Hess Reports Estimated Results for the Third Quarter of 2023

Source Company Press Release
Company Hess Corporation
Tags Corporate: Corporate Results, Guidance, Overview/Strategy, Country: Canada, Guyana, Malaysia, United States, Financial - Costs & Metrics: Capital Expenditures, Hedging, Upstream: Drilling Activity, Upstream News
Date October 25, 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

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  hess.com.

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  
Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd