures were $52 million in the second quarter of 2023 and $72 million in the prior-year quarter.

Liquidity:

Excluding the Midstream segment, Hess Corporation had cash and cash equivalents of $2.2 billion and debt and finance lease obligations totaling $5.6 billion at June 30, 2023. The Midstream segment had cash and cash equivalents of $4 million and total debt of $3.1 billion at June 30, 2023. The Corporation’s debt to capitalization ratio as defined in its debt covenants was 35.1% at June 30, 2023 and 36.1% at December 31, 2022.

   Net cash provided by operating activities was $974 million in the second quarter of 2023, compared with $1,509 million in the second quarter of 2022. Net cash provided by operating activities before changes in operating assets and liabilities3 was $974 million in the second quarter of 2023, compared with $1,463 million in the prior-year quarter.

2. Net production from Guyana in the second quarter of 2023 included 13,000 bopd of tax barrels. There were no tax barrels in the second quarter of 2022. Net production guidance for Guyana for the full year 2023 includes tax barrels of approximately 15,000 bopd.

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 7 and 8, 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
June 30,
(unaudited) 
  Six Months Ended
June 30
(unaudited) 
    2023    2022    2023    2022 
    (In millions) 
Exploration and Production      (82)      —      (82)      — 
Midstream        —        —        —        — 
Corporate, Interest and Other        —        —        —        13 
Total items affecting comparability of earnings between periods      (82)      —      (82)      13 

   Second Quarter 2023: E&P results include a charge of $82 million ($82 million after income taxes) that resulted from updates to the Corporation’s estimated abandonment obligations in the West Delta Field in the Gulf of Mexico. These abandonment obligations were assigned to the Corporation as a former owner after they were discharged from  Fieldwood Energy LLC as part of its approved bankruptcy plan in 2021.

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
June 30,
(unaudited) 
  Six Months Ended
June 30,
(unaudited) 
    2023    2022    2023    2022 
    (In millions) 
Net income attributable to Hess Corporation      119      667      465      1,084 
Less: Total items affecting comparability of earnings between periods        (82)        —        (82)        13 
Adjusted net income attributable to Hess Corporation      201     $    667      547      1,071 

   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
June 30,
(unaudited) 
  Six Months Ended
June 30,
(unaudited) 
    2023    2022    2023    2022 
    (In millions) 
Net cash provided by (used in) operating activities before changes in operating assets and liabilities      974      1,463      2,006      2,415 
Changes in operating assets and liabilities        —        46        (394)        (1,062) 
Net cash provided by (used in) operating activities      974      1,509      1,612      1,353 

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

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  .

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) 
(IN MILLIONS) 
                         
    Second
Quarter
2023 
  Second
Quarter
2022 
  First
Quarter
2023 
Income Statement                         
Revenues and non-operating income                         
Sales and other operating revenues      2,289      2,955      2,411 
Gains on asset sales, net        —              — 
Other, net        31        30        42 
Total revenues and non-operating income        2,320        2,988        2,453 
Costs and expenses                         
Marketing, including purchased oil and gas        547        843        603 
Operating costs and expenses        454        356        382 
Production and severance taxes        46        67        48 
Exploration expenses, including dry holes and lease impairment        99        33        66 
General and administrative expenses        108        95        136 
Interest expense        122        121        123 
Depreciation, depletion and amortization        497        391        491 
Impairment and other        82        —        — 
Total costs and expenses        1,955        1,906        1,849 
Income before income taxes        365        1,082        604 
Provision for income taxes        160        328        176 
Net income        205        754        428 
Less: Net income attributable to noncontrolling interests        86        87        82 
Net income attributable to Hess Corporation      119      667      346 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) 
(IN MILLIONS) 
         
    Six Months Ended
June 30, 
Income Statement    2023    2022 
Revenues and non-operating income                 
Sales and other operating revenues      4,700      5,268 
Gains on asset sales, net        —        25 
Other, net        73        66 
Total revenues and non-operating income        4,773        5,359 
Costs and expenses                 
Marketing, including purchased oil and gas        1,150        1,525 
Operating costs and expenses        836        669 
Production and severance taxes        94        128 
Exploration expenses, including dry holes and lease impairment        165        76 
General and administrative expenses        244        205 
Interest expense        245        244 
Depreciation, depletion and amortization        988        728 
Impairment and other        82        — 
Total costs and expenses        3,804        3,575 
Income before income taxes        969        1,784 
Provision for income taxes        336        525 
Net income        633        1,259 
Less: Net income attributable to noncontrolling interests        168        175 
Net income attributable to Hess Corporation      465      1,084 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) 
(IN MILLIONS) 
                 
    June 30,
2023 
  December 31,
2022 
Balance Sheet Information                 
Assets                 
Cash and cash equivalents      2,226      2,486 
Other current assets        1,478        1,445 
Property, plant and equipment – net        15,741        15,098 
Operating lease right-of-use assets – net        515        570 
Finance lease right-of-use assets – net        117        126 
Other long-term assets        2,153        1,970 
Total assets      22,230      21,695 
Liabilities and equity                 
Current portion of long-term debt         
Current portion of operating and finance lease obligations        222        221 
Other current liabilities        2,173        2,172 
Long-term debt        8,459        8,278 
Long-term operating lease obligations        407        469 
Long-term finance lease obligations        168        179 
Other long-term liabilities        1,891        1,877 
Total equity excluding accumulated other comprehensive income (loss)        8,419        7,986 
Accumulated other comprehensive income (loss)        (147)        (131) 
Noncontrolling interests        630        641 
Total liabilities and equity      22,230      21,695 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) 
(IN MILLIONS) 
                 
    June 30,
2023 
  December 31,
2022 
Total Debt                 
Hess Corporation      5,398      5,395 
Midstream (a)        3,069        2,886 
Hess Consolidated      8,467      8,281 
a. Midstream debt is non-recourse to Hess Corporation                
    June 30,
2023 
  December 31,
2022 
Debt to Capitalization Ratio (a)                 
Hess Consolidated        49.3%        50.0% 
Hess Corporation as defined in debt covenants        35.1%        36.1% 
  1. Includes finance lease obligations.
 
               

    Three Months Ended
June 30, 
  Six Months Ended
June 30, 
    2023    2022    2023    2022 
Interest Expense                                 
Gross interest expense – Hess Corporation      88      86      174      178 
Less: Capitalized interest – Hess Corporation        (10)        (3)        (15)        (3) 
Interest expense – Hess Corporation        78        83        159        175 
Interest expense – Midstream (a)        44        38        86        69 
Interest expense – Hess Consolidated      122      121      245      244 
  1. Midstream interest expense is reported in the Midstream operating segment.
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) 
(IN MILLIONS) 
                         
    Second
Quarter
2023 
  Second
Quarter
2022 
  First
Quarter
2023 
Cash Flow Information                         
Cash Flows from Operating Activities                         
Net income      205      754      428 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                         
(Gains) losses on asset sales, net        —        (3)        — 
Depreciation, depletion and amortization        497        391        491 
Impairment and other        82        —        — 
Exploratory dry hole costs        62        —        31 
Exploration lease impairment                   
Pension settlement loss        —              — 
Stock compensation expense        18        16        35 
Noncash (gains) losses on commodity derivatives, net        52        163        — 
Provision (benefit) for deferred income taxes and other tax accruals        50        136        42 
Net cash provided by (used in) operating activities before changes in operating assets and liabilities        974        1,463        1,032 
Changes in operating assets and liabilities        —        46        (394) 
Net cash provided by (used in) operating activities        974        1,509        638 
Cash Flows from Investing Activities                         
Additions to property, plant and equipment - E&P        (778)        (607)        (773) 
Additions to property, plant and equipment - Midstream        (43)        (56)        (64) 
Proceeds from asset sales, net of cash sold        —              — 
Other, net        —        —        (4) 
Net cash provided by (used in) investing activities        (821)        (659)        (841) 
Cash Flows from Financing Activities                         
Net borrowings (repayments) of debt with maturities of 90 days or less        77        (14)        103 
Debt with maturities of greater than 90 days:                         
Borrowings        —        400        — 
Repayments        —        (5)        — 
Cash dividends paid        (134)        (116)        (137) 
Common stock acquired and retired        —        (190)        (20) 
Proceeds from sale of Class A shares of Hess Midstream LP        167        146        — 
Noncontrolling interests, net        (132)        (277)        (131) 
Employee stock options exercised                   
Payments on finance lease obligations        (2)        (2)        (2) 
Other, net        (4)        (10)       
Net cash provided by (used in) financing activities        (27)        (61)        (183) 
Net Increase (Decrease) in Cash and Cash Equivalents        126        789        (386) 
Cash and Cash Equivalents at Beginning of Period        2,100        1,370        2,486 
Cash and Cash Equivalents at End of Period      2,226      2,159      2,100 
                         
Additions to Property, Plant and Equipment included within Investing Activities 
Capital expenditures incurred      (956)      (665)      (792) 
Increase (decrease) in related liabilities        135              (45) 
Additions to property, plant and equipment      (821)      (663)      (837) 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) 
(IN MILLIONS) 
         
    Six Months Ended
June 30, 
    2023    2022 
Cash Flow Information                 
Cash Flows from Operating Activities                 
Net income      633      1,259 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                 
(Gains) losses on asset sales, net        —        (25) 
Depreciation, depletion and amortization        988        728 
Impairment and other        82        — 
Exploratory dry hole costs        93        — 
Exploration lease impairment        13        10 
Pension settlement loss        —       
Stock compensation expense        53        49 
Noncash (gains) losses on commodity derivatives, net        52        218 
Provision (benefit) for deferred income taxes and other tax accruals        92        174 
Net cash provided by (used in) operating activities before changes in operating assets and liabilities        2,006        2,415 
Changes in operating assets and liabilities        (394)        (1,062) 
Net cash provided by (used in) operating activities        1,612        1,353 
Cash Flows from Investing Activities                 
Additions to property, plant and equipment - E&P        (1,551)        (1,098) 
Additions to property, plant and equipment - Midstream        (107)        (111) 
Proceeds from asset sales, net of cash sold        —        28 
Other, net        (4)        — 
Net cash provided by (used in) investing activities        (1,662)        (1,181) 
Cash Flows from Financing Activities                 
Net borrowings (repayments) of debt with maturities of 90 days or less        180        (13) 
Debt with maturities of greater than 90 days:                 
Borrowings        —        400 
Repayments        —        (510) 
Cash dividends paid        (271)        (235) 
Common stock acquired and retired        (20)        (190) 
Proceeds from sale of Class A shares of Hess Midstream LP        167        146 
Noncontrolling interests, net        (263)        (351) 
Employee stock options exercised              40 
Payments on finance lease obligations        (4)        (4) 
Other, net        (3)        (9) 
Net cash provided by (used in) financing activities        (210)        (726) 
Net Increase (Decrease) in Cash and Cash Equivalents        (260)        (554) 
Cash and Cash Equivalents at Beginning of Period        2,486        2,713 
Cash and Cash Equivalents at End of Period      2,226      2,159 
                 
Additions to Property, Plant and Equipment included within Investing Activities 
Capital expenditures incurred      (1,748)      (1,245) 
Increase (decrease) in related liabilities        90        36 
Additions to property, plant and equipment      (1,658)      (1,209) 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) 
(IN MILLIONS) 
                         
    Second
Quarter
2023 
  Second
Quarter
2022 
  First
Quarter
2023 
Capital and Exploratory Expenditures                         
E&P Capital and exploratory expenditures                         
United States                         
North Dakota      264      188      232 
Offshore and Other        82        72        29 
Total United States        346        260        261 
Guyana        508        286        454 
Malaysia and JDA        44        66        47 
Other (a)        35        10       
E&P Capital and exploratory expenditures      933      622      765 
                         
Total exploration expenses charged to income included above      29      29      30 
                         
Midstream Capital expenditures      52      72      57 
  1. Other includes capital and exploratory expenditures associated with Canada.
 
                       

    Six Months Ended
June 30, 
    2023    2022 
Capital and Exploratory Expenditures                 
E&P Capital and exploratory expenditures                 
United States                 
North Dakota      496      323 
Offshore and Other        111        128 
Total United States        607        451 
Guyana        962        605 
Malaysia and JDA        91        125 
Other (a)        38        21 
E&P Capital and exploratory expenditures      1,698      1,202 
                 
Total exploration expenses charged to income included above      59      66 
                 
Midstream Capital expenditures      109      109 
  1. Other includes capital and exploratory expenditures associated with Canada.
 
               

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                           
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                      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 
                                 
    Second Quarter 2022 
Income Statement    United States        International        Total 
Total revenues and non-operating income                                 
Sales and other operating revenues      1,860          1,095          2,955 
Other, net        25                      26 
Total revenues and non-operating income        1,885            1,096            2,981 
Costs and expenses                                 
Marketing, including purchased oil and gas (a)        827            31            858 
Operating costs and expenses        175            116            291 
Production and severance taxes        65                      67 
Midstream tariffs        296            —            296 
Exploration expenses, including dry holes and lease impairment        24                      33 
General and administrative expenses        40                      47 
Depreciation, depletion and amortization        192            153            345 
Total costs and expenses        1,619            318            1,937 
Results of operations before income taxes        266            778            1,044 
Provision for income taxes        —            321            321 
Net income (loss) attributable to Hess Corporation      266    (d)      457    (e)      723 
  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $34 million (noncash premium amortization: $34 million; cash settlement: $0 million).
  3. Includes after-tax losses from realized crude oil hedging activities of $18 million (noncash premium amortization: $18 million; cash settlement: $0 million).
  4. Includes after-tax losses from realized crude oil hedging activities of $99 million (noncash premium amortization: $99 million; cash settlement: $0 million).
  5. Includes after-tax losses from realized crude oil hedging activities of $64 million (noncash premium amortization: $64 million; cash settlement: $0 million).
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) 
(IN MILLIONS) 
         
    First Quarter 2023 
Income Statement    United States        International        Total 
Total revenues and non-operating income                                 
Sales and other operating revenues      1,365          1,044          2,409 
Other, net                            14 
Total revenues and non-operating income        1,374            1,049            2,423 
Costs and expenses                                 
Marketing, including purchased oil and gas (a)        584            35            619 
Operating costs and expenses        205            118            323 
Production and severance taxes        46                      48 
Midstream tariffs        283            —            283 
Exploration expenses, including dry holes and lease impairment        20            46            66 
General and administrative expenses        54            12            66 
Depreciation, depletion and amortization        203            240            443 
Total costs and expenses        1,395            453            1,848 
Results of operations before income taxes        (21)            596            575 
Provision for income taxes        —            170            170 
Net income (loss) attributable to Hess Corporation      (21)    (b)      426    (c)      405 
  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $27 million (noncash premium amortization: $27 million; cash settlement: $0 million).
  3. Includes after-tax losses from realized crude oil hedging activities of $7 million (noncash premium amortization: $7 million; cash settlement: $0 million).
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) 
(IN MILLIONS) 
         
    Six Months Ended June 30, 2023 
Income Statement    United States        International        Total 
Total revenues and non-operating income                                 
Sales and other operating revenues      2,664          2,032          4,696 
Other, net        15                      22 
Total revenues and non-operating income        2,679            2,039            4,718 
Costs and expenses                                 
Marketing, including purchased oil and gas (a)        1,121            62            1,183 
Operating costs and expenses        446            261            707 
Production and severance taxes        91                      94 
Midstream tariffs        585            —            585 
Exploration expenses, including dry holes and lease impairment        43            122            165 
General and administrative expenses        104            23            127 
Depreciation, depletion and amortization        415            478            893 
Impairment and other        82            —            82 
Total costs and expenses        2,887            949            3,836 
Results of operations before income taxes        (208)            1,090            882 
Provision for income taxes        —            322            322 
Net income (loss) attributable to Hess Corporation      (208)    (b)      768    (c)      560 
         
    Six Months Ended June 30, 2022 
Income Statement    United States        International        Total 
Total revenues and non-operating income                                 
Sales and other operating revenues      3,564          1,704          5,268 
Other, net        52                      59 
Total revenues and non-operating income        3,616            1,711            5,327 
Costs and expenses                                 
Marketing, including purchased oil and gas (a)        1,528            33            1,561 
Operating costs and expenses        319            223            542 
Production and severance taxes        123                      128 
Midstream tariffs        583            —            583 
Exploration expenses, including dry holes and lease impairment        56            20            76 
General and administrative expenses        89            15            104 
Depreciation, depletion and amortization        387            250            637 
Total costs and expenses        3,085            546            3,631 
Results of operations before income taxes        531            1,165            1,696 
Provision for income taxes        —            513            513 
Net income (loss) attributable to Hess Corporation      531    (d)      652    (e)      1,183 
  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $61 million (noncash premium amortization: $61 million; cash settlement: $0 million).
  3. Includes after-tax losses from realized crude oil hedging activities of $25 million (noncash premium amortization: $25 million; cash settlement: $0 million).
  4. Includes after-tax losses from realized crude oil hedging activities of $156 million (noncash premium amortization: $133 million; cash settlement: $23 million).
  5. Includes after-tax losses from realized crude oil hedging activities of $99 million (noncash premium amortization: $85 million; cash settlement: $14 million).
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
EXPLORATION AND PRODUCTION OPERATING DATA 
           
  Second
Quarter
2023 
  Second
Quarter
2022 
  First
Quarter
2023 
Net Production Per Day (in thousands)           
Crude oil - barrels           
United States           
North Dakota  79    68    76 
Offshore  23    20    24 
Total United States  102    88    100 
Guyana (a)  110    67    112 
Malaysia and JDA     
Other (b)  —    17    — 
Total  216    176    216 
           
Natural gas liquids - barrels           
United States           
North Dakota  68    47    61 
Offshore     
Total United States  69    49    62 
           
Natural gas - mcf           
United States           
North Dakota  206    147    158 
Offshore  45    41    47 
Total United States  251    188    205 
Malaysia and JDA  359    381    369 
Other (b)  —    11    — 
Total  610    580    574 
           
Barrels of oil equivalent  387    322    374 
  1. Production from Guyana includes 13,000 bopd of tax barrels in the second quarter of 2023 and 15,000 bopd of tax barrels in the first quarter of 2023. There were no tax barrels in the second quarter of 2022.
  2. 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 second quarter of 2022.
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
EXPLORATION AND PRODUCTION OPERATING DATA 
   
  Six Months Ended
June 30, 
  2023    2022 
Net Production Per Day (in thousands)       
Crude oil - barrels       
United States       
North Dakota  78    73 
Offshore  23    20 
Total United States  101    93 
Guyana (a)  111    49 
Malaysia and JDA   
Other (b)  —    18 
Total  216    163 
       
Natural gas liquids - barrels       
United States       
North Dakota  64    48 
Offshore   
Total United States  66    50 
       
Natural gas - mcf       
United States       
North Dakota  182    152 
Offshore  47    41 
Total United States  229    193 
Malaysia and JDA  363    373 
Other (b)  —    12 
Total  592    578 
       
Barrels of oil equivalent  381    309 
  1. Production from Guyana includes 14,000 bopd of tax barrels in the first six months of 2023. There were no tax barrels in the first six months of 2022.
  2. Other includes production from Libya. The Corporation sold its interest in the Waha Concession in Libya in November 2022. Libya net production was 20,000 boepd in the first six months of 2022.
 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES 
EXPLORATION AND PRODUCTION OPERATING DATA 
             
    Second
Quarter
2023 
  Second
Quarter
2022 
  First
Quarter
2023 
Sales Volumes Per Day (in thousands) (a)             
Crude oil – barrels    217    173    213 
Natural gas liquids – barrels    67    46    64 
Natural gas – mcf    610    580    574 
Barrels of oil equivalent    386    316    373 
             
Sales Volumes (in thousands) (a)             
Crude oil – barrels    19,740    15,763    19,161 
Natural gas liquids – barrels    6,084    4,180    5,761 
Natural gas – mcf    55,548    52,811    51,692 
Barrels of oil equivalent    35,082    28,745    33,537 
             
        Six Months Ended
June 30, 
        2023    2022 
Sales Volumes Per Day (in thousands) (a)             
Crude oil – barrels        215    157 
Natural gas liquids – barrels        65    48 
Natural gas – mcf        592    578 
Barrels of oil equivalent        379    301 
             
Sales Volumes (in thousands) (a)             
Crude oil – barrels        38,901    28,343 
Natural gas liquids – barrels        11,845    8,719 
Natural gas – mcf        107,240    104,709 
Barrels of oil equivalent        68,619    54,514 
  1. 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 
                         
    Second
Quarter
2023 
  Second
Quarter
2022 
  First
Quarter
2023 
Average Selling Prices                         
Crude oil - per barrel (including hedging)                         
United States                         
North Dakota      65.67      93.60      68.63 
Offshore        68.32        95.22        68.12 
Total United States        66.24        93.96        68.50 
Guyana        75.82        104.19        79.15 
Malaysia and JDA        68.87        106.21        72.91 
Other (a)        —        105.21        — 
Worldwide        71.13        99.16        74.23 
                         
Crude oil - per barrel (excluding hedging)                         
United States                         
North Dakota      69.22      106.01      71.78 
Offshore        71.86        107.58        71.27 
Total United States        69.79        106.37        71.65 
Guyana        77.64        112.57        79.86 
Malaysia and JDA        68.87        106.21        72.91 
Other (a)        —        114.93        — 
Worldwide        73.74        109.51        76.02 
                         
Natural gas liquids - per barrel                         
United States                         
North Dakota      17.90      40.96      24.25 
Offshore        20.17        39.88        24.28 
Worldwide        17.95        40.92        24.25 
                         
Natural gas - per mcf                         
United States                         
North Dakota      1.29      6.89      2.54 
Offshore        1.62        7.63        2.42 
Total United States        1.35        7.06        2.51 
Malaysia and JDA        5.56        6.18        5.44 
Other (a)        —        5.36        — 
Worldwide        3.82        6.45        4.39 
  1. 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 
         
    Six Months Ended
June 30, 
    2023    2022 
Average Selling Prices                 
Crude oil - per barrel (including hedging)                 
United States                 
North Dakota      67.05      88.98 
Offshore        68.22        90.21 
Total United States        67.32        89.25 
Guyana        77.50        100.55 
Malaysia and JDA        71.02        97.73 
Other (a)        —        98.14 
Worldwide        72.66        93.65 
                 
Crude oil - per barrel (excluding hedging)                 
United States                 
North Dakota      70.41      98.46 
Offshore        71.55        99.58 
Total United States        70.68        98.70 
Guyana        78.76        109.06 
Malaysia and JDA        71.02        97.73 
Other (a)        —        108.06 
Worldwide        74.87        102.65 
                 
Natural gas liquids - per barrel                 
United States                 
North Dakota      20.99      40.40 
Offshore        22.20        38.68 
Worldwide        21.02        40.33 
                 
Natural gas - per mcf                 
United States                 
North Dakota      1.83      5.57 
Offshore        2.03        6.02 
Total United States        1.87        5.67 
Malaysia and JDA        5.50        6.00 
Other (a)        —        5.07 
Worldwide        4.09        5.87 
  1. 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  

Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd