Hess Reports Estimated Results for the Fourth Quarter of 2021

Rhea-AI Summary

Hess Corporation (NYSE: HES) reported a fourth-quarter net income of $265 million or $0.85 per share, a significant improvement from a net loss of $97 million or $0.32 per share in Q4 2020. The company announced new discoveries at Fangtooth and Lau Lau, boosting recoverable resources at the Stabroek Block to over 10 billion barrels of oil equivalent. Net production was 295,000 boepd, with an expectation to increase to 330,000-340,000 boepd in 2022. Capital expenditures for E&P are projected at $2.6 billion, primarily for projects in Guyana and the Bakken.

Positive

• Net income of $265 million, compared to a net loss of $97 million in Q4 2020.
• New discoveries at Fangtooth and Lau Lau enhance the recoverable resource estimate to over 10 billion boe.
• Projected 2022 net production increase to 330,000-340,000 boepd, a 12%-15% rise from 2021.
• Organic reserve replacement of 295% with a finding cost of approximately $5.25 per boe.

Negative

• Net production excluding Libya decreased to 295,000 boepd from 309,000 boepd in Q4 2020.
• Bakken production decreased to 159,000 boepd from 189,000 boepd in the prior-year quarter.

Key Developments:

• Announced significant new discoveries at Fangtooth and Lau Lau on the Stabroek Block, offshore Guyana; the positive result at Fangtooth, the first standalone deep prospect, confirms the deeper exploration potential of the Block
• The Fangtooth and Lau Lau discoveries increase the Stabroek Block's previously announced gross discovered recoverable resource estimate to more than 10 billion barrels of oil equivalent (boe)

Fourth Quarter Financial and Operational Highlights:

• Net income was $265 million, or $0.85 per share, compared with a net loss of $97 million, or $0.32 per share in the fourth quarter of 2020; adjusted net loss¹ in the prior-year quarter was $176 million, or $0.58 per share
• Oil and gas net production, excluding Libya, was 295,000 barrels of oil equivalent per day (boepd); Bakken net production was 159,000 boepd
• E&P capital and exploratory expenditures were $593 million compared with $371 million in the prior-year quarter
• Year-end proved reserves are estimated to be 1,309 million boe; organic reserve replacement was 295 percent (204 percent excluding price revisions) at a finding and development cost of approximately $5.25 per boe (approximately $7.60 per boe excluding price revisions)

2022 Guidance:

• Net production, excluding Libya, is forecast to be in the range of 330,000 boepd to 340,000 boepd, which is a 12 percent to 15 percent increase from 2021; Bakken net production is forecast to be in the range of 165,000 boepd to 170,000 boepd, which is a 6 percent to 9 percent increase from 2021
• E&P capital and exploratory expenditures are expected to be approximately $2.6 billion, of which approximately 80 percent will be allocated to Guyana and the Bakken

 

NEW YORK--(BUSINESS WIRE)-- Hess Corporation (NYSE: HES) today reported net income of $265 million, or $0.85 per share, in the fourth quarter of 2021, compared with a net loss of $97 million, or $0.32 per share, in the fourth quarter of 2020. On an adjusted basis, the Corporation reported a net loss in the prior-year quarter of $176 million, or $0.58 per share. The improvement in adjusted after-tax results compared with the prior-year period was primarily due to higher realized selling prices in the fourth quarter of 2021.

1. “Adjusted net income (loss)” is a non-GAAP financial measure. The definition of this non-GAAP measure and a reconciliation to its nearest GAAP equivalent measure appears on pages 6 to 8.

 “This year marks an inflection point in the execution of our strategy,” CEO John Hess said.  “We have built a differentiated portfolio offering a unique value proposition – delivering durable cash flow growth that enables us to continue to invest in some of the highest return projects in the industry and to start growing our cash returns to our shareholders.”

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

	Three Months Ended December 31, (unaudited)								Year Ended December 31, (unaudited)
	2021				2020				2021				2020
	(In millions, except per share amounts)
Net Income (Loss) Attributable to Hess Corporation
Exploration and Production	$		309		$		(39)		$		770		$		(2,841)
Midstream			74				62				286				230
Corporate, Interest and Other			(118)				(120)				(497)				(482)
Net income (loss) attributable to Hess Corporation	$		265		$		(97)		$		559		$		(3,093)
Net income (loss) per share (diluted)	$		0.85		$		(0.32)		$		1.81		$		(10.15)
Adjusted Net Income (Loss) Attributable to Hess Corporation
Exploration and Production	$		309		$		(118)		$		888		$		(643)
Midstream			74				62				286				230
Corporate, Interest and Other			(118)				(120)				(497)				(481)
Adjusted net income (loss) attributable to Hess Corporation	$		265		$		(176)		$		677		$		(894)
Adjusted net income (loss) per share (diluted)	$		0.85		$		(0.58)		$		2.19		$		(2.93)
Weighted average number of shares (diluted)			310.0				305.1				309.3				304.8

Exploration and Production:

   E&P net income was $309 million in the fourth quarter of 2021, compared with a net loss of $39 million in the fourth quarter of 2020. On an adjusted basis, E&P's net loss in the prior-year quarter was $118 million. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $71.04 per barrel in the fourth quarter of 2021, compared with $45.32 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the fourth quarter of 2021 was $36.47 per barrel, compared with $15.80 per barrel in the prior-year quarter, while the average realized natural gas selling price was $4.77 per mcf, compared with $3.35 per mcf in the fourth quarter of 2020.

   Net production, excluding Libya, was 295,000 boepd in the fourth quarter of 2021, compared with 309,000 boepd in the fourth quarter of 2020, or 295,000 boepd proforma for assets sold. Net production for Libya was 21,000 boepd in the fourth quarter of 2021 compared with 12,000 boepd in the prior-year quarter.

   Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $12.17 per boe (excluding Libya: $12.84 per boe) in the fourth quarter of 2021, compared with $11.31 per boe (excluding Libya: $11.57 per boe) in the prior-year quarter. The change in per unit cost reflects the impact of lower production volumes and higher production and severance taxes in North Dakota in the fourth quarter of this year. Income tax expense increased in the fourth quarter of 2021 compared with the prior-year quarter primarily due to improved results from Libya and Guyana.

Oil and Gas Reserves Estimates:

   Oil and gas proved reserves at December 31, 2021, which are subject to final review, were 1,309 million boe, compared with 1,170 million boe at December 31, 2020. Net proved reserve additions in 2021 totaled 348 million boe, which is comprised of net positive revisions of 107 million boe due to higher commodity prices and other net additions of 241 million boe primarily from the Bakken. Asset sales in 2021 reduced proved reserves by 91 million boe.

   Excluding asset sales, the Corporation replaced 295 percent of its 2021 production (204 percent excluding price revisions) at a finding and development cost of approximately $5.25 per boe (approximately $7.60 per boe excluding price revisions).

Operational Highlights for the Fourth Quarter of 2021:

   Bakken (Onshore U.S.): Net production from the Bakken was 159,000 boepd compared with 189,000 boepd in the prior-year quarter primarily due to the impact of lower drilling activity caused by a reduction in rig count from six to one during the first half of last year, lower NGL and natural gas volumes received under percentage of proceeds contracts, and the second quarter 2021 sale of Little Knife and Murphy Creek nonstrategic acreage interests, which contributed net production of approximately 5,000 boepd in the fourth quarter of 2020. Net oil production was 79,000 barrels of oil per day (bopd) compared with 97,000 bopd in the fourth quarter of 2020. NGL and natural gas volumes received under percentage of proceeds contracts were 9,000 boepd in the fourth quarter of 2021 compared with 21,000 boepd in the fourth quarter of 2020 due to higher realized NGL prices lowering volumes received as consideration for gas processing fees. The Corporation added a second rig in February 2021 and a third rig in September 2021, and drilled 17 wells, completed 13 wells, and brought 19 new wells online in the fourth quarter.

   Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 39,000 boepd, compared with 32,000 boepd in the prior-year quarter primarily due to downtime for hurricane-related maintenance in the fourth quarter of 2020. Net production from the Shenzi Field, which was sold in November 2020, was 3,000 boepd in the fourth quarter of 2020.

   Guyana (Offshore): At the Stabroek Block (Hess – 30%), the operator, Esso Exploration and Production Guyana Limited, announced two significant discoveries at Fangtooth and Lau Lau. The Fangtooth-1 well encountered approximately 164 feet of high quality oil bearing sandstone reservoirs, and confirms the deeper exploration potential of the Stabroek Block. The well was drilled in 6,030 feet of water and is located approximately 11 miles northwest of the Liza Field. The Lau Lau-1 well encountered approximately 315 feet of high quality hydrocarbon bearing sandstone reservoirs. The well was drilled in 4,793 feet of water and is located approximately 42 miles southeast of the Liza Field.

   The Corporation’s net production from the Liza Destiny floating production, storage and offloading vessel (FPSO) was 31,000 bopd in the fourth quarter of 2021 compared with 26,000 bopd in the prior-year quarter. On October 25, 2021, the Liza Unity FPSO, with an expected capacity of 220,000 gross bopd, arrived at the Stabroek Block and startup of Phase 2 of the Liza Field development remains on track for the first quarter of 2022. The third development, Payara, will utilize the Prosperity FPSO with an expected capacity of 220,000 gross bopd; first oil is expected in 2024. A fourth development, Yellowtail, was submitted to the government of Guyana for approval in the fourth quarter. Pending government approval and project sanctioning, the project is expected to have a capacity of 250,000 gross bopd with first oil anticipated in 2025. We expect to have at least six FPSOs on the Stabroek Block in 2027, with the potential for up to 10 FPSOs to develop the current discovered recoverable resource base.

   Following the completion of the Fangtooth-1 well, the Stena DrillMAX will begin drilling at the Tarpon prospect. Following the completion of the Lau Lau-1 well, the Noble Don Taylor began drilling at the Barreleye prospect. The Stena Carron completed drill stem tests on the Longtail-2, Whiptail-2 and Turbot-2 wells, and is currently performing a drill stem test on the Tilapia-1 well. The Noble Sam Croft, the Noble Bob Douglas and the Noble Tom Madden are currently drilling and completing development wells at Liza Phase 2 and the Payara Field.

   South East Asia (Offshore): Net production at North Malay Basin and JDA was 66,000 boepd compared with 56,000 boepd in the prior-year quarter, reflecting higher natural gas nominations due to a recovery in economic activity which had been impacted by COVID-19.

Midstream:

   The Midstream segment had net income of $74 million in the fourth quarter of 2021, compared with net income of $62 million in the prior-year quarter, primarily due to increased revenue from higher minimum volume commitments and rates.

   In October 2021, Hess Midstream LP completed a public offering of approximately 8.6 million Class A shares held by Hess Corporation and Global Infrastructure Partners. The Corporation received net proceeds of $108 million. After giving effect to this transaction, the Corporation owns an approximate 44% interest in Hess Midstream LP, on a consolidated basis.

Corporate, Interest and Other:

   After-tax expense for Corporate, Interest and Other was $118 million in the fourth quarter of 2021, compared with $120 million in the fourth quarter of 2020.

Capital and Exploratory Expenditures:

   E&P capital and exploratory expenditures were $593 million in the fourth quarter of 2021, compared with $371 million in the prior-year quarter, primarily due to higher drilling and development activity in Guyana and the Bakken. Midstream capital expenditures were $54 million in the fourth quarter of 2021, compared with $51 million in the prior-year quarter.

Liquidity:

   Excluding the Midstream segment, Hess Corporation had cash and cash equivalents of $2.71 billion and debt and finance lease obligations totaling $6.1 billion at December 31, 2021. The Midstream segment had cash and cash equivalents of $2 million and total debt of $2.6 billion at December 31, 2021. The Corporation’s debt to capitalization ratio as defined in its debt covenants was 42.3% at December 31, 2021 and 47.5% at December 31, 2020.

   Net cash provided by operating activities was $899 million in the fourth quarter of 2021, up from $486 million in the fourth quarter of 2020. Net cash provided by operating activities before changes in operating assets and liabilities² was $886 million in the fourth quarter of 2021, compared with $532 million in the prior-year quarter, primarily due to higher realized selling prices. Changes in operating assets and liabilities increased cash flow from operating activities by $13 million during the fourth quarter of 2021 and decreased cash flow from operating activities by $46 million in the prior-year quarter.

   During the quarter, the Corporation received net proceeds of $108 million from the public offering of approximately 4.3 million Hess-owned Class A shares of Hess Midstream LP. In January 2022, the Corporation paid accrued Libyan income tax and royalties of approximately $470 million related to operations for the period December 2020 through November 2021.

   2. “Net cash provided by (used in) operating activities before changes in operating assets and liabilities” is a non-GAAP financial measure. The definition of this non-GAAP measure and a reconciliation to its nearest GAAP equivalent measure appears on pages 7 and 8.

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 December 31, (unaudited)								Year Ended December 31, (unaudited)
	2021				2020				2021				2020
	(In millions)
Exploration and Production	$		—		$		79		$		(118)		$		(2,198)
Midstream			—				—				—				—
Corporate, Interest and Other			—				—				—				(1)
Total items affecting comparability of earnings between periods	$		—		$		79		$		(118)		$		(2,199)

   Fourth Quarter 2020: E&P results included a pre-tax gain of $79 million ($79 million after income taxes) associated with the sale of the Corporation's 28% working interest in the Shenzi Field in the deepwater Gulf of Mexico.

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

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

	Three Months Ended December 31, (unaudited)								Year Ended December 31, (unaudited)
	2021				2020				2021				2020
	(In millions)
Net income (loss) attributable to Hess Corporation	$		265		$		(97)		$		559		$		(3,093)
Less: Total items affecting comparability of earnings between periods			—				79				(118)				(2,199)
Adjusted net income (loss) attributable to Hess Corporation	$		265		$		(176)		$		677		$		(894)

   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 December 31, (unaudited)								Year Ended December 31, (unaudited)
	2021				2020				2021				2020
			(In millions)
Net cash provided by (used in) operating activities before changes in operating assets and liabilities	$		886		$		532		$		2,991		$		1,803
Changes in operating assets and liabilities			13				(46)				(101)				(470)
Net cash provided by (used in) operating activities	$		899		$		486		$		2,890		$		1,333

Hess Corporation will review fourth 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 www.hess.com.

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, and future economic and market conditions in the oil and gas industry.

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, including as a result of COVID-19; reduced demand for our products, including due to COVID-19, 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 as well as fracking bans; operational changes and expenditures due to climate change and sustainability related initiatives; disruption or interruption of our operations due to catastrophic events, such as accidents, severe weather, geological events, shortages of skilled labor, cyber-attacks, health measures related to COVID-19 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 weakness in the oil and gas industry or negative outcomes within commodity and financial markets; liability resulting from litigation, including heightened risks associated with being a general partner of Hess Midstream LP; 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 (loss)” presented in this release is defined as reported net income (loss) 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 (loss) 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 (loss) or net cash provided by (used in) operating activities. A reconciliation of reported net income (loss) attributable to Hess Corporation (U.S. GAAP) to adjusted net income (loss), and a reconciliation of net cash provided by (used in) operating activities (U.S. GAAP) to net cash provided by (used in) operating activities before changes in operating assets and liabilities are provided in the release.

Cautionary Note to Investors

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

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
	Fourth Quarter 2021				Fourth Quarter 2020				Third Quarter 2021
Income Statement
Revenues and non-operating income
Sales and other operating revenues	$		2,237		$		1,321		$		1,759
Gains on asset sales, net			—				79				29
Other, net			18				17				23
Total revenues and non-operating income			2,255				1,417				1,811
Costs and expenses
Marketing, including purchased oil and gas			672				281				522
Operating costs and expenses			316				313				333
Production and severance taxes			49				32				42
Exploration expenses, including dry holes and lease impairment			45				60				36
General and administrative expenses			86				82				76
Interest expense			121				118				125
Depreciation, depletion and amortization			398				486				349
Total costs and expenses			1,687				1,372				1,483
Income (loss) before income taxes			568				45				328
Provision (benefit) for income taxes			212				72				143
Net income (loss)			356				(27)				185
Less: Net income (loss) attributable to noncontrolling interests			91				70				70
Net income (loss) attributable to Hess Corporation	$		265		$		(97)		$		115

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
	Year Ended December 31,
	2021				2020
Income Statement
Revenues and non-operating income
Sales and other operating revenues	$		7,473		$		4,667
Gains on asset sales, net			29				87
Other, net			81				50
Total revenues and non-operating income			7,583				4,804
Costs and expenses
Marketing, including purchased oil and gas			2,034				936
Operating costs and expenses			1,229				1,218
Production and severance taxes			172				124
Exploration expenses, including dry holes and lease impairment			162				351
General and administrative expenses			340				357
Interest expense			481				468
Depreciation, depletion and amortization			1,528				2,074
Impairment and other			147				2,126
Total costs and expenses			6,093				7,654
Income (loss) before income taxes			1,490				(2,850)
Provision (benefit) for income taxes			600				(11)
Net income (loss)			890				(2,839)
Less: Net income (loss) attributable to noncontrolling interests			331				254
Net income (loss) attributable to Hess Corporation	$		559		$		(3,093)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
	December 31,
	2021				2020
Balance Sheet Information
Assets
Cash and cash equivalents	$		2,713		$		1,739
Other current assets			1,633				1,342
Property, plant and equipment – net			14,182				14,115
Operating lease right-of-use assets – net			352				426
Finance lease right-of-use assets – net			144				168
Other long-term assets			1,491				1,031
Total assets	$		20,515		$		18,821
Liabilities and equity
Current portion of long-term debt	$		517		$		10
Current portion of operating and finance lease obligations			89				81
Other current liabilities			2,458				1,532
Long-term debt			7,941				8,286
Long-term operating lease obligations			394				478
Long-term finance lease obligations			200				220
Other long-term liabilities			1,890				1,879
Total equity excluding other comprehensive income (loss)			6,706				6,121
Accumulated other comprehensive income (loss)			(406)				(755)
Noncontrolling interests			726				969
Total liabilities and equity	$		20,515		$		18,821

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
	December 31,
	2021				2020
Total Debt
Hess Corporation	$		5,894		$		6,386
Midstream (a)			2,564				1,910
Hess Consolidated	$		8,458		$		8,296
(a) Midstream debt is non-recourse to Hess Corporation.

	December 31,
	2021				2020
Debt to Capitalization Ratio (a)
Hess Consolidated			55.3 %				57.4 %
Hess Corporation as defined in debt covenants			42.3 %				47.5 %
(a) Includes finance lease obligations.

	Three Months Ended December 31,								Year Ended December 31,
	2021				2020				2021				2020
Interest Expense
Hess Corporation	$		90		$		94		$		376		$		373
Midstream (a)			31				24				105				95
Hess Consolidated	$		121		$		118		$		481		$		468
(a) Midstream interest expense is reported in the Midstream operating segment.

 

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
	Fourth Quarter 2021				Fourth Quarter 2020				Third Quarter 2021
Cash Flow Information
Cash Flows from Operating Activities
Net income (loss)	$		356		$		(27)		$		185
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Gains on asset sales, net			—				(79)				(29)
Depreciation, depletion and amortization			398				486				349
Exploratory dry hole costs			—				26				2
Exploration lease and other impairment			5				3				5
Pension settlement loss			4				—				1
Stock compensation expense			16				16				17
Noncash (gains) losses on commodity derivatives, net			64				73				64
Provision (benefit) for deferred income taxes and other tax accruals			43				34				37
Net cash provided by (used in) operating activities before changes in operating assets and liabilities			886				532				631
Changes in operating assets and liabilities			13				(46)				(16)
Net cash provided by (used in) operating activities			899				486				615
Cash Flows from Investing Activities
Additions to property, plant and equipment - E&P			(466)				(319)				(431)
Additions to property, plant and equipment - Midstream			(43)				(55)				(67)
Proceeds from asset sales, net of cash sold			—				482				130
Other, net			(1)				(1)				(2)
Net cash provided by (used in) investing activities			(510)				107				(370)
Cash Flows from Financing Activities
Net borrowings (repayments) of debt with maturities of 90 days or less			(48)				6				43
Debt with maturities of greater than 90 days:
Borrowings			—				—				750
Repayments			(2)				—				(503)
Payments on finance lease obligations			(3)				(1)				(3)
Proceeds from sale of Class A shares of Hess Midstream LP			108				—				—
Cash dividends paid			(77)				(76)				(77)
Noncontrolling interests, net			(75)				(67)				(452)
Employee stock options exercised			2				—				—
Other, net			—				(1)				(14)
Net cash provided by (used in) financing activities			(95)				(139)				(256)
Net Increase (Decrease) in Cash and Cash Equivalents			294				454				(11)
Cash and Cash Equivalents at Beginning of Period			2,419				1,285				2,430
Cash and Cash Equivalents at End of Period	$		2,713		$		1,739		$		2,419
Additions to Property, Plant and Equipment included within Investing Activities
Capital expenditures incurred	$		(607)		$		(391)		$		(528)
Increase (decrease) in related liabilities			98				17				30
Additions to property, plant and equipment	$		(509)		$		(374)		$		(498)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
	Year Ended December 31,
	2021				2020
Cash Flow Information
Cash Flows from Operating Activities
Net income (loss)	$		890		$		(2,839)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Gains on asset sales, net			(29)				(87)
Depreciation, depletion and amortization			1,528				2,074
Impairment and other			147				2,126
Exploratory dry hole costs			11				192
Exploration lease and other impairment			20				51
Pension settlement loss			9				—
Stock compensation expense			77				79
Noncash (gains) losses on commodity derivatives, net			216				260
Provision (benefit) for deferred income taxes and other tax accruals			122				(53)
Net cash provided by (used in) operating activities before changes in operating assets and liabilities			2,991				1,803
Changes in operating assets and liabilities			(101)				(470)
Net cash provided by (used in) operating activities			2,890				1,333
Cash Flows from Investing Activities
Additions to property, plant and equipment - E&P			(1,584)				(1,896)
Additions to property, plant and equipment - Midstream			(163)				(301)
Proceeds from asset sales, net of cash sold			427				493
Other, net			(5)				(3)
Net cash provided by (used in) investing activities			(1,325)				(1,707)
Cash Flows from Financing Activities
Net borrowings (repayments) of debt with maturities of 90 days or less			(80)				152
Debt with maturities of greater than 90 days:
Borrowings			750				1,000
Repayments			(510)				—
Payments on finance lease obligations			(10)				(7)
Proceeds from sale of Class A shares of Hess Midstream LP			178				—
Cash dividends paid			(311)				(309)
Noncontrolling interests, net			(664)				(261)
Employee stock options exercised			77				15
Other, net			(21)				(22)
Net cash provided by (used in) financing activities			(591)				568
Net Increase (Decrease) in Cash and Cash Equivalents			974				194
Cash and Cash Equivalents at Beginning of Year			1,739				1,545
Cash and Cash Equivalents at End of Year	$		2,713		$		1,739
Additions to Property, Plant and Equipment included within Investing Activities
Capital expenditures incurred	$		(1,881)		$		(1,931)
Increase (decrease) in related liabilities			134				(266)
Additions to property, plant and equipment	$		(1,747)		$		(2,197)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
	Fourth Quarter 2021				Fourth Quarter 2020				Third Quarter 2021
Capital and Exploratory Expenditures
E&P Capital and exploratory expenditures
United States
North Dakota	$		153		$		72		$		169
Offshore and Other			31				40				16
Total United States			184				112				185
Guyana			330				224				264
Malaysia and JDA			63				25				42
Other			16				10				7
E&P Capital and exploratory expenditures	$		593		$		371		$		498
Total exploration expenses charged to income included above	$		40		$		31		$		29
Midstream Capital expenditures	$		54		$		51		$		59
					Year Ended December 31,
					2021				2020
Capital and Exploratory Expenditures
E&P Capital and exploratory expenditures
United States
North Dakota					$		522		$		661
Offshore and Other							103				258
Total United States							625				919
Guyana							1,016				743
Malaysia and JDA							154				99
Other							34				25
E&P Capital and exploratory expenditures					$		1,829		$		1,786
Total exploration expenses charged to income included above					$		131		$		108
Midstream Capital expenditures					$		183		$		253

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
	Fourth Quarter 2021
Income Statement	United States					International					Total
Total revenues and non-operating income
Sales and other operating revenues	$		1,612			$		625			$		2,237
Other, net			13					2					15
Total revenues and non-operating income			1,625					627					2,252
Costs and expenses
Marketing, including purchased oil and gas (a)			668					24					692
Operating costs and expenses			167					87					254
Production and severance taxes			47					2					49
Midstream tariffs			292					—					292
Exploration expenses, including dry holes and lease impairment			25					20					45
General and administrative expenses			44					7					51
Depreciation, depletion and amortization			263					91					354
Total costs and expenses			1,506					231					1,737
Results of operations before income taxes			119					396					515
Provision (benefit) for income taxes			—					206					206
Net income (loss) attributable to Hess Corporation	$		119	(b)		$		190	(c)		$		309
	Fourth Quarter 2020
Income Statement	United States					International					Total
Total revenues and non-operating income
Sales and other operating revenues	$		904			$		417			$		1,321
Gains (losses) on asset sales, net			79					—					79
Other, net			12					2					14
Total revenues and non-operating income			995					419					1,414
Costs and expenses
Marketing, including purchased oil and gas (a)			267					34					301
Operating costs and expenses			158					92					250
Production and severance taxes			30					2					32
Midstream tariffs			243					—					243
Exploration expenses, including dry holes and lease impairment			36					24					60
General and administrative expenses			43					8					51
Depreciation, depletion and amortization			325					121					446
Total costs and expenses			1,102					281					1,383
Results of operations before income taxes			(107)					138					31
Provision (benefit) for income taxes			—					70					70
Net income (loss) attributable to Hess Corporation	$		(107)	(d)		$		68	(e)		$		(39)

(a)		Includes amounts charged from the Midstream segment.
(b)		Includes after-tax losses from realized crude oil hedging activities of $50 million (noncash premium amortization: $50 million; cash settlement:  $0 million).
(c)		Includes after-tax losses from realized crude oil hedging activities of $14 million (noncash premium amortization: $14 million; cash settlement:  $0 million).
(d)		Includes after-tax gains from realized crude oil hedging activities of $84 million (noncash premium amortization: $63 million; cash settlement:  $147 million).
(e)		Includes after-tax gains from realized crude oil hedging activities of $28 million (noncash premium amortization: $10 million; cash settlement:  $38 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
	Third Quarter 2021
Income Statement	United States					International					Total
Total revenues and non-operating income
Sales and other operating revenues	$		1,280			$		479			$		1,759
Gains on asset sales, net			—					29					29
Other, net			12					7					19
Total revenues and non-operating income			1,292					515					1,807
Costs and expenses
Marketing, including purchased oil and gas (a)			542					—					542
Operating costs and expenses			150					99					249
Production and severance taxes			41					1					42
Midstream tariffs			270					—					270
Exploration expenses, including dry holes and lease impairment			21					15					36
General and administrative expenses			35					7					42
Depreciation, depletion and amortization			229					79					308
Total costs and expenses			1,288					201					1,489
Results of operations before income taxes			4					314					318
Provision (benefit) for income taxes			—					140					140
Net income (loss) attributable to Hess Corporation	$		4	(b)		$		174	(c)		$		178

(a)		Includes amounts charged from the Midstream segment.
(b)		Includes after-tax losses from realized crude oil hedging activities of $50 million (noncash premium amortization: $50 million; cash settlement:  $0 million).
(c)		Includes after-tax losses from realized crude oil hedging activities of $14 million (noncash premium amortization: $14 million; cash settlement:  $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
	Year Ended December 31, 2021
Income Statement	United States					International					Total
Total revenues and non-operating income
Sales and other operating revenues	$		5,378			$		2,095			$		7,473
Gains on asset sales, net			—					29					29
Other, net			48					16					64
Total revenues and non-operating income			5,426					2,140					7,566
Costs and expenses
Marketing, including purchased oil and gas (a)			2,065					54					2,119
Operating costs and expenses			610					355					965
Production and severance taxes			166					6					172
Midstream tariffs			1,094					—					1,094
Exploration expenses, including dry holes and lease impairment			102					60					162
General and administrative expenses			162					29					191
Depreciation, depletion and amortization			1,020					341					1,361
Impairment and other			147					—					147
Total costs and expenses			5,366					845					6,211
Results of operations before income taxes			60					1,295					1,355
Provision (benefit) for income taxes			—					585					585
Net income (loss) attributable to Hess Corporation	$		60	(b)		$		710	(c)		$		770
	Year Ended December 31, 2020
Income Statement	United States					International					Total
Total revenues and non-operating income
Sales and other operating revenues	$		3,604			$		1,063			$		4,667
Gains on asset sales, net			79					—					79
Other, net			18					13					31
Total revenues and non-operating income			3,701					1,076					4,777
Costs and expenses
Marketing, including purchased oil and gas (a)			1,043					24					1,067
Operating costs and expenses			564					331					895
Production and severance taxes			118					6					124
Midstream tariffs			946					—					946
Exploration expenses, including dry holes and lease impairment			284					67					351
General and administrative expenses			176					30					206
Depreciation, depletion and amortization			1,480					435					1,915
Impairment and other			697					1,429					2,126
Total costs and expenses			5,308					2,322					7,630
Results of operations before income taxes			(1,607)					(1,246)					(2,853)
Provision (benefit) for income taxes			—					(12)					(12)
Net income (loss) attributable to Hess Corporation	$		(1,607)	(d)		$		(1,234)	(e)		$		(2,841)

(a)		Includes amounts charged from the Midstream segment.
(b)		Includes after-tax losses from realized crude oil hedging activities of $190 million (noncash premium amortization: $190 million; cash settlement:  $0 million).
(c)		Includes after-tax losses from realized crude oil hedging activities of $49 million (noncash premium amortization: $49 million; cash settlement:  $0 million).
(d)		Includes after-tax gains from realized crude oil hedging activities of $452 million (noncash premium amortization: $230 million; cash settlement:  $682 million).
(e)		Includes after-tax gains from realized crude oil hedging activities of $95 million (noncash premium amortization: $30 million; cash settlement:  $125 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
	Fourth Quarter 2021		Fourth Quarter 2020		Third Quarter 2021
Net Production Per Day (in thousands)
Crude oil - barrels
United States
North Dakota	79		97		78
Offshore (a)	26		24		20
Total United States	105		121		98
Guyana	31		26		32
Malaysia and JDA	3		3		3
Other (b)	19		17		20
Total	158		167		153
Natural gas liquids - barrels
United States
North Dakota	52		61		44
Offshore (a)	4		3		3
Total United States	56		64		47
Natural gas - mcf
United States
North Dakota	170		185		158
Offshore	55		31		52
Total United States	225		216		210
Malaysia and JDA	375		315		284
Other (b)	11		7		9
Total	611		538		503
Barrels of oil equivalent	316		321		284

(a)		The Corporation sold its working interest in the Shenzi Field in the deepwater Gulf of Mexico in the fourth quarter of 2020.  Net production from the Shenzi Field was 3,000 boepd in the fourth quarter of 2020.
(b)		Other includes production from Denmark and Libya.  The Corporation sold its interests in Denmark in the third quarter of 2021.  Denmark net production was 6,000 boepd in the fourth quarter of 2020 and 3,000 boepd in the third quarter of 2021.  Libya net production was 21,000 boepd in the fourth quarter of 2021, 12,000 boepd in the fourth quarter of 2020 and 19,000 boepd in the third quarter of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
	Year Ended December 31,
	2021		2020
Net Production Per Day (in thousands)
Crude oil - barrels
United States
North Dakota	80		107
Offshore (a)	29		38
Total United States	109		145
Guyana	30		20
Malaysia and JDA	3		4
Other (b)	21		9
Total	163		178
Natural gas liquids - barrels
United States
North Dakota	49		56
Offshore (a)	4		5
Total United States	53		61
Natural gas - mcf
United States
North Dakota	162		180
Offshore	72		76
Total United States	234		256
Malaysia and JDA	347		291
Other (b)	10		7
Total	591		554
Barrels of oil equivalent	315		331

(a)		The Corporation sold its working interest in the Shenzi Field in the deepwater Gulf of Mexico in the fourth quarter of 2020.  Net production from the Shenzi Field was 9,000 boepd in 2020.
(b)		Other includes production from Denmark and Libya.  The Corporation sold its interests in Denmark in the third quarter of 2021.  Denmark net production was 3,000 boepd in 2021 and 6,000 boepd in 2020.  Libya net production was 20,000 boepd in 2021 and 4,000 boepd in 2020.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
		Fourth Quarter 2021		Fourth Quarter 2020		Third Quarter 2021
Sales Volumes Per Day (in thousands) (a)
Crude oil - barrels		165		184		148
Natural gas liquids - barrels		56		64		47
Natural gas - mcf		611		538		503
Barrels of oil equivalent		323		338		279
Sales Volumes (in thousands) (a)
Crude oil - barrels		15,225		16,974		13,627
Natural gas liquids - barrels		5,124		5,842		4,338
Natural gas - mcf		56,202		49,542		46,317
Barrels of oil equivalent		29,716		31,073		25,685
				Year Ended December 31,
				2021		2020
Sales Volumes Per Day (in thousands) (a)
Crude oil - barrels				174		167
Natural gas liquids - barrels				53		61
Natural gas - mcf				591		554
Barrels of oil equivalent				326		320
Sales Volumes (in thousands) (a)
Crude oil - barrels (b)				63,540		60,924
Natural gas liquids - barrels				19,406		22,397
Natural gas - mcf				215,589		202,917
Barrels of oil equivalent				118,878		117,141

(a)		Sales volumes from purchased crude oil, natural gas liquids, and natural gas are not included in the sales volumes reported.
(b)		Sales volumes for the year ended December 31, 2021 include 4.2 million barrels of crude oil that were stored on very large crude carriers at December 31, 2020 and sold in the first quarter of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
	Fourth Quarter 2021				Fourth Quarter 2020				Third Quarter 2021
Average Selling Prices
Crude oil - per barrel (including hedging)
United States
North Dakota	$		67.39		$		42.69		$		59.65
Offshore			69.04				47.59				62.23
Total United States			67.80				43.65				60.14
Guyana			77.20				49.56				70.05
Malaysia and JDA			83.23				37.80				69.87
Other (a)			75.24				50.22				68.36
Worldwide			71.04				45.32				63.17
Crude oil - per barrel (excluding hedging)
United States
North Dakota	$		72.54		$		36.46		$		65.11
Offshore			74.11				41.36				67.88
Total United States			72.93				37.42				65.64
Guyana			79.94				43.96				73.12
Malaysia and JDA			83.23				37.80				69.87
Other (a)			77.78				44.63				71.43
Worldwide			75.22				39.45				67.88
Natural gas liquids - per barrel
United States
North Dakota	$		36.63		$		15.93		$		32.94
Offshore			34.23				13.07				32.00
Worldwide			36.47				15.80				32.88
Natural gas - per mcf
United States
North Dakota	$		4.40		$		1.67		$		3.75
Offshore			4.63				1.42				3.76
Total United States			4.46				1.64				3.75
Malaysia and JDA			4.97				4.57				5.45
Other (a)			4.27				2.27				3.62
Worldwide			4.77				3.35				4.71
(a) Other includes prices related to production from Denmark, which was sold in the third quarter of 2021, and Libya.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
	Year Ended December 31,
	2021				2020
Average Selling Prices
Crude oil - per barrel (including hedging)
United States
North Dakota	$		55.57		$		42.63
Offshore			60.09				45.92
Total United States			56.64				43.56
Guyana			68.57				46.41
Malaysia and JDA			71.00				37.91
Other (a)			66.39				51.37
Worldwide			60.08				44.28
Crude oil - per barrel (excluding hedging)
United States
North Dakota	$		59.90		$		33.87
Offshore			64.77				36.55
Total United States			61.05				34.63
Guyana			71.07				37.40
Malaysia and JDA			71.00				37.91
Other (a)			69.25				43.42
Worldwide			63.90				35.52
Natural gas liquids - per barrel
United States
North Dakota	$		30.74		$		11.29
Offshore			26.40				8.94
Worldwide			30.40				11.10
Natural gas - per mcf
United States
North Dakota	$		4.08		$		1.27
Offshore			3.25				1.23
Total United States			3.82				1.26
Malaysia and JDA			5.15				4.47
Other (a)			3.40				3.41
Worldwide			4.60				2.98
(a) Other includes prices related to production from Denmark, which was sold in the third quarter of 2021, and Libya.

The following is a summary of the Corporation’s outstanding crude collars for calendar year 2022:

	WTI				Brent
Barrels of oil per day			90,000				60,000
Average monthly ceiling price	$		100		$		105
Average monthly floor price	$		60		$		65

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220126005017/en/

For Hess Corporation

Investors:

Jay Wilson

(212) 536-8940

Media:

Lorrie Hecker

(212) 536-8250

Jamie Tully

Sard Verbinnen & Co

(917) 679-7908

Source: Hess Corporation

FAQ

What is Hess Corporation's net income for the fourth quarter of 2021?

Hess Corporation reported a net income of $265 million, or $0.85 per share, for Q4 2021.

How have the new discoveries at Fangtooth and Lau Lau impacted Hess Corporation?

The discoveries increased the Stabroek Block's recoverable resource estimate to over 10 billion barrels of oil equivalent.

What is the expected production range for Hess Corporation in 2022?

Hess Corporation forecasts 2022 net production to be between 330,000 and 340,000 boepd.

What are Hess Corporation's capital expenditures for exploration and production in 2022?

Capital expenditures for E&P are expected to be approximately $2.6 billion in 2022.